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  • If you know how the

  • world financial system works

  • you know the game that you're playing

  • and if you don´t know the game and the rules that we're playing by

  • you are going to get slaughtered,

  • you are going to get slaughtered.

  • Ever since the Federal Reserve was born, we have been living under a lie.

  • In order for us to mantain the levels we've got and to maintain

  • the prosperity

  • Obama has to be twice as far in debt when he leaves office than when he came in,

  • or the whole thing is starting to collapse.

  • The Federal Reserve, they're buying bonds directly from the Treasury.

  • This is Quantitative Easing, they're calling it,

  • and that means there's an emergency going on.

  • I can see that there was not anything

  • in history

  • as far as finances goes, that was as much as a sure thing

  • as gold and silver accounting for the expansion of the fiat currency supply.

  • There is absolutely no chance in hell that this won't happen,

  • right now it takes about 15000 to 20000 dollars an ounce of gold.

  • I believe that there's going to be a deflation

  • first

  • and then all of the world's central banks

  • will start printing like crazy to get us out of that deflation and Ben Bernanke

  • will be leading the charge.

  • You can´t have a debt that is 10 times the size of your economy.

  • It's not posible. Everything comes to its screeching halt first.

  • I've got to show you

  • the world's stock markets

  • and real estate bubbles

  • have to continue crashing because

  • all it is

  • is the market trying to seek

  • fair value.

  • It's trying to seek equilibrium,

  • this is what the markets do.

  • It is their job.

  • Basically,

  • you know, our entire currency system

  • is imaginary,

  • it doesn't really exist. It's just that we're all dreaming the same dream.

  • If anybody chooses to wake up...

  • it's over with.

  • Thank you very much!

  • I'm Mike Maloney

  • author of the bestselling book on precious metals investing,

  • Guide to Investing in Gold and Silver, is part of

  • the Rich Dad series that Robert Kiyosaki started,

  • the original book. Robert Kiyosaki says: write a book

  • no other instructions: write a book,

  • and so I start writing this book

  • two and a half years of research and writing

  • probably 30 hours a week,

  • every week

  • for two and a half years. It's a very well researched book.

  • The one thing I really worry about

  • is perpetuating misinformation, I want it to be accurate

  • and then I tried to boil it down and make it real simple. I read all these books by

  • economists like Milton Friedman

  • Murray Rothbard,

  • Ben Bernanke, if you get a chance to read some Ben Bernanke, don't!

  • He is a horrible author,

  • just horrible.

  • They're all trying to write over each other's head and impress each other

  • And by doing so, they make economy sound so complex

  • that everybody thinks well, I can't understand economics.

  • It's really simple.

  • Economics is very simple if you boil it down to its essence

  • and it's not that difficult to understand and that's what I tried to do

  • in my book.

  • For the people that have not read my book,

  • about 75% of it

  • is not about investing in gold and silver, it's some history of money

  • and then how the world economy works and what could potentially happen

  • you know, where we came from, where we are today and what could potentially happen.

  • By the way,

  • I really couldn't care less about gold and silver,

  • I don't want gold and silver, it's just in its cycle right now, it's a stupid lump

  • of metal that doesn't

  • have cashflow or spinoff dividend yields.

  • And so I don't want gold and silver,

  • it's just that right now I don't want anything else.

  • They're just in their cycle right now and they're going to be outperforming

  • everything else, in my opinion from all of my research,

  • and they're going to be able to buy a whole lot more other stuff.

  • A whole lot more real estate,

  • whole lot more stocks,

  • whole lot more oil wells, farmland,

  • all the true wealth.

  • It's in

  • the buildings, the businesses, the farmland that is out there,

  • and people get this picture in their head

  • that if there is an economic disaster, if there were some sort of collapse

  • that it's going to be like this nuclear wasteland afterwards, it's not.

  • All the buildings still are going to be there, the apartment buildings.

  • It's just that they're all going to be on sale.

  • The problem is

  • when investments are on sale nobody buys,

  • the public comes charging in, and they chase investments after they're going up.

  • Gold and silver get hot

  • whenever they're going up and as soon we see them take a dip,

  • it's like sales turn off like a light switch, most of the time.

  • And I don't want anybody

  • to get slaughtered.

  • I really don't want these bad things to happen, I just think that

  • all the evidence is there.

  • What our leaders have done to the economic system

  • is going to cause these things to happen and it's inevitable,

  • and I'm trying to warn as many people as possible

  • as quickly as possible. My company has a mission,

  • to get as much gold and silver in the hands of the middle class

  • as quickly as possible, because

  • when there's great economic upheaval, there is great political change,

  • and usually goes along with it

  • In the hyperinflation in Weimar Germany in 1923,

  • this hyperinflation ended

  • on November 15th, 1923. On November 8th, one week before

  • the end of the hyperinflation,

  • Hitler's storm troopers

  • pointing machine guns at the front door of the Burgerbraukeller where

  • there was a political meeting, this big beer hall

  • where there about 3000 people listening to politican speeches

  • and on that night he took the stage

  • at gun point

  • and to this literally captive audience gave a speech that changed the world.

  • Nobody knew the name Hitler, nobody knew who he was

  • until he gave this speech

  • to a newly empoverished middle class

  • people that were scared and looking for somebody to lead them,

  • and here this charismatic guy takes the stage, gives them a scapegoat

  • and says "I know the way out of this".

  • The next day, those people in that beer hall

  • followed him to try to do a military... a coup to take over

  • the government

  • and it failed.

  • He was imprisoned,

  • he was tried for high treason,

  • his trial went on for an entire month,

  • and during that month he had the ear of the nation.

  • He was covered in every newspaper

  • all across Germany,

  • and the judges were sympathetic to his beliefs

  • so they let him go on for hours on end with the speeches

  • and that's when he gained power was when the middle class was scared.

  • The middle class defines a country with their vote.

  • The country, as the middle class goes so goes the country,

  • and so

  • what I'm worried about

  • is not the loss of my financial well being,

  • it's the loss of capitalism, it's the loss of

  • our quality of life, it's the loss of our freedom of choice.

  • That's what I'm worried about,

  • and I know that there are certain people that I'm not going to be able to reach.

  • Joe-six-pack, I refer to the guy that comes out

  • of his beer and football induced coma

  • at the very end of the bull market and comes charging in and buys at the peak.

  • I can't do anything for him.

  • I'm hoping that I can do something for all of you.

  • These are wealth cycles. If you have two asset classes that are rising,

  • you have for instance, let's say that this is real estate on the bottom

  • and on the top here we've got precious metals.

  • Precious metals in this last decade here,

  • precious metals outperformed real estate and stocks

  • but everything went up.

  • Stocks went up, bonds went up, real estate went up and so did commodities and precious metals.

  • Is that possible?

  • Can everything go up? Think about it for a minute.

  • If we've only got so much stuff in society and if you've got these

  • 3 or 4 asset classes

  • and everybody rushes toward one, pushing it to a bubble shouldn't it be drawing

  • currency away from the others? Shouldn't the others be going down?

  • Well, they didn't in the last decade.

  • And what's happening here if you've got two things that are going up,

  • if you're invested in this one down here,

  • when you've got to sell, you can't buy as much as this one.

  • If you're invested in this one, when you sell you can buy more of this one.

  • They're both rising in price,

  • this one is falling in value

  • when you sell it you can't buy as much gold, or food or oil.

  • Your house is worth half as much in oil, as oil was 10 dollars

  • a barrel in 1999.

  • So your house measured in oil has crushed, the stock market measured

  • in oil has crushed.

  • If you start looking at your home or all of your investments

  • and you divide them by something else, you measured them in

  • the price of a bushel of wheat,

  • a pound of copper, a ton of iron

  • shares of the Dow or ounces of gold,

  • you're going to discover something.

  • These two things that they're going up, eventually

  • the people that are invested in this one realize that

  • the smart investors realize that it's going into a bubble,they sell

  • and they buy undervalued asset,

  • and then this trend reverses. It can't go on for ever, and if it did,

  • if gold outperformed real estate for ever, there would come a day

  • where one ounce of gold would buy the entire planet and we all know that

  • that can't happen. Right?

  • So,

  • eventually one becomes overvalued and the other one becomes undervalued

  • and the cycle reverses,

  • and then it reverses again,

  • and what is happening is that they're printing currency about this rate

  • and that's the reason you can't see it. People would say:

  • "well, at least my house is worth a 100.000 dollars more than it was

  • in the year 2000", or "it's worth

  • 20 per cent more"

  • Well, in fact if the inflation was 40 per cent it actually went down in value.

  • They'd say that,

  • you know, they looked at the stock market

  • and the Dow right know is just barely above its 2000 high.

  • In the last decade stocks have gone sideways for a decade.

  • We've had inflation during that time, they inflated the currency supply.

