Hidden Secrets Of Money - Death Of The US Dollar On A Timeline
In this video, Mike Maloney discuss about the sense of urgency towards US Dollar inclination. He explains how currency collapse when gold reserve will be claim by currency owners. He also added that Gold Standards do not work over long period of time but gold itself does.
I'm in Singapore and I'm about to go on stage in just a few minutes. I have not given a presentation for over a year now. I was in a little fender-bender while back. And so I took a little bit of time off. There's this sense of urgency now. The global dollar standard was put in place by a series of accidental events that were very fortunate for the United States because it gave us an advantage over the rest of the world. But our politicians over the past decade or so have abused this privilege as though it was their birthright. And now the rest of the world are turning their backs on the US dollar standard. This is going to cause a financial calamity the likes of which we've never seen before and it's going to be devastating for most people. I don't want this to happen but the damage has already been done. So I'm going around trying to alert people and show them how they can protect themselves and turn this into a great opportunity for themselves.
"There's always one result from what we are doing right now, expanding the currency supplies all over the planet. There's one result and that is higher gold and silver prices."
"I love America, at least, the America that the founding fathers created. And I'm hoping that people get interested in this so that they'll see that what made America great is the answer to our problems. To get back to free markets, free people and sound money. Our own history proves that this is the road to maximum prosperity."
We are entering a period of financial crisis that is the greatest the world has ever known. The wealth transfer that will take place during this decade is the greatest wealth transfer in history. Wealth is never destroyed. It is merely transferred and that means that on the opposite side of every crisis there is an opportunity. The great news is that all you have to do to turn this crisis into your great opportunity is to educate yourself. I believe that the best investment that you can make in your lifetime is your own education. Education on the history of money, education on finance, education on how the global economy works. Education on how all of these guys, the central bankers, the stock market, how they can cheat you, how they can scam you. If you learn what is going on and how the financial world works you can put yourself on the correct side of this wealth transfer.
Winston Churchill once said that the further you look into the past the further that you can see into the future. This program is all about creating your own crystal ball, being able to gaze into the future, being able to change this crisis, the greatest crisis in the history of mankind, into your great opportunity.
I was born in Salem, Oregon in 1956 and we moved to California when I was four years old in 1960. But when I went to school it was obvious after just the fourth grade that there was something different with me and by fifth grade I was in remedial classes. And it turned out that I was dyslexic and teachers were not taught to recognize that back then. I was always falling behind everyone else.
When I would get a teacher that would lecture instead of making us read out of books I would just absolutely excel. I suddenly went from the dumbest kid in class to the smartest kid in all of the periods of that class. But the result was that after a while I was in every single remedial class. And I just couldn't take it and in tenth grade I dropped out, middle of 10th grade and I've never been back to school.
I often say that in every crisis there's an opportunity. And in this case the handicap of dyslexia has also been a blessing. Because I couldn't learn out of books and I couldn't take notes, I just had to remember everything. And I have the ability to -- my brain is wired a little bit differently. I have the ability to look at a chart today and I know how it relates to a chart that I saw 10 years ago.
But it was back in about the year 2000 when Steve Jobs of Apple introduced OS10 the world of books opened up to me built right into the operating system was a text-to-speech program. Now I could just have an assistant slice and scan my books and turn them into text and email me and then all I have to do is highlight the text, press a button and the computer reads to me.
People are turning to assets that will keep their value if prices rise. So much money has been pumped into the system that people are worried about inflation down the road said Bruno S. Frey, Professor of Economics at the University of Zurich.
The dyslexia is no longer a problem. But what it's also done for me is I have the ability to explain complex things to people in a simple manner for some reason. And so I sort of made it my mission to try and wake up the middle class to let them know how the monetary system works, to let them know that there is a major economic calamity coming sometime down the road and it's most likely within this decade that we're in right now.
