 Welcome back to the 21 convention. I hope everybody had an awesome night last night I'm really excited to announce our first speaker of the day today. He's gonna be talking about our favorite subject money He has worked for three of the top five Asset management firms in the country. He's currently managing around 300 million dollars in assets for one of the firms And he's a level three CFA. I do have to mention though that everything he's about to say are his opinions They have nothing to do with the firms he works for everything. He's saying is based on his life experiences and everything He's been through. I'd like to welcome to the stage Gary Corlove morning everyone so The reason I chose to speak about money today is because it's more important to Each person's each individual's life even if you're not an investor. You don't really care about Stocks and bonds you still affected by money Without money, you really can't do much in a society we have right now and of course everybody watches the news and you see what's going on as far as the bailouts and all the Problems in Greece and the pigs countries as far as Spain and Portugal and Ireland And even the problems here with the housing With the crash that we had a few years back and the crash we had in 2000 the crash that we had an 87 which wasn't as big and People are really trying to figure out. Where is all this going into the future? There's a lot more uncertainty the more the longer we go The longer we go and longer we continue on and So really what I want everybody to take away from the speech today Is an understanding of what money really is and why it is that a very few people very powerful people very well-connected people can print money and can decide the price of money and Really what you can do to protect yourself in the future From the dangers that are likely to and from the events that are likely to take place in the future Based on what is happening right now, but really to understand what has happened And what will happen in the future to really make your own Make your own deductions and make your own hypotheses and theories about what's going to happen and act on it and prepare yourself You should understand where money came from and how it really works because it seems like it's really basic, but The fundamentals of it are really simple and they should be and when you watch TV some a lot of times you'll see that They make it sound really complicated You see Ben Brunenke on TV is the guy to 1600 and his SATs and this really intelligent guy And what do I know about money if he that's a guy that really understands money and it's really not like that That's what they want you to think money is really supposed to be simple and If we look throughout history if we look at how money began right first There was no medium of exchange first. There was just barter of course People started off as hunters and gatherers where there was no trade at all then as people settled They began understanding that they need something if you grow let's say wheat and you need a plow Well, you want to exchange your wheat for the plow Well, what if the plowmaker doesn't want your wheat? Well, then you have to go find something that the plowmaker Really needs and then exchange your wheat for that and then bring the plowmaker what he really wants So it's an inconvenient system Over time people started to understand that there are a few goods that everybody always covets and that everybody can hold on to They're easily transportable and they will last a very long time and People don't throw them away. So they have intrinsic value And they start understanding that they can exchange this with anyone because anyone will hold on to it And they'll understand this to be exchangeable with everybody else and it's a became a universal medium of exchange And throughout history, of course, you know about gold that it's been money for about 6,000 years But there were a few other goods that were exchanged besides that were used as money and exchanged besides Gold of course there was silver. There was also Salt tablets. There was also seashells. There was also Pelt's in Native American cultures. There were dried yams and some African cultures So all these goods had a few fundamental Strengths and why they were used and few fundamental characteristics as why they were used as money Again, they're all very easily transportable everybody that You exchange with could use them even if they didn't want to exchange them So you could eat the yams you could use the salt to preserve your food and to flavor your food You could use the gold for jewelry. You could use the pelts to make some kind of an outfit So as time went on Gradually gold kind of started to dominate money and what money really is and the reason that happened is really It outlasted all other it's it's much more easier to transport gold in in Large quantities of value so you could bring a few coins and you could buy a house for instance with that Whereas a lot of these other goods again, they weren't as scarce So gold really was the most scarce the most beautiful and it's the longest lasting So it will last forever if you put it into the ground a piece of gold a coin will last a million years You can dig it up. It looks exactly the same as it did before and the reason for that is And gold doesn't bind with any other metal and doesn't bind with any other element so Then we had pretty much a worldwide gold standard for thousands of years Well something started happening in the seven in the earlier than that in the medieval times in England where when people needed to get coins made for exchange or they needed to Have a jewelry made so they would go to a goldsmith and that goldsmith would give them a receipt saying I owe you this much gold and People started noticing that it's almost easier to carry this receipt around and it's a little bit safer to carry this receipt around And they could exchange it with other people in the community because this receipt the certificate Showed other people in the community that all well I know this goldsmith and you know I know that if I bring the certificate back. They'll give me the gold that he's storing for you So at this point the gold the goldsmith started realizing that he's also more of a custodian a place where you can store gold and Just keep it there for safety Now over time the goldsmith also started realizing something else that once people bring their gold in They really leave it there for quite a long time and they don't actually Redeem it very often so they'll leave it there for very long periods of time because I saw nobody's robbing the goldsmith because it's a very safe place in the community So they started thinking how do I make a little bit more money? And they started understanding that if they take most of the about 90% of that gold and if they learn it out They can make an interest On that gold that they're learning out while at the same time the person that's holding that certificate does not know that the gold is