Precious metals sank to 5-year lows during this past week. The long painful price decline that began at the end of 2011 still continues unabated. Holders of gold & silver are understandably wondering if their faith in precious metals has been misplaced.
In this week's podcast, we invite Mike Maloney back on the podcast. Mike is the owner of one of the largest bullion dealers in the US, GoldSilver.com, and one of the top minds we know of on monetary history. In this wide-ranging interview — which announces the release of a new educational video, The Rollercoaster Crash, which kicks off Season 2 of GoldSilver's excellent video series Hidden Secrets of Money — Mike lays out the rationale for an approaching global reset of the existing fiat currency regimes, and why asset-backed currencies are highly likely to return in our lifetime:
History shows that whenever there is a problem with the currency, whether it is big inflation, hyperinflation, or deflation, people go back to safe haven assets. And we should be going into a deflationary episode that is overreacted to that causes big inflation or hyperinflation, which causes a breakdown of the current global monetary system, the global dollar standard that is now the longest-lived of these artificial monetary systems and has developed a bunch of stress cracks and is in the process of imploding right now. There is going to be before the end of this decade, most likely, another emergency meeting of a bunch of finance ministers and economists to try and hash out another world monetary system. It is just history repeating, and it is a natural consequence of a man-made, artificial manipulation of the free market.
But if this debt-based currency system has to evolve, switchover to some sort of asset-based currency system or currency system that is a free market thing, I am fine if the free market selects Bitcoin or if it selects gold or silver again like it has for the past 2500 years — it keeps on selecting gold and silver as the optimum money. I am fine with whatever the free market picks. And I believe it will lead to greater prosperity. But we are in for some short-term pain. The good news is that for somebody that is properly positioned, it can be the best thing that ever happened to you because of this enormous wealth transfer. If currency a fails, its price measured in gold goes to infinity.
Today, there is about $200 worth of gold, investment-grade gold, per person. And there is about $40,000 worth of other liquid financial assets that compete in storing purchasing power. And so those liquid financial assets such as cash, stocks, and bonds, the problem with them is that their purchasing power can evaporate. It is something that is just based on trust. And if just 10% of those liquid financial assets come chasing gold, gold’s purchasing power has to rise 20-fold.
Click the play button below to listen to Chris' interview with Mike Maloney (78m:22s)
Chris Martenson: Welcome to this Peak Prosperity podcast. I am your host, Chris Martenson. Context is everything. Everything. So what exactly is the context of our current monetary and financial systems? Well, you have to understand money creation, human behavior, and history if you want to have any hope at all of understanding where we are today and, more so, where we are going. Now if you have not seen it, one of the very best—and I do mean very best—educational video series out there is the Hidden Secrets of Money, written, produced, and directed by Mike Maloney’s team over at GoldSilver…GoldSilver.com I should say. It is so well produced, it is in a league all its own. Here to discuss the release of the latest installment, which is episode 6, "The Rollercoaster Crash," is Mike Maloney, good friend of mine. Mike, welcome to the show.
Mike Maloney: Thanks for having me, Chris. It has been a while. How are you doing?
Chris Martenson: Well, I will be honest with you, I am a little vexed by these markets. I trust we will get to talking about those in just a minute. But where we are in this story and why these markets are so vexing and the fact that we are in the mother of all bubbles really is…I do not think it is surprising it is taking this long to play out. But you have been writing about this and talking about this for a long time.
Mike Maloney: Yeah.
Chris Martenson: And so I just am fascinated to find out what your views are on all of this. We are going to get there, but I really just want to say that every time I watch the Hidden Secrets of Money, I am just so astonished. The quality is just…it is amazing. You and your team—a heaping pile of credit for making and then sharing this video series with everyone. In this most recent one, I saw clips of you, you are in Egypt. I think I saw you on the Great Wall of China. You are in London. You are all over the world. So before we just get into that, for our listeners, I am interested, tell us about the making of the Hidden Secrets of Money.
Mike Maloney: Well, I have to give the credit to my team basically. Dan Rubock is just awesome, and then my animators, Lincoln and Aidan. Aidan put like two years of his life into episode number 4. And we have got some stuff coming up featuring some of Lincoln's work that is just amazing. So we have a full-time crew doing this, but Dan shoots it, edits it. He scores it. He is a screenwriter. He basically does everything, except the animations, and he does it so well that it is really to a level of like the History Channel or PBS or something like that. And it is shot in 18 countries. So you mix all of these nice backdrops. All I do is I stand in front of the camera and say stuff. My job is not that hard. Dan is the one that really makes the series. But there is something big coming. And back after the NASDAQ crashes when I really became interested in the global economy and what is wrong with it…before the NASDAQ crash when….
My father died back in the 80s, and he left my mother with a good inheritance and estate that should have taken care of her for the rest of her life. And in the late 90s, her broker started saying he just does not understand these markets anymore. And they were going crazy. In hindsight, we should have stuck with him, but the statement that he does not understand the markets actually scared us. And my sister and I interviewed a whole bunch of financial planners along with my mother, and we picked the one that had the most glowing recommendations and testimonials. And he proceeded to lose about 50% of the estate in just about a year and a half. Now to be fair, there was a stock market crash that went along with that. At least he did not have us in a bunch of tech stocks. He had us in lower beta stocks. But when it got down to about half, I ripped everything away from him, moved it to cash, started studying the markets myself. And I am dyslexic. It was very difficult for me to read, but about the same time as when Apple came out with text-to-speech in their operating system, so any Mac since that period has been able…you just highlight the text, press a button, and the computer speaks to you. It reads it.
And so the world of books opened up to me and websites and everything else, and I was able to…I studied, oh…at first it was just addictive. All day on weekends, like 12, 13 hours on weekends. From the moment I woke up to when I went to bed, and then every night after work for between four and six hours of just studying the global…the economy. And you cannot study the US economy in isolation, it leads to global economics. And when you get to global economics, the only people back then that were worried about trade imbalances and budget deficits was the hard assets community, the precious metals sector. And they also love monetary histories. So I studied the markets first, global economics second, and then when I discovered monetary history, I just fell in love.
I sort of started seeing what was coming back in that timeframe of 2000, 2003. By 2004, I decided that I was going to get out of my previous business—which I was producing tradeshows for high-end audio and home theater electronics—and get into the precious metals sector. And I knew that I was going to be writing something someday. Started collecting a whole bunch of information on my research. And then in 2005 incorporated GoldSilver.com.
I had precious metals investor. In October 2002, I started buying gold when it was about $315, $325. I have got a whole bunch of Gold Eagles that I bought for $325 each. And then in April 2003, I discovered that silver was way undervalued compared to gold and started buying silver. So I was an investor first, and then I became a dealer in 2005.