The US dollar is about 60% of the value of all the currency on the planet. And more than half of the dollars reside outside the United States. The reason every country has US dollars is, first of all, that's what central banks used as the reserve currency. Second of all, oil is priced in dollars. So this is the world and what we what you see here is that these are the countries that are avoiding the US dollar in trade. They're doing bilateral agreements where they'll either hold each other's currency and settle that way or they're establishing like right now they're talking about a BRICS bank, Brazil, Russia, India, China and South Africa, having a bank that will do settlements between the countries directly without using the US dollar. These countries they tried to avoid using the US dollar like Iran tried and we banned them from using Swift.
How many of you here have made wire transfers before? So do you know what a Swift number is? It's a code that you plug in and this Swift system is what transfers those dollars from one person's account to another person's account. Well, Iran decided that they were going to sell oil only in Euros. They got banned from Swift but there's countries right now coming up with a replacement for Swift and it doesn't use the dollars, the Sucre system. And Iraq started selling oil for Euros. In Libya, they were talking about creating the Gold Dinar and selling oil for gold. So those are the countries that were trying to use something other than the dollar.
Then we've got gold competing with currency. And there's a lot of talk around here about the Gold Dinar. And there's people that are actually using gold in some of the countries over here. And then in Utah, Utah has recognized gold and silver as money again. It's legal tender currency in the state of Utah in the United States. And then you've got physical gold accumulation.
I'll show you later that China is accumulating an immense amount of gold and all the countries with an up arrow that's gold accumulation. Then we have gold repatriation. Germany has been asking for their gold back and they're getting it. Venezuela has repatriated their gold from the Bank of England and then if we put this on a timeline here's the nails in the coffin for the Dollar standard and you will see that there's not a lot of time left.
This is my evidence that I think is proof that the death of the dollar is coming and it's coming shortly. Nixon ended Bretton Woods and we went on the dollar standard. Then the first nail on the coffin is Iraq sells oil in Euros. The crisis of 2008 and we added 1.25 trillion to our base money in the United States. As we add to the base currency, people get worried about inflation they start rushing toward gold and silver. Iran ends oil sales in dollars and they're taking commodities and trade for oil. In Turkey, they take the local currency and then buy gold in Turkey and export the gold to Iran so they're basically selling oil for gold. They do the same thing with India.
QE2, quantitative easing. That's more currency printing in the United States. Libya, China and Russia bypassed the dollar. They did a bilateral trade agreement where they hold each other's currency and they do direct debt settlement without having to wire transfer US dollars. Chinese President just recently said that the dollar is the world's reserve currency is a product of the past. Utah recognized silver and gold as money. China and Iran bypassed the US dollar with the bilateral trade agreement. Venezuela repatriates it's gold. China and Japan trade directly. India and Japan bypassed the US dollar. Russia and Iran trade directly. Iran sells India oil for rupees and commodities. China and Brazil trade directly. Swiss citizens demand gold repatriation. African countries banned the dollar. In Zambia, you can go to jail if you use US dollars.
Quantitative easing number three. They have announced, the Federal Reserve, that they're starting with $40 billion of currency they are creating each month and now it jumps to $85 billion. That's more than one trillion a year. And remember it took 200 years to go from no dollars to 825 billion. And now they're going to create a trillion every year. Iran trading energy for gold. Singapore removes tax on money. Germany repatriates 150 tons of gold from the New York Fed. The citizens of Netherland demand gold repatriation. Ecuador repatriates part of its gold reserves. Austrian citizens demanding gold repatriation. China acknowledges fundamental market shortage of gold. And now the Fed is increasing the rate of printing. When I said from 40 to 85 billion every month, just over a trillion per year. So those are the nails in the coffin for the dollar standard. And if you noticed they are all speeding up and they're all happening right now. You don't have a whole lot of time. And if you wait too long then the opportunity is gone.
It's going to fail. Why is the dollar sacrosanct? Why is it not going to happen to US dollar? Well, it will. People think oh! no, it's high technology. We have computers now, the internet. These are ridiculous arguments. The truth is all fiat currencies have failed and there's no reason why this one won't. It worries me again so much is that it's a global situation. And so it's going to cause problems on a global basis. And it's a trust breaking down. And you already seem the trust breaking down as I said earlier because you're seeing different countries exchange directly with each other's currency circumventing the dollar. You're seeing that in oil. You're going to see it more and more. And people are just going to opt out of the dollar. And you'll probably get to a point before the whole thing collapses entirely where the dollar is more or less used internally in United States and externally it's not used as much. Because there'll be a lot of agreements made between nation states outside of the United States that will want to use each other's currency and not the dollar.
