[Music] foreign [Music] ette and I decided we wanted to come in the room together into the studio here and talk about kind of where we've been in the past to how did we get to where we are today and then what do we really see for the future we wanted to do this in a different format kind of like the format we do in a q a but a little bit more conversational um and just kind of kind of present you the timeline of events in a way that we hope really translates you in a way that you guys are always asking can you what's the one video that my friends and family should watch that really explains to us uh explains to them what's going on here but we wanted to do it in a more conversational dialogue type of format without all the charts and the you know graphs and all those things and kind of try to keep it simple so we're just going to dive in this is something we've never done before we wanted to try to do it for you guys because you've been asking for this kind of content so Lynette yes okay so where do you feel like this all started like what was kind of the in your opinion like the starting point well I think government's had a problem when we were on the gold standard because if they wanted to tax you more you knew about it and if you knew about it then you might give them pushback and they don't want pushback they want you to volunteer so they needed a system that they could tax you without having to go through legislation making it visible for you and when you're on a gold standard it kind of supports the currency and doesn't allow you to inflate its value away so the whole thing started from that premise plus companies corporations wanted to pay you less money but if you were used to getting a certain amount you're not going to be willing to take less however if they could make what they give you spend less and put more money in their pockets that's what they wanted to do so private corporations got together with the government and they came up with this Fiat money idea and they installed the Fred or the Federal Reserve in 1913 and that really started the transition so we were still on a gold standard but they shifted from a 20th of an ounce to of a to a dollar to 20th of an ounce to two dollars and forty cents which enabled them to inflate the monetary the currency that was in circulation by almost two and a half times okay so the Federal Reserve was Institute in 1913.
What year did the the transition from you said a 20th amounts to a dollar to uh a 20th of an ounce to two dollars and forty cents 40 cents what year was that about that was 1913. and it was okay that was and so if you look at the purchasing power graph you can see on the kickoff that the purchasing power dropped roughly 50 percent yes because they printed 2.4 dollars right as compared to the gold that they held so that would have been noticeable but at the same time they were also for the first time enabling the normal population to get credit and to get you know unbacked credit so it kind of offset it and since there was so much more money sloshing around have you heard of The Roaring 20s so part of the way that governments and central banks use the transition is they allow the general public to thrive for a certain period of time so that they're not really paying attention right because hey what are you going to complain now all of a sudden you have a lot more at least nominally you have a lot more money than you did right so then in 1933 when the government basically confiscated the gold right because they needed to be able to print even more money and then they changed that ratio well let's kind of back up to move forward for a second sure because when we were on the gold standard if you if you as an individual did not like what your government was doing you would simply bring money cash dollars Federal Reserve notes into the banks and convert it to the gold pull the gold out of the system which then you know when you're on a gold standard it's fiscal responsibility governments have to be responsible but so you would walk him with a dollar bill and walk out with the gold and that created for the restrictions for the government right they couldn't print as much money correct so then enter 1933 uh they had to Roosevelt confiscates the gold gives you the 20.67 an ounce but then shortly thereafter raises the price of the gold to dollar ratio for for 35 dollars to one which then reduced the purchasing power of the currency 42 overnight so people lost 42 percent after that confiscation right so so now I'm just going to fast forward all the way to 19.
