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. 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 in the midst of a crisis. 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. 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 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. 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, 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. 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, 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?