This isn't going to be pretty when it happens. I am not an end of worlder or a doomsday guy. All you can do is play the hand that you are dealt. If we go to a new monetary system and I think it's absolutely inevitable, there is just too much energy built up in this one that has to release. It has to come crashing down somehow. When that happens there's an enormous wealth transfer for people that are on one side of the bed or another. And people don't realize that whether they think they are making a bet or not they are making the bet. They are involved. This wealth transfer affects everybody whether you want to participate or not. If you are holding paper assets and paper currencies, you have bet one direction. If you're holding gold and physical assets you've bet the opposite direction.
So these are changes in Chinese holdings. They are accumulating gold. They are getting rid of US Treasury bonds. This is gold held in China. The green line is the cumulative gold that's on this side, this scale. So it's gone from about 700 tons to almost 6,000 tons just since the year 2000. So this is their central bank holdings. This is their mine supply. My researcher put all of this data together. You're the first people to see this. This is the amount of gold flowing through the Hong Kong exchange that goes into China. And the past couple of years here they have ramped up their buying. They know that the dollar standard is coming to an end and they are protecting themselves, and you're probably going to see gold back renminbi someday, the yuan.
So this is an interesting chart changing global influence. So this is the correlation to this basket of currencies. This basket of currencies if you add them all up they're trading up or they're trading down and this was pre-crisis so it's before 2008. So this is from the International Monetary Fund, it's their data. So from 2005 to 2008, this is the correlation of if that basket of currencies was trading up the dollar was probably doing about the same thing is what it's saying. The Chinese renminbi a little less so. And then this is today. The US dollar is done for.
I don't think there's any question we're heading for a new monetary system. The question is what would it consist of, you know, the four choices are sort of a world of multiple reserve currencies and Barry Eichengreen of Berkeley is the leading proponent of this or a leading scholar on this topic. The problem with that and where I disagree with Eichengreen is there's no anchor in that system. We did have multiple reserve currencies before in the 1920's. He's right about that. And it was Sterling and the Dollar but they were both anchored to gold. And in the post Bretton Woods world since 1994, it's been one reserve currency which is the anchor. And it was anchored to gold until 1971. Since then the dollar has been detached from gold but all the other currencies are still linked to the dollar. So at the end of the day we've had an anchor of some kind. We've never had a world of multiple reserve currencies with no anchor. I'm not sure that's that stable.
The SDR is the second choice. The SDR is a basket currency sponsored by the IMF. At least for the time being it's also printing money. The IMF literally prints the SDR's and shifts them out to the members. And their reserves go up exactly the way the Fed creates money and bank reserves go up. But it's not backed by anything. Third choice is gold. Some variation on the gold standard. And the fourth choice is what I call chaos which is that nobody does anything. There's a lot of wishful thinking. There's a lot of denial. There's a lot of delay and we get to the point where people just totally lose faith on paper currencies, go to hard assets and we have a sequential collapse of paper currencies around the world at which point governments will have to react with emergency measures that could include coercion, confiscation, you know, various sorts of freezes on paper assets. Could be a lot of things in that scenario. So to me it's smaller reserve currencies SDR's gold or chaos. I favor gold but I fear that we may get chaos.
I've talked about every 30 to 40 years the world has a new monetary system. And the thing is that over the years governments in these central and the banks have basically screwed us more and more and more. And these new currency systems are always created by the same idiots that created the last one that fell apart. It's the big banks. It's the central banks and it's government's that are creating these new systems each time and each time the system they come up with is a system that cheats the population more and enriches the government and the banks more. It's a system that transfers wealth at greater and greater speeds. This one is going to fall apart just like all of the others.
