Jay Zawatsky: What Really Is Money?

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foreign

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with annuities where every single week I

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welcome a celebrity guest expert that

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can help you maximize chapter 2 of your

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[Music]

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welcome to fun with annuities I'm your

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host Stan the annuity man America's

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annuity agent licensed in all 50 states

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we have a brand new guest on today and

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he's not he's going to be back numerous

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times

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um

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just an absolute Superstar his resume

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was unbelievable I mean just give you

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some highlights I'm going to go through

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everything because I want to get to

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topics and we'll have a lot on him uh

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he'll have his own page like all of our

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celebrity guests do but he's a lawyer

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he's he's a finance Professor he's just

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an all-around

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unbelievably smart person but today's

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topic is going to be interesting because

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we're going to talk about money in all

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different forms I would like to welcome

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Jay zawatski to the program Jason so so

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happy that you're here welcome thank you

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Stan I appreciate being here

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uh I appreciate also the opportunity to

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discuss with your audience some simple

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framing devices

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uh because what I really am most

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interested in is having people

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particularly those

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who are young and I know most of your

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audience is probably in the 40 and over

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probably 50 and over but we I mean our

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audience is growing by leaps and bound

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we're one of the fastest Financial

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podcast growth podcasts in the in the in

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the country and I think it's because we

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bring on smart people and it's not

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salesy we don't sell anything we're

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talking about you know like today we're

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talking about money we're digging in so

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with that being said I'm going to give

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the floor to you and just just listen to

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what you're what you have to say to our

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audience because this is valuable stuff

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so go jump in anytime certainly

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um when I'm teaching my personal finance

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classes to a wide range of people

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uh and I I like to teach at community

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colleges because that's where the real

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people are people at Harvard and Brown

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from which I graduated many many many

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years ago don't need this kind of help

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they have experts who work for the them

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correct but average folks who actually

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get dirt under their fingernails

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uh are the kinds of people that I want

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to help

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and I want to help them Reach a

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retirement that will uh satisfy their

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every desire and the only way to get to

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a retirement that satisfies your every

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desire

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is to understand basically what money is

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and what it should be

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now when I teach my classes I introduce

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a

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easy framing topic uh which is good

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money versus bad money

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good money is money that acts as both a

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battery

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and a time machine

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if you have money that can

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store the value of your labor

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then you have

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one aspect of good money

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but the second one is more important

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than even the first and that is can it

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preserve its purchasing power over long

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spans of time

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and over the grand sweep of history

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there have been only a few good monies

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that have been able to accomplish both

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being a battery and a time machine

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and the one that has survived everything

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every change every generation every war

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every cataclysm there's only one

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and it's called gold g-o-l-d it's not

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Bitcoin it's not Dogecoin it's not the

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U.S Fiat dollar

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it's not anything that is emanated by a

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printing press

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because printing press money also known

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as ex-nihilo money meaning out of

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nothingness

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can be printed at the whim of the

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government and we've seen that we've

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seen that in the last couple years we've

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just printed what have we printed 30

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percent more money than we had well what

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one uh interesting statistic is that

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uh from the beginning of the Republic in

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1789 remember the Constitution is when

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the Republic began

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and that was in effect as of uh 1789

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from 1789 until 2008.

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the total emanation of currency by the

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United States government was

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800 billion dollars not even 1 trillion

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since 19 excuse me since 2008

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the reserve excuse me the balance of the

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Federal Reserve

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uh has gone up by a factor of 10. 10

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times more money has been created ex

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nihilo out of nothingness

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uh in the last 13 14 years then were

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created in the first 200 plus years of

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the United States that gives you some

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understanding of the valuelessness of

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the Fiat dollar

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now Santa Stan I sent you uh

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an interesting uh slide that I use in my

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classes and I constantly update this

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slide and I don't know if you're going

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to be able to we're going to put that on

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on your page so people be able to access

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that okay now what this slide describes

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is two points in time one is

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1915 when an individual could purchase a

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Model T automobile

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for the grand sum of

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825 dollars

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now 825 dollars back in those days

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was worth 42 ounces of gold

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now let's fast forward to 2022.

