The Future of Gold and the Economy – Robert Kiyosaki, James Rickards

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this is the Rich Dad radio show the good news and bad news about money here’s Robert kosaki hello hell hello Robert kosaki the rich dead radio show the good news and bad news about money and today we have the single most important show of your life and the reason for that is we have a very dear friend but one of in my opinion one of the greatest minds of our times you know there are Sages of the time and this gentleman Our Guest today is that person I mean uh some of you have heard of him his name is James re Jame James records and I started with his book currency Awards I’ve read all of his books up to that um the other thing I like about Jim is that he puts his books on audio books and I can actually hear him read his books so I was listening the road to ruin all the way through Montana for and it it was the most exciting but frightening book I’ve ever listened to on audio tap i’ already read the book but the listen to Jim speak it was incredible any comments Kim well Jim’s one of the one of the smartest guys we know and what’s fascinating also is that he was a national security adviser for the Pentagon and the CIA so there’s probably things he can’t tell us or we’ll he’ll have to kill us so uh no just a super uh super good guy and uh author last book he wrote was the ca new case for for gold he wrote Death of money currency Wars road to ruin his latest book is called aftermath and it was published 2019 I think we’re in the aftermath we’ll find out and and one last thing too is he uh Jim also has a financial newsletter and once you hear this interview you’re probably going to want to sign up for it’s called strategic intelligence so let me let me give you the agenda because we only have two 20 minute slots so Jim has been calling and he’s not a guesser he is a mathematician he’s unbelievable he’s calling for goal to hit $115,000 by 20 and so he doesn’t guess at it he’s not pulling numbers out there he’s not trying to sell goal he’s not doing anything it’s just the way his brain works so the question today these are the four questions I’m going to ask Jim in these two 20 minute slots and I call him the Fire H because once you get started you can’t stop him so I’m not going to interrupt him so first question asked Jim is what what does the rising price of goal mean see it it’s not good news goal hitting 15,000 an ounce means something is really screwed up in the economy so he’s going to be talking more what’s behind the price of gold number two is why is Buffett dumping Bank shares and buying gold and silver the thread question is BU bonds versus gold and four is what does he expect inflation or deflation and subjects like that so those are the four questions so stay tuned to this most important Rich Dad radio program for your financial future so welcome to the program my friend Jim records welcome Jim thank you Robert thank you K thank you for the very kind introduction thank you so question number one okay so you’re calling for gold to hit $155,000 in uh if anybody wants to find out Jim’s logic behind it he goes into great detail on YouTube about how he C how he derives $15,000 my question to Jim is this what’s causing that you see there’s something very very sick inside the economy and in our monetary system to be driving gold that high so question number one Jim why is the price of gold Rising what’s going on in the economy right uh it’s sort of a a two-part answer Robert one is exactly as you put why is why is go going up what’s going on uh what’s the basis for predicting $15,000 an ounce by 2025 which I do uh but then also what does it what does it really mean is that you said it’s not a good thing and I agree it’s not a good thing for the economy it’s not a good thing for um for most Americans if you have gold you can pat yourself on the back and say yeah I made a lot of money on gold but that might be a world where you’re losing a lot of money on other things and you need to be alert alert to the overall economic picture so let’s take this one at a time you know the goal $155,000 an ounce it’s it comes out of three different analyses that actually don’t correlate to each other know you do it one way uh you get a number you do it another way you get a number you do it a third way you get a number it was interesting that they all came out not exactly to the penny but very close to that $155,000 number so um the first way to do it is just uh it’s a little bit of technical analysis not overly technical we’re in the third grade bull market in gold in history when I say in history you’re like well G history is a long time how come this is only the third bull market well the answer is for almost all of history up until 1971 gold was money so you didn’t have bull markets or bare markets it was just gold uh and that that was the money and you thought about it by weight you said well I’ll give you an ounce of gold for this property or I’ll give you you know a quarter ounce for you know some food or groceries or whatever so you thought about gold by weight it was money constant store value so it’s really only since 1971 when Nixon suspended Redemption of uh dollars for Gold by our foreign trading partners that gold just went its own way detached from the dollar so the dollar would do what it was going to do and and gold had it had its own market and still does um the first great bull market was 1971 to 1980 uh and gold went up over 2,000% uh from $35 an ounce to $800 an ounce in January 19 1980 uh then there was like a long drawn out almost 20-year uh bare Market from 1980 to 1999 uh and gold dropped down to around 250 so went from the 800 level down to 250 the Second Great bll Market was from 1999 to 2011 August 2011 go went from $250 an ounce to $1,900 an ounce that was an almost 700% gain then the second bare Market August 2011 to December 2015 the third bull market I give you the exact date December 16th 2015 Gold hit $1,050 an ounce that was the bottom of the second bar Market I described pretty steep fall from the 1900 level but you could tell it was the bottom you said how do you know that um I had a conversation with our friend Jim Rogers one of the greatest traders in general and certainly one of the greatest commodity traders of all time and this was before that Market bottom when it was still going down