How High Will The Gold Price Rise? | Mike Maloney

more and more highly respected investors many of them billionaires like warren buffett paul singer sam zell and ray dalio have increased their exposure to gold over the past 12 months they've done this for many reasons with rising inflation topping the list so for those betting on a bright future for gold how high can the price go we invited money expert mike maloney to answer that very question at the recent wealthy wealthyon conference held in early june don't worry if you missed the conference as we're making mike's excellent presentation available to you right now it's only the last 50 years that we began this grand experiment where all of the world's currencies would be fiat currencies and this experiment where we're going to run the world's reserve currency as a fiat also and this experiment of of currencies being fiat has been tried thousands of times it has a 100 failure rate hi i'm mike maloney and i want to congratulate adam taggart on putting together such a great set of speakers for his first wealthy on event this is so jam-packed full of speakers i don't have a lot of time so i'm going to get right into it with some headlines from the previous week zero hedge russia's uh sovereign wealth fund dumps all dollar assets now anybody that's been following me knows that i've been uh present making presentations on the death of the global dollar standard since 2009 and this is just another one of what i call the nails in the coffin and they're coming faster and faster these days now uh before last week the mix that the this sovereign wealth fund had was about 35 percent dollars 35 euros and the other 30 was made up of the yen the yuan the british pound and gold and today that mix as of this week uh that mix is being changed the euro is going from 35 to 40 percent but uh the the mix that used to be just 30 percent now makes up 60 percent and the big increases are mostly in the chinese yuan and gold so this is huge news uh another one of the nails of the coffin in the global dollar standard and it's just saying that there's some big changes coming from the wall street journal biden's budget signal to the fed his economists assume negative real interest rates for a decade now the real interest rate is the interest rate that you're getting on short-term bonds minus or whatever investment that you've got that you've got an interest rate on minus the rate of inflation if inflation is higher than the interest rate you're getting paid then your interest rate is actually negative so negative real rates through 2031. so this is a a decade-long projection that they're basing their budgets and their spending off of so the rosier they can make this stuff the smoke and mirrors that they use the uh the the more that they're able to sp justify reckless spending inflation will remain between 2.1 and 2.3 that's a 0.2 percent band that they're going to be able to keep inflation uh ranging between for a decade yeah right three months a month treasuries will remain below the inflation rate for 10 years the 10-year treasury will stay below inflation through 2024 never rising above 2.8 percent even as the unemployment rate hits 3.8 percent in 2023 and stays there through 2031. now this is a bold statement remember this because i'm going to come back to it in a minute so uh in 2023 two years from now the unemployment rate is going to go down to just 3.8 and it's going to stay there for the next eight years that's what they're basing all of these numbers on in other words the white house is assuming that the federal reserve will maintain negative real rates of interest despite eight years of full employment so you've got a booming economy but you're suppressing interest rates and keeping them negative for eight years yet somehow inflation will remain contained these are two like mutually exclusive things there's there's no place at least in this universe that these things can both happen together maintain negative interest rates and have full employment for eight years a booming economy so here is the unemployment rate and i just generated this yesterday on the federal reserve's website and this goes back to 1948 i believe and we're supposedly down at six percent but they're really fudging these numbers to try and get that uh there's no way that it's really down at six percent but i want to point out that the last economic expansion uh ten years and six months was the longest in history the one preceding that that was the second longest now is this one from 1992 to 2001 or 2002 and what you see here is that it hit 3.8 percent here and then when eventually went down to 3.5 but or 3.8 percent here but in order to see 3.8 percent again there was april of 2000 that it hit 3.8 percent and before that you got to go all the way back into the 60s to get unemployment rates this low so they're saying they're going to go down to the lowest rates since the 1960s and they're just gonna stay there for eight years and they're basing their numbers off of this so this is the uh an update from a presentation i gave called early warning back in 2018 and it's the length of the time between recessions so it's the economic expansions and it's a list that goes all the way back to 1854 so you're going back to the civil war here and i've put these in order of length not in order of the time period and what you see here is that the longest when i gave this presentation it was in 2018 that's the reason this says 2009 to 2018. um the longest one was 1991 to 2001 and it lasted 120 months 10 years and this is so the average in all of these is 4.5 years and this is where we were at the time and i said this is coming to an end this is this economic expansion is very long in the tooth it cannot go forever and i was also citing the employment sys statistics unemployment had been very very low and so this had to come to an end because every time unemployment gets down to that area of 4.2 