okay but you could say that's an overnight revaluation couldn't you 100 it is right so it is a reset yes it is yes absolutely 100 so then in 1971 Nixon takes that us off the gold standard completely under the guise of a bunch of different things but he then it that enables the central banks to print money it will unchecked right and I know you've said it many times that enabled the financial products that we see today oh so why don't you tell them about derivatives and where you feel like your concern is with derivatives okay so really what was happening in the 60s uh the the late 50s and the 60s with the Vietnam War was that the U.S was exporting inflation because they were inflating the currency that they were had promised to keep steady at 35 dollars an ounce to gold and so there was actually a run on the dollar from foreign governments and they were turning in dollars and pulling the gold out of the system that's really why Nixon they say it's so nicely closed the gold window but what he did was disallow like they did for individuals in 33 and 71 he then disallowed other governments from sending in their dollars and pulling it out of our system to create restrictions and then when he closed the gold window he handed over full control of inflation to private central banks right okay so that's what happened in 71 even with the promise well if you buy if you buy American-made products you're not going to feel the inflation right yeah well if you do that except then we started on the path to globalization and we shipped all of the American jobs or a lot of the American jobs particularly in manufacturing we ship that away and then with the central banks were doing after that what would the currency was backed by the full faith and credit no more gold that goes away it's just faith and credit so if you think about those terms as long as we trust you and we have faith we'll keep loaning you money so that was then the system based upon debt which is why we have the debt levels that we have today because that's how new money is created in this system but yes that absolutely goes to they call it Financial Innovation where they can create products out of nothing because it's easy to fund those products with the funny money right kind of works like a Spoke if you have the central bank that creates the money in the in the center then you have the corporations that are closest to the central bank so other Banks JP Morgan Wells Fargo all those guys will they get the money the new money cheapest when it has most value and then after that that next Wider Circle is the government because we the taxpayers have to pay that debt but if Wall Street gets that money when it is the cheapest and it has the most value it's pretty easy then to turn that into all sorts of leveraged products because that leverage creates more debt and that more debt creates more money so that's how they were able to grow that system and also pick winners and losers right so then so then derivatives are invented essentially we see derivatives explode out of control and then 2019 right okay so let's let's just fast forward let's just go all the way to 2008 so now so now this whole money printing has gotten out of control and they've it's allowable financialization of products and now we have derivatives and they've gotten huge and now speculative derivatives right okay uh and what happened in 2008 was very much like what happened in 1929 so there was lots and lots and lots of of loose credit right they wanted people to borrow and spend to quote-unquote stimulate the economy and they were using I mean we went to a period where we were going from Bubble to Bubble so the central banks created that housing bubble just like they just now created another one between you know 2008 and all of these derivative products products with all of that Innovation well what they would do is they take a mortgage and they would pull from the mortgage your promise to pay that mortgage and that went into let's say you had really crappy credit and it's important to understand all of this Innovation right so the mortgage is sitting over here with the bank but the promise to pay is pulled out of it now if you somehow with their formulas if you have crappy credit you know you'd be at maybe a a b or a Triple C or something like that below investment grade quality but somehow according to their formulas 20 of the people with that really crappy credit were likely to default however when you take a whole bunch of people with really crappy credit and you put them together somehow magically it goes from below investment grade junk quality to AAA rated well you can do a lot of things with AAA rated credit it can go into retirement plans it can go and that that's really the key it can go to into Insurance products Etc but the underlying Theory and the underlying formulas were wrong and they will be wrong again and so when the credit was cut off and these those pools of of promises were called cdos collateralized debt obligation that was the promise to pay so we know what happened in 2008 a lot of people stopped paying didn't they all right so that was this the second speculative derivative implosion because derivative has been around for a while but they weren't speculative they were for end user and I've talked about that quite a bit over time and so instead of the cdos the bang for international settlements is super concerned about c l O's which are collateralized loan obligations that have taken the place of those cdos right so what you're saying is that whole blow up in 2008 they didn't really solve it they just renamed it papered over it and let's move on right and instead a bunch of individuals with crappy credit now we've got these Clo's that are a whole bunch of Corporations with crappy credit and we're going into a recession which means not only you know I mean we've heard of zombie corporations which are corporations that for at least three years do not have enough income to pay the interest on their debt let alone any of the principal but the banks have not wanted to show that as bad loans on their books because it would hurt their stock valuations so instead they've just been loaning their money so that they pay at least enough of the interest so they're compounding they're compounding interest and the problem is is that no interest rates are rising well so before we get to that okay so I think it's important to um explain because there's a couple of things that we already know derivatives are bigger than they were in 2008.
