Gold & Silver Ignite Stage 3 – Where to From Here? Mike Maloney

published on August 2, 2020

Gold is actually just beginning this third phase of its bull market and today was that beginning gold and silver are absolutely on fire and today marks the day of the third and final phase of this bull

Market this is the day it began and the third phase is the phase of the greatest gains in the shortest period of time when i say this bull market what i'm

Talking about is this bull market actually started in the at the beginning of this century and this is one giant bull market uh the correction that we have been through the cyclical

Pullback this we we went from uh the beginning of the century up to uh 2011 and we've been in a pullback a cyclical pullback in a secular bull market so this

Cyclical bear the bear portion ended in 2015 we've gone back up and today we broke out into all-time record highs in the gold price measured in us dollars but since gold

Has been setting records in almost every currency i would imagine that today i haven't checked but i would imagine that today gold is setting records in almost all currencies

On the planet you know all currencies fall at different rates compared to gold you know the dollar goes up and it goes down and other currencies go up and down but when

It comes to comparing them against gold over a long period of time and we'll see this later in the video they all go down and pause and down and pause and they may go up a little over a short period of time but over a

Long period of time they just go down compared to gold now the fundamental change that has taken place that launched this uh brand new this third phase the last phase in this gold bull market

Is the is investor sentiment investor psychology this has changed now from a greed driven mania that first portion of the from from the year 2000

To 2011 was agreed driven mania gold went from 253 up to 1900 an ounce and uh that 1900 announce was in august of 2011 but silver hit its peak in april of 2011

And that just is not how a precious metals bull market ends precious metals are geopolitically sensitive metals they are money and so when people get scared

They're scared of currencies they're scared of debt they're scared of overvalued stocks they rush towards safe havens well the safe havens you know the us treasury sovereign bonds especially the us

Treasuries have been considered the safe haven but even those now are uh investors are starting to doubt and so the only safe haven left is gold the only choice is gold and

Silver there are two choices and cryptocurrencies also so i i expect that uh some of them will do very well uh but here we are at we hit 1940 something today 1945 an ounce so the previous high was it was

1900 so gold is up you know it it was down in the um 1452-90 it says here uh for the uh low in on march 16th and

Just a little over four months later we're up more than a third 33 percent but silver has been the star of all of this silver back in march on on march 18th was uh

1169 was the low and today we're over 24 so it's gone from under 12 to over 24 it's more than 100 percent gains in just a little over four months

But getting into the reasons why this has shifted from a greed driven mania to a fear-driven panic is all of the things that are happening right now gold roars to record high dollar dives again

Uh gold soared to an all-time high on worsening ties between the us and china a sinking dollar and ultra-low interest rates now we are going to come back and visit uh

These factors numerous times during this video so you can fully understand what's going on here uh gold prices surged to record high amid coronavirus worries

And us china tensions but what's most revealing in this article is in a note circulated before the new highs the commonwealth bank of australia said that the fall in us 10-year real treasury yields

Is the most important driver now i don't know if it's the most important driver but it's one of the really big factors and like i said we're going to visit that and really take a look at it

In depth later in the video the us china clash has entered perilous new territory and this is about a speech given by the secretary of state and in it it talks about

It gives some context here for some context to understand the dangers of our time think of what's coming as an updated version of the period between world war ii's end in the in 1945

And the cuban missile crisis of 1962 now for anybody that doesn't know about the cuban missile crisis you should read about it because we came within hours of total nuclear war with russia

With with the ussr today the number of missiles uh that the number of of warheads that the two world powers had at the time was just a tiny tiny fraction

Of what the world has today so uh that is definitely worth looking up and uh reading about uh billionaire investor ray dalio fears for the dollar and the soundness of our money well the author here isn't talking about money

He's talking about currency uh you know even when i when i keep on harping on the difference between money and currency and that no nation on earth today uses money that we all use as national currencies

Even in the federal reserve act of of uh 1913 it says that federal reserve notes have to be backed 40 percent by lawful money lawful money being gold or us treasury gold notes uh and

Uh in this article he says that there's a trade war there's a technology war there's a geopolitical war and there could be a capital war that's the reality

If you say by law don't invest in china or even possibly withholding the payment of of bonds that the us owes payment on in china these are these things are possibilities and they have big implications

Such as for the value of the dollar because pre-market i believe what the author was meant to say here was free market not pre-market because free market investors are not

Used to having those things dictated by government and uh this is true if government starts saying you can't invest in china you got to sell your investments in china and bring