4 3.8 it means there's a recession coming up just around the corner that's that's always been an indicator is these very low unemployment rates uh but then the congressional budget office or the cannabis bogarting optimists projection was there smoking something funny to get out to this they were projecting uh 240 months 20 years of uh economic expansion so you know what they're projecting this time isn't going to happen either not with the imbalances that we currently have so this is also an update from the early warning and i originally did this in 2017 a year before early warning but i was looking at long-term interest rates and just noticed what it what appears to be a cycle and i looked up some charts the information gets very blocky before the year 1880 but you could see that there appears to be these waves and cycles that repeat throughout history of interest rates bouncing up and down and what i did was i took the lowest interest rates in a cycle so when the cycle begins at the lowest goes up to a peak and returns to the bottom and it turned out it was the same number of months leading up to the peak as the decline into the next bottom and you could balance an arrow perfectly on top of that so with that i decided i would say you know can i make a projection on how long this interest rate cycle is going to go by repeating the same process and i said that somewhere between 2020 and 2023 interest rates should bottom and then we'll see a reversal of interest rates which traps the the government and the treasury and the federal reserve once interest rates start increasing the refinancing of the national debt becomes very very expensive and starts to consume more and more and more of the annual budget so anyway let's see where this went since the since i made this graph originally this is what has happened since in the last year last couple of years so that's where we are we're very close to what should be the end of this there could be one more big dip left but you know we're getting down close to zero and this is long-term interest rates so these are 30-year and 20-year bonds that we're talking about we're not talking about three-month bills or we're not talking about treasury notes we're talking about bonds so it can't stay that way forever are we in bubbles well that last chart of interest rates when interest rates are going down that's a bull market for bonds and that went from 1980 until today so that's one of the oldest bull markets longest in the tooth uh way overvalued and severely you know radiate ready for a severe correction and the higher the cliff the bigger the fall this is p e ratios so it's the the price that people are paying for stocks and this is for the s p 500 it's the price that people are paying for stocks as a multiple of the earnings per share the the amount that uh the dividends are uh paid per share in that car or the company's earnings per share whether they use that for expansion or dividends but what this shows you is you know uh the the bubbles and the times when stocks are way undervalued a super bargain and you should be buying them and it sort of looks like maybe 20 is fair value when you look at the scale of this but no we have been in this insane bubble territory for this entire century if you erase this century and you take a look at this 115 years of data that goes from 1880 to 1995 what you see is that for that 115 years about 15 was fair value and when i got into this 20 years ago the nasdaq was crashing and and there were writers out there saying of course the stock markets are crashing the p e ratios were in a bubble it was unsustainable it was just absolutely insane so let's bring back uh this century and take a look at where we are today what sticks out for me here is that in 19 in 1929 we were at a p e ratio of 33 today we're up at 37 something and so we are in an enormous bubble the higher the cliff the bigger the fall this is the buffett indicator so it's the market capitalization or the value of the companies divided by gdp this is the federal reserve's data the wilshire 5000 is another good proxy and you get almost exactly the same curve there's a little bit of variation when you get into this century but it's very very tiny when you use the wilshire but anyway we're up at 209 percent the the value of the publicly listed companies is 209 percent the value of the economy over a one year period that's nuts and uh about 50 60 you know 40 to 60 percent is a fair value range this goes from 87 down to 32 before we got into the craziness of uh the 21st century all i can say is the higher the cliff the bigger the fall this is the same thing market cap u.s equities divided by gdp and what we have here is different data we've got the federal reserve data the fraser institute the international monetary fund and the wilshire indexes and you see the same three peak uh bubbles in this century and then a dip down in the 80s just like the other two charts a rise to a peak in the 60s but then this goes back to the year 1900 right there and so what you get to see here is that fair value truly is in that area that i pointed out 40 to 60 percent of the economy uh is what the corporations that create the economy should be valued at not 209 of the economy now one of the attendees of this conference sent in a question when he signed up and that was a few weeks ago but i dug that question up because i haven't answered that yet in my youtube videos and it's has there ever been an episode in history of hyperinflation with a reserve currency and what i want to say is oh you got me there hasn't the answer is no there hasn't been a hyperinflation with reserve currency well how did this get started you know a few years ago some newsletter writers slash commentators slash monetary historian slash economist slash precious metals expert uh said that there's never been an episode of hyperinflation with a reserve currency and uh you know when he said that everybody