Thomas D. Conrad, Ph.D. is a highly ranked hedge fund manager with World Opportunity Master Fund and president of Financial Management Corporation. His flagship World Opportunity Master Fund, LP, is an international hedge fund that operates globally as a fund-of-hedge-funds. Fund managers hold in aggregate well over US$2 billion in managed investments. The fund has been ranked number nine in the world in certain categories by BarklayHedge and recently reached a number three ranking. Dr. Conrad has held a seat on the Philadelphia-Baltimore-Washington Stock Exchange, and was Deputy Assistant Secretary of the United States Air Force for the Reagan Administration. Website: www.worldfund.net.TDV: Hello, Tom, thanks for sitting down with us once again. We last talked to you more than a year ago. At the time you predicted a significant stock market crash and only a month later the Dow reflected your position with a huge intra-day crash. There was huge volatility throughout the fall.
Tom Conrad: Yes, and then again in at the beginning of January of 2016.
TDV: It's not over yet, of course.
Tom Conrad: Eventually, we're going to see a crash of stupendous proportions. I’ve been at this 50 years and after a while you can get a sense of the market even above and beyond the statistics and what you read. It's been bad and is getting worse despite the market averages.
TDV: We agree. That’s why we were interested when we got your note regarding the prediction of “helicopter money.”
Tom Conrad: I sent that out to all my clients.
TDV: Let me read it out loud.
I am predicting and expecting the United States will soon print and distribute $100 billion of free money to inhabitants of the United States (helicopter money). This is intended to create greater inflation. [ Our fund] will therefore be increasing our percentage of gold ownership as insurance in the fund.Tom Conrad: I wanted to provide a rationale for what we intend to do, which is substantially add to our portfolio of physical gold.
TDV: For anyone who might not know, why don't you explain helicopter money in a little more detail
Tom Conrad: It's simple enough concept, and one I think was developed by Ben Bernanke. It's the idea of getting massive sums of currency into the hands of the larger population so it can circulate throughout the economy.
TDV: Which was the point of QE -
Tom Conrad: But as it turned out, as usual when the Fed is involved, the money enriched only the upper few percentiles of the population ...
TDV: - Yes, as we've pointed out.
Tom Conrad: In this case by some means, money is to be dropped to people via helicopter figuratively speaking. One they have money, they will presumably spend it. And that will increase inflation as well.
TDV: Do you have a sense of the timing?
Tom Conrad: I've been asked that and also how it's going to be done. I don't think anyone knows. Maybe some insiders planning it but no one else.
TDV: It's a controversial subject. Not everyone is predicting helicopter money in the US. In fact, there’s been more significant discussion about QE and negative interest rates than helicopter money – which has been discounted so far in the mainstream media.
Tom Conrad: That may be another reason to watch out for it. You’ll never get a sense of the real options in the mainstream these days. They spent most of 2015 talking up a non-existent recovery and by my count, we’re supposed to have seen several Fed hikes by now.
TDV: Yes at least two or three as the recovery gathers force.
Tom Conrad: But there is no recovery. There’s only debt, which is why the Fed is so desperate for inflation. And why these other strategies don’t really make sense.
TDV: You mean helicopter money is the most logical strategy.
Tom Conrad: I’m not alone in seeing this. It’s been suggested by various newsletters.
TDV: It doesn’t seem to have been the subject of a lot of attention at the recent Jackson Hole Fed meeting.
Tom Conrad: It was mentioned as an alternative. Janet Yellen referred to it as well in her speech. She indicated an exploration of "a broader range of assets." And then there was that fellow [Professor Christopher] Sims of Princeton University who talked about a massive new program that would "shock" investors into a different mindset.
The US is deeply in debt, historically deep. The kind of debt you never get out of. There are really two choices the Fed faces at this point: Default or significant inflation verging on hyperinflation.
TDV: The debt is disaster. And, as we’ve pointed out many times, only a few basis points upwards would make it impossible to service.
Tom Conrad: And yet Congress keeps adding to the debt. The country is out of control. They need to cut the debt by half and the only way to do that is by printing money day and night.
TDV: Of course there’s been talk of negative rates as well.
