this is a logarithmic scale so so we're multiplying by five every time we go up I want to show you the same thing on a linear scale this this is it oh man this is it and prices measured in Gold so if you take the CPI and just divide it by the price of gold that's the yellow line it goes from 169 to 100 down to 34 right over the span of 219 years wow all of the sudden this green line shoots up like a rocket ship because we don't use money we use [Music] currency hi everyone and welcome to this


video I've got Alan hibd with me once again Alan how are you doing I'm great Mike thanks how are you great so you've got uh some information that you're going to present to me and I sort of know that it's about inflation but uh it's uh it's um something I haven't seen before so I'm going to be reacting to most of it like at on the spur of the moment so what have you got yeah um it is about inflation and I wanted to use the world's most famous restaurant chain


as an example McDonald's this is an old menu back when hamburgers were 15 cents and cheeseburgers were 19 cents uh yes you know I used to when I first started going to McDonald's for you could get a hamburger and fries and um by the way in our prep you said you know it's about inflation about prices going up no it's about the currency going down yes exactly and I was definitely gonna mention that but yes thank you so anyways McDonald's has been in the news lately because of outrageous prices M


the McDonald's CEO promises quote affordability amid backlash over $18 Big Mac Combos and $6 hash browns so there's a Big Mac combo that was $18 at one particular franchise yeah now again that's the combo it's not just a sandwich so maybe the sandwich was $9 $10 I'm not sure okay go back to that menu for just one second so if we take two of those hamburgers and take you know the bun off of one of them insert the Patty now you've got a uh the the Big Mac double Patty and the french


fries and then we need to add a CO to it 10 cents so you have 30 cents for the hamburger and uh 40 50 cents so from 50 cents to 18 bucks oh my God plus cheese don't forget four four cents for cheese oh yes yes yes well eight cents because two catties and two two slices of cheese so yeah 58 cents so under 60 cents and it's gone to $18 unbelievable yeah that's a factor of 30X 30X so uh yeah crazy prices and this article is from early February this year yeah you know I'm sorry I'm interrupting


but um they have to do whatever keeps them in business uh it isn't like they are purposely going out to uh you know pillage the public uh the the the inflation isn't caused by McDonald's the inflation was caused by the Federal Reserve and exactly so yeah I certainly don't mean this as a a criticis business or anything like that so yeah so one of the quotes from this article comes from McDonald's chief executive Chris Kinski he says I think what you're going to see as you head into 2024 is probably more


attention to what I would describe as affordability so they can add some sawdust to the hamburger buns and you know oh gosh I yeah right but anyways um in particular low inome customers making less than $445,000 per year have largely stopped ordering from McDonald's pummeled by inflation they're eating at home more frequently as grocery prices come down according to the executive fa wow so yeah that's interesting I mean low-income customers that really is their target market as far as I'm I I


don't know many wealthy people who who eat at McDonald's so um a similar a similar I was I think I ate it at McDonald's about 15 years ago maybe 20 yeah it's been a few years only because I was on a road trip and I had to so exactly um a few months ago there was a similar article on the same topic and during an earnings call with investors the CFO a different gentleman confirmed that the company's us prices did increase in the third quarter again this is 2023 though he didn't specify by how


much he said McDonald's expects to increase the cost of its menu items by just over 10% for the full year which is the second consecutive annual 10% price hike so that's 10% per year two years in a row that's right and you gotta uh take into account that this is one of the most efficient uh companies on Earth they are buying their beef and all all of their supplies they are buying at the lowest cost that you can possibly get them anywhere on the planet and then they have very efficient Supply chains


and very efficient uh all the food processing and everything the the the cooking and everything they do right down to the delivery of the customer everything uh has been studied and effici efficiencies constantly improved from the late 50s until today and so there is nobody better at doing this if they've done it 10% year-over-year twice uh that means that inflation the real rate of inflation for them for their supplies and for the labor that they have and everything else that's what they are experiencing on their cost


