hi this is mike maloney with jeff clark once again and jeff what have you got for us today all our usual stuff mike article the day tweet of the day uh chart of the day some great viewer feedback and a very good meme so stick around for that so we're going to jump right into our article of the day and dan our producer mike wanted to highlight the article i wrote yesterday that came out on our site the gold s p 500 ratio reversal our mainstream investors really ready and just like the silver one that we did


which by the way was very popular one of the most popular articles on our site this year uh but just like that when i i wanted to look not just at the ratio mic but at the prices that gold and the s p 500 could hit when this ratio reverses not if but when it reverses and hits some of the prior highs in other words peaks in this ratio that we've already seen before and the tables show what kind of prices we could hit everything from gold falling to 1500 all the way up to gold going to 10 000 so it's quite amazing to look at


these tables it's worth perusing to see what it would mean if these ratios were hit before and again these aren't projections or you know wishes on the part of gold bugs these ratios have all been hit before in history mike right you know one of the things i came up with something a while back called wealth cycles and it's how everything is relative in the economy and if you measure stuff with stuff you can see what the true value is if you measure it with currency it's a smoke screen because


the currency's value is always dropping against all stuff and it makes all stuff over long periods of time look like it's going up but stuff doesn't go up compared to other stuff you know one of the things that i'm impressed with here is i'm looking at your um uh the first chart in your article and right now the ratio that we're at is about the ratio of the stock market against gold in 1970 if you look at the you know the height of it it might even be lower so it started out


and that's a great issue it bounced way up and then it bounced down and so it's going above and below this equilibrium of stocks and gold having a certain value in stocks and real estate real estate and gold oil and gold oil and real estate oil and stocks all of these things uh do this throughout time i've got uh charts that i was making for my book that go back into the 1880s and it shows how things uh go uh overvalued and undervalued compared to each other but then they swap and they swap again and they swap again


and they keep on doing this throughout time so this is a picture of basically uh one of the overvaluations against gold and under evaluations of the stock market the 70s to 1980 and then the next phase of the cycle to 2000 and then we started the uh the the next full cycle so you've got one wave and the next wave has started but we just we're just in this uh pullback you know if you look at uh 70 to 74 it goes up to 2.93 and then does a pullback that's what we're in right now we're


still in a bull market this is just a midterm correction so uh tell us what what you've got next here on the article oh it i i think it's just worth perusing all these tables and just going back to the 1980 hi there mike uh that last table boy that really just shows you uh it's nothing short of a complete wipeout like it was in the silver article of the stock market so it's really very sobering to think about uh and again i directed the article to the average mainstream uh stock investor


not to us gold bugs but to the stock investor look if these ratios return you could see a you could see just a dramatic uh loss of value in your stock portfolio yeah um it's not just a loss of value in your stock portfolio but this is actually the wealth transfer that i'm talking about if you uh identify the correct undervalued asset and you buy it and it's changing in value compared to another asset the wealth is actually being transferred and then you sell it to somebody that that owns stocks and now they want gold


and that uh wealth has has already been transferred to you it's a very stealth process but you know it's just part of economics uh so you know i i love you've got um uh here's uh to reach some of those prior highs uh gold would have to rise nearly three times to match 2011 over four times to reach the 1987 peak almost six times to match the 1974 high and over 17 times to reclaim the 1980 peak and uh that i mean that that's if the stock market like stays at this value gold would have to go up


17 times but it can go up 17 times against the stock market if gold stayed here and the the stock market fell to 117 of what it currently is it can go either way either way the purchasing power is transferred yes good point this is a perfect example of what a wealth transfer looks like when it takes place and i think we'll be on the right side of that wealth transfer mic so i want to uh look at your tables here because you know you've got uh 1500 uh gold and if you had 1500 gold it would have


fallen 14.3 percent but at that price if it returned to that 1.67 ratio the stock market for it to be in that equilibrium would also have to fall but it would fall by 78.6 even with gold falling that is a wealth transfer you're going to actually have more purchasing power because that would mean we're in severe deflation and even though the price of gold would be falling the value of gold how much it can purchase would be rising um and you know you have to get way over 5 000 per ounce at that 1.6 ratio which was the 2011


high uh for for the gold and the stock market to be in equilibrium where the stock market wouldn't show losses against gold at 10 000 the stock market would be up uh 42 percent if it stays but i mean you go to the next table at 2.93 which was the 1974 high and then you go to the last one the 1980 ratio of 7.58 that is the astounding one because uh what it shows is that even at ten thousand dollars an ounce if you went to that ratio gold would be up uh 471.4 percent while the stock market at that rate with


gold at 10 000 an ounce the stock market uh has to fall it loses two-thirds of its value yes it loses two-thirds of its value against gold now i quickly calculated here that um you know gold would have to rise over 17 times and i took this uh ratio and you come out with if the stock market just went sideways and we were at the same you know the uh points on the s p i believe is 4 200 roughly right now and so if if you take 4 200 and then you do this uh 7.58 uh ratio you have to have 32 000 gold


