And so what is the primary thing that a market needs in that situation
in that scenario?
It needs to encourage the hoarders of silver specifically to Discord
their supplies at any cost because the economy needs a monetary medium
in order to restart the division of labor and keep everyone from
dying.
You could buy a nice house in Berlin for about a 100 dollars for an
exchange students, foreigners in Berlin.
At that time could exchange a 100 dollar bill for a nice sized house.
In the Swanky Town, areas of Berlin, and at a 15 to 1 ratio gold,
silver, that would mean about 75 ounces of silver for a house.
Do I believe this is going to happen again?
Yes.
I do.
But it's more than just a fantasy that we use to comfort ourselves in
times.
When silver is down, it is a logical reality that this would happen
and at the end of this video you'll understand why going to build up
to it.
And first examine what is going on in the housing market and then how
it is connected to Silver and then what happens when mortgage-backed
Securities which are pretty much in free fall.
Now when they collapse what happens to the fed the dollars issuer in
that time frame.
Now ultimately, this translates to has, is being sold for about 75 to
100 ounces of silver for a nice size house in the United States,
obviously prices will vary depending on location in size, but
generally, that is what should be expected at that point.
We should Discord our supplies.
Let's begin with a look at the physical premiums, which now are
pushing about 30%.
Which is higher than bear Market bottom in 2015 for the silver market.
From there, we'll go into the silver and housing thesis and so
premiums gone wild your is junk silver.
Now pushing 29% premiums just under 30% and you see here, the line
that I drew at the current premium, exceeds the premium and bear
Market, bottom late 2015, early 2016 exceeded only by to financial
crisis.
When premiums typically go to records, This is not been a Spike as
much as been a slow and steady move, higher trending move hires is not
quite a vertical line.
The we are going fast now.
And as a, reminder, once again, here it was silver.
Squeeze in 2021 right around a four, percent premium and premiums have
been moving higher ever since then.
And now I wanted to go into the housing issue and then we will pull
this back into the silver and gold markets and explain.
What is going on?
Is it chart that I could jiggered on Fred?
and it shows in blue, the 30 year, fixed mortgage,
Great and in red, the CPI inflation rate which we all know is a lie
but we're using it anyway as a base.
Now, what happens when the inflation rate, the CPI inflation rate as
they measure it is above the 30-year mortgage rate.
Well, that means that when a bank sells a mortgage, they will
automatically lose money on it because if they're weeding more power,
purchasing power than they're gaining by loaning out money at an
interest rate below.
The inflation rate, they will lose money by the end of that loan.
It is guaranteed only once in US history has that happened prior to
2021 and that was in the 21 months between 1973.
I believe it was November 1973 to around July 1975 or so.
It was this period here in the black rectangle.
And this was a period of stagflation of oil embargo and crisis, energy
crisis, price controls a whole bunch of Stuff was missing everything
up and it hasn't happened since then.
Until 2021 I believe those March 20 21 and it has been this way for 16
months and therefore logically anyone any any mortgage-backed
security, any thing that buys this kind of paper is going to lose real
purchasing power and it's going to be a losing investment.
So The Logical question becomes, why would a bank loan money?
Why would it be?
A Excel, a mortgage on a home.
Below the inflation rate.
It doesn't make any sense.
Why would a bank do that?
And the answer is because they can offload the mortgage into a
mortgage-backed security.
Bundle it up into a mortgage-backed, security, and offloaded on
someone or something that will buy the whole thing for an upfront
payment, and what are those things?
Well, one is the Federal Reserve which buys mortgage-backed Securities
and less now, and the other is the government-sponsored.
Prices the gses which are under the conservatorship of the United
States government, since 2008 and remain.
That way Fannie, Mae and Freddie Mac, who stalks are basically
worthless because they're under conservative ship.
So, when they buy these mortgage-backed Securities, what happens, they
give the bank's and upfront payment.
Meaning, the government gives the bank and upfront payment, or the
FED, gives the bank, an upfront payment and They will automatically
lose on these MBS has as the issuer of the dollar as a unit of
liability.