That currency home uh if if they tell china that they're not paying them on all of the treasuries that we've issued then that is bad news for investors worldwide for the for

Worldwide trade for just everything that really sinks the world economy and this is billionaire investor ray dalio moving on uh the secretary of state uh stephen newton says

That uh the gop coronavirus relief plan is ready to go as unemployment boost runs out we can move very quickly but the point here is that they're about to pass another

One trillion dollar spending package so they're going to spend another trillion dollars that we don't have and if we don't have it they've got to borrow it if they're trying to borrow it in a time

When investors are starting to get a little bit nervous about us treasury bonds and in a time when treasury bonds are yielding nothing as you're going to see later on in the video that means

That the federal reserve will have to monetize this they may go into the open market for a little while but within weeks it'll be the us fed that owns these bonds not not the not private investors

Or or brokerage houses and such so look for the fed's balance sheet to go from 7 trillion up to 8 trillion within just a few months

And then larry kudlow the white house economics advisor says chronovirus relief will include 1200 bucks for everybody so th these are those checks falling out of the sky from the

Currency bombers that we have in episode seven of hidden secrets of money uh so this is more of the you know part of the expansion of the currency supplies

And the loss of confidence in fiat national currencies because this is a global event uh joint eu debt must not become a regular thing says uh germany and in here

They are going to try to raise up to 750 billion euros in the capital markets so that means uh the uh eu will be selling uh 750 billion euros worth of bonds uh in the markets and

Uh that the exchange rate puts that at uh 087 uh trillion us dollars so 8 875 billion us dollars then moving on world trade continues to slide as

Recovery sputters so last month there was a 122 drop in world trade and that's expected to be uh uh there the decrease month a month this month

Is another uh 11 so world trade is slowing down and then this chart sort of says it all uh this is the bloomberg dollar index the five year us real treasury yields and the gold spot price and so gold is

The purple line in the background the uh white line is the dollar and then this blue line is treasuries and you can't expect everybody to rush toward treasuries when they're not paying you anything and when gold has

Been showing such spectacular performance as a 33 percent gain in four months and here you're being promised just a pittance this is the yield curve chart and i've shown this

Many times but take a look at how low this yield is and let's go through from the late 1990s and when we could see that you know you're up at five six percent and then uh the yields

Change and this is an inverted yield here where the 10 year is below the two year and that predicts a a market crash and we had a market crash and then the yields come back

Up and it inverts again and we have another market crash but now look at what happens with the amount that the 5 the 10 and the 20 and the 30 are yielding

And that amount has is shrinking and we still have a positive yield curve we have uh almost an inversion here but the yield curve came back down and this is at the beginning of this

Year so this is uh the end of january uh and yields were were still decent and this is what the yields are today they're just absolutely nothing and the great thing about this chart you can click through and you can see

That you get 123 percent if you loan the government your currency for 30 years and then if you only want to loan it to them for 10 years you're going to get 59

Point five nine percent annual for 30 years and uh the five year we'll go to the three month here uh the three month is currently at 11 you have to actually look at this

You can't look at it logarithmic because it's it's just absolutely broken the whole monetary system is broken and that's what these thing this is the five-year

Down at 027 percent just absolutely insane uh so moving on the us dollar has been falling and what you see right now is it just broke below 94 so we're at about uh 93

And a half roughly we're at 936 and taking a long view of the us dollar here's the us dollar going all the way back to 1973 and the reason it doesn't go back before that much is it it

We didn't have these exchange rates the forex really didn't exist before 19 august 15 1971 basically before august 15 1971 this chart from 1934 to 1971 would have been a flat line and it would

Have said 35 because it was 35 dollars per ounce of gold all the world's currencies were measured against gold not against this floating basket of currencies and

As you'll see in a moment these currencies are all falling over the long period of time against gold but if we take this dollar index and we zoom up on it a little here we're going to go to just

The last 10 years of this dollar index and i'm going to hit annotate and there's something wrong with stock charts right now if i draw a line over here it comes out

Way over here so i'm going to take that i'm going to put this right at the bottom of that and draw a trend line here and what it shows is that we have we're now at 936 so we're right up here

So we've just broken this this trend line that goes back 10 years this is very important um now another thing to notice here if you know what a head and shoulders pattern is this is sort of a tilted head

And shoulders you've got a shoulder a head a shoulder and if you break that neckline we haven't decisively broken it yet the dollar could still balance and if it does then uh this uh

You know then gold will do a pullback uh we'll get a little bit more time for this all to play out and i'm actually hoping that that's what happens here but it may not if anything else goes wrong

