Join The Five to make every sale.
Hello, my friend, and welcome to the 460th episode of the sales podcast. I'm chef with the sales whisper, your host, the quartet of central bankers did in fact succeed in keeping the world economy going, but they were only able to do so by holding us interest rates down and by keeping Germany afloat on borrowed money, it was a system that was bound to come to a crashing end.
Indeed. It held the seeds of its own destruction. Eventually the policy of keeping us interest rates low to shore up the international exchanges precipitated a bubble in the us stock market. By 1927, the fed was torn between two conflicting objectives to keep propping up Europe or to control speculation on wall street.
You tried to do both and achieved neither its attempts to curb speculation were too half-hearted to bring stocks back to earth, but powerful enough to cause a collapse in lending. To Germany driving most of central Europe into depression and setting in train, deflationary forces throughout the rest of the world.
Eventually in the last week of October, 1929, the bubble burst plunging the U S into its own recession. The U S stock market bubble. Thus had a double effect on the way up. It created a squeeze and international credit that drove Germany and other parts of the world into recession. And on the way down, it shook the U S economy.
Skipping ahead, a paragraph after 1929 responsibility for world monetary affairs ended up in the hands of a group of men who understood none of this whose ideas about the economy were at best outmoded. And at worst, plain wrong. So that is from the ending. This is page four, 502, 503 of a book from, I want to say 2004.
And I'll look that up in a second here. Let's call it the Lords of finance or just Lords of finance, the bankers who broke the world. . I've med. Um, very interesting book, quite detailed. When did this come out? Copyright to them? Nine. Oh, okay. That was a little bit older. Um, I read this, um, over the summer, almost finished it on my RV trip back in June.
Mmm. Well, yeah, basically did then I got the Rona and, um, so I've been meaning to get to this it's um, it's a deep book. It gets into looking at, um, you know, the early 19 hundreds, uh, how we emerged from world war one, um, looked at the four major central banks, uh, the U S the UK. Uh, Germany and France, um, the impact of reparations on Germany and the rest of the world, the impact of the gold standard, uh, starts looking at, um, the games that FDR played.
Um, and the reason I wanted to talk, talk about this on the sales podcast. So you understand. A little bit of insight on what the heck's going on right now, the federal reserve and the us treasury three and Congress and DC, um, you know that right. White house, they are playing a lot of games and we think that, um, because they're out of town and they wear a nice suit and we see them on TV.
We think that they know what the heck they're doing, but in this book and I'll look it up and give you the references. But you know, it talks about FDR, literally sitting in bed, uh, his team coming over in the morning, watching him eat breakfast, reading the newspaper, and just randomly, literally pulling numbers out of his butt to set the price of gold for the day.
It's like things you could just. No, they kept it secret back then, but it was kind of an open secret that that's literally what was going on. Um, so I just want you to be, you know, trust, but verify, start digging in and asking questions because. The steps that the federal reserve is taking today, the financial stimulus, the emergency loans, the extended unemployment it's going to impact you.
And I understand your may not be a financial advisor. You may not have a lot of money invested. Your money may be at risk right now. I mean, who knows, uh, but you need to understand what is going on because look. It's okay. It's better to know that a storm is coming and begin to prepare than to just be caught off guard.
You know, I grew up in the South hurricanes just were a part of life, you know, I remember. Tying down trees and filling bathtubs with water and, you know, getting coolers and get ice, get everything ready, uh, boarding up some things sometimes leaving, you know, once I was married, you know, and a wife, a kid, another kid on the way, uh, didn't mess around with that.
I mean, I just got out of Dodge. Um, but compare that to an earthquake. I haven't had any big earthquakes here where I live in Southern California, but, you know, I felt them and, um, you know, there's obviously been big ones. And, you know, there's no warning there. You're just hanging out in boom. Roof's fallen in on your head.
So yeah, much rather face a hurricane or be threatened by him than an earthquake. All right. And that's kind of how I want to approach this. I want you to be prepared. I want you to know what's going on. Uh, cause at Lee, even if it's bad news, at least you've got the news. Okay. And how does this apply to sales?
Well, you know what? Sales is life. And so how does this apply? It's like, Look, if you have bad news to tell a prospect or even a customer, you better get it out of the way. Okay. You need to understand how to position it, how to understand the true needs and wants and desires of your prospects. So you can put yourself in the best light, uh, but you can't lie.
Right. I'm a good customer would rather hear the bad news early. Okay. And deal with it. Then you string them along. Uh, and you know, I've always said our job in sales is to sort sift and separate. Our number one job in sales is to prospect. And when we prospect, we are disqualifying the prospect. And so I'd rather hear no early than do a sign, you know, song and dance and wine and dine.
For days and weeks and months on end only to then address the elephant in the room that we knew probably was unavoidable was a true objection. You know, an obstacle that could not be removed. So, you know, you've got to dig in, you got to look at what's really going on face it. And deal with it. So if nothing else, you know, you get out of this.