  • So,

  • if you start measuring one thing with another thing, so you're measuring stuff

  • against stuff instead of using currency, what you discover

  • is that everything is trapped in this valuation channel,

  • where it goes from overvalued to undervalued to overvalued and undervalued again,

  • and the thing that you're measuring it with is doing

  • the exact opposite mirror wave.

  • The trick is

  • sell the overvalued asset

  • near the peak if you can,

  • find the undervalued asset and I call this wealth cycles.

  • And if you can do that,

  • it's a road to true wealth, you're escaping that valuation channel.

  • Here is a real example, this is the Dow

  • measured in points. And what are points?

  • Points are derived by

  • the dollar value of the underlying stocks, so basically

  • its points are dollars,

  • and one of the reasons that they measure it in points is just

  • like when you go to Las Vegas, they take your currency and they give you chips.

  • Now they're pieces of plastic, so you don't care, you're just having fun.

  • So change it to points,

  • and it's not as bad as if "Wow, you lost so many dollars"

  • "it went down so many points".

  • Anyway, that's the Dow measured in points, but

  • if you go every month during this entire graph from the year 1900

  • to today,

  • and each day you take the points on the Dow and divide it by the price of gold

  • you get

  • how many ounces of gold one share of the Dow is worth,

  • and this is what it looks like measured in gold.

  • It's not going anywhere,

  • it's got a mean of about 4 ounces of gold, which means that the price of gold

  • should be one quarter of the points of the Dow and then things

  • will sort of be in equilibrium.

  • It's fair value when

  • the Dow is only four times the price of gold,

  • but what you see here

  • is that it goes into, it goes from fair value into a bubble 18 ounces of gold,

  • it crashes down to 2 ounces, another bubble of 28 ounces of gold

  • because the bubble was bigger,

  • because they print more currency in the meantime, when it crashed it went down to

  • one ounce of gold. There was a day in 1980 when gold was 850 and

  • the Dow was at 850 points,

  • one ounce of gold bought the Dow. Conversely, if you cash out

  • you could only buy one ounce of gold with the proceeds of your stocks,

  • and then we're going on to the biggest bubble in history.

  • There's no time in history, this point in 1999 - 2000

  • there's no time that gold was as unloved and ignored

  • as in that time period. It was no nation's money and it had gone down

  • for 20 years, it was "the worst investment you can possibly make", nobody wanted it.

  • Take this,

  • This is the price of the Dow measured in gold. Flip it upside down and

  • you've got the price of gold measured in the Dow.

  • Put these two things together,

  • and what you find is that there's a cycle here

  • and if you've written stocks up to 1929

  • and then sold your stocks and bought gold,

  • and then in 1932 gone to gold

  • ... and then, gone back to stocks I mean,

  • and then in 1980 go back into gold,

  • and so on,

  • uh...

  • this is the road to true wealth, I mean, you're making

  • massive gains here.

  • I show two hypothetical families in my book

  • and one goes from 35 bucks to 11.000 bucks over that time period

  • and the other one goes from 35 bucks to 11 million

  • and that is the difference, one family creates a dynasty

  • the other one

  • didn't even break even.

  • This is

  • the Gold-Dow ratio instead of the Dow-Gold ratio, so you're measuring

  • gold's value per ounce measured in what percentage of a share of the Dow

  • that it would buy,

  • and what is showing is that

  • gold is nowhere near a bubble,is very undervalued here and still has to go up,

  • the mean should be 25 per cent or more.

  • and

  • in every bubble in history and in nature, I used to be

  • an electronics engineer in

  • physics,

  • when something is out of whack, when it reverse back to the mean it overshoots.

  • if it's more out of whack, when it reverses to the mean, it overshoots further,

  • so I'm expecting the day

  • where the price of gold would be double or more the points on the Dow.

  • This is the Silver-Dow ratio.

  • Silver has

  • just

  • I mean, the gains here should be immense.

  • This is just gold for the past decade.

  • I just challenge anybody to go and find an index or stock or anything,

  • that looks that good over the last 10 years.

  • This is a perfect chart, it's very bullish,

  • there's nothing here saying gold,

  • in this information that you're looking at, this is what technical analysts look at

  • when they're

  • trying to figure out whether to buy an asset or sell an asset,

  • and this is saying

  • that gold is probably going to continue rising, there's nothing bearish

  • in that signal.

  • This is the SP 500 over the last decade, so representing

  • stocks of the 500 largest companies in America and there is gold.

  • uh...

  • Here we have

  • silver and

  • I recently spoke at the 8th annual banking conference in Socci

  • Russia, this is

  • the big banking conference for all of Europe and Russia.

  • And I was showing them this at the very end, they cut me off

  • it was really interesting.

  • I was running out of time,

  • and you hear this voice come over the loudspeaker

  • and it is their Finance Minister in their parlament,

  • telling me: "mister Maloney, mister Maloney, you've got to stop now mister Maloney"

  • they were trying to cut me off, I was presenting this information

  • they did not want presented at this conference,

  • and then

  • he comes up to me afterwards, he's got a copy of my book that he bought,

  • he wants it signed!

  • Oh, by the way, please visit our table afterwards, we're giving away,

  • these are 100 trillion dollar bills, they are real, they are from Zimbawe, we are giving away

  • 20 quatrillion dollars at my table,

  • so... uh...

  • come and get your 100 trillion!

  • OK, so...

  • what I showed here was that there is an inverted head-and-shoulders

  • and this works just as well upside down, as it does rightside up,

  • you can see the head hanging, it's like this guy hanging from his feet.

  • This is the head and shoulders that I'm tracing out here in blue,

  • and then,

  • you draw

  • across the neckline, and you invert that head in a predicted move and you see this,

  • if you watch my...if you google

  • "10 dollar oil" you'll see a video

  • where he's cutting me off, and I'm sort of flashing through this,

  • I don't get a chance to describe it, but I was predicting that silver would make

  • a big move and guess what?

  • That's what silver did.

  • It doubled

  • from where it was.

  • This is the spot price of silver.

  • This is the price of silver IOUs, the price of gold and silver

  • is determined by people going: "I owe you 5.000 ounces of silver, I owe you

  • 5.000 ounces of silver, I owe you 5.000 ounces of silver and

  • handing this things out,

  • and they're trading this IOUs on the Commodities Exchange

  • and that's what determines the worldwide spot price.

  • Now you can do this naked...it's called the naked shorts. If you don't have the silver

  • to cover it, if you're not sitting on a pile of silver and you are writing IOUs,

  • you can still sell them.

  • And some big banks do this, like J.P.Morgan and they crash the market

  • and then

  • come in and cover their shorts, they buy those IOUs back

  • at a lower price than they sold them for and they get to make the spread.

  • They fleece the public and some funds that invested in silver

  • for hundreds of millions of dollars by doing this,

  • and they do it, they've done it on a regular basis.

  • But Silver fell too low this time and so did gold,

  • and investors that were looking for physical realized that it was just too cheap,

  • and they all had to get some and shortages developed,

  • and all across India, Europe and North America the cupboards

  • were bare.

  • There were 3 months where we can only

  • get one silver product at a time, and we had no gold.

  • We didn't have gold and my dealer shipped for 3 months

  • and I deal with 4 of the world's largest wholesalers and they could not find gold

  • for us.

  • People don't realize how much gold and silver there is on the planet.

  • There are 6.6 billion people on the planet,

  • there are only 2.2 billion ounces of gold. That's a third

  • of an ounce per person. Silver is even more rare. There's only about 14th

  • of an ounce per person.

  • That means that 14 people have to share that same one ounce of silver.

  • And right now,

  • you can get a whole lot

  • for your currency.

  • uh...

  • I'm going to take a little

  • detour here.

  • I did not define the difference between currency and money,

  • and you will hear me say: currency, currency, currency, over and over and over again.

  • Back...before World War One,

  • uh...

  • each note the Treasury issued, each dollar in existence

  • in the United States

  • would say that there have been deposited within the United States Treasury

  • 20 dollars in gold coin, and payable to the bearer upon demand.

  • The money was in the vault,

  • the currency was a note they gave you, it was a claimcheck,

  • only a claimcheck on the money. The same as if

  • you go to the dry cleaners and give them your shirt, and

  • they gave you a claimcheck for your shirt.

  • The value is that shirt at the dry cleaner's, not the piece of paper

  • that says that you own that shirt.

  • So our currency that circulated,

  • was the paper US dollars, and they were claimchecks on money,

  • and people do not understand that money has to be a store of value.

  • Only gold and silver qualify as money.

  • They have all the attributes that you need. They are portable, durable,

  • divisible, fungible... and then money is a store of value over

  • long periods of time.

  • One of the things that I always start with

  • is how currency is created, because if you know how the world financial system works

  • you know the game that you're playing.

  • And if you don't know the game and the rules that we're playing by

  • you're going to get slaughtered,

  • you're going to get slaughtered.

