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if you know how the world financial system works you know the gamethat you're playing and if you donâ´t know the gameand 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 levelswe've got and to maintain the prosperity
obama has to be twice as far in debtwhen he leaves office than when he came in, or the whole thingis starting to collapse. the federal reserve, they're buyingbonds directly from the treasury. this is quantitative easing,they're calling it, and that means there'san emergency going on. i can see that there was not anything in history as far as finances goes, that wasas much as a sure thing as gold and silver accounting for theexpansion of the fiat currency supply.
there is absolutely no chancein hell that this won't happen, right now it takes about 15000 to20000 dollars an ounce of gold. i believe that there's goingto be a deflation first and then all of theworld's central banks will start printing like crazy to get usout of that deflation and ben bernanke will be leading the charge. you canâ´t have a debt that is 10times the size of your economy. it's not posible. everything comesto 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 thatwe'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 bookon precious metals investing, guide to investing in goldand silver, is part of the rich dad series thatrobert kiyosaki started, the original book. robertkiyosaki says: write a book no other instructions: write a book, and so i start writing this book two and a half years ofresearch 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 andmake it real simple. i read all these books by economists like milton friedman murray rothbard, ben bernanke, if you get a chance toread some ben bernanke, don't! he is a horrible author, just horrible.
they're all trying to write over eachother's head and impress each other and by doing so, they makeeconomy sound so complex that everybody thinks well,i can't understand economics. it's really simple. economics is very simple if youboil it down to its essence and it's not that difficult tounderstand and that's what i tried to do in my book. for the people thathave 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 worksand 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 lessabout gold and silver, i don't want gold and silver, it's just in itscycle right now, it's a stupid lump of metal that doesn't have cashflow orspinoff dividend yields. and so i don'twant gold and silver,
it's just that right nowi don't want anything else. they're just in their cycle right nowand they're going to be outperforming everything else, in my opinionfrom all of my research, and they're going to be ableto 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 thispicture 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 nuclearwasteland afterwards, it's not. all the buildings still are goingto be there, the apartment buildings. it's just that they're all going to be on sale. the problem is when investments areon sale nobody buys, the public comes charging in, and theychase investments after they're going up.
gold and silver get hot whenever they're going up andas soon we see them take a dip, it's like sales turn off like alight switch, most of the time. and i don't want anybody to get slaughtered. i really don't want these bad thingsto happen, i just think that all the evidence is there. what our leaders have doneto the economic system is going to cause these things tohappen and it's inevitable,
and i'm trying to warnas many people as possible as quickly as possible.my company has a mission, to get as much gold and silverin 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 inweimar 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 frontdoor of the burgerbraukeller where there was a political meeting,this big beer hall where there about 3000 peoplelistening to politican speeches and on that nighthe took the stage at gun point and to this literally captive audiencegave 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 andlooking for somebody to lead them, and here this charismatic guy takesthe stage, gives them a scapegoat and says "i know the way out of this". the next day, thosepeople in that beer hall followed him to try to doa 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 hehad the ear of the nation. he was covered in every newspaper all across germany, and the judges weresympathetic to his beliefs so they let him go on for hourson end with the speeches and that's when he gained powerwas when the middle class was scared.
the middle class defines acountry with their vote. the country, as the middle classgoes so goes the country, and so what i'm worried about is not the loss of myfinancial well being, it's the loss of capitalism,it's the loss of our quality of life, it's the lossof our freedom of choice. that's what i'm worried about, and i know that there are certain peoplethat i'm not going to be able to reach.
joe-six-pack, i refer tothe guy that comes out of his beer andfootball induced coma at the very end of the bull market andcomes charging in and buys at the peak. i can't do anything for him. i'm hoping that i can dosomething for all of you. these are wealth cycles. if you havetwo asset classes that are rising, you have for instance, let's saythat this is real estate on the bottom and on the top herewe've got precious metals. precious metals in this last decade here,
precious metals outperformedreal estate and stocks but everything went up. stocks went up, bonds went up, real estate went upand 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 insociety and if you've got these 3 or 4 asset classes and everybody rushes toward one, pushingit 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 gottwo things that are going up, if you're invested in this one down here, when you've got to sell, you can'tbuy as much as this one. if you're invested in this one, when yousell 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'tbuy as much gold, or food or oil. your house is worth half as muchin 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 homeor all of your investments and you divide them by somethingelse, 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 thatthey're going up, eventually the people that are investedin this one realize that the smart investors realize thatit'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 estatefor ever, there would come a day where one ounce of gold would buythe entire planet and we all know that that can't happen. right? so,
eventually one becomes overvaluedand the other one becomes undervalued and the cycle reverses, and then it reverses again, and what is happening is that they'reprinting currency about this rate and that's the reason you can't see it.people would say: "well, at least my house is worth a100.000 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 centit actually went down in value.