Tom Conrad: Negative rates make no sense. These bankers pretend it’s stimulative, that it will impel people to borrow but the economic distortion is huge. Where does the bank make any money? You’re entirely destroying the time-value of money. The bank is now totally dependent on its central bank to provide the cash it used to receive from the borrower.
TDV: It’s basically just a Ponzi Scheme.
Tom Conrad: It’s completely irresponsible like the rest of monetary policy. Twenty years ago you had well defined middle classes. Now everyone is lower middle class and living paycheck to paycheck. People have given up on the hope of retirement. No one trusts the markets anymore because they are so obviously controlled and manipulated.
TDV: And Deutsche Bank has actually admitted to manipulation.
Tom Conrad: Yes, gold manipulation but that’s the tip of the iceberg. Anyway, over time, as markets become more unstable, metals manipulations will become less effective. That’s another reason to add to our physical gold position.
TDV: How high do you think gold can go – or to put it another way, how low can the dollar go against gold?
Tom Conrad: I’d say optimistically it might hit $3,000 an ounce. But you have a lot of late buyers who would probably sell as the dollar falls, so that would act as a cap. That’s why I say “optimistically.”
TDV: Anyone who can buy metals probably should be adding.
Tom Conrad: The trouble is probably few can afford significant amounts at any price.
TDV: What about mining shares?
Tom Conrad: You can make a lot of money in mining, but you have to be very, very careful. Nine out of ten will go bust. It’s not a game you probably want to play on your own. [Editor's Note: To get the best information and advice on mining stocks, check out TDV Premium with world famous analyst Ed Bugos' mining picks]
TDV: You told us once you believe a return to a gold standard is possible.
Tom Conrad: It is possible, as the US dollar economy continues to unravel. The real problem is that the decision makers are currently part of the problem. That may change with this election. Trump has some good people on his team – Steve Moore from The Club for Growth, Art Laffer, Larry Kudlow – fundamentally market oriented.
TDV: Presumably, they wouldn’t find much that’s worthwhile in the Fed’s current activism.
Tom Conrad: Trump doesn’t intend to rehire Yellen if he gets in. And he recently pointed out that our entire economy these days is “phony” because of these unnaturally low rates.
TDV: And of course helicopter money would make it even worse.
Tom Conrad: Well, you also have to consider they want to make it worse, as you’ve often pointed out in your articles.
TDV: Good point. As a prelude to global government.
Tom Conrad: They have to collapse national and regional central banks. So the Fed is not really after a “healthier economy.”
TDV: Tell us how it would work.
Tom Conrad: Such a massive cash injection would unbalance markets in two ways. First, sooner or later it would probably bring the level of price inflation well past two percent, triggering further hikes. And it is these hikes, conceivably, that would set off the crash.
And here's another point. The reason that the Fed distributed money via commercial banks and banks generally was to ensure that people didn’t realize it was simply green-colored paper being printed by the Fed. But if the Fed hands out money directly, the knowledge of how money is made – out of thin air – would gradually become common knowledge.
TDV: So they’re playing a dangerous game.
Tom Conrad: If they want to destroy the credibility of the dollar, there’s probably no better way.
TDV: And we should keep in mind that’s actually the ultimate goal.
Tom Conrad: After World War II, elites updated the Bank for International Settlements and created the International Monetary Fund and The World Bank. This time around, after wars and the ongoing economic depression make it feasible, the global consolidation will probably set up a formal international government.
TDV: So helicopter money could be the tipping point.
Tom Conrad: It's one way. The bottom line here is that as the current collapse continues, we'll continue to seek ways to protect our investments and our clients. We're up again this year but we intend to prepare for any eventualities.
TDV: Obviously you're putting a lot of thought into alternatives. Thanks for sitting down with us.
Tom Conrad: My pleasure. Thanks for the invite.
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oups. my bad
try this one
My precious!!!!
Jeff, did you mention bitcoin in your interview? I'm curious what his opinion is on that.
Thanks for the post!
If I get any helicopter money Im buying gold.
By then, it will be too late.
I think it would be possible to buy metals and crypto early in the process. Most Americans are still asleep and would use the currency to get caught on up their lives.