and I said Jim um we were down the Dominican Republic I said Jim are you buying gold and he said no he said I’ve I’m I’ve got gold I’m keeping the gold I have I’m not buying more right now because it hasn’t hit bottom and then the he gave me one of the best pieces of advice I’ve ever had he said Jim nothing goes from here to the Moon without a 50% draw down along the way it’ll get there but it’ll go up down 50% and then back up for the really big you know sort of hyperbolic price we see you have to expect that it’s true of all Commodities well taking that advice and then you know look at the charts well starting uh 1900 if you say okay it was it was 250 was 1999 1900 was August 2011 so there was that gain I sry 250 to to 1900 so there was that gain of um 17 uh um sorry $650 $1,650 an ass of gain take half of that is 825 um so take 1900 minus 825 and guess where you come at you come out right at uh you know right at 1075 and so uh when I saw 1050 I said Bingo there’s the 50% draw Downs exactly what Jim Rogers uh said would happen uh that’s the bottom and it’s up about 50% from there it’s been a little bit higher than that but it’s up about 50% from there so there’s your third bull market but here’s the point Robert if the first bull market was up 2,000% and the second bull market was up 700% if you just take the average of those two you don’t have to pick the higher of the two you don’t have to go crazy your sale will be bigger than never it could be but you don’t have to do that if you just take the average of those two um you would come up with a number around uh, 1400% gain from where we from from the 1050 well that would put you at almost $15,000 an now so in other words and and the same time period the Chris bull market was uh uh eight years sorry nine years the second bll Market was 12 years just take the average you get 10 and a half years so from December 2015 just using the averages not anything crazy uh 10 and a half years up you know 1500% Bingo put you at $155,000 an ounce in 2025 and by the way don’t wait if if you if you agree with that analysis and there’s more to back it up don’t wait until 20 25 people say oh okay well it’s going to be $155,000 an ounce uh I’ll go out and get it in 20 24 you know I’ll catch the wave no it’s it it’s a long way between here and 1500 I mean you got to get to 3,000 4,000 5,000 6,000 7,000 Etc you got a long way to go to 15,000 so why not get get the gold now which I do recommend and then enjoy all those profits don’t wait to the end because it could happen there could be like a little Spike at the end so uh by by the way Gold’s approximately with premium about 2,000 an ounce correct so it sounds expensive today but at 2025 you’re gonna say I should have bought it in in I should have bought it in 2015 but that’s okay most most of the gains are you to come the other thing that people don’t understand Robert is just this is sixth grade math you know you don’t need calculators for this um each $1,000 gain is a $1,000 gain if you have an Al of go is up $1,000 an ounce you just made $1,000 that’s real money but because you’re working off a higher base each ,000 gain is a smaller percentage than the one before so when you move from $2,000 to $3,000 an ounce that’s a 50% gain but when you move from 14,000 to 15,000 it’s only a 7% gain so that’s why these bull markets get get a lot of their gains toward the end because 7% That’s a week and then you’re not going to you might have to wait a while to get to 3,000 but if you’re at 14 you’re not going to wait long to get to 15 7% could be a onewe rally so in other words those thousand increments are smaller percentages and easier to achieve the further along you go one more reason to get the goal now so so that’s why you you’ve talked about it it goes parabolic It goes correct but uh again a thousand bucks is a th000 bucks it’s the same amount of money but it’s a smaller percentage which means it’s easier to hit and so that the hard work is right now kind of get to three 4,000 which it will but uh it can really take off from there $100 days are going to be the norm1 thousand weeks are not going to be unusual and they’ll be more and more frequent as we move along so that’s one analysis the second analysis is um if you just choose a monetary analysis I’m not saying we’re going to go on a gold standard we may but right now there’s not a Central Bank in the world that wants a gold standard not one they hate it but they may be forced to go to or something like it because if if confidence is lost in in government money in Fiat money uh they may have to turn to Gold not because they want to but because they have two to restore confidence so what’s that math well um the the global money supply is about um I’m using M1 and the major economies which is about 80% of global GDP uh is about 33 trillion uh and there happen to be about 34,000 tons of official that’s not all the goal in the world that’s the official goal held by central banks and so forth well just do just do the division okay divide the the 33 oh sorry take the take the 33 trillion and just say you need 40% backing some people would say 100% but you know historically 40% has worked pretty well so you need about 12 or 13 trillion dollars worth of gold uh to back up that money well if you have 34,000 tons and you need about 13 trillion dollars of gold to back up the money supply what does that come to we’ll just divide by one by the other and again you get a number uh close to $14,000 an now so there are two completely independent methods one is the technical historical look the other one is the monetary look based on money supply but interestingly they come out in the same place uh and then there other there other ways of getting to to the same U the same answer so so that’s uh I feel very strong I feel it’s a very uh solid kind of analysis to get to that number but the other part of your question question Robert is okay what does it mean isn’t it isn’t this great well Gold’s going up I’m making a lot of money well maybe you are and other people are who have gold and I certainly recommend it but to me the price of gold never changes I think of gold by weight you have an ounce you have a kilo you have a ton you have a 400 ounce bar whatever you may have if the dollar price of gold is going up what’s really happening is that the value of the dollar is going down because gold is a constant story value