they'd say that, you know, they lookedat the stock market and the dow right know is justbarely above its 2000 high. in the last decade stockshave gone sideways for a decade. we've had inflation during that time,they inflated the currency supply. if you start measuring one thing withanother thing, so you're measuring stuff against stuff instead of usingcurrency, what you discover is that everything is trappedin this valuation channel, where it goes from overvalued to undervaluedto overvalued and undervalued again,
and the thing that you'remeasuring 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 assetand i call this wealth cycles. and if you can do that, it's a road to true wealth, you'reescaping 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 theunderlying stocks, so basically its points are dollars, and one of the reasons thatthey measure it in points is just like when you go to las vegas, they take yourcurrency and they give you chips. now they're pieces of plastic, soyou 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 dowmeasured in points, but if you go every month during thisentire graph from the year 1900 to today, and each day you take the points on the dowand divide it by the price of gold you get how many ounces of gold oneshare of the dow is worth, and this is what it lookslike 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 thepoints of the dow and then things will sort of be in equilibrium. it's fair value when the dow is only fourtimes the price of gold, but what you see here is that it goes into, it goes from fairvalue 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 inthe meantime, when it crashed it went down to one ounce of gold. there was aday 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 ofgold with the proceeds of your stocks, and then we're going on to thebiggest bubble in history. there's no time in history,this point in 1999 - 2000 there's no time that goldwas as unloved and ignored as in that time period. it was nonation's money and it had gone down
for 20 years, it was "the worst investmentyou can possibly make", nobody wanted it. take this, this is the price of the dow measuredin gold. flip it upside down and you've got the price ofgold measured in the dow. put these two things together, and what you find isthat there's a cycle here and if you've writtenstocks up to 1929 and then sold yourstocks and bought gold, and then in 1932 gone to gold
... and then, goneback 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 hypotheticalfamilies in my book and one goes from 35 bucks to11.000 bucks over that time period and the other one goesfrom 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 thedow-gold ratio, so you're measuring gold's value per ounce measured in whatpercentage of a share of the dow that it would buy, and what is showing is that gold is nowhere near a bubble,is veryundervalued here and still has to go up,
the mean should be 25 per cent or more. and in every bubble in historyand in nature, i used to be an electronics engineer in physics, when something is out of whack, when itreverse back to the mean it overshoots. if it's more out of whack, when itreverses to the mean, it overshoots further, so i'm expecting the day where the price of gold would bedouble or more the points on the dow.
this is the silver-dow ratio. silver has just i mean, the gains hereshould be immense. this is just goldfor the past decade. i just challenge anybody to go and findan index or stock or anything, that looks that good overthe 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 whetherto buy an asset or sell an asset, and this is saying that gold is probably going to continuerising, there's nothing bearish in that signal. this is the sp 500 over thelast decade, so representing stocks of the 500 largest companiesin america and there is gold. here we have
silver and i recently spoke at the 8th annualbanking conference in socci russia, this is the big banking conferencefor all of europe and russia. and i was showing them thisat the very end, they cut me off it was really interesting. i was running out of time, and you hear this voicecome over the loudspeaker and it is their financeminister 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 presentedat this conference, and then he comes up to me afterwards, he's gota copy of my book that he bought, he wants it signed! oh, by the way, please visit ourtable 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 thatthere 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 shouldersthat i'm tracing out here in blue, and then, you draw
across the neckline, and you invert thathead 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, andi'm sort of flashing through this, i don't get a chance to describe it, buti 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 oweyou 5.000 ounces of silver and handing this things out, and they're trading this iouson the commodities exchange and that's what determinesthe worldwide spot price. now you can do this naked...it's called thenaked shorts. if you don't have the silver to cover it, if you're not sitting on apile of silver and you are writing ious,
you can still sell them. and some big banks do this, likej.p.morgan and they crash the market come in and cover their shorts,they buy those ious back at a lower price than they sold them forand they get to make the spread. they fleece the public andsome funds that invested in silver for hundreds of millionsof dollars by doing this, and they do it, they'vedone it on a regular basis. but silver fell too low thistime and so did gold, and investors that were looking for physicalrealized that it was just too cheap,
and they all had to get someand shortages developed, and all across india, europeand north america the cupboards were bare. there were 3 monthswhere we can only get one silver productat a time, and we had no gold. we didn't have gold and mydealer shipped for 3 months and i deal with 4 of the world's largestwholesalers and they could not find gold for us. people don't realize how much goldand silver there is on the planet.
there are 6.6 billionpeople on the planet, there are only 2.2 billionounces of gold. that's a third of an ounce per person. silver is evenmore rare. there's only about 14th of an ounce per person. that means that 14 people have toshare that same one ounce of silver. and right now, you can get a whole lot for your currency. i'm going to take a little
detour here. i did not define the differencebetween currency and money, and you will hear me say: currency, currency,currency, over and over and over again. back...before world war one, each note the treasury issued,each dollar in existence in the united states would say that there have been depositedwithin the united states treasury 20 dollars in gold coin, and payableto the bearer upon demand. the money was in the vault,
the currency was a note theygave you, it was a claimcheck, only a claimcheck onthe money. the same as if you go to the dry cleanersand give them your shirt, and they gave you aclaimcheck for your shirt. the value is that shirt at thedry cleaner's, not the piece of paper that says thatyou own that shirt. so our currency that circulated, was the paper us dollars,and they were claimchecks on money, and people do not understand thatmoney has to be a store of value.
only gold and silverqualify as money. they have all the attributes thatyou need. they are portable, durable, divisible, fungible... and then moneyis a store of value over long periods of time. one of the things thati always start with is how currency is created, because if you knowhow the world financial system works you know the gamethat you're playing. and if you don't know the gameand 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 checkthere must be sufficient funds in our account to cover the check, but when the federalreserve writes a check there is no bank depositon which that check is drawn.