  • So this,

  • just by knowing this, increases your odds

  • just a hundred fold of winning.

  • So...uh...

  • "When you or I write a check there must be sufficient funds

  • in our account to cover the check,

  • but when the Federal Reserve writes a check

  • there is no bank deposit on which that check is drawn.

  • When the Federal Reserve

  • writes a check

  • it is creating money".

  • And that is

  • "Putting it Simply" from the Boston Federal Reserve's website.

  • Basically,

  • the way this works is: the trader of the United States is the US Treasury.

  • uh... but every country has the equivalent to our Treasury

  • so the Treasuries around the world

  • uh... create a bond and, what is a bond? A bond is just an IOU:

  • Loan me a trillion bucks and I promise that over a 30-year period,

  • I'm going to pay you back 2 trillion

  • That's basically a bond, an IOU.

  • And there's something in the middle here called open market operations,

  • that I'm gonna just show you real quickly,

  • but the open market operations is just a shell game

  • that obscures what is truly going on.

  • So banks show up at the Treasury Auctions, primary dealers

  • they're called,

  • and then the Federal Reserve comes along and through open market operations,

  • they write a check to the bank and they buy that bond from the bank,

  • so the Federal Reserve ends up with

  • the bond

  • but then

  • the next month those banks show at the Treasury Auctions again. Now the Treasury

  • has the dollars

  • and the Federal Reserve has the bond, and this process repeats itself over and over

  • and over again.

  • And there is a build up of dollars at the Treasury

  • and bonds at the Federal Reserve,

  • So,

  • we borrow currency into existence with an IOU, that bond,

  • and the Federal Reserve opens up the bigger checkbook that

  • doesn't have a single penny in it,

  • and writes a bad counterfeit check

  • and hands that to the Treasury,

  • dollars spring into existence,

  • then the Treasury deposits that in the various branches of the government

  • and the government does some deficit spending,

  • on social programs, public works and war,

  • and then they pay

  • those

  • government workers, the contractors and the soldiers.

  • And all of those people deposit in their private banks,

  • "Banks create money by 'monetizing' the private debts of businesses

  • and individuals".

  • Federal Reserve Bank of New York.

  • So, now the miracle of fractional reserve lending comes in to play.

  • Fractional reserve lending is just what it says.

  • They reserve a fraction of what they've got,

  • if you go to the bank and you deposit 100 dollars,

  • the bank is allowed to keep 10 dollars in your checking acount in case

  • you want some of that 100 dollars,

  • and they get to steal 90 dollars of it without telling you.

  • Your checking account never has the balance that it says it's got in there.

  • They have borrowed most of that currency out of there,

  • and they're going to loan it to other people.

  • When those people sign their loan, currency actually gets created because

  • you had a 100 dollars on deposit,

  • and they have 90 so now there's 190.

  • Then,

  • they go and buy something, that's the reason they're taking out a loan.

  • And they buy a house or a car,

  • or someyhing like that,

  • and when they buy that thing,

  • the seller then deposits it in his bank account so that 90 dollars

  • get deposited and then they get to go and steal 90 per cent of that

  • meaning 81 dollars,

  • so now there's 271 dollars on deposit. Can everybody see

  • how the currency supplies is getting magnified by the banks here?

  • And that process happens over and over and over again,

  • and under a 10 per cent reserve ratio,

  • every dollar deposited can create another 10.

  • So if you deposit a trillion in base money, you can create 10 trillion,

  • uh... And

  • that is basically it, there is nothing else. Our entire currency supply

  • is either IOUs

  • or receipts for IOUs.

  • That's all that it is.

  • It's all an imaginary agreement and it is all giving value

  • because you experienced yesterday that the dollar purchased you something,

  • so you expect that is going to tomorrow.

  • So you have this agreement that is,

  • basically,

  • you know, our entire currency system

  • is imaginary.

  • It doesn't really exist, it's just that we're all dreaming the same dream.

  • If anybody chooses to wake up,

  • it's over with.

  • So it's really just a couple of bucks that is whipped up

  • in this little voodoo hocus pocus scheme here, where the Treasury

  • and the Federal Reserve write IOUs for each other,

  • a check is an IOU, a bond is an IOU,

  • and they swap IOUs: dollars spring into existence.

  • A dollar is a receipt or a claimcheck:

  • an IOU!

  • Then the rest of the currency supply

  • is a bunch of numbers that the bank type in their computers.

  • They don't exist.

  • In my book,

  • I call things

  • money until I get to the point where I define what money is.

  • And the difference between money and currency and from that point forward,

  • I only call gold and silver money,

  • and I call everything else currency,

  • but in the original manuscript,

  • when I start talking about the massive currency creation that is going on,

  • and how

  • banks are just debasing their currency supply all over the world

  • and how this Mandrake mechanism works,

  • I start referring to it as the numbers supply.

  • the M3 number supply,

  • uh... the base number supply because

  • they're just numbers that somebody made up. I can write numbers on a post-it

  • and hand them out like this.

  • They make them up, they type them in a computer, it is nothing but a supply

  • of numbers, How many numbers are there?

  • It's infinite!

  • So it's nothing but a number supply.

  • But it becomes real

  • when you work for some of that

  • currency supply, that number supply,

  • and at that point,

  • it now represents your blood, sweat, labor, ideas and talent.

  • You are what gives the currency supply value.

  • It would have no value without you.

  • And the way that that value is enforced this is the really cruel joke here.

  • Let's say you save a part of that currency supply, so you can pay

  • tax to the tax collector in the United States, that is called the IRS,

  • so that they can turn that over to the Treasury so the Treasury can pay

  • the principal plus the interest

  • on that bond

  • which was paid for with a check from nothing.

  • So, you can see that, right?

  • Everybody sees how this works?

  • Now, there's another joke.

  • There was interest due on that bond.

  • Let me ask you, if you borrow a dollar into existence and it's the only

  • dollar that exists on the entire planet but you promise to pay back

  • 2 dollars,

  • Where do you get the second dollar?

  • Has anybody got the answer on that one?

  • You borrow it into existence.

  • When people say they're just printing money,

  • they're wrong.

  • First of all, they're printing currency, but they're borrowing currency

  • into existence.

  • The Fed doesn't just print money,

  • what they do is they indebt us in the future.

  • Everyone of these loans that we took out of the bank that created

  • the vast majority of our currency supply, 95 per cent of our currency supply,

  • roughly,

  • has been created by the banks

  • uh... i think actually is 93 percent now

  • and the Federal Reserve created about 7 percent

  • but uh...

  • before the financial crisis

  • the actual physical paper dollars are what the Federal Reserve and the Treasury

  • creates it's known as base, they call it base money, I call it base currency

  • uh... and then we

  • create the rest of the currency supply

  • by going to the bank

  • and borrowing for home or something like that or buying dinner

  • and sign our credit card.

  • When you sign a credit card receipt you've expanded the currency supply of

  • the planet.

  • The problem with this system is

  • that every single month there is a payment due

  • on that bond

  • for the principle plus the interest

  • and there's payments due on your home mortgages and on your cars and on your

  • credit cards every single month

  • you've got to make a payment

  • on that currency that you borrowed into existence and on the balance sheet

  • that payment extinguishes the currency that you borrowed into existence, so

  • the currency supply starts to collapse.

  • This system

  • requires

  • that we go deeper into debt every month than were the previous month, we have to

  • always borrow more currency into existence

  • than we are extinguishing every single month

  • or the whole thing starts to collapse,

  • and

  • I'll show you what that collapse looks like in a minute

  • but first I'm going to show you the base money, this is the

  • these are the physical paper dollars uh... it's basically cash in circulation

  • plus the deposits that the big commercial banks have at the Federal Reserve

  • uh... all of the banks have a checking account at the Federal Reserve

  • and their deposits are redeemable in paper dollars so it's a measurement

  • of how many paper dollars exist.

  • It took 200 years to go from zero dollars in existence to

  • 825 billion

  • dollars,

  • then came along, came the financial crisis of 2008

  • and it has only taken two and a half years to triple that.

  • We are now at about uh...

  • 2.4 trillion dollars of base money

  • from 825

  • just two-and-a-half years ago,

  • so this looks like the currency supply of the planet is just exploding

  • when you look at this and

  • most economists and newsletter writers are talking about inflation, inflation

  • inflation is right around the corner, this is going to happen.

  • I believe that we're going to have, I wrote in my book

  • we would have the threats of deflation

  • followed by big inflation

  • which we have already had, that's what this is,

  • followed by a real monetary deflation which is the collapse of the currency

  • supply: inflation, deflation

  • are properly referred to as an expansion or contraction of the currency supply

  • prices follow but there's a delay,

  • uh... and so uh... consumer price inflation

  • keeps your eye off the ball.

  • If you can look at what's happening in the currency supply

  • you're seeing into the future.