I started writing my book in 2005. It was finished in November 2007 with a few touchups in April of 2008. And it came out in August just before the crash, and in the book I predicted the crash. And my favorite scenario after showing what would happen in deflation, big inflation, regular inflation—like things just go along as they are—hyperinflation, and then what I call the rollercoaster crash. And I said we were on a wild rollercoaster of a ride, that we would have a big inflation and then the threat of deflation, to which Ben Bernanke would overreact and do a big helicopter drop of currency, which would cause a big inflation. So we would have regular inflation, deflation, Ben Bernanke would overreact, cause a big inflation. Now because the base money that he created is held as excess reserves by the banks, it did not cause a big inflation of retail prices as much as asset prices. Real estate and stocks are back up into a bubble, and it is because of the Federal Reserve with low interest rates and zero interest rates and creation of all this currency.
But then I said that there would come a point where there would be a real deflation after the big inflation, where the currency supply actually contracts. And this is from people getting scared and not taking out new loans, not charging up their credit cards, and not rolling over old loans—paying down debt. That causes the currency supply to collapse because our whole monetary system is debt-based. You have to go deeper in debt every year in order to keep—as a society—we all have to go deeper in debt every year to keep this phony Ponzi scheme game going.
I saw all of that and wrote my book, came out in August of 2008, and it became the best-selling book on investing in precious metals of this century. I do not know what numbers the bestsellers of the 80s were. I would imagine because publishing was so much bigger back then that those books sold a lot more. But my book is produced in 11 languages now. But the video series, Hidden Secrets of Money, is free. It is produced to a very high level. We have a mission to enlighten the world that maximum prosperity can only be achieved through individual freedom, free markets, and sound money. And that is an absolute fact.
Chris Martenson: Well, I am so glad to use the word prosperity. And I am…just a little self-plug here, we are recording this on November 17th, which happens to be the day of our most recent book launch. This is actually our launch date for Adam Taggart and I, and the book's title is Prosper. So it all comes together. That seemed like a relatively seamless plug on my part, right?
Mike Maloney: Yes.
Chris Martenson: We are very….
Mike Maloney: Congratulations on the book, too.
Chris Martenson: Thanks. The book is just a tiny amount of production effort—and, by the way, it is a huge production effort—compared to traveling to ten countries and assembling all of that footage and putting together this enormous story. And you are releasing it in a in a serial format. This is, I believe, chapter 6, right? Episode 6 that has just come out.
Mike Maloney: This is episode 6. There have been five episodes per season. Season 1 was all aired in 2013, so this is really the 2016 season that we are starting here. So November of 2013 was the last episode of the Hidden Secrets of Money. So there has been some downtime here. It is not a huge crew, with three people working on this, but doing a production level that you would expect of 50. It does take a little bit longer.
The reaction that we get from people is that they just love complex subjects to be explained very, very simply so that they can understand it. And then when we visit all these different countries and trace the history of money—but we do not just…there have been other documentaries on the history of money, but it is just the history of money, not how each instance back in history reflects on what is happening today. And that is the big difference is we show you like the deficit spending that they did in Athens to fund war—the Peloponnesian wars that ended in 407 B.C. with Athens being defeated and the end of the classical period of Athens when all those great structures were built. Athens basically going from the world leader to fading into history and becoming eventually just a satellite of Rome. That deficit spending, it is the first incident where they debased the currency supply to fund war and great public works. It caused the end of their small Empire, and it is causing the end of the American Empire today.
Chris Martenson: Well, now let us talk about this. The subtitle to episode 6, which is "The Rollercoaster Crash," the subtitle is: "Top 4 Reasons for Deflation Before Inflation." You have gotten to a little of that. A very timely subtitle, I suggest here, because, look, there are signs of deflation all around. Whether we are looking at the Baltic Dry Index or the price of oil or global trade at this point in time or…
Mike Maloney: Copper, yeah.
Chris Martenson: Copper, wages, you name it. Everything except financial assets and the so-called incomes of the very top 1% or even fraction of 1%—those are saying inflation. But deflation everywhere else. Are things more or less…
Mike Maloney: There will be deflation that happens in all of those financial assets and for the top 1% or 1/10 of 1% also.
Chris Martenson: Now why is that—
Mike Maloney: But go on with the question.
Chris Martenson: The question is: Are things unfolding more or less as you expected? Is taking longer? Any surprises here or is this pretty much what you would expect in a time of history like this?
Mike Maloney: I have been saying that there will be a currency crisis before the end of this decade, so we have got until the year 2020. And for some reason, 2018 feels right. I have no specific…it is not…that is a guess. It is not something that I am coming to a conclusion on by studying data. But in looking at all of the data, it is suggesting that…and it has been for years. It has been suggesting deflation. And the thing is, we live in a world of Keynesian economists running things. The central banks are all run by Keynesians who believe that you can create prosperity by expanding the currency supply, and it is not possible. But they think that you can…they do not realize that when they expand the currency supply, they are robbing from one sector or from one point in time to give to another sector or another point in time. And so all it does is transfer purchasing power and economic energy. It does not create new economic energy or purchasing power. It is theft. It is fraud. But being that the world is run by Keynesian economists at the central banks, the next time that there is a big threat—the next big global recession. Now, we have a recession every two to nine years. There is a recession without fail.
There has never been an expansion period longer than nine years, and there has only been a couple of those. The average is like four and half of five years. There is a recession that is due. And we are seven years into this expansion, and so there should be a recession right around the corner, 2016, 2017. The Federal Reserve and most of the world's central banks are out of bullets. With zero interest rates, they really cannot take interest rates much lower. They have tried negative interest rates; they have proven that that does not work.
In the United States, we went from $0.8 trillion worth of base currency up to about $4.2 trillion, $4.3 trillion worth of base currency. And so we have expanded the number of…base currency, just for the listeners, is paper dollars and dollars that the banks have on deposit at the Federal Reserve in their reserves, all of which are redeemable in paper dollars. So it is really a measurement of the amount of paper dollars that exist, which used to be a tiny fraction of the currency supply. It was 0.8 trillion out about a $16 trillion currency supply. Today, we have got an $18 trillion currency supply but over $4 trillion of it is now base currency. So it is a much, much larger portion of the currency supply. But actually, I just forgot where I was going [laughter]. So go ahead.
Chris Martenson: Well, so we have all this money floating around it, and you were talking about how you are convinced that there is going to be deflation across everything, including for the top 0.1% and their beloved financial assets.