so if all of a sudden you know $2,000 gets me now but we get to a world where it takes $5,000 to get me an ounce what happened the value of the dollar went down I need two and a half times more dollars to get the same ounce so a high dollar price of gold is is again good for gold holders but not close for celebration because it means the complete and utter collapse of the US dollar that’s what happened in the 70s and that’s what’s happening now and so then the next question is then you know Buffett who has really trashed gold for a long time he also trashes Bitcoin I think he called it rat poison or rat droppings he called Bitcoin that and I kind of laugh because he also said the same thing about Apple stocks but but waren Buffett you know he he just started selling his banking shares and he bought into Barra so from Jim record’s point of view what do you think is going on in Buffett’s mind well a couple things the reason for dumping the banking shows is you know I was I work at I was the council the City Bank for 10 years so I know a little bit about the banking business the way you the way you make money is you borrow short land long you borrow at a low rate and land at a higher rate and you keep the difference you got fees and credit losses and lots of complications but that’s pretty much what the banking business has always been well if uh interest rates are zero all across the yield curve you know if you’re borrowing close to zero maybe 25 basis points and you’re lending close to zero maybe 1% or less how do you make money the answer is you can’t you can make a little bit of money you can leverage it a little bit but you don’t make enough money to cover your credit losses and your expenses and your overhead and fees and and a lot of other uh costs associated with that so the flatter the yield curve here’s the here’s a 10e rate here’s a you know overnight rate if it’s like this you can make all this money in between you’re taking risk in terms of timing but you don’t have to take a lot of credit risk but if it’s flat you can’t make any money so he’s dumping the backing shars because they can’t make money why would you buy Barra well obviously likes gold that goes without saying but birkshire haway which is Buffett’s investment vehicle is so big so big we’re talking you know upwards of a trillion dollars you can’t buy Junior miners you know that they they junior miners can be very very attractive Investments but they don’t move the needle at ver your haway you got to be spending a half a billion dollars just to kind of get on the list well there are only a couple mining companies in the world that are that big numont Barrack uh IM am gold there are a few but that’s it so so Buff’s not going to be able buying Junior miners anywhere he doesn’t have the time and the ability to attract them he needs a big name and barck is one of the best interestingly the way Barrack’s going to make their money they’ll make money in gold for sure and their stock price will go up and it’s a smart move by Buffet but they’re not going to make it by exploring they’re going to make it by buying Junior miners that’s why for some for an investor a little bit smaller than birkshire half way the junior miners can be attractive so so Barrack will start buying Junior miners that’s the yeah they don’t have the time to go out and explore and produce and take all that risk they’ll just look at they’ll just wait until other people do hit a good Gold Mine prove it out start mining start producing then they’ll just buy that company and add it to their output so how how much would Buffett be thinking about the price of gold Rising so you know Kim and I started a goal mine in China which was a big mistake but anyway uh they because they took it yeah right and they took the gold in the ground they didn’t take our mind they just took the gold in the in the ground how much Barracks huh they put their straw in your milkshake exactly exactly what they did well that’s called help yourself you know anyway but uh what was I talking about I’m still a little upset about that Jim but anyway the point is here he’s buying gold in the ground too in the anticipation of gold going up in price is that sure yeah I mean and for that matter a gold mining company is a leverage bet on gold just because of the the economics U you know you have fixed cost and variable costs well once you cover your fixed costs and assuming you can control your variable cost as the price of go goes up all that money goes straight to the bottom line initially you got a lot you got Capital costs and uh you know Leasing and geological surveys and all kinds of things but once you get producing and you cover your fixed costs a lot of the incremental price of go goes the bottom line the stock market gives you a multiple of that so so the answer is if Gold’s going to go up five times which I expect it will or more a Mining stock could go up 25 or 50 times just because the economics of stocks versus go so let me get just a question back to the banks what when you’re saying they’re not going to be able to make money what’s the predict what’s your prediction on banks are they are we losing the banks is their system going to change no the banks are necessary they may may not be everyone’s favorite institutions but they are necessary uh the the the big ones will not be allowed to fail we know they’re too big to fail so they’re almost like utilities like the electric company or a phone company or something like that they’re not going to fail but they don’t have to be particularly profitable and that’s what Buffett’s saying yeah you’ll be around City Bank will be around in 10 years but may not may may find it extremely difficult to make a lot of money in this environment so get out of it okay it’s Robert k at radio show we’re talking to a great friend and um person tremendous respect for Jim records get his books I mean every time I read his books it every book is different it just blows my mind it I mean how big this world of money is and also his financial newsletter strategic intelligence is chalk full of lots of gym records wisdom wisd lots of wisdom years of personal experien and the thing you know some of his books he talks about being with the CIA and what he saw from the inside holy moly I mean what he saw from the inside it’s it’s worse than you think so he comes from a he’s a he much of a gentleman he doesn’t