  • And I believe that there's going to be deflation first

  • and then all of the world central banks

  • will start printing like crazy to get us out of that deflation

  • and Ben Bernanke will be leading the charge,

  • and so

  • back in

  • March of 2006

  • uh... the Federal Reserve hid

  • the broadest measure of the currency supply,

  • the currency supply that is M1, M2 and M3

  • uh... M1 is uh...

  • cash in circulation

  • uh...

  • plus checking,

  • checking accounts

  • uh... M3

  • was the broadest measure that incorporated the most different types of

  • of bank deposits and so on,

  • not at all the entire currency supply, the entire currency supply is actually

  • total credit

  • so about 53 trillion today and it's uh...

  • stalled and started to shrink.

  • But M3, they used to publish it every month

  • it was the uh... measurement of the currency supply that most newsletter

  • writers and uh... on the news that they would report

  • and the Fed hid it from us in March of 2006 claiming

  • that it was too expensive to compile all this information

  • and that it was useless anyway that you couldn't glean anything from M3

  • that you couldn't get from M2.

  • Now, here's the real kicker.

  • There is a...

  • uh... M3 is... you take a whole bunch of different monetary aggregates

  • that the Fed publishes

  • and you add them together and you get M3.

  • The only one that they don't publish I believe it's uh...

  • uh... euro-dollars

  • I can't remember, I believe it's euro-dollars,

  • it was 0.6 percent of M3

  • so you can still reconstruct M3 off of all the other monetary

  • aggregates plus minus 0.6 percent accuracy

  • and there are several companies that do this, shadow stats, shadow government

  • statistics or shadowstats.com,

  • is one of them, it's by John Williams. He's one of the people that does and all the

  • people that do their data agrees,

  • so I'm like 99.4

  • because is there a 0.6 percent plus minus,

  • I'm 99.4 percent

  • sure

  • that this information is correct,

  • and what you see here is that there's a little collapse going on

  • of the

  • currency supply up here,

  • and it's not huge we've gone from you know this would be 15 so about

  • 14.7 trillion dollars down to just under 14 trillion

  • dollars

  • in M3,

  • but base currency

  • is a component of the M3 that red part on the bottom is part of it,

  • and they've been pushing that up like crazy

  • Why? Because there's a credit collapse going on right now.

  • When you deduct the base money

  • from the credit based portion

  • of this part of M3,

  • so the portion of what we borrow into existence

  • what happens is that it shows this enormous collapse going on. This is M3 minus

  • base money

  • and there's a 1.7

  • trillion-dollar collapse of the currency supply, it's about 13 percent,

  • Now, there's no time in history that this has happened, this goes back to nineteen

  • sixty

  • except the beginning of the Great Depression,

  • that was the last time the currency supply contracted was,

  • the beginning of the Great Depression.

  • Usually there's a time lag between stuff like this happening

  • and the public feeling it

  • so the Federal Reserve

  • is borrowing currency into existence like crazy

  • and they're now doing direct purchases of bonds from... They don't even go through

  • that open market operations shell game,

  • that keeps you from seeing what's going on,

  • they're buying bonds directly from the Treasury, this is Quantitative Easing

  • they're calling it

  • and that means there's an emergency going on.

  • They're telling us that everything's fine,

  • that, you know

  • all of their emergency efforts cured everything, and the economy is OK

  • what the hell is this right here?

  • why in just the past couple of months this is part of the quantitative easing

  • why is the currency expanding?

  • from uh...

  • 2 trillion

  • to 2.4?

  • If everything was fine,

  • the Federal Reserve would not be doing that!

  • They're scared shitless, so it's happening

  • they're doing anything they can to prevent this deflationary collapse

  • that I predicted in my book

  • uh... you know

  • I first started buying gold when it was 325 bucks

  • an ounce, actually

  • it was 315

  • uh...

  • 326 for golden eagles

  • uh... that was October 2002,

  • by April 2003 I had discovered silver

  • and I was all in.

  • I can see, I was reading in 2001 and 2002

  • I was researching what was going on in the global economy every single day,

  • I was addicted to it.

  • And by October of 2002 I started making my commitment

  • and by April of 2003 I was all in. In 2004

  • I started speaking on it.

  • In 2005 I incorporated goldsilver.com and became a precious

  • metals dealer and start writing my book and that was published in 2008,

  • so I didn't just bet my portfolio on it, I bet my entire life on it.

  • I can see that there wasn't anything

  • in history as far as finances go that was as much of this sure bet, a sure

  • thing

  • as gold and silver accounting for the expansion of the fiat currency supply.

  • Gold and silver are denominated

  • in this fiat currency, these digital numbers that they type into the computers

  • and paper notes so they just run off the printing press and it's all borrowed

  • into existence.

  • Periodically throughout history for the past 2400 years they have

  • done this.

  • This is...

  • the lower line is the value of the gold held at the Treasury so

  • the uh...

  • the number of ounces of gold times the price.

  • The upper line

  • is the currency in circulation, base money.

  • And that this is from the year 1918 and here we have

  • the stock market crash in 29 and these are the bank runs of the

  • 30 where people were asking for gold.

  • But they printed too many receipts for gold. If you can go back to before World

  • War One these two lines would converge.

  • They diverge there and we've created this lie where we were

  • creating all these receipts for gold, these claimchecks on gold that didn't

  • exist.

  • When people wanted it,

  • Roosevelt had to make private ownership of gold illegal because there was a run

  • on gold,

  • and in the United States americans could not own gold.

  • And then a year later they unpegged the dollar from gold

  • and the dollar's value

  • plummeted,

  • so that it took, it went from taking 20 dollars to purchase one

  • ounce of gold

  • uh...it then required 35 dollars to purchase, so they called it a change in the price

  • of gold, they can't change the price of gold when you're on a worldwide gold standard,

  • and gold has, you know, it's got a certain intrinsic value.

  • The dollar fell.

  • And so...

  • what's amazing

  • is accounted for the currency supply.

  • This is the free markets in the will of the public forcing the government hands

  • forcing them to change the rules. Here's the same chart again

  • uh... but now I've taken the dates out further, so you can see

  • uh... World War Two, the expansion of the currency supply then in 59

  • uh... Charles de Gaulle, the president of France

  • uh... says we want our gold, other countries started jumping on board and gold

  • started leaving the vaults.

  • Then I'm taking it out further because that one goes out to 1971

  • In 1971 we go off of gold but there's another line here,

  • a blue line.

  • how many here would say the credit cards are replacing cash in circulation?

  • Credit cards are replacing cash in circulation.

  • I believe they are and when you sign a credit card receipt and you paid

  • that merchant, the merchant's checking account does not know the difference between

  • credit card currency that you created

  • and cash that the Federal Reserve created.

  • It can't tell the difference and that currency that you created circulates

  • until somebody saves it up and pays down credit card debt.

  • And so uh...

  • I add that

  • to the currency supply.

  • Once Nixon took us off of gold, and gold became a separately traded

  • commodity/currency

  • uh... the will of the public and the free markets drove the price of gold up until

  • once again

  • the value of gold held at the Treasury

  • exceeded the currency supply and there was a year where we could have gone back

  • on the gold standard

  • and

  • it also covered outstanding revolving credit for an entire month.

  • So all it was doing is the same thing as it did in 1934

  • and in Weimar Germany and hundreds and hundreds of times

  • since the year 407 BC with the first grade inflation in Athens.

  • This is the same chart again

  • but it shows Ben Bernanke panicking over here and this is the increase of

  • base money.

  • that's that first chart that I showed you, not first chart,

  • but one where there was a red

  • area on the bottom,

  • so that's the increase in base money.

  • Well, there's the outstanding revolving credit piled on top of it,

  • uh... here's gold

  • and what this means

  • is that gold has to rise from here

  • to way up there to do the same accounting that it has already done

  • twice in the United States and hundreds and hundreds of times in

  • history.

  • This is a natural thing. It does this automatically. The will of the public and

  • the free market force this to happen. I'd believe

  • that is there's absolutely no chance in hell that this won't happen,

  • right now it takes about 15000 to 20000 dollar a ounce of gold

  • So, here is another way of looking at the same thing, and it's a great way of looking

  • whether gold is undervalued or overvalued.

  • If you take just the paper dollars, that base money

  • and you say there's a certain amount of paper dollars, how much gold do we have

  • as a percentage of those paper dollars to cover them?

  • And so gold is expensive

  • when we've got too much gold, more than uh... paper dollars,

  • and it's cheap

  • when we don't have enough, and it's very cheap

  • uh... when uh...

  • when it's way down here. Well,

  • this is where we are as far as just the paper dollars. Here's when you add outstanding

  • revolving credit.

  • This is what

  • a debt collapse or currency collapse looks like.