Mike Maloney: The next deflation, people do not understand that because we have got a debt-based currency supply and all currency that exists on the planet today is borrowed into existence, and when we borrow it, we promise to pay it back plus interest. The currency to pay the interest does not exist yet. Anybody that wants to fully understand that should watch episode 4 of Hidden Secrets of Money that really dissects and explains in very simple language how the monetary system works. But if people stop borrowing and start paying down debt, the currency supply starts to eat itself. It starts to collapse because the units of currency to pay that interest that is due are not being borrowed into existence, but we still have to make the payments. So the currency supply goes into deflation. The world’s central bankers are all Keynesians, and they have already proven that their only answer is to print. And they will print and print and print until deflation gives way. And at that point…some of your listeners are very advanced. Some are not. So for the ones that do not know velocity of money, velocity sort of determines inflation or deflation of prices in the short-term. Velocity is basically the number of times a unit of currency is involved in transactions over a year.
When velocity slows down—when business—if people get scared…Right now we have had the incidents in France. When war breaks out, velocity tends to slow. That is a very deflationary thing when velocity slows. If the economy gets bad and baby boomers—who all need to retire in just a few years—get scared and start saving and paying down debt instead of spending and getting themselves deeper into debt, then the currency supply starts to collapse. The Federal Reserve will fight that.
One of the things I have found is base currency used to be part of the people's money. And M2, which is the one of the other measures of the currency supply, is the credit-based portion of the people's money, the average person. It is measuring bank accounts that are under $100,000 and such. That is like Main Street’s money. Excess reserves and M3 is Wall Street and Donald Trump and the bank accounts larger than $100,000 and excess reserves held by the banks that they are not using to lend against. With fractional-reserve lending, they have to have a certain amount of base currency to be able to lend against, and then they just create credit dollars. They come out of nowhere as a ratio of how much base currency they have got on deposit with the Fed or as vault cash. And they have not really been lending. It is all sitting on the bank’s balance sheets.
All of the currency that Ben Bernanke and Janet Yellen have created is being held, most of it…some of its leaking out but most of it is held as excess reserves. And what that does is it enriches the banks, which pumps the stock market. You can chart an overlay of the Wilshire 5000 total market cap index, which is the value of the stock market over base money, and the correlation is astounding. I mean, it is just scary how these two charts almost match. They are almost identical. And so since 2009, the stock market rising has been an entirely artificial, engineered, manipulated pumping of the economy. Meanwhile, low interest rates have caused real estate to go back into a bubble. So we have got these government or Federal Reserve mandated or forced bubbles. And when these pop, it is going to be horrific.
I think we are going into something I call the Bernanke Bust. The crisis of 2008 was not Bernanke’s doing. That was Alan Greenspan's doing. He lowered interest rates too low, held them there too long, to try and get the stock market reflated after the NASDAQ crash, which was another bubble that he actually created. When it popped though, getting the stock market levitated again and the economy going, he accidentally created a real estate bubble, completely unintended.
There are always consequences—something that comes squirting out at 90 degrees from your intended goal—when you mess with what Harry Dent in the bonus feature calls Mother Nature. The free market is a natural thing. You put two people together on a planet that produce and they are going to trade among one another. It is something that just occurs naturally. And when government or an entity like the Federal Reserve meddles with it, there is always stored up energy and unintended consequences that happen. And my fear is that we went through the first half of the hurricane, 2007 through ’09 and ’10. And we have been in this eye of the hurricane were things been fairly calm since, but the second half of this hurricane is going to be horrendous.
We had a stock market bubble pop in 2000. In 2007 and ’08, it was stocks and real estate. This one is going to be stocks, real estate, and bonds. And it is Ben Bernanke creation from taking interest rates down to zero and quadrupling base money. We took two hundred years to make the amount of base money that we had. He created 800 years’ worth of currency in just six.
Chris Martenson: Well, this is something that I think really—it is hard to over belabor this, and it is hardly even belabored it all—is this idea of, you know what, this time is different. I hate those words usually, but it really is like to understand historically…and this is where I think your series comes in just beautifully. You have to go back and understand money through history. Start with Athens, right? And as you come through, you find out that the kinds of mistakes we are making today have been made many, many times before. And so I have to hold these two competing thoughts. On the firsthand, this time is different because we have never had a global money printing-fest like this. There is nowhere to go.
If I am working with somebody and somebody says, "well, where would I go when I hide out?" Very non-facetiously, I will say Estonia. They have the lowest government debt and they really have…if you are going to go to a place, find a place that is not like…has not bought hook line and sinker into the whole Greenspan/Bernanke magic voodoo style of things, which is that we can print our way to prosperity, deficits do not matter, as long as we can compound our debts exponentially, all will be well in the world. That is a magical line of thinking, right?
At the same time, I also want people to be aware that it is not different, at the same time this is different. Look how big this is. Look how giant this bubble is. The charts that you have to show now to show what you talked about—base money or credit—they are parabolic charts. In some cases, parabolic does not even do them justice, right? They are actually vertical charts. And we are all supposed to believe, well, they have it under control. The Federal Reserve and the central planners, maybe they got it right this time.
Mike Maloney: [Laughter] Maybe. Right. I am just amazed that they do not look around and say, well, applying Keynesian economics to Japan and their bubble popped in ’89, ’90, and they have been trying to print their way to prosperity since then. And it has not worked. They are stuck in this grinding deflation, and their economy is like Harry Dent says in this episode, it is a coma economy. They never let the free market work and complete the deflation and clearing of debt so that a brand-new economic spring can happen where you start with a solid foundation and you building again. So one of the things…the first episode of Hidden Secrets of Money is about…and I do not know, did I talk about the mission of Hidden Secrets of Money?
Chris Martenson: Not fully.
Mike Maloney: It is to enlighten the world that maximum prosperity can only be achieved through individual freedom, free markets, and sound money. That is a mix that creates prosperity wherever you look around the globe. It is absolutely true. So that is what we are trying to do.
In my book and in the first episode of Hidden Secrets of Money, I talk about the difference between currency and money. I want to appeal to you and everybody that is in our community, everybody that teaches and that advocates hard money or free markets, to start differentiating between currency and money. We do not use…there is no country on the planet today that uses money. They use fiat national currencies. That is why it is called "currency wars." That is why they are called "national currencies."
Money has to be a store of value. The properties of currency are that it is a medium of exchange, a unit of account. It is portable. It is durable. It is divisible—you can make change. Something called fungible, for your listeners, that is an interchangeability of all the units. In other words, if I loan you a $20 bill, you can pay me back in five ones, a five, and a ten, and I do not care. The value is the same as the 20. Money has to have all of those attributes plus be a store of value. The dollar has dropped 96% since the inception of the Federal Reserve and, therefore, does not qualify. It is not money. If it was money, prices would not rise. A single-family median-priced home would still be $3,000. It is not.