name names but there’s a lot of Fredo Bandidos out there running our economy so we come back we’ll be asking Jim uh two more questions what’s the difference in bond versus gold and are we looking at inflation or deflation we’ll be right back have you heard about the expanding influence of bricks Brazil Russia India China and South Africa and its potential to severely impact the US dollar by possibly creating a new world currency even JP Morgan said and I’m paraphrasing the impact of bricks would most likely be felt here in the US where moving away from the dollar would cause our financial assets like our IRAs and 401ks to lose value we agree with JP Morgan and many others now is the time to position yourself for stability security and wealth protection so take it from Robert and me whether you’re a seasoned investor or just starting we believe that gold should be a part of everyone’s portfolio seize the opportunity to ensure your financial future with gold and do it with one of the best in the industry Allegiance gold Allegiance gold has done things right from the beginning having earned five stars with trust link and an A+ with the Better Business Bureau Allegiance gold can help protect your IRA or 401K with physical gold and silver or you can have it delivered securely to your doorstep get up to $5,000 in free silver on a qualifying investment when you visit protect withth robert.com today or you can call 8443 Robert that’s 8443 Robert hi everyone I’m Kim kosaki thank you for being with us today as CEO and co-founder of the Rich Dad company I can assure you Robert and I are both dedicated to our Rich Dad mission to elevate the financial well-being of humanity and you are the humanity we truly want you to succeed when you succeed we all succeed and our mission grows stronger with that in mind I’m excited to extend a personal invitation to you to elevate your financial well-being by attending our exclusive free online wealth building event hosted by Robert you’ll learn what to focus on first to start increasing your cash flow immediately you can reserve your seat right now by going to richdad online.com just go to to richdad online.com the event is 100% free and will help you achieve your financial goals welcome back Robert Kaka the rich Dead uh radio show the good news and bad news about money today we’re talking about the good news and bad news about gold but what it means to the economy if the price of gold goes up our guest today is uh dear friend Jim recards he is the author of incredible books the first book of recck was currency work is how we fight you know there’s no more not shooting people’s planes down we just shoot them down by changing the value of our money purchasing powers and his latest book was aftermath which was published last year so we’ll see how that plays out and then you can listen to the rich radio show anytime anywhere on iTunes Android and YouTube and please please leave us a review when you listen and all of our programs are archived at richdad radio.com we archive our programs so you can listen to them again because repetition is how we learn best you listen to this program again you pick up twice as much but more importantly ask friends family and business associates to listen to this program and discuss it if you listen and discuss you’ll be a genius so anyway uh just go to richat radio.com any comments Kim well I just I love listening to Jim because he’s a wealth of information but also he just makes sense it just makes sense you know people say oh the price of gold is going through the roof but they have no backing or no no calculation for it and this just makes sense and I also like like Jim what you said about um Buffett and Hathaway Berkshire Hathaway he’s just looking how to where to make money right right I the banks aren’t going to make money but the mining companies are going to make money and especially if you’re into the junior the junior mines you might want to get into that right because they’re going to be bought up by big guys that’s what Kim and I started we we didn’t start a junior mine we started a mini mine and it turned into a big mind we made a big mistake of hitting a lot of gold in China and then the the CCP you know the Chinese Communist Party helped themselves to it so they don’t take intellectual property they take real property too they take both they do and we had already listed our our business on the Toronto Stock Exchange and they didn’t care that we were a publicly listed company they just took it right anyway uh we’re GNA get into bonds versus skull because Jim mentioned one of the most important dates in history was August 15th 1971 that was the day that President Nixon went on the TV show Bonanza and said hey by the way I’m going to steal all your money I’m going to take the gold let me the dollar off the gold standard and after that then bonds became better than gold technically you know what I mean and and so that’s why so many old guys are trapped in we’ve been in this bull you know Raging Bull Market in bonds and that may change if the yield curves change again and interest rates go up so the the the the contention has been between Bond holders and gold holders so Jim could you mind explain a little bit more differential between bonds and gold sure and one they pardon me Rob just to be clear when I talk about bonds I’m talking about us US government securities US Treasury Securities or I might talk about Japanese government bonds so-called buns which are German government Benchmark bonds Etc I’m not really talking about corporate bonds we could but you know the problem of corporate bonds they have the economics of bonds but they also have all the credit risk of stocks and they’re very idiosyncratic there’s probably some good corporate bonds out there and there’s some you wouldn’t touch with a 10- foot pole because they’re going to go pank so I I’ll keep away from the corporate sector that’s I’m I’m familiar with it but that’s not my area of expertise so I’m talking about bonds I’m really talking about us treasuries unless I you know specify one of the major uh other Global Benchmark Bond markets uh but um you know Bond math is not as hard as you know some people make it sound this this easiest rule a little counterintuitive but when interest rates go down the price of the bonds goes up and when interest rates go up the price of the bond goes down and the reason