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 It means that there's going to be blood in the streets in the future and that is the time to be an investor. But you have to be in the asset class that goes up because those the other asset classes that go down, I mean that is the time to take your gold or silver and buy a bunch of real estate and high dividend yield stocks. Hi everyone, we've got another great presentation from Alan Hibbert. Alan, what have you got for us? Hey Mike, thanks for having me. Uh yeah, so there's a lot of talk about what is

going to happen in the stock market because it's pretty clear that we do have a capital rotation event which means gold is going to outperform stocks broadly speaking. But there's a big question of whether the stock market is going to have a nominal increase, a nominal decrease, or if it's going to go sideways for maybe the next decade or more. So I wanted to explore those three scenarios, take a look at some charts, and then we can all sort of place our bets with where we think things are

going to go and see how it goes. Excellent. Let's get going. Okay. All right. So, the first one here, uh, we have the S&P. We have highlighted two lost decades, and we have Jay Capel here who says, "In my opinion, what's going on here is not a sell signal. It is, however, an if your entire strategy is buying and holding an S&P 500 index fund, you might need to adjust your expectations or consider a different strategy signal." So what he's saying here is that households have a very

large percentage of their financial assets in equities. So right now households have 40% of their of their assets in equities. This is a very high percentage compared to how it is historically. And the two times in the past where households have been this heavily allocated to stocks, we've gotten a lost decade in the S&P 500. In other words, it basically went sideways for 10 years or more. So his his suggestion or his u his hint here is that that could happen the next 10 maybe 15 years. The S&P could go sideways with

absolutely no gains whatsoever. Yeah, I would suggest uh to everybody that they may want to investigate joining the capital rotation. Now, one thing about this chart with the two lost decade circles, there's no in this is not inflation adjusted. You and I did this for the book. We did it with the Dow, I believe, not the S&P. I can't remember, but it isn't a decade. It's more it's more I believe it's like 16 years because that second bump you know you've got the f the crash of the NASDAQ is the

first part and then you've got the real estate bubble peak just before the global financial crisis that when you inflation adjust it is a lot lower. So to get back to break even you got to move much further out in in time. So it was I can't remember you know people would have to buy the book but uh the same thing but even more severe was the last decade of the 70s. We had raging inflation then and it was like a more than a 70% crash of the stock market. It wasn't a lost decade. If you had uh a

thousand bucks in the stock market at the beginning and you could go out at the beginning in 1966 when that starts, you could go out and buy $1,000 worth of stuff. If you left that thousand dollars in the stock market and you waited until the end of that inflationadjusted crash, the end of that lost decade, you still had $1,000, but it would only buy you $300 worth of 1966 goods and services. So, you're hanging on through an invisible crash. And uh I wrote about that in my first book and in my second

book. The reason I wrote about it twice is because it's so important for people to understand. Yeah, exactly. There's 15-year period 1966 to 1981 where stocks went sideways nominally and like you're saying, adjusted for inflation, purchasing power got eroded 70% or more. So absolutely brutal. Yeah. And by the way, a lost decade just sort of happened in Europe nominally speaking, except it was a lot longer than a decade. Uh, if you bought European stocks in the year 2000, 2000, we're in 2025 now. You have

finally broken even after 25 years, congrats everyone. We did it. Holy cow. Look at this. I wouldn't say congratulations. I would say you sucker because you're not inflation adjusting this. You have to judge these things in purchasing power, not nominal euros or dollars or some fiat currency that keeps on changing in value. You know, in one of the hidden secrets of money series, in one of the episodes, I interview Steve Forbes while he was running for president, and he talks about uh the

floating dollar that this is uh and then he compares it to like building a house. What would happen if the foot changed every day? If it was, you know, 10 in on one day and 14 in on the next and three on the next, uh, how would you be able to build a house? How would you be able to make plans out into the future? It was a brilliant. Everybody should go and watch that. It just shows you the stupidity of the system that we live under. But anybody looking at this and going, "Oh my god, I've finally broken

even." is completely deliluding themselves. They need to adjust everything for inflation. And the problem with that is they're using uh statistics from the BS, the Bureau of Statistics. It's actually the Bureau of Labor Statistics, but I I just leave out labor because I I think it's a bunch of BS. Someone John Williams from shadow govern government statistics has an alternate inflation uh indicator and what he's using is the way the government measured everything before 1982. It's government numbers. It is not