Chris Martenson: Three thousand.
Mike Maloney: Yeah.
Chris Martenson: You can rent a one bedroom in Berkeley for a month for 3,000. I know that.
Mike Maloney: Right, right.
Chris Martenson: [Laughter] Astonishing.
Mike Maloney: If we can all start differentiating and stop calling currency money, eventually people will get this, that there is a difference and that is the fact that we use these debt-based currencies and this Ponzi scheme type of monetary system that is responsible for all these giant booms and busts that cause these bubbles which are fueled by credit and manipulated. I mean, one person was essentially responsible for the global economic crisis of 2008, Alan Greenspan. I mean, he had help. Companies created things like mortgage-backed securities, these derivatives that helped fuel that bubble. But basically, if Alan Greenspan had not done what he did as a response to the NASDAQ crash, we would not have had a real estate bubble in 2007. And it would not have popped causing this global economic damage.
Chris Martenson: Indeed. So let us talk about that. So what you are really getting to is this idea that our monetary system has been used, misused, abused, maybe by people who understood Taylor rules and Q factors but did not really understand really the role of money. I mean, money is, come on, it is a medium of exchange. It should be a commodity. It is not a fancy thing. Why you should borrow it all into existence is a crazy idea that people are increasingly understanding is not a good idea. Let me sharpen that up, currency gets borrowed into existence.
Mike Maloney: Well, it allows few people to game the system and basically ride for free. If you are a bank, currency creation from a debt-based currency is a good thing if you are a bank. But I do believe that if we had had some sort of free market…I do not promote gold or silver. I believe in the free market, and the free market should be selecting what money is and what the cost of money is. But we use currency, which can be manipulated by a single person, like Alan Greenspan can manipulate the currency supply. That means we do not have a free market because the currency is 50% of every transaction. So that means that every transaction gets manipulated by one guy who has the arrogance and audacity to think he has enough information to make these decisions, more information than the free market. The free market has the information of every transaction going on in that society.
Chris Martenson: Yeah. So let us talk about what happens then. So Mike, I really credit you with bringing to my awareness and helping me more deeply understand the idea of a wealth transfer instead of a wealth destruction. So you are telling about how your mother's portfolio and estate was shredded, right? The way you would read about that in the Wall Street Journal and New York Times, they would say, "oh, my gosh, there was this great wealth destruction."
Mike Maloney: Yeah, that $4 trillion was lost in the stock market in this crash.
Chris Martenson: Whoops. Yeah, just went away.
Mike Maloney: There was somebody that had those stocks at the top and sold, and somebody that has it that is still holding those same stocks—the same percentage ownership in a company—at the bottom. The perceived dollar value has fluctuated, but has that company really changed? No. The true wealth is…people do not realize that the currency is just a medium exchange and it stores—temporarily stores—purchasing power for us. The value is all the stuff in society that we produce. So all of the goods and services that man creates is the value—the purchasing power—that is temporarily stored in an agreed medium of exchange. When you have an agreed medium exchange that a few people stop agreeing on and it starts to fall apart, when it is numbers that are just printed on a piece of paper, what gives a $10 bill or $100 bill any difference in purchasing power versus a Post-it that I write "100" on and hand to you? It is just numbers on paper.
Gold had a certain amount of value stored in it from the…it has to be dug out of the ground. Somebody has to be incentivized to spend part of their life digging that up, refining it, minting it into a coin before it is this agreed-upon money. But it is that energy that went into it that gives it value. And if people do not value it is much, then not as much comes to market because people are not willing to spend that effort to get it. If they are valuing it too high, more comes to market. It is has been selected by the free market over and over and over again as money for the past 2500 years. The free market selects gold and silver as money over and over again. Everything else is just currency.
Chris Martenson: Everything else is just currency. So let us talk about this wealth destruction. In your series you said that we are going to see that this decade is going to see the greatest wealth transfer in history. So again, just for the benefit of my listeners, this wealth transfer, it is a tricky idea, I guess, at heart because we have been sold on the other side of it. The wealth is really being transferred from whom to whom, and just what is that process? And second, any chance you are engaging in a bit of hyperbole when you say "the greatest ever"?
Mike Maloney: No. I do not believe there is any chance of when I say "the greatest ever" of that being hyperbole. This is the first time that it is absolutely global where we are going into a currency crisis. It is going to be a global event, this deflation. The Great Depression was almost global, not quite. The countries that were not on the gold standard, China and India, were sort of exempt from the deflation. And much of the world was living in poverty and deflation really did not hit those. It hit more of the advanced economies. This time, it is going to be a global event. And then when you take a look at some of the other factors like, for instance, you asked about the wealth transfer. If I you were in will real estate during…if you had ridden the NASDAQ bubble up and sold for real estate in 1999 before the crash and watched that crash play out in 2000 and then bought back in after the NASDAQ had crashed 70% of whatever it crashed…sold real estate and bought the shares in the NASDAQ, you would have increased your position tremendously and wealth would have been transferred from—at first from the holders of real estate to the holder of the stocks who was invested in the NASDAQ as it went up, but then he bought real estate cheaply compared to the NASDAQ. Then the stocks went down and real estate did not crash. So if he sold the real estate and traded it for stocks, he made tremendous gains. Meanwhile, he may have had cash flow from that real estate.
The same thing happens like…I have been buying gold since 2000…October 2002. I have got a bunch of Gold Eagles that I bought for $325 each. So gold spot was probably about $315. I discovered silver in March of 2003 or April of 2003 and discovered that it was tremendously undervalued against gold and started buying that at about $4.30 or so. And so if you look…if you do a chart of…in fact, I will send you a chart, maybe you can post it. But if you do a chart of gold versus the S&P, the Dow Jones Industrial Average, or the NASDAQ, you will discover that over the past decade gold is way, way up.
And even though it has dropped over the past four and a half years, it has still way outperformed the markets from the year 2000. And I mean it is by many multiples. The markets are barely—as far as a percentage basis compared to gold—they are barely up. In fact, the NASDAQ is actually flat. It has gotten back to where it was, but there has been inflation in the meantime.
So that was a wealth transfer. We got out of stocks and into gold. Gold did better than stocks. We can now buy many, many times more stocks. But this wealth transfer is not over with. If you are holding gold and gold goes to $10,000 an ounce and…you follow the Dow/Gold ratio, right?