In the economy or geopolitically we could see this fall and if it decisively breaks this pattern then this head and shoulders is sort of suggesting you you take the center of

This neckline and so from that point right about there and you flip use that like a hinge and you flip this upside down and it's predicting the bottom of this chart so this low 10 years ago would become

Support at that point so that's potentially where the dollar is headed and if that happens gold is going to soar and it will be soaring very quickly

These are a bunch of ifs but if the dollar falls gold will be going up and it'll be going up big time now i wanted you to see this is the us dollar that same chart

So this chart here this is the us dollar but when you measure it in gold that dollar measured against a basket of currencies then measured in gold it looks a bit different and then if you go over a long

Period of time this is going all the way back to 1973 you can see that you know the dollar yeah the dollar has a parachute on it it's falling uh more slowly than some of the other

Currencies and so but it but compared to gold that's going down and the best way to look at this is uh on a linear graph instead of logarithmic that's the same graph

Produced linear we've gone from 17 down to zero 005 so that is gold as compared to the us dollar and again there's just the us dollar not measured in gold and even that against the other basket of

Currencies you draw a trend line across here and the dollar is falling against that basket of currencies then moving on us dollar at risk of sudden collapse

Ex-imf official warns blow-up event could sink currency as debt mounts so that is the point of this whole video here the that gold is actually just beginning this third phase

Of its bull market and today was that beginning we just broke above gold's previous all-time high now as a percentage of the federal reserve's balance sheet

Gold is on the federal reserve's balance sheet gold could back the dollar once again as a percentage of the current balance sheet gold makes up zero point so again it starts

With zero point one five seven percent of the federal reserve's balance sheet and that is at the statutory price that the federal reserve

And the us government observe of 442222 dollars so it's 442222 cents uh which is a ridiculous price but even if you bring it up to today's real price that puts the gold at just 7

Of the federal reserve's balance sheet making making it it would have to go up roughly 14 times from where it is uh to cover all of the if you wanted 100 coverage of all the dollars that the

Federal reserve has created as of today you got to add that another there's another trillion dollars coming real soon folks but if it was to cover all of the federal reserve dollars not the dollars that all the banks create

The 8 trillion that exist not the 23 trillion that exist in as far as as far as mzm money of zero maturity shows all the dollars that the banks create this is just the federal reserve dollars

Uh it would be 26 000 an ounce now they if if they're forced if we end up having to go back to some sort of gold standard they would do some sort of phony reserve

Ratio or maybe they only back the currency in circulation but you're talking about some pretty spectacular numbers all the way around so when you take a look

At where gold is adjusted for inflation now this is using shadowstats alternate cpi which is the original cpi that existed before in 1980 and using that cpi that original basket of

Goods and services unchanged for all this hedonic adjustment and replacement and substitution and all these things that the bureau of labor labor statistic does to make the consumer price index look

Good make inflation look lower than it really is all of those things have altered the cpi so going back to the original john williams of shadowstatscom uh crea recreates the original cpi but

The truth lies somewhere in the middle i think his alternate cpi exaggerates inflation and the current the the government's cpi underestimates

Inflation but this article that this is a chart from an article that jeff clark our senior precious metalistic goldsilvercom did either at the end of 2018 or the beginning of this year

And it showed that gold just hit an all-time low using the 1980 cpi and even using the government's cpi we have yet to uh clear this the 2011 high we've got

Quite a ways to go just to clear that so gold has a long way to run that is the point of today's video so i want to thank you very much for

Watching we'll see you next time at this point the boys at the fed will buy enough government debt to fund tax rebates for all the taxes in the previous year

But still nobody will buy that new car the threshold the fed is looking for will not be reached then in not so quiet desperation the fed will say screw the helicopters send in the bombers and as the shadow

Of millions of stealth currency bombers darken the skies currency will begin to fall like rain in the desert as joe six-pack and john q get tax rebate checks in the mail

For all the taxes they paid during their entire lifetimes fear will be temporarily alleviated and some of that currency will come out of hiding just as in weimar germany

Prices will rise quickly and dramatically as all that stored up currency energy is released in a panic the fed will call back the bombers but it will be too late there's nothing

They will be able to do to stop it now because the hyper inflation will have already begun the dow will begin an invisible crash of epic proportions and gold prices will shoot to the moon

If you are wise enough to moor your boat in the safe harbors of gold and silver and other commodities you will weather the storm it won't be pretty but at least you'll be safe

At this point confidence in the currency will fall faster than it can be created

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