world financial system works

you know the game that you're playing

and if you don´t know the game and the rules that we're playing by

you are going to get slaughtered,

you are going to get slaughtered.

Ever since the Federal Reserve was born, we have been living under a lie.

In order for us to mantain the levels we've got and to maintain

the prosperity

Obama has to be twice as far in debt when he leaves office than when he came in,

or the whole thing is starting to collapse.

The Federal Reserve, they're buying bonds directly from the Treasury.

This is Quantitative Easing, they're calling it,

and that means there's an emergency going on.

I can see that there was not anything

in history

as far as finances goes, that was as much as a sure thing

as gold and silver accounting for the expansion of the fiat currency supply.

There is absolutely no chance in hell that this won't happen,

right now it takes about 15000 to 20000 dollars an ounce of gold.

I believe that there's going to be a deflation

first

and then all of the world's central banks

will start printing like crazy to get us out of that deflation and Ben Bernanke

will be leading the charge.

You can´t have a debt that is 10 times the size of your economy.

It's not posible. Everything comes to its screeching halt first.

I've got to show you

the world's stock markets

and real estate bubbles

have to continue crashing because

all it is

is the market trying to seek

fair value.

It's trying to seek equilibrium,

this is what the markets do.

It is their job.

Basically,

you know, our entire currency system

is imaginary,

it doesn't really exist. It's just that we're all dreaming the same dream.

If anybody chooses to wake up...

it's over with.

Thank you very much!

I'm Mike Maloney

author of the bestselling book on precious metals investing,

Guide to Investing in Gold and Silver, is part of

the Rich Dad series that Robert Kiyosaki started,

the original book. Robert Kiyosaki says: write a book

no other instructions: write a book,

and so I start writing this book

two and a half years of research and writing

probably 30 hours a week,

every week

for two and a half years. It's a very well researched book.

The one thing I really worry about

is perpetuating misinformation, I want it to be accurate

and then I tried to boil it down and make it real simple. I read all these books by

economists like Milton Friedman

Murray Rothbard,

Ben Bernanke, if you get a chance to read some Ben Bernanke, don't!

He is a horrible author,

just horrible.

They're all trying to write over each other's head and impress each other

And by doing so, they make economy sound so complex

that everybody thinks well, I can't understand economics.

It's really simple.

Economics is very simple if you boil it down to its essence

and it's not that difficult to understand and that's what I tried to do

in my book.

For the people that have not read my book,

about 75% of it

is not about investing in gold and silver, it's some history of money

and then how the world economy works and what could potentially happen

you know, where we came from, where we are today and what could potentially happen.

By the way,

I really couldn't care less about gold and silver,

I don't want gold and silver, it's just in its cycle right now, it's a stupid lump

of metal that doesn't

have cashflow or spinoff dividend yields.

And so I don't want gold and silver,

it's just that right now I don't want anything else.

They're just in their cycle right now and they're going to be outperforming

everything else, in my opinion from all of my research,

and they're going to be able to buy a whole lot more other stuff.

A whole lot more real estate,

whole lot more stocks,

whole lot more oil wells, farmland,

all the true wealth.

It's in

the buildings, the businesses, the farmland that is out there,

and people get this picture in their head

that if there is an economic disaster, if there were some sort of collapse

that it's going to be like this nuclear wasteland afterwards, it's not.

All the buildings still are going to be there, the apartment buildings.

It's just that they're all going to be on sale.

The problem is

when investments are on sale nobody buys,

the public comes charging in, and they chase investments after they're going up.

Gold and silver get hot

whenever they're going up and as soon we see them take a dip,

it's like sales turn off like a light switch, most of the time.

And I don't want anybody

to get slaughtered.

I really don't want these bad things to happen, I just think that

all the evidence is there.

What our leaders have done to the economic system

is going to cause these things to happen and it's inevitable,

and I'm trying to warn as many people as possible

as quickly as possible. My company has a mission,

to get as much gold and silver in the hands of the middle class

as quickly as possible, because

when there's great economic upheaval, there is great political change,

and usually goes along with it

In the hyperinflation in Weimar Germany in 1923,

this hyperinflation ended

on November 15th, 1923. On November 8th, one week before

the end of the hyperinflation,

Hitler's storm troopers

pointing machine guns at the front door of the Burgerbraukeller where

there was a political meeting, this big beer hall

where there about 3000 people listening to politican speeches

and on that night he took the stage

at gun point

and to this literally captive audience gave a speech that changed the world.

