Want To Do The Debasement Trade? Don't Just Buy Gold/Bitcoin…Do This
Summary
Debasement Trade Analysis: The podcast challenges the prevailing narrative that the rise in gold, Bitcoin, and silver prices is solely due to currency debasement, suggesting a deeper analysis of money supply changes.
Importance of Rate of Change: Emphasizes the significance of the rate of change in money supply rather than just the absolute increase, using historical data to illustrate different periods of monetary expansion.
Historical Money Supply Comparisons: Compares current money supply growth to historical periods, highlighting that past periods, even under a gold standard, experienced significant monetary expansion.
Role of Banking System: Argues that the banking system, rather than the Federal Reserve, primarily controls money supply, influencing inflation and deflation dynamics.
Investment Strategy: Suggests a strategy of playing both sides of the debasement narrative by considering trades that benefit from both inflationary and deflationary outcomes, rather than solely investing in gold or Bitcoin.
Yield Curve Insights: Discusses the significance of yield curve inversion and steepening as indicators of economic expectations, suggesting potential investment opportunities based on these movements.
Professional Investment Approach: Highlights the difference between amateur and professional investment strategies, with professionals focusing on asymmetric opportunities and hedging to improve odds.
Transcript
Hello fellow Rebel Capitals. Hope you're well. So, everybody has been talking about the debasement trade. Gold is over 4,000. Bitcoin is almost at all-time highs. Silver exploded over 50 bucks. And it has to be because of the debasement trade. Well, I'm going to tell you right here in this video. Number one, that might not necessarily be true. I'm going to give you a whole plot twist right here on the whole debasement argument or narrative. And then I'm going to show you what I'm doing in my own portfolio to have maybe better odds of playing the debasement narrative, we'll say. And I got this strategy from some of the pros I know that have been doing this for over 40 years. So, you're going to want to sit down, buckle up, pour yourself that stiff drink because we're going to get into it right now. So, what is the argument for this debasement trade and gold being over 4,000 and Bitcoin being at almost all-time highs? Well, you guys know, let's look at this chart right here. M2 money supply. So most people define currency debasement by a loss of purchasing power in let's just say the dollar because you're creating more and more and more of those dollars. And what we have to realize as investors is it's all about the rate of change especially in a debt in a debt based monetary system. You guys know that from watching my videos. So, we look at this chart and we can see that my goodness gracious, from 1960 to even the middle of the 70s, it's pretty flat. And then in the 1970s, it really starts to ramp up. Get a little bit of a flattening there, interestingly enough, in the 1990s. And then it really starts going parabolic. And then when we get to QE1 2 3 look at this chart look at the trend although it's straight but look at how much more of an angle look at how much more extreme it is and going higher and higher and higher and then we get to the surveys sickness it goes completely parabolic straight up and then we go and then you guys know what happened in 2021 it goes up by what 25% within the matter of a year or two and then it goes down slightly but Now we're right back to where we were and let's say the QE123 era where money supply is growing at just as rapid a rate. If you look at this chart, but you'll notice this chart is just simply a total number of dollars. This doesn't tell you the rate of change. And why is the rate of change so critically important? Well, let me put it to you this way. Would you rather buy a stock for $100 that is growing or the company or the the share price is increasing at 20% per year or would you rather buy a share of XYZ company that's trading at $1,000 per uh let's say $1,000 a share where the stock price is going up by 1% per year. Which would you rather have? the cheaper stock going up at 20% per year or the more expensive stock going up at 1% per year. This is why you want to look at the rate of change and you could take that to an extreme that example where even that 1% increase would be much much more than the tw in terms of nominal dollars then the percentage increase or the nominal dollars you got from the percentage increase of the $100 share going up by 20%. You guys get my point. You're intelligent people. It's all about the rate of change. So, if it's all about the rate of change, if we really want to know what's happening with currency debasement, we can't look at this chart. We've got to look at a log chart because that's going to tell us the percentage change from year to year. So, now let's switch it up. And I've got this chart already set up because I did this in a whiteboard video today. And it tells not just a different story, it tells the complete opposite story, doesn't it? Look at the rate of change from 1960. You can tell just by the slope of the the trend line here from 1960 to I just call it the early 1980s. Now I want you to compare that with the trend line from call it 1995 all the way to 2019. From 95 to 2019 it's a much lower slope. the trend line is lower, meaning the rate of change for money supply growth was a lot less from 1995 to 2019 than it was from 1960 to 1980. And you say, "Well, George, that's because the 1970s." Now, look, look at the rate of change in the 1960s. It wasn't that much different in the 1970s. And oh, by the way, going into the 1980s, look at the rate of change versus the 1970s. Almost identical. Almost identical, which almost identical, which begs the question, what did Paul Vulkar do? And the answer is