A Conversation with G. Edward Griffin

I had a chance recently to catch up with the legendary author G. Edward Griffin. At age 93 he may not see it come to pass, but he’s been warning we’re in the final stages of the current monetary system. It sounds scary, but if you’re prepared, and you understand where much of the world’s problems come from, you don’t need to be. The system that creates inequality, which transfers wealth from the many to the few for over a century may be coming to an end.

Central banks worldwide have purchased over 1,000 tonnes of gold in 2024 alone

This suggests even the architects of our monetary system are hedging against their own creation. The accumulation of hard assets by institutions speaks to a deeper understanding of what Mr Griffin (I called him that on the podcast, as it seems appropriate!) calls “the creature from Jekyll Island” – a system that’s far more controlling than the everyday investor realises.

“The Federal Reserve system… is a private organization. It’s a corporation.”

The Jekyll Island meeting of 1910, documented extensively by historians, brought together six men who would design America’s third attempt at central banking. Unlike previous iterations, this system was crafted with sophisticated shell games most of us don’t understand, to create money from debt (out of nothing). Most of us are taught (myself included) that banks take the money from depositors and lend it to borrowers. The other [credit creation] theory suggests banks create new money by simply accepting IOUs and converting them into spendable currency.

When money can be created at will like this, the purchasing power of existing money faces constant erosion. Fine for asset owners, but devastating for those who rely only on their time as the asset.

Between 1913 and 2024, the US dollar has lost approximately 96% of its purchasing power

In a conversation I had recently with John Alcock, Mr Griffin argues that the fundamental political struggle isn’t between left and right, but between collectivism and individualism.

“I think the difference between collectivism and individualism is the issue behind all issues”

By understanding this philosophical framework I personally believe we can become better investors.

But what is collectivism? Collectivist systems prioritise group outcomes over individual rights, whereas individualist principles focus on protecting and growing personal wealth.

In a way, both left and right political ideologies embrace collectivist principles, where the state’s interests supersede individual rights. The relevance? Traditional political choice is a mirage.

The more I’ve worked with clients over the years, the more obvious it’s become: policies and market risks don’t change much with political parties, because both sides are often rowing in a similar direction when it comes to monetary control.

Where Do We Go From Here?

So what’s an everyday investor (or their adviser) to do? Watch what the central banks do, not just what they say. The record-breaking gold purchases by central banks aren’t a random blip; they’re a signal that those “in charge” of the system are preparing for something.

Since 2024, more and more clients have been asking about gold, bitcoin, and direct ownership of real assets than in the previous five years combined.

These aren’t just the “doomers”. These are regular Kiwis  genuinely seeking safety in an uncertain world.

If I was in charge of creating confidence in the current financial system, I’d be happy to learn most people consider this “fringe” thinking still. My job is to preserve and grow wealth for my clients though, and just like a doctor acts in the best interests of their patients, sometimes, it means stepping outside the mainstream.

The Bottom Line

It’s tempting to tune out “doom and gloom”, or even just blame it on your favorite political party you love to hate (we’re spoilt for choice!). Sure, you could wait for experts and institutions to fix things, but where’s the incentive to do so?

Central banks and governments all around the world are involved in a parasitic, co-dependent relationship, and we are the kids who suffer.

Personally, I wouldn’t trust in politicians, or ideologies. When it comes to your family and your wealth, consider diversifying into other forms of money – not just different asset classes. If you (or your adviser) aren’t at least questioning the status quo now, you’ll find it much harder to catch up, when the masses catch on.

If you’re prepared to see through the noise, these periods of upheaval can actually open up opportunities – you just need to be earlier than most. By focusing on what you can control and being proactive, you’re giving yourself the best shot.