  • We borrow

  • uh... two units of currency into existence here

  • uh... and

  • uh... to do that

  • we promise to pay back, we're borrowing this currency into existence with the bond

  • the bond is over here, say you've got

  • uh... these two units of debt plus interest,

  • so you owe back

  • more than you're borrowing into existence but then each month

  • you're going to pay off

  • a small portion of that debt,

  • and so the next month we go on borrow more into existence

  • and we pay off, we keep on hang off that debt every month

  • and we always have to borrow more into existence than we're paying off, but notice

  • something.

  • You notice how the debt is now growing faster? It was only fifty percent higher

  • but now it's a double, it's a hundred percent.

  • It grows faster

  • than the currency supply.

  • There comes a day where this is unsustainable.

  • If the public gets scared and they stopped borrowing currency into

  • existence and they save up and pay down debt,

  • the whole thing goes into a deflationary collapse.

  • This is what I was predicting and this is what is happening right now.

  • Thank you.

  • uh... This is how much debt we owe compared to the size of our economy.

  • If you owe fifty cents and your economy is a dollar

  • you owe fifty percent of the size of the economy.

  • If you owe five hundred billion and your economy is one trillion you owe fifty

  • percent

  • the size of your economy.

  • It's the same either way so uh... this what this chart shows,

  • is how much debt the United States has,

  • the National Debt,

  • compared to the size of its economy,

  • and it goes back to 1792, which was when the original coinage act of

  • the United States was created,

  • and there was debt leftover

  • from the revolutionary war and, so that's this debt here at the very

  • beginning of the chart,

  • right there

  • and what you see is that it never exceeded the fifty percent level,

  • until World War Two,

  • this includes the Civil War,

  • World War One and the establishment of the Federal Reserve,

  • uh... the Great Depression.

  • You see that during the twenties we were growing the economy faster than the debt,

  • and so the debt compared to the size of the economy is a smaller and smaller

  • uh... portion

  • because we were having the roaring twenties, the economy was growing

  • and the debt wasn't growing as fast,

  • so on this chart the debt is shrinking through the twenties but then suddenly

  • in 1930 it goes up. Why?

  • It wasn't because we were borrowing a whole bunch of currency and going into

  • debt,

  • it's because the economy shrank

  • and our debt stayed the same,

  • so that was the last great deflation that got us into uh... a deeper debt

  • because we couldn't afford to pay the debt that we owed,

  • uh... the economy shrank

  • faster

  • then we do the deficit spending for World War Two and we can exceed this

  • level of fifty percent because now we have this fiat currency system,

  • where we could just borrow currency into existence

  • but when you do that

  • a bond, bonds range from like a month to thirty years out into the future that

  • you're going to pay them back,

  • that means we're borrowing prosperity out of the future. You remember how I said

  • you save up some of the currency supply and you can pay tax to pay the

  • principle plus interest.

  • So the prosperity that we're enjoying right now, this moment

  • is owed back

  • in the future.

  • We have to pay a principle plus interest for the privilege now of having currency

  • that we can use. Somebody is skimming off the top basically, this is the way the

  • banking system sort of skims off the top, is through inflation

  • there's people that get rich off of this without having

  • to do any work and

  • putting their value into the system, they get to skim

  • purchasing power out of the system through inflation.

  • But every dollar that we borrow into existence puts us in debt in the future,

  • so we are every year borrowing prosperity out of the future and we

  • spend it today.

  • The average roll over for all the bonds is about four-and-a-half years,

  • so the prosperity that we're enjoying right now

  • we owe back

  • uh... we've got to pay for four-and-a-half years from now.

  • And right now the taxes that you're paying

  • are paying for prosperity during the Bush administration,

  • We have already spent it, it's gone.

  • So then we started growing the economy faster than we were doing deficits

  • spending,

  • so our debt compared to the size of the economy goes down during the Korean War,

  • in Vietnam,

  • and then we have the end of the gold standard and then Reagan says:

  • "deficits don't matter"

  • we can just go ahead and spend as much as we want.

  • uh... The debt increases. Just before this era of the financial crisis,

  • there's a little

  • slope where it starts to go down, that's the Clinton era.

  • They said that we had surpluses, it was

  • uh... bullshit.

  • If you look.. I don't look at the government's accounting

  • of whether or not they say we have a surplus or deficit, what I look at

  • is the National Debt.

  • Did it go up? If it went up it meant we spent more than we had. If it went down

  • it means we had a surplus, we had excess income above what we're spending

  • and during the Clinton years there was never a year

  • where the actual national debt went down.

  • I don't know of the people in the United States, from the United States here,

  • remember when uh... Gore and Bush were running against each other

  • they're both telling us how they were going to spend all this currency that

  • was flowing in.

  • You know, they were each

  • trying to compete

  • on all the free crap they're going to give us in the future,

  • and uh...

  • you know, that's how

  • uh... actually that isn't how Bush won...

  • but that's another story. Anyway,

  • These statistics are from the congressional budget office. This is what

  • our government is going to tell us, is going to happen in the future,

  • and it's not pretty.

  • It's completely unsustainable, it is impossible,

  • it cannot happen, you can't have

  • debts that is ten times the size of your economy.

  • It's not possible. Everything comes to a screeching halt first,

  • and so something has to change.

  • Right now,

  • uh... I don't know if it got passed or not, but the government

  • I dont't keep up with the news, I consider it all short term noise,

  • it distracts you from what is really going on, so I'm not sure

  • did uh... they settle on some sort of budget and is the government gonna keep

  • on running?

  • Does anybody know this?

  • Yes, they did?

  • Did the republicans, who were trying to get this thing passed whose gonna pay down the

  • debt that they win?

  • There's some sort of compromise.

  • You see, it's deflationary.

  • It would cost a financial collapse to try and pay down this debt, you have to go into..

  • In order

  • for us to maintain the levels we've got and to maintain the prosperity

  • Obama has to be a...

  • we have to be twice as far in debt when he leaves office than when he came in.

  • Or the whole thing is starting to collapse.

  • uh... so,

  • more proof that we are going into a deflation first.

  • This is what a dead cat bounce looks like.

  • This is the stock market. The stock rises

  • uh... it peaks, takes a little dip,

  • a bunch of investors come in, thinking that they're scooping up deals and they

  • start buying and it rises again and then the crash continues because

  • when they started buying it hadn't reached fair value yet. It had just rollover

  • taken a little bounce in the market that's still uh...

  • looking for a fair value so there's the dead cat and it bounces.

  • There's the Nasdaq,

  • so that's uh...

  • uh... what

  • a dead cat bounce looks like.

  • The initial crash on the Nasdaq was 38 percent. The total crash was

  • 78 percent.

  • This is the Dow

  • in the 1929 crash and the dead cat bounce,

  • uh... the initial portion of the crash was 48 percent,

  • and the total crash was 90 percent,

  • so in the first examples was 38 percent, 78 percent.

  • 48 percent, 90 percent, so if the initial crash is larger

  • the rest of the crash is going to be larger.

  • We are going through a giant version of the 1929 crash or the

  • Nasdaq crash. We just had the biggest crash in history: the Dow

  • which is supposed to be the biggest, safest, securest. The 30 largest

  • companies in the United States

  • uh... just crashed

  • by 56 percent and we are in a dead cat bounce, meaning

  • that ultimately

  • the total crash should be greater than 90 percent from its high.

  • This is the best way of measuring

  • the value of a stock, and I'm sorry if I'm going fast and this isn't sinking in, I've got

  • lot of stuff here and I've got to cover it,

  • only got twenty minutes left,

  • I gotta show you that the world's stock markets and real estate bubbles

  • have to continue crashing because

  • all it is

  • is that market trying to seek fair value,

  • it's trying to seek equilibrium,

  • this is what the markets do,

  • it is their job.

  • The SP 500, these are PE ratios, how many here knows

  • know what a PE ratio is?

  • OK, how many do not?

  • It's OK, raise your hand and say that you don't. OK,

  • it's the price of a share of stock

  • divided by the earnings of the company.

  • So it's basically how much is this stock costing me, compared to how

  • much is the company making.

  • And one of the best ways, the

  • entire industry stock market, the industry, the financial industry

  • agrees that this is probably the best way

  • of measuring the true value of the stock, whether it's overpriced or underpriced

  • when you're buying it.

  • The S&P only goes back to the year 1950 but professor

  • Robert Shiller

  • of Yale University

  • uh... reconstructed the S&P and took the 500 largest companies in America

  • and took it

  • all the way back to the year 1880.

  • So you have

  • a hundred and

  • twenty years or two hundred and twenty one years

  • of data here.

  • Fair value

  • is when PE ratios are about 12, meaning you're paying

  • twelve times the earnings of the stock,

  • so if you buy a stock its going to... if nothing else changes and the

  • company continues making the same amount every year, it's gonna take you 12 years

  • to make your

  • uh... money back and be in profit.