being loaned out and the person that has a certificate is likely not going to come back and And try to redeem all their gold They'll probably on average are doing about 10% and if they do redeem all their gold the other Certificate holders won't redeem their gold at the same time So this was the beginning of fractional reserve banking and you've probably heard this term before It's where a bank never has all the money that you give it to to hold to custody. They only have about 10% of it Now you can see where this is a very profitable business for For the goldsmith and you can see where it's really not an honest business and It's the only industry banking. It was where this is even allowed And we can get into why that is later So over time also what what these goldsmiths would do is they'll own other people's gold out for an interest Which they get and if that person could not pay pay back that loan With a real goal, they would just take over whatever property they purchased with that goal and so you could see where Now they were not goldsmiths, but bankers. They became very wealthy doing this So things went on like this for a few centuries and then We get to the invention of modern central banking, which was at the end of the 17th century in England actually it really began in in in the Netherlands, but It really spread and it was made It was made popular by the English central bank so Why would a central why would this be centralized? Why would some of the bankers give up control some of the control to Produce a somewhat of a cartel or an agreement between all the other bankers in the country well, the reason is Bankers are always completely inherently insecure Because they understand that they're always lying to their customers that they're not actually holding all the money That they say that are holding so if you're an enterprising banker and you understand that if you If you kind of start spreading rumors about your other banker buddy That who's a little bit over leveraged has too many loans out and then there will be a run on that bank and Everybody will try to withdraw their gold and that banker will go out of go out of business because he doesn't have all that gold that he says he does So they would so all the bankers got together and try to institute a cartel and Of course this was voluntary the government nothing to do with that at this point the king had nothing to do with it Now when you have a cartel cartels don't work. Why because over time what happens is If you have a cartel and Everybody agrees not to snitch on each other and everybody agrees to set an interest rate on all their loans together Then each person's individual profit motive will Will be stronger than the common good So these cartels will break up So the bankers started understanding eventually that they need to make this Legal and requirement if you're going to be a banker a business of banking in in England Legally you have to be part of this cartel and it's called the central bank Now why would the government Want to do this? Why is this in the government interest? well Because you became part of the banking cartel you also printed the exact same certificates So when people brought in their gold you would give them a certificate and each bank before the cartel had their own Gold certificates or their own currency you could say Now what happened was when you centralized that the whole country now had the same certificate So you could take it to any bank and exchange it for gold So the whole country now had one currency The king in England always needs to wage wars or in any country really for whatever reason at that point it was a they needed to Recapitalize the Treasury because the Treasury was bankrupt and how do we do this because we don't really have any money We don't have any real money. We don't have any gold well Now they were approached by the bankers saying listen you make this Institutional you make this part of law that this banking cartel has to be in power It has to be in power and has the power to print all the money in the country And now at the same time we will loan out to you Whatever money you need You don't have to give us back gold in return. We'll just print you a bunch of these certificates We'll buy your bonds in your turn will give you money And the central bank had some gold reserves from all these other little banks, but officially These notes really weren't backed by anything, but they were back circulated into the Public into the public money supply so what you get there you can see where the Treasury or The king would profit from this because now they have a bunch of money which was created out of nothing now they can go buy their ships buy their you know pay their army and have whatever war they need to have and The central bank is happy because the most powerful banks in the world the most connected at that point in England now We're sure that nobody is going to destabilize their system of fractional reserve banking where they loan out most of their money and make an interest on it and At this point people pretty much had to store their gold with these banks part as part of the cartel because They were printing the currency that was used to buy anything in the whole country So this is the system that we have now This is a system that spread from England and you can see why any kind of a state would really favor a system like this Because whatever financing needs to be Whatever financing a government will need the central bankers are ready to provide it any time And of course the state always needs money because the state has no money of their own How can they make money they can either tax their citizens in which case the citizens Revolt if the tax is too high or they can just talk to the central bank and the central bank will buy their bonds or print money They're not buying these bonds with real money because they don't have any real money They didn't make any real money. There's no profit there, but they can create it because It's the law. They're the only ones that are allowed to create currency so How did we get from where we were from that system where we are right now in the US and And the gold standard is pretty much written into the Constitution not pretty much. It is written into the Constitution and This was a big problem as a for For the government in the US for a long time. It kept the government very weak Because they had to finance all their expenditures with real money with gold or they had to tax the citizens And the citizens don't want to get taxed Americans are very individualist They'd like to think for their for themselves relatively speaking to other countries They were very rebellious people that you know because they came from Europe and they were afraid of any kind of a Any kind of authority over them So there was a few central banks instituted in the United States history But Their charters eventually expired because they were a short term and the United States It's biggest period of prosperity where it really