Nobody knew the name Hitler, nobody knew who he was

until he gave this speech

to a newly empoverished middle class

people that were scared and looking for somebody to lead them,

and here this charismatic guy takes the stage, gives them a scapegoat

and says "I know the way out of this".

The next day, those people in that beer hall

followed him to try to do a military... a coup to take over

the government

and it failed.

He was imprisoned,

he was tried for high treason,

his trial went on for an entire month,

and during that month he had the ear of the nation.

He was covered in every newspaper

all across Germany,

and the judges were sympathetic to his beliefs

so they let him go on for hours on end with the speeches

and that's when he gained power was when the middle class was scared.

The middle class defines a country with their vote.

The country, as the middle class goes so goes the country,

and so

what I'm worried about

is not the loss of my financial well being,

it's the loss of capitalism, it's the loss of

our quality of life, it's the loss of our freedom of choice.

That's what I'm worried about,

and I know that there are certain people that I'm not going to be able to reach.

Joe-six-pack, I refer to the guy that comes out

of his beer and football induced coma

at the very end of the bull market and comes charging in and buys at the peak.

I can't do anything for him.

I'm hoping that I can do something for all of you.

These are wealth cycles. If you have two asset classes that are rising,

you have for instance, let's say that this is real estate on the bottom

and on the top here we've got precious metals.

Precious metals in this last decade here,

precious metals outperformed real estate and stocks

but everything went up.

Stocks went up, bonds went up, real estate went up and so did commodities and precious metals.

Is that possible?

Can everything go up? Think about it for a minute.

If we've only got so much stuff in society and if you've got these

3 or 4 asset classes

and everybody rushes toward one, pushing it to a bubble shouldn't it be drawing

currency away from the others? Shouldn't the others be going down?

Well, they didn't in the last decade.

And what's happening here if you've got two things that are going up,

if you're invested in this one down here,

when you've got to sell, you can't buy as much as this one.

If you're invested in this one, when you sell you can buy more of this one.

They're both rising in price,

this one is falling in value

when you sell it you can't buy as much gold, or food or oil.

Your house is worth half as much in oil, as oil was 10 dollars

a barrel in 1999.

So your house measured in oil has crushed, the stock market measured

in oil has crushed.

If you start looking at your home or all of your investments

and you divide them by something else, you measured them in

the price of a bushel of wheat,

a pound of copper, a ton of iron

shares of the Dow or ounces of gold,

you're going to discover something.

These two things that they're going up, eventually

the people that are invested in this one realize that

the smart investors realize that it's going into a bubble,they sell

and they buy undervalued asset,

and then this trend reverses. It can't go on for ever, and if it did,

if gold outperformed real estate for ever, there would come a day

where one ounce of gold would buy the entire planet and we all know that

that can't happen. Right?

So,

eventually one becomes overvalued and the other one becomes undervalued

and the cycle reverses,

and then it reverses again,

and what is happening is that they're printing currency about this rate

and that's the reason you can't see it. People would say:

"well, at least my house is worth a 100.000 dollars more than it was

in the year 2000", or "it's worth

20 per cent more"

Well, in fact if the inflation was 40 per cent it actually went down in value.

They'd say that,

you know, they looked at the stock market

and the Dow right know is just barely above its 2000 high.

In the last decade stocks have gone sideways for a decade.

We've had inflation during that time, they inflated the currency supply.

So,

if you start measuring one thing with another thing, so you're measuring stuff

against stuff instead of using currency, what you discover

is that everything is trapped in this valuation channel,

where it goes from overvalued to undervalued to overvalued and undervalued again,

and the thing that you're measuring it with is doing

the exact opposite mirror wave.

The trick is

sell the overvalued asset

near the peak if you can,

find the undervalued asset and I call this wealth cycles.

And if you can do that,

it's a road to true wealth, you're escaping that valuation channel.

Here is a real example, this is the Dow

measured in points. And what are points?

Points are derived by

the dollar value of the underlying stocks, so basically

its points are dollars,

and one of the reasons that they measure it in points is just

like when you go to Las Vegas, they take your currency and they give you chips.

Now they're pieces of plastic, so you don't care, you're just having fun.

So change it to points,