  • Undervalued is anything under 10, overvalued is 15 to 18,

  • anything over 18 is a bubble,

  • and so here's the data going back to the year 1880

  • and what you see here

  • is that there is no time in history that we go from fair value to overvalued, once it

  • hits overvalued,

  • it does not stop, it bounces on the way down,

  • and visits undervalued, overvalued, undervalued, overvalued, undervalued,

  • overvalued, undervalued.

  • The greatest bubble in history,

  • the year 2000

  • PE is at almost 45,

  • absolutely insane investing in a stock

  • and having to wait 45 years to be in profit.

  • This was nuts and people were chasing stocks like crazy. This is the tech

  • boom and so on.

  • Well, it crashed down the fair value during the market crash of 2008

  • and it bounced back into a bubble,

  • where PE is about 23 or 24 right now.

  • The stock markets seek equilibrium. They seek fair value over the years. This is

  • their job, that is what they do.

  • There's a famous trader named Bernard Baruch

  • who said in the short term the stock market is a voting machine,

  • is like a stock machine, I mean, it's a slot machine or voting machine

  • it does

  • what the public thinks it should do.

  • The public chases after something, it goes into a bubble,

  • but in the long term it's a weighing machine,

  • it balances,

  • its scales balancing each other.

  • That's what the stock market is always trying to do: seek fair value.

  • It's only there for brief moments in history,

  • but the point is that every time we are in a bubble,

  • it visits severely undervalued and the greater the bubble, usually the greater

  • you overshoot

  • fair value.

  • uh... This is the second best way of measuring a stock's value:

  • the dividend yield. If you buy a stock for a buck

  • and that company pays you six cents every year into your brokerage account

  • you're getting a six-percent yield.

  • I have inverted this chart because

  • uh... the higher the yield the more undervalued the stock is, the lower the yield

  • more overvalued it is.

  • So I inverted it, so the bubbles are up

  • and undervalued is down,

  • uh... so fair value is

  • uh... four and a half to almost six

  • uh...

  • so there you see the same pattern as before,

  • but here's what's alarming.

  • It's that there is no time in the first 118 years of data

  • that we have been in a bubble this large.

  • This is absolute insanity and it can not last.

  • There are two ways that the market can seek equilibrium. One:

  • the market goes sideways for a decade while we have raging inflation

  • that will balance this out and then bring dividend yields and PEs back into line.

  • Two: it crashes,

  • the markets go down,

  • the currency supply is collapsing,

  • therefore this has to be a deflationary collapse, this can't be an

  • inflation in what they call an invisible crash.

  • uh... these are the world stock markets,

  • so there you have the US stock market, the England stock market, Germany

  • stock market,

  • this is Singapore and Japan.

  • Notice that

  • before the year 2000

  • Singapore and Japan used to trade in different direction than the United States.

  • The United States could be going up while their stock market was going down.

  • But before the year 2000

  • all of the markets of all the major

  • economies

  • trade in the same direction at the same time.

  • Here is Brazil

  • and here is Russia

  • and in about the year 2003

  • they started trading in the same direction and since the market crash of

  • 2008 all markets, all world markets

  • go the same direction at the same time.

  • The S&P, the Dow they're way, way overvalued in a bubble,

  • we're having a deflationary collapse of the currency supply,

  • the markets have to go down,

  • when they do, the rest of the world's, where the United States goes so

  • goes the rest of the world.

  • These markets all

  • have to collapse.

  • Now, we have some real estate bubbles going on. The real estate bubble in the United States

  • uh... took

  • it basically burst in the year 2007-2008

  • and it's been falling

  • but I measure something called the mortgage rent ratio,

  • uh... fair value on a home is if you're paying about a uh...

  • uh... a dollar to a dollar five

  • for the mortgage, the monthly mortgage on a thirty-year mortgage

  • plus your carry cost like insurance and stuff,

  • for each dollar that you can rent the house for, if you were going to rent it.

  • We went into a bubble of a buck twenty five in 1989-1990,

  • fair value is about a buck five,

  • and then we had the recession and it went to ninety cents, on national average

  • in the year 1995

  • uh... real estate cash flow by ten percent, a single-family medium price home

  • in the United States

  • except you couldn't get a loan back then, credit was tight,

  • the economy was lousy,

  • then we went into this real estate bubble that was the greatest bubble in

  • world history,

  • where people are paying a buck eighty-five, a buck ninety, almost two bucks

  • for each dollar they could rent the house for.

  • uh... And

  • then that bubble popped,

  • and it came back down not to fair value but to a buck twenty five and bounced,

  • so it came back down to the height

  • of the previous bubble,

  • it bounced,

  • and we are right now at a buck twenty five, so valuations on real estate are

  • still

  • as high as they were in the bubble in 1989.

  • they have to come down

  • or rents have to go up.

  • This is all deflationary, which means that rents are not going to go up,

  • real estate is gonna come down.

  • All of this travels together, like I said.

  • Now, when the world stock markets crash,

  • does anybody know about the bubbles that are going on, the real estate bubbles

  • that are going on in the rest of the world?

  • How many here are watching the videos that we produce each week on Youtube

  • and so on?

  • OK, do you enjoy those videos?

  • Yes, good. Are they informative? Yes.

  • Do we try to sell you anything? No.

  • All we do is we educate.

  • So here is a video that we made in Las Vegas uh... this is our driver

  • very well-informed man, very educated.

  • uh... he was very informed on world finance, the stock markets, real estate,

  • he really knew what was going on

  • in Las Vegas and behind him there is a uh... big casino project I can't

  • remember the name of this one

  • uh... there's the...

  • Venetian in the background and there's a building going up in front of that.

  • this is the

  • the casino project that they were developing

  • uh... and that's another shot of it.

  • See that tall building behind it?

  • That's a hotel called the Fountainbleu.

  • If you go to the other side of the Fountainbleu

  • what you notice is that there's a bunch of windows that are boarded over, this

  • thing is skinned on the outside, it's not finished on the inside,

  • they've got a billion and a half into it, now looking for another three billion

  • dollars to finish this thing,

  • and this stuff is all over Las Vegas, it's not just in Las Vegas, it's all over the world.

  • This is in Moscow,

  • this is a development called Moscow's City Center,

  • there's the

  • project, you can't read it unless you read Russian,

  • uh... but all of these beautiful buildings here, there's nine buildings

  • one of them was completely in the framing stage, another one was uh... half

  • way completed

  • of the others there are two that are occupied and one that is one-third

  • occupied,

  • the rest are just skinned over,

  • and they're not completed on the inside.

  • The project is at a standstill,

  • uh... and

  • then in front of this project there's this giant hole in the ground and this

  • is where the centerpiece was supposed to be.

  • This was Russia's bragging rights,

  • this was going to be the tallest building in Europe,

  • Federation Tower, and it's a hole in the ground,

  • and it'll remain a hole in the ground,

  • that will never be finished.

  • Does anybody know what the Singapore flyer is? I've only got ten minutes and I'm

  • not gonna be able to finish this thing,

  • It's a big ferris wheel in Singapore, it's one of the tallest in the world if not

  • the tallest, I think it is the tallest,

  • and here I am looking at their real estate bubble

  • and if you noticed

  • there's cranes on top of all these buildings here,

  • uh... there's cranes everywhere. Look at all those buildings being built uh...

  • All bubbles burst, we are in a worldwide credit bubble,

  • when these markets rollover

  • the giant real estate bubbles

  • that were going up and then took a little breath when our

  • markets crashed

  • their bubbles kept on going after pausing, when our real estate bubble

  • uh... popped and started reverting back to fair value.

  • The markets are just trying to seek fair value, that's all they're doing.

  • But people and the world central banks go: "Oh, my God!"

  • every time there's a little

  • crash

  • "we gotta do something about it!"

  • It doesn't feel good to be in a recession so they try and pump everything up

  • but they don't realize that they're just making everything worse later.

  • Everything they do is gonna come back to haunt them as more

  • uh... inflation eventually

  • uh... or

  • this deflation I'm talking about is the expansion of credit

  • contracting.

  • Here's another thing that is going on

  • that is going to mean that this decade is different than anything else that you

  • have known.

  • uh... People don't realize that every 30 to 40 years

  • the world has an entirely new monetary system.

  • It changes every 30 to 40 years.

  • In 1873 Germany started the Classical Gold Standard

  • uh... and by 1900

  • pretty much every developed country on the planet was on the standard

  • where every note in circulation that was put out by their treasury was backed by

  • an equivalent amount of gold,

  • so it was 100 percent backing,

  • uh... then World War One happened,

  • all the combatants in Europe went off of the Classical Gold Standard

  • and started printing,

  • and between the wars

  • we had something called the gold exchange standard where it was a mixture

  • of debt

  • and uh... gold backing the currency

  • uh... then that was a very poorly constructed man-made system,

  • and anything man-made cannot last, so

  • basically they were uh...