Isn't $100B about $275 per person in USA? That's like a Bush tax cut that's over in a blink.
Great conversation, Jeff.
The entire world is headed towards Venezualan hyper-inflation. Here's Robert Kiyosaki and Mike Maloney discussing Federal Reserve dollar printing and Quantitative Easing + why you should invest in gold/silver.
another step towards one world government, one world bank ??
Read into bitgold. It will change your life
BitGold makes it super easy for the little guy to offshore some holdings. I don't trust anyone enough to hold a significant portion but a small percentage, definitely.
Thank you for posting this interview.
Sounds like a "going out of business" blowout sale on fiat currency!
that's exactly what it sounds like. Good analogy.
But if Janet raises the Interet Rate and Europe continues to QE, the dollar may actually raise and not crash.
Chinese play with their currency to remain competitive and will stay like this.
US imports or overseas manufacturing (read: made in China, even if proudly designed in California) will cost less and some companies may yield even higher profits (assuming they sell mostly on the US territory).
I am more interested in the EUR-USD rate now.
In the end, Gold remains a safe choice during tough times.
Janet makes no decisions, she takes orders. The dollar is crashing there is no doubt at all. It has been planned, how else do you end a ponzi scheme and begin another one?
We shall see.
I believe that it is more complicated that that in the end. Christine, Mario and Janet have a strong influence on economies via the interest rates. Banks spreads are highly impacted.
ECB said today they will do QE before the enf of the year.
FED wants to (and will) raise interest rates.
Let's put it on the table with figures :at the 1st jan 2017, where do you see the USD/EUR ?
I would bet 1.05 USD per EUR. (1.125 spot today)
Rising rates would pop the bond bubble and the money bubble... Just death by another method... USD & EUR will sink or swim together... No real difference.
We shall see.
USD and EUR can spread (I remember times at 1,57 USD / EUR).
Bonds will suffer for sure. A housing market crash in the Bay Area would be more than welcome ;-)
Now, the black scenario, Death I beg to differ... not this time. Probably at the next bubble, when will will think that all is behind us...
Another great article. They just keep on coming. Happy to share this on Twitter✔ for my followers to read. Cheers. Stephen
For you Jeff https://steemit.com/art/@villainblack/daily-sketch-for-dollarvigilante
Jeff i know you write about numerology, what do you think about today being the first "999 day" since september 9 1800, and the last until 2025...?
The ECB is doing it, might as well "keep up with the Joneses".
Yo dawg, I heard you like inflation....
Inflation is not a bad thing when in a tight bracket. It favorises consumption. (Inflation = price raises + salary raises)
1% inflation: strong dollar.
3% = trouble
5% = out of control zone, Zimbabwe mode.
That is what the Fed watches when they have their hands on the tap of QE and on the IR.
I personally see a 1:1 parity between USD and EUR at mid 2017.
Super Mario (Draghi) just fell in love with QE...
Man that's scary! Good thing Crypto has a negative correlation to the dollar and traditional stock markets.
I was hoping for home prices to come down here in Panama but if this is the plan then all bets are off.
Sorry, excuse me while I find a spatula to scrape my bottom jaw off of the ground...
Buy gold.. or some funky CDS to cover you asses.
Maybe Gold is simpler (Silver and platinum too?)
That could definitely pull the trigger on the collapse. I still really don't know what to expect. I do know fiat currencies and overbearing governments don't last forever, so i think being in precious metals is a good strategy.
Greenspan famously touted the Fed's total independence in these matters. Seems dubious to think Trump would have any substantial influence.
The FED is a private institution, totally independent. If he doesn't know that yet, he will soon.
Good post. Helicopter money!!
is helicopter money similar to the rebate checks the government gave out with bush?
Reading, watching and learning.
Brilliant insight as always Jeff! Keep spreading the truth!
Thanks as always. I enjoy watching your youtube site as well. Congrats on scoring big with Steemit. You are the reason I am here.
great interview ;) ths
Huh, the Fed could hike the rates right away then. Everyone else is asking them to do just that since years. No need to create themselves excuses by creating fake inflation.
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