Chris Martenson: Of course.
Mike Maloney: Or the S&P/Gold ratio. So it is the stock market divided by the price of gold. And what you see is that in 1903, the Dow Jones Industrial Average was worth 1-1/2 ounces of gold. By 1929, the stock market had risen to where it was worth 18 ounces of gold, so a whole lot more. But then the stock market crashed, gold’s price was fixed. It fell all the way down to just 2 ounces of gold. There was a day in 1932 where the Dow Jones Industrial Average was at 40.22 points and gold was $20.67 an ounce. And then the stock market rose, gold was still fixed. It went to $35 an ounce in 1934. But in 1966, the Dow Jones Industrial Average—if you divide the points by gold, it was worth 28 ounces of gold.
And the Dow bumped its head on 1000 points and could not break through it from ’66 to ’82. So now it is the Dow that is fixed, but in ’71 Nixon took us off the gold standard and gold became a freely traded commodity/money. And it was bid up in price from $35 to $850. Well, there was a day in 1980 where the points on the Dow and the price of gold were the same. So the Dow is now only worth 1 ounce of gold. The Dow had gone from 400 points in 1929 where it was worth 18 ounces of gold, the Dow had risen in points to 1000 but had dropped in value to 1/18 of its 1929 price. It was now 1 ounce of gold with the value of it. These are wealth transfers, being on the right side of the asset class trends at the right time. Then the stock market from 1982 took off, it broke through 1000 points and went to, I believe, it was 14,000 in the year 2000; 14,700 I think…or no, 11,700.
Chris Martenson: Eleven seven, yep.
Mike Maloney: Yeah, 11,700. And it was…the price of gold had dropped down near 250, so was worth 45 ounces of gold. There is no time in human history where paper assets were more overvalued and gold was more undervalued. In 1980, gold went into a small bubble at $850 and then went into a grinding bear market from $850 down to $250 in the year 2000, 2001. And there is no time in all of human history that gold was as undervalued because all investors had given up on by the year 2000. And at the same time in 1971, all countries stopped using gold as money. It was not backing the currency anymore. So no country wanted it and no investor wanted it. Before, it used to be our money. Everybody wanted it. So that was the most undervalued in all of human history, and it was the biggest bubble in stocks. And since then, we had a Dow/Gold ratio of about 16 now. So this tells you something. Where is the Dow, at about 1700 points now or something?
Chris Martenson: Seventeen six or five or eight, something like that.
Mike Maloney: So 1700. That sounds more like more than 398 doesn’t it?
Chris Martenson: Little bit.
Mike Maloney: Okay, in 1929, the Dow hit 398 points. It was worth 18 ounces of gold then. It is now worth 16. So the wealth transfer occurs without anybody having to trade things. It is this stealth background thing that is happening where you are in the proper asset that is rising against other assets. And the problem is you cannot see these things when you are measuring it in dollars. You have to start dividing assets into other assets like the Dow/Gold ratio. How much is your house worth measured in barrels of oil? How much is your house worth measured in bushels of wheat, tons of iron, pounds of copper, ounces of gold, shares of the Dow, or ten-year treasury notes?
Chris Martenson: Trying to measure the value of things using currency is like you bought a ruler from the Heisenberg Ruler Company. It is just absolutely uncertain at all points in time. It is shifting in value at all points in time. We can never really know the value of our currency any point in time, and so really you are describing…in the long sweep of history, we have seen aggressive periods of people falling in and out of favor with various assets.
Let me return to this idea of this being a slightly different time. Now, Mike, when I talk with people who are running big hedge funds or manage a lot of money, they are as confused as anybody right now because this is a period of time where…let me tell you something that is different. I am sure you know this. Central banks have never been more interventionist, more aggressive. They have a central bank preferred incentive buying program at the Chicago Mercantile Exchange, which only deals in highly-leveraged futures products for commodities and stocks. That is it. They do not sell you anything else, right? What are banks doing monkeying around with those things?
We know that central banks are buying stocks. We know that Japan’s central bank owns about half of their ETFs at this point in time. We do not know what they are not telling us about, but we can all guess, watching the hijinks that go on in markets here and there. Tell me, how do we begin to use history to make sense of a time like this where I am increasingly convinced that the majority of the trend in the moves we have been seeing in the markets have been set by a little committee of people, relatively small committee in various countries, called "central bankers," who have taken upon themselves the duty, the right, the obligation to manufacture appropriate prices to convey the right signal so they can get preferred outcomes of, I guess, I do not know what, consumer and political behavior. It seems fairly all-encompassing at this point, doesn’t it?
Mike Maloney: It is and it is just an incredible level of arrogance that it takes for somebody to actually think that they can manipulate the economy. Whenever we do something large in nature, there are always…you build a dam and there are other unintended consequences. Anytime we change nature, we find there is something that happens that we were not considering. The Monarch butterfly—we incentivize the corn industry, and we plow all of these fields and plant them with corn and spray these herbicides like Roundup, which kills the milkweed that the Monarch butterfly needs to eat and reproduce. And so we are seeing that population just collapse right now. We may be witnessing another extinction. And it is an unintended consequence of man meddling with Mother Nature. And Harry Dent called the free-market Mother Nature. It is true. You put…I think I already said this but you put two people on a planet together, and if they produce anything, they will start trading. It is just an automatic thing that happens.
The audacity of these central bankers to think that they have enough knowledge to be able to control the economy. What the free market does is—there is something called the "price discovery mechanism" where price is used to set supply and demand in equilibrium at all times. And what they are trying to do is upset that supply-demand equilibrium to achieve a boom or stimulate the economy over here or slow it down over there, thinking that they have got their hands on the levers and complete control. What they do not realize is that every time they interrupt the price discovery mechanism from setting things in equilibrium, it stores energy as they go out of equilibrium. And the free market, Mother Nature, will overwhelm their manipulations. And the more they manipulate, the greater the crisis is going to be.
There would not have been a NASDAQ crash had it not been for the policies of Alan Greenspan. There would not have been…or there might have been a very small one, a pullback. There would not have been a global financial crisis in 2008 had it not been for the policies of Alan Greenspan. We are now headed for the Bernanke Bust, and this time it is going to be stocks and…that was 2000 with stocks, 2007 and ’08. It was stocks and real estate. This time it is going to be stocks, real estate, and bonds. And it is Bernanke’s fault. Janet Yellen will just be dealing with the consequences. But the way that she deals with them and the way the rest of the world’s central bankers deal with them will determine the outcome. And being that they are all Keynesians, they only have one answer: Print.
Chris Martenson: Print, of course. The more educated I become about all this, the more cynical I become... I would love to be a happy, carefree guy. But the more I look at these various systems, be they education, prisons, politics, military-industrial complex, even healthcare, which really should be called "sick care" in this country, the more disillusioned I become. So maybe it is…is it only fitting that our monetary system is itself just another fraud? Because it is really a supporting mechanism for a wide variety of frauds and deceits. I mean, to paraphrase: Do we not have the monetary system we deserve?
Mike Maloney: No, we do not. Starting back with the Rothschild’s, a lot of conspiracy theorist still think that they control the world or whatever. But they were the ones that really refined fractional-reserve lending and central banking. We adopted it from—oh, I forgot his name. Paul Warburg was the architect of the Federal Reserve, and Senator Aldrich, who was at the head of the monetary commission back then, could not even understand what Paul Warburg…I mean, it took weeks for him to get a clue of the way currency would be created once they started the Federal Reserve and where the economy will be controlled. It is a Ponzi scheme that is extremely complex and hard to figure out. In episode 4 of Hidden Secrets of Money, we have created an animation that helps people understand how this Ponzi scheme works, but it benefits the few at the expense of the many. And, yes, we deserve a far better monetary system. What we deserve is the free market.
It provides the maximum amount of prosperity that can be attained, but we always hamper the free market. And so we should be…we really should be living 200 years right now, and if you wished, being able to vacation on the moon [laughter]. I know it sounds a little crazy, but we should reached this level of prosperity 500 or 1,000 years ago had it not been for all of these stupid roads that we ventured down into socialism. And we are swinging back toward socialism right now and allowing government and people to meddle with the free market. And then when the consequences of their meddling come back at them, when there is this blowback of a bubble popping, they scream, "oh, the free market is not working. We have got to do something about it." And it is their fault. It is because they did something about it in the first place. If they leave it alone, we will not have all these problems. If they just let people deal with one another.
Chris Martenson: So aside from the monetary system shortfalls, which I totally agree with…and I would love to actually see myself and others have the opportunity to select among monetary systems freely and let the market decide which is a better-managed currency. Because I tell you what, if I could run screaming away from the central fiat currencies, I would— and I guess I have, in my own ways, with hard assets.
But aside from the monetary system shortfalls, let us even pretend we are running it well. Isn’t it also true that there is just a math problem built right into the system of savings and retirement due to demographics, right? So maybe it never really made sense for people to expect a comfortable retirement unless they were in an expanding population shaped like an age pyramid with a relatively few at the top and also provided the economy was constantly expanding. I mean, that is really what retirement was predicated on. None of that seems to be true. I know you talked about this in your most recent episode. It is a really important point.
Mike Maloney: Yes, the population demographic really drives everything, and that is where Harry Dent comes. Harry Dent is one of the foremost demographics experts in the world. When you study populations, you discover that different age groups do different things to the economy. Children do not produce anything, and so they do not pay any taxes. And they do not buy anything unless it is with their parent’s money. When you get into the age when you are from a high school dropout to somebody that spends many years in college, when you eventually become working age, you start out at a lower salary. On the average, it is not quite a breakeven for society when people are 18 to 24 and they first go to work. They are not paying into the system as much as they are pulling out of the system by just existing. People do not realize that right now government spends…between federal, state, and local government, your cost of entry into society is about $18,500 per person. So that is a lot for a family four. And if you are not paying that amount of tax, you are actually a net loss to society. $18,500 per person. That means that somebody else is helping pay for your existence. You not paying for yourself.
As you get into your late 20s early 30s, you have learned enough, you become more valuable to your employer, and you start making enough to become a breakeven for society.
As you get into the demographic of 45 to 55, that is called the maximum spending demographic, and that is where people are making the most. They are spending the most of their lifetime. They have got kids that they are going to be sending to college and they are buying them cars. They are living in the big four bedroom, three bath house and they are driving the biggest, most expensive cars of their lifetime. That age group drives the retail economy.
Then they go into the maximum savings demographic. They are still making a lot, but now they are empty-nesters. They are going to sell their four-bedroom house and move into a one-bedroom or two-bedroom condo on the golf course. They basically say, "oh, man, we spent everything on the kids. We have not save anything for retirement, and we want to retire in five to ten years." So it does help drive the stock market because they are investing, but it does not drive the retail economy.
When they retire, they move into the maximum social burden demographic where they become a drag on the economy simply because they are no longer working, they are surviving by liquidating assets. It is a very deflationary pressure on the economy. They are liquidating stocks and bonds and their real estate. Something I had never thought of that Harry Dent pointed out is you have to subtract from the buyers. You have to subtract the dyers. Dyers are sellers of real estate, and so there comes a point when all of these homes that have three, four, five bedrooms, the big McMansions that were built during the last real estate boom, those have to hit the market. And there are fewer buyers than there are sellers, so that is a big deflationary pressure on real estate. We are in for a demographic catastrophe, and it is coming. And this happens on a backdrop of there is a recession due.
When I was writing my book, I discovered you could not read about the change in world monetary systems. You could read about the classical gold standard or the interwar gold standard, the gold exchange standard, or you could read about the Bretton Woods system. Or the global dollar standard. But when I looked at all this, I was looking for cycles. I put every economic event that I could in a spreadsheet and was looking for a regularity to their occurrence. What leapt out at me is that every 30 to 40 years, the world has a new monetary system, and they are entirely different from one another. I mean, full gold backing with the Bank of England being the clearinghouse of the classical gold standard before World War I. Partial gold backing plus British consoles or US bonds or British pounds or US dollars as your base currency backing the world’s currencies and the clearinghouse being both England and the USA. And then the Bretton Woods system where every country was backing their currency with US dollars and the US dollar was backed by gold at $35 an ounce. So all currencies were pegged to gold through the US dollar.
And then the global dollar standard was like this default when the Bretton Woods system fell apart, the world had been flooded with dollars because of all the loans during both wars and because under the Bretton Woods system, every country had to hold dollars in reserve. And so this monetary system we are on now is the most poorly designed, and it is an accident. It is just the default that was there when we went on to floating exchange rates and severed the connection with gold.
What happens with each of these monetary systems—a man-made system cannot account for all the forces in the free market. It builds up pressures, disequilibria, starts to develop stress cracks, and eventually starts to implode. And then you have an emergency meeting like the General Conference of 1922, Bretton Woods Conference of 1944, and I cannot remember whether it was the Smithsonian Agreement or the Washington Accord in 1971—but one of those. But they always have this emergency meeting of a bunch of economists and finance ministers to try and hash out a new world monetary system. Well, it turned out that the one in 1971—nothing came of it because we just went on this floating exchange rate system with the dollar as the world's reserve currency. That is falling apart right now at an amazing rate.