when the federal reserve writes a check it is creating money". and that is "putting it simply" from the bostonfederal reserve's website. the way this works is: the trader of theunited states is the us treasury. uh... but every country has theequivalent 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 promisethat 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 middlehere called open market operations, that i'm gonna just showyou real quickly, but the open market operationsis just a shell game that obscures what is truly going on. so banks show up at thetreasury auctions, primary dealers they're called,
and then the federal reserve comes alongand through open market operations, they write a check to the bankand they buy that bond from the bank, so the federal reserveends up with the bond but then the next month those banks show at thetreasury 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 ofdollars at the treasury and bonds at the federal reserve, we borrow currency into existencewith an iou, that bond, and the federal reserve opensup 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 inthe various branches of the government
and the government doessome deficit spending, on social programs, public works and war, and then they pay those government workers, the contractorsand the soldiers. and all of those people depositin 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 fractionalreserve lending comes in to play. fractional reserve lendingis just what it says. they reserve a fractionof what they've got, if you go to the bankand you deposit 100 dollars, the bank is allowed to keep 10 dollarsin your checking acount in case you want someof that 100 dollars, and they get to steal 90dollars of it without telling you. your checking account never hasthe balance that it says it's got in there. they have borrowed mostof that currency out of there,
and they're going toloan 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 90so now there's 190. then, they go and buy something, that'sthe 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 hisbank account so that 90 dollars get deposited and then they get to goand steal 90 per cent of that meaning 81 dollars, so now there's 271 dollarson deposit. can everybody see how the currency supplies is gettingmagnified by the banks here? and that process happens overand over and over again, and under a 10 percent reserve ratio, every dollar depositedcan create another 10. so if you deposit a trillion in basemoney, 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 agreementand it is all giving value because you experienced yesterdaythat the dollar purchased you something, so you expect that isgoing to tomorrow. so you have this agreement that is,
basically, is imaginary. it doesn't really exist, it's justthat we're all dreaming the same dream. if anybody chooses to wake up, so it's really just a coupleof bucks that is whipped up in this little voodoo hocus pocusscheme here, where the treasury and the federal reservewrite ious for each other, a check is an iou,a bond is an iou, and they swap ious: dollarsspring into existence.
a dollar is a receiptor a claimcheck: an iou! then the rest of the currency supply is a bunch of numbers that thebank type in their computers. they don't exist. in my book, i call things money until i get to the pointwhere i define what money is. and the difference between money andcurrency 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 massivecurrency creation that is going on, and how banks are just debasing theircurrency supply all over the world and how this mandrakemechanism works, i start referring to it asthe 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 themin 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 thecurrency supply value. it would have no value without you. and the way that that value is enforcedthis is the really cruel joke here. let's say you save a part of thatcurrency supply, so you can pay tax to the tax collector in theunited states, that is called the irs, so that they can turn that over tothe treasury so the treasury can pay
the principal plus the interest on that bond which was paid forwith a check from nothing. so, you can see that, right? everybody sees how this works? now, there's another joke. there was interestdue on that bond. let me ask you, if you borrow adollar into existence and it's the only dollar that exists on the entireplanet 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'rejust 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 theyindebt us in the future. everyone of these loans that wetook 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 93percent now and the federal reservecreated about 7 percent but uh... before the financial crisis
the actual physical paper dollarsare what the federal reserve and the treasury creates it's known as base, they call itbase 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 likethat or buying dinner and sign our credit card. when you sign a credit card receiptyou've expanded the currency supply of the planet.
the problem with this system is that every single monththere is a payment due for the principleplus the interest and there's payments due on your homemortgages 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 intoexistence and on the balance sheet that payment extinguishes the currencythat you borrowed into existence, so the currency supplystarts to collapse.
this system requires that we go deeper into debt every monththan were the previous month, we have to always borrow morecurrency into existence than we are extinguishingevery single month or the whole thingstarts to collapse, i'll show you what thatcollapse looks like in a minute but first i'm going to show you thebase money, this is the these are the physical paper dollarsuh... it's basically cash in circulation
plus the deposits that the big commercialbanks have at the federal reserve uh... all of the banks have a checkingaccount at the federal reserve and their deposits are redeemable inpaper dollars so it's a measurement of how many paper dollars exist. it took 200 years to go fromzero dollars in existence to 825 billion dollars, then came along, camethe financial crisis of 2008 and it has only taken two anda 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 supplyof the planet is just exploding when you look at this and most economists and newsletter writersare talking about inflation, inflation inflation is right aroundthe corner, this is going to happen. i believe that we're goingto have, i wrote in my book
we would have thethreats of deflation followed by big inflation which we have alreadyhad, that's what this is, followed by a real monetary deflationwhich is the collapse of the currency supply: inflation, deflation are properly referred to as an expansionor 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'shappening in the currency supply you're seeing into the future. and i believe that there'sgoing to be deflation first and then all of theworld central banks will start printing like crazy toget us out of that deflation and ben bernanke will beleading the charge, back in march of 2006 uh... the federal reserve hid
the broadest measure ofthe currency supply, the currency supplythat is m1, m2 and m3 uh... m1 is uh... cash in circulation plus checking, checking accounts uh... m3 was the broadest measure thatincorporated 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 trilliontoday and it's uh... stalled and started to shrink. but m3, they used topublish it every month it was the uh... measurement of thecurrency supply that most newsletter writers and uh... on the newsthat they would report and the fed hid it from usin march of 2006 claiming that it was too expensiveto compile all this information