not much. But that's a topic for a completely separate video. So then we go over to the survea sickness and look at the rate of change here. It definitely goes up. Definitely goes up. But then we peak out around call it 2021 2022 it goes down. Now it has been going up over the last couple years. But look at this slope. In fact what I'm going to do is I'm going to zoom in and let's look at 2000. And now you can really see we know this slope is less than it was in let's just say the 1980s. And now we're looking at this increase. And it looks to me like it's even lower than it was in the 2000s or the 2010s as far as the rate of change. So the argument here for the debasement trade is the amount of currency units or the growth in the money supply that we're seeing the debasement of the currency is totally unprecedented. Totally and completely unprecedented. Because what they do is they show you this chart. Whoops. They'll show you this chart and they'll point to this right here. When this is it's either being a little ignorant or it's being intellectually dishonest. If they're really being honest about it, they'd show you this chart which tells you the complete opposite story. Now I know a lot of you right about now are saying well George you can't use this as an example because when you include this massive spike right here the amount of currency units that were created let's just say the percentage total was much greater unprecedented from 2020 to today's date than it was at any other time in US history. And this is why the gold price is going over 4,000. This is why silver is trading over 50 bucks. This is why Bitcoin is trading, let's just say, near all-time highs. Now, I'm going to address that right now. Before we do, I want to point out that the rate of change since this money supply growth started to increase is a lot lower than it was before. We pointed that out because the argument the push back I'm going to get there is well yeah sure it's been like this but in the future it's going to be a lot higher very similar to this maybe maybe not right now we don't see that but now let's go back to the argument that the aggregate total is so extreme this is really what the gold price and the debasement the gold price is sniffing out. Okay so we're going to go over to long-term trends. So let's look at the aggregate total increase in money supply since 2000 just before the surveys of sickness. So we've got February 2020 to August so almost today's date August 2025 and you can see it increased using M2 as a proxy by 43%. 43%. So most people out there would say, "Uh, George, hello. I told you 40%." That's an astronomical number. That is a mindnumbing number. Even though the trend has been, let's say, rather benign, relatively speaking, over the last two or three years, it was front-loaded to such a massive degree that you have all this money slloshing around the system and just trying to find a home and that's what's going straight into gold and silver and it's going to do the exact same thing in the future because the Fed's going to have to do yield curve control or insert excuse here. And therefore, we're going to have even more debasement than we had before. And even if it doesn't, who cares? Because we had so much debasement at the beginning 2021 into 2022 that it more than takes care of maybe the lack of debasement we've had. All right, let's go ahead and put this to the test. So what I want to do is I want to look at a time frame when we had massive disinflation because the flip side or the the maybe it's not the flip side that's not the right way to say it but the same argument that we are going to have currency debasement is effectively saying that we're going to have increased rates of inflation. Right? Same thing. So now let's go back to 1980 to 1985 because you guys know very well that we had massive disinflation. Now prices were still going up but they're going up to a much lower degree in 1985 than in 1980. And let's compare that to just what we've seen over the past 5 years where we've had relatively high rates of inflation for the United States. So let's go back to 1980. And of course, what you would expect to see is that we had much much lower rates of money supply growth higher 60%. When just as a reminder, 2020 to 2025, it was 40%. Now, let's do some other comparisons. Let's go to 2000 to 2005, right around 40%. Let's go to 2010 to 2015. right around 40%. So you see what we have had, although I don't like it. I'm not a proponent of expanding the money supply by 40%. Especially if it involves the government and the Federal Reserve, but it's not unprecedented. Not even close. Not even close. In fact, at a time frame when gold price was plummeting, that was down that was back 1980 to 1985 and we had disinflation the aggregate total money supply growth was much higher than in percentage terms than it was from 2020 to 2025. So it's very difficult to say definitively that the reason the gold price is at 4,000 and you guys know I'm very very bullish on gold but mechanically it it's not the debasement trade now narrative speaking yes it's absolutely this is the narrative and this is why I think retail is going to come on board and probably push the price even higher over the next three months over the next six months but just because it's the narrative doesn't necessarily mean that it's reality. But at the end of the day, reality doesn't even matter because it doesn't matter what this chart says. It doesn't matter what George Gam thinks. It doesn't matter what you think. It only matters what the market thinks. Now, I know a lot of you right about now are saying to yourself, "Okay, George." Well, this just proves why we need a gold standard. Because if we had a gold standard, then we wouldn't have all this money printing and we wouldn't have all this debasement regardless of whether 2020 to 2025 was unprecedented or just the normal. We wouldn't have it and we wouldn't