like some lunatic conspiracy theorist uh made up inflation. This is the way that the government used to track inflation. The truth I believe lies somewhere between the two. But the CP lie is exactly that. It is a lie. And people need to wake up when they're looking at something like this. This is over a long time span. And so, you know, you're talking about 24 years here. And what has happened to the euro in that period of time, the purchasing power? So, anyway, back to you, Alan. Yeah,

exactly. So, if you were invested in stocks in Europe, I feel bad for you. Um, yeah, sorry, guys. So anyways, this is uh sort of the possibility of of nominally going sideways. What about a a stock market that moves down? Could that happen? Well, of course, there's historical precedent for that. So, what we see here is the S&P 500 over time and three different crashes. The dotcom crash, the subprime crash, the CO 19 crash, and the possibility of another crash. And if we look here at the blood

indicator, I love that name. Blood indicator. There's there's a lot of indicators that have been called the blood indicator, but this particular one is the US threemonth treasury bill divided by the high yield spread. So basically junk bonds minus um treasury bills uh you know and then treasury bills as a fraction of that difference. So so that's the black line here and then the blue line is the 100week moving average of of the black line. And you can see that whenever there's a cross,

that corresponds to a nominal crash in the S&P 500. So that's basically the beginning of the end for each for each of these bull markets. It means that there's going to be blood in the streets in the future. And that is the time to be an investor. But you have to be in the asset class that goes up because those the other asset classes that go down I mean that is the time to take your gold or silver and buy a bunch of real estate and high dividend yield stocks because at the bottom of a stock

market bare bare market uh that is when yields are the highest when the nominal price of a stock compared to the earnings of the company uh is very very low. Uh that is when you want to be buying stocks and get that monthly income off of the yield. Yeah, exactly. Buy low, sell high. And if you look at the S&P right now, it's high on a relative basis. So, makes sense to sell it and then buy it after the crash that could be happening as a result of this indicator. So, time will tell. Place your bets,

folks, you know, and then you got to live with the choices you make. So, um, and there's one other scenario I want to look at, which is the possibility of a melt up. So, basically, if the S&P continues to rise and gold just rises even more to sort of make up the difference in the ratio, could that happen? Well, of course it could. But that basically means that the dollar would have to fall apart and lose all of its value and then every other asset kind of goes up measured in dollars. Hyperinflation. hyperinflationary

scenario if they're both headed north at the same time, but gold is just outperforming the S&P, bringing all of these things back into balance. So, if they're both rising, that means the dollar is falling at a faster rate. You know, I do want to point out that there is another way that these things could balance. Gold and the S&P could both be falling. the S&P, the stock market just falls much much faster than gold. And these things do correct. However, the possibility of that happening, you've

got to ask yourself, is the Federal Reserve and the government and the banks, are they going to stop creating currency? if they're if they're going to stop creating more dollars and actually destroy dollars as loans get paid off and as the uh Federal Reserve reduces the size of their balance sheet, then yeah, it's possible both the S&P and gold could fall, but what are the chances of that? Pretty much zero. Yeah, you're funny, Mike. They're they're not they're not going to stop that. So,

anyway, so yeah. So, is there a possibility of a meltdown where they both fall? I mean, yeah, but it seems it seems like so unlikely. Is there a possibility of a melt up in which the dollar loses its value and then asset prices measured in dollars all go up? Well, that would only happen if the purchasing power of the dollar falls precipitously. And look at this chart right here, which is the US dollar year-to-date performances over the last 30 years. Each of these crazy lines here is one of the previous 30 years. And how

are things going so far in 2025? Uh it is the worst start to a year for the dollar uh in the last 30 years. So a meltup scenario certainly is possible. Wow. Awesome. Yeah. Yes. So I want to end it here with a quote from Ludvig Van Misus. There is no means of avoiding the final collapse of a boom brought about by credit expansion like the one we're in now. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion or later as a final and total

catastrophe of the currency system involved. You know, I do want to point out to everybody that our current debt-based monetary system always requires further expansion because if you stop expanding and you try to just, you know, stand still, the loans being paid off extinguishes parts of the currency supply and you start to go into a deflationary collapse. So, uh, the only true voluntary abandonment would be to switch over to a new monetary system that is not debt based, and that would probably incorporate gold. Let's hope.

Let's hope they do it. Okay, I want to thank everybody for watching. We'll see you next time.