Huge and they're they're definitely a major threat one of the one of the Jenga maybe multiple pieces of the Jenga thing that could cause the sampling of the system right so but I think what's important is for people to understand a little bit about reg D and the bail-ins and then a little bit about seed and Co and the Yale law study that you found that really shows how we don't really own anything right because I think that is an eye-opener as far as okay yeah cool there's been all this money Printing and there's been these derivatives but I think if people see that what that is it really to me it drove home like holy cow this is this is really dangerous oh yeah so tell them a little bit tell them about the yellow law study well okay you want me to start with reg D or the law study either one either one yeah because because the the rig D really started in Earnest to the part that impacts the individuals in 1995 and the banks needed more money to fund those speculative derivatives right so what the law that was passed enabled when you make a deposit for them to sweep those funds to sub-accounts in the bank's name so that they can go out and use your equity and do whatever they want with it more derivatives Etc right because we do we it should be really clear to everybody that central banks and governments pick winners and losers and banks are too big to fail but individuals are just about the right size to fail so they put that in place and that that enabled Banks to boost their earnings through trading which today is like one of the main ways that they get their their money that they they produce their earnings so that was rig D at the same time I mean really this started back in the early 70s where they started to transfer the risk from corporations to individuals so I'm kind of kind of back up here to move forward a little bit because prior to 1971 most people worked for corporations like you went in there and I remember you just plan on working at the same place for all these years because these corporations were promising you uh a set amount when you retired if you stayed with them right for all that period of time which means that the corporations took Market risk but in the 70s that's when they created the IRA so now they started to transfer the risk from the corporations on to the individuals because now instead of a instead of a defined benefit it is a defined contribution so you put so much in your account every week or every month however you get paid right and then institutional investors invest that money so that's important to know because at the same time that they were setting up that kind of thing they were setting up DTC and seed and Company and that's what you're referring to in the Yale law study and this incredible flow chart showing who the real legal owner is remember they finalized and really started to formalize perception Management in the 80s under President Reagan when he brought over Rupert Murdoch because hey they know how to Market this stuff so very quietly I was a stockbroker in the 80s and I remember how much they were pushing to get assets in-house assets in-house because prior to that people held their stock certificates their bond certificates so those were out of the system right but if they're out of the system then the banks can't use it for their benefit so all of this transition and the transition of risk and the transition of who actually owns this wealth really started after the banks took over okay now if you look at that flow chart you have a seeden company DTC now who owns them all of the banks the the financial institutions whether it's Commercial Bank or an investment bank and then all of their subsidiaries below them right but it's the big Banks and all the financial institutions that own seeden company and DTC now where do you fall on that flow chart all the way down at the bottom so seeden company and it's just a corporation that legally holds the legal title to everything that is titled uh street names so if you have a brokerage account whether it's at a bank or a bro or a broker's a investment broker or even a variable annuity at an insurance company Etc find out how that account is held my bet is it will be held in street name and so what you've agreed to without realizing it is that you've agreed to just be the beneficial owner seed and Company is the legal owner if you go to a court of law who are they going to care about the beneficial owner down at the bottom or the legal owner at the top it's the legal owner that's why when you look at what happened in 2008 nobody went to jail because even though what they did was disgusting and evil and horrible and ruined a lot of people it was all legal right okay so so seating company owns all all the assets legally Legally now and you talked about reg D about sweeping anytime you make deposits into the bank they can sweep that money into sub-accounts in their name but so the bail-ins I think is something that's super scary to me and important oh yes so I know reg D then enabled right balance to be able to happen right yes because it's called deposit reclassification because you don't own those deposits you may perceive that that's your money but it's not as soon as you make that deposit and they sweep it below you are a lender to that bank you don't own that money at all and so I mean look these guys know what they're doing and I don't mean necessarily in a good way but also they know that we're driving off of a cliff so what they needed to do and there was never any doubt you know you and I went through 2008 together and 100 of the time when 2008 happened I said that's it the system just died so they printed all of this money to cover up all of the garbage but they did not change Behavior they just changed how they accounted for that behavior but they came out with all these rules in the Dodd-Frank and they never even actually implemented all of them but they did implement the bail in laws because people were really taxpayers were really not happy that all those taxpayers went all those tax dollars went to the banks right so now they created bail in they tested it in Cyprus why'd they pick Cyprus because Cyprus is way over there and it's in itty bitty so anybody else in an advanced economy is going to go well that's Cyprus that could impossibly happen here but while since 2010 since they uh they legalized Dodd-Frank they have dismantled almost all of the roles and regulations except for the bail in which I find really interesting and what that means is if your bank is failing they get to bail in take your money that well it's not really your money but the money that you've loaned the bank that you perceive as your money they get to just take it and leave you stock in the failing Institution sounds fair to me guess who determines how much that stock is worth the bank that's failing yeah so between between the seeden company and the balance I think those are two really really scary points yes um so now we know that the money printing now has gotten out of control right oh yeah we've gone I mean what not was 9 trillion in 2008 now we're at over 32 trillion something like that so I know that we talk a lot about on the channel about hyperinflation and reset so yes just briefly touch on um hyperinflation and reset and what that looks like okay well you know look here here is how inflation helps everybody right it it reduces the value of the currency and that is supposed to push up your salary so that it makes the debt that you're servicing seem cheap so anybody that bought their first house and thought Oh my God this payment is so high but over time you're it at least it looks like you're making more money and it makes that debt payment easier the problem is is that officially there is roughly three cents left in terms of purchasing power out of the original dollars worth of purchasing power the FED has managed to inflate all of that value away so we're at the end that the Federal Reserve has to regulate the rate and speed of inflation our interest rates but we've been anchored at zero since 2008.