end of the balance sheet so yeah um or not balance sheet but yeah U the income statement income statement yes yeah I get your point yeah definitely and I agree and and to your point it's not isolated to one particular company we can even see in in a quote below here um one Reddit user asked in a now viral thread what is no longer worth it because of how expensive it has become top rated response most fast food right it's not just McDonald's specifically it's most fast food this is this is an


entire um sector of the economy that specializes in providing food as cheaply as possible and even they can't keep prices down because of all the currency printing yeah rice and beans at home is much cheaper yeah yeah not as tasty but you know right and and if you're on the road you're not at home so you might not be able to get those uh ingredients late at night so anyways so this uh see these articles reminded me of something that I wrote actually a few years ago and and published on quora so I want to share


with you a little bit about that I made this chart which is a combination of M2 in red and the Big Mac index which is put together by The Economist in brown and they're on different scales here so it's it's not exactly perfect but you can see that even one of the most efficient restaurants in the world isn't immune from all of the currency creation so this Brown Line basically follows the red line all the way up and this is just about 20 years I think I made this in 2019 so so yeah so I mean the prices are


rising despite their best efforts to keep them down right right uh increases in efficiency and productivity only go so far exactly exactly so um I want and you know what I just got to point out that this is the Federal Reserve and the government stealing from all of us this is theft uh these people are criminals basically but it's legalized uh so you know under the the law as it currently exists they're not considered criminals but morally this is wrong so yeah okay go ahead I'm sorry I went off on that


but it was important to me it's okay and I agree with you and I I think some things are coming up that will that will illustrate that so anyways this article that I wrote actually was from a question about Bitcoin somebody asked will Bitcoin ever hit 100,000 per coin why or why not but the point I made was about inflation so we're not going to talk about Bitcoin and by the way this is my picture on quora that's an old one that's when I had long hair so this is this is going back anyway so here's what


I said in my opinion yes absolutely Bitcoin will eventually hit $100,000 per coin but my prediction isn't really about Bitcoin it's about the dollar in some sense the person asking this question can be uh you know it can be restated is will the Federal Reserve keep printing dollars and the answer is yes absolutely for some bizarre reason the central Bankers of the world think that printing currency will somehow boost the economy in reality it just steals from the poor and transfers it to


the rich but that's a discussion for another post and then I have a chart coming up uh look at this incredible exponential growth in quote unquote money printing during the last few years of quantitative using before you leave this though uh the um sens um I have changed printing because everybody says printing but printing has costs to it there's paper there's ink there's Trucking and everything else and they don't do that anymore they type it into existence it has virtually the total


cost the effort behind you know I can't remember who it was that uh Dan pointed out that somebody had said uh that the difference between maybe it was no was in one of the um comment section comments uh under a video that the difference between one and and one trillion is 12 zeros yes I remember 12 keystrokes 12 keystrokes right that's it I remember that and that's part of the reason I put printing in quotes and I also put money in quotes because even back in 2019 I knew the difference


between money and currency so yes right anyway you remember um uh what people do is they normalize the dollar uh when we were writing uh the great gold and silver R of the 21st century in one of the chapters I had you do a whole bunch of charts where we normalized uh real estate and uh and pre and gold and silver and the US dollar and so we would Norm everybody thinks of everything in terms of dollar prices nobody thinks of uh the value of uh gold in uh the you know how much of a single family median price home it requires to


buy a kilo of gold or whatever uh and so uh you did a whole series of normal but I it was just too complex to put in the book and it was a stretch to get people to follow that but someday we will publish it because it was important because people have this bias that that they've been uh brought up since birth now but uh people have this bias where they normalize everything to whatever their local currency is and in a lot of parts of the world it'll be their local currency and the US dollar but nobody uh