have any of this inflation and we wouldn't have a loss of purchasing power of the United States dollar. We have to go back onto a gold standard or maybe even a Bitcoin standard, right? That would put the constrain on money supply growth. Let's put that one to the test. Let's look at this exact same chart from 1960 to 1965. And most of you know that we were still on a quasi gold standard back then. And you can see represented by this black line, M2 money supply up 50%. So that would be more than we've had from 2020 to 2025. But I know a lot of you out there are saying to yourself, "Okay, George, fine." But you yourself admitted this is a quasi gold standard. It's nothing like we had in the late 1880s. That's what we need to go back to because if we had the gold standard, the most strict gold standard we have had as a nation, then this would give us the prosperity. This would limit the money supply growth and that would lead to the incredible disinfl or deflation, the good type of deflation that we had in the late 1800s. See, we need a more strict gold standard, not just this flim flam, this flimsy gold standard we had in the 1960s. Well, let's put that one to the test. Let's go back and look at 1880 to 1885. And there you go. Money supply increased by ah call it 70%. High 60s 70%. So out of all the the five-year periods at the beginning of decades in US history that we have just gone over, the one with the largest debasement of the currency was when we had a gold standard. In fact, the most strict gold standard that we've ever had. Why is that? How can this be possible? Because at the end of the day, the government, the Federal Reserve, doesn't control the money supply. Who does? It's the banking system. It's the banking system. So, one of the main points of this video is when you look at uh this is M2. When you look at this chart, you see, and actually let's go back to a max. This is the percentage change. You see, especially in a debt-based monetary system, that if we have a slowdown in the rate of growth even and you don't have velocity, that does not equal inflation. That equals disinflation, if not outright deflation, until the Fed comes in and does what they did here or right here, which could could lead to inflation, but it might lead to anti-inflation or excuse me, anti-delation. In other words, kind of what we got right here, excuse me, right here where the CPI, we'll use that as a proxy, was under 2%. even though the Fed was doing everything in their power to prop up prices and to create inflation. Remember those days? Well, why did they struggle so much? Because at the end of the day, it's all about the banks. They're at the center of the the monetary solar system. It's not the Fed. So even if the Fed is trying to create all this inflation and if the government is doing everything that they can to run the economy hot or whatever you want to say, at the end of the day, if the banks aren't playing ball, we're not going to have it. The banks are the arbiter of truth here. They're the ones that determine if we're going to have inflation, disinflation, deflation. And right now, and this could change very soon, but right now they're saying they don't want to play ball. And right now they're saying, "Eh, we're not going to go ahead and create loans. We see some economic storm clouds out there." So regardless of what the Fed's doing, we're going to create a lot fewer loans than are being paid off. And therefore, even let's just say the Fed does another round of QE, it might not impact or it might not increase M2 money supply on net because of what the banks are doing. And at the end of the day, they're far more powerful and they control the money supply or the debasement of currency to a much greater extent than any of the central planners. So from an investing standpoint, George, what's your point? Glad you asked. You can't just sit back knowing that the mechanics are completely the opposite of the narrative. You can't just play the narrative because well that's what everyone's thinking. So you've got to be at least you don't have again this isn't investing advice. I'm just telling you what I'm doing and I'm telling you what some of the pros that I know are doing in addition to by the way owning gold and Bitcoin. Full disclosure I own Bitcoin. Full disclosure, I own gold. I own a lot of gold and I own gold miners, but I'm doing things in addition to that because I understand that the mechanics and the fundamentals outside of what the government is doing is disinflationary. It's deflationary. And so it all depends on government shenanigans as to whether we get a little bit more inflation or we get the disinflation deflation that the market wants to do or the economy wants to do naturally or if we have the deflation disinflation and the Fed government tries to just prop it up to the degree to which they can during like the 2010s where it's just the government intervention or the Fed intervention is just simply anti- deflationary. You see? So, now let's go over to a chart. Uh oh, that's right. I put it at the end here. Here you go. So, this is pretty much what the whole video is about. It's about helping you guys realize that there are strategies out there to play whatever you want to play that might be something to think about. Again, not investment advice. I'm just sharing with you guys some of the things that I've done that actually worked very very well for me. And I didn't learn this on my or I didn't just think about this on my own. I learned it from some of the pros that I have the wonderful fortune of actually knowing due to this YouTube channel and whatnot. So let's look at the inversion of the curve. This is the twos 10. This is the yield on the twos 10. So, you guys know from watching my videos that when this goes negative, that means that the yield on the 2-year Treasury is higher than the 10-year Treasury. This is not what it should be. It should be the