There were no nails in the dollar standard's coffin from ’71 until Saddam Hussein tried to sell oil for euros and skip the US dollar. He was destroying the petrodollar, which is another thing that keeps the US dollar in place as the world's reserve currency. But then there is one a country after another today abandoning the global dollar standard. China and Russia doing direct trade. There is an exchange in Russia now for Chinese yuan futures, so they can stabilize prices in time when they're doing trade between the countries and have predictable outcomes. It is just one thing after another. And just like a couple of days ago, the IMF announcing that they are considering the…on November 30, they are going to be voting whether or not to include the Chinese yuan as a backing for the SDR, the IMF’s fiat currency that they use for central banks. That makes it a world reserve currency. So the days of the global dollar standard are numbered.
When it starts to implode, this is going to be total chaos. They're going to try and keep the fiat currency game going. I do not think they are going to be able to. I think that what will end up happening—they will try SDRs or this thing or that thing. They will try and patch up a monetary system. But I think it is going to be chaos and that they will eventually look around and say, "what worked before?" And they will say, "gold."
The classical gold standard had full gold backing. The interwar gold standard had 40% reserve ratio. Bretton Woods did not have a specified reserve ratio, and it fell to where I believe it was like 8% gold backed against the number of paper dollars that we had created that were claim checks on gold. And then the dollar standard has no gold backing. So to go from nothing but a debt-based currency where every dollar created is a promise to tax you in the future…I mean, we just finished paying off the prosperity we enjoyed under Ronald Reagan. When we retire 30-year treasury bills, that is when you finish paying off the prosperity that we enjoyed 30 years ago.
But if this debt-based currency system has to evolve, switchover to some sort of asset-based currency system or a currency system that is a free market thing...I am fine if the free market selects Bitcoin or if it selected gold or silver again like it has for the past 2500 years, it keeps on selecting gold and silver as the optimum money. I am fine with whatever the free market picks. And I believe it will lead to greater prosperity. But we are in for some short-term pain.
The good news is that for somebody that is properly positioned, it can be the best thing that ever happened to you because of this enormous wealth transfer. If a currency fails, its price measured in gold goes to infinity, and the purchasing power, though, of gold and silver…right now the purchasing power of gold and silver back in like ancient times, that was our money. That was what was being traded, and it did not have any competition that diluted its purchasing power.
Today, there is about $200 worth of investment-grade gold per person. And there is about $40,000 worth of other liquid financial assets that compete in storing purchasing power. And so those liquid financial assets such as cash, stocks, and bonds—the problem with them is that their purchasing power can evaporate. It is something that is just based on trust. And if just 10% of those liquid financial assets come chasing gold, gold’s purchasing power has to rise twentyfold.
Chris Martenson: Well, I think first we would need free markets. And so here we are recording this on the 17th. It was on the 13th that France experienced pretty horrific terrorism acts and the response of France was to really tighten down and then sort of declare war on an entire religion as much is anything. And since that time, we have seen the S&P shoot up about 60 points and we have seen gold lose about 20 bucks. That would not have happened 10 years ago or 15 years ago, that specific pair of events.
Mike Maloney: This is the type of thing that makes you suspect manipulation because if you look at the number of ounces of paper gold sold on the commodities exchange compared to the number of ounces of real gold that is available for delivery, we are experiencing some extraordinary times, unprecedented things. The commodities exchange has always been sort of a fractional-reserve lending scheme where there is usually about 20 times more ounces sold in futures contracts that exist than actual gold to deliver into those futures contracts if somebody wants to take delivery of their gold. It exploded last week…I do not know what it is this week, but last week it was up at 293, I believe, ounces of paper gold that promise delivery of real gold. And so there are almost 300 people that think that they can lay claim to the same ounce of gold. It is a disaster waiting to happen, but when paper gold gets sold into the market, it suppresses the spot price.
Chris Martenson: Which leads to lower prices which, by the way, makes China go crazy. 2015 was the largest ever year of purchase of gold by China, well over 2000 tons. Throw another 1000 for India, just hemorrhaging from west to east. I could not believe, Mike, if you had said six years ago we would be in this situation and gold would just be weak every moment it could possibly be weak, especially in the paper market and thin overnight electronic markets in the United States and elsewhere. I look at all of that and I say, look, I do not gnash my teeth much about the manipulation anymore, I notice it. And I understand why there doing it. I mean, if I just did red team, blue team, I put myself on their team, and I say I am in the Federal Reserve. I have painted myself in this particular corner. What do I do? I have to try and control everything I can because this is a Franken market. The bubble is so big, perception is reality, they have to control perception at all points. I get why they are doing it.
What I do not get, and the thing that confuses everybody I talk to who is an astute observers is this: What is the plan? I get that you are trying to control it but for what outcome? Show me the happy path. If everything goes your way, where do we go? And all they do, the economists I talk to, they wave their hands vaguely at this idea of we are going to get back to full-capacity growth, right? Well, here we are ten years into this, and were not at growth. And we are going to get it back because there is too much debt. Every time we do get growth, energy shoots up in price, which just shoots the recovery right in the ankle, and that is where we are. And so nobody has a real plan for this, which is why I counsel people: Listen, I would rather be a year early than a day late. Get your preparations in order. I know I have been saying that for a long time, but given the potential energy stored in this system, given the massive concentrations of wealth, when one or more of those wealthy elephants decides "I do not want to be a paper anymore," the stampede is on, and nobody is getting through that doorway. I mean, you are in the precious metals business so you see what happens when there is a little bit of extra interest. What happens to the supply chain, say, for silver or gold at the retail level?
Mike Maloney: Well, we just had a big silver shortage just a few months ago, and the price of silver dropped two bucks during that shortage. But at the retail level like, for instance, Silver Eagles, they stayed the same or went up. Our cost for Silver Eagles, the premium that we pay over spot, more than doubled. As a dealer, we had to pay more than double the premium over spot that we would normally pay. Some bullion items did drop a little. Also, the mints got really backed up, and that affects our business because we buy a bunch of silver and have it minted. And if it takes two months to mint, you got a half a million or a million bucks or more wrapped up sitting at some mint for a while for two months instead of three, four, five days. And so it sucks a whole bunch of capital out of companies and makes the shortage even more acute, and so the price actually rises.
