"BE READY! 5-Digit Gold Prices Are Near..." - Rafi Farber | Gold Silver Price
Summary
TLDRThe script discusses the intrinsic value of gold as a monetary standard, contrasting it with fiat currencies like the dollar. It explains the historical transition from silver to gold standards and the potential for a 'crack-up boom', a hyperinflation scenario where the value of money plummets. The speaker emphasizes the importance of holding physical gold and silver over paper assets or ETFs, predicting a future where trust in money substitutes is lost, and physical precious metals become the primary store of value.
Takeaways
- đ° Gold is considered the ultimate form of money, and the value of paper currency is derived from its historical equivalence to gold or silver.
- đ The Monetary Regression Principle states that the understanding of current prices is based on historical prices, which is crucial for the division of labor and the functioning of an economy.
- đ· The dollar originally started as a silver standard before transitioning to a gold standard, which was a method of wealth transfer from the middle class to the wealthy.
- đ The illusion of a stable gold value for the dollar can lead to economic depression, as seen when the gold price was adjusted from $21 to $35 in 1933.
- đ The true monetary value of gold could be significantly higher than its current market price if everyone attempted to exchange their dollars for gold simultaneously.
- đž The concept of a 'crack-up boom', as described by Austrian Economist Ludwig von Mises, refers to a hyperinflationary period where the value of money substitutes falls to zero.
- đ A global crack-up boom could result in a scenario similar to historical hyperinflationary events, affecting all countries and economies.
- đ In the event of a currency collapse, physical assets like gold and silver could become extremely valuable, allowing individuals to acquire significant resources.
- đ Gold and silver mining companies may be in a unique position to provide real dividends in gold and silver during a currency collapse, offering a form of tangible wealth.
- đ ETFs like GLD and physical gold are not equivalent; while ETFs are useful for speculation, they may not be reliable sources of physical gold in a crisis.
- âïž In the endgame scenario, the speaker advocates for a free market in money with competing currencies, where dishonest ones fail, and honest ones thrive.
Q & A
What is the monetary regression principle mentioned in the script?
-The monetary regression principle is the concept that the only reason we can determine current prices is because we have knowledge of past prices. Without this historical context, prices would be arbitrary, and the division of labor and the economy would break down.
Why is the dollar considered a gold substitute according to the script?
-The dollar is considered a gold substitute because when you exchange it for goods and services, you are essentially exchanging the gold or silver value that the dollar represents, not just a piece of paper.
How did the dollar's origin relate to the silver and gold standards?
-The dollar was born as a silver standard and later transitioned to a gold standard, which was a transfer of wealth from the middle class who owned silver to the wealthy who owned gold.
What is the significance of the gold to dollar exchange rate change in 1933?
-The change in the gold to dollar exchange rate from 21 to 35 in 1933 was an admission by the government that the previous exchange rate was not sustainable, leading to the Great Depression.
What is the difference between the industrial price and the monetary price of gold?
-The industrial price of gold is the price seen on the futures exchange, reflecting the demand for gold in industrial applications. The monetary price is the hypothetical price that would result if everyone tried to exchange their dollars for gold, which could be significantly higher.
What is the 'crack up boom' as described by Austrian Economist Ludwig von Mises?
-The 'crack up boom' is a term used to describe a situation where economic activity in fiat currency terms increases rapidly, leading to hyperinflation. It is characterized by people wanting to spend their money as quickly as possible to avoid holding onto rapidly depreciating currency.
How does the script relate the endgame scenario to historical hyperinflationary events?
-The script suggests that the endgame scenario will be similar to historical hyperinflationary events, such as those in Weimar Germany or Zimbabwe, where the value of currency collapsed and people sought alternative stores of value like gold.
Why might physical gold and silver be more valuable than ETFs in an endgame scenario?