opposite. Very counterintuitive. We should have long-term interest rates higher. But notice what happens every single time or most of the time in the past, especially after Greenspan really tried to manipulate the front end of the curve. Notice what happens when we get an inversion. We usually after it steepens out, we have an uninversion. we get the stuff hitting the fan again. Most of you know that from watching my videos, but look at what happens to the spread. It just skyrockets. And it's not just prior to the 1990s. Look at the dot, exact same thing. Look at the GFC, exact same thing. Look at the survea sickness, exact same thing, just to a lesser degree, but it got up to a 1.58 basis point or 158 basis point spread. Now, you guys know that we were hugely inverted and we have more recently uninverted. Now, it says 57. I don't know where they're getting this. Uh, as we speak, I think it's right around 54 or so. And again, in full disclosure, I had this trade on from about 45 basis points to about 55. I do not have it on right now. By the time you're watching this video, if you're not watching it live, I may have put the trade back on. I don't know. But just keep that in mind. So the the point here is if we get disinflation and the mechanics actually win out assuming that the rate of change for money supply growth continues at a lower rate than it was even in the 2010s and at a much lower rate than it was in the 1980s, then that likely leads to a recession. That likely leads to disinflation. Okay, fantastic. In that environment, what happens to the spread? It likely increases because the beginning of this increase is usually a result of the Fed dropping rates. So although the 10 years going down, the two years going down even faster because the Fed is dropping by 25, 50, sometimes 75, sometimes 100 basis points. You see, now when we get to right here though, let's go to the GFC. When we get to right here, this steepening, let's just say from, you know, December of 2008 especially, because they had already taken rates down to zero. This steepening from here up to here is not a result of the Fed dropping rates. They're already at zero. So, what was a what was it a result of? The opposite. The 10-year Treasury going up. So, think about this. If the 10-year Treasury is going down or we're getting a what we would call a a bull steepener, then this is the market saying that expectations are for disinflation, if not deflation. But if you get a bare steepener, meaning the long end of the curve is going up faster, that's the exact opposite. That's the market telling you that it expects higher rates of inflation, growth in inflation. So you see what my point is is at the beginning of this steepening it's a result of disinflationary pressures and the or expectations and the end where it steepens out even more is a result of inflationary expectations. So it and where we are right now let's just say at 55 basis points you see that usually it goes up to 250. That's a big move. That's a big move. So if we have disinflation, guess what happens? The spread increases. If we have inflation and more currency debasement, like we had QE3, when the Fed is really doing whatever it is they're doing, let's just say quantitative easing, yield curve control, something like that. And the banks in addition to that are lending more than people are uh they're creating more loans than people are paying off. So the banks are creating money which really matters and then the Fed is doing QE which impacts M2 money supply increases it then you get the curve going even higher. So it's disinflation, you win, deflation, you win. Inflation, debasement, you win. Now, of course, we could get a flattener, in which case you would lose. But you can see the the odds of that, although there are no certainties, they're only probabilities. If this cycle plays out like it has in the past, regardless of the outcome as far as debasement, inflation, deflation, disinflation, the spread is going to do extremely well. The spread is going to increase. So, this is just one example, and I've talked about it on this channel a couple times, and again, this is not investment advice. I just wanted to share with you a strategy that I know the pros use in this type of environment, especially when they don't know what's going to win. Is it going to be the debasement narrative or is it going to be the debasement reality based on that log chart that I showed you? Well, to them, they don't care because they're playing both sides of the game. They're they're they're on both teams here, right? They're playing both sides of the coin. and they're doing and why are they doing this? Because it's just asymmetry and it increases the probabilities. So should I'm not saying anyone should do this, right? I own gold, I own Bitcoin, but I'm also or I have done this in the past and it's just something that you might want to think about. Not just this trade, but the whole concept of it. Because in my experience, this is what separates the pros from the amateurs. Is the amateurs will go out and just buy Bitcoin or just buy gold or just buy the S&P 500 index fund. And the pros will even if they have the exact same macro framework or the exact same macro base case, they'll play it in a way where the asymmetry and the odds, the probabilities are much more in their favor. And usually they've got a nice hedge in there. And this is a great representation of that. So guys, if you want more kind of contrarian out of the box type of strategies, this is exactly what we talk about in Rebel Capitalist Pro. Uh that's the online uh investment community I have with my friends Lynn Alden and Chris Macintosh. Uh if you want to check that out, we'll just put a link in the description below. On that bombshell, guys, enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market, capitalism, and let's see how this debasement actually plays out. We'll see you in the next video.