takes a look at life uh by normalizing it to you know how much of uh what percentage of my house is that thing Worth or uh what percentage of a barrel of oil how many barrels of oil does it take to buy a car uh and and the point is that the dollar lies so yeah yeah so go ahead with your I'm sorry went off on another tangent that's all right it's all good stuff so yeah so I wanted to show uh quantitative easing um and really just currency creation even before they called it quantitative


easing so so I've got this meme from the back here and if I remember this was from Germany um sweeping up all these currency notes yeah yeah lmer hyperinflation yeah exactly so yeah quantitative easing if you don't know what it is look it up uh so anyways so I have here since 1960 I have uh M2 and I took the first 10 years which was pretty much linear and just extrapolated it that's this yellow dotted line across the bottom this is a linear path and the red is of course exponential so this is really just


showing the currency creation over 60 years and of course it's it's continued Beyond this uh yeah and and the point is in the Big Mac graph that we showed a minute ago this red line is the same so it kind of looks linear on this scale but it's the same red line here from 2000 to 2019 so it is exponential and you know the cost of Big Max is going up exponentially to stay in line with all that currency creation yeah so we figured 68 and um to $18 unbelievable yes yes if that is an exponential function I mean definitely


it is definitely it is so from that core article I had three key points if the Federal Reserve okay this one's about Bitcoin so it doesn't really matter but eventually just the price of anything will go up um if the Federal Reserve continues printing dollars exponentially the dollar price of Big Max will continue to rise exponentially So eventually they will reach $10 or even a $100 per Big Mac yeah we're past 10 right maybe not Nationwide or maybe not worldwide but certainly at some


franchises it's at it's at 10 and just in terms of Bitcoin but but really this generalizes to anything obviously $100,000 Bitcoin only refers to the price of that thing italicized yeah yes it says nothing about the value which is what really matters so right again we we Hammer this point home all the time but you know if everything if everything all of a sudden costs $100,000 you know that you can think of it as a ratio of one to one yeah it's not so much that you know you have a lot of dollars


necessarily so um so so interesting comments came out of this so below my article there were a bunch so many comments like 60s something comments hi I just wanted to take a moment and thank you for subscribing and mention that if you'd like to help our Channel please consider my company goldsilver.com the next time you buy precious metals we're one of the most trusted names in the industry our prices are sharp delivery is fast and we have an insiders program where you find out exactly what I'm


doing with my own Investments thanks for making goldsilver.com your dealer and now back to the video so many comments like 60 something comments um and so I just want to go through these quickly and get your comments on these comments so following your logic my my Logic the price of Bitcoin may rise exponentially but also it may end up buying the same amount of Big Max it buys today sure of course that's possible I mean I don't think that's going to be the case I expect Bitcoin to rise more quickly than


Big Max but sure if they if they rise in tandem then it would buy the same amount you have to look at uh the size of the asset class like you know gold silver Bitcoin and the number of dollars rushing into it from wherever whatever other Investments it's coming out of uh and but yeah absolutely it it it should go up Bitcoin should purchase a whole lot more Big Max but it should purchase many many times more currency yes exactly exactly yeah um this is a good answer thanks I like this one a big Big


Mac will never cost $100 give me a break I totally get how outrageous that sounds because exponential functions are not intuitive to people but if we think about that math we just did going from 68 cents all the way to $18 um I guess that's a combo meal so maybe for the individual sandwich might be1 or 12 how many years does it take for something to double at a 10% compound annual rate that's that's yeah that's where I was going so exactly so if we did 10% two years in a roll if we just


use the rule of 72 we divide 10 into 72 we get about seven years to double in price okay about seven years so if you want to go from let's say let's say $12.50 okay which is shy of 18 because it's a combo meal so let's call it 1250 and the reason I'm saying 1250 is because a factor of eight would give it to $100 even a factor of eight so eight is three doublings three doublings time two * 2 * 2 you've multiplied by eight so in order to get three doublings at seven years per doubling that's 21 years


