all of the institutional uh currency that's out there uh they own right now just this tiny tiny tiny percentage of gold in their portfolios there's very few of them but now we're seeing some of them announce that they're going to start putting gold in their portfolios they're going to start they haven't the flood hasn't come yet uh and these are the places it's going to come from all you have to do as a small investor is be along for their ride and and you're going to do


very very well you're putting yourself on the right side of this wealth transfer hi this is mike maloney and i'm here with jeff clark again senior precious metals analyst at goldsilver.com jeff how are you doing i'm doing great mike it's great to be back with you again this week of course and we have some interesting things to talk about so let me just dive right in if you don't mind sure go right ahead this first article caught my eye yesterday it was an article that ron paul had written


and i think you'll have a reaction to it i met ron paul oh maybe 10 years ago or so had my picture taken with him got to talk with him for a little bit i really like ron paul a lot he's one of the few honest politicians that are out there in my opinion but in any way in this article he said that some fed officials are claiming they want quote tougher banking regulations to prevent investors from taking quote excessive risks and creating asset bubbles but mike is more banking regulation really the


issue is that really going to solve the problem i mean really what what causes bubbles in the first place is it a lack of regulation the federal reserve the federal reserve is the source of all bubbles and it has been since since 1914 the the federal reserve act was passed in 1913 that's the date you normally hear but it was november 1914 that they actually opened their doors for business and started manipulating the economy and expanding the currency supply causing wealth transfers causing a


greater inequality between all of the different uh parts of society and uh now they're in the business of creating uh center billionaires people that have more you know they're in the business of creating multi-billionaires sent a billionaires and very shortly trillionaires uh in the next big crisis when they try to reflate the stock market and they create all of these uh the brand new currency they shove that into the banking system and the brokerage houses and you'll see the stock market go up by the same


percentage at about the same time that the currency is created that's a transfer of wealth by diluting the currency supply and giving it to uh the pushing up the stock markets because they think that the stock market is the economy and there's this big confusion every you know in this century everybody equates the stock market doing well with the economy doing and it's not true right now we have the stock market doing well and the rest of the economy is not doing so it's it's uh there's a big huge


disconnect here and they have it isn't investors most of the trading that goes on on wall street is black box trading and it's one brokerage house selling to another brokerage house back and forth back and forth in microseconds and they're all just trying to take a quarter of a penny here and a quarter of a penny there and uh and it can add up to some really big numbers but this high frequency trading is the vast majority of the trading that's going on it's not the the uh brokerage house the


pension funds and so on and people with their 401ks their iras they take a position and they usually hold it for some period of time when you look at the volume that there's that's almost none of the volume they do have an investment in the market so they do see a little bit of benefit when the market goes up but when you're creating dollars and i you know jeff bezos no longer owns 16 of amazon but he used to own 16 when you create dollars and one of the biggest stocks as far as market cap


in the s p 500 is amazon and you give these dollars to brokerage houses by taking mortgage-backed securities and bought u.s treasury bonds off of their balance sheets you put cash on their balance sheets they look for higher yielding instruments than than what was just purchased for them and when they invest in the stock market they usually do it through etfs exchange traded funds and those exchange traded funds are typically like the s p 500 so the nuke the value of the new currency it gets its purchasing power by diluting


the currency pool that's out there and so anybody holding currency like you and me are basically wealth is transferred away from us and it's given to whoever owns 16 percent of amazon right but it forces things into a massive bubble if you look at the value of the wilshire 5000 total market cap index i wish i had just the market cap of the s p because that's through these etfs that's really where everything flows to it flows to just a few stocks it doesn't flow to the broad market


so it isn't pushing up the stocks of uh small publicly listed companies companies that might be located in your town it's pushing up just the stocks of the s p 500 and uh and uh causing them to go into this enormous bubble and when you look at the uh market capitalization of the wilshire 5000 compared to the size of the economy the bubble has never been bigger in all of history this uh it's a massive massive bubble and it has nothing to do absolutely nothing to do with individual investors and more


regulation just slows everything down and makes it there's all this compliance and all of these forms that have to be filled out and organizations have to be able to afford to hire another person to handle all of this compliance and so this that's a burden on the small organizations for the big organizations they're going to love extra regulation because they can afford the compliance and it puts the small guys out of business so they gain market share uh but the bubbles are purely caused by the fed and they have nothing


to do with the individual investor that took a position in the in uh uh specific stocks through their pension fund or through their 401k or ira and uh and uh then did not trade it back and forth 10 000 times a second uh the the value that's currently in the stock market is this bubble that it's been pushed into is the big brokerage houses trying to get rid of the excess currency that they've been given by the federal reserve which was just created from nothing and stole purchasing power from all of


us so there is the long answer to a short question right the bottom line is they're not looking at the root cause and until they look at the root cause regulation isn't gonna really fix anything it's not that regulation some regulations aren't are all bad it's that regulation isn't the isn't the source of the problem it's not the cause uh like you uh well the guys at the federal reserve do not understand fundamental economics and so therefore if they're ignorant of