I hope you understand that the, the experts really are not very good quite often. You know, the definition of an expert is they come from out of town, they carry a briefcase. So we've got plenty of those around. Okay. So who are you turning to? Who are you relying on? Uh, you know, and the reality is you can't keep up on everything.
You do have to pick and choose, you know, who you follow. Who's going to give you the cliff notes. Um, you know, I get it, uh, but don't hold those people up on a pedestal. Okay. Question them, dig in, uh, make sure they're staying on track and make sure they're giving you the facts. Not an opinion. Okay. You're the one that has to form your opinion based on the facts.
So make sure you're dealing with people that are shooting straight with you. Okay. But, um, you know, spend some time going through this book against a huge book, 500 plus pages, um, but some amazing stories about. Golly, international finance and war. Uh, and how interesting little, um, issues with people, little preferences, snide remarks, vanity, uh, literally shifted and tilted the world on its axis.
One dude, like to collect paintings, you know, other guy was just too busy dating and. Yeah, a couple of guys were sick. I mean, take, take months off at a time. Imagine that you imagine taking two to six months off every gear to handle. I dunno, tuberculosis. I mean, that's what the leader of the federal reserve was doing, right.
That the leader of, of the, uh, UK reserve, you know, would have nervous breakdowns. And it's not like you can text and get a quick answer. Right. These guys would literally be like almost unfundable. I mean, you'd have to send, you know, Telegraph to somewhere and get on a horse, you know, or you know, a car, uh, but a rickety car on rickety roads to try to get a message.
I mean, just crazy. Wow, the world is crumbling down. That's what was going on so crazy times. Okay. So that's also why I say you got to toughen up. Okay. These are unprecedented times, whatever. Okay. Whatever. We had a bad, bad flu hundred thousand people dying in 1968, 69, millions, tens of millions dying around the world and the Spanish flu 1917, 1918.
Um, you know, the great depression, Korean war. I mean, what were one while were two Korean war, Vietnam war, good grief. Almost 20 years now in the middle East, you know, the great recession of Oh eight. We've had a lot of bad times. And look, I do believe. We've got a hard rain coming. When I moved to Southern California in December of Oh four, you know, moving in from, from the outside, looking in, it was obvious the emperor had no clothes.
So we rented and I was correct. Um, the, the direction in the severity of the collapse, I was wrong on my timing. It took three plus years for it to really happen. Uh, there's an old saying that the market can stay irrational longer than you can stay solvent. Okay. So let's say I had shorted the market. Um, I'm like, it should be going down.
It should be going down. The fundamentals are all wrong and there's no way that it should be going up. There's always something you don't know. Okay. But I didn't, I just rented, rented my house. After five years, he got foreclosed on, we moved in another house and it on a short sale at literally 40 ish percent off from its high.
Okay. Now, you know, So we moved into this house. So five, 10 it's like February, 2010. We closed on it early, like January of 2011. So we've owned it now nine and a half years. Um, and it's appreciated tremendously. So the timing was right now, as I look at this crazy market, I think it's even crazier. There's a lot of federal reserve intervention going on, probably bigger than what they were dealing with in world war one, world war two, you know, uh, era.
So you need to have at least a cursory knowledge of this stuff. Okay. So you can just be prepared. So with that, Let's get you prepared. So the introduction kicks off in August 15th, 1931. As I mentioned, the governor of the bank of England has been in disposed as a result of the exceptional strain to which he has been subjected in recently months.
So he had said Canada for months. So the one remaining guy of the four and, you know, because kind of skipped ahead, then they go back and he tells a story. The one remaining guy with, uh, some history, some intelligence and experience. Um, he is having a breakdown while the world. Is breaking down. And so they, they go into some of the specific, you know, this guy, he would, he would travel under a faulty name, you know, a made up name.
I talked to about climb over the boat, exited with a rope ladder, one time to avoid the press. Um, you know, this guy, he didn't want to talk to anybody and he's the most experienced central banker in the world. So as all of this is collapsing, right? Production in almost every country had collapsed in the two worst hit the United States and Germany had fallen 40% factories throughout the industrialized world car plants of Detroit, the steel mills of the roar from the silk mills of lions, the ship yards of Tyneside.
I said that right. Were shuttered or working at a fraction of capacity. It sounds like right now during COVID, uh, businesses, that cut prices by 25% in the two years since the slump had begun. Uh, but heck I'm seeing prices go up. A friend of mine is in the car business and, um, I talked to him. I don't know, a month ago, roughly.
And he said one of his dealerships normally has 350 units on hand. They were down to 175, I think he said, um, and this month August expected them to have like, as little as 75 in September. So production is down, but. It's down too much. Right. And there's still enough demand that it's actually driving prices up.
So, you know, cause I'm looking at a new truck, even a used truck. I don't, I usually don't buy new, but um, everything is up, you know, Jeeps, diesel trucks, anything like that, that I'm interested in is way up. So it's, I mean, it's almost like the Jimmy Carter stagflation, you know, of the late seventies. It's just, you know, when you have stag.
Use these resources to grow your sales:
Check out early episodes of The Sales Podcast: