This clip is from the recent Casey Research event “When Money Dies”.

Mike Maloney clearly explains the following:

* Wealth is never destroyed, it is merely transfered.

* What could potentially happen if all currencies have a crisis, at the same time?

* Why this could be the greatest wealth transfer in the history of mankind.

* Mining stocks with speculative capital.

* Fool’s Gold – ETFs, leverage accounts, and numismatic coins.

* Why is this particular time in history unlike any other?

All this and more on this interesting video!

If you are ready to be on the winning side of the greatest wealth transfer in history – join our team to build your own gold and silver home based business and the opportunity to build extra cash flow income and purchase pure gold and silver products.

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By Jeff Clark, BIG GOLD

It may not feel like it after a 12% correction in the past 30 days, but Mike Maloney – founder of GoldSilver.com – is convinced that we’re in a gold bull market that will be life changing for those who participate. I interviewed him for our current edition of BIG GOLD and am sharing some of what we talked about here. You may be shocked at what you read, because he’s devoted a larger allocation to gold and silver than we have. See why he’s convinced a bubble is ahead for precious metals, how high prices will go, and why he stores some gold overseas.

Jeff Clark: For those who don’t know you, why is Mike Maloney such a big believer in gold and silver?

Mike Maloney: Around 1999, my mother needed help with the estate my father had left her. My sister and I interviewed a dozen financial planners and picked the one that had the most glowing recommendations and gave him control of the assets. He lost about 50% of them in the next year and a half. What I’ve found is most financial planners get it wrong. They’re always chasing yesterday’s news. To be fair, there was a market crash, but with 50% of her assets gone by 2001, I ripped everything away from him, moved it to cash, and started studying the economy like crazy.

I discovered that the people concerned about budget deficits and trade imbalances at that time were in the precious metals sector, the hard money advocates. All the rest of the economists and newsletter writers didn’t really care. Concerns about international trade imbalances and how they were going to come back to bite us one day were coming from the hard money analysts. They also wrote about monetary history, something I just fell in love with. The fact that things just repeat over and over again is amazing.

I have hard data from 1918 to today, and anecdotal evidence before 1918, that shows that throughout history a society has a certain amount of real money – gold and silver. Then they either come out with debased coinage, or paper representations of gold and silver and expand the currency supply, which eventually cause prices to rise. People then realize there was something wrong with the currency and they rush back toward gold and silver to protect their purchasing power… and in doing so, they bid up the value of the gold and silver in the country until it matches the value of the circulating medium.

It appears to me this process has been going on since 407 BC, with the first great inflation in Athens. I have charts in my book, Guide to Investing in Gold and Silver, starting in the year 1918, showing the value of the gold held at the United States Treasury compared to the value of all of the base money or paper currency, and it was a 1:1 ratio.

Jeff: So history shows that the value of gold eventually equals the value of all paper money in circulation?

Mike: Yes. Back then, the US dollar was a claim check on real money – gold. Base money was the number of US Treasury gold notes in circulation. Before World War I, base money equaled the value of the gold held at the US Treasury. Then we established the Federal Reserve and did a bunch of deficit spending for WWI, expanding the currency supply, so now there wasn’t enough gold to cover all the dollars they printed. In 1934 the price of gold was changed to $35 per ounce and the values of base money and gold at the Treasury were once again in equilibrium.

Then we expanded the currency supply to pay for WWII, Korea, and Vietnam, and in the ‘70s the price of gold rose until its value at the Treasury exceeded base money. But, for a short time in 1980, the value of gold at the Treasury not only exceeded the base money, it surpassed base money plus outstanding credit card balances. This is important because credit cards are replacing cash in circulation, so you must include it if you want to estimate a price target.

Jeff: So how high do gold and silver go?

Mike: When I finished the book, it required a $6,000 gold price to cover base money plus outstanding revolving credit. I’m not saying that that’s going to happen, but if history were to repeat, that would be the price.

However, since the book was written, Bernanke created a whole bunch of base money to bail out the banks, and now it takes a $15,000 to $20,000 gold price. One caveat is that $1.6 trillion of excess currency is sitting on banks’ balance sheets. It has yet to enter circulation, and if it never does, then this price target changes. My point is that prices are a moving target. Putting a dollar figure on them is an exercise in stupidity, I think, because the dollar is always changing. You can’t use it as a measuring stick.

My target for gold is that it should be equivalent to 1/40 of a single-family, medium-priced home, or two shares of the Dow. So gold will probably buy you about 12 times more stocks and 3 times more real estate in the future than it does now. So those are my prices.

And silver will leverage you to that. There is more gold on the exchanges and with the dealers that investors can buy than there is silver. Their current prices do not reflect this. Gold is way too cheap compared to dollars, and silver is too cheap compared to gold.

Jeff: Sounds like it’s not too late to buy gold and silver.

Mike: No. What investors need to be aware of is that we are on the last legs of our currency system. History shows that the world sees a brand-new monetary system every 30-40 years – and ours is 40 years old. Right now all currencies on the planet are backed by debt. All of the previous transitions were baby steps from something (gold) to nothing (debt). In order to give confidence back to the currencies, we’ll have to go from nothing (debt) to something (most likely gold again) in one big, huge, gigantic leap. This will cause an economic convulsion the likes of which the world has never seen.

The end of this precious metals bull market will be marked by panic buying. Gold and silver will be going into an astronomical bubble one day, probably the biggest bubble in financial history. That is why I think gold and silver are still fundamentally undervalued.

Jeff: Investors reading this might be a little skeptical that a bullion dealer is telling them to buy gold and silver. Do you mind sharing what percentage of your assets is held in gold and silver?

Mike: My personal portfolio is 100% in gold and silver. I have no other investments. I am completely committed to this because I absolutely believe it. I spent 2-1/2 years writing what is now a bestselling book on gold, and I opened a precious metals dealership. There isn’t anything I do, no action I take, that isn’t somehow connected to gold and silver.

Jeff: What separates GoldSilver.com from other bullion dealers?

Mike: Everybody at GoldSilver.com invests in gold and silver. They have all been invested in precious metals since I started the company in 2005. Everyone is absolutely committed and very knowledgeable. So we are all on the same side of the boat as Casey Research. If you become a gold and silver client, you’ll know we’re invested just like you are. We’re walking the walk and talking the talk.

We also have a team of researchers who are constantly analyzing where we are in this bull market. It’s in our best interest to try to find the top of this bull market and sell when the time is right. I believe we can multiply your winnings by letting you know what we’re doing when it comes time to sell. The way I’ve set up my company is that if you don’t win, I don’t win.

Another thing you should know is that I am not a gold or silver bug. I couldn’t care less about these metals. They are just in their cycle right now and will be the best performing asset for the coming years – period – just based on history.

There are these brief moments in history where the safe-haven asset also becomes the asset class with the single greatest potential gains in absolute purchasing power. We’re in one of these cycles right now; as the currency supply gets ramped up and people realize there is something wrong with it, they’ll rush back toward gold and silver and bid the price up until it matches the value of the currency supply.

Jeff: You’re increasing the number of storage facilities outside the US; why should a US citizen consider storing bullion outside the country?

Mike: Some investors are concerned about “confiscation,” which is technically incorrect. The US government never confiscated gold; they “nationalized” it. In 1933, they bought it from US citizens at full face so that the Treasury could hold it as an asset for the entire nation. That’s the very definition of nationalization.

Jeff: Are you saying you don’t think gold could be confiscated?

Mike: It’s possible, but I don’t believe it would happen in the United States. More than half of our currency resides outside the border. We’re the only country in that situation. If Obama passed an executive order today once again nationalizing gold, I believe that banks and brokerage houses around the world would suspect something was wrong with the dollar, and they would immediately dump their dollars and buy gold and silver. That would cause the dollar to fall to zero and send gold and silver to infinity in a matter of weeks. I would hope there is someone in the government smart enough to know this. If so, then it makes nationalization very unlikely.

Jeff: Good point.

Mike: But I do believe that it is good to have some geographical diversity. I think we’re going to see governments trying to limit our financial freedom even more than we’ve seen since 9/11. They’ll do this by instituting such draconian capital controls that today’s IRS will seem magnanimous by comparison. I want to be able to travel freely and have access to my funds no matter what happens. Therefore, I keep some of my gold in offshore storage accounts in several countries.

Jeff: But why go to the hassle and bother with the reporting requirements?

Mike: Because if you’ve got ownership outside the country, you may be able to retain it, even in a nationalization. The point is, we don’t know the future. All we can do is look at what’s happening, try to figure out what governments are going to do, and then protect ourselves with a little bit of diversity. And of all the assets you could own offshore, I believe none are safer than physical gold or silver.

Jeff: Do you think foreign storage puts a target on my back with government officials?

Mike: Well, they want to make sure you’re declaring any capital gain. And I do think that precious metals investors will see some sort of windfall profit tax when the government tries to punish those nasty gold speculators that caused the dollar to crash. They will always point the finger anywhere but where it belongs – which is squarely at the government and the Federal Reserve. People are just trying to protect themselves from government stupidity and the Fed by buying gold and silver.

I think the reason they require the reporting is to make it difficult for people to cheat on their taxes. I don’t think it’s going to make you any more of a target than anybody else if you report everything. If you play within the rules, you’re not a target. I myself walk the straight and narrow. I make sure I comply with everything the IRS and the Treasury require.

Jeff: What about the small investor? Do you have any advice for the person who has limited funds?

Mike: Yes. It only takes $40 to become a silver investor. Regardless of what your income level is, you’re going to come out much better in the end. And once you take the leap and become an investor, your mindset changes and you find yourself starting to plan. A lot of people are not really planning on the future that much – but once you buy an ounce of silver and become educated, you give yourself a tremendous advantage over the rest of the population.

So just buy small quantities of silver. It has such leverage to it. And silver will probably go into some sort of super-spike that you will want to catch, which means you probably need some sort of guidance. That’s where subscribing to newsletters such as yours is very, very important for anybody who’s going to get into this.

Jeff: Thanks for your time, Mike.

Mike: You’re very welcome.

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Original source

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Mike Maloney is the author of the world’s best selling book on precious metals investing. Since 2003 he has been advocating gold and silver as the ultimate means of protecting wealth from the games played by our governments and banking sector. In this 90 minute presentation he lays down his ‘most likely’ scenario for the global economy over the next deacde…short term deflation, followed by big or even hyperinflation. Here you will learn the true definitions of inflation/deflation, the difference between currency and money, price vs value, ‘Wealth Cycles’, gold and silver accounting for the expansion of fiat currency, gold and silver supply and demand, the differences between the today’s bull market and that of the 1970s, The Debt Collapse, and more.

If you would like to know more check out Mike’s website http://www.GoldSilver.com

Mike sends out a free weekly newsletter from each of the above sites each with valuable information on the economy and gold & silver, see you there.

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Investing in Gold & Silver During Inflation, Stagflation and Deflation?
By: Julian D. W. Phillips, Gold/Silver Forecaster – Global Watch

In this piece we are looking at some critical fundamental features of precious metals that are rarely considered or accepted in the developed world markets. Expert investors like Warren Buffet look at inactive, buried gold with amazement, because he is focused on companies that produce things and earn money. And most of us wish we had his skill and money behind us.

George Soros and the like invested in gold as an anti-deflationary measure. Most analysts appreciate the anti-inflationary value of gold and silver. The protection of gold and silver in stagflationary environments are a combination of both abilities.

But why are gold and silver capable of giving such protection in bad times as well as good times?

They have certain qualities that shine forward at times when other investments fail.

The Limitations of Cash

In times of monetary stability and soundness, safely-stored cash never fails. Most consider cash in the bank to be the safest conservative investment, and in the distant past, the days of our grandfathers, this was largely true.

But that horrible word, inflation, came into being where prices kept on rising and cash saved would buy less-and-less. Interest rates compensated for this inflation, but then interest rates stopped rising. When interest rates did rise, it was at a slower pace than inflation. Cash lost its buying power as time went by. Bank charges would eat away any gains that might be made. At first inflation would occur one country at a time, and the exchange rate on those currencies fell, hurting international buying power even more. Today inflation is a global phenomenon.

Investors would have to move out of cash and into businesses or other investments that offset the cost of inflation.   This was not easy unless inflation happened while growth was vibrant. And this benefitted those middle classes that enjoyed such growth. The poor, whose income rises slower than inflation, feel the pinch.

Suddenly, booms turn into busts and businesses don’t do well. The value of businesses and its shares fall, losing investors money. Even self-managed businesses fall in value, putting rich people into bankruptcy. This is deflation, a monetary mood that causes values to shrink. In deflation the value of cash grows as prices fall.

Those who believe they are skilled investors answer, sell, then cheaply buy back. We look at that timeless story of an investor who did that just before the Wall Street Crash. His friend did not do so well selling only when the fall was half way down. But our hero who sold at the top, overwhelmed by his own skill bought back in, when the fall was half way down. His friend did not buy back in, but stayed in cash. It’s not so easy!

Then you get a situation when the bust happened and all of the markets plummet because forced selling drives investors out. Interest rates fall to negative levels. If cycles are consistent, there should have followed a boom period. But growth was so anemic that stagnation set in. Businesses and the economy struggle to find small amounts of growth and some cut back, turning over at survival level.

Suddenly, something that shouldn’t happen in a downturn happened. It was inflation, driven by factors no government can control. It came from energy and food and became uncontrollable. This type of inflation is deflationary. Businesses covering expenses suddenly found their costs ate away at profits much the same as deflation and inflation would have done. This is ‘stagflation’, a climate where stress levels steadily eat away at sanity.

Surely bills and bonds are a way out of the hole, as they pay an interest rate, while being almost like cash?

The trouble with this thinking is that interest rates have fallen so low that the bill and bond markets are so high as to be heading for a fall, far worse than any Wall Street Crash.

Next interest rates rise to stop negative interest rates from rising higher. Then the prices of fixed interest securities have to fall, while their yield rises. Investors rush to exit those markets the moment that happens.

Surely there is no escape from these three economic ailments?

Well, there is….

For a long time, our Asian friends have suffered through poverty, hard times, government corruption and mismanagement. They have found refuge in good times and bad times. They want financial security and their investments to last for more than one generation. Correctly invested, their savings provide financial security for many generations.

You would have thought that Europe in particular would have learned the same lessons with their history of currency collapses and wars.

Why Precious Metals?

Gold (and to a lesser extent, silver) is more than a barbarous relic from yesteryear. Its rising price is telling us that it is a very modern investment preference because

It is both cash and an asset.

In the long term, it outperforms cash because of these qualities…

v  It has all the features that makes cash valuable, even capable of earning an income(when lent out).

v  It is an enhanced version of cash, in that it is not subject to the vagaries of interest rates solely dictated by central banks and banks.

v  It carries no national obligations. It does not rely on nations to supply collateral to honor payment. If you ask the Fed to honor the value of your dollar, they will simply exchange it for another.

v  It is not dependant on the creditworthiness of the nation issuing money.

v  It has the same value in Mongolia as it has in the U.S. or Europe.

v  It is collateral in any transaction and of greater value than the price it can be exchanged at.

v  It cannot be issued at will, with the intention of being withdrawn from the system later.

v  It does not decline when an individual currency declines (and does not rise when that currency rises in value). It is a ‘counter to currencies’.

v  This century it has moved away from the control of the U.S. and Europe to global control. In the years to come, rising Asian demand will dwarf demand from the developed world, making it a fully internationally-valued asset again.

v  In a deflating global economy (just as cash is a national protection) gold is better than cash even when local currencies are not deflating.

v  In an inflating global economy, gold acts as an asset, when currencies are cheapening. There are no other currencies that are deemed as assets, like gold.

v  In a stagflationary economic environment, gold acts both as cash and an asset.

Get started with a Gold and Silver savings plan

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Buy or Sell Gold?

The latest Wall Street Journal is filled with stories about financial planners advising clients to either sell their gold or not buy anymore.

Naturally, you’re probably asking, “Should I buy or sell gold?”

My answer is that it depends.

My gold buying career began in 1972 while I was a pilot in Vietnam, when gold was about $85 an ounce. When it passed $750 an ounce from 1979 to 1980, I was forced to sell, not because I wanted to, but because I needed to pay off some bills.

In the 1980’s, when Kim and I were flat broke, we bought a little gold and a little silver on a regular basis. When gold dropped below $400 on its way down from $850, I bought gold at $400, thinking it was a good price. Then it dropped to $375. I felt stupid, saying to myself, “I should have waited.” So, I bought at $375 and it dropped again. Still feeling stupid, I bought more gold. When gold went below $300 around the year 2000, I bought as much as I could afford.

In 1996, with gold and silver so low in price, a group of investors and me purchased a silver mine in South America and a gold mine in China. We nearly went broke bringing both mines to market in Canada. The silver mine was sold to another silver company and the Chinese gold mind went public through an IPO on the Canadian Exchange.

I regret selling that silver mine. I should’ve held on to it but the cash was tight and the offer too good to refuse.

In 2000, Rich Dad Poor Dad was still a self-published, obscure book. We had no income from the book or our games. Oprah hadn’t called yet to get me on her program. Our primary investments at the time were larger apartment houses and one commercial property. Cash was tight in 2000, but with gold and silver at such low prices, we cut corners on food and luxuries and bought as many gold and silver coins we could afford.

In 2001, after Rich Dad Poor Dad took off, Ron Insana interviewed me on the financial TV channel, CNBC. He asked me what I was investing in and I told him gold. He thought gold was a strange investment but listened to my arguments politely.

Generally, paper asset investors like Ron Insana, don’t invest in gold, silver, or real estate. If they do invest in hard assets, they invest via paper assets through gold mining shares, ETFs (Exchange Traded Funds), and REITs (Real Estate Investment Trusts).

Today, gold is on everyone’s mind. Many say gold is in a bubble. Some say it’s time to sell, not to buy. Personally, I’m not buying much more gold and silver because I have enough. But you might want to know why I’m not selling.

Why I’m not selling
The primary reason I’m not selling my gold and silver is that the US government is in big trouble and the problems are getting bigger, not better. In the October 25th edition of The Wall Street Journal, a number of articles validate my concerns.

One article points out that TIPS (Treasury Inflation Protection Securities), are gaining in popularity. This means investors are now betting on inflation. For a number of years, TIPS and traditional US Treasury Bonds were running at about the same price. Which gave no indication of inflation or deflation. Bonds are good investments during deflation. TIPS are good investments in inflation.

I knew such a neutral position between bonds and TIPS couldn’t last long. Today, TIPS are so hot that they’re selling for a negative yield. In other words, the fear of inflation is so high that TIPS investors will do anything to get their money into something that won’t lose value. TIPS investors are paying money in order to not loose as much money as they could otherwise, if that makes any sense.

Now, with TIPS becoming hot, it means bond market investors are betting on inflation, not deflation. This is good for gold and silver. Rather than invest in TIPS, I prefer gold and silver. Rather than trust my government, I trust gold and silver. And if traditional bonds became hot, it still wouldn’t change my preference for gold or silver.

The article on TIPS in The Wall Street Journal was only the tip of the iceberg. On the same page were articles with headlines such as:

So, from just one page of The Wall Street Journal, there are four articles indicating inflation, when the article on TIPS is included, and only one article about financial planners advising against gold.

I’m betting gold and not the advisors. What you do is up to you.

The primary reason I hold on to gold and silver is because the US has massive problems still ahead. We have a massive budget deficit, debt that won’t stop, and a dysfunctional political system. On top of that, there are approximately 75 million baby-boomers about to start collecting Social Security and Medicare. Medicare is slated to go broke in 2019, and to make matters worse, President Obama passed Obama care, adding to the costs. This is nuts.

I’m not blaming President Obama. He’s accurate when he says that he inherited the problem. For those of you who’ve read Conspiracy of the Rich: The 8 New Rules of Money, you know that today’s problems started a long time ago and have only grown worse.

I doubt the US can solve our financial problems. We’ll never be able to produce enough to pay our bills. Our budget problems are now too big. Since the US cannot produce more than we spend, the way the US will attempt to solve the government’s financial problems is by printing more money.

And as long as the US is going to print money, I’ll stick with gold and silver. If the government stops printing money, I may start selling.

But if the US stops printing money, you’ll definitely want to buy a gun and enough ammunition to last a while. It may take sometime for the rioting and looting to subside.

Rich Dad’s Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future

YOUnique Wealth – Gold & Silver

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