and that it was useless anyway that youcouldn'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 bunchof different monetary aggregates that the fed publishes and you add themtogether and you get m3. the only one that they don't publishi 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 m3off of all the other monetary aggregates plus minus0.6 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'sone of the people that does and all the people that do their data agrees, so i'm like 99.4
because is there a 0.6percent plus minus, i'm 99.4 percent sure that this information is correct, and what you see here is thatthere's a little collapse going on of the currency supply up here, and it's not huge we've gone fromyou know this would be 15 so about 14.7 trillion dollars downto just under 14 trillion
dollars in m3, but base currency is a component of the m3 that red parton the bottom is part of it, and they've been pushingthat up like crazy why? because there's a creditcollapse 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 weborrow into existence what happens is that it shows this enormouscollapse going on. this is m3 minus base money and there's a 1.7 trillion-dollar collapse of the currencysupply, it's about 13 percent, now, there's no time in history that this hashappened, this goes back to nineteen sixty except the beginningof the great depression, that was the last time the currencysupply contracted was,
the beginning of thegreat depression. usually there's a time lagbetween stuff like this happening and the public feeling it so the federal reserve is borrowing currencyinto existence like crazy and they're now doing direct purchasesof bonds from... they don't even go through that open marketoperations shell game, that keeps you fromseeing what's going on, they're buying bonds directly from thetreasury, this is quantitative easing
they're calling it they're telling us thateverything's fine, that, you know all of their emergency efforts curedeverything, and the economy is ok what the hell is this right here? why in just the past couple of monthsthis is part of the quantitative easing why is the currency expanding? from uh... 2 trillion
to 2.4? if everything was fine, the federal reservewould not be doing that! they're scared shitless,so it's happening they're doing anything they can toprevent this deflationary collapse that i predicted in my book uh... you know i first started buying goldwhen it was 325 bucks an ounce, actually
it was 315 326 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 inthe global economy every single day, i was addicted to it. and by october of 2002 istarted making my commitment
and by april of 2003i was all in. in 2004 i started speaking on it. in 2005 i incorporated goldsilver.comand became a precious metals dealer and start writing mybook and that was published in 2008, so i didn't just bet my portfolioon it, i bet my entire life on it. i can see thatthere wasn't anything in history as far as finances go that was as much of this sure bet, a sure thing gold and silver are denominated
in this fiat currency, these digital numbersthat they type into the computers and paper notes so they just run off theprinting press and it's all borrowed periodically throughout historyfor the past 2400 years they have done this. this is... the lower line is the value ofthe gold held at the treasury so the uh... the number of ouncesof gold times the price. the upper line
is the currency incirculation, base money. and that this is from theyear 1918 and here we have the stock market crash in 29and these are the bank runs of the 30 where peoplewere asking for gold. but they printed too many receipts forgold. if you can go back to before world war one these two lineswould converge. they diverge there and we'vecreated 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 ownershipof gold illegal because there was a run on gold, and in the united statesamericans could not own gold. and then a year later theyunpegged the dollar from gold and the dollar's value plummeted, so that it took, it went fromtaking 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 goldwhen you're on a worldwide gold standard, and gold has, you know, it's gota certain intrinsic value. the dollar fell. and so... what's amazing is accounted forthe currency supply. this is the free markets in the will ofthe public forcing the government hands forcing them to change the rules.here's the same chart again
uh... but now i've taken thedates out further, so you can see uh... world war two, the expansionof the currency supply then in 59 uh... charles de gaulle,the president of france uh... says we want our gold, other countriesstarted jumping on board and gold started leaving the vaults. then i'm taking it out furtherbecause that one goes out to 1971 in 1971 we go off of goldbut there's another line here, a blue line. how many here would say the creditcards are replacing cash in circulation?
credit cards are replacingcash in circulation. i believe they are and when you signa credit card receipt and you paid that merchant, the merchant's checkingaccount does not know the difference between credit card currencythat you created and cash that the federalreserve created. it can't tell the difference and thatcurrency that you created circulates until somebody saves it up andpays down credit card debt. and so uh... i add that
to the currency supply. once nixon took us off of gold, andgold became a separately traded commodity/currency uh... the will of the public and the freemarkets drove the price of gold up until once again the value of goldheld at the treasury exceeded the currency supply and there wasa year where we could have gone back on the gold standard it also covered outstandingrevolving credit for an entire month.
so all it was doing is thesame thing as it did in 1934 and in weimar germany andhundreds and hundreds of times since the year 407 bc with thefirst grade inflation in athens. this is the same chart again but it shows ben bernanke panickingover here and this is the increase of base money. that's that first chart that ishowed you, not first chart, but one where there was a red area on the bottom,
so that's the increasein base money. well, there's the outstandingrevolving credit piled on top of it, uh... here's gold and what this means is that gold has torise from here to way up there to do the sameaccounting that it has already done twice in the united states andhundreds and hundreds of times in history. this is a natural thing. it does thisautomatically. the will of the public and
the free market forcethis to happen. i'd believe that is there's absolutely no chancein hell that this won't happen, right now it takes about 15000 to20000 dollar a ounce of gold so, here is another way of looking at thesame thing, and it's a great way of looking whether gold is undervaluedor overvalued. if you take just the paperdollars, that base money and you say there's a certain amount ofpaper dollars, how much gold do we have as a percentage of thosepaper 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 paperdollars. here's when you add outstanding revolving credit. this is what a debt collapse orcurrency collapse looks like.