for that is if you have a bond with a certain coupon uh and interest rates go up a new buyer is going to want that new Bond it’s hey give me that higher coupon well I got this other Bond over here it’s got a lower coupon was like well you you have to sell that to me at a discount because I need to get comp for the fact that it doesn’t have as high an interest rate so simple as that interest rates up price is down interest rate down price is up that’s how the bond market works but the point being and just one little one more little quick piece of bond math so how much I said prices of bonds go up when interest rates go down which is true how much well the answer is it’s not constant it varies depending on the level of Interest ratees something called the dvo1 the dollar value of one basis point how much does my bond go up for every one basis point decline in yield well so let’s say I cut interest rates from9 % to 8 and 3/4 that’s the 25 uh basis point cut let’s say I cut interest rates from U 25 basis points to zero that’s a 25 basis point cut those two 25 basis points do not produce the same gains the second one produces a much larger capital gain because the DB1 is higher so in other words when you’re at low rates low levels of rates every basis point decline in rates produces a bigger capital gain than if the same thing were happening at higher level of interest rates now your your original question Robert was well what about gold versus bonds what’s up there to me I don’t have to resolve that debate because I would say have both you know I of course I like gold and I recommend gold but I recommend 10% some investors higher that seasoned to taste but but the point is if you have 10% in Gold you’ve got the other 90% of your portfolio what are you going to do with that well I would have a slice for 10e treasury notes for the reasons we just discussed I’d have cash there’s room for equities and Alternatives and all that but you can have bonds and gold side by side that may be an ideal portfolio so no this is this is what I’m asking you the question because I’m a very simple guy was a a 1972 I bought my first Krueger ran in Hong Kong because it was illegal for Americans to own gold but the reason everybody says you don’t buy gold is because it had no yield and is it is it accurate with you the more that the price or the yield on bonds or your interest on bonds goes down doesn’t that affect the price of gold it’s generally correct uh so if if um if bonds are competing with sorry if gold is competing with money market so i’ say well let’s flip from bonds to the money market because that’s the most liquid form uh money market funds Bank CDs uh you know short-term Investments Etc if gold is competing with these money market or substitutes money market funds and their rate is zero and gold yield is zero then it’s a fair fight now it’s all about capital gains now you obviously we already talked about in the last segment how you can make 10 times your money uh in capital gains on on price of goal but if you’re comparing yield to yield even assuming the price is going to be constant it’s a fair fight if they’re both at zero then take a pick so um what I’m asking you is this when I was this young kid I didn’t I never understood bonds I understand debt right you know because I’m a real estate guy and the interest rates went down I got happier as Larry you know we could buy buy more real estate and I never understood why would I put my money in a bond but I understood gold because nobody could mess with it you know there’s no counterparty risk to it it was just gold well when when you’re when you’re borrowing money for real estate in in fact you’re issuing bonds because somebody somebody taking kosaki not he’s the bond holder but ums many many years that you want to be in the real estate side of that you want to be the borrower not the investor that’s correct B investor right and so I’m ignorant when it came to bonds that the whole thing and and but now Kim and I have a lot of gold and a lot of silver just because we saved money in gold and silver we didn’t we just kept using debt to get rich sure well you kept issuing debt but now we’re talking about buying debt correct and for for the investor for someone with mine absolutely have your gold and silver but I’d have some treasury notes side by side I just want to jump in here for a second because Jim you made a comment early and it just kind of passed by you said the new Great Depression are we in a new Great Depression we are uh and by the way thank you for mentioning my last book aftermath and if you have a copy of aftermath handy go to page Pages 288 to 291 now this book came out in July 2019 in those pages I say there’ll be a pandemic in the next three years and there’ll be social disorder and riots in the streets oh it’s your fault it’s your fault we knew it was well anyone who read that book can’t say they weren’t warned so again two read the whole book by all means but Jim Jim can I say one more thing is in in the book the road to ruin you warned also that there are military vehicles stationed all around America getting ready for the riots sure and and uh and they uh we were even closer with the with the book aftermath so everything we’re seeing now was in that book but Kim to your point the title of the book is the new Great Depression winners and losers in a post-pandemic world a lot of people don’t know what a depression is because they um first of all no one’s ever lived through it if if you have a living memory of a US depression you are 90 years old and there my mother’s 90 so she remembers it we still talk about it but you’re 90 or older if you remember the depression so very very few people in that category most people have never lived through a depression they don’t know what it is they assume it’s must be a continuous declining GDP it’s not two two quarters of GDP of declining GDP is the technical definition of a recession but a depression means depressed growth you can have growth in a depression it’s just the growth is below potential so if your potential is three three and a half percent and your actual growth is one and 3/4 percent that gap between say three and a half and one three4 that Gap is depressed growth now if your debt is going up five six seven eight% a year which it is and if your growth is one and a half 2% a year which it is which it will be um in in my forecast