What is the Value of Gold and Silver During Inflation?
hello everyone welcome to our wednesday q a on tuesday this is our wednesday q a our wednesday q a on tuesday we're recording this right yeah so we're we're we're pushing this to you tomorrow um we normally do them live but i will be out of town tomorrow so we cannot do that live so for those of you don't know are tuning in for the first time we take your questions that you submit to us via email to questions at itmtrading.com take them we put them on a screen right here in front of us we ask them live so you get a real true spontaneous organic response and this is eric and i'm lynette i forgot to mention that that's okay all right so annie tc asks how much silver might be needed for bartering just for very basic necessities of survival and would this apply to anyone regardless of their overall wealth status so when i was you know we answered this question a lot with oh well it depends on your strategy and you know you got to have you get you know it's all about your situation and your goals and your amount of money and all this kind of thing but i thought maybe we could answer this from the perspective of like is there a like a bare minimum that you would suggest for people like at the very least you know i've never really looked at what a you know i would say a bare minimum would be as much as you can afford but it's really based upon your current cost of living so if you were going to look at a very basic necessities of survival then you would have to look at what you currently spend your money on and see what you'd be willing to cut out all those starbucks coffees would probably be something you could eliminate but food would probably not be something that you could eliminate and you know i mean what's a very basic like i'm single but i planned for my two children and their families so it it's really i i can't really say that the very basic necessities of survival i mean what do you need to survive you need food you need water i just met somebody that's been living in a tent basically camping camping for three years with no running water or no electricity he's doing fine with that are you willing to do fine with that because i kind of like having running water and electricity myself so i would consider that a very basic need you know so i can't really answer that question because i wanted to ask because people want to know and you're right it does if you're really trying to plan it right like how much silver do i need then you kind of do have to you gotta you gotta go through the the strategy and answer all all the questions because otherwise it's just like okay well just buy as much as you can afford right exactly if you want to be targeted you gotta you gotta be targeted right then then put down what you spend your money on now and look at well what am i willing to not do like for some people they just are so hooked on starbucks that that would be they would consider that a very basic necessity of survival i would not personally because i drink i don't drink coffee anyway i mean i do occasionally it's not but you know i drink my chicory so right it just kind of but and it does apply to anyone regardless of their overall wealth status but if you are wealthier then you probably have some things that you might think of as more of a necessity and if you're if you're not wealthy and you're used to doing things on a shoestring yeah you just need to figure it out and there's right if you have more to work with you're going to want to be more targeted you're going to want to be more targeted because there's other things you need to protect like you know 401ks and all these other things that you might have that you might want to use your gold and silver to protect right yeah exactly but if you're living paycheck to paycheck you might you might just be thinking well i have forty dollars every two weeks that i could put into silver and then you would just go buy you know forty dollars of the silver every week right so it just it just but we've got a fantastic team here so you can call us and have a conversation or you know schedule a calendly and have a conversation and see what your basics are and they can help walk you through how to look at what you're going to need so all right so anders b asks could 10 to 30 year treasury bonds be a safe haven during the upcoming recession well you can see me automatically kind of going um no because the problem is debt and a bond is a debt instrument and the debt bubble is already imploding i mean you know i'm not saying that they're not going to go to reflate it again because they will but i am saying that everything is falling apart so no 10 to 30 year treasury bond and especially we are we are a hair's breath away from inverting the 2 the 10 spread because the 5 and the 20 in the 30-year spread has already been inverted and remained that were a hair's breath away and maybe it even happened today i don't know yet i'll have to look uh from inverting on the 2-10 which means that you're going to get paid less if you loan them money for 30 years then you are if you're gonna loan the money for five years or two years i mean that's the time value of money so no the 10 to 30 year bonds are not safe haven during this is not a normal recession this is a currency life cycle reset and that's what i know and what i've studied more than anybody else that i know of i'm not saying nobody else has but i don't know of anybody else that has so no the pros and cons okay well it's a debt instrument and the money you could get your whole principal back but you wouldn't be able to buy anything with it and give me physical gold that's real money i can convert it into any other fiat currency as i need it so i can maintain my value my purchasing power you can't do that with the treasury bond by design yeah because the interest is always lower than inflation anyways absolutely so um yeah no anders no treasuries nope well and then so like a point of clarification