uh it's it's uh amazing how undervalued gold is compared to stocks right now and it's going to remain undervalued as long as um there is no crisis as long as we don't go into some monetary crisis some big huge recession some you know uh uh it's there's going to come a day though when everybody's trying to get gold and one of the problems is it's really hard to get and the spreads go huge so for anybody that's in early kudos to them uh you know i've been doing this for a


number of years and uh and uh all of my holdings are way up at this point so uh anyway so let's move on to the next thing what do we got yeah the bottom line is all those ratios have been hit before this is just history repeating that's all this article is right yeah okay well on to our tweet of the day this is from zero hedge and he says lenin is so proud that he is or they are referencing uh this article on bloomberg titled america should become a nation of renters uh and of course he's referring zero


hedges referring to us becoming more socialist uh all these big hedge funds that are buying single-family homes they're buying houses uh they're buying whole neighborhoods right black black exactly yeah right so yeah and the very uh features that made housing an affordable and stable investment are coming to an end and uh you know that's true and it's all caused by the federal reserve but uh you know a little while back at the world economic forum klaus barbie i mean schwab i do that on purpose


uh said uh that in the future you'll own nothing and be happy and so that's what he's talking about they will own it all and they will be renting to all of the people that are supposedly going to be happy with this uh situation i don't think you're gonna be that happy if you uh actually can't own anything and you've got to rent it's uh it's a you know a form of of indentured servitude basically uh you know the serfs uh never actually owned their own homes under uh feudalism


they got to live there and they got to eat as long as they uh grew the crops and did the harvests and then and gave the vast vast majority of their efforts to the uh the lord well you know that's where landlord comes from and the lord would allow them to live on his land so uh we're getting back to serfdom welcome served him yeah what's next less freedom does not equal greater happiness it equals less happiness right so exactly well if you're liking this video please hit that like button down there below for us


and also the notification bellows so you're sure to get all our videos so yeah well on dude one last thing i want to say before yeah the next thing is uh you know if you have to rent your life from some somebody else then that is less freedom not more being able to own things yourself and not be beholding to anyone gives you more freedom yes absolutely exactly well on to our uh chart of the day and this is from the daily shot and mike you've talked a lot about margin debt and how uh that shows just how overvalued and


vulnerable the stock market is the daily shot says forget margin debt u.s retail investors are taking out personal loans to trade stocks this is not going to end well and there's a couple great charts here the first one shows uh the different age populations of investors that have borrowed to uh invest in the stock market but the chart below shows uh the type of debt that they took on and the biggest one by far is they took out a personal loan to go buy stocks this survey was completed in april


mike this is fairly recent uh yeah it's amazing to me and it's very dangerous extremely dangerous and generation z and the millennials are going to get wiped out they have no idea the type of risk they're taking and they're doing this because uh everybody's is looking around if you haven't uh made or accumulated anything uh everybody's looking around it's it's such a screwed up manipulated economy and the wealth disparity that the the federal reserve is creating uh


everybody is taking like these hail mary passes you know throw that football and hope there's somebody out there to to catch it so they're gambling on these things and somebody has borrowed you know if if 80 of them have done this borrowing to uh and taking out personal loans and stuff you know the least risky of these is refinancing your house and that's the lowest one because most of the millennials and gen z's a lot of them don't own homes yet so they can't refine and refinance a


house but at least there it's locked it would but what amazes me is this does not include margin debt and it just shows how indebted they are now i belong to the baby boomer cohort here and uh uh you know nine percent uh are have have borrowed and 91 for me um you know i just um i recently took on uh some debt but i've been i've lived mostly debt free i recently took on a mortgage because i think that and i wrote this in my book that there will come a day when uh when the rates uh turn around


and start going the other direction and i wanted to lock in some low rates of borrowed currency and if the rate goes higher than that in the future then the bank is paying me to take the currency yes very good the point of all this is it makes the stock market much more vulnerable and could make the decline the sell-off even bigger because people are going to scatter uh which goes back to the original article the gold s p ratio and why that some of those prior ratios could be hit in a scenario like that so


yep well onto some viewer feedback mike and you might like this one this is from justin borland the fact that the markets go up or down on what the fed may or may not do two years from now shows how whacked our system has become that sounds pretty true doesn't it mike yes and uh thank you for saying that the uh you know it is absolutely crazy and what's even more crazy is people now equate the stock market with the economy like it is the economy and so if the stock market isn't doing good the


economy can't do good uh the stock market went sideways from 66 to 1982. uh it wasn't performing we still had an economy and there were some boom times in there uh there's the it back you know until it wasn't until the late 90s that uh the stock market got conflated with the uh confused with the economy by the average uh citizen if stocks are down all the economy must be falling apart the whole thing is just crazy but the fed says a couple of words about what they might do two years from


now and everything changes yes it's crazy yes it is crazy well uh on to our meme of the day but if you've not read mike's book uh remember he mentioned it earlier in some of the charts that are still valid in it there uh you can do so for free the link is below down there so well mike share this meme of the day with us okay we've got bernie madoff under interrogation all right madoff where did you get the idea of paying early investors with money from late investors and his answer from


the social security system absolutely true read my book thanks a lot jeff we'll see you later thank you mike see you next time