became a world power was after the Civil War When the United States was on a gold standard the whole time and it was a constant period of deflation where there was a gold standard there was no central bank and Money constantly became more valuable. So if you just hold your gold You could buy more and more with it over time because there was more goods being produced constantly Production was increasing technology was getting better and better more goods are being produced for the same amount of money and What started happening around The early 1900s was very powerful interest like the Rockefeller's banking family and oil family and the JP Morgan's Inherently understood again the problem that has existed with banking for centuries and They also needed a way to get rid of this problem. How do we get security? How do we? Get security in the banking system. So there's no runs on banks. So we can take out more loans We can leveraged we can leverage more and we can Control the interest rate. So it's not as competitive. So, you know, everybody can loan out Can loan out at 5% let's say and make 5% on this money that they don't really have And also at the same time corporations of course standard oil the Rockefeller interests and other very big very well connected Corporations always want an easy way to get loans So they started lobbying the government to institute a central banking system And you may have heard this meeting in Jackal Island where all the press was paid off not to not to write about it because People understood the problems and they really wanted to know about any kind of central banking Cartelizing going on civilization going on. So a lot of press was paid off to not talk about This meeting in Jackal Island, Georgia where these interests the Warburgs from Europe, which were connected to the banking interests in Europe JP Morgan interests and the Rockefeller interests and a few others got together and wrote the Federal Reserve Act together and They got Woodrow Wilson to Institute and and write this into US law or legalizing And The way they sold it to the people is there was regional central banks, so to speak There's so there's a Federal Reserve in New York. There's Kansas City. There's of course a few Western ones there's a southeastern one and The guys is it's a democratic system. There's not one central banking banker deciding everything. So what What happened was there was some Backlash, but when Congress was out of session they instituted this Federal Reserve Act and Of course what happened soon after was World War one Something else was also written into law at the same time that the Federal Reserve Act was Was written into law and that's also the income tax and they could see that the that's a World War one was going to take place They also understood That they're now going to print a lot of money and they needed a source of revenue to pay back the loans that they were going to Take out from the Federal Reserve so They knew that they needed an income tax they need another source of revenue from the people and it really started off at a very minimal amount So then after World War one we had The Roaring 20s if we're sure heard it's a period of great prosperity in the United States Well, why did that happen and you'll you'll always hear blame on capitalism and greed and you know bank and These financial interests these brokers that are kind of hyping up stocks. What happened was The Federal Reserve had very low interest rates which encouraged lending So they lowered interest rates so they could land more money out and this encouraged a lot of people take out loans and It added a lot of liquidity to the system So when you have a lot of liquidity it inflates the money supply you have an issue where Prices of everything go up including stocks So of course eventually that system becomes unsustainable and there's a crash and that's what happened in 1929 When this crash took place you'll hear a lot about Hoover being a very non-interventionist president Actually, he was the most interventionist president up until that time and FDR came in saying that he's not going to be an Interventionist president. He's not going to try to stimulate the economy because Americans were very much against that. They understood that it's really doesn't work But what ended up happening is? FDR Franklin Delano Roosevelt, which is really by Americans is almost deities. He's almost a deity He's almost a God at this point in my opinion. He is absolute worst president of the 20th century Probably him Woodrow Wilson Hoover A few others they're all pretty much bad, but there's there's a few that are decent halfway Harding I would say is probably the best president of the 20th century And why would I say that is because Harding was president right after World War one and there was a threat of a big recession and Actually, there was a big depression not even a recession GDP dropped by something like 30% if we had something like that happen at this point then I Don't know what would happen. Everybody would just go crazy problem because they're they're afraid of these kind of numbers But Harding said listen, I'm the president I'm not I'm not a business person. I'm not going to tell business people How to run their business? I'm not going to print any money. I'm just gonna sit here and play some cards He was famous for having these poker games at the White House and You know, that's pretty much all he all he did and the economy recovered From this crazy depression in about six months Why because entrepreneurs are smart and there was no meddling with the economy by bureaucrats who think they know what they're doing and That's why you never hear about the great depression of 1920 because Harding knew and understood What was really Key to a to a prosperous economy and also the Federal Reserve was very young at that point so the at that at this point they weren't a lot they didn't have the power and didn't really have Kind of the bravery to go out there and stimulate like they do now so In the 30s you have FDR now also at the same time you There is this progressive movement and there's more Socialization going on of course you had the revolution Of the where the communists came into power in the Soviet Union and there was a lot of more Socialist leading governments and progressive leading governments all over Europe at the same time so This type of a pressure Created the type of presidents what we had in the in the late 20s early 30s So Franklin Dern Delano Roosevelt even though he said he's not going to intervene in the economy What does he do a few years after he comes into office? He declares a bank holiday. So there's no running banks and he also under threat of jail time prison time ten years He makes everybody take all their gold and bring it in and and to the government and Just get currency in return. So he takes the people off the gold standard. So this is the point where the real money is taken away from the people and In return they're just given a paper currency So you see what's going on there? He's finding a way to Have complete control over the money supply and be able to print as much money as they want Without it actually being backed by gold Now so at this point the central banking system was still on a gold standard So countries and central banks in different countries could exchange with each other on gold But no longer was the US citizen on a gold standard. It was illegal so then we get to about 1944 close to the end of World War one World War two sorry and what we have is the Bretton Woods Bretton Woods was an agreement because the United States was the really the only big industrial power left standing that the whole world was now going to be on a US dollar standard So the whole world would view as the dollar as their reserve currency And that's because the US government of Fort Knox and all that really still had most More gold than any other central bank in any any other country But it was just held it was held away from the people and it was held in certain areas So New York a Federal Reserve of New York and Fort Knox and a few others so Other central banks agreed to the system now There was a lot of Austrian economists and Austrian is a certain school of economics that is becoming popular because they really understand What's going on and they predicted all these crises They predicted that Bretton Woods would fail But it went through anyway. Why because all the elites all the elite institutions all the elite Corporate interests and banking interests. They're all on the same side And of course most most politicians are as well because that they're financed by these interests so Bretton Woods was enacted and the reason it worked is because the United States promised that any central bank If they use the dollar as their reserve could always come back to the United States Federal Reserve and redeem Their Dollars their paper dollars for real gold and so that system worked fine up until through the 60s When there was a lot of different programs instituted Which were designed kind of help the poor or there were more kind of Government funding to help The politically or the economically disadvantaged all these programs whether they're good or bad It's not really a political statement. They made the government print a bunch of money that they didn't have and other central banks started really worrying about Are we really going to get all our gold back? if we try to Take all these dollars which are now worthless because all this money is being printed because all these programs So they started getting nervous and they started redeeming their dollars for gold and Then you have 1971 1971 President Nixon Defaulted on the US on the US debt so so the United States defaulted in 1971 They refused to pay back other central banks and gold At that point you had the 70s where you had a great amount of inflation because around the world people lost Faith in the dollar and no gold skyrocketed at that point and it went up to some ridiculous a dollar per ounce But so basically what what the United States said was we're not going to give you gold But you can still use the dollars or reserve currency. We'll just promise to pay you Dollars so dollars at that point were substituting gold and and there was they were promising other central banks that will be responsible with our dollar printing policy and It'll work trust me basically so that's what they said so so what happened was it did work somewhat After Volcker came in during the Reagan administration in it started really working well Reagan came in with Paul Volcker who's the Federal Reserve Chairman. He raised interest rates really high You may have heard about this and that really kind of broke the back of gold and brought inflation under control because it was really hard to get a loan Unless you paid a really high interest rates, of course, there's less loans in the system less money in the system And it contracts the money supply So as far as central bankers go, he's probably the best one of the whole century of the whole last century So So that worked, but at the same time To finance the deficits that Reagan was running They still printed a bunch of money and the United States wasn't more debt than they ever had were before So they were still printing a bunch of money in a form of treasuries that were selling And at that point in 1987 you had That SNL crisis which nobody really hears about now. It was during the first Bush administration 1987 were all these thrifts or little silver like banks got into trouble where Again, they were in Solomon. They made a bunch of real estate loans. They went bad again because of meddling as far as How much they could how much they paid out on deposits versus how much they were taking in on the loans they were That they had out to people that were buying homes So this is the really this the beginning of the era of the bailout because the government put through a Bill which allowed a lot of these thrifts to be saved So they printed about five hundred billion dollars at that point all together to Recapitalize a lot of these thrifts so this banking system doesn't go down and it was supposed to be the only time that this ever happens So then everything worked fine for about Ten years and then well five years and then you had Really the beginning of course you have the end of World War one One cold war at that point and everybody was really happy and there's a lot of positive sentiment in the United States And of course you had the tech bubble So you had the stock market the NASDAQ run up to just sky-high numbers throughout the 90s last century and A lot of these companies really didn't even have a revenue stream But people were ready to buy the stock of these companies I'm sure you probably heard of Peter Schiff. He's one of the people that predicted the financial crisis of 2008 He was at the time around 98 97. He was a broker. He was trying to sell Exxon to people these solid value companies And everybody who would talk to would say, you know, I want to buy yahoo and he said listen The price of yahoo right now for the price of yahoo you could buy the whole country of New Zealand Would you rather have New Zealand would rather have yahoo and people would say I'd rather have yahoo So and it's you know, what happens is When interest rates brought are brought down, which is what happened during the 90s as well During the Greenspan era Greenspan was a Federal Reserve chairman who Seemed to be very astute and he didn't really say much. It was known for being very mysterious But he didn't even say much because you really want people to understand what's going on but he had interest rates very low and that allowed a lot of money to flow into the system and It went into the stock market So the stock prices got ran up and what happened was of course was unsustainable Eventually everybody comes to their senses and there is the big crash of 2001 2001 2002 what happened at that point? Greenspan again brought interest rates to almost zero so about 1% record lows and there have been low that low ever So that got us out of that Of that recession probably earlier than It would have otherwise been if there was no intervention but what happened afterwards all this money had to go somewhere and The bank of the central bank does not know where this money is going to go when they lower the interest rates they just know that it's going to go somewhere and The economy is likely going to Improve a little bit faster because once they flood the market with a bunch of debt It has to be liquidated if they lower interest rates flood the money the market with money again It won't be as painful So when they flooded the market this time with cash what happened was You had the real estate bubble There was other few policies where the banks were required to loan out to people who didn't really couldn't afford a home So you had to loan out to those people and then you had to and plus you have very low interest rates where the banks were encouraged To make loans Because the Federal Reserve Allowed banks to take money from the Federal Reserve where they were charging those banks about maybe Half a percent or 1% and loan it out at 4% of course. That's a great business model so Then you had the crash of 2008 And we're still in that same scenario where we're trying to recover from that There's a lot of bad debt out there that has not been liquidated. Why are we still going through these problems? Why is the? Why does not feel quite that we're in a period of prosperity right now even they flooded the market now with about five trillion dollars this time around This is because there's a lot of bad assets out there that have not been liquidated and Until those assets are liquidated We are not going to Really have a real period of prosperity what needs to happen and what would happen Let's say if there was no Federal Reserve as of like right now Let's say is there would be a very severe contraction in the money supply. There would be a very severe recession But it would probably last about six months to a year A lot of banks would fail a lot of companies who go out of business But the ones that are left would be the most powerful the most solid companies a lot of mid-sized banks a lot of mid-sized businesses would be left standing and Really then we would have a real Economy based on real solid fundamentals and then we would have more prosperity like we had in the late at the end of the 19th century But that's not likely to happen. Why because who did who got the bailouts last time around? 2008 it was your AIG's it was your Merrill Lynch, which I worked for it was your Bank of America It was these guys that are Went to the same schools that were to go to the same cocktail parties as the central reserve as the Federal Reserve Bank as the Federal Reserve Chairman and all his buddies there so What you have to understand is the Federal Reserve? exists To increase bank profits and to fund the government and The way they do it is they tax you through inflation. They don't tax you through They don't tax you through Real Tracks increases because nobody is going to go for that, but I think I'm out of time and if you have any questions I'll be around for a few minutes Okay, I got time. Okay. All right All right. Well, so what I will say is Where are we going now? Where are we going into the future? I would say at this point The Europeans are trying to preserve their banks and that's why you see them trying to bail out countries which are insolvent of course you have Greece where people have Insane benefits. I think it's something like if you retire you get pension and then if you die Your wife gets pension until she dies and then her kids get a pension something along those lines So obviously you can see where that's unsustainable again, not a political statement. We're just talking money here So Why would you ever bail out somebody out like let's say if we were on a gold standard You actually have to give gold to Greece and you have to tax the people where they have to turn in part of their gold So that We could give gold to Greece to bail them out. Do you think that would actually happen? No That's why there's a central Bank for all of Europe which Is able to print a bunch of money and give it to Greece for free Why because a lot of other banks in Europe own a lot of the European debt Or a lot of the Greek debt and if Greece is allowed to default and Get out of the euro then those banks are likely to suffer very big losses now shareholders like to suffer very big losses So they're going to keep interest rates very low and they're going to continue on trying to bail Greece out I Mean according to my predictions. I think they're just going to keep trying to do it They're going to try to kick the can down the road The debt limit in the US is likely to be increased and they're going to kick that can down the road The path we are on here is unsustainable as well so Let's talk about how you can protect yourself as far as the money you earn And if you want to just at least keep the real value of what you have at least not even make money But let's just keep the real value of it So if you have long-term Assets let's say you have savings where you want to start a business down the road Maybe say two three four five years down the road. I would say you should Have part of your money in cash the certain Currencies are still viable even if there are fiat currencies are more responsible in the US But I would definitely say part of your money common sense. You should have it in gold don't buy I Preferred to actually hold the real coins. I wouldn't buy the GLD or these other ETFs that you can buy buy some coins by the ones that are not the new mathematics not the collectibles by the ones that are just very common But they're readily exchangeable some silver too is okay, but silver is a little bit more tied to the economy than gold is To other areas of the economy production. So gold really if you want to protect yourself against inflation just buy some gold coins I would say for your long-term money do half in gold half in fiat currency Because if you do it for your short-term money, the problem is you have to keep exchanging it back and forth And it's really inconvenient. So any money that you're saving a year out or further I would say just do that for yourself just to protect what you earned I mean, I know some people that put a hundred percent of their savings into gold But again, there may be something that we were not seeing correctly that we can't foresee that may happen where Gold may depreciate very quickly. You'd never know what What the next plan is of the ones that are in charge but I Will conclude here Any questions anybody have any questions or concerns? Okay Well, like I said, I enjoyed the speech and the history was great in which I've heard before But some of the unique things was a lot of the stuff about the development of into Roosevelt And then even when gold took a dip because that's one of the arguments you hear for gold from 1971 and all that stuff Nixon but and you were touching on it and I'd really like to hear about it more I think these guys will stimulate it with their questions to what What is the importance of us in a healthy economy because like what you're saying is it's probably not gonna get good You know and what what is the importance of us in a healthy economy? And what's the one thing that we could do good which you were touching on it But I just if you could be more specific with it. Sure. So Are you saying well, hold on keep the mic on are you saying that? What's important how can you protect yourself in the future? What's what do you mean the importance of all? Yeah, and I well I heard the gold thing, but I think also We're walking it well I don't know you would know better than I but from what a lot of people are saying is we're walking into an area where Or a period in time where the economy is not going to be great, right? And it's gonna get worse there will be another crisis powers that be are not in our favor. So What's the point of having a healthy economy? I don't know if we're going to have it, you know And so what's what's the real alternative? What are the steps you're taking? okay, so Again, so we will have another crisis It's going to happen and it's going to be bigger than the last one and it's likely that the next one will be a sovereign debt crisis where everybody basically bat private debt was taken over by The government and by the taxpayers so the next crisis is likely to be a sovereign debt crisis Where people say listen all these governments are printing a bunch of money and it's unsustainable So people lose confidence in the currency so currencies go down in value and there's a lot of inflation Some people say there could be deflation, but it's going to be pretty bad either way. So I would say If you are in certain industries like finance, which is what I'm in that's going to be an industry that suffers quite a bit Let's talk about where the monetary system could go my hope and There's a lot of solid economists that would say things could go this way is the world would go back to a gold standard Of course the current banking interest do not want this to happen So that's one avenue that could go and that where we could go Where the people are allowed to exchange in gold again legally Another way we could go is the regional currencies in that a global currency Which is the absolute worst thing that could ever happen to this world Because then you have even less very powerful people in charge of the whole world's money supply So all you can do I mean I can just say from being from the from Russia from the Soviet Union where There was a lot of inflation. I can just say that people we're living on borrowed time here Things are too easy and they won't be this easy eventually. They'll be harder Because we are using our dollars We are sending them to China and to our own Federal Reserve who's printing us more dollars and that's what we're using to live on That's why it's so easy. That's why money is it relatively easy to come by here We're all we've all got loans. We've all got car loans, and I've all got how home loans So I will just say it'll get harder Eventually I mean I'm not saying tomorrow. I'm not saying next month two three years out at least probably going to see some of these big problems all I can say is People need to pay down their loans if you're not a business person you're gonna pay down the loans as much as you can Unless you can always you have so much in savings that you can pay your loans no matter what then you want to have Theoretically as many loans as possible. The reason is if you're paying 5% of your loan now and inflation is 9% You're actually making money on your loan you should only have a loan if you don't need it Let's say if you have a $100,000 saved up But you buy a house we'll take out a loan on the house because if there's ever a problem you lose your job Something happens. You can't pay the mortgage. You can always pay off the house But if you can't if you're barely affording to pay them the loan now Consume less pay off the loan and whatever savings you have again save it in the types of Currencies that are going to hold their value or in types of commodities that are going to hold their value which would be gold and silver I mean all I can say is it will get harder and The dollar's gonna continue to lose value am I answering your question? I'm not Basically, what could we do now and what ways could we invest in gold like well if you if you're able to move to another country from an Enterprising Enterprise individual like where my favorite would be Switzerland, Singapore, Hong Kong China is great if you don't care about speaking out But if you're a business person because you can start a business I mean walk down the street start a business They don't care, you know here is just it's very regulated Especially depends on what kind of business you want to start where we're dying in a sea of regulation here If you want to be an entrepreneur move to a country which likely has a great future I mean when people were coming to this country, they were not looking kind of Looking forward and saying man. Look at all that debt out there. It's beautiful. I love all that debt that that country has I want to go over there because they have a great future. They were seeing Prosperity they were seeing a real economic growth. So where is that now? That's in the emerging markets So I would say China Some of the other Asian countries Again, there are problems now. I'm not saying they're perfect But if you want solid economic growth look there, they're also fee at currency countries But actually Switzerland is trying to reinstate a gold standard as a parallel currency may happen. It may not so in Europe You're saying Switzerland South America anything? South America Argentina is good Chile maybe There's a lot of up-and-coming countries there But again, you have problems there with less developed capital capital markets. So you have to know the culture Really, so there's the rule of law What makes gold better than silver or platinum to have for an investment Well, the reason gold is better than silver. Let's say because silver is much less valuable So I have silver and gold. Let's say for my savings because you can have silver and lower denominations Gold silver is also tied to other industrial To industrial products. So silver the price of silver will fluctuate more with the economy price of gold really fluctuates With them with the money supply and another thing about gold that you have to understand is if rates ever go up To where there's a real interest rate right now. We have a negative real interest rate That's why gold keeps going up is if you hold dollars, they're going to lose value If you hold dollars and put them into a CD that's making you 2% if inflation is 6% and Don't trust the government number CPI of 2.8. Whatever it is. I would say it's much higher than that But whatever real inflation is If inflation let's say is 6% that you're actually you have a negative real interest rates for holding dollars You're losing money So that's why gold as well because just by go holding it you don't have to get an interest rate You're making money now. Why did gold go down in value when? Volcker came in in 1980 The reason it went down in value so much is because he raised interest rates so high to where you could use a regular Currency you could put it and get a CD and that CD if it makes you 20% and Inflation is 12% you're making 8% on your CD, you know, so you're making so gold competes as a currency with fiat currencies So that's what's going on and right now gold is out competing gold is beating the fiat currencies and Does that answer your question? Platinum and gold why would gold be better than platinum? Well plat of course platinum is even more rare so your Gold is a really has that perfect balance between the rarity or scarcity and there's enough of it to really go around Platinum is is more valuable and more rare you could hold platinum. It's just never really been used as a currency so you could hold it to preserve value platinum was also tied to to Industrial use as well because it's using catalytic converters in a few other areas as well. So It's gonna fluctuate based on other factors gold is really more tied to money Fundamentally that answer your question. I have a question here And and and we're gonna expand this so you guys can hear One I'm very passionate about this and thanks for coming to this event and and speaking. It's awesome When I hear someone say what can we do? Yeah, I buy more gold I wonder if you couldn't help and comment. Maybe it takes it to political and maybe that's not where it should go But when we say as Americans, how can we empower this change? Isn't it lie within our vote? Well, so great question by the way, and of course the the man that you've probably heard of all of you that a Lot of people think is a quack Is Ron Paul if you want us to country go back to the gold standard. I know I love I love the man I there's probably two men that I love. It's it's my father and it's Ron Paul. I Really love this man and the reason he actually went and Ran for Congress. He ran for Congress in 1971. It's not a coincidence. He ran for Congress in 1971 because of Nixon closed the gold window and he was watching the news and he was a doctor, of course, and and nobody cares and He and he said people just sleepwalking through life. Nobody understands how important this is so he saw 40 50 years down the road what was going to happen and That's why he's that's he's so consistent because that's all he's ever said He wants the country back on a gold standard. He wants to do away with the Federal Reserve And he wants to do away with all of this, you know warmongering around the world But really how is it all financed it's all financed by this printing of money And that's why gold is doing so well because there's less and less of it The financial markets understand because the people that are that are in charge of money That are bidding up bidding up the price of gold understand what's going on Does that answer so the true power remains in our vote? Exactly. Yeah, I would say the problem with the Constitution is it gives Powered attacks and the power to judge which are really the two core powers to the government So eventually it just takes over because without those two powers you couldn't but with those two powers that so eventually the guard the US government has really been able to The US has been so prosperous so far is because of how weak the government was but at this point it becomes so powerful So strong that it's sort of starting to choke off You know freedom so that would be how I'd look at it I just wanted to get your opinions on Things you can do to prosper in some probably coming up really hard times like Donald Trump said that the We're going into a depression that makes a great depression look like a picnic. Yeah, and I've heard some Read some things about what happened in the Russia in the 90s when it was so chaotic is coming here and can you draw any parallels to things that would work like, you know a lot of these guys, you know or Mindset to be entrepreneurial and I think that's going to be the saving grace of America, right? You know it's going to take a long time But what are some things we can do that? You know would would get us in a more prosperous position in the next few years because I think they're going to be really hard Well, of course anyone that starts a business Knows it's a very difficult thing to do especially in an environment. We're in right now Now there's a few industries General trends that are likely to outperform other industries. So if you're going to be in agriculture if you're going to be in mining So some producing something real Those are likely going to be areas where you will see a lot of prosperity. So you see Jim Rogers event famous investor had mentioned recently that you know, it'll be the farmers driving the Maserati's 20 years from now not the bankers So I would say if you look in just broad trends long term what industries to get into I would say those two mining agriculture I mean there's always a need for doctors and engineers, but I would say banking or finance is probably on its on its way down There's too many finance people like myself so That that would be my my view of The industry entrepreneurs, I mean entrepreneurs if you're good at what you do And you're going to fail ten times if you're ready for a life of ten years of struggle and after that you're probably going to do very well And you can do that pretty much anything I mean you can do that if you're good enough you'll you'll eventually get to the top right But if you want general industries to get into those are some you should look at Did I answer your question Like Make sure that we're able to eat and You know be able to do to trade barter. Maybe all right. I have the ideas of that I bought I just bought a property myself And I bought it with a half an acre so and it's out in the country. It's a well water So I have to worry about city water and this is again This is just an insurance policy You don't do this because you think this is going to happen you do this just in case it happens Half an acre is enough if it is enough land to sustain yourself if you need to you can grow You know have a garden on it if you need to and you know probably gonna I have a gun permit I have several guns I have a shotgun and You know you got to know how to use them just in case again This is an insurance policy You don't buy a fire insurance policy because you think you're gonna have a fire in your house you do it just in case So that's how I would look at it if you're really worrying about that worst case scenario where there's anarchy There is a misunderstanding also That's because we've all been taught this way that without government There is anarchy and chaos everywhere That's not really how it is. I mean there's there's cases. There's people historians studying