though too because he said during the upcoming recession well there there could be a recession before we hit a reset right oh they don't want to be able to collapse that in their own mind right like yes i okay so this is what i see um we're i'm i'm pretty sure that gdp is going to be negative so now we have two negative quarters of gdp we're in a recession okay for many people they never came out of it in 2008 but we're in a recession at the same time you have high inflation so in reality we are in stagflation lower productivity higher cost of living for for most things and this is happening globally so this is going to be much bigger how much pain how far down will the central banks allow the stock markets to fall or the real estate markets to fall or the bond markets to fall how far down will they they allow them to go before they turn on that money printing spigot drop however high up they got the rates we're at 175 so maybe we'll get to 250 maybe we'd even get to three or 350. okay drop them down to zero even though in every previous prior to 2008 every single previous recession they've dropped rates uh about five to five and three quarters percent to stimulate borrowing and stimulate the economy they don't have that level uh uh they don't have that level that they can move now so they will drop them down they will most likely print money that makes 2020 look like chump change just like 2020 may 2008 look like chump change and we're inside of the hyperinflation that is now obvious to everybody because their confidence is holding on by a thread by a thread so yeah all right so adrian m asks if if and when gold is revalued to its fundamental value north of 11 000 what effect will this have on other assets well you know actually once it's revalued that means that if you have fiat money assets which are things like you know stocks and bonds and mutual funds and etfs and annuities and things like that anything that you can only convert into that fiat money well even even before that revaluation it's pretty obvious to everybody that there's really no value left in the currencies so um you know what effect will this have on other assets well some of them will go away like a lot of a lot of corporations are going to be tested because we have so many zombie corporations out there will their earnings their nominal income might go up but will their earnings continue to go up doesn't look like it right so everything has to readjust and that's what will happen to frankly all other fiat money assets particularly where those that have been pushed to highs like real estate things like that in in nominal terms everything's going to be adjusted downward it's all going to be adjusted downward that's that's what happens in an overnight reset so that it makes you look like they've gotten things under control but they don't change behavior so they don't have anything under control all right so jack s asks the fed chairman recently remarked that he is surprised at how little we know about inflation how embarrassing many other experts are surprised at our current state of affairs none of this engenders confidence do you get the feeling they are deliberately nudging us towards collapse by chipping away at their own credibility you know honestly jack i actually love that question and i love how you laid it out because frankly that is really accurate and i mean when you know that you're at the very end and you know that the only thing that is keeping it together is that credibility piece um yeah just like i i i'm not convinced that they're so shocked right it sounds weird that they'd be shocked especially planned out so much of it exactly so um yeah uh yeah i i wouldn't be surprised if this was an intentional deliberate nudging and giving up their credibility because they just gave up their credibility to the markets they just did it they just handed it away and that seemed awfully too easy to me so yeah i would not be surprised jack if it wasn't part of the plan interesting yeah that's never been part of the plan before so it'd be really interesting to i'm trying to think like what would they be setting it up what would they be setting up by like oh the fed we don't even know what we're doing at the federal reserve we need to usher in this thing because it's going to help us you know would be the only reason why they would do something like that right they're at the very end of it so i mean very often people always made the assumption that they were trying to keep everything just going and kicking the can down the road down the road down the road but they're kicking the can down the road until they have something that they feel can replace it do they have that in the cbdc's i don't know i mean certainly we see the tests that cryptocurrencies and that whole actual arena is going through right now so that kind of could in some ways undermine think about this one that could undermine central bank digital currencies or central bank digital currencies can come out being hailed as the alternative to the private ones that really went through all of this garbage and there was nothing backing them and blah blah blah all that right but here we have these and the government but going back to the credibility piece will people forget it will people do people really realize it because once they give up their credibility how do they get it back it's not an easy thing to do it's a great question unless they usually utilize an external source to bring back confidence like you know let's say that's cr cbdc's right oh well this cbdc now can help save us because it's got a component of gold in it well i don't know but that's what they do they could bring in this external thing that's gonna help right but i know that you have an interview in five minutes so i did let's go to the next question so harvard misfit asks why are gold and silver losing value when inflation is out of control so i i wanted to bring we've talked about this before but this is a big