then your debt to GDP ratio when your debts going up faster than your income you’re going broke it’s as simple as that so um but but people aren’t uh we’re looking at intergenerational changes and again it all comes out of the covid pandemic but the pandemic the social unrest and the depression that all converged in 2020 a lot of people don’t know the stock market reached a certain level in 1929 do you know when it re then it crashed 90% do you know when it regained the 192 level when it got back to the 1929 level 1954 it took 25 years to get back to where it was in 1929 the Dow hit 381 and it took till 1954 to hit 381 again correct but went down to it went down to about 30 I remind people that Joseph P Kennedy became one of the richest men in America by shorting stocks ahead of the Great Depression so uh you can make money in depressions you just have to see it coming yeah anyway the last question is that debate between inflation and deflation you know and I don’t know if you pay attention to Peter Schiff but his definition of inflation and deflation are different than your definition of inflation and deflation and so the question is are we heading for wheelbarrow money you know where it takes a wheelbarrow of money to buy a loaf of bread or are we uh what else are we going into so uh we’re pro yeah we’re probably uh I had a debate with Peter on this recently kind of reminded me of the uh uh I forget the character of man had maybe from Alison Wonderland so words mean exactly what I say uh no more no less um Peter has Peter has a definition of inflation that may work for him but it doesn’t work for the Federal Reserve the European Central Bank the United States Treasury or anybody’s trying to figure things out so uh I use uh Consumer Price inflation may just to be a little technical the FED uses something called uh personal consumption expenditure deflator year-over year that’s a technical name but it’s basically just the their personal core by the way core PC defl year it’s just their personal uh definition of inflation that’s the one I use it doesn’t matter if I agree with it or not if I’m trying to figure out the fed and the markets I better use the same tools the FED is using or else I’m going to miss it money supply has nothing to do with inflation inflation is caused by velocity which is the turnover of money so let’s just say you took the money supply from $4 trillion to7 trillion nominal GDP is money supply times velocity this is just the quantity theory of money this is Milton Freeman’s famous equation which actually goes back to IR Fisher in the 1920s well they took the minus Supply to 7 trillion okay what’s 7 trillion times zero it’s zero zero in other words if you don’t have velocity you don’t have an economy the thing that drives inflation is not the money supply it’s the turnover of money that’s the that’s the velocity that’s the zero in my case velocity has been dropping since 1998 it didn’t start in 2008 it didn’t start in 2020 it’s been dropping like a stone since uh 1998 and it’s getting closer to zero so’s Jen what does velocity mean veloc velocity is the turnover M let me give you a very simple example so let’s say I go out for dinner and I tip the waiter and the waiter takes my tip and she takes the taxi cab home and tips the taxi driver and the taxi driver takes the tip and fills up his car with gasoline okay in that example my dollar had velocity of three there was the the waiter tip the taxi driver tip and the gasoline so my dollar supported $3 dollars of goods and services so that’s velocity of three what if I stay home and watch TV and don’t spend any money the velocity is zero that’s the point it’s not how much money you print it’s whether people are lending and spending and they’re not and it’s psychological and the fake cannot control the psychology and you’ve got to change the psychology get out of that deflationary problem which by the way the only guy who did it successful was Franklin D Roosevelt 1933 and how did he do it he raised the price of gold so they’re kind they’re sitting on it they’re not they’re not spending it well you’re right you’re absolutely right Kim it’s in the data the H personal savings rate so savings rates have tripled or quadrupled uh and that that is what’s actually happening those are Chinese levels of savings so people are not spending the money and they do if they write a check they’re paying off debt they’re not using it for consumption so the final question to you is that when I buy gold and silver the velocity he stops yeah because you you know I speak for myself you buy gold you put it in a in a vault and you sit on it well I’m not spending the money that’s and that causes deflation correct and that’s why Franklin D Roosevelt confiscated the gold and changed the price of before he raised the price because it was the ultimate Insider trade everybody I mean like I said you know Jam recers is the man of this time and it’s an honor to have you part of the Rich Dad uh radio programs nice to call you as a friend so again thank you Jim look forward to work thanks Jim all right have a wonderful day thank you we’ll be right [Music] back welcome back Robert kak R sh radio show the good news and bad news about money you can listen to Rich that radio program anytime anywhere on iTunes Android and YouTube and please leave us a review if you like what you heard or you dislike what you heard and listen to our podcast all of our all of our programs are archived at richdad radio.com we archive them because don’t sell anything we’re a pure educational company so if you listen to this program again you’ll learn twice as much and if you discuss it with friends family and business associates you’ll learn out what what idiots they are anyway that’s the good thing about discussion and you’ll learn a lot more about your Idiot Friends any comments Kim well this was this was fascinating I mean I love talking to Jim and and he goes way into the technical but he just made some excellent points anyway ladies and gentlemen it’s always good news and bad news about money thank you for listening to Rich Dad Radio program and thank you to our friend Jim records what’s his website Kim uh website is the James records project.com oh James Rickards pro.com he’s a very smart guy thank you very much thank you for listening to the rich radio program this podcast is a presentation of Rich Dad media Network