  • the Federal Reserve, under the Federal Reserve Act there was a 40 percent

  • reserve ratio

  • and they were allowed to put

  • uh... a fifty dollar bill into circulation for each twenty dollars

  • worth of gold that they had backing the fifty dollars,

  • so they're putting claimchecks on gold in excess of the amount of gold that

  • they actually had.

  • Ever since the Federal Reserve was born we have been living under a lie.

  • And if people say that we've got free markets in the United States, they're

  • wrong. You cannot have free markets without free market money.

  • Your currency is fifty percent of every transaction,

  • all of the transactions are the free market.

  • If there's a small group of men deciding what currency is

  • and how much the cost of currency is going to be, the interest rates, that

  • isn't a free market.

  • We do not have free markets, we haven't had since the year 1913,

  • then we have uh... something called the Bretton Woods system, the Classical Gold

  • Standard broke down,

  • the Bretton Woods system was from 1944

  • where uh... all of the world's

  • uh... currencies would be backed by the US dollar at 35 dollars an

  • ounce and foreign central banks only

  • could exchange those dollars for gold at the New York Fed,

  • for 35 dollars per ounce,

  • so all the world's currencies were pegged to gold but through

  • the US dollar.

  • uh... All of these countries started asking for dollars and gold flowed

  • out of the vaults and Nixon had to take us off the gold standard in 1971,

  • so you've got 30 to 40 years, 30 years, 28 years, 39 years

  • plus what's next?

  • In this decade there's going to be an emergency meeting of the G7, of the

  • G20 countries,

  • and there going to be trying to hash out a new world monetary system and they're

  • already working on it,

  • they're trying to figure out

  • what they're going to do when the dollar collapses.

  • uh...

  • Here's the differences between

  • the seventies bull market and today and this is the reason I say that you really

  • can't compare them, their isn't any comparison,

  • and remember

  • in eight years

  • gold went up 24 times its price silver went up 36, these are enormous

  • winnings in such a short period of time.

  • uh... In the seventies it was basically North America and Western Europe,

  • that drove the price of the precious metals,

  • the exchanges were the London Metals Exchange,

  • and the Commodities Exchanges in the United States,

  • that's where the price of gold and silver was set.

  • All of the USSR

  • they could not participate, there were no exchanges there, there's no market

  • for gold and silver

  • and even if you could buy some, it was on the black market, so your investment did

  • not affect the worldwide price. Those people were excluded in participating

  • in this bull market and driving the price of gold forward.

  • China under Mao,

  • same thing,

  • first of all everybody was making a subsistence living, very few people even

  • had electricity

  • let alone being able to go and invest in gold.

  • India, Mexico, South America, these countries were all very poor at that time,

  • the world's richest man is Carlos Slim,

  • and uh... he lives in Mexico City,

  • uh... you have massive investors in all of these countries now and in Shanghai

  • investing is a sport,

  • people will sit around in a room like this and watch tickers go by and make their bets,

  • uh... the rest of the world, Africa, I mean, pretty much

  • the whole rest of the world was excluded in that bull market and gold went up 24 times

  • and silver 36.

  • So what...and back then too,

  • news traveled very slowly,

  • you turned on that old vaccum tube TV set waiting 60 seconds for it

  • warm up and then Walter Cronkite would come on give you the price of gold

  • and or

  • you open the newspaper the next day

  • and uh... get your news 24 hours after it happened,

  • and then you pick up the telephone and call your broker and if you were lucky he can

  • get an order onto the floor of the exchange for you the same day, but

  • possibly the next day.

  • So, news and reaction time was very slow.

  • uh... Also the development of the investor mindset.

  • before the Arisa Act and before Nixon took us off of gold, before

  • 1971 when Nixon took us off of gold

  • if you went to work between your late teens or mid twenties,

  • depending on whether you went to college or not, you could expect

  • that if you saved ten percent of your income every month

  • then when we got into your sixties you can retire and live off the interest in your

  • savings account.

  • Can you do that today? Nobody can live off the interest of

  • its savings account, unless he got twenty million bucks sitting there,

  • fifty million bucks, that's the only way you're going to get by.

  • and you wouldn't leave in the savings account because you're losing to

  • inflation,

  • your principle is getting whittled away

  • because of inflation.

  • uh...

  • So,

  • my parents' generation

  • were savers

  • not speculators and investors.

  • uh... What's different today?

  • Today, the entire world can participate.

  • It's roughly ten times the populations that can participate in

  • this bull market.

  • News travels at the speed of light over a tremendous variety of media outlets.

  • You can get the news

  • on your cell phone,

  • on your laptop,

  • uh...

  • And

  • an investor crossing the Sahara,

  • we're out filming in front of the pyramids and there's this Bedouin guy

  • sitting on the ground and he's got some sticks and he's starting a fire to make

  • some tea,

  • and he's on his cell phone.

  • this guy crossing the desert can take his Apple Iphone, check the price of gold and

  • place a trade right there.

  • Is this a different world or not?

  • Yes?

  • OK?

  • uh...

  • Then you have the development of the investor mindset. Along comes the

  • tech bubble,

  • and Nasdaq and everybody got themselves a trading platform and became a day trader,

  • uh... and then they got punished, the market crashed.

  • Then you've got a real estate bubble that happens and everybody starts chasing

  • real estate,

  • and then they get foreclosed on, on real estate,

  • the bubble popped at least here in the US and England,

  • the bubbles are still going on all down the coast of China and Australia and

  • New Zealand, those bubbles are massive and they're about to burst.

  • uh... And so they got punished,

  • nobody has been punished on precious metals for 30 years.

  • Our memories just aren't that long so the next

  • great bubble is absolutely destined to be precious metals.

  • Nobody has been burned out on it, you know, nobody that's chasing

  • after an investment

  • to either secure their retirement or to buy them that new Lamborghini.

  • uh...

  • And so

  • the development of the investor mindset, this is really critical to try and

  • figure out.

  • How many units of currency around the planet are gonna come chasing

  • the same tiny little pile of gold and a pile of silver that's about one fifth

  • the size that was in 1980?

  • uh... It's at least ten times the eligible populations,

  • each one of them has at least ten times the currency,

  • and, you know, as I think about this it's probably greater than these figures

  • I was saying that there was somewhere between

  • ten and one hundred times more investors but think about this:

  • In all of the USSR and China, more that half the world's population, there was

  • not one

  • investor,

  • not one

  • and today it's the sport in Shanghai.

  • So i think this is probably over a hundred, it might be a thousand I don't

  • know.

  • So you can take these figures and possibly add a zero to them and

  • that's the potential amount of units of currency that can come chasing the same...

  • I mean we had 2 billion ounces of gold back then,

  • uh... on the markets, and today there's 2.2, so it's 10 percent more gold,

  • but silver there's only about 600 million ounces of silver

  • on the exhanges, 500 million ounces, 600 million ounces.

  • uh... Here's the 747,

  • and here's a little man with very strong legs that just dropped out of the sky,

  • this is for scale,

  • and if you took all of the silver ever mined in history

  • it would fit into a cube about that size on the scale and all the gold ever mined

  • in history

  • would be a cube about that size, however, gold has two basic functions:

  • money and jewelry,

  • and that's a pretty much it. Only 5 percent of gold production gets used in

  • industry.

  • Silver is the second most useful commodity known to man, oil is the first

  • with about 30.000 uses,

  • silver is second with about 10.000 uses but we use it in microscopic

  • amounts.

  • When you type on the keyboard you're typing on silver, when you look at a DVD

  • or a CD you're looking at silver, when you look in the mirror, you're looking at silver.

  • When you look through a thermal pane window, you're looking through silver.

  • It's everywhere, it's a biocide, it's going into superconductors,

  • it's going into RFID chips,

  • but you know what? None of that matters.

  • What's going to drive the price of silver is investment demand,

  • it's the public rushing into this and when gold gets too expensive for the

  • public, they switch their preference to silver, this is what happened back in

  • in late 1979 and early 1980,

  • silver lagged gold and then uh... silver just exploded because gold

  • got too expensive.

  • But silver has already been outperforming gold,

  • and there will come a day when there's commentators on MSNBC, Fox News, CNN

  • they're going to be showing with...

  • Whenever you're in a bubble, whatever is in a bubble and the public is

  • chasing, they want to hear about, and the news accommodates,

  • they give you whatever you want to hear about, they don't tell you what they

  • should be telling you,

  • they tell you what you want to hear.

  • And there's going to be people on air like me

  • showing charts and saying: "Of course, silver has been outperforming gold,

  • there's less of it".

  • "There's five times more gold for investors to buy than there is silver"

  • that's the reason is been outperforming gold so, is it possible that silver could

  • actually

  • exceed the price of gold?

  • Sure, it is. All you have to do is look at these insane bubbles that have

  • happened in the past like the tulip mania of 1637.

