when all of this rehypothecation and phantom gold when when this story falls apart then that alone has to increase the gold price big time hi everyone i'm here with jeff clark as the moderator and chris martinson again my friend chris uh ally and uh jeff senior precious metals analysts to goldsilver.com doing a fantastic job with these articles lately so jeff take it away hey it's great to be back with you guys again this week so chris how are you i'm doing really well it's uh good to be back with both of you


it's fall so oh my gosh uh the mini farm is keeping me busy too yeah i bet that's great well let's jump right into some articles i want to go over with you guys the first is the big news last week was the fed actually changing their mandate about inflation and this article we'll put it up on the site you can read uh what the change actually is and why it may or may not work uh but my question to you guys is do you think inflation is going to run higher now because of this change in


the fed's mandate uh do you expect higher inflation or maybe do we get some form of stagflation because when you think about it we have all this currency printing but at the same time we have major deflationary forces with unemployment loss of businesses etc still going through the economy so mike what do you think inflation deflation stagflation what do you see coming here i still see episode seven of hidden secrets of money i see deflation before big inflation or hyperinflation uh it's going to be sort of an


in deflation though there will be things that are going up while especially asset prices will be going down the reason the fed did this is because they are losing control and they are panicked uh they want to be able to if they see the slightest threat to way overreact to one side but you know they're sort of like a drunk driving a crazy drunk person driving a bus the fed has all these models the models are not only wrong but they're broken they're using a thermometer to guess how fast we're


going you know for thermometer instead of a speedometer they're driving with the rear view mirror looking at what has happened in the past and how they should reaction to the react to the future so uh you know they think it's summer that it's actually winter we're driving down an icy road they're over correcting and under correcting and we're in this uh you know spin and and uh the only way to save yourself to jump from the bus you know this economic bus is gold silver possibly cryptos


uh farmland uh you know being self-sufficient if you can uh but what i see is that they've gone from you know before the crisis of 2008 they used to have like a dial and a lever and they would uh try to control the economy by just uh dialing up these things and and slowing this down and stuff and now they've got switches and buttons let's just turn this on turn this off take a look at the charts of like repurchase agreements and look at what we did before 2008 and what we do now we just switch it on


switch it off same thing with some of the treasury uh purchases that we do uh they switch them on switch them off there's times when the this asset classes at zero on their balance sheet and other times when it's a huge factor and so they're panicked they're scared they are they they know that they are losing control and uh i think that what they're going to do is well what they have been doing is overreacting and this rear view mirror that they're driving with can't predict these big outliers like


we've just had the last time something like this happened in the economy was 1918. and so they aren't prepared for that that we uh you know if we had some savings we might be able to get through this but we don't everybody's in debt including the government the that we've we've just spent ourselves into this hole that we can never climb out of and then this outlier event something that is uh you know way outside uh the normal uh bell curve of probabilities okay great so what do you think chris


inflation deflation in deflation stagflation yes i think yes uh in deflation i like that uh and and the reason is and i don't i don't want to mix metaphors too much i like the drunk bus driver i think that's that's good um but i actually think the fed's motto ought to be the beatings will continue until morale improves uh i think everybody in this story except for the ultra wealthy are going to feel like the redheaded stepchild in an abusive relationship with bad parents after this is all done because


we already have inflation i spent an entire chapter of the crash course going through how the government calculates inflation and and they calculated a way where they go look we don't have inflation we need more right but if you lived in a city let's say you were over the age of 70 you're on a fixed income and you lived in san francisco the government told you you experienced 1.2 inflation last year when if you added up rent drug costs uh prescription drug medications food all of that stuff and


you actually added that up including property taxes and sales taxes and all that other stuff you would have found that that according to the chapwood index that your inflation was closer to 10 a year right so we already have really high inflation for one in basic living things so what the government actually measures is not the cost of inflation they measure what i call it's a cost of living so they figure that because you're over 70 living in san francisco you got high prescription drug costs what do you do


well you skimp and you don't you buy fewer drugs so the government goes well then your inflation went down because you were no longer taking life-saving medication right it's crazy what they do to convince themselves that inflation is lower than it actually is is your experience quick example according to the bureau of labor statistics a car in 1997 compared to today actually costs less money it's deflated about 1.2 percent every single year costs less money you might have noticed that the average


car cost in 1997 was 17 000 and today it's 36 000 your experience of that is it's more than doubled in price but the government is busy telling you it's actually gone down slightly and they have the reasons i can't totally disagree with all of them cars are built better it's nice having airbags it's nice having a camera to back up but they they do all of that and they confuse what it actually costs with the value you get out of it and so it's all a mess right now here's my


definition of inflation does the stuff i'm buying cost more than it did yesterday if it did it's inflating right so we see inflation already in stocks in bonds in precious metals in real estate everything except the the the milk that the government measures you know and says that's our entire cost of living now it's it's crazy it's crazy you guys it's just i think we're already experiencing inflation i want to give listeners permission to feel as if it's okay for them to