There is a difference this time though. There is the Internet. People are connected all over the world. Information is spreading and people are getting educated. So I'm hoping that we go back to gold. Not a gold standard. Gold standards suck. I did a video on that. With a gold standard there's supposed to be a certain amount of gold in the vaults for each unit of currency. In other words, it's a one to one ratio. It's the way it started. And then they print more receipts than gold that exists. So if we have gold standards, we're going to get scammed again. If we used gold and silver, if the public gets educated enough before all of this happens. If we went back to gold and silver then governments can't scam us. It limits their ability to transfer wealth from the population to the government and to the banks.
A lot of people say that you can't use gold and silver today because they're too heavy and bulky and it's completely wrong. You could put gold and silver in a vault and you could make payments to somebody by transferring ownership of nanograms, grams or ounces of gold and silver from one person's account to another by means of a check, a credit card, or even your cell phone. If we go back to a gold-backed currency, gold-backed US dollar, at that point I think the minimum scam that the US could get away with which means the minimum number of dollars in existence that they could make convertible into gold would be the dollars that are held in foreign central banks. That would be similar to the Bretton Woods system that we had from 1944 to '71.
Well, I did some analysis on this when I was writing a book back in 2005. And back then it required $20,000 an ounce gold for the Treasury to have enough gold to cover those dollars or the New York Fed actually. And if they were going to back all of the dollars, you're talking gold measured in the hundreds of thousands of dollars per ounce. There just isn't that much gold and there's a whole lot of currency. We keep on printing it every minute of every day.
This is gold and how it accounts for currency supply. This is our base money in the United States which was gold back here from 1900 until the Federal Reserve. The amount of currency in circulation and gold were the same. Then we established the Federal Reserve and we inflated for World War I and we had more currency in circulation than we had gold to back it. There were some bank runs in the 30's. Then Roosevelt unpacked the dollar from gold and gold's value rose from $20 an ounce to $35 an ounce and when it did the value of the gold held at the US Treasury rose to meet the value of all the currency that was printed in the meantime. Here's the same chart again but now I'm taking it out to 1971. And what you see is these gold inflows during World War I, during World War II, it's another 117% percent gold increase.
This is what made the United States a superpower. It's all financial. It isn't our war machine necessarily. It's all the gold inflows that we got because everybody else was at war and we were isolated from it and they had to pay us for all their consumer goods and so on. And then we jumped into the war and we inflated, and then in about 1959 countries started figuring out that we didn't have all the gold, we were printing more dollars than gold that we had to back it and under the Bretton Woods system they could go to the New York Fed and turn in their dollars for gold at $35 per ounce, only foreign central banks. Individuals couldn't do that. So gold started flowing out and the US lost 50% of its gold from '59 to '71. And in the meantime, we kept on printing currency. If this had continued until it got down to zero, if there was one more dollar out there that laid claim to gold that came in and said we want our gold for currency and there was no gold to back it up, the entire world monetary system would have come crashing down.
So Nixon had to take us off of the Bretton Woods system, the last vestiges of the gold standard in August 15th, '71. So here's the same chart again, there's the first chart and the second chart to '71 and now I'm taking it out to '85. And I'm adding a second line here. How many people would agree that credit cards are replacing cash in circulation? Yeah. Credit cards, you use your credit card more and more every year, right. You use cash less and less. Well, this is outstanding credit card balances. It's called revolving credit outstanding is the name of the chart that you get from the Federal Reserve. When you charge something on a credit card you create currency. The bank didn't actually loan you anything. They invented a number. And then they have the gall to charge you interest if you don't pay those numbers back on time. But so the thing is that the merchant that you're paying, the restaurant or the grocery store, that merchant's checking account can't tell the difference between the credit dollars that you created or the cash dollars that you pay. So to that merchant's checking account it all looks the same and those dollars that you created stay in circulation until somebody saves them up and pays down credit card debt.