Wild West so-called Wild West now where they see that there was actually less crime in the Wild West than there is now in the average city because if you wanted to saloon to get drunk and You know you kind of mouth off to some guy and you guys had a duel out in the street one of you died That's not a crime. There was a contract. There's a contract that said I'm better than you you're better than me Let's go duke it out You know, that's that's not really a crime if you went on about your business. You were fine So it doesn't mean just because the government becomes weaker and if there is a period of chaos Maybe there is there's more danger for a certain period, but if you're prepared I think I think you'll be able to kind of come out of it I I tend to think it's really somewhere in the middle between complete chaos and then nothing happens I think it'll just get harder from being in Russia at a time when there was a crisis when I went into that transition from Soviet Union to what we have now It's just a high inflation and it's just harder to get the same thing but people got along somehow there's more crime but I mean some parts of this town it's a lot of crime right now, so It's just that that's how I'd look at it That that answer First of all, I really enjoyed that. I think I'm gonna have to take a while to process everything Because this is new material for me. It's it's really interesting There's two things that I'm trying to to wrap my head around from this whole paradigm and you know the history and things the first is about about gold and The you said the things that made it originally a good currency was that you know it would last forever and It's useful outside of that and now you say It's not tied to the economy. It seems like it's lost It's you know you can create a plastic and you can bury it and it'll last forever. So what? What makes gold still the good? Standard good good question. Well, you can't create More gold you have to mine it so you can create more plastic So that that's the reason why fiat currency is failing because it's very easy to create it Gold is used as jewelry. So gold nobody throws away gold that that's really the fundamentally fundamentally what it is Everybody likes gold. Some people don't really I don't wear gold but I know that a lot of people do and a lot of people trust its value and It has intrinsic value because people don't throw it away. That's really the fundamentally But like it seems like a psychological thing that could you know, it could That feels very tenuous to me, you know, you're right. You're right. And the only the only reason that I Would say that it stands the it stands the test of time I mean if you had a piece do you have any gold? I don't know if you have gold if you have any at all Or your family members have gold would they ever? throw it away would they ever Would they ever? You know give it to somebody for a dollar or you say, I mean, I don't know I mean, maybe you say you have family members like that or Okay, so that that's really what it is. You see it's People cling to it So they have value they put value on it. That's really what it is. I mean this right here You know if if they print more money, this is going to be worthless, you know This is just paper And that's what they love, you know, that that's what the Federal Reserve loves and but that gold coin Well, right, so again the bills there's not really any difference exactly there's no difference between the ink that's on it and the way it's shaped The the gold I can melt the gold coin and it's still gold, right? So I can wear this jewelry where people like it and and think that I have a lot of money or whatever whatever reason people wear gold That's beautiful fundamentally, you know, so Like that answer question and the second question I have is about Population how it Fits into this because our population is is growing exponentially and It seems like what you said when we were on the gold standard the deflation was It was linear So it seems like you run into a situation where the country is getting poorer and poorer just because You know, we're getting more and more people faster than the the currency is getting more and more Valuable I would say as is the country's become more industrialized. They actually grow slower As if you see the biggest growth populate population growth is in Africa, which is the least industrialized so We are population is growing you're right but If we're looking at standard of living there's a few areas in the world that prove that no matter how populated an area is You can very successfully live in that type of environment look at Hong Kong look at Singapore just Massive if you call overpopulation, but everybody's just fine I mean people are dying to move there and live there because it's so successful because Technology outpaces population growth so ways to deliver food waste to grow food Ways to improve medical care and sanitation the outpaced the growth population. That's really what it is and money supply has Outpaced growth of population as well. So that's what increase that's why you have in That's why you have Continued the kind of slow impoverishment No, that's that's what I would that's why I would blame for it. All right. Thank you very much. Yeah Gary yeah, thank Hello Okay What's your end game for gold? You know this this point in time might not come for another 10 years but you mentioned in 1980 when interest rates rose and and people obviously restored their faith and fiat currency, but what do you foresee? The economic climate looking like in the future where that comes about again Just so that we have some sort of a you know mental time horizon of how this should all play out so to speak well So the end game again You want to look for if there is a real Resolve at the Federal Reserve if you watch the news and they say for whatever reason they're going to raise interest rates Really high not like 2% because that will bring gold prices down temporarily But they'll come back up again because come back out come back up again because the markets know that inflation rates higher than that if they say 8% or eventually over a period they raise it to like 8% or 10% or 15% then you can see the price of gold really tank because that at that point fiat money its convenience and it's it's It will outcompete gold Because you don't have to exchange actual gold you can just use your credit card like you do now That's not going to happen because they know that they'll double kill all the banks They will kill the real estate market, which will kill all the banks That's why the Federal Reserve has to keep interest rates very low because they have to protect the monetary system The way it is right now if they raise interest rates They know they're going to sink that and then also Obama knows he's not going to get reelected if that happens Not saying Obama's any any worse than the Bush when the Republicans get into government get into power They do the same exact thing that the Democrats do So thank you