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Is Gold Money? Why Would it be a Better Solution than the U.S. Dollar? – The Market Report

March 5, 2020


[intro music]>>Mark Alyn: This is the Market Report from
the Birch Gold Group. Hi everyone, I’m Mark Alyn. Joining me today, Will Hart and Jake
Kennedy from the Birch Gold Group. Gentlemen, welcome.>>Will Hart: Thank you Mark, thanks for having
me.>>Jake Kennedy: Thanks for having us.>>Mark Alyn: Let’s start with you, Will.
There’s a recent happening in the state of Oklahoma where Oklahoma seems to be moving
toward the gold standard. Can you explain that?>>Will Hart: Okay, the way I understand it,
again, Utah has already done it in the past, where they’re accepting gold as currency.
So they’re looking at gold, again, the dollar is not backed by gold. To me, when I hear
“gold standard”, that means that our dollar is backed by gold and that is not what’s happening
right now. However, Oklahoma is leaning towards saying, “Yeah, you want to buy something with
gold? We’ll accept it.”>>Mark Alyn: So I can walk in to a store
in the state of Oklahoma and pay for it in gold?>>Will Hart: From what I read, that is exactly
what you can do. Again, I don’t know what type of change you’re going to get. If the
item is a hundred dollars and you walk in with an ounce of gold, are you going to walk
out with $1,200 in cash and the hundred dollars left is what paid for it? I don’t know the
specifics.>>Jake Kennedy: This isn’t going to take
on, I don’t think, unless everybody in every store is briefed on what to do if someone
hands them an ounce of gold. So I don’t think this is really a practical measure because,
do people really expect to take their gold or silver in and buy a gallon of milk with
an ounce of silver? Because what are people going to do, “Oh, how much is this worth again?
Let me check on my app on my phone or whatever.”>>Will Hart: Yeah I agree. And I think that
it’s not a very practical idea for people to carry around gold in their pocket. But
what I like about it, why I think it’s a great measure that Oklahoma’s taking and Utah and
other states like Kansas and Texas I guess are following suit, is that people are recognizing
gold for what it is. That it’s something that is rare, it’s expensive to get out of the
ground, and it’s not just a piece of paper that somebody printed.>>Mark Alyn: Jake Kennedy, what’s your take
on this?>>Jake Kennedy: I think it’s more of a big
picture issue that the states are addressing. I think that they’re losing confidence with
our currency but they’re listening to the people of the states who really don’t have
maybe much confidence with the dollar or where we’re heading as a nation. And I think they’re
implementing these actions to show the people that maybe in the future we may not need to
rely so much on the dollar. And gold could become a strong part of our foundation as
a state, much as it was when the nation was born. So I think it’s more of a symbolic move,
but it could actually be a part of a bigger move of many states that see, maybe, five,
three, two years into the future where the dollar could lose dramatic amounts of its
value and because this bill’s already in place sitting there as a sleeper bill or simmering
under the surface, maybe suddenly it’ll be like, “Okay well let’s look at this paragraph,
and yes the dollar’s in free fall. Yes, it’s not worth what it was and we don’t want to
trade the dollar. Look, we’ve got this thing in place, which says you can use gold and
here are some new rules about how it’s used�” And suddenly, in the space of a few days,
it can actually be pushed to forefronts of legislation and suddenly, it makes a lot of
sense to be trading in gold and silver and it can probably be implemented very quickly.>>Mark Alyn: Historically, when high inflation
and currency values drop. Precious metals, gold in particular, rises, right? That’s what
you’ve been saying for weeks.>>Will Hart: Absolutely.>>Mark Alyn: So I can see, you know, some
people going into stores with barrelful’s of money, of cash, of dollars, yet somebody
else walks in with a sliver of gold. I don’t how that will work, but to buy their groceries,
for example.>>Will Hart: Yeah, again, if we’re still
specifically talking about Oklahoma, I guess that is certainly an option. I’m one of the
believers that the dollar is on the way out and that we’re going to have to make some
dramatic change and I think gold is going to be a big part of that. I think, you know,
saying yes you can use gold to buy things, I just don’t think it’s very practical and
I agree with Jake on that aspect, but at the same time, I think it’s a great move to get
people aware and to say, “Hmmm, maybe I should have gold in case the dollar continues to
head down this southward movement.”>>Mark Alyn: And Jake, would agree with what
Will just said?>>Jake Kennedy: I think so because, yes I
do�>>Mark Alyn: But? I hear a “but” in your
voice.>>Jake Kennedy: No, I think he’s right and
if it makes people more aware of what real money is and to own precious metals as maybe
a hedge against inflation or a hedge against the dollar, then that’s a great thing. And
I think ultimately if you look at history, when nations hyperinflate their currencies
through reckless creation of money, money printing essentially, what has ultimately
happened is that I don’t think you really necessarily trade in gold unless maybe we’re
heading down that road, but what people do because they have gold and own gold, and they
need to buy something or they need cash to pay a debt or whatever it is, they take that
gold which is rising in value versus the money which is flat and therefore losing buying
power, so they take that gold and they trade it in for the currency at the time, local
currency. In our case, the dollar. In Germany’s case, the Reichsmark, whatever it is, and
they get a bunch of money, and then they use that to buy goods, products and services at
the time.>>Mark Alyn: But they do that, you were saying
earlier, almost on a daily basis because the dollar, the currency, changes and fluctuates
so quickly.>>Jake Kennedy: And history shows, let’s
say for example the Weimar Republic in Germany and Zimbabwe and other countries that have
had extreme hyperinflation, at the end of this, when the inflationary, you know on the
chart at the tail end when it doubles, triples every day in terms of percentage of inflation,
that’s when currency, what do you with this? That’s when you wheelbarrows full of cash.