we borrow uh... two units of currencyinto existence here uh... and uh... to do that we promise to pay back, we're borrowingthis currency into existence with the bond the bond is over here,say you've got uh... these two unitsof debt plus interest, so you owe back more than you're borrowing intoexistence but then each month
you're going to pay off a small portion of that debt, and so the next month we goon borrow more into existence and we pay off, we keep on hangoff that debt every month and we always have to borrow more intoexistence than we're paying off, but notice something. you notice how the debt is now growingfaster? 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 wherethis is unsustainable. if the public gets scared and theystopped borrowing currency into existence and they saveup and pay down debt, the whole thing goesinto a deflationary collapse. this is what i was predicting and thisis what is happening right now. thank you. uh... this is how much debt we owecompared to the size of our economy. if you owe fifty cents andyour economy is a dollar
you owe fifty percent ofthe size of the economy. if you owe five hundred billion and youreconomy 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 debtthe united states has, the national debt, compared to the size of its economy, and it goes back to 1792, which waswhen 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 neverexceeded the fifty percent level, until world war two, this includes the civil war, world war one and theestablishment of the federal reserve,
uh... the great depression. you see that during the twenties we weregrowing the economy faster than the debt, and so the debt compared to the size ofthe economy is a smaller and smaller uh... portion because we were having the roaringtwenties, the economy was growing and the debt wasn'tgrowing as fast, so on this chart the debt is shrinkingthrough the twenties but then suddenly in 1930 it goes up. why? it wasn't because we were borrowing awhole bunch of currency and going into
debt, it's becausethe economy shrank and our debtstayed the same, so that was the last great deflationthat got us into uh... a deeper debt because we couldn't afford topay the debt that we owed, uh... the economy shrank faster then we do the deficit spending forworld war two and we can exceed this level of fifty percent because now wehave this fiat currency system,
where we could just borrowcurrency into existence but when you do that a bond, bonds range from like a month tothirty years out into the future that you're going to pay them back, that means we're borrowing prosperityout of the future. you remember how i said you save up some of the currencysupply and you can pay tax to pay the principle plus interest. so the prosperity that we'reenjoying right now, this moment is owed back
in the future. we have to pay a principle plus interestfor the privilege now of having currency that we can use. somebody is skimming offthe top basically, this is the way the banking system sort of skimsoff the top, is through inflation there's people that getrich off of this without having to do any work and putting their value into thesystem, they get to skim purchasing power out of thesystem through inflation. but every dollar that we borrow intoexistence puts us in debt in the future,
so we are every year borrowingprosperity out of the future and we spend it today. the average roll over for all the bondsis about four-and-a-half years, so the prosperity thatwe're enjoying right now we owe back uh... we've got to pay forfour-and-a-half years from now. and right now the taxesthat you're paying are paying for prosperityduring the bush administration, we have alreadyspent it, it's gone.
so then we started growing the economyfaster than we were doing deficits spending, so our debt compared to the size of theeconomy goes down during the korean war, in vietnam, and then we have the end of the goldstandard and then reagan says: "deficits don't matter" we can just go ahead andspend as much as we want. uh... the debt increases. just beforethis era of the financial crisis, there's a little
slope where it starts to godown, that's the clinton era. they said that we had surpluses, it was uh... bullshit. if you look.. i don't look at thegovernment's accounting of whether or not they say we have asurplus or deficit, what i look at is the national debt. did it go up? if it went up it meant wespent more than we had. if it went down it means we had a surplus, we had excessincome above what we're spending and during the clinton yearsthere was never a year
where the actual nationaldebt went down. i don't know of the people in the unitedstates, from the united states here, remember when uh... gore and bushwere running against each other they're both telling us how they weregoing to spend all this currency that was flowing in. you know, they were each trying to compete on all the free crap they'regoing to give us in the future, and uh...
you know, that's how uh... actually thatisn't how bush won... but that's another story. anyway, these statistics are from thecongressional 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 timesthe size of your economy.
it's not possible. everything comesto a screeching halt first, and so something has to change. right now, uh... i don't know if it got passed ornot, but the government i dont't keep up with the news,i consider it all short term noise, it distracts you from what isreally going on, so i'm not sure did uh... they settle on some sort ofbudget and is the government gonna keep on running? does anybody know this?
yes, they did? did the republicans, who were trying to getthis 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 tryand pay down this debt, you have to go into.. in order for us to maintain the levels we'vegot and to maintain the prosperity obama has to be a...
we have to be twice as far in debt whenhe leaves office than when he came in. or the whole thing isstarting to collapse. uh... so, more proof that we aregoing into a deflation first. this is what a dead catbounce looks like. this is the stock market.the stock rises uh... it peaks, takes a little dip, a bunch of investors come in, thinkingthat they're scooping up deals and they start buying and it rises again and thenthe crash continues because
when they started buying it hadn'treached fair value yet. it had just rollover taken a little bounce inthe market that's still uh... looking for a fair value so there'sthe dead cat and it bounces. there's the nasdaq, so that's uh... uh... what a dead cat bouncelooks like. the initial crash on the nasdaq was38 percent. the total crash was 78 percent.
this is the dow in the 1929 crashand the dead cat bounce, uh... the initial portion ofthe crash was 48 percent, and the total crash was 90 percent, so in the first examples was38 percent, 78 percent. 48 percent, 90 percent, so ifthe initial crash is larger the rest of the crashis going to be larger. we are going through a giantversion of the 1929 crash or the nasdaq crash. we just had the biggestcrash 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 adead cat bounce, meaning that ultimately the total crash should be greaterthan 90 percent from its high. this is the best way of measuring the value of a stock, and i'm sorry if i'm goingfast and this isn't sinking in, i've got lot of stuff here andi've got to cover it,
only got twenty minutes left, i gotta show you that the world'sstock markets and real estate bubbles is that market tryingto 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 handand say that you don't. ok, it's the price of a share of stock divided by the earningsof the company. so it's basically how much is thisstock costing me, compared to how much is the company making. and one of the best ways, the entire industry stock market, theindustry, the financial industry agrees that this isprobably 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 theyear 1950 but professor robert shiller of yale university uh... reconstructed the s&p and took the500 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 hundredand twenty one years of data here. fair value is when pe ratios are about12, meaning you're paying twelve times theearnings of the stock, so if you buy a stock its going to...if nothing else changes and the company continues making the same amountevery 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 datagoing back to the year 1880 and what you see here is that there is no time in history thatwe go from fair value to overvalued, once it hits overvalued, it does not stop, it bounceson 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 insaneinvesting in a stock and having to wait 45years to be in profit. this was nuts and people were chasingstocks like crazy. this is the tech boom and so on. well, it crashed down the fair valueduring the market crash of 2008 and it bounced backinto a bubble,
where pe is about 23 or 24 right now. the stock markets seek equilibrium. theyseek fair value over the years. this is their job, that is what they do. there's a famous tradernamed bernard baruch who said in the short term the stockmarket is a voting machine, is like a stock machine, i mean, it'sa slot machine or voting machine it does what the publicthinks it should do. the public chases aftersomething, it goes into a bubble,
but in the long termit's a weighing machine, it balances, its scales balancing each other. that's what the stock market isalways trying to do: seek fair value. it's only there for briefmoments in history, but the point is that everytime we are in a bubble, it visits severely undervalued and thegreater the bubble, usually the greater you overshoot uh... this is the second best way ofmeasuring a stock's value:
the dividend yield. if youbuy a stock for a buck and that company pays you six cents everyyear into your brokerage account you're getting a six-percent yield. i have inverted this chart because uh... the higher the yield the moreundervalued the stock is, the lower the yield more overvalued it is. so i inverted it, sothe bubbles are up and undervalued is down, uh... so fair value is
uh... four and a halfto almost six so there you see thesame pattern as before, but here's what's alarming. it's that there is no time inthe first 118 years of data that we have beenin a bubble this large. this is absolute insanityand it can not last. there are two ways that themarket can seek equilibrium. one: the market goes sideways for a decadewhile we have raging inflation that will balance this out and then bringdividend yields and pes back into line.
