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By
anybody’s standards Peter Daniels has a most amazing "rags to
riches" story.
At
the age of 26 Peter was an illiterate bricklayer, from a 3rd generation
welfare recipient family. Today he has involvement in business than spans the
globe, has chaired boards of directors, advised corporations and governments
and written several books.
When asked if there was one key factor that brought about this change, Peter
Daniels sites when he, and his wife Robina,
attended a Billy Graham Crusade and May 25th 1959; "I suddenly realized
I was equal with all men before God."
Peter Daniels
kindly made time for this interview in September 1999.
PHILIP: Your
understanding of business comes from its successful practical application
rather than theoretical knowledge; for a long time you have been saying that
at some point there is going to be a major down turn in the global economy.
Why are you so sure?
PETER DANIELS:
Well Phil I’m a pragmatist, which means I’m interested in things
that work. There are many factors that are going to cause this downturn.
People lose sight of the fact that economies are cyclic; we have had the
longest economic free run in probably in the history of mankind.
The 1st reason
is simply DEBT. I’m very interested in history and the thing we learn
from history is that we learn nothing from history. As I travel around
western countries, the debt factor is bigger than it has ever been before in
history, and I’m talking about in every single level. As we have a look
at the debt of individuals, corporations and governments; its never been as large and never been as
frightening.
The 2nd thing
is we are having POWER SHIFTS; there is an emerging neo-nationalism around
the world we are seeing it in the region of the old Soviet Union; to the
north of our shores in Indonesia, India and Africa. Wherever there are power
shifts there are always difficulties and economic downturns, even if
prosperity comes later.
And 3rdly we
have a TRADE WAR. Interestingly with this trade war, no-one is talking about
it, its happening right under our noses. People are
putting up economic and other barriers. In my opinion this trade war may last
20 years and I think we are going to have acceleration in it.
The 4th thing
is DECEIT. I don’t think we have never had so much deception.
That’s not only with America, we’ve had that with almost every
country of the world, we’ve had so much
deceit, cover-ups people breaking their contracts. We are having a resurgence
of what we had in the 1970’s with "situation ethics" which
means "I will keep my ethic as long as the situation remains the same
and if the situation changes I have every right o
break my commitment." We see this in divorce, delinquency and even in
things such as law enforcement.
PHILIP: We have
all seen those graphic pictures of the great depression. While many
contemporary economists believe we wont have
another depression, the many people I’ve spoken with all maintain the
next depression will be far worse than the one we experienced in the
1930’s – how bad do you feel it will be?
PETER DANIELS:
I was a child during the Great Depression and I remember it with a certain
amount of vividness. They were desperate days, very desperate days. I believe
because of the demographics the next one will be much larger and more severe.
We need only
look at the stock market. When we look at the Dow Jones we find that many of
those stocks are valued at 50 or 60 times earnings. It could happen tomorrow
morning its that close, it
has to happen at some point, there is no way of avoiding it. There is no way
that anyone can pay all this money back, there is no
way we can ride it through.
PHILIP: Do you
feel it could happen very dramatically - very quickly?
PETER DANIELS:
I am convinced of that, I don’t think it will happen slowly, I think it
will happen very quickly and I believe it could happen as quickly as a few
hours. The stock exchange could drop and suddenly right across the world
people would start to panic; it happened in the last Great Depression.
PHILIP: What
can the average "man on the street" expect form this kind of
economic shake-up?
PETER DANIELS:
We could expect inflation or even deflation and that could happen quickly as
well. You will find there will be mass unemployment, banks will begin to call
loans and any assets they can get, a lot of commodities we take for granted
will start to disappear from the shelves and fuel may become scarce.
Of course you
will see an increase in crime and that’s one of the frightening sides
of it because when someone is faced with feeding their family and someone has
more and they have less, then an ordinary person who is normally quite
passive, becomes an entirely different human-being.
There is
another good side to it though. We saw in the Great Depression that people
went back to their churches, they got down on their knees as they started to realise that their wealth wasn’t in a political
system, it wasn’t in their factories but it was in the hands of God. I
believe it could see the greatest revival time in the history of Christendom.
PHILIP: You
have maintained for many years that gold and silver performs very well in the
kind of environment we are talking about, but this is contrary to the views
of many of today’s popular economists. What makes you so sure you are
right on this?
PETER DANIELS:
History tells us that we are right. The majority is always wrong,
it is always the minority that is right. Since the beginning of time gold and
silver has always been the measure for value.
Then remember
its rarity. For some reason or another we feel, think or hope that something
printed on paper has more value, yet there is less than 1 oz
of gold for each individual on the planet.
Looking at
history from the 15th century, the number of countries that got in trouble
from debasing their coinage, and finally when the bankers call out, they
would say "pay us back with gold", that’s just the way its been. When the axe finally falls, gold is the only
thing that people are interested in.
It may go up
and down in value, although I believe it will explode when thing start to
look really bad, but if you have it in small denominations and in a protected
form, you will be able to do anything that you want to do.
PHILIP: You
talk about cycles, whether its debasing currency or
just people in trouble rushing back into gold.
PETER DANIELS:
It interesting to see what happened to gold recently. For a long time it kept
going down, even though there is (relatively speaking) less and less above
the ground. Many people know its
because cartels are selling to one and other to keep it down.
Then when it
went up 20% in 10days (September 1999), if it had been any other commodity it
would have been headlines and yet for some reason it failed to stir the
imagination of the newspapers. Yet when it continues to go up people will
start to buy it and it will accelerate far greater than we can imagine; we
saw this in 1980.
PHILIP: This
brings me to a very interesting and bold statement you’ve said in the
past "if every Christian owned 2 oz of gold
and 6 oz of silver, we would absolutely control tomorrows economy". Can you explain what you meant by
this?
PETER DANIELS:
We would then have the majority of the wealth in the world. You don’t
need the total wealth, you just need to have a
percentage that is big enough to shift markets. If you look at the Christians
of the world (including nominal) and multiply that by 2 oz
of gold and 6 oz of silver, there is no question,
we would control global economics, and you not talking about a lot of money
in western terms to own that amount of gold and silver. I cant believe why Christians will not do that, they
have read the story of the flood, they have read the story of the wise
virgins who had to trim their lamps, in both those stories the door was shut
when they did not take head of the warnings.
We understand
Ecclesiastes, "there is a time for every purpose under heaven",
there was a time to negatively gear, a time for
borrowing big, but now is not the time, now is the time for being
conservative. Now is the time to acquire gold, not using it for growth
return, but putting it aside as a heritage for your family.
One of the
things I hear all the time is that "the wealth of the wicked is laid up
for the righteous" but people don’t always recall the beginning of
the verse where it is written "a good man leaves an inheritance to his
children’s children." We need to be leaving an inheritance to our
future generations, and if we did this today we wouldn’t be so poor, we
would be the movers and shakers of the world.
Philip Judge
Anglo Far-East Company
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