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Comments (37)

  • @kodyharriott5021 June 6, 2024 Reply

    Man you can tell Robert didn’t want Kim talking much on this video😂

  • @elxnin1007 June 6, 2024 Reply

    GOLD WILL NEVER GO TO 15K AN OZ OR BE ALLOWED TO GO TO ANYWHERE NEAR THAT PRICE.

    WHY?

    2 REASONS….

    1) GOLDS PAPER PRICE CAN BE MANIPULATED BY THE NWO
    2) BITCOIN

    simple concept most goldbugs are too ignorant and biased to comprehend

    iow

    cognitive dissonance

  • @user-eo7cf2cd7k June 6, 2024 Reply

    Velocity! Great explanation. I check in on your channel once in awhile. I am not interested in getting rich, I just try to keep abreast of things as America collapses. It is not that I'm against being rich. It is just that my work as an archivist keeps me occupied all the time. Plus, I'm old and don't really require much. Even so, money comes in handy when you need it.

    Back in the 1970's I was at one of the big hotels near LAX attending a free lecture on how to get rich. The huckster in the big ballroom promoting his expensive course told the crowd that "money is stored energy." That was the best definition I ever heard for money.

    Getting back to money and needs. I am not a professional archivist. I don't do it for $, I do it for love. Consequently, I pick and choose to work only in areas that interest me. I work in a huge number of areas of archival preservation. This is due to 2 things: I have a wide area of interests and I have no prejudice with my work. It is not that I don't have personal prejudices, it is that I check any personal prejudice at the door when it comes to my work.

    Throughout the areas of archival work, money is generally not an issue, even if relatively broke. It is all more or less affordable except for one area. And that area is cine' film preservation. And it is not that the films I collect are unaffordable. About 99% of them are in the $20 – $150 area. The problem is with digitizing the films. A cheap, but still good sound 16mm scanner is about $75K. And paying for timed scans at $1 a foot for 3 or 4 million feet of film is definitely not affordable. So, this is an area where money would come in handy.

    As I said, I'm old. I've chased trying to buy happiness over the decades, so I know the score. Looking to buy inner fulfillment through outer possession never ends. Self-worth comes from within. Even so, when the lotto hits high levels, I fantasize about being able to buy a cine' film scanner or two, a cheap house for $1/3 million (Rustbelt house) to work out of for the archive and a film cleaning machine for $50k. Oh…and possibly some flat land to put a greenhouse on to grow some fig trees. Fig trees and boogie boarding in the polluted Santa Monica Bay are the only things I miss about living in L.A.

  • @LearnDigiMarketing June 6, 2024 Reply

    In love o this channel and what's providing, i consider robert as my mentor ❤

  • @bullseye8988 June 6, 2024 Reply

    although i agree with james math about gold, i still think that gold price hitting 15k by 2025 is like mission impossible given that its price is a little over 2400 now

  • @SuperHouse_t June 6, 2024 Reply

    Velocity = rate of $ changing Hands.

  • @shazmac8555 June 6, 2024 Reply

    Question.. So if gold is a hedge against inflation & then everyone hordes it, therefore velocity decreases causing deflation how is there an upside?

  • @pegrenier400 June 6, 2024 Reply

    Jim was a 'no inflation' guy one year ago

  • @LivefreeG June 6, 2024 Reply

    Berkshire does not currently own Barrick, they sold out in 2020. Is this an old interview?

  • @bobcarpenter9218 June 6, 2024 Reply

    Jim also said that if you don’t have velocity, you don’t have an economy. I disagree with that also. We had an economy way before fiat backed currencies. Jim is thinking in terms of MMT of course but we don’t need centralized monetary systems to drive growth. Even if we stop the velocity of money right now, we still have to content with the debt. It has to be serviced and at this point we would have to come up with another trillion in tax revenue or stop the extra 2 trillion deficit by shrinking the government. Of course none of this is going to happen. Which is why it’s possible to have short term deflation, followed by massive inflation as the debt continues to explode exponentially.

  • @bobcarpenter9218 June 6, 2024 Reply

    I agree with everything Jim said, except that money supply doesn’t matter. If it didn’t matter gold would still be at 300.00. Yes velocity determines the speed in which inflation occurs but both the supply and velocity are inflation.

  • @Kristofur77 June 6, 2024 Reply

    If more people are mining for gold that raises velocity too

  • @lubosimaboshe June 6, 2024 Reply

    Awesome show thank you 👍😊

  • @alexyanuzzelli2862 June 6, 2024 Reply

    Same guy that called a silver boom?

  • @jorgeteixeira1922 June 6, 2024 Reply

    I would like to thank you both, I think you are benefactors of humanity by sharing your economic knowledge.
    Mr. Kiyosaky, I bought and read your book RICH DAD, POOR DAD and it gave me a better understanding of this world. I'm sorry I couldn't get my hands on the CASHFLOW game, it's impossible to find.
    Thank you again for all you do.
    I greet you with gratitude and tenderness from France.
    May God keep you.

  • @Graham_09 June 6, 2024 Reply

    I really appreciate the stats and Data that you and others puts together for us daily, If you invest right now in Bitcoin, the sky is limit. If you invest in gold, you have my sympathies. I was a Peter Schiff customer disciple since 2010. Very disappointing returns. Perth mint silver. Negative returns. The government has gold and silver locked down. They aren't going anywhere significant. I don't know what many youtubers are talking about with assets. Most stocks give no dividends and when the company goes bust stock holders usually get zip, nothing. No risk. No reward……. it’s so sad that many are so powerless and it's not about guessing the market's next move; it's about playing it smart and steady during trading…managed to grow a nest egg of around 2.3Bitcoin to a decent 19Bitcoin in the space of a few months… I'm especially grateful to Francine Duguay, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape.