two: it crashes, the markets go down, the currency supply is collapsing, therefore this has to be adeflationary collapse, this can't be an inflation in what theycall an invisible crash. uh... these are theworld 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 indifferent direction than the united states. the united states could be going upwhile their stock market was going down. but before the year 2000 all of the marketsof all the major economies trade in the samedirection at the same time. here is brazil
and here is russia and in about the year 2003 they started trading in the samedirection and since the market crash of 2008 all markets,all world markets go the same directionat the same time. the s&p, the dow they're way,way overvalued in a bubble, we're having a deflationarycollapse 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 goingon. the real estate bubble in the united states uh... took it basically burst inthe year 2007-2008 and it's been falling but i measure somethingcalled the mortgage rent ratio, uh... fair value on a home isif you're paying about a uh...
uh... a dollar to a dollar five for the mortgage, the monthlymortgage on a thirty-year mortgage plus your carry costlike insurance and stuff, for each dollar that you can rent thehouse for, if you were going to rent it. we went into a bubble of a bucktwenty five in 1989-1990, fair value is about a buck five, and then we had the recession and itwent to ninety cents, on national average in the year 1995 uh... real estate cash flow by tenpercent, a single-family medium price home
except you couldn't get a loanback then, credit was tight, the economy was lousy, then we went into this real estatebubble that was the greatest bubble in world history, where people are paying a buckeighty-five, a buck ninety, almost two bucks for each dollar theycould rent the house for. then that bubble popped, and it came back down not to fair value butto a buck twenty five and bounced, so it came backdown to the height
of the previous bubble, it bounced, and we are right now at a buck twentyfive, so valuations on real estate are still as high as they werein the bubble in 1989. they have to come down or rents have to go up. this is all deflationary, which meansthat rents are not going to go up, real estate is gonna come down.
all of this travelstogether, like i said. now, when the worldstock markets crash, does anybody know about the bubbles thatare going on, the real estate bubbles that are going on inthe rest of the world? how many here are watching the videosthat 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 inlas vegas uh... this is our driver very well-informedman, very educated. uh... he was very informed on worldfinance, the stock markets, real estate, he really knew whatwas going on in las vegas and behind him there is auh... big casino project i can't remember the name of this one uh... there's the... venetian in the background andthere's a building going up in front of that.
this is the the casino projectthat 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 otherside of the fountainbleu what you notice is that there's a bunchof 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 intoit, now looking for another three billion
dollars to finish this thing, and this stuff is all over las vegas, it's notjust in las vegas, it's all over the world. this is in moscow, this is a development calledmoscow's city center, there's the project, you can't read itunless you read russian, uh... but all of these beautifulbuildings here, there's nine buildings one of them was completely in theframing stage, another one was uh... half way completed
of the others there are two that areoccupied and one that is one-third occupied, the rest are just skinned over, and they're notcompleted on the inside. the project is at a standstill, then in front of this project there'sthis giant hole in the ground and this is where the centerpiecewas supposed to be. this was russia's bragging rights, this was going to be thetallest building in europe,
federation tower, and it'sa hole in the ground, and it'll remain a holein the ground, that will never be finished. does anybody know what the singaporeflyer is? i've only got ten minutes and i'm not gonna be ableto finish this thing, it's a big ferris wheel in singapore, it'sone of the tallest in the world if not the tallest, i think it is the tallest, and here i am looking attheir real estate bubble and if you noticed
there's cranes on topof all these buildings here, uh... there's cranes everywhere. look atall those buildings being built uh... all bubbles burst, we are ina worldwide credit bubble, when these markets rollover the giant real estate bubbles that were going up and then took alittle breath when our markets crashed their bubbles kept on going afterpausing, when our real estate bubble uh... popped and startedreverting back to fair value.
the markets are just trying to seek fairvalue, that's all they're doing. but people and the worldcentral 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 recessionso they try and pump everything up but they don't realize that they'rejust making everything worse later. everything they do is gonna comeback to haunt them as more uh... inflation eventually
uh... or this deflation i'm talking aboutis the expansion of credit contracting. here's another thing that is going on that is going to mean that this decadeis different than anything else that you have known. uh... people don't realizethat every 30 to 40 years the world has an entirelynew monetary system. it changes every 30 to 40 years.