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uh December 16th to be more exact

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I checked just before you started to

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record this and the price of one ounce

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of gold was 1

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787 dollars

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and if you converted that to the

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equivalent of the car now let's take the

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Model T in 1915. it had very few uh

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bells and whistles but let's say today's

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equivalent thereof would be a 2022 Honda

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LX

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Accord

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that car can be purchased for cash for

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twenty eight thousand two hundred and

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six dollars I checked with a local

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dealer just before uh recording time so

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that's 28 206 dollars divided by one

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thousand seven hundred eighty seven

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dollars which is exactly fifteen point

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eight seven ounces of gold

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so you could have purchased

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a Model T for 42 ounces of gold it all

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the way back into uh 1915

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uh but if you would simply take it or

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your great grandfather had taken

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and let's say buried in the backyard 42

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ounces of gold

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and with a treasure map for you to dig

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up uh when you were say 30 years old

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uh and you take the money debt you take

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the gold uh down to the Honda dealership

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and you'd be able to buy not one

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not two

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but two point x Honda Accords

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Now That's What I Call preservation of

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purchasing power if you would try to

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take the same 825 dollars uh you

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wouldn't even get the steering wheel now

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others would say well yes but you would

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have invested your 825 dollars and it

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would have earned interest that is a

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true statement

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but how much interest and how many times

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would that 825 dollars have compounded

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at the interest rate that was available

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so if you were to take a three percent

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interest rate which has been the average

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uh treasury bill interest rate over that

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span of time and then acknowledge that

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that would be taxable as you received it

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on an annual basis say you put in one

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year treasury bills and just kept

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rolling them forward

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uh you would have doubled the amount of

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money

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every 24 years because via the rule of

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72 very simple to calculate how often

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your money will double at a particular

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interest rate

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if you take 72 and divide by 3 that's 24

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that means it takes 24 years for any sum

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of money invested at three percent to

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double so how many doublings have there

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been essentially over 100 years well

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that would mean that it would have if 24

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uh years to double roughly uh four

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doublings

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so if you started out with 825 let's

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just round it up to a thousand a

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thousand

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first doubling two thousand

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second doubling four thousand

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third doubling 8 000.

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fifth doubling sixteen thousand for

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sixteen thousand dollars

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and that assumes you don't have to pay

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any taxes on the interest that you

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receive but let's just say you had in a

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tax-free account which in those days

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didn't exist but say it did

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you would not have enough money to buy

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even a single Honda Accord at twenty

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eight thousand two hundred and six but

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if you would simply without any risk

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whatsoever

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you just dig it up from the backyard

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that your great grandfather buried

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you would have not only preserved your

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purchasing power but you would have

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magnified your purchasing power so

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what's the takeaway I mean one of the

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things that you told me the other day I

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think it was is how much gold had been

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actually produced and taken out of the

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ground and it was such a small amount

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that I literally was

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I guess we're like what it wasn't it

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like a Olympic-sized swimming pool

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didn't you tell me that well they're

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actually since the beginning of time see

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nobody throws gold away gold is always

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reclaimed because it has so much

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purchasing value right and it's distinct

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uh the total amount of gold ever mined

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in all of human history ever ever is it

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is totals 180 maybe 1

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000 metric tons that's it now given the

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specific density of gold that's enough

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gold to fill up two olympic sized

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swimming pools so when you think about

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uh you know Phelps flying down uh the

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lane incredible and and underneath him

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there would be like Scrooge McDuck

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remember uh Scrooge he loses he liked to

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swim around in his goal well just

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picture Michael Phelps you know doing

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his butterfly in an Olympic-sized

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swimming pool and you can kind of get

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these sense of how little gold there

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actually is in the world

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now that gold

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uh if you were to convert all of it to a

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modern amount of money

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uh would be able to serve as it as the

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base for all money produced today the

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problem would be is that the price of

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gold worldwide converted to US dollars

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would have to be you know Thirty to

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forty thousand dollars per ounce

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so if anybody ever decided to return to

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a gold standard then gold would have to

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be remonetized to make the number of

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fiat currency units and the number of

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ounces of gold equivalent roughly 30 to

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40 000 per ounce let me ask you a

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question

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um

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I mean that's a great Foundation to

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start with so I'm assuming my podcast

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listeners and the people that are

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watching on all major podcast platforms

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thank you and the fun with annuities

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YouTube channel they're asking okay got

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it problem

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[Music]

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all right Jay what's the solution or is

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there one I mean what are you thinking

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here based upon that Foundation based

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upon some gasping for error realities of

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how much has been mined

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I know we're in trouble as from

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monetary-wise what are you thinking what

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are you proposing what's your Solutions

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well you have to understand that uh

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the

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general public doesn't understand what

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money is so we've tried to give an

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explanation of what sure good money is

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but unfortunately we're plagued with bad

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money bad money that is uh emanated ex

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nihilo without from nothingness that's

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Bitcoin in a nutshell I happen to agree

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with that um Bitcoin is just another

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form of Fiat because you can create as

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many bit currencies as you choose and

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they have there's seven thousand right

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and most of them will go to zero and I

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believe that eventually Bitcoin will go

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to zero because

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Bitcoin is only crypto

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1.0 what what happened to betamax uh

14:23
Sony's betamax when

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it went to zero

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uh and then uh that technology went to

