"BE READY! 5-Digit Gold Prices Are Near..." - Rafi Farber | Gold Silver Price

Summary

The 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

• 💰 Gold is considered the ultimate form of money, and the value of paper currency is derived from its historical equivalence to gold or silver.
• 🔄 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.
• 🏷 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.
• 📉 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.
• 🌐 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.
• 💸 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.
• 🌍 A global crack-up boom could result in a scenario similar to historical hyperinflationary events, affecting all countries and economies.
• 🏠 In the event of a currency collapse, physical assets like gold and silver could become extremely valuable, allowing individuals to acquire significant resources.
• 🏭 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.
• 📊 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.
• ⚖️ 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

00:00

💰 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.

05:00

🏆 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 ones被淘汰, 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.

Keywords

💡Gold Standard

The gold standard is a monetary system where a country's currency or paper money has a value directly linked to gold. In the video, it is mentioned that 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 to the wealthy. This concept is central to understanding the speaker's perspective on the value and history of money.

💡Monetary Regression Principle

The monetary regression principle is a concept that explains how the value of money is determined by its historical purchasing power. The speaker uses this principle to argue that the value of the dollar is based on its past value and that without this historical context, prices would be arbitrary. This principle is foundational to the video's argument about the nature of money and its value.

💡Division of Labor

Division of labor refers to the specialization of tasks in production, which increases efficiency and productivity. In the video, the speaker explains that the purpose of money is to divide goods and services according to supply and demand, which is essential for the division of labor. The concept is used to emphasize the importance of a stable monetary system for a functioning economy.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. The speaker discusses the concept of inflation in the context of the dollar's value being inflated and how this can lead to economic depression when the illusion of the dollar's value breaks down.

💡Great Depression

The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States. In the video, the speaker refers to the Great Depression as an example of what can happen when the value of money is artificially manipulated, such as when gold's value was adjusted from $21 to $35 per ounce.

💡Fiat Currency

Fiat currency is a type of currency that a government has declared to be legal tender, but it is not backed by a physical commodity, such as gold or silver. The video discusses fiat currency in the context of its potential for hyperinflation and the speaker's belief that it will eventually lead to a 'crack-up boom' scenario.

💡Crack-Up Boom

The term 'crack-up boom' is derived from Austrian economics and refers to a situation where an economy experiences a rapid increase in the money supply, leading to hyperinflation and the eventual collapse of the currency. The speaker uses this term to describe the potential endgame for fiat currencies, including the current monetary system.

💡Hyperinflation

Hyperinflation is a term used to describe a rapid increase in the quantity of money, leading to a rapid increase in inflation. The video script mentions hyperinflation as the likely outcome of the 'crack-up boom,' where the value of money falls to zero, and people are desperate to spend their currency to avoid losing all value.

💡ETFs (Exchange-Traded Funds)

ETFs are investment funds that are traded on stock exchanges, much like individual stocks. In the video, the speaker discusses the limitations of ETFs, such as GLD or SLV, when it comes to holding physical gold or silver, suggesting that in an economic crisis, investors would be better off with physical assets rather than paper representations.

💡Physical Gold/Silver

Physical gold and silver refer to tangible assets as opposed to paper or digital representations of these metals. The speaker advocates for holding physical gold and silver as a safeguard against the collapse of fiat currencies, suggesting that these assets will retain value and can be used to acquire real resources during economic turmoil.

💡Competing Currencies

Competing currencies is the concept of multiple forms of money being available in an economy, allowing for a free market in money. The video suggests that a free market in money, with competing currencies, would lead to the elimination of dishonest money substitutes and the rise of more trustworthy ones, ultimately benefiting the economy.

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