in 1873 germany startedthe classical gold standard uh... and by 1900 pretty much every developed countryon the planet was on the standard where every note in circulation that wasput 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 wentoff of the classical gold standard and started printing,
and between the wars we had something called the goldexchange standard where it was a mixture of debt and uh... gold backing the currency uh... then that was a very poorlyconstructed man-made system, and anything man-madecannot last, so basically they were uh... the federal reserve, under the federalreserve act there was a 40 percent reserve ratio
and they were allowed to put uh... a fifty dollar bill into circulationfor each twenty dollars worth of gold that they hadbacking the fifty dollars, so they're putting claimchecks on goldin excess of the amount of gold that they actually had. ever since the federal reserve was bornwe have been living under a lie. and if people say that we've got freemarkets in the united states, they're wrong. you cannot have free marketswithout free market money. your currency is fifty percentof every transaction,
all of the transactionsare the free market. if there's a small group of mendeciding what currency is and how much the cost of currency isgoing 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 thebretton woods system, the classical gold standard broke down, the bretton woodssystem was from 1944 where uh... all of the world's
uh... currencies would be backedby the us dollar at 35 dollars an ounce and foreigncentral banks only could exchange those dollarsfor gold at the new york fed, for 35 dollars per ounce, so all the world's currencies werepegged to gold but through the us dollar. uh... all of these countries startedasking for dollars and gold flowed out of the vaults and nixon had to takeus 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 anemergency meeting of the g7, of the g20 countries, and there going to be trying to hash out anew world monetary system and they're already working on it, they're trying to figure out what they're going to dowhen the dollar collapses. here's the differences between the seventies bull market and today andthis 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 pricesilver went up 36, these are enormous winnings in such ashort period of time. uh... in the seventies it was basicallynorth america and western europe, that drove the priceof the precious metals, the exchanges were thelondon metals exchange, and the commodities exchangesin the united states,
that's where the price ofgold and silver was set. all of the ussr they could not participate, there were noexchanges there, there's no market for gold and silver and even if you could buy some, it was onthe black market, so your investment did not affect the worldwide price. thosepeople were excluded in participating in this bull market and drivingthe price of gold forward. china under mao, same thing,
first of all everybody was making asubsistence living, very few people even had electricity let alone being able togo and invest in gold. india, mexico, south america, thesecountries 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 allof these countries now and in shanghai investing is a sport, people will sit around in a room like thisand 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 inthat 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 tubetv set waiting 60 seconds for it warm up and then walter cronkite wouldcome on give you the price of gold and or you open the newspaperthe next day
and uh... get your news 24hours after it happened, and then you pick up the telephone and callyour broker and if you were lucky he can get an order onto the floor of theexchange for you the same day, but possibly the next day. so, news and reactiontime was very slow. uh... also the developmentof the investor mindset. before the arisa act and beforenixon took us off of gold, before 1971 when nixontook us off of gold if you went to work between yourlate teens or mid twenties,
depending on whether you wentto college or not, you could expect that if you saved ten percent of yourincome every month then when we got into your sixties you canretire and live off the interest in your savings account. can you do that today? nobodycan live off the interest of its savings account, unless he gottwenty million bucks sitting there, fifty million bucks, that's theonly way you're going to get by. and you wouldn't leave in the savingsaccount because you're losing to inflation,
your principle isgetting whittled away because of inflation. my parents' generation were savers not speculators and investors. uh... what's different today? today, the entire worldcan participate. it's roughly ten times thepopulations that can participate in this bull market.
news travels at the speed of light overa tremendous variety of media outlets. you can get the news on your cell phone, on your laptop, and an investor crossing the sahara, we're out filming in front of thepyramids and there's this bedouin guy sitting on the ground and he'sgot 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 hisapple iphone, check the price of gold and place a trade right there. is this a different world or not? yes? ok? then you have the development of theinvestor mindset. along comes the tech bubble, and nasdaq and everybody got themselves atrading platform and became a day trader,
uh... and then they gotpunished, the market crashed. then you've got a real estate bubble thathappens and everybody starts chasing real estate, and then they getforeclosed on, on real estate, the bubble popped at leasthere in the us and england, the bubbles are still going on all downthe coast of china and australia and new zealand, those bubbles are massive andthey're about to burst. uh... and so they got punished, nobody has been punished onprecious metals for 30 years.