In 2008, gold had hit eleven hundred bucks, and it dropped all the way down to seven during the crisis. It dropped for…but it bottomed…I believe it bottomed near the end of October and turned around and started rising, and the markets continued to crash until March. But maybe it was…it was not October, it was a little later than that, November or December. But there was a point where I was speaking at an event in Florida, and I was looking at the price that Silver Eagles were going for on eBay. And they were going for more than four times the spot price. There was a client that called me and silver was now below $9 an ounce at this point, and he said the dealer that he went into in Chicago was charging $18 an ounce for 100-ounce bars, double the spot price. And so during that collapse, we were…the premiums we were paying were huge, and then we also had to adjust our premiums because we could only get so much. And we did not want to be sold out the first hour of every morning and then be basically out of business for the rest of the day.
And so we had to adjust our prices. It is just simply the free market during the price discovery mechanism. We were trying to balance our business, but there was about three weeks where we could not get any silver whatsoever. And our only product for like a week was kilo bars of gold. So the cheapest product that we had was $30,000. And then there was three days where we could not get anything. We were actually out of…basically out of business for three days. So when the spot price goes too low compared to what the real physical demand is, shortages develop, premiums explode. I am expecting…we are going into deflation I believe, not inflation right away. The big inflation or hyperinflation will come later as the central banks overreact.
But in the meantime, I think it could take gold below $1000. I think you could see $700 gold or the old $850 high again, but will you be able to actually buy some physical at that price? I doubt that very much. I think if it goes under $1000…about $1000 is sort of where the physical price might freeze. I might be wrong, but history shows that whenever there is a problem with the currency, whether it is big inflation, hyperinflation, or deflation, people go back to safe haven assets. We should be going into a deflationary episode that is overreacted to that causes big inflation or hyperinflation, which causes a breakdown of the current global monetary system, the global dollar standard that is now the longest-lived of these artificial monetary systems and has developed a bunch of stress cracks and is in the process of imploding right now. There is going to be, before the end of this decade, most likely, another emergency meeting of a bunch of finance ministers and economists to try and hash out another world monetary system. It is just history repeating, and it is a natural consequence of man-made, artificial manipulations of the free market.
Chris Martenson: It might be another normal outcome, but I know you have said this before, the number one feature of having a bubble, whether our bubble happens to be a bubble of faith in authority or a monetary bubble or debt bubble, however you want to categorize it, humans have been down this path. But the number one rule of a bubble is that the vast majority of people have to lose a lot of money in them. There is no other way for them to resolve.
Mike Maloney: Yes, that is true. In fact, the majority has to be wrong usually for people to make money in the stock market. That is how wealth is transferred. Yeah, that is the reason the banks hire all of the best traders that there are. And then they have got ultimate deep pockets, so the banks usually win at the trading game. But, yes, you are absolutely correct.
Chris Martenson: So this is just repeating itself again. People can watch Hidden Secrets of Money now 1 through 6. Where do they go to watch this?
Mike Maloney: The best place is HiddenSecretsofMoney.com. You can also just Google it and watch it on YouTube. But if you watch it at HiddenSecretsofMoney.com, there is a whole bunch of bonus features, and there is all of the previous episodes all organized there. There are playlists on Hidden Secrets of Money. Now, on the YouTube channel, I have a playlist about deflation before inflation or hyperinflation. I have been saying this for many, many years. The demographics and history do not point to just going straight into inflation. That would reward the public for mass stupidity, for borrowing and spending throughout their entire lifetimes and not saving anything, for using their homes like ATMs. And I cannot find a single episode in history of that happening. What would usually happen like during wars, World War I, everybody saved. And in the United States, as soon as we came out of World War I, we went into the depression of 1921. A huge deflation.
During World War II, everybody expected deflation just like happened after the stock market bubble popped in 1929, just like happened after World War I, so they saved all during World War II. And what happened is the opposite. During World War I, we expanded our currency supply, I am sorry. We were not a nation of savers during World War I. We were still…we were feeling pretty good the war was on other people's soil. And deflation happened to us. Deflation happened after the stock market bubble popped, and it trained people. And so during World War II, everybody saved. And by the time we came out of World War II, inflation happened instead. So whatever side the public is on, like you said, the majority has to be wrong, the opposite always happens. So right now we are a nation of borrowers, spenders, and debtors, and we are not going to get rewarded at the expense of the big banks losing and Joe Sixpack winning. That is just not going to happen.
Every time I look around in history, I do not see that.
We were a nation…we did not go into this huge savings mode like in Germany. Dduring World War I, velocity of currency slowed down. Even though they expanded their currency supply, currency supply was five times larger at the end of World War I than it was at the beginning in Germany. But velocity slowed. Every extra mark that was printed got saved. As soon as the anxiety was lifted, they went into a huge inflation that I call a pre-hyperinflation hyperinflation. Prices rose 900% from the end of World War…from 1918 to I believe it was February of 1921. So 900…prices went up nine-fold. And then they had a short period of stability, so it wiped out all of the savings that people had accumulated during the war once that anxiety was lifted and velocity picked up. So we are in for whatever is the opposite of what would be best for the masses.
Chris Martenson: The opposite for…alright, I like that I guess. I do not really like it because I wish we were not here, I have got to be honest with you. But, Mike, I have got to say, I am just in awe of the level of artistry, the storytelling, the overall quality of the Hidden Secrets of Money.
Mike Maloney: Thank you.
Chris Martenson: I really tell everybody they should watch it. It is a real testament to your passion for quality, for the story itself, and a gift to humanity.
Mike Maloney: I would like to ask your listeners, if they watch it and they do like it, I feel that these are very important things, and that we have to all work to pass this knowledge along and educate each other. And so if they could share it with anybody that they care about, that would really help things along.
Chris Martenson: I agree, I agree, and it helps…it does not do any good unless people are curious and interested. But anybody who wants to understand the world around them and where we're going and how we got here, I really think they should watch this and understand because it is so hard to keep our bearings in a bubble. That is hardest part. It is like navigating in the fog without a compass. It is just tricky. So thank you for putting it together, and thank you so much for your time today. And I cannot wait to see the rest of the episodes.
Mike Maloney: Thank you. Oh, and by the way for your listeners, one of the episodes features you. It is one of the future episodes upcoming next year. So we are starting the 2016 season with this release, and the last episode that was released was November 2013. So it has been on hiatus for a couple of years while we have been getting all of this together. And so this is an important launch for us, so thanks.
Chris Martenson: Well, I cannot wait to…I saw a little sneak preview of what that piece might be with me in it, and of course my viewers are going to say, Chris, why didn’t you do everything at that level of quality? So it is going to be a mixed blessing for me obviously [laughter]. I cannot wait to see it, I really cannot. So thanks again.
Mike Maloney: Thanks.