hi this is Mike Maloney and hidden
secrets of money number seven comes out
tomorrow it's actually been finished and
in the can and locked and loaded for a
very long time now but I didn't want to
release it until people were really
going to take it seriously and I think
that moment is right now I think we're
at the inflection point where a bunch of
the predictions that I wrote in my book
which we've animated for you in this
episode are about to play out and I
think that the recession that I've been
predicting is here now and I think that
there's some economic disasters about to
start to play out we're already seeing
it start to heat up in Europe so I
wanted to show you some of the images
from this episode and I wanted to
introduce you to some of the concepts
that I explore in it but first you
really should watch episode 6 again
before watching episode 7 it's really
important to understand the big four
reasons that I see deflation coming
first hidden secrets of money number
seven shows how the transition from
deflation to Big inflation or possible
hyperinflation might happen as a
consequence of the world's central banks
meddling with the free market so join me
and my guests Jim Rickards and Rick rule
as we explore some of the economic
processes and some monetary history to
to show how that monetary history
reflects on you today how it's just
history his repeating and we're going to
explore the invisible crash and we're
going to explore the velocity of money
in this video I want to explore some
more of the invisible crash and this is
what an invisible crash will look like
in a
hyperinflation stocks will go along and
they will double in a year and then
they'll double again in six months and
then again in three months and then
again in a month and then again in a
week but if gas and groceries go up at a
rate that's 10 times as fast that means
that stocks even though people see them
going up and they rush into them are
actually not going up in value they're
going up in price I dedicated an entire
section of my book an entire chapter to
the concept of some things going up in
price while they're actually going down
in value and to show this what we have
to do is to inflation adjust some of
these prices so I'm going to inflation
adjust the gas and groceries uh with the
cpis version of gas and groceries now
the CPI index there's a whole bunch of
cpis and the one that you hear on the
news is called core CPI and in there
they exclude the only two things that
you absolutely need to survive food and
energy they measure a whole bunch of
other stuff but they do not measure food
and energy they claim that it's too
volatile and I think that's a bunch of
crap but if you adjust food and energy
to food and energy you come out with a
flat line the price of an apple measured
in apples is always an Apple so you come
out with a flat line like this but then
if you measure stocks in food and energy
instead of dollars you come out with a
line that looks like this and that is
the invisible crash instead of going up
in price
it's going down in value so you know you
can do the same thing measured in gold
and to show that uh I want to go to a
couple there's some examples here of
this is a a chart from my book and this
shows an invisible crash that happened
from 1966 to
1982 the black line is the Dow Jones
Industrial Average measured in points
which is basically a represent ation of
dollars and the gry line is the Dow
Jones Industrial Average adjusted to the
CPI which I like to call the CP lie
since the changes that they made in the
CPI back in the 80s under the Reagan
Administration but what you see here is
the top line is about flat the Dow Jones
Industrial Average rose up to 1,000
points and sort of bumped its head on it
and couldn't break through a th000 for
16 years but there was raging inflation
during that period of time and so
adjusted for inflation I wrote in my
book there are two basic kinds of tax
the kind the masses can see and the kind
they can't the inflation tax is of the
second kind whenever a politician
promises you more stuff than the guy
he's running against whenever the masses
think they're getting something for
nothing whenever our government engages
in deficit spending when whenever we
borrow the prosperity of tomorrow to
spend today it comes back to haunt us in
the form of of an inflation tax which
insidiously and invisibly confiscates
our wealth the greatest Advantage an
investor can have is to understand that
fact and exploit it now getting back to
this graph if you take a look at the gry
line if you had put $100,000 in the Dow
in
1966 by 1982 your 00,000 was still
$100,000 but due to inflation it would
only buy you
$334,000 worth of goods and services as
measured by the 1966 CPI that represents
a 66% loss in value that's how inflation
can cause an invisible crash now if you
look at the 1929 crash you see that's
about a 90% crash it's huge but who ever
heard of the crash of
1966 nobody and it's an invisible crash
the average investor doesn't know about
it but the same thing has been going on
today um here I show the the bottom line
is the NASDAQ the middle line the blue
line is the S&P 500 the purple line is
the Dow Jones Industrial Average and the
red line way on top is the performance
of gold this goes back to the year 2000
so from January 2000 until today these
are the performances of the stock market
compared to gold now this is not
inflation adjusted inflation adjusted
all of the stock markets are still down
they are below their their 2,000 highs
and to show you that here's the S&P
going back to the year 2000 again but if
you want to measure it in terms of gold
instead of of dollars take the dollar
out of the equation and here is what you
get when this is how many ounces of gold
the S&P is worth so this is what the S&P
uh 500 Index looks like to a gold
investor stocks have been going down now
for 16 years it's gone from 52 ounces of
gold down to 1.65 ounces of gold here's
a longer term view going all the way
back to 1980 measured in Gold though
this is from the perspective of a gold
investor the S&P has been falling for 16
years the peak was actually back in
1999 and right now the S&P has the same
value that it had in
1996 and guess what folks it's going
back to levels that it was back in the
80s I don't know exactly when uh you
know things go up and down in the
meantime but its Destiny is to go back
down on those levels of the early 1980s
at the beginning of this chart so that's
my take on things please join us in
episode 7 for some really interesting
understandings of the velocity of money
and of the invisible crash thanks a lot
for listening we'll see you at hidden
secrets of money episode 7 and if you
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