question i think people are asking right now they really want to know what why is this happening why is gold going down right right so i wanted to bring up i got a chart edgar can you put up the chart from 2008 that i gave you so this is the spot price of gold right remember it's a contract right this is the underlying value of gold so the spot market so you can see that in march of 2008 and march of 2008 was actually we had reached a high it was a thousand thirty two dollars an ounce and that was the highest gold had ever reached at that point and then nominally right and then then continued to fall from there till about november almost november of uh 2008 when it got down to 692 dollars and that was like an intraday now before you go on let's see when did lehman implode september right okay so i just wanted to right see yeah and you can even see that gold during that lehman period even bounced up right it went from about 750 725 bounced all the way up to about 900 before it came back down now there was a big sell-off there because people needed corporations banks they had margin calls they needed to get rid of some of their other assets that were performing well in order to make up for the losses in other assets right right but i wanted to point out you know we had gold go what is that almost a 30 drop now i'm not saying it's gonna anything's going to be exactly the same as it was right but 30 percent drop in the value during that period of time before exploding to the upside edgar do you have that other graph that shows spot right from 2000 to to um today right yeah present and so you can see that little drop there before correct in 2008 before it then went up to make even newer highs like about 19 18 1900 but we've broken out you can see that cup formation you can see how it broke out and there's like a little mini cup at the end because a rising gold price is an indication of a failing currency and once you really do get that this currency is going away you think about it much differently so they have to suppress it spot market is an easy and cheap and very visible way can i ask you because you of course work with the wholesalers all the time are we seeing premiums what are we seeing happening with premiums right now well so premiums have been kind of holding but let's let's get a look really quick at like for example because that's the other thing that you have to keep in mind when you're looking at the spot market is that that's a contract price what's happening in the physical world is really a lot more important because that is a true supply of demand exactly spots not i mean it's 150 bucks and you control 500 ounces of gold it's pretty ridiculous so my um while i'm looking this up my point was is you know during a period where a lot of a lot of asset prices are falling you're gonna see gold you know it's been holding pretty firm sure while everything else has been falling but it broke down a little bit today i think we've we're down like 30 or 40 dollars um this morning um but look at what the look what the stock market is doing they're getting margin calls right so people are having to sell off right what the market is willing to buy so so premiums are still very high okay well just i'm just looking at silver eagles as one example so spot price is like a right around 20 and silver eagles are selling for about 33 so that tells you that the premiums are still pretty darn high on the physical because of demand especially on silver not as much on gold but definitely on silver uh because the demand for silver is really high especially why it's not this prices price is coming down people are buying it so um but the main the main thing i wanted to get across with that 2008 chart was look we can have a falling price um and still while while things are you know not that great we i think when did we go into that recession was 2007 i think is when they declared that there was a recession so it was going down during that period of time and then skyrocketed up from there so it's not buy gold as an insurance policy it is buy gold and then don't look at it every day and like oh my gosh what's my gold and silver doing right i just keep accumulating right i don't really care what happens in the spot market because i know the true value of an ounce of gold because it has the broadest base of demand and when you're going into a crisis what do you want you want something that has a minimal level of demand you know one buyer or you want a million buyers give me a million buyers because that really will make a market so and we have to have and trying to time the market right like if you would have bought any time during the uh during the 2008 period even while it was coming down it went up to 1900 an ounce in 2012 right after that period so you know not that i'm saying buy it as a trade but i'm i'm just illustrating like it's still a bar it was still a bargain even while it was falling it was and let me tell you also because we didn't show it on this but at that same time where you saw the spot market falling uh by december 2008 that's when the collectible gold coins made their current trend high yeah december of 09 was their curve yeah because they people started buying in right around december 008 and then pushed it pushed it pushed and pushed it for a whole year they kept pushing it up exactly so you know the physical market where it really is a supply and demand market versus a paper market where they can just create as much supply as they want i mean that's and manipulate it just don't be fooled we're out of time we are out of time so thank you so much for joining us if you have not done so already get your strategy in place just click that calendly link below and give us a call and we will set up a time for you to create your own strategy for you and if you like this please give us a thumbs up make sure that you subscribe leave a comment share these videos it's 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2022-07-07 14:24