Want To Do The Debasement Trade? Don't Just Buy Gold/Bitcoin…Do This
Summary
Transcript
Hello fellow Rebel Capitals. Hope you're well. So, everybody has been talking about the debasement trade. Gold is over 4,000. Bitcoin is almost at all-time highs. Silver exploded over 50 bucks. And it has to be because of the debasement trade. Well, I'm going to tell you right here in this video. Number one, that might not necessarily be true. I'm going to give you a whole plot twist right here on the whole debasement argument or narrative. And then I'm going to show you what I'm doing in my own portfolio to have maybe better odds of playing the debasement narrative, we'll say. And I got this strategy from some of the pros I know that have been doing this for over 40 years. So, you're going to want to sit down, buckle up, pour yourself that stiff drink because we're going to get into it right now. So, what is the argument for this debasement trade and gold being over 4,000 and Bitcoin being at almost all-time highs? Well, you guys know, let's look at this chart right here. M2 money supply. So most people define currency debasement by a loss of purchasing power in let's just say the dollar because you're creating more and more and more of those dollars. And what we have to realize as investors is it's all about the rate of change especially in a debt in a debt based monetary system. You guys know that from watching my videos. So, we look at this chart and we can see that my goodness gracious, from 1960 to even the middle of the 70s, it's pretty flat. And then in the 1970s, it really starts to ramp up. Get a little bit of a flattening there, interestingly enough, in the 1990s. And then it really starts going parabolic. And then when we get to QE1 2 3 look at this chart look at the trend although it's straight but look at how much more of an angle look at how much more extreme it is and going higher and higher and higher and then we get to the surveys sickness it goes completely parabolic straight up and then we go and then you guys know what happened in 2021 it goes up by what 25% within the matter of a year or two and then it goes down slightly but Now we're right back to where we were and let's say the QE123 era where money supply is growing at just as rapid a rate. If you look at this chart, but you'll notice this chart is just simply a total number of dollars. This doesn't tell you the rate of change. And why is the rate of change so critically important? Well, let me put it to you this way. Would you rather buy a stock for $100 that is growing or the company or the the share price is increasing at 20% per year or would you rather buy a share of XYZ company that's trading at $1,000 per uh let's say $1,000 a share where the stock price is going up by 1% per year. Which would you rather have? the cheaper stock going up at 20% per year or the more expensive stock going up at 1% per year. This is why you want to look at the rate of change and you could take that to an extreme that example where even that 1% increase would be much much more than the tw in terms of nominal dollars then the percentage increase or the nominal dollars you got from the percentage increase of the $100 share going up by 20%. You guys get my point. You're intelligent people. It's all about the rate of change. So, if it's all about the rate of change, if we really want to know what's happening with currency debasement, we can't look at this chart. We've got to look at a log chart because that's going to tell us the percentage change from year to year. So, now let's switch it up. And I've got this chart already set up because I did this in a whiteboard video today. And it tells not just a different story, it tells the complete opposite story, doesn't it? Look at the rate of change from 1960. You can tell just by the slope of the the trend line here from 1960 to I just call it the early 1980s. Now I want you to compare that with the trend line from call it 1995 all the way to 2019. From 95 to 2019 it's a much lower slope. the trend line is lower, meaning the rate of change for money supply growth was a lot less from 1995 to 2019 than it was from 1960 to 1980. And you say, "Well, George, that's because the 1970s." Now, look, look at the rate of change in the 1960s. It wasn't that much different in the 1970s. And oh, by the way, going into the 1980s, look at the rate of change versus the 1970s. Almost identical. Almost identical, which almost identical, which begs the question, what did Paul Vulkar do? And the answer is not much. But that's a topic for a completely separate video. So then we go over to the survea sickness and look at the rate of change here. It definitely goes up. Definitely goes up. But then we peak out around call it 2021 2022 it goes down. Now it has been going up over the last couple years. But look at this slope. In fact what I'm going to do is I'm going to zoom in and let's look at 2000. And now you can really see we know this slope is less than it was in let's just say the 1980s. And now we're looking at this increase. And it looks to me like it's even lower than it was in the 2000s or the 2010s as far as the rate of change. So the argument here for the debasement trade is the amount of currency units or the growth in the money supply that we're seeing the debasement of the currency is totally unprecedented. Totally and completely unprecedented. Because what they do is they show you this chart. Whoops. They'll show you this chart and they'll point to this right here. When this is it's either being a little ignorant or it's being intellectually