right and even when they attempted to raise it the last time 2016 to 2019 it was a big fat fail every single currency that has tried to lift off of that zero bound has been forced to do a pivot which the markets love the pivot but what this next pivot is likely to do okay so we were talking about the debt but on the books of the Federal Reserve when we went into 2008 they went to 800 billion which was outrageous at the time they got as high as little bit I think it was uh close to 9 trillion from the 800 billion so it's even worse when you add it on to the to the federal debt so they're trying to reduce their balance sheet they're trying to increase the interest rates so that when we go into the next recession that by the way globally everybody's pushing right into right they can turn around and drop those interest rates again but from 1982 to 1922 right um up until that point well up until 2008 the average level that they have dropped the interest rate to to actually stimulate borrowing spending was eight and a half to eight I mean five and a half to five and three quarters percent so if that happens right now that's why everybody's calling for a pivot and the markets are kind of going oh the fed's going to Pivot and the FED keeps telling them no I'm we're not going to Pivot and that's happening globally so there really is a battle royale that has just gone started between the markets and the central banks and are the central banks going to prove to the markets that they're in control by continually raising the rates past a point that the markets can tolerate that's why you might hear people talking about you know the FED making a mistake a policy error you know either way if they keep raising the rates it's a policy or if they turn around and pivot it's a policy or because they have no more room on the interest rate front and how much more room do they have on their balance sheet I mean they can still do they can still do more as long as we have confidence in them but there's no purchasing power left we have to go to negative rates they have to attack and remember they first went to negative rates and I said oh here we go they're attacking principal remember that conversation all those years ago so they have to attack they have no more purchasing power they have to attack principal so that's where they're taking us into a place where we can't where we perceive that we can't escape it we can escape it that's what gold and silver are about physical outside of the system in your possession So eventually what ends up happening is in my from you know listening to you all these years is that they continue down the path of printing money printing money printing money the only thing they have yeah and eventually throwing debt growing debt too many dollars chasing too few goods and that accelerates the velocity speeds up and we go into a hyper-inflationary environment where you know a loaf of bread that costs four dollars today now costs a thousand dollars then a million dollars then 10 million dollars right but Eric that can't happen here isn't that what a lot of people out there watching this are saying to themselves for sure but it's only a matter of how much time before the all the money printing comes home to roost exactly and we can get into all those details but trying to in in trying to keep this video somewhat short right so then so then we get to the point where we say where they go and say okay we need to we need to reset the currency right and there's let's see there's a couple of different there's two different kinds of resets right that you've talked about one where it's like a revaluation a reevaluation a revaluation and then a complete reset right right well see all of this hinges on confidence because this is totally a con game right and that's what makes but remember last summer when the fed and not just the FED but the ECB and a number of other central banks actually kind and you know shocked the markets and destroyed in many ways the confidence that the markets had in the fed's forward guidance and Central bank's forward guidance because the Fed was saying this is what we're going to do and then the markets could get into position Wall Street could get into position to benefit from it but all of a sudden they said this is what we're going to do and then at the last second they did something different it's that loss of Confidence from the public which is what happens with rapid inflation that puts the confidence that puts the FED in jeopardy and that's when the hyperinflation really starts because that's what creates the velocity of money right exactly loss of confidence exactly and that's why they are are always checking to see what are those inflation expectations what is consumer confidence because it's it's what the public thinks there's way more of us right so we go into a hyperinflation right I mean that's that obviously future problem that we have right hyperinflation and then explain like the the overnight revaluations the resets that occur you want to explain that real quick yes because what happens then as as the public loses confidence and the currency starts losing value rapidly right which is why everybody's raising rates right now because they're trying to prevent that then um ultimately people stop using the dollars right if they have a choice they stop using the dollars they'll use anything else but them because nobody really wants them so the only entities that take them are some kind of government or quasi-governmental agencies that are actually forced continue to force to take the dollars and like you said the loaf of bread can go to a thousand dollars or you know in Zimbabwe it went to 80 000 Zimbabwe dollars so that first overnight revaluation what they'll do is well they will Lop off a bunch of zeros and I