took that as meaning oh a reserve currency cannot go into a hyperinflation because that has never happened before well let's examine this a little bit a lot of this comes from this chart right up here this chart was put together by jp morgan uh using data from the hong kong monetary authority in december of 2011 and it has been repeated time after time after time and then copied by others with embellishments on the data and then they give themselves credit after embellishing it a little bit um but uh this is just it's wrong it's it's bad information uh it is misinformation um when you the further you go back in history the more ambiguous that everything becomes the more vague all of the data gets you don't have reports from a central bank you can't make a graph on the federal reserve's website and get pretty accurate data from all of these uh different treasuries and so on uh so you're going back into the 1400s here and they just originally had these little boxes uh then somebody drew some lines across here and then somebody does some research on wikipedia and puts in the number of years that they think it lasted and then somebody else copied that and and but where does this notion come from uh it says reserve currency status does not last forever so this is somebody that has an agenda they believe the same thing that i believe i believe that the dollars uh that the dollar as the uh global dollar standard this is going to end soon the dollar's days as a reserve currency are numbered but where does this uh information come from and and why is why do i suspect that this is misinformation and that a lot of it is actually wrong well a few years ago i put together my own version of this called predominant and or reserved currencies and new monetary systems and so we've got the same blocks portugal 80 years spain 110 years holland 80 years france 95 years now i don't know much about portugal back then and france i know a little bit about this probably shouldn't even be here and if it is this should be like a lot smaller or something it wasn't like this main hub of the international monetary system with all of the world's central banks holding french livers or franks or whatever they had back then but here in spain this hundred and ten years that they selected this is when the conquistadors were going over to the americas and they were murdering all of the citizens and and absconding with their economic with with their economy they were taking all of the gold and silver taking it back to spain melting it down and turning it into coins now everybody across all of europe took the gold and silver coinage it didn't matter what images were on it what country it came from it was more trusted the more you had seen the same coin over and over again but during this great inflation that happened in spain during that economic boom that they had they started importing a lot of goods and when you're importing goods and you're paying for it with money gold and silver real money not fiat currency uh well if this happens whether you're paying for it with fiat currency or not but when you're paying for it with real money you're exporting that money and you're importing the goods so uh spanish coins started flooding the world back then and then in holland this is because of the dutch east india company and the trade route going to india caused there was a boom in holland and they were doing the same thing they were importing goods along this trade route with all the countries that they were dealing with and when they do that they're exporting their own coinage so it becomes the predominant coinage that is circulating the predominant currency uh it's these are not reserved currencies none of them are reserved currencies back then each country had a treasury they would tax their citizens and take the gold and silver coins and they would spend them on building castles for royalty and war that's you know that's what the treasuries did they had wars and they built castles but during this period of time there were no central banks there was no hub of the monetary system doing international clearing and payments uh and uh when you take this 110 years of spain being the predominant currency actually it was predominant you know a lot of the history it depends on uh what documents you're reading and what country they came from uh with this spanish thing you know the coinage act of 1792 where the u.s dollar was first created it was a specified a certain weight of silver there was a a weight and a purity specified and it was a carbon copy of the spanish mill dollar why because all the way over here in 1792 the coins that were the predominant coins circulating in the americas was the spanish mill dollar so really this went for more than 250 years uh it all depends on the history that you're looking at and and what facts you're nitpicking but really all of these need to be real fuzzy things that are overlapping because otherwise it's just misinformation then the world's first central bank uh the bank of england uh now this says 98 to 104 years all of the other ones said 105 years i've changed this and there's a reason now the bank of england uh was first created in 1694 way back here but in 1816 they went on the gold standard and then uh when world war one broke out in 1914 they went they abandoned they suspended the gold standard then they went back on to it in 1925 and then they finally completely abandoned it forever in 1931. so i've created this overlap and then all of those other charts started the usa as the world's reserve currency when great britain stopped i've created the overlap here but i've got 77 to 107 years why because uh the the uh federal reserve the act was passed in 1913. they opened their doors for biz that was december of 1913 the federal reserve act was passed they opened their doors for business in november of 1914 and so um from 1914 until today is 107 years but the u.s dollar didn't become the