dishonest. If they're really being honest about it, they'd show you this chart which tells you the complete opposite story. Now I know a lot of you right about now are saying well George you can't use this as an example because when you include this massive spike right here the amount of currency units that were created let's just say the percentage total was much greater unprecedented from 2020 to today's date than it was at any other time in US history. And this is why the gold price is going over 4,000. This is why silver is trading over 50 bucks. This is why Bitcoin is trading, let's just say, near all-time highs. Now, I'm going to address that right now. Before we do, I want to point out that the rate of change since this money supply growth started to increase is a lot lower than it was before. We pointed that out because the argument the push back I'm going to get there is well yeah sure it's been like this but in the future it's going to be a lot higher very similar to this maybe maybe not right now we don't see that but now let's go back to the argument that the aggregate total is so extreme this is really what the gold price and the debasement the gold price is sniffing out. Okay so we're going to go over to long-term trends. So let's look at the aggregate total increase in money supply since 2000 just before the surveys of sickness. So we've got February 2020 to August so almost today's date August 2025 and you can see it increased using M2 as a proxy by 43%. 43%. So most people out there would say, "Uh, George, hello. I told you 40%." That's an astronomical number. That is a mindnumbing number. Even though the trend has been, let's say, rather benign, relatively speaking, over the last two or three years, it was front-loaded to such a massive degree that you have all this money slloshing around the system and just trying to find a home and that's what's going straight into gold and silver and it's going to do the exact same thing in the future because the Fed's going to have to do yield curve control or insert excuse here. And therefore, we're going to have even more debasement than we had before. And even if it doesn't, who cares? Because we had so much debasement at the beginning 2021 into 2022 that it more than takes care of maybe the lack of debasement we've had. All right, let's go ahead and put this to the test. So what I want to do is I want to look at a time frame when we had massive disinflation because the flip side or the the maybe it's not the flip side that's not the right way to say it but the same argument that we are going to have currency debasement is effectively saying that we're going to have increased rates of inflation. Right? Same thing. So now let's go back to 1980 to 1985 because you guys know very well that we had massive disinflation. Now prices were still going up but they're going up to a much lower degree in 1985 than in 1980. And let's compare that to just what we've seen over the past 5 years where we've had relatively high rates of inflation for the United States. So let's go back to 1980. And of course, what you would expect to see is that we had much much lower rates of money supply growth higher 60%. When just as a reminder, 2020 to 2025, it was 40%. Now, let's do some other comparisons. Let's go to 2000 to 2005, right around 40%. Let's go to 2010 to 2015. right around 40%. So you see what we have had, although I don't like it. I'm not a proponent of expanding the money supply by 40%. Especially if it involves the government and the Federal Reserve, but it's not unprecedented. Not even close. Not even close. In fact, at a time frame when gold price was plummeting, that was down that was back 1980 to 1985 and we had disinflation the aggregate total money supply growth was much higher than in percentage terms than it was from 2020 to 2025. So it's very difficult to say definitively that the reason the gold price is at 4,000 and you guys know I'm very very bullish on gold but mechanically it it's not the debasement trade now narrative speaking yes it's absolutely this is the narrative and this is why I think retail is going to come on board and probably push the price even higher over the next three months over the next six months but just because it's the narrative doesn't necessarily mean that it's reality. But at the end of the day, reality doesn't even matter because it doesn't matter what this chart says. It doesn't matter what George Gam thinks. It doesn't matter what you think. It only matters what the market thinks. Now, I know a lot of you right about now are saying to yourself, "Okay, George." Well, this just proves why we need a gold standard. Because if we had a gold standard, then we wouldn't have all this money printing and we wouldn't have all this debasement regardless of whether 2020 to 2025 was unprecedented or just the normal. We wouldn't have it and we wouldn't have any of this inflation and we wouldn't have a loss of purchasing power of the United States dollar. We have to go back onto a gold standard or maybe even a Bitcoin standard, right? That would put the constrain on money supply growth. Let's put that one to the test. Let's look at this exact same chart from 1960 to 1965. And most of you know that we were still on a quasi gold standard back then. And you can see represented by this black line, M2 money supply up 50%. So that would be more than we've had from 2020 to 2025. But I know a lot of you out there are saying to yourself, "Okay, George, fine." But you yourself admitted this is a quasi gold standard. It's nothing like we had in the late 1880s. That's