can't tell you exactly what that ratio is going to be but the most normal one the typical one is a thousand to one so if you have a thousand bucks in the bank and you go to sleep overnight when you wake up in the morning there's one right and then that happens again and then typically it happens again because they don't change Behavior right so what you know you and I have talked about in the past is a one way that they hope to right control all of this and try to get out in front of all this but we know that it's a major threat to our way of living is the Central Bank digital currencies oh yes because that gives them full control right I mean when we were on the gold standard you just have to kind of look at this when we were on the gold standard the public had control because they didn't like what the government was doing they pulled the gold out of the system then we went on the paper standards so the Federal Reserve notes which is a dead instrument that neither charges interest nor pays you interest so that means that it's got a zero interest rate so that's a problem for governments because it inhibits their ability to go below zero and and they ran that test for quite some time since 2009 up until just recently right and it really it definitely inhibited them so now with the Advent of Technology they want to go to that cbdc which is programmable money at least when we're on the paper standard if you hold the bills in your wallet they're invisible and you cannot protect your purchasing power but you can protect your principal well they got to take that principle so they need you all your wealth in a system that makes it easy for them to to have their finger and they've talked about this constantly tweaking because right now when they issue policy takes roughly 18 months to go through the system for them to know is this working or not well once we're once they're in full control and they're going to sell it like there won't be any inflation once we control the cbdcs no it'll be deflation because they're going to charge negative rates to force you to do what they want you to do and that's the thing programmable money so you have it's completely in their control instantly and you have no privacy because they know everything that comes in they know everything that goes out they know where you're spending it they can dictate I mean you can look in China and see full surveillance economy and hey you're crossing the street and you're jaywalking by the time you get to the other side that money's pulled out that's a fine well and they and programmable means they can tell you how much of your salary that you're earning you can spend on your mortgage how much you can spend on your car how much you can spend on your food oh and if you didn't uh do what they wanted you to do they could just freeze your bank account and make it so you can't spend your money so cbdc's are a major threat and it's something that they're going to spin is awesome but yeah we should all be very concerned about Central Bank digital currencies having total control right so and Eric that's why I own gold because I can always convert it into wherever I am in the world I can convert it into the local currency well and it's 100 no vote exactly 100 Central Bank digital currencies yes it is to inflation hyperinflation it's a no vote to everything that they're up to exactly and and one of the reasons why we believe so much in what we do here at i-team trading which is create strategies with gold and silver to help people survive and thrive what we think is we know is coming right I mean this is right right just a repetition of history but even the bis and the IMF admit that gold is the only on the money flower the only asset that runs no counterparty risk and is not controlled you say it better than I do right on the the bank for international settlements creates this money flower and gold and silver as commodity money are are the only money that is that is universally accepted but is outside of the purview of the central banks everything else is inside the purview of the central banks and I love the fact that you said it's a no vote because people don't realize that they vote with our purses right we we do how do you spend your money so if you keep your money in the stock in the bond market that's a vote and it's in the system and it's in the system that's also a vote and it's outside of the system and it is decentralized and here's the other thing that nobody ever talks about except for me I think I'm the only one that I ever hear say this and that is that the reason why gold and silver never have gone to zero is because it has the broadest base of use throughout the global economy it doesn't require a government to say this is money this is this like the Fiat money does the government-based money full faith and credit it is it has been globally accepted as money for six thousand years and it has the broadest base of buyer so hopefully that gives you an insight into where we where we came from in the in the 1913 forward and it tells you why we ended up getting into a financialization of the money products where the problems are what the central banks feel the solutions are and what the threats of hyperinflation in a reset look like and also why we do what we do here at itm training so hopefully that helped uh like subscribe comment below tell us what you think about this video did we do a good job did we tell you this in a way that you can understand it we hope we did and if we didn't and you let us know we'll try again try again we will try again because our real goal is to explain this stuff in a way that that not only can you understand it but you can actually get some practical experience how can I put my best interest first and protect my family and myself so until next time