think that maybe their cost of living has gone up a lot and it's going to go up a lot more and that's why i took the fed statement jeff that you asked about is i reinterpret it as the beatings will continue until morale improves right that's a very good analogy i think that's more true than not for sure so another big story line last week was the idea of institutional investors moving into the gold market i've written a couple articles on it the most recent though was the ohio police and fire pension


fund announced that it's going to put five percent of its assets under management into gold and there have been other institutional investors as we've documented that bought gold and even silver in q2 but this is the first pension fund in 2020 to make that public announcement so this seems to be a major shift that's underway mike what do you think does this shift continue does the uh funds from institutional investors continue to come into the gold market and what happens if they do well


to continue it would actually have to uh start first and it hasn't really started yet we've just heard the first of these announcements and you know the fed if we went back to uh full gold backing of the you know the the only portion of the currency supply that's on the fed's liability that's a fed liability on their balance sheet is the paper dollars that exist and right now there's two trillion dollars of federal reserve notes the other the liability is uh bank you know the


excess reserves there are no more required reserves so it's bank reserves are the other liability but that never enters the real economy that's just something that banks use for leverage to make loans um so the fed notes reached 2 trillion dollars and they have about a quarter billion ounces of gold and when you divide these into each other you get an 8 000. so they could stop all of this by going back to a fully backed gold standard at 8 000 an ounce but they're not going to do that uh


what's going to happen is you're going to see gold blow way past that when all of these institutions come charging in because there just is not enough gold anywhere near these prices not you know these prices are a tiny fraction of what the gold price would have to be to be able to support uh when institutions start getting worried and run for a safe haven and the other traditional safe haven bonds is is going to be distrusted at some point or another so they're going to run from bonds


they're going to run from all other asset classes and run into precious metals and when that happens get ready for some fireworks yes uh very much so chris i actually put a graph in that chart maybe we can throw it up in this video that at most two percent of uh pension funds own any gold and silver at the very most do you see this trend continuing and if so what happens uh it's just exactly what happens is what mike said uh the price explosion has to happen because there isn't enough gold out there


right now this is the i i would call this the buffett effect right a lot of people follow warren buffett he's been a very successful investor for a long time he decided to move very publicly into gold bought um a gold mining company a bunch of shares of barrack right so that's good uh and i think other people are following that and i'm pleased for that because i do think that is a way for individuals and pensions to protect and extend their fiduciary responsibilities uh so you got to


protect yourself in this environment the fed's being just insane about all of this but i have some advice so if anybody from the pension world is actually listening to this make sure you actually own gold not a claim on gold right and if you have the firepower to be putting billions in or something like that make sure that you are personally paying for the audit of that stuff that your bar numbers belong to your your fund and your clients because i got to tell you i don't think it exists to echo something mike just said


you know you mentioned mike that that you know the federal reserve claims they have a quarter billion give or take i think it's 261 million ounces of gold is on the books you know what else is interesting i did pretty good in accounting in business school um the exchange stabilization fund under the treasury lists all those same ounces of gold as an asset on their books the federal reserve lists them as an asset i'm not that bad at accounting i don't know how two entities both can claim an asset


right and they both do i've you know i've puzzled over this for a long time so someday there'll be a cat fight over who actually owns those and surprised probably not all those ounces actually exist for other complicated reasons but uh i think right now the danger for big money trying to move into gold is that they move into a murky world where nobody really knows who owns what and i think this is time to get simple about all this he who owns it is you know possession is nine tenths of the law in this story


make sure you possess it uh i think texas has a depository there they were moving some of their they had you know big talks about moving some of their i think a teacher's retirement fund into some gold into their own depository thumbs up for that i highly would recommend that as a as an action if you're a pension fund but the same thing i'd recommend for an individual private individual own it at least your core fund own it don't own what you think you own own what you know you own


uh that's great advice and of course that's what we think everyone should do is make sure you own physical gold the greater the crisis you expect the more critical it could be to actually not just have price exposure through a paper product but actual physical metal so let's jump to the next topic and talk about the gold price itself oh mike let me let me uh make one last comment on the topic we were just on and that is that when all of this rehypothecation and phantom gold when when this story falls apart


then that alone has to increase the gold price big time let alone that coming at the same time that there's all this brand new demand when people find out that there's a lot of fictitious gold out there gold that doesn't exist or gold that's owned by two three four parties at the same time and they all think they have 100 title to it when that starts to fall apart the you know recently uh the commodities exchange just added i can't remember how it was like 100 and something 127 new types of bars


that are acceptable uh and the reason they did that is because basically what they're saying is well any gold that's out there will now take because we can't get enough gold that is the reason they're adding all of these other hallmarks uh to their bar lists of gold and silver uh both of these things are in very short supply they can't get enough of it and so they have to start accepting uh brands of bars that they used to not accept for some reason they weren't good enough before suddenly now they're