-Physical gold and silver are more valuable in an endgame scenario because they are tangible assets that can be held and used for transactions when trust in currency substitutes is broken. ETFs, being financial instruments, may not be deliverable in such a scenario.
What is the role of gold mining stocks in the endgame scenario according to the script?
-Gold mining stocks are advocated as a way to potentially receive real dividends in the form of gold and silver certificates when the currency collapses. These companies may be able to provide tangible assets as dividends, unlike ETFs.
Why does the script suggest that a free market in money is necessary?
-A free market in money is suggested as necessary to allow for competing currencies, which would encourage trustworthiness and eliminate dishonest money substitutes. This would lead to a more stable and reliable monetary system.
What is the potential outcome for people holding physical gold and silver during the initial phase of the endgame scenario?
-The script suggests that people holding physical gold and silver could amass huge amounts of real resources as their purchasing power would increase significantly when the value of currency substitutes collapses.
Outlines
đ° The Monetary Value of Gold and the Dollar's Intrinsic Value
The first paragraph discusses the foundational role of gold in the monetary system, asserting that the value of the dollar is essentially a substitute for gold. It explains the concept of the monetary regression principle, which posits that the understanding of current prices is based on historical prices, preventing arbitrary valuation. The speaker argues that the dollar's value is inflated and that a true gold standard would reveal a much higher value for gold, possibly in the range of $35,000 to $40,000 per ounce. They predict a 'crack-up boom', a term coined by Austrian Economist Ludwig von Mises, which refers to hyperinflation where the velocity of money increases to the point that people lose faith in holding cash, leading to a rush to spend. This would result in a significant increase in the purchasing power of gold and silver, with physical assets becoming extremely valuable.
đ The Endgame: Physical Gold and Silver's Dominance in a Currency Collapse
The second paragraph delves into the potential outcomes of a currency collapse, emphasizing the importance of holding physical gold and silver. It suggests that in the initial phase of a monetary crisis, only physical coins will be accepted for goods and services due to the collapse of trust in money substitutes. The speaker anticipates a scenario where the value of gold and silver will skyrocket, allowing those who hold physical assets to amass real resources. They also discuss the potential for a return to a free market in money, with competing currencies emerging, and the dishonest onesèą«æ·æ±°, leaving only the trustworthy ones. The paragraph cautions against relying on ETFs like GLD or Sprott for physical gold during such a crisis, advocating instead for direct ownership of physical gold and silver or investment in mining stocks, which could provide dividends in the form of gold and silver certificates.
Mindmap
Keywords
đĄGold Standard
đĄMonetary Regression Principle
đĄDivision of Labor
đĄInflation
đĄGreat Depression
đĄFiat Currency
đĄCrack-Up Boom
đĄHyperinflation
đĄETFs (Exchange-Traded Funds)
đĄPhysical Gold/Silver
đĄCompeting Currencies
Highlights
Gold is considered the ultimate form of money, with the dollar being a substitute for gold.
The Monetary Regression Principle explains the continuity of pricing and the necessity of a stable monetary system.
The origin of the dollar is traced back to a silver standard, then a gold standard, indicating a transfer of wealth.
Barter systems and the evolution to using silver and gold as exchangeable commodities are discussed.
The current inflated value of the dollar as a gold substitute and its potential implications are highlighted.
The historical event of 1933, when gold's value was adjusted, is mentioned as an example of monetary policy impact.
The concept of the 'real' monetary price of gold, based on a global exchange rate, is introduced.
The potential for a 'crack-up boom', a term from Austrian Economics, is explained as a hyperinflation scenario.
The endgame of fiat currency leading to a global economic collapse is predicted.
Physical gold and silver are posited as the ultimate store of value during economic downturns.
The difference between the industrial price and the monetary price of gold is clarified.
The potential for a run on physical gold and silver, leading to a collapse in the value of fiat currencies, is foreseen.
The historical precedent of Germany's hyperinflation and its impact on asset values is cited.