14:31
zero when uh the next thing came out now

14:36
we have Netflix and we have all of these

14:38
things uh that are digital or think of

14:40
Myspace when internet started Myspace

14:43
and and um you know all of that stuff

14:47
that was that was the hottest thing I

14:49
mean you don't even they're not on the

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radar screen I do agree with you and I

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do agree with Warren Buffett that you

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know he said I wouldn't give 25 for the

14:57
whole lot of it and I do think the the

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latest

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um FTX issue you know innocent to till

15:05
proven guilty but it looks pretty bad

15:06
for this kid I think it's going to

15:08
unwind from here and I think it's going

15:10
to be pretty ugly do you agree with that

15:11
on the Bitcoin side well there are two

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elements that you have for crypto and

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distinguish between all of these various

15:19
cryptocurrencies and blockchain

15:21
technology blockchain technology is

15:23
incredibly valuable fantastic I totally

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agree with that and eventually it will

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you know be the basis of uh legal

15:31
contracts uh medical records uh legal

15:36
records I totally agree 100 but as far

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as the use of it for a currency the

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problem with Bitcoin right now is that

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it has raised the ire of governments

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worldwide as a result governments are

15:58
going to destroy it and they're going to

16:00
come out with the Central Bank digital

16:02
currency which is the worst thing

16:04
in terms of privacy that could ever

16:06
happen to anybody I agree because

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they'll be able to tax us real time not

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just tax you but look what happened to

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those poor truckers the freedom truckers

16:15
up in Canada you know they wanted to

16:18
help a particular group of people uh

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make a point they're supposed to have

16:22
freedom of speech in Canada

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uh but the Canadian government said oh

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no you know if you help the freedom

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truckers we're going to go in and seize

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your money right now imagine if they had

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control of every uh currency unit under

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your so-called ownership they'd be able

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to go in and say you can't have access

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to your money until you recant until you

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you know become a double plus good duck

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speaker you know in the orwellian love

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to do that that's where I mean and this

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isn't conspiracy theory stuff this is

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common sense rational pragmatic thinking

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and linear thinking on where this could

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go and it could be a problem I've always

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said from the start that cryptocurrency

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is the government's dream if they could

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control it because there would never be

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an April 15th again they would just tax

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us every day

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every day they would be able to you know

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increase or decrease taxes you know at

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will correct and they would be able to

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Target specific people for additional

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taxation based on your lifestyle suppose

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uh you know you were a little overweight

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and they decided that you had gotten too

17:33
many medical services and they see that

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you're trying to charge something at

17:36
McDonald's and it's a Big Mac Quarter

17:39
Pounder or whatever those things you're

17:41
not going to be able to get that sorry

17:43
no Big Macs for you you know like on uh

17:45
Seinfeld

17:47
let's go back because you know this is a

17:51
Solutions podcast so we're talking about

17:53
money and we're talking about 11 000

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Baby Boomers hitting 65 every single day

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and most of people listen to this

17:59
podcast have either retired thinking

18:01
about retirement planning on retirement

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trying to spell the word retirement

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um what

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what's

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all right Jay what's the solution no no

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what's the no there's no Perfect

18:14
Solutions just bad sales pitches you

18:16
know that but what's the thought

18:18
and the um from your end on okay people

18:22
are going toward retirement what should

18:24
they do to hopefully help and enhance

18:27
that that retirement based upon the

18:29
foundation you just laid out right well

18:31
I can I can tell you what I do in my own

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personal let's do that let's do that

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what I have done in order to preserve my

18:40
retirement okay I recognized a long time

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ago that Fiat money was bad money as

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we've been talking about for the last

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many minutes

18:48
and I also realized that gold was good

18:51
money so what I've done is I've based my

18:54
retirement on a barbell approach I have

18:57
a substantial uh percentage of my Assets

19:01
in gold and silver and by the way I do

19:04
not keep those uh in the United States I

19:07
keep the silver in the U.S now let me

19:08
ask you a question because once once you

19:10
start saying that we have to be just

19:13
very specific because as you know

19:16
and as as my listeners know there's

19:18
there's gold mutual funds there's gold

19:20
ETFs there's actually hard gold you you

19:22
hold your hand there's gold coins dig in

19:26
and throw the dart at exactly what

19:28
you're talking about yeah

19:31
um there are uh many ways to own

19:35
physical

19:36
allocated bullion

19:39
uh in an offshore account which is

19:42
perfectly safe

19:44
not held by a government but held by a

19:48
private entity who is audited on a

19:51
monthly basis and there are many uh such

19:55
Services where you can convert uh your

19:59
currency units wherever you happen to

20:00
may be on earth dollars or Canadian

20:03
dollars or Pounds or Euros or what have

20:06
you into physical bullion in a

20:10
completely allocated account that