good enough now i would like to take this opportunity to announce the chris bars which uh are now available it'll look a lot like bars but these are now acceptable as well chris bars remember get them pick them up with your chris bonds right very good the chris colander there is what it looks like right okay let's go to the next topic and that is the gold price itself so it's been kind of flat it's been down since it's had its big spike so which is not surprising that it's


flat after such a big run and silver too uh but how long do you expect this you know range trading to last uh when do we see the next run in gold and silver is this something that's going to be days away weeks away months away not till next year what do you think mike well i'm i'm hoping that we do go through a consolidation phase and have a back because i don't think there's a whole lot more time left to get ready and there's still some things that i want to do before all hell breaks loose and uh you know if


you look at the weekly transparent gold holdings and the weekly transparent silver holdings what you see is that you know when the price started taking off and and rising the amount of gold and silver that people were buying increased dramatically and that drives the price even higher but uh when it reached a certain level the uh the number of ounces being purchased declined significantly and so we've sort of a lot of the precious metals have been sold to the big boys at this price and we've run out of buyers


at this price a consolidation uh phase will be something you know where it just travels sideways or pulls back a bit that would be good for gold and silver and then you look at the commitment of traders reports now i go over these with my insiders i haven't gone over them that much with the general youtube audience but typically the uh there's commercial traders which in these charts are represented by blue and then all of the speculative funds and the small traders over on the red side and it all nets out


to zero for every long there's a short but the commercials almost always win and when the price rises they keep on adding to their short position in other words they're making up contracts and selling fictitious gold they're they're uh promising to deliver some day in the future gold but most contracts never get settled in physical and uh and then when the price falls they tend to they tend to cover their positions they buy these contracts back and they can they make a profit on this


almost always they really got slaughtered in this last price rise if you look at the chart the price rise especially on silver they didn't cover their shorts when the price fell all the way down to 12 bucks back in march and and so all of those shorts uh as the price rose they kept on losing and losing and losing and they have never really covered but they also didn't increase their position hugely uh on this last price rise but they really need it to do a pullback so that they can cover these shorts and


not lock in these huge losses that they've had so with the reduction in the number of ounces that are being purchased by the big boys on the weekly transparent gold and silver holdings and then the commitment of traders it says to me that we we hopefully because like i said i've got i've got some books to finish i've got some uh positions to that i'm trying to take and i still would like to accumulate just a little bit more uh and i've been accumulating some uh silver explorer exploration stocks


recently um i want to make sure that i'm positioned right before all hell breaks loose and it's going to break loose soon right i i don't have much doubt about that at all mike so chris what do you think do you have a feel for how long the consolidation continues here for gold and silver yeah i gotta confess um i don't spend as much time looking at the price movements as i used to uh because i have this belief system that the prices are not really indicative of actual supply actual demand or actually anything


except uh how the bullion banks would prefer to manipulate prices uh they've been doing it for a long time i've got a really you know fairly deeply researched view about about just how fictitious that market is but not just those gold and silver markets i could tell you a tale about corn i could tell you a tale about lots of different stock issues as well i really believe that this thing is a casino and as a simple example i don't even think the treasury market the u.s treasury market one of the largest most


liquid markets in the world is giving us appropriate price signals because the federal reserve has uh distorted and deformed that market to such an extent that you could ask me the same question chris what do you think the 10 years telling us about the future and i'd say i don't know anymore used to give good information so i don't think the prices are giving us accurate information so i'm spending more time trying to figure out who's doing the buying uh why are they doing the buying


how are people positioning themselves and you started you know earlier with with the idea of a pension fund starting to move into gold i see big money continuing to position itself in and around gold at the nation state level at the family office level at maybe now the pension level so i think big money is is still there and it's still interested and that's what i care about most right now and for all the same reasons that that we've talked about right that the banks the central banks are going


crazy they're printing like mad they don't have an end game that they're at least publicly announcing and they're just going to keep printing because they don't feel like they have there is no alternative right tina there is no alternative so they print and so what do you do you don't play their game um you know and so i do see a lot of people positioning gold in gold i can tell you from a personal standpoint i've had more inquiries from friends and family who've known about my


gold buggish tendencies who've never talked to me about it asked me about it in the last month so there's that yeah very good point i've had some uh friends and neighbors and things that are also asking me about gold that have never asked me about code before and so that's uh that's very interesting i think uh on your point there chris it's important to note that it's probably more important to look at how many ounces you own relative to your net net worth as opposed to worrying about


whether the price is going to fall five dollars more and you might get a better value so look at the number of ounces that you own so well thank you guys that'll do it for this video remember both mike and chris have free books on their website you can find them and download them for free they're still valid and updated so check those out there so mike and chris thanks for joining uh me again this week and we'll see you at the next video thank you jeff thanks jeff thanks mike