hi this is the first of the private
newsletter / videos that goldsilver.com
customers only can get however the first
several of these and until we reach a
blow-off top until gold and silver are
maxing out in their value we're going to
make some of these available to the
public so they can see what we are doing
several weeks after you get a chance to
view these one of the values that we
think that we can provide that no other
dealer can provide is that we are all
invested in gold and silver we're on the
same side of the fence that you are it's
in our vested interest to try and figure
out exactly where the top is and to sell
our personal investments at that time
what we're going to be doing for our
customers we're going to be measuring
this for ourselves and then we're going
to let you know what we are doing and
the thing is a lot of people will say
well when gold hits twenty-five hundred
dollars or when it hits five thousand
dollars an ounce I'm going to sell but
they're missing the point that price
means absolutely nothing we need to talk
about a price you're using the dollar as
a measuring stick or some other currency
in the world as a measuring stick and
all currencies are falling in value they
are not a store of value so you can't
use them to measure anything price means
nothing value is everything twenty five
hundred five thousand dollars those
might be good figures for Gold's Peak if
we go into a deflation if we go to a big
inflation it could be thirty thousand
dollars or fifty you know ten thousand
fifteen thousand thirty thousand who
knows if we have hyperinflation it is
perfectly logical to have gold prices
measured in billions trillions or
quadrillions the whole point here is
currencies are a very poor measuring
stick and it doesn't matter which
currency you're using but gold is
measured in US dollars and the US dollar
keeps on shrinking in purchasing power
that is the reason that prices go up
it's not because this stuff went up it's
because the currency went down
so you need some other measurement of
value and one of the best is measuring
things with gold and silver at
goldsilver.com we have a team of
researchers and myself and what we're
doing is every day we're trying to
figure out what the value is and we have
a proprietary basket of indicators that
we're going to be using that measure
Gold's purchasing power and so we should
be able to measure where the top of this
market is and then we've got some
confirming indicators some other
indicators that we use that have to sort
of flash a sell signal once we get into
these over valuations on the main basket
of indicators and I can't tell you what
the whole basket is or what the
confirming indicators are but I can tell
you a few of them and basically a couple
of them are the gold dowel ratio which
you have seen before
most likely and real estate a
single-family median price home measured
in gold so instead of pricing these in
dollars we're going to price them and
value them in ounces of gold if your
house goes up in price but it purchases
less food less gasoline less pay pays
less for water and power or shares of
stock or ounces of gold that means it's
actually fallen in value while it's been
going up in price
same thing for stocks and for stocks the
one of the best measurements is the Dow
which is a basket of 30 different
companies it's the largest industrial
companies in the United States the Dow
Jones Industrials and they take this
index of the 30 companies what we do is
we take it and we divide it by gold and
you've probably seen this before from
other sources also but basically when
you price and value the dow in gold what
you see is that it has a mean average of
about four ounces of gold and if you
start back in 1900 up to 1929
got out of whack it went into a bubble
2:28 I'm sorry 18 ounces of gold however
that was just the stock market moving it
was stocks moving but not gold gold was
$20 and 67 cents an ounce then the
markets crashed and it reverted past the
mean down to just two ounces of gold in
1932 then we went up in 1966 to about 28
ounces of gold and then the stock
markets went sideways but gold began to
move because it became free trading in
1971 and the market reverted and the Dow
went all the way down to just one ounce
of gold that means that on the same day
the Dow and gold were the same price the
points of the Dow and the price of gold
then it went from one ounce of gold up
to 45 ounces of gold in the year 2000
and it's reverting now it's back down to
8 the mean is 4 but because we're in a
larger bubble remember it was 18 back in
the 1929 28 in 1966 and then 45 in the
year 2000 the more out of whack it is
when it was at 18 it went to 2 when it
was at 28 it went to 1 it was a 45 in
the year 2000 it's probably going down
to about a half an ounce of gold meaning
there will come a day where the price of
gold is going to be double whatever the
points of the Dow is now it's possible
that in a deflation it may only go down
to just 2 ounces of gold in a big
inflation or hyperinflation it might go
to one tenth of an ounce of gold
meaning the price of gold would be 10
times the Dow we don't actually know
this but we do have other indicators
that these these main indicators Gold's
value measured in stock and gold's value
measured in real estate those are going
to tell us when we're getting into a
caution zone and then where we get we're
into an over valuation where it should
normally be sold but there's some other
things that you have to watch what's
going to happen with the dollar you know
what our exchange rates doing
bonds all of these things have to be
watched and sort of simultaneously read
and then you've got to sort of try and
make a prediction of what is going to
happen where the top is because if
currencies do start to fail and people
rush back toward gold and silver versus