what we need to go back to because if we had the gold standard, the most strict gold standard we have had as a nation, then this would give us the prosperity. This would limit the money supply growth and that would lead to the incredible disinfl or deflation, the good type of deflation that we had in the late 1800s. See, we need a more strict gold standard, not just this flim flam, this flimsy gold standard we had in the 1960s. Well, let's put that one to the test. Let's go back and look at 1880 to 1885. And there you go. Money supply increased by ah call it 70%. High 60s 70%. So out of all the the five-year periods at the beginning of decades in US history that we have just gone over, the one with the largest debasement of the currency was when we had a gold standard. In fact, the most strict gold standard that we've ever had. Why is that? How can this be possible? Because at the end of the day, the government, the Federal Reserve, doesn't control the money supply. Who does? It's the banking system. It's the banking system. So, one of the main points of this video is when you look at uh this is M2. When you look at this chart, you see, and actually let's go back to a max. This is the percentage change. You see, especially in a debt-based monetary system, that if we have a slowdown in the rate of growth even and you don't have velocity, that does not equal inflation. That equals disinflation, if not outright deflation, until the Fed comes in and does what they did here or right here, which could could lead to inflation, but it might lead to anti-inflation or excuse me, anti-delation. In other words, kind of what we got right here, excuse me, right here where the CPI, we'll use that as a proxy, was under 2%. even though the Fed was doing everything in their power to prop up prices and to create inflation. Remember those days? Well, why did they struggle so much? Because at the end of the day, it's all about the banks. They're at the center of the the monetary solar system. It's not the Fed. So even if the Fed is trying to create all this inflation and if the government is doing everything that they can to run the economy hot or whatever you want to say, at the end of the day, if the banks aren't playing ball, we're not going to have it. The banks are the arbiter of truth here. They're the ones that determine if we're going to have inflation, disinflation, deflation. And right now, and this could change very soon, but right now they're saying they don't want to play ball. And right now they're saying, "Eh, we're not going to go ahead and create loans. We see some economic storm clouds out there." So regardless of what the Fed's doing, we're going to create a lot fewer loans than are being paid off. And therefore, even let's just say the Fed does another round of QE, it might not impact or it might not increase M2 money supply on net because of what the banks are doing. And at the end of the day, they're far more powerful and they control the money supply or the debasement of currency to a much greater extent than any of the central planners. So from an investing standpoint, George, what's your point? Glad you asked. You can't just sit back knowing that the mechanics are completely the opposite of the narrative. You can't just play the narrative because well that's what everyone's thinking. So you've got to be at least you don't have again this isn't investing advice. I'm just telling you what I'm doing and I'm telling you what some of the pros that I know are doing in addition to by the way owning gold and Bitcoin. Full disclosure I own Bitcoin. Full disclosure, I own gold. I own a lot of gold and I own gold miners, but I'm doing things in addition to that because I understand that the mechanics and the fundamentals outside of what the government is doing is disinflationary. It's deflationary. And so it all depends on government shenanigans as to whether we get a little bit more inflation or we get the disinflation deflation that the market wants to do or the economy wants to do naturally or if we have the deflation disinflation and the Fed government tries to just prop it up to the degree to which they can during like the 2010s where it's just the government intervention or the Fed intervention is just simply anti- deflationary. You see? So, now let's go over to a chart. Uh oh, that's right. I put it at the end here. Here you go. So, this is pretty much what the whole video is about. It's about helping you guys realize that there are strategies out there to play whatever you want to play that might be something to think about. Again, not investment advice. I'm just sharing with you guys some of the things that I've done that actually worked very very well for me. And I didn't learn this on my or I didn't just think about this on my own. I learned it from some of the pros that I have the wonderful fortune of actually knowing due to this YouTube channel and whatnot. So let's look at the inversion of the curve. This is the twos 10. This is the yield on the twos 10. So, you guys know from watching my videos that when this goes negative, that means that the yield on the 2-year Treasury is higher than the 10-year Treasury. This is not what it should be. It should be the opposite. Very counterintuitive. We should have long-term interest rates higher. But notice what happens every single time or most of the time in the past, especially after Greenspan really tried to manipulate the front end of the curve. Notice what happens when we get an inversion. We usually after it steepens out, we have an uninversion. we get the stuff