There's no question that if we have a dollar crisis, gold is going to
rise to replace the dollar as the primary International Reserve asset,
not a currency.
Gold is true money, what would happen is silver if you took it up,
fifty five fifty times, fear Silver's at 20, you know, a thousand
dollars silver, Well, the difference is the financial position of the
United States in 1980 verse the versus the pennant financial position.
Now I mean, the national debt in 1980 was only about a trillion.
It's 31 times that size.
Now, you know, the the fed's balance sheet will didn't really have
much of a balance sheet back then as opposed to the nine trillion
dollar balance sheet, it has right now the levels of debt throughout
the economy Unprecedented compared to 1980 back in 1980.
The US economy was still a creditor Nation.
Now we're the world's biggest debtor Nation.
We were still writing trade, surpluses in 1980, not record trade,
deficits debt to GDP.
I forget what it was, maybe down like 40% or something like that.
Now, it's like a hundred and twenty percent so it's night and day,
we're not in a position to do the right thing.
I mean, we are ER, but only with far, more adverse consequences than
what we suffered in the early 1980s and I just don't think there's the
political will anywhere in Washington including the Federal Reserve to
allow that to happen.
Now, that doesn't mean we're going to get away with it, we're actually
going to end up with something worse, because what we're going to have
is run away or hyperinflation, that is what we're likely to suffer as
a result.
Of the fed and got the government's unwillingness to let us swallow
the bitter tasting medicine.
So he end up dying from an inflationary disease that they refused to
allow the Cure but if you go back to the 1970s gold started, the
decade at $35 an ounce.
And it ended around 850 now, think about that percentage gain.
That is enormous.
Now, the reason that gold stop going up in early 1980s, was because
Volker and those 20% interest rates.
Well, we're nowhere.
Close to that right now.
I mean, Global goal is closer to 1979 1980 as far as where it is in
the cycle.
And so this is going to be an explosive rally that will rival the
percentage gains I think of the 1970s and that is just enormous.
If you're talking about silver, I mean, silver was really about a
dollar an hour, Ounce in 1970, you know, a silver dollar.
Worth a dollar that's about an ounce of silver, you know?
And those silver dollars were trading for like, 50 bucks, a piece by
the peak in 1980, it was a 50 fold increase in the price of silver.
What's, you know, what would what would happen is silver.
If you took it up, fifty five fifty times, fear silver said 20, you
know what thousand dollars silver to have something to rival?
What happened 1970s?
Oh look, there's a long way for these metals to go and everything
that's happening now.
Is just noise as we're bouncing along the bottom.
If you also look at the bond market, you can see the answer.
I mean, look at a 30-year US Treasury.
It's yielding 3% now.
Inflation is nine percent.
Why would somebody loan the US government money for 30 years at 3%?
Well, they must believe that, that nine percent inflation is going to
go away very quickly and that the average rate of inflation over the
next 30 Years will be maybe two percent which means there's a one
percent yield although why anybody?
Take a one percent return over 30 years, that makes no sense either,
but it's clear that the bond market is confident that inflation is
going to go away.
I think the gold market is making the same mistake.
Gold Traders are looking at the fence commitment to fighting inflation
and they believe that they've got the resolve that they're going to do
it that they're going to get rid of inflation and they're going to do
it with high interest rates which are going to be at a headwind for
gold.
And if gold is an inflation hedge and there's no inflation to hedge
because the FED is committed to get rid of it.
Well, that's what's keeping the price of gold down.
But when investors in both markets, both the bond market and the
metals markets, understand that this is all talk and so Bluff that the
FED is not going to be able to fight inflation because the severity of
the rate hikes that would actually be required because what they've
done so far as holy and sufficient, the type of monetary policy that
would actually be required to get rid of inflation.
Is never going to happen.
And of course we're never going to have get rid of inflation without
the cooperation of the government.
The government has to substantially cut government spending and that's
never going to happen.
They're going to keep on increasing government spending.
So when the markets figure out that this is all a ruse that inflation
is not going away.
It's here to stay and it's going to be much much higher than 2%, maybe
even double digits.
As far as the eye can see, the bond market is going to implode, and
the gold market is going to Explode right.
Bond prices are going to crash and goals going to soar, but the reason
that's not happening now is because investors don't get it.
They just do not understand the predicament that the economy is in.
They, they don't understand the position that the Federal Reserve is
in and they are overestimating, the feds ability to do what they claim
they're going to do.
And, you know, I don't know why everything the FED has said, has been
wrong.
Every forecast they've made, has been wrong yet.
They still have credibility.
No question that if we have a dollar crisis, gold is going to rise to
replace the dollar as the primary International Reserve asset, not a
currency, gold is true money.
Everything else is a money substitute.
And the difference between legitimate currencies and Fiat currencies,
legitimate currencies are backed by gold Fiat.
Currencies are not, they're backed by nothing.
And so I think the world is going to go back to a gold standard for so
many different reasons.
Us.
And the beauty of the technology that we have today is that people can
also go on a gold standard privately.
You don't need the government's to do it.
In fact, maybe the free market will return to the gold standard before
governments because it's very easy to have gold stored in a depository
that you trust.
And the owner of that, the depository can issue digital tokens that
are on a blockchain that Back by that gold, each token can be one gram
of gold and those tokens can be easily negotiated.
They can be used as a medium of exchange as a unit of account as a
store of value.
And so people can easily and inexpensively transact and Save in gold
and silver with counterparties all around the world.
Very simply easier than they can ever do in the past.
So the technology that we have today, makes a gold standard far more
practical than it.
Ever was in the past and it worked great in the past.
So it'll work even better in the future.