And so what people do is, you know, you have to trade, if you’re trading from gold to paper,
you have to spend that money right away because an hour later or three hours later or half
a day later it’s lost 10% of its value or 20% or 30%.>>Mark Alyn: It goes that fast?>>Jake Kennedy: It does. I remember learning
that during the last few months of the hyperinflationary period in Weimar Republic, Germany, people
were getting paid their salaries three times a day. And they would take a break, once they
got paid in the morning and everyone would leave the offices, go into the streets and
buy hard goods, products and services, or just products, really, whatever it is, go
back to the office, four hours later they would get paid again and then go and spend
it on food and stuff.>>Mark Alyn: And they do that every day?>>Jake Kennedy: Yes, it was the end of this
crisis.>>Mark Alyn: Wow.>>Jake Kennedy: And so it became a part of
life for a short while, anyway.>>Will Hart: And see if we had a currency
backed by gold, that would not be the case. You wouldn’t see that kind of rise and fall.>>Mark Alyn: So in history, who do we blame,
if anybody?>>Will Hart: Well the situation we’re in
now, we blame Nixon. Nixon took us off the gold standard. If Nixon didn’t take us off
the gold standard we would not have an $18 trillion debt, or almost an $18 trillion debt,
and we would not be able to just print willy nilly as much as we need. The government would
say, “Okay we have ‘x’ amount of gold sitting at Fort Knox. We can only print so much money,
and there it is.” And that’s why we are in the problem we are right now.>>Jake Kennedy: The gold standard allows
countries to remain fiscally responsible. And that’s where we have over the last thirty
or forty years become fiscally irresponsible because, “Oh, we’ve got this war to fight,
let’s just create more money. And we’ll just pay for it that way.” And of course, down
the line, and we’re pretty much at the end of the line here, that’s when you get in trouble
when everything falls apart.>>Mark Alyn: There is a very interesting
article on gold, the gold standard, if you will, in Oklahoma and other states, which
was in a recent Forbes column by Keith Weiner. And we have an exclusive interview that will
be on our website, the Birch Gold Group website, shortly. So people should stay tuned for that
and look for that in coming weeks. I’m really curious about something and that is: Are there
other countries that are backed, their currency, is backed by gold today?>>Will Hart: The answer is no. There is not
a single currency on Earth that a currency is backed by gold. That’s the problem. Everybody
has a fiat currency, everybody’s printing and that’s the problem that we’re running
into is the percepted value of a dollar or of a Yuan or whatever, is questioned. I think
this is one of the reasons why we’re seeing Russia, China, India, Germany, so aggressively
buying gold by the tons! They’re not doing because they’re bored, they’re doing it because
they have some sort of plan, in my opinion, in motion. And I’m waiting to find out what
it’s going to be.>>Mark Alyn: And at the same time, major
corporations, universities, are also stockpiling gold.>>Will Hart: Absolutely, billionaires, the
list goes on and on. And again I always say, go where the smart money goes. Why are they
all leaning so heavily towards gold? Why are people shying away from the market? The big
$64,000 question is what is coming around the corner?>>Mark Alyn: What would be the purpose of
using gold versus cash, versus dollars in our case?>>Jake Kennedy: On a day-to-day basis you
mean?>>Mark Alyn: Yes.>>Jake Kennedy: I don’t think you would be
using gold on a day-to-day basis. I think gold in these environments and situations
is more used as a store of value or a store of wealth. So you buy the gold and you put
$10,000 or $100,000 into gold today and you see inflation. That gold will rise in value.