our memories just aren'tthat long so the next great bubble is absolutelydestined to be precious metals. nobody has been burned out on it, youknow, nobody that's chasing after an investment to either secure their retirement or tobuy them that new lamborghini. and so the development of the investor mindset,this is really critical to try and figure out. how many units of currency around theplanet are gonna come chasing
the same tiny little pile of gold and apile of silver that's about one fifth the size that was in 1980? uh... it's at least ten times theeligible populations, each one of them has atleast ten times the currency, and, you know, as i think about this it'sprobably greater than these figures i was saying that therewas somewhere between ten and one hundred timesmore investors but think about this: in all of the ussr and china, more thathalf the world's population, there was not one
investor, and today it's the sport in shanghai. so i think this is probably over ahundred, it might be a thousand i don't know. so you can take these figures andpossibly add a zero to them and that's the potential amount of units ofcurrency that can come chasing the same... i mean we had 2 billionounces of gold back then, uh... on the markets, and today there's2.2, so it's 10 percent more gold, but silver there's only about600 million ounces of silver
on the exhanges, 500 millionounces, 600 million ounces. uh... here's the 747, and here's a little man with very stronglegs that just dropped out of the sky, this is for scale, and if you took all of thesilver ever mined in history it would fit into a cube about that sizeon the scale and all the gold ever mined would be a cube about that size,however, gold has two basic functions: money and jewelry, and that's a pretty much it. only 5percent of gold production gets used in
industry. silver is the second most usefulcommodity known to man, oil is the first with about 30.000 uses, silver is second with about 10.000uses but we use it in microscopic amounts. when you type on the keyboard you'retyping on silver, when you look at a dvd or a cd you're looking at silver, when you lookin the mirror, you're looking at silver. when you look through a thermal panewindow, 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 ofsilver is investment demand, it's the public rushing into this andwhen gold gets too expensive for the public, they switch their preference tosilver, this is what happened back in in late 1979 and early 1980, silver lagged gold and then uh... silverjust exploded because gold got too expensive. but silver has already beenoutperforming gold,
and there will come a day when there'scommentators 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 hearabout, they don't tell you what they should be telling you, they tell you whatyou want to hear. and there's going to bepeople 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 forinvestors to buy than there is silver" that's the reason is been outperforminggold so, is it possible that silver could actually exceed the price of gold? sure, it is. all you have to do is look atthese insane bubbles that have happened in the past likethe tulip mania of 1637. i don't know if it will, i don'tactually expect it to, but it definitely could because it'smore rare and the markets do
something called the price discoverymechanism where they try to find out, uh... they set the price based uponthe equilibrium that's determined by the rarity of the two items. uh... that's been goingon for centuries, the price discovery mechanismis not broken, it still works, uh... and i expect it to work, so we use upthe silver, so the result is, this is what they look like today. now, cubes are deceiving that sothe 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 feetby 2 feet, it hasn't doubled, it's now 8 cubic feet. uh... as you double the measurements ona cube, it goes up in volume eight times, so there's actually about four, fivetimes more gold than there is silver on the exchanges thatinvestors 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 goldby at least a factor of 3.5,
i'm expecting a 10/1 ratioat an absolute minimum. uh... silver being 1/5 ofgold's price is perfectly logical, if it's going up slow and it hits gold'sprice then all the industry will just switched to gold because that's theonly 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 ofplatinum, rhodium and paladium. they use 900 millionounces of silver so there's not enough of those othermetals, the only alternative to silver in most of these applications, likekeyboards in electronics, is gold.
uh... so if it was going up slowly andit did hit the price of gold, gold can stop it in its tracks, if there's arush gold can go past, however silver is much cheaper to mine thangold and it wouldn't stay there. uh... we are always trying to figurethis stuff out at our company, trying to measure it and seewhen 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 ofinformation that you get, and when we're nearing a top, ourcustomers 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'recoming off the bubble, when it's overvalued it has never in 130 years, just gone back to fair value and goneback up into a bubble, it always continues on its uh... way down in abear market until it goes to severely
undervalued and then a new bull marketstarts 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 severelyundervalued, just like it has every time for thepast 130 years. so real estate and stocks aredoing this at the same time, while we're in a bull market forprecious metals and there is a problem with currencies. so we are going to be measuring allthese things very carefully, and then
using some confirmingindicators that should flash to us when to get ready to sell andwe're going to be letting you know, so thanks a lot, i hope you have somegreat holidays, i'll see you later. i was standing in front of a green screen just sortof drawing this charts out of memory and our animator adam had to sort of flow the chartsin front of me and move them around to match them up with my finger, uh... that is what youget as a customer, it's on the youtube channel "why goldand silver?" so if you do a search for "sell silver mike maloney",
because it's when to sell your gold and silverso "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 themhas a few dozen videos on it.
this is the gold panicin 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 abarbed wire canoe, fucked! thank you! unlike the secondto the last frame here,
here's one thingpeople do not realize. it does not take ben bernanke to print the dollarinto 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 investorsto try to get theirs before the masses wake upand the herd comes charging in, but this is the masses,this is the people waking up
out of their beer-and-footballinduced 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 inahead of the trend, and then get out when everybodyelse is panicking like that. like i said, this is the greatestwealth transfer in history, but you have no ideaof the scale until you think. if we do have a changein our monetary system
and if we have to go back tosome sort of asset backed currency that means that the people that areholding non asset backed currencies, which is all the currencieson the planet today, their wealth is transferred tothe holders of precious metals. this is the greatest wealth transfer inhistory, 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 theroaring twenties and through
the stock market crash and thenin the depths of the great depression, she started buying stockswhen everybody else was selling and when stocks were like the bad,and the poisoned investment that you did not wantto get involved in. stephanie's grandfather's sisterstarted buying the stocks, she is an example of wealth cycles, she rode this stocks up and idon't know exactly when she did it, but she must have sort of innate sensethat 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 seeout in the lobby where you can get free 100 trillion bucks from us, thanks! so, i just came offstage of the event, and you know, it's great, the event went great, all the informationwas very well received, it was a great audience,
but, you know? even though it's so rewarding to talk to the people liveand 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 reachingmillions of people at a time, and that's why i'm trying to go more video oriented,
than travelling around the planetlike 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'thave to make any more personal appearances, that i can just produce videos, write booksand get the information out there as fast as possible and reach
millions instead of thousands. well, we've been working on adocumentary 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 enjoyablefor people and highly educational. no chance in hell thatit's gonna happen, as far as a one world currencythat everybody is going to use. but what you see hereis that in the xau since the early eighties, on the average,
gold and silver outperformed thestocks, 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, onething you find out is that all fiat currencies eventuallyfall 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 sawthat 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 removesome things that you can't, some things that put financial constraint, whereyou just can't print as much currency as you want, the currency is pretty much doomed. it's beyond astonishing... if itwasn'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 backin history in the last 3000 years,
every episode of this kind of silly crap ended very very badly...