so in 21 years we could very realistically have $100 big Maxs yeah if nothing really big happens between now and then that causes them to panic and print currency like crazy type currency like crazy right that's right so yeah so we could see $100 Big Max in 21 years I mean I'm only 35 so I'd be 6 MH and I'll be saying you know when I was a kid I remember when you could get a Big Mac for a dollar or or whatever and everyone be spending $100 and they'll think I'm a crazy old man uh so anyways I I do think


that's very likely and reasonable even though it sounds absurd so anyways we have another quote here which or a comment here which is very interesting why hasn't the price of gold hit 100,000 per ounce then which is it's a it's an interesting thought experiment and I think you sort of answered that question it depends on the size of the asset class and so forth it does uh but when it comes to like the official price of gold you know countries all over uh hold gold as an asset not every country but a


lot of them hold gold in their central banks and on the Federal Reserves balance sheet if if you look at their I can't remember it's the H1 h41 or h. 1.4 release I can't remember but uh gold is on there and the gold at the Federal Reserve is pledged against the currency notes in circulation so cash in circulation but right now it's uh it at the official price of 44 uh2 two22 uh 2222 yes there's four tws back there um uh it is um backing the dollar to I believe believe 0.4 C per dollar


there's that much gold there and if there was a crisis and for some reason they had to make the dollars convertible I believe that today it's somewhere around $9,300 an ounce something like that it was 92 last time I looked and it's constantly Rising because the currency in circulation is that's one thing that doesn't seem to be going up and down and up and down like like right now M2 has been contracting now it's expanding again uh so it isn't something they can easily just type in


there's actually some work in involved exactly yeah so so roughly a fair ratio right now is roughly $10,000 per ounce roughly obviously the price hasn't cut up but again one more keystroke one more zero on the on the currency printer and it goes up by a factor of 10 asset prices would also go up by a factor of 10 and then all of a sudden gold goes from 10,000 to 100,000 exactly so yeah yeah and you know it it really does take there's going to come a day and I don't know when it is but it


takes a loss of confidence in the currency it takes a little bit of fear to enter the market it might be with our next great crisis which I do believe is lying in weight somewhere just around the corner and I call it Bernan geddon because it is all Benjamin bernanke's fault uh Yellen and and Powell are just you know using his Playbook but he changed the rules of the game completely with Bernan conomics so yeah okay let's let's go back to the presentation okay all right we're almost done last last


comment here um good post this is kind of a tldr like if if you just want to highlight this is it central banks cause dollars to be printed in the US it is the Federal Reserve supply and demand more dollars chasing the same product equals price escalation so yeah basic ratio I mean this is a nice distinct way to put it so purchasing power of the currency declining yeah a lot of people when they think of supply and demand they think of the supply of the goods you're talking about and the demand of


the goods you're talking about and they just think that dollars are somehow this fixed thing that just doesn't change but the dollar also has a supply it also has a demand based on people's willing willingness to borrow and so forth and that was the great thing about gold was a fairly fixed Supply because the stock to flow ratio is what important people say well what about you know if we discover a asteroid made of gold and we start doing asteroid mining fine you invest the trillions upon trillions of


dollars it's going to take to put all that infrastructure in there and then see what the price of gold is by the time you get it back to Earth from an asteroid it's not it's not like if you find uh enough gold in an asteroid to double the supply on Earth that it's actually going to cut the purchasing power of the gold in half uh gold was a and is an excellent monetary system it's not being used right now simply because um mankind doesn't have that much influence over the uh Supply that


stockto flow ratio how much is in the system compared to how much we can add each year and even if you raise the price of gold to $10,000 an ounce today and there's a gold rush and everybody runs out and starts looking for gold takes years for that to get into the pipeline and uh and still the stock to flow ratio isn't going to change that much and so the uh the purchasing power per unit remains sort of in a valuation Channel undervalued or overvalued and right now I still believe it's very