world's reserve currency right away uh it took some some time for that to happen and it really happened at the bretton woods conference and that was 77 years ago not 107 years ago so that is when reserve currencies really started was with the bretton woods conference back uh during the uh reign where great britain was running the uh the international monetary system being the hub of the international gold standard with settlement happening and uh and gold in the basement of the bank of england on pallets for a lot of different countries back then other central banks didn't hold a whole lot of british consoles or german buns or u.s bonds or guilds or whatever they didn't hold the currencies or the bonds of that country they held gold most most of the reserve currency was gold and the same thing continued with the usa until the bretton woods system and that started flooding other countries with uh fiat with currency that was denominated in either bonds or dollars but then so predominant currency status averages about a century it isn't it used to say that reserve currency status averages 94 years baloney it averages somewhere around a century but there are monetary system shifts that happened and uh we're at 49 years plus right now august 15th of this year the u.s dollar will have been a fiat currency for 50 years so here's the uh classical gold standard the intra-war gold exchange standard the bretton woods system which was one of the most stable of these this was very stable but there still still were a lot of conflicts of interest when it comes to banking and finance back then that were outlawed later and then we go on to a completely fiat system globally all currencies began august 15 71 nixon takes the dollar off of gold and almost all of the world's currencies were backed by u.s dollars and not gold a few of them were backed by gold but very shortly after that they left gold as well so basically it's of this 107 years it's only the last 50 years that we began this grand experiment where all of the world's currencies would be fiat currencies and this experiment where we're going to run the world's reserve currency as a fiat also and this experiment of of currencies being fiat has been tried thousands of times it has a 100 failure rate there is no currency that you can point to that existed like uh you know before world war one that had ever survived that went fiat when they went fiat they eventually died and so we began this experiment only 50 years ago so uh let's you know the thing is that gold and predominant currencies gold has been real money and predominant currency for more than 5 000 years the predominant currency for more than 5 000 years and it's been predominant reserve currency since central banking started and it i mean i'm going to show you a chart in a minute here so the question has there ever been an episode in history of hyperinflation with a reserve currency no why the reserve currencies were gold you can't print gold it's that simple gold puts a constraint on central bankers it puts a constraint on the economy on government and central bankers and the only way that a fiat currency can work is for a central banker to have the restraint if he's not constrained he's got to have his own restraint not to add some zeros when he's typing currency into the system you know we used to type millions and then billions and now we type trillions and the in we type trillions all the time into the economy now what is the difference between 1 and a trillion 12 zeros what is the difference between a trillion and a quadrillion three zeros so that central banker has to prevent himself from typing another zero in there or we go into hyperinflation now so am i saying that there is going to be a hyperinflation of the u.s dollar the world's reserve currency no that's not what i'm saying i'm saying that it is definitely possible though it has been since we began this experiment 50 years ago and so we have to watch for that but here incrementum my friend ronnie strofile at incrementum ag they put together this great chart with information from the imf the world golds count gold council uh this equals 100 of uh central bank reserves so all the world's central banks this is a hundred percent of their reserves and this is the mix and here's 1971 when we went off of the you know the bretton woods system and the gold standard but you can see it's only been i mean it didn't pass even 50 until the late 80s and so you know you've got 40 years here of this experiment where it's mostly fiat currency now this ends in 2017 so um uh it's probably close to 90 percent right now fiat currency and only 10 gold but you go back to 1964 when this begin begin the chart begins now that's 20 years after bretton woods and you can see this was the fiat currencies were ramping up but it was mostly gold it was 70 percent gold i bet if you go back to 1944 it's like 10 or 15 percent fiat currencies and uh 85 90 gold so why has a uh reserve currency never gone into a hyperinflation because you can't print gold and every reserve currency or and or predominant currency has been gold in the past that is the reason so can a fiat currency that's a reserve currency go into a hyperinflation absolutely will it happen maybe uh so charles de gaulle in the dollar crisis february 1965 he says we consider necessary that international trade be established as it as it was the case before the great misfortunes of the world which meant the world wars on an indisputable monetary base and one that does not bear the mark of any particular country which base in truth no one can see how one could really have any standard criterion other than gold so when it comes to central banking and uh international payments and the world's reserve currency the one of the world reserve currencies around the world is still gold i mean canada doesn't have any there's a few countries that don't have any but take a look at how many countries are accumulating