fundamental economics then they're incompetent and they don't belong in their job if they do understand fundamental economics and this wealth transfer and how these bubbles are caused then they are complicit and they belong in jail so the two places that they belong is either fired or in jail right i i think those that should be fired are going to get in for a a rude wake-up call here uh someday soon mike by the way our friends at peak prosperity have actually interviewed ron paul and i believe that's going to be on


their site today so you can head over to peakprosperity.com if you want to check that out so okay let's move on to the next question mike and that is this article that says roughly one in three full-time workers have experienced a pay cut due to coronavirus issues that due to the pandemic this year and then on top of that of course you have a lot of people millions that are unemployed so i'm not going to ask you to comment on that but but the question i have in response to that is mike who's going to buy all this gold


and silver and push prices up higher if you have you know a third of of americans with lower income and millions that have no job how are golden prices going to see this uh gold and silver going to see this big demand and push prices higher okay um you know you and i were writing a book together and it got stalled because some more important things got in the way uh however uh i did a big study on this there's a whole chapter on it and uh it's you know in the last answer you asked me uh you know who creates these bubbles uh


you asked me the federal reserve wants to implement more rules and regulations to try and prevent people from taking these unnecessary risks and speculating in the stock market and that that was causing these bubbles well all of this currency that the fed created goes somewhere you take a look at any of the currency supply statistics and the currency supply is uh has expanded hugely and most of it is parked it's in savings accounts it's in money market accounts but it has gone to all of the people


that already had big portfolios it didn't trickle down to main street you know some of it did with these uh checks for the uh you know relief of being out of you know being fired out of work there's a lot of government stimulus going on there but when you take a look at like mzm which they call money of zero maturity it's not money it's currency um when you take a look at that that is measuring the big accounts that's measuring stuff that's in the brokerage houses and stuff


like that when uh you uh do quantitative easing and you buy an asset from a brokerage house or a pension fund or a uh you know a non-bank entity that had an asset that the fed bought and they shoved cash on their balance sheet by buying this uh now that entity has too much cash and not enough of the assets that they're supposed to be invested in so they go out and they buy more concepts and you can draw a direct correlation between currency creation and the value of the stock market and as the stock market gets pushed up it


enriches the people that are holding a lot of stocks so the person that is already a multi-millionaire a 100 you know a hecta millionaire i guess you would call it uh or a sent a millionaire or a uh a billionaire or a hecta billionaire somebody with 10 billion or more or a cent a billionaire like jeff bezos and bill gates they're the ones that as soon as they see inflation and the stock markets crashing all of these people that have enormous amounts of assets that were given to them by the federal reserve they were stolen from


you and i given to them by the federal reserve but they're going to want to protect them they don't understand that the federal reserve committed this theft on their behalf but they are definitely going to want to protect what they've got and you know gold gold has been one of the best performing assets of this century in fact i've got a chart on it here so we'll bring that up and here is since the year 2000 the s p 500 is the red line at the bottom and gold is the blue line at the top


and gold was up over 700 percent it's pulled back to where it's up 600 percent from the year 2000 but the stock market is barely over up more than 150 percent and so right now uh gold's performance in this century is four times what what the the uh uh s the stock market has been you know the uh main industry that's used as a measurement of the stock market so uh that's another again a long answer to a short question that's a good answer um i think what some investors tend to forget and i've


written a lot about this is just how small the gold and silver markets are i mean the gold market is uh a piece of lint on warren buffett's suit i mean it's just right he could buy every registered ounce of gold at the comics with something like 10 or less of his cash every ounce of registered gold the silver market is even smaller it's ridiculously small the point is that it doesn't take a lot of cash or funds coming into those markets to impact their price in a great way and don't forget it's it's not that


people may have less income it's that they'll be desperate to find some kind of monetary solution in the middle of a crisis in the middle of inflation or whatever the situation might be and so i do expect regardless of what's happening right now with the virus and unemployment and reduced incomes i do expect gold and silver prices to be impacted in a great way uh whenever this next crisis hits yeah and the uh upper upper upper middle class and the rich and the uber wealthy are the ones that are going to get


more and more wealthy while the people that don't have stocks are going to be affected by the you know that don't have stocks and can't afford gold and silver the people that are unemployed and so on they're going to be the ones that suffer the most and that's all because of the federal reserve but one more thing that you have pointed out is that all of the funds the pension funds and and the the different investment funds and uh all of the institutional uh currency that's out there uh they own right now


just this tiny tiny tiny percentage of gold in their portfolios there's very few of them but now we're seeing some of them announce that they're going to start putting gold in their portfolios they're going to start they haven't the flood hasn't come yet uh and these are the places it's going to come from uh all you have to do as a small investor is be along for their ride and and you're going to do very very well you're putting yourself on the right side of this wealth


transfer that's a good point it's not just retail investors it's institutional that obviously have a lot more funds to invest than the retail and like you said they're just now starting to get involved so any kind of panic and those guys will be swarming in uh as long as we own gold and silver before that happens we will benefit and it's that that will be a fun day so well mike thanks this has been a great little video so thanks for joining me and i'll see you again real soon on the


next one thank you jeff