the dollar I mean prices could really go
astronomical but the thing is you have
seen that Dow Gold ratio before where
the Dow is measured in ounces of gold
but you're measuring the value of stocks
with gold
if you flip that around and measure gold
with by how many shares of stock gold is
worth then you get the opposite where
you're measuring how much purchasing
power Gold is and if we do a chart on
that what you see is that the from 1980
gold went down and it's just coming off
the bottom and it should continue rising
up to where it was and probably go
further but this is going to make a nice
little basket that you can then load
real estate and stocks into but the the
Dow so the silver Dow ratio when you
look at that that went like straight
down and it's coming off of this bottom
and it's barely even started to move up
well it's going to rise just like the
other side if you flip these charts
around you'll get as a symmetrical idea
of what this chart is doing but because
silver is more rare this time around
than it was during the bull market of
the 70s and because there's a greater
percentage of the world's population
that could invest in gold and silver it
was only 10% of the world's population
before just North America and Western
Europe and because everybody has 10
times more dollars and because people
have an investment mindset now the
average public did not have an
investment mindset back in the 70s
you've got 10 times more people that can
buy it each with ten times more currency
and in every population probably
somewhere between 10 and 100 times maybe
even greater more people that have an
investment mentality that are look
for that next place to store their value
that's going to protect their wealth and
grow their wealth if you look at the
Soviet Union back in the 70s there
wasn't anybody there that could buy gold
there were no markets there China under
Mao they couldn't buy gold and there
were no markets there the price of gold
in the 70s was set on the commodities
exchange in the United States and the
London metals exchange that was it so it
was North America and Western Europe the
rest of the world was excluded this time
it's everybody and this time currencies
have a problem so I believe this silver
ratio that I was talking about silver
Dao ratios is going to fall and then
it's going to go up and it's just gonna
I mean you know in this studio we've got
a very high ceiling with 10 12 foot
ceiling this thing is going to go
through the roof so it's going to look
like this giant ladle that you can then
scoop up real estate and oil wells and
stocks you'll be able to go into the
next investment class and what we're
going to do is help you figure out where
that is I mean we can't guarantee
anything but we only win if we can pick
the top of this anybody that says they
can nail the absolute top they're lying
if they do pick the absolute top they
were lucky and that's all it is but we
are planning on easing out probably like
in 20 percent increments sort of around
the top and we'll be measuring this and
letting you know what we do know is that
real estate is still in a bubble based
on the one of the best ways to measure
real estate is the mortgage rent ratio
and so how much would you pay for a
house how many dollars would you pay for
a house for each dollar in rent that you
can receive and right now we are coming
off the biggest bubble in history the
bubble back in in the in 1989-1990 it
was about a buck 25 that you were paying
on a house if you were taking on a
30-year mortgage you were paying a buck
25 for each dollars
worth of rent and then when that bubble
popped it blew past the mean it should
be right around a buck a buck five that
you pay for a house for each dollar you
can rent it for monthly and it blew past
the mean it went down to 0.9 so that
means on a national average from 92 to
about 95 real estate cash flowed
single-family median price homes cash
flowed by about 10 percent but nobody
could get a loan credit was hard to come
by the economy was in the dumpster so
nobody was buying them except the people
that / we're positioned right and we
hope that we can help position you right
but then we went into the biggest bubble
in history where this real estate
mortgage rent ratio went to where people
were paying a buck 85 a buck 90 for $1
in cash flow it was insane now it's
reverting it has come down to the level
of where we were in 1989 at the top a
peak of that bubble and bounced and
we're still not below the bubble of 1989
it's it's seeking equilibrium all
markets seek equilibrium they have to is
seeking fair values and so it has to
fall until the mortgage rent ratio is
where it has been historically and
because it's coming off the biggest
bubble in history it's probably going to
blow right past the mean and you're
going to see a cash flow like crazy
where real estate is going to cash flow
the single-family median price home on a
national average may cash flow at
fifteen twenty percent twenty five
percent who knows but by measuring this
is one of the indicators that we're
using to show whether or not this these
markets are over with another one every
currency on the planet
there is no culture or country or
currency that is safe from the US dollar
the u.s. the US dollar catches a cold it
is contagious and if it catches a cold
the rest of the world will get sick
except this time I don't think it's just
a cold
I think the US dollar has cancer this
isn't going to be pretty when it happens
I am NOT an end of world or a doomsday
guy all you can do is play the hand that
you are dealt and if this does happen
and I believe it will happen no matter
what we do because it's just all this
energy that has built up being released
when it happens it's not going to be
good for most people it's only going to
be good for a few those are the people
that hold gold and silver