20200325-Ivan interviewed Mike Maloney-deflation then hyperinflation

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Deflation then Hyperinflation – Interview with Mike Maloney

-There will always be a BIG Deflation first then the Hyperinflation  (2:09) as the FED print and print and print and to get us out of the problem!

-FED is out of trick.   It can no longer influence the economy with interest rates.   Everyone is already at 0% or slightly negative interest rate.    You can’t go too negative;  otherwise, people will stop deposit money in the bank.

-We don’t use money.   We use currency – national fiat currency that is design to steal money from you, to lose value-  that’s what inflation is.   Inflation isn’t price going up.  It’s the value of currency going down in the form of decreasing purchasing power. (3:28)

-The economy and prices are determined by quantity of currency x velocity.    How the economy is doing is determined by how often the money being used/circulated.    The price is determined by quantity x velocity.

-Velocity is how many times that the currency changes hands in a year.    If the Central Bank increases the quantity of currency 10X but the velocity went down 10X, then nothing happens.

-The Central Banks have no control over velocity!   They wish they did!   (10:18)

-The velocity has been going down steadily.   People are spending less and less.   They are hoarding money. 

-The price of gold and silver are NOT falling.   Only the paper contracts for gold and silver are falling.   The physical gold and silver are disappearing very quickly!    As a dealer, Mike said they can only restock 50% of the products they offer.   Silver Eagles right now ranged from $17-$24, because US Mints are out of them.   Gold and silver are becoming unaffordable and unattainable very quickly!   

-Anyone who thinks that gold is going to stay under $10,000/oz is NUTS!   It’s going astronomical!

-Looking back in history, mankind tends to build something simple and robust to start out and then it becomes more and more complex  until it becomes very fragile to the point where there is potential for a systemic failure.   That’s what we done with monetary system that has beome so complicated that NO ONE understands it anymore!

-We are at the end of a 100-year debt super cycle.  It is on the brink of collapse.

-While the wealth transfer is taking place, the world is getting more dangerous with potential riots and civil unrests.

-The Central Banks are trying to buy financial assets to stimulate the economy.   That is just making the rich richer.

-Mike thinks the government will try to get us to use national crypto first so they can maintain control over us and the currency.

-If the government switches to gold standard, it will put a lot of restrictions on what they can do.   They no longer can do massive spending.   They would have to borrow from the private sector.  17:59

-He doesn’t advocate for gold standard fiat system because the history will repeat itself.   Previously, the gold standard allows the government to cheat and do deficit spending.    The classic 100% backing of gold happened before WWI.   Then during WWI and WWII, the currency became only 40% backed by gold.   But it was poorly designed and fell apart during the Great Depression.   In the Brentwood system, the US dollar was backed by gold but with unspecified amount and all the other currencies in the world were backed by US dollar.   After the Nixon decoupled the US dollar from gold completely, we have the global dollar standard that allows the US to do massive deficit spending and build up huge debts.

-He wants to use 100%gold and silver and the currency maybe backed by crypto currency.

-The money system is just as complicate and fragile like the supply chain that we built.   None of them have a backup system. 29:17  The supply chain can be rebuilt.  But if the financial system with so much derivatives built on top of all the debts collapses, it will be a total disaster and hard to be restarted again.  That will stop ALL transactions temporary.

-Mike is worry that the entire world going very socialistic (30:26).   People are going to elect some arrogant, strong assholes who are going to claim they know how to save the world.

-The only thing that will bring prosperity is free market system.   When governments are going to own everything and run everything and share everything, there will be economy collapse.   Just look at Soviet Union, China……   

-The danger of crypto is once the government implements it (national crypto), it will allow them to track everything that we do and take from us instantly.

-On a personal level, Mike’s largest holding is in precious metals because they have been proven throughout history and have never failed.   He stores them in the vaults with Brinks and the metals can be quickly converted to cash.

-He also holds some gold chain (like jewelry) at home because he is afraid the nationalization and confiscation of gold where an ordinary citizen is banned from holding gold.