I mean let me give you a real-time example out of the Ukraine. And this is what people
there, what the smart people would have done if they saw this coming. The crisis happened
earlier this year, the beginning of this year. And in that time to today, the currency, the
hryvnia, has lost 25% of its value, probably more by this point. But gold there has gone
up 70% in value, in that time. So what does that mean? How are people using gold? Well
they’re not necessarily buying goods, products, and services with gold, but the smart people,
if they saw the crisis coming or when the crisis started, they saw where this could
be going, and they took their $10,000 in the bank account or $100,000 in their retirement
account or the equivalent, and they moved to gold, rode the crisis through, and it’s
still going, but rode the crisis through, their cash, if they still had cash, has lost
25% of its buying power and today buys them less goods, products and services. So they’ve
lost money, although it’s still sitting in the bank.>>Mark Alyn: They’ve lost dollars. The dollar
value.>>Jake Kennedy: The value, so it buys them
less. They still have that money in the bank, and most people think, “I’ve still got the
money” but they go and spend it on milk, and gas has gone up 25%, so some people don’t
see that. But, if they bought gold, it’s actually up 70%. So what the smart money is doing and
what people are doing is buying the gold, or should have been buying the gold, and when
they need to fix their car or buy a new car, they then trade that gold in, get the increased
value for the gold in the currency, not the best currency to have, but then you spend
it right away. Do you see what I mean?>>Mark Alyn: Sure.>>Jake Kennedy: So that’s how they should
have done it there, and I see that situation as being maybe a, something that could happen
here. We’re seeing a crisis maybe playing out over a longer period, two years, one year,
three years, and it’s going to speed up towards the end. But you put your money into gold,
the local currency, in this case, the dollar, will lose value, and it always is the trend
is down, and gold will go up in value. And at the time you need money, you trade out
of gold into dollars�>>Mark Alyn: Spend it as quickly as you can.>>Jake Kennedy: Yes. Pretty much. But store
your wealth in a tangible asset, gold, silver, that is going to maintain and increase value
during these pretty tough times we’re seeing ahead of us.>>Mark Alyn: As we see the dollar take a
dive.>>Jake Kennedy: Exactly, yeah.>>Mark Alyn: Do you agree with that Will?>>Will Hart: I do. One of the products that
we see sell is called the Valcambi Bar. Basically you can break them off in grams. Credit card
size I just don’t see somebody breaking it off going to 7-Eleven to go buy a Big Gulp
with it and then what change are they going to get? It doesn’t make any sense! So definitely
having the gold as a store of wealth, and then when you’re ready, you’re offsetting
that devaluating dollar, and then when you’re ready to sell that gold, you sell it, and
you get the value of whatever the gold is worth then, but at least you didn’t ride that
dollar down.>>Mark Alyn: Now we’ve talked about Utah,
we’ve talked about Oklahoma, of course. Texas. I believe you said there are another twenty
or so states considering using gold as cash, as currency, allowing it.>>Will Hart: Yeah, they’ve made themselves
aware that they’re interested. A lot of people don’t trust where the dollar is heading. States
are saying this is silly. We’re just losing value and they’re believing more and more
leaning back towards gold.>>Mark Alyn: Alright, as we wrap up, you
said something very interesting a while ago, Jake. And you said “hedge against the dollar”.
We’ve heard the expression, for years, “hedge against inflation”. I guess this is a fairly
new concept, a hedge against the dollar, as the dollar is taking a dive.>>Jake Kennedy: Yeah I think what you read
and what you hear from our clients is that they’re very concerned about the dollar losing
value. And if you look, since 1972/3,>>Will Hart: 1971.>>Jake Kennedy: ’71, yeah we’ve lost 78%
of the dollar’s buying power. And in the last ten in years it’s around 40% of that devaluation
has happened. So it means it buys you, with inflation, a lot less than it did ten years
ago. So I think we’re going to see that exponentially speed up over the next, maybe, five years
because we’re creating that much more money, and it has to do with our debt ratio versus
gold. So what people are worried about here is that as we continue to devalue our currency
by massive money printing, everything’s going to get more expensive and our dollar will
buy us less and I think therefore, and of course some people are very concerned and
it’s a real possibility that the dollar could actually crash, or fail as countries and nations
and people lose confidence in this fiat currency we’re printing into oblivion. And as that
happens, their dollars will become worth less or even worthless, so people are trying to
hedge against a catastrophe with the U.S. dollar here. And one of the best ways to do
that is to buy gold and silver and store your wealth in tangible assets that rise with inflation.>>Mark Alyn: I know we’ve thrown out a lot
of different concepts and ideas, so we’re going to invite our listeners to ask us questions.
If you have a question about buying precious metals, email us at [email protected] That’s
[email protected] Or you can visit our website, that’s birchgold.com. There is a lot of information
on there. It’s constantly updated. It’s a great website to give you a look at why gold
and silver and other precious metals belong as part of your portfolio. And of course you
can always call a Gold Specialist directly at (800) 355-2116. That’s (800) 355-2116.
Will Hart, Jake Kennedy, thanks for joining us on the Market Report.>>Will Hart: Thanks Mark.>>Mark Alyn: I’m Mark Alyn for the Birch
Gold Group. Thanks for listening.

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