The dollar is essentially backed partly by mortgage-backed Securities
and so and mortgage-backed securities fall.
The dollar Falls, the value of the dollar in purchasing power Falls.
Yes, the value of housing Falls, the capital value has in Falls.
So all who made investments in housing will also lose, but rents will
not go down the cost of living will.
Continue to rise.
So this set the stage for a falling housing market.
And
In consumer prices at the same time, which is essentially what was
happening in the mid-1970s during that time, when the inflation rate
was above the 30 year mortgage rate, housing silver, and the market
logic of a 12:45 monetary ratio.
Okay, so we saw from mortgage-backed Securities before.
2008, the FED didn't know any of them.
So before 2008, those markets were not joined at the hip.
Now, they are second bullet point here, the The role of silver as I
explained in a previous silver report is to divide gold for retail
transactions.
And when paper is trusted, when you have a gold substitute paper or
digital, that is trusted that the that the public accepts then there
is basically, zero demand for monetary silver.
Now, you could say coins?
Yeah, we demand coins, we hoard coins, we are silver stackers.
So, doesn't that monetary demand.
The answer is not really.
No, it is hoarding demand.
Monetary demand is demand to use actual physical.
Cyril, silver material coins as money in a transaction, giving
somebody coins in exchange for something else.
That is a monetary demand, but that is not happening now, because
instead of we use substitutes, but when that paper, when that
subsidies no longer trusted, all of a sudden, demand for monetary,
silver to use those coins in transactions.
For other things, becomes infinite.
Why?
Because everyone in the world needs silver material in order to divide
gold for retail purchases.
And all of a sudden, the monetary demand for silver goes from 0 to 100
or whatever.
The Maximum number is on a scale of 1 to whatever.
Okay.
Now, here's where housing comes in.
Inviting our luxury homes went for about a hundred dollar bill and
that is true about 5 ounces of gold.
Now, at a 15 to 1 ratio is about 75 ounces of silver.
And a, what is the logic of having a house?
Sell for, what you could have enough for silver?
You could hold in one hand and just hand over for an entire house.
How does that make any sense?
If we just don't say, it's just fantasy and crazy.
Well, it's happened before.
And why does it make sense?
That it will happen?
Because in a world where government money substitutes are No longer
trusted, there is no way to divide goods and services rationally and
therefore the division of labor breaks down.
This is the zombie apocalypse, okay?
That is the equivalent of it because if the division of labor rates
down, nobody's going to eat in, everyone's going to start to death.
And so, what is the primary thing that a market needs in that
situation in that scenario?
It needs to encourage the hoarders of silver specifically to Discord
their supplies at Any cost because the economy needs a monetary
medium, in order to restart the division of labor and keep everyone
from dying.
This is more important than food is more important than water because
there's no way you're going to get food if you don't have a monitor.
Medium to divide goods and services and to establish a division of
labor.
And so the market screams for the silver, hoarders for the silver bugs
or the Silverbacks, whatever you want to call us to Discord, our
supplies at the best possible exchange rate.
And you're not going to get much better than that.
So we know when to do that and the need for a real physical monetary
medium silver.
As a monetary medium is going to be at the maximum of what it is
possible to be because everybody will need it.
And so if you have a bunch of silver and safe and you can get a house
for Handful of it, you better do it because by doing that not only
will you be able to acquire real wealth in enormous quantities.
But the economy in which you live division of labor in which you
participate will be able to re-establish itself, thanks to your
discarding of your physical silver supplies.
So as we try to get through this final correction, keep that in mind,
there is no escape from this.
It is happen every single time in monetary history, since gold and
silver became money is going to happen.
Again, this is just a matter of getting through this nasty correction,
as the reserve currency of the world dies, when a chicken is
slaughtered, it runs around for several seconds.
Without a head is already dead.
Why is it still running around because of electrical?
Those are still in its nerves but it is not going to run around for
much longer.
The monetary system is a chicken that has been slaughtered that ahead
running around and about to fall over.
Keep that in mind and you'll get through this.