  • @oneeleven9832 June 6, 2024 Reply

    I’ve read Jims books, he has a great mind & is a great speaker…but when he is debating someone & gets pushback ahh not so much..he struggled in my opinion against Brent Johnson who understands how the Euro Dollar system works…you cannot look at the US Dollar in isolation..

  • @cullensailing June 6, 2024 Reply

    When was this video recorded & released. They talk about Berkshire owning Barrick Gold… I believe that Buffett sold the stake years ago. Why are you releasing this video now? Do you have an agenda to push Gold for your own interests?

  • @robertm8380 June 6, 2024 Reply

    If you can't afford it get fractional gold 1/4 and 1/2 Ounce gold

  • @abelucas3037 June 6, 2024 Reply

    I see $20K spot price for Gold sometime this decade. $15K first, then $20K and furthermore.

  • @AaronHansen-iu1df June 6, 2024 Reply

    I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Charlotte Miller.

  • @r-nb8ji June 6, 2024 Reply

    Very good show

  • @6554532 June 6, 2024 Reply

    At 2:56 “Why is Buffett dumping bank shares and buying gold and silver?” How old is this video? He bought and sold Barrick shares in 2020

  • @RajTravelogues June 6, 2024 Reply

    When was this video shot? Looks real old??

  • @LauraJanet-i June 6, 2024 Reply

    Thanks for the educative video. From my observation and historical market pattern, there might be a bit of turbulence in the market coming up, but here's the deal: Trying to guess what's going to happen next is less important than spreading your bets when trading and thinking long term. It's not about guessing the market's next move; it's about playing it smart and steady…managed to grow a nest egg of around 130k to a decent 653k in the space of a few months… I'm especially grateful to Bradford Jackson, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape…

  • @LauraJanet-i June 6, 2024 Reply

    Thank you for your Educative videos .. If there is one thing I have learned in recent months it is to remain calm, especially when it comes to investments in cryptocurrencies. Learn not to sell in a panic when everything goes down and not to buy in euphoria when everything goes up. I advise y'all to forget predictions and start making a good profit now because future valuations are all speculations and guesses. Bitcoin going up is good for the entire market and you can not tell if it's going bearish or bullish. I Would say More emphasis should be put into day trading as it is less affected by the unpredictable nature of the market.I have made over 31btc from day trading with Bradford Jackson insights and signals. in less than 2 months, this is one of the best medium to backup your assets incase it goes bearish…

  • @thandolwakhechiliza8507 June 6, 2024 Reply

    Thank you Robert

  • @Mochi_Forever123 June 6, 2024 Reply

    How many predictions has he made already? Just tired of it.

  • @emrysmyrddin8279 June 6, 2024 Reply

    Funny how many bots are in these comments. Copy paste responses, same exact ones as on other similar videos

  • @terryli340 June 6, 2024 Reply

    👍👍

  • @americafirst8201 June 6, 2024 Reply

    Gold to 15k by 20 mike muted?!?!?😅

  • @keith43068 June 6, 2024 Reply

    15k gold and we are gonnna see Jesus 👍👍

  • @-SoulSimulation- June 6, 2024 Reply

    15000? I better make sure the backhoe is fueled up

  • @KingofJV June 6, 2024 Reply

    Jim is definitely the type of guy who likes playing simulator golf and eating burnt ends

  • @MoeToOFFeR June 6, 2024 Reply

    Lol they wanna talk 15k gold existence bc they own mines

  • @charlessmith4381 June 6, 2024 Reply

    If someone understands that inflation is the expansion of the money supply and credit, you don’t miss out on the Fed’s monetary policy or the bubbles created by monetary or fiscal policy. I will take Schiff’s opinion on economics over this guy any day. The savings rate is 3.6% which is lower than the normal 8%. People are not saving money because inflation is eating away at whatever they earn. Let’s not forget the debt level ever increasing. Buffet is sitting on tons of cash. Maybe he is saving all that fiat for everybody else. This is the same guy who claimed he helped create the petrodollar. The same monetary system which favors imports by exporting dollar inflation. BTW, FDR first confiscated gold and then devalued the paper money that was suppose to represent gold. This destroyed savings. No wonder the government has been doling out entitlements to people. The government is the obstacle to people creating and storing their wealth. I will remain civil. Sound money assets are better than fiat. People like Richards is the reason why we have fiat money. Toilet paper money. If the left side of the quad gets fed up, the right side of the quad isn’t going to make any money.

  • @kleinkbkayb5369 June 6, 2024 Reply

    Rules of success:
    ® Day – 24 hours
    ® Week – 168 hours
    ® Month – 744 hours
    ® Year – 8,760 hours

    Choice always yours.🤘🏼🫶🏼🫡😊

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