So unpaid credit card balances, I include as part of the cash in circulation and in 1971, Nixon took us off the gold standard and gold became a freely traded separate commodity/money and it did an accounting of the currency supply. There was quite a while here where we could have gone back on the gold standard. The value of the gold of the Treasury exceeded all the dollars printed from George Washington to Jimmy Carter and for a week or so, a couple of weeks, it exceeded base money plus outstanding revolving credit. So here's the same chart again, that was to 1985 and now I'm going to take it out to today. And so there's that 1980 peak where it shot past base money and base money plus outstanding revolving credit. And then we get to the crisis of '08. And Ben Bernanke, by the way instead of billions we're now measuring in trillions.
So we started in millions and then it went to billions and now it's trillions. So we did the bailouts and all the quantitative easing and that's what the currency supply looks like today. And then they announced quantitative easing three, which is that 85 billion a month that they're creating. And they think they're going to have to do it until about 2015. So here's the projection for gold covering the currency supply today would be $13,400 per ounce gold. For history to repeat and for gold to do the same thing that it did in 1934 and in 1980 and believe me it shocked people in the 1970's. When gold was $35 an ounce and Nixon took us off the Bretton Woods system all the economists were predicting that gold was going to go down because now there was going to be no more monetary demand for it. Anybody that said gold was going to go to a hundred bucks was considered an absolute lunatic and it went to 850. It rose 24 times its price. Well, when I wrote my book we were right here with base money. So base money plus outstanding going credit, it took about $6,000 an ounce for to history repeat.
Today it takes for 13,400 and if you include the same overshoot, remember in 1980, it didn't just cover base money but it shot past it, $24,000 an ounce gold is what it would require to meet that. Except the Fed has announced that they're going to keep on printing currency until there's lower unemployment and the economy gets back on track. And they think till 2015. So the projected price according to the Fed and history repeating if the Fed does this and then history repeats and gold, the public gets afraid of what the Federal Reserve is doing and they rushed toward gold and silver to protect their purchasing power, gold would have to rise from there to way up here and that is $26,000 per ounce gold to cover. If it does the same overshoot, we're talking about $47,000 an ounce gold. Now I don't even like to measure gold in dollars. If you measure it in a price, price doesn't mean anything. It's the value. How much can you buy with the proceeds? If we have deflation and some of this currency evaporates because it's all just numbers that they type into a computer these days. If we have deflation maybe gold peaks at $3000 an ounce and the currency supply collapses to way down here somewhere. And the Dow is at 1500. That means gold will still be double the Dow. You're still going to get 14 times more paper assets one day than you can buy today with them. And it's probably only a couple of years left that this is going to take as you saw about how the nails in the coffin of the dollar standard, how they're speeding up.
If we have big inflation and the Dow goes to 30,000, maybe gold will be 60,000 an ounce. And if we have hyperinflation, the Dow would be 30 trillion and gold would be 60 trillion. It doesn't matter, in any case gold would buy you 14 times more paper assets than it does today. So these are the global assets, here's the bond market. Here's the stock market. This is the value of real estate on the planet. And these are bank deposits and there is gold. Now that little slice of the pie is going to get a lot bigger in just the next few years and it's not going to do it by a whole bunch more gold just appearing. It's going to do it by the price of other assets going down or at least their value going down. And the value of gold going up. So the price of gold will change. That piece of the pie is going to grow. It was a lot bigger back in 1980, when gold was at $850. It's going to get a lot bigger today again. But today as you've seen it requires far, far higher prices. So the death of the dollar standard, how many people here believe that I'm sort of predicting what's going on in the future here? You can see that there's a new world monetary system coming. It happens every 30 to 40 years except this time instead of a baby step off of gold we've got to go from nothing back to something. It's going to be a worldwide convulsion, the scale of which has never been seen before.
At the end of the day the fundamental driver of gold is not so much the golds in a bull market it's more of the dollars in the bear market. And people say well, how high can gold go and my answer is well how low can the dollar go. The answer is the dollar can go to zero if you divide any number by zero the answer is infinity. So gold can go to infinity if the dollar goes to zero. Now in the real world something else will happen. It's not the gold becomes worth infinite number of dollars. It's more the case that the dollar just falls off the stage, the dollar gets the hook so to speak and you'll count gold in dollars to five thousand to ten thousand at some point but there will come a time when you won't count gold in dollars anymore. Because dollars won't count. People won't want dollars.