The Theory of Money and Credit by Mises suggests a return to physical coins in times of monetary crisis.
The idea of competing currencies in a free market of money is proposed as a solution to monetary monopolies.
The risks associated with ETFs like GLD and Sprott in an endgame scenario are discussed.
The potential benefits of holding gold mining stocks as a means to receive real dividends in gold and silver are highlighted.
The importance of owning physical gold or silver, rather than paper assets, is emphasized for the endgame.
Transcripts
gold is money period when you are
exchanging a dollar for a pack of gum or
groceries or whatever what are you
exchanging you're not exchanging a piece
of paper you're exchanging a gold
substitute you're exchanging the gold or
silver value of that dollar for the
goods and services that you're buying
and why must this be true this is true
now it's true it's true always because
of something called the monetary
regression principle the only reason you
know what prices are now is because you
knew what prices are yesterday otherwise
prices would completely would be
completely arbitrary and if they are
completely arbitrary then there's no way
to divide goods and services and
division of labor breaks down the
purpose of money is to divide goods and
services according to supply and demand
otherwise there's no division of labor
and you can't have an economy so you
have to go back in time so the question
is how is the dollar born and some
people could say gold standard and but
that's not even that even that's not
true um the dollar was born as a silver
standard and then it was changed to a
gold standard as a transfer of wealth
from the middle class who own silver to
the wealthy who own gold but let's just
say that the dollar started as a gold
standard why because barter started by
exchanging one thing for another thing
that's how Society began or economics
began and the thing that was most
exchangeable for other things just
happened to be silver and then gold
later so even now when you're exchanging
a dollar you're exchanging a gold
substitute it happens to be a very
inflated gold sub substitute and we know
what happens when the the illusion of
the Dollar's value of gold when that
illusion is broken then there's a
depression because that's what that's
what happened in 1933 right gold went
from 21 to 35 as an admission by the
government that this exchange rate is
not real and therefore we have to change
it and then you had a big Great
Depression the real price of gold the
monetary price of gold is what price
would it be if everyone on the planet
were to exchange all their dollars for
gold right now what would the price have
to be what the exchange rate it's not
even a price it's an exchange rate what
would the exchange rate between gold
substitutes and gold have to be and the
answer is probably around 35 $40,000 to
make everyone who wants gold you know to
have it uh that's the monetary price the
price that we see on the Futures
exchange that's the that's the
industrial price because not everyone
needs gold for industrial purposes but
everyone needs it for monetary purposes
just they pretend that the dollar they
have is gold but uh not not these
exchange rates the endgame we've seen it
many times in history
exactly how it's going to come to pass
this time I don't know but I can imagine
that will be something like we've seen
before but Global what have we seen
before in the end game the endgame is
what the Austrian Economist lck vanon
mises calls the crack up boom so we we
know what booms are booms are when
economic activity in fiat currency terms
picks up and it looks like everyone's
Rich because you know the spending the
GDP goes up and blah blah blah but GDP
is really just another count of the
money supply because if you increase the
money supply you're going to increase
the the amount of dollars that are spent
in an economy it's kind of stupid so the
crackup Boom is otherwise known as
hyperinflation when the economy speeds
up the economy it's not the really
economy it's the the amount of uh money
substitutes being circulated in an
economy speeds up to the point where the
the desire to hold cash balances as
money itself Falls to zero and once the
desire to hold money substitutes
themselves Falls to zero then uh people
are willing to spend infinite amount of
money or infinite amount of currency I
is say on anything just to get rid of it
so that's that's the crackup boom that's
what we're headed for and it doesn't
matter if we're talking about Central
Bank digital currencies or paper money
or whatever it's all the same crap
doesn't make a difference I mean people
make these big deal out of Central Bank
digital currencies and it's a big deal
in the sense that it robs everyone of
any privacy whatsoever but it's all the
same Fiat so when it all goes to zero
that that's it it's all it's all dead
it's all the same so um the crackup Boom
is going to be something along the lines