  • I don't know if it will, I don't actually expect it to,

  • but it definitely could because it's more rare and the markets do

  • something called the price discovery mechanism where they try to find out,

  • uh... they set the price based upon the equilibrium that's determined by the

  • rarity of the two items.

  • uh... That's been going on for centuries,

  • the price discovery mechanism is not broken, it still works,

  • uh... and I expect it to work, so we use up the silver, so the result is, this is what

  • they look like today.

  • Now, cubes are deceiving that so the gold cube's actually about four, five

  • times larger than the silver cube.

  • If you take a cubic foot, that's a foot by a foot by a foot.

  • And if you make it 2 feet by 2 feet by 2 feet, it hasn't doubled, it's now

  • 8 cubic feet.

  • So,

  • uh... as you double the measurements on a cube, it goes up in volume eight times,

  • so there's actually about four, five times more gold than there is silver on

  • the exchanges that investors can buy,

  • so when people come flooding into this, I do expect this... Right now silver's

  • value is 1/35 of gold.

  • I expect it to outperform gold by at least a factor of 3.5,

  • I'm expecting a 10/1 ratio at an absolute minimum.

  • uh... Silver being 1/5 of gold's price is perfectly logical,

  • if it's going up slow and it hits gold's price then all the industry will

  • just switched to gold because that's the only other metal they can use in most of

  • these instances. They can use platinum, rhodium, paladium and gold but they only mine

  • 5 million ounces each per year of platinum, rhodium and paladium.

  • They use 900 million ounces of silver

  • so there's not enough of those other metals, the only alternative to silver in

  • most of these applications, like keyboards in electronics, is gold.

  • uh... So if it was going up slowly and it did hit the price of gold, gold can

  • stop it in its tracks, if there's a rush gold can go past, however

  • silver is much cheaper to mine than gold and it wouldn't stay there.

  • uh... We are always trying to figure this stuff out at our company, trying

  • to measure it and see when to buy, when to sell.

  • Now...

  • Can you roll that... This is a

  • clip from one of our Youtube videos, and this is the insiders video

  • that uh... our customers at Goldsilver.com, they got to see this two months

  • ago and then we just released it,

  • and so this is the type of information that you get,

  • and when we're nearing a top, our customers are going to be informed on

  • what we are doing,

  • so, can you roll that video, please?

  • And what you see is that when you're coming off the bubble, when it's overvalued

  • it has never in 130 years,

  • just gone back to fair value and gone back up into a bubble, it always

  • continues on its uh... way down in a bear market until it goes to severely

  • undervalued and then a new bull market starts again and it start rising.

  • Well, we are in a bubble, it has to seek equilibrium, it's probably gonna blow right past it

  • and go to severely undervalued,

  • just like it has

  • every time for the past 130 years.

  • So real estate and stocks are doing this at the same time,

  • while we're in a bull market for precious metals and there is a problem

  • with currencies.

  • So we are going to be measuring all these things very carefully, and then

  • using some confirming indicators that should flash

  • to us when to get ready to sell and we're going to be letting you know,

  • so thanks a lot, I hope you have some great holidays, I'll see you later.

  • I was standing in front of a green screen just sort of drawing this charts out of memory and our

  • animator Adam had to sort of flow the charts in front of me and move them around to

  • match them up with my finger,

  • but uh...

  • uh... that is what you get as a customer,

  • it's on the Youtube channel "Why Gold And Silver?" so if you do a search

  • for "sell silver Mike Maloney",

  • because it's when to sell your gold and silver so "sell silver Mike Maloney"

  • you'll get that video in its entirety, and there are dozens of videos on

  • "WhyGoldAndSilver"

  • "GoldMikeMaloney"

  • and "WealthCycles".

  • So those are the 3 Youtube

  • channels

  • that you can go to,

  • and each one of them has a few dozen videos on it.

  • uh...

  • This is the gold panic in 1948 in Shanghai,

  • if you wait

  • until the last minute,

  • I'm not very good at swearing, Robert Kiyosaki is great at it

  • so I usually don't

  • swear much on stage,

  • but if you wait until the last minute, you are shit out of luck,

  • up shit creek, without a paddle in a barbed wire canoe, fucked!

  • Thank you! Unlike the second to the last frame here,

  • here's one thing people do not realize.

  • It does not take

  • Ben Bernanke to print the dollar into oblivion for gold

  • to go to 10.000 dollars an ounce, 50.000 dollars an ounce,

  • 100.000 dollars an ounce.

  • All it takes are

  • a few very wealthy investors to try to get theirs

  • before the masses wake up and the herd comes charging in,

  • but this is the masses, this is the people waking up

  • out of their beer-and-football induced comas,

  • coming in at the last second, well, this is sort of a different situation,

  • because their currencies were going to to go to zero because of war,

  • but basically,

  • you've to get in ahead of the trend,

  • and then get out when everybody else is panicking like that.

  • Like I said, this is the greatest wealth transfer in history,

  • but you have no idea of the scale until you think.

  • If we do have a change in our monetary system

  • and if we have to go back to some sort of asset backed currency

  • that means that the people that are holding non asset backed currencies,

  • which is all the currencies on the planet today,

  • their wealth is transferred to the holders of precious metals.

  • This is the greatest wealth transfer in history, therefore it is the greatest

  • opportunity in history.

  • By the way, is Stephanie Wing here?

  • Stephanie stand up for just a second. Stephanie's grandfather's sister

  • was the Secretary during the roaring twenties and through

  • the stock market crash and then in the depths of the Great Depression,

  • she started buying stocks when everybody else

  • was selling and when stocks were like the bad, and the poisoned investment

  • that you did not want to get involved in.

  • Stephanie's grandfather's sister started buying the stocks,

  • she is an example of wealth cycles,

  • she rode this stocks up and I don't know exactly when she did it, but

  • she must have sort of innate sense that the stocks were overvalued, and

  • she sold the stocks and bought real estate. If you go to the French Embassy in Washington DC

  • that was her hotel,

  • thank you, Stephanie.

  • So, thank you very much, we'll see out in the lobby where you can get

  • Free 100 trillion bucks from us, thanks!

  • So, I just came off stage of the event, and

  • you know,

  • it's great, the event went

  • great, all the information was very well received,

  • it was a great audience,

  • but, you know?

  • Even though it's so rewarding

  • to talk to the people live and hear their reaction

  • still reaching a few hundred

  • or a few thousand people at a time.

  • It's not good enough any more, we're really in an emergency

  • and we need to start reaching millions of people at a time,

  • and that's why I'm trying to

  • go more video oriented,

  • than travelling around the planet like I have been, country by country,

  • telling

  • 400 to 4.000 people at a time.

  • So, you know, hopefully

  • I'm hoping that I don't have to make any more

  • personal appearances,

  • that I can just

  • produce videos, write books and get the information out there

  • as fast as possible and reach

  • millions instead of thousands.

  • Well, we've been working on a documentary and we have been

  • around the world, Taiwan, Singapore, Australia, New Zealand

  • Colombia, Peru,

  • Ecuador,

  • London, Saint Petersburg (Russia), Moscow

  • Germany, Rome,

  • Paris,

  • Athens (Greece),

  • and we shot in front of the pyramids in Egypt, it's been a spectacular trip,

  • trying to put together

  • this documentary and I think

  • that's going to be really enjoyable for people and highly educational.

  • No chance in hell that it's gonna happen,

  • as far as a one world currency that everybody is going to use.

  • But what you see here is that in the XAU

  • since the early eighties,

  • on the average,

  • gold and silver outperformed the stocks, on the average.

  • ...you've gotta get started, that'why... the free markets always overwhelm manipulations,

  • it's a doomed plan,

  • eventually it will fail,

  • but, they've got to position so accordingly, they've got to be ready, you can't wait...

  • because you can see 200, 300 point gap days for gold.

  • Basically,you know, one thing you find out is that

  • all fiat currencies eventually fall to their intrinsic value,

  • because they ruin it by puttink ink on it. It's the amount of energy you can extract from it,

  • the amount of the BTUs,

  • from combustion, when you burn it, and you saw that during the Weimar hyperinflation,

  • people used the currency as fuel to heat the house. Currencies have been backed by oil, by gold and silver

  • by land, but as soon as you remove some things that you can't,

  • some things that put financial constraint, where you just can't print as much currency as you want,

  • the currency is pretty much doomed.

  • It's beyond astonishing... If it wasn't for the horrific effects,

  • it would be more ludicrous, it would be actually comical, that we can stop and have some fun with,

  • and it's actually horrific, if you look back in history in the last 3000 years,

  • every episode of this kind of silly crap ended

  • very very badly...

If you know how the

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2万オンスの金のケース - 債務の崩壊 - マイク・マロニー - 銀と金 (The Case for $20,000 oz Gold - Debt Collapse - Mike Maloney - Silver & Gold)

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    TIKI に公開 2021 年 01 月 14 日
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