gold current currently and you get an inkling of well could they know something something that might be up that i don't know about well you know russia's getting rid of their dollars and they've been accumulating gold china's been doing the same thing so uh if gold went up you know if we had a crisis and they needed to reinstill uh trust in the system because all banking the more you investigate this the more that you uh realize that finance and banking is nothing but a shell game a hat trick it's a con game and what a con game means is confidence game and if you lose confidence then the game is up the game is over with if if you're if if somebody is a trickster trying to dupe somebody else and steal from them and he get gains their confidence that's a confidence game and if if the person that this trick is being perpetrated on loses confidence in the trickster then the game's up the the con doesn't work and so that's what a confidence game is and if the us has to back currency in circulation with the gold that it claims that it owns take a look at my two videos who really owns america's gold and you'll find out that it's actually the federal reserve but whether it's the treasury or the federal reserve the gold that is supposed to be american americans gold uh if they had to back the currency in circulation and currently on the fed's balance sheet that's the liability that the gold is the asset against it's it's uh to back the us dollar the paper dollars that are in circulation but today that would be eight thousand two hundred and forty dollars an ounce then if they had to reinstall confidence in the entire banking system if banks were afraid to lend to each other if they didn't trust the base currency that the federal reserve types into their accounts at the federal reserve because the total monetary base is currency in circulation plus all of the uh base currency the the bank reserves that are in the accounts that the banks have at the federal reserve and it never leaves the federal reserve unless the bank uh takes some of their reserves and trades them in to the bureau of engraving and printing and orders vault cash when they get vault cash they're converting bank reserves into vault cash and then that becomes currency in circulation so i'm i just made a chart yesterday this same exact chart except instead of being at 5 trillion this now goes over 6 trillion so i'm i tried to line them up really well and i'm going to weigh wipe them up from top to bottom but it used to be 20 20 000 ounce actually it was a little less it was 19 890 or something like that i just rounded to 20 000 for my last presentation that was about 10 months ago or something and but since then look at what they've done to the monetary system it's over 6 trillion now and we're at 23 hundred and six dollars per ounce required to cover base currency if enough confidence was lost between the banks to where they had to use the gold to cover uh inter bank settlement so the point of this whole presentation revolves around the two opening articles the second opening article was about the white house's proposed budget and the fantasy fairy tale numbers that they're basing this on which can't happen in any reality that exists in this universe maybe there's some parallel universe that they could exist in but it's pretty much impossible if they did achieve this it means that for the next decade we are going to experience the greatest precious metals bull market in the history of mankind if that doesn't happen it means that scenario two has happened which was the original article i opened up with which was about the transition from the current monetary system the global dollar standard to some new system so it means a complete rearrangement the complete chaos of the breakdown and rearrangement of the monetary system which means the precious metals won't just experience some astronomical bull market it'll be somewhere between astronomical and infinity so this is the performance of gold versus our proxy for the stock market the s p 500 for this entire century and my question is have you got gold thank you very much and thank you adam for having me we hope you've enjoyed this excellent presentation by goldsover.com's mike maloney if mike's outlook for gold is inspiring you to take action i've got a nice surprise for you following mike at the june wealthy on conference was jeff clark goldsover.com's senior precious metals analyst he gave an absolutely fantastic presentation about how to invest in precious metals mining companies and within it he shares exactly which specific stocks he's most interested in today and why if you're interested in watching that presentation right now for free simply go to wealththeon.com miners and if you're at all interested in learning more about how to tap the potential power of a rising gold price in your portfolio then jeff's presentation folks is truly not to be missed but before you go watch it please just take one second and subscribe to this channel if you haven't already by clicking the subscribe button below as well as that little bell icon right next to it because the more subscribers this channel has the more world-class presenters we can attract on this program alright now that you're subscribed head over to watch jeff's free presentation at wealthyon.com miners thanks for watching you

Channel: Wealthion

Views: 228,883

Keywords: gold and silver, gold price, mike maloney, federal reserve, how to buy gold, price of gold 2021, inflation/deflation, u.s. central bank, price of gold, inflation, gold, silver, finance, investing, economy, precious metals, silver price, gold price today, silver price forecast, gold price forecast, gold price prediction, steve forbes, buy gold, precious metal, gold price prediction 2021, investing in gold, gold price forecast 2021, federal reserve inflation, inflation stock market

Id: _qfgTf09f5I

Length: 37min 39sec (2259 seconds)

Published: Tue Aug 03 2021