Speakers Excellence: Mr. Schulte, your book "Kontrollverlust" stormed the bestseller charts from August and even reached 2nd place on the Spiegel bestseller list on September 7th, and was already at number 1 among all books sold by Amazon. How do you explain this success?
Thorsten Schulte: First of all, I want to say that the title of my book has nothing to do with Karl Lagerfeld's statement: "Whoever wears sweatpants has lost control of their life." It's about us citizens potentially losing control over our freedom, our cash, our security, and our country. You can see that the book is highly political. In the second part of the book, I ruthlessly depict the situation in the Eurozone, criticize the monetary policy of the European Central Bank, show historical debt developments for the Eurozone, and provide important tips for all key areas of asset protection. We must realize that we need to think the unthinkable. Napoleon once said that the word "impossible" exists only in the vocabulary of fools. We humans tend to think too linearly, while life is full of surprises and exponentially accelerating developments. For me, the coming years are not about maximizing profits, but about protecting our assets.
Speakers Excellence: Mr. Schulte, you were an investment banker and call yourself the "Silver Boy." You advocate for more investments in precious metals, especially silver. Could you kindly explain to non-experts why you consider this so important?
Thorsten Schulte: The negative interest rates in today's time show even to laymen that our current paper money system is highly flawed. Negative interest rates are like the rider carrying the horse. Holders of paper money claims are being punished. Currently, there is more paper money circulating in the Eurozone than ever before, even and especially in relation to our economic strength. We must realize that for centuries and millennia, we could buy things with gold and silver. In ancient Rome, you could get a suit with sandals for an ounce of gold, and this is still easily achievable with an ounce of gold today. Silver has the advantage of being needed in the real economy. While the industry, including dental technology, consumes just over a tenth of the gold supply annually, with silver, it's well over half. I have long said: Gold is hoarded, while silver is consumed. Silver gains much more than gold during a precious metals boom but also naturally loses more during a correction. Please note that gold and silver lead a shadowy existence as investments. The entire above-ground silver treasure is not even worth $50 billion. In the first quarter of 2017, the total financial assets of Germans amounted to €5,676 billion. Such comparisons speak volumes.
Speakers Excellence: Why metals specifically and not stocks or bonds?
Thorsten Schulte: In my book, stocks have a place, and they are essential for an asset protection strategy. They have the disadvantage that they do not hold up against the money devaluation in times of high inflation as many financial advisors promise. However, they have the advantage that financial repression could target gold with a ban, but stocks would remain unscathed. I also present an important historical experience in the US during and after World War II. So, let's not preach either precious metals or stocks, but rather a both-and approach. As for bonds, I can only say that they yield ridiculously low interest rates and many even show negative returns. Investors might even have to pay. It's a truly upside-down world. Saving is being punished. In my book, on page 208, I show how the price of a 10-year bond falls with rising interest rates. There is an Italian government bond with an annual interest rate of 4.75 percent, due to be repaid on May 28, 2063. On August 12, 2016, the price (value) of this bond was as high as 172.59 percent of its face value. So, if you had acquired a face value of €100 on the day of issue, you would have received €172.59 on that day. By March 20, 2017, it had dropped to only 117.12 percent. Those who bought at the peak lost a significant portion of their wealth. I would avoid such a bond like the devil avoids holy water.
Speakers Excellence: You fear that the Euro could turn into the Italian Lira due to high inflation. Is there reason to believe this scenario could become a reality?
Thorsten Schulte: Mario Draghi himself states that he wants inflation. "We will do what we must to raise inflation and inflation expectations as quickly as possible, as our mandate requires to ensure price stability," said Mario Draghi on November 22, 2014, to around 400 bankers in Frankfurt at the European Banking Congress. For this purpose, he has bought not only government bonds, covered bonds, and even corporate bonds. The ECB's key interest rate was lowered to 0.05 percent in September 2014 and to 0.00 percent in March 2016. Banks have been charged for parking their money overnight at the ECB since June 5, 2014. It started with a negative interest rate of 0.10 percent, and since March 10, 2016, it's 0.40 percent with a negative sign. There is currently so much paper money in the system, both absolutely and relative to economic power, that I have lost faith in a good outcome. Do you remember the statement by Karl Schiller, the former German Minister of Economics, in 1968? "Inflation is dead, it is dead as a rusty nail." A few years later, in 1974, there was an 11 percent wage agreement in the public sector under Willy Brandt because inflation had reawakened. For me, it's an excellent example that the declared dead can live longer. Hardly anyone can imagine the return of inflation today. I'm not saying it will happen tomorrow, but central banks can cause currency devaluation if they wish. Do you know the ketchup bottle effect? We keep hitting the bottom of the ketchup bottle, and nothing happens. At most, a few drops come out. And suddenly, it happens: a huge amount of ketchup spills over the plate. Central banks cannot dose inflation precisely, even if they try to convey a different impression. Given the high levels of debt, a response to inflation in the form of high-interest rates would be very dangerous because it could quickly lead us back into a crisis like in 2008 or 1929. This illustrates the dilemma of today's central banks. None of this is healthy.
Speakers Excellence: Do you think it would be best to peg the Euro back to the gold standard? Thorsten Schulte: In the book, I say that the current paper money system is not the only option. My dream is a mass movement for direct democracy. My dream is to hold rallies where representatives of the Monetative, advocates of Free Banking, and supporters of the reintroduction of the gold standard each present their arguments. In the book, I explain why I support the gold standard and am not a fan of the Monetative, i.e., full money. But above all, it's about the fact that the current paper money system is not set in stone. Speakers Excellence: In recent years, there have been repeated attempts to abolish cash. What do you think about this, and what dangers does such a step pose?
Thorsten Schulte: The first two chapters of my book deal with this. I have compiled everything meticulously. Finance ministers, interior ministers, bankers, central bankers, payment service providers in general, and credit card companies in particular form an unholy alliance. The death of cash is happening gradually and therefore unnoticed by the masses. I am deeply concerned about our cash and thus our freedom. I see how I am massively in the crosshairs since I raise my voice for cash. If the marginalization of cash leads to a ban, then we will lose our freedom and become completely transparent. For those who say they are indifferent to the future of cash despite my explanations, let them consider the following words of Edward Snowden: "When you say that privacy doesn't matter to you because you have nothing to hide, that's like saying freedom of speech doesn't matter because you have nothing to say." At the cash rally on October 22,
