Goldsmith comment: Below, you'll find an exclusive interview I conducted with Porter in December 2010. I asked Porter what problems America faces today, exactly what you can do to protect yourself, and what he would do to fix these problems. Plus, Porter reveals a never-before-heard prediction involving a freedom U.S. citizens will lose in the next two years.
Before we get to the interview, if you haven't already seen Porter's End of America video, on which this interview is based, you can watch it here...
Sean Goldsmith: Okay. So, Porter, you recently made the video, The End of America, and it's been getting huge media coverage. I know you just recently did a radio interview where it was broadcast to millions of people. So what spurred you to make this video?
Porter Stansberry: I've been working on these ideas pretty consistently since 2005 because I believe the growth of the debt in the U.S. economy were unsustainable and that it eventually was going to have very serious consequences for the American people. It was time to make the video because a lot of that debt which had been private is getting placed into government hands. So the public is bailing out a bunch of people who made bad choices when it came to debt, and the result will be a tremendous crisis in the value of our currency because the Federal Reserve and the Treasury have taken on more debts than they can possibly afford.
SG: So the government already isn't your biggest fan, and now you're saying it's bankrupt. Are you expecting any backlash for this?
PS: Certainly the government does not approve, in many cases, of the things we write, because we don't toe the line when it comes to the bailouts and companies like General Electric that have basically become the for-profit wing of the Obama administration. So I'm used to that kind of criticism and pressure from the government, and I expect that the bull's eye on me will get larger with the success of this video that I've produced.
SG: It's good you're at least getting the message out. So I know a lot of your work started years ago when you started looking at Fannie Mae, Freddie Mac, and GM and you noticed that these companies were in a lot of financial trouble. So how did you know that these companies were going to fail?
PS: Let's talk about another company just to introduce a new name. I think people are very familiar with my work on General Motors and Fannie and Freddie. But I'll point out to you a different thing I was following, which was in Las Vegas – the rise of MGM.
I can't remember whether it was in 2005 or 2006, but I went to Zurich with Steve Sjuggerud, and we were looking into supplying large amounts of bullion to our readers. We wanted to buy older European sovereign coins, and Europe was supposedly where we could find them.
So we were talking to the banks about buying these 100-year-old coins, and at the time, they were actually trading for less than melt because people thought they had no real value, so it was a good time to be in Zurich. And I happened to run into one of the guys who built the Mandalay Bay. He was a Las Vegas developer. The Mandalay Bay, as I'm sure you know, is a huge hotel complex at the end of the Strip, and it has a Four Seasons Hotel – it was a very, very big project.
He had just sold it to MGM for $8 billion, and he was in Zurich buying gold. I thought to myself, "Huh. That's pretty interesting." When a guy who's spent his life building Vegas cashes out and buys gold bullion in Zurich, that's a sign of something important going on in the economy, so I started looking into the deal where he had sold Mandalay Bay to MGM.
It turns that MGM bought Mandalay Bay at a price equivalent to $2 million per hotel room. So you start doing the math on this, and you're trying to figure out how could it possibly be profitable to buy a hotel for $2 million per hotel room.
SG: Seems rich.
PS: And, of course, as we know now, it was way too rich. It couldn't even be financed. The whole thing has fallen apart, and now MGM is selling itself off piece by piece to help repay these terrible debts. Treasure Island was sold about a year ago to another well-known Vegas entrepreneur, and the price of the sale was about $50,000 per hotel room. I don't think it takes a rocket scientist to realize companies that do things like buy hotel rooms for $2 million a piece and then sell them five years later for $50,000 a piece are not going to be good investments.
SG: Sure. So there was definitely an "Aha" moment with MGM. You met this Vegas guy in Zurich and you saw ...
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