There is so much opportunity in crisis it is absolutely extraordinary. That's just not me saying that, that's just history. You read any amount of history and I don't mean last week, I mean real history. In terms of crisis, it's when huge fortunes were made. Times of crisis is when human beings create and develop newest technologies and new science and new medicines. In times of crisis there's so much opportunity as long as you can remain calm, get educated, be resourceful. It's a challenge for most people is that in crisis they go into crisis mode. Which means they go into scarcity, they're going to lack, they're going to blame and none of those emotions are resourceful for helping you solve whatever challenge is in front of you.
I believe that this is probably the greatest opportunity of anyone's lifetime. There has never been a situation where all of everything came together just like this. This is the first time in history where all the world's currencies are just fiat currencies backed by nothing. And if what I think is going to happen happens this is the greatest wealth transfer in history. It's the greatest opportunity. And it'll never happen in our lifetimes again.
So now we've learned the following hidden secrets of money. There is a global loss of confidence in the US dollar that is accelerating rapidly. The change to a new monetary system is inevitable and will most likely be chaotic. Gold standards do not work over long periods of time but gold itself does. The public contributes to the massive amounts of currency creation by using credit cards and signing loans. Gold is already accounted for the expansion of US dollars twice in the last century and may likely do so again.
So that's it for this episode. I thank you for watching and I hope you enjoyed it. I know I threw around a bunch of astronomical prices for gold someday in the future, but it isn't the price measured in dollars. It's how much is its value. What is it worth? How much stuff can it purchase? The price measured in dollars or any currency for that matter is just a bunch of numbers and it really doesn't mean anything. They are numbers that are created by the world's central banks, by the commercial bank system and we're forced to transact in these currencies. But in our next episode, we're going to clear away the smokescreen of national currencies and show you how the world monetary system really works and how all national currencies have to continue losing value. It is not possible for them to maintain purchasing power over any reasonable period of time.
As for the golden nails in the dollar's coffin, it's only been a short while since we filmed the presentation in Singapore and already there are more of them. So for an update visit HiddenSecretsOfMoney.com and in your free information toolkit there's an exclusive presentation on the latest developments of the golden nails in the dollar's coffin. Now I know this episode was kind of serious and it might have you upset right now. But believe me it's not all doom and gloom. As I've said many, many times before, there are these brief moments in history where the safest asset class, the safe haven investment for the last five thousand years also becomes the asset class that has the greatest potential gains in purchasing power and I have bet my life on it.
First, I became an investor back in 2002, and then I started telling everybody about it. I started warning them what was going to happen with the world economy and how to protect themselves and I made it my mission to educate as many as I could. So in 2005, I wrote my book and then I gave people a means to protect themselves and opened up GoldSilver.com. I believe that my team and I have created the world's best precious metals dealership because we don't just sell gold and silver, we are gold and silver investors. And what we want to do is help you understand how to get through what is coming to protect yourself and to turn all of these bad things around to your benefit.
So if you decide that precious metals are for you, please visit GoldSilver.com. We'd love the opportunity to become your dealer because we feel that we are more than a dealer. We are a partner with you and we're on the same side of defense as you. So thank you very much, good luck. We'll see you at the exclusive presentation at HiddenSecretsOfMoney.com. Thanks.
Do you think this is a man the lifeboats situation? Let me ask you this, if you knew the Titanic was going to sink and you were on the Titanic, you know there's going to be a lifeboat situation coming up soon. Would you like --
There was enough lifeboats available.
That's right. Would you like to get in the lifeboat early get a nice seat. Maybe close to the water. Maybe close to the food supply, right there in the middle nice and comfy or do you want to be one of the last ones on the boat. You're jockeying for position to throw a kid out to make room for you. Yeah. So in a lifeboats situation it depends how you like your accommodations on lifeboat is whether you should be blinking your way towards it right now. And I will be edging my way towards it right now.
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