hitting the fan again. Most of you know that from watching my videos, but look at what happens to the spread. It just skyrockets. And it's not just prior to the 1990s. Look at the dot, exact same thing. Look at the GFC, exact same thing. Look at the survea sickness, exact same thing, just to a lesser degree, but it got up to a 1.58 basis point or 158 basis point spread. Now, you guys know that we were hugely inverted and we have more recently uninverted. Now, it says 57. I don't know where they're getting this. Uh, as we speak, I think it's right around 54 or so. And again, in full disclosure, I had this trade on from about 45 basis points to about 55. I do not have it on right now. By the time you're watching this video, if you're not watching it live, I may have put the trade back on. I don't know. But just keep that in mind. So the the point here is if we get disinflation and the mechanics actually win out assuming that the rate of change for money supply growth continues at a lower rate than it was even in the 2010s and at a much lower rate than it was in the 1980s, then that likely leads to a recession. That likely leads to disinflation. Okay, fantastic. In that environment, what happens to the spread? It likely increases because the beginning of this increase is usually a result of the Fed dropping rates. So although the 10 years going down, the two years going down even faster because the Fed is dropping by 25, 50, sometimes 75, sometimes 100 basis points. You see, now when we get to right here though, let's go to the GFC. When we get to right here, this steepening, let's just say from, you know, December of 2008 especially, because they had already taken rates down to zero. This steepening from here up to here is not a result of the Fed dropping rates. They're already at zero. So, what was a what was it a result of? The opposite. The 10-year Treasury going up. So, think about this. If the 10-year Treasury is going down or we're getting a what we would call a a bull steepener, then this is the market saying that expectations are for disinflation, if not deflation. But if you get a bare steepener, meaning the long end of the curve is going up faster, that's the exact opposite. That's the market telling you that it expects higher rates of inflation, growth in inflation. So you see what my point is is at the beginning of this steepening it's a result of disinflationary pressures and the or expectations and the end where it steepens out even more is a result of inflationary expectations. So it and where we are right now let's just say at 55 basis points you see that usually it goes up to 250. That's a big move. That's a big move. So if we have disinflation, guess what happens? The spread increases. If we have inflation and more currency debasement, like we had QE3, when the Fed is really doing whatever it is they're doing, let's just say quantitative easing, yield curve control, something like that. And the banks in addition to that are lending more than people are uh they're creating more loans than people are paying off. So the banks are creating money which really matters and then the Fed is doing QE which impacts M2 money supply increases it then you get the curve going even higher. So it's disinflation, you win, deflation, you win. Inflation, debasement, you win. Now, of course, we could get a flattener, in which case you would lose. But you can see the the odds of that, although there are no certainties, they're only probabilities. If this cycle plays out like it has in the past, regardless of the outcome as far as debasement, inflation, deflation, disinflation, the spread is going to do extremely well. The spread is going to increase. So, this is just one example, and I've talked about it on this channel a couple times, and again, this is not investment advice. I just wanted to share with you a strategy that I know the pros use in this type of environment, especially when they don't know what's going to win. Is it going to be the debasement narrative or is it going to be the debasement reality based on that log chart that I showed you? Well, to them, they don't care because they're playing both sides of the game. They're they're they're on both teams here, right? They're playing both sides of the coin. and they're doing and why are they doing this? Because it's just asymmetry and it increases the probabilities. So should I'm not saying anyone should do this, right? I own gold, I own Bitcoin, but I'm also or I have done this in the past and it's just something that you might want to think about. Not just this trade, but the whole concept of it. Because in my experience, this is what separates the pros from the amateurs. Is the amateurs will go out and just buy Bitcoin or just buy gold or just buy the S&P 500 index fund. And the pros will even if they have the exact same macro framework or the exact same macro base case, they'll play it in a way where the asymmetry and the odds, the probabilities are much more in their favor. And usually they've got a nice hedge in there. And this is a great representation of that. So guys, if you want more kind of contrarian out of the box type of strategies, this is exactly what we talk about in Rebel Capitalist Pro. Uh that's the online uh investment community I have with my friends Lynn Alden and Chris Macintosh. Uh if you want to check that out, we'll just put a link in the description below. On that bombshell, guys, enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market, capitalism, and let's see how this debasement actually plays out. We'll see you in the next video.