undervalued yeah definitely I totally agree with you well speaking of gold as a monetary system I want to zoom out and look at basically the prices of the average thing in society not Big Mac in particular but just the average level of consumer prices since the year 1800 so so here this is a chart again I made back in 2019 this is the CPI in the the green line indexed to 100 in 1914 and it's over 200 years over 200 years of data and the one thing and then the yellow line is gold um and the one thing that people


don't realize is that the CPI fell pretty consistently on average until the creation of the Federal Reserve this is something people don't realize the CPI fell so on average Goods would get cheaper hamburgers would get cheaper coffee would get cheaper beer horses Saddles whatever you have everything sing family median price home yeah homes exactly everything tends to get cheaper on average because people find ways to produce it more cheaply and that's yes productivity and efficiency


increases and new technologies that we keep on discovering yeah exactly and you know during that period in the late 1800s uh we had quite a bit of currency creation oh that area where it sticks above the gold that green line there that's the Civil War and the green back that Lincoln printed I will bet yes it is right and um but um yeah during that period there was an expans of the currency Supply we had a free banking era when just about anybody could you know if you ran a general store you


could make your own currency because it was all IUS but velocity fell to compensate and it was basically uh just uh the where're we're seeing just the efficiency of mankind getting better at everything that we do exactly and so the other thing to point out is this is a logarithmic scale so so we're multiplying by five every time we go up I want to show you the same thing on a linear scale this this is it oh man this is it and prices measured in Gold so if you take the CPI and just divide it by the price


of gold that's the yellow line it goes from 169 to 100 down to 34 right over the span of 219 years wow all of the sudden this green line shoots up like a rocket ship because we don't use money we use currency yes and that is all theft and enslavement because uh the this is the um M2 right uh this is the CPI oh the C what okay measured in dollars so it's consumer prices which uh M2 would have affected more than uh currency in circulation or any any base currency that is created by the Federal


Reserve so this is also created by the Banks but it's all it's not just theft so when a bank uh you bring a a home to the bank and you say this is worth a million bucks I want to borrow a million dollars to buy this home the bank types that currency into existence that didn't exist and anybody that wants information on how this is done just go to ggsrp4 for free or watch the videos on it um and thanks Dan uh and uh uh but that it's all free and you can see all all of the processes there uh but when


they do that they're typing uh into this into existence it doesn't get its when when we used gold somebody had to mine they had to go out and Prospect so a bunch of time and effort was expended and then they had to turn that into a mine and they had to mine the ore and then Mill the ore and uh make it into gold and then pour the gold into bars and then the gold bars had to be melted and turned into coins and then the fed the um the treasury would come along and print gold notes which seems like theft


but it wasn't because it bought the gold coins but they were redeemable in the gold coins so uh if you saved up and and and made you know saved up a stack of gold coins the value of that all of the time that you spent uh equals the value of uh chopping the trees making the lumber if you're going to buy a house by the time you get that house all hammered together the cement the copper and everything that's in that house is about equal to so was a fair trade now you've got this purchasing power that is just


typed into existence and you've got this house that's all of this uh effort and investment and and companies and people doing this you type this into existence and it's a fraud it's a theft that is going on where did the purchasing power come from it came by typing new currency into existence in diluting the currency Supply thus stealing from all of us and causing that green line to rise exactly couldn't have said it better myself so last thing last thing I do want to say here is if if you sit


there and you hold dollars your prices are going to go up and up and up over time and you're not going to be able to afford very many hamburgers or houses or anything but if you own gold your prices are going to go down over time and all of a sudden you're going to be able to afford so many hamburgers so many houses so many of whatever you want so to me which one am I going to hold well I'm going to hold a lot of gold and very few dollars and some people will saywell gold doesn't pay interest well you can't


get enough interest on those dollars to cover that price rise even with the interest you are losing holding dollars and you are gaining holding gold thank you so much for this presentation that was great yeah thank you Mike okay I want to remind everybody please like And subscribe and we're gonna see you next uh in the next video thanks