of what happened in viar what happened
in Zimbabwe or what happened in any
hyperinflationary country except
everywhere all at the same time and what
happened then in in vinar Germany you
could buy for example a mansion in
Berlin for like four or five gold coins
so I expect the people with physical
gold to be able to amass huge amounts of
real resources and that's when the
purchasing power gold and silver goes
through the roof in the initial phase
when the when the real breakdown happens
it's going to have to be physical
because all trust in all money
substitutes will be broken it's not like
people are going to have this Revelation
oh I understand what money is now and I
get what Rafi is saying when he talks
about the monetary regression principle
and they're all going to suddenly study
Austrian economics and become Geniuses
in economic theory that's not that's not
what's going to happen what's going to
happen is the same thing that happens in
every bubble you know whether it's
Bitcoin people chase Bitcoin because
it's going up people chase this stock
Tesla whatever because it's going up
people are going to chase gold and
silver not because they understand what
money is because it's going up and it's
going up because it's this is the end
game and it's money so people are going
to try to chase it they going to try to
get as much physical as they can they're
going to call for delivery there's going
to be a there's going to be a run
there's going to be you know uh dealers
going broke they can't get supply and
there's going to be panicked and then
the prices of everything are going to go
way way way down in terms of physical
gold and silver because everyone in the
world's going to want it in the the book
The Theory of money and credit misus
says that we have to go back to
exchanging physical coins I don't think
it's going to stay that way forever but
in the initial phases where prices are
just off the- wall and bonds are
collapsing and this and that then no
one's going to accept anything for any
of their services in return goods and
services in return except for coins so
you're going to need some of that are
you going to need like huge mansions
full of it no because I don't think it's
going to last forever until you know
someone's going to offer to store your
gold and silver for some meaningful
substitute and then substitutes will
come back to life and there will be more
trustworthy ones and less TR trustworthy
ones that's what it should be instead of
a monopoly on the subit supply there
should be competing currencies and the
the dishonest ones will go out of
business and the honest ones will live
there should be a free market in money
that's what I think is going to happen I
hope make sure that you're actually
buying physical gold or physical silver
it doesn't really matter what kind uh in
the in the end game when the end game
really does come ETFs are not going to
help you forget it whether it's Sprat or
GLD Sprout is more trustworthy yeah but
like if everyone's desperate and
everyone calls Sprout at the same time
saying I have pslv I have P phys please
give me my gold spot's going to say sure
here it's going to mail it to you it
it's not going to happen okay I'm not
saying it's not there I'm saying you're
not going to get it you're going to have
you're going to have paper gold and what
are you going to do with it if the
dollar can't buy anything GLD is useful
if you're trying to speculate using gold
right and I do that I don't do it with a
huge amount of money but if you want to
play the options in the gold market for
speculative purposes um then GLD would
be the one to do if you want to buy gold
gldd is not what you want to use at all
and neither is phys or anything from
Sprat so gold mining stocks it's less of
a problem to have
ETFs uh because the ETFs are just
baskets of shares and there there's much
less of a chance that they're cheating
and not actually holding the shares that
they say they hold they probably hold it
the question is like what happens to
mining shares when there is an endgame
and uh what I think is going to happen
and why I advocate holding mining stocks
in the first place is that when the
currency collapses and it will collapse
to zero uh then gold mining companies
and silver mining companies will be
practically the only companies that can
pay your real dividends how with gold
and silver certificates for their
product because they'll have the money
and you'll be able to earn real
dividends and maybe the the mail out
certificates and you can talk to your
company and say Here's my certificate
mail me the gold and when things settle
down eventually you'll probably be able
to get it um whereas with ETFs I don't
think so because they're owned by Banks
so you don't want to mess with those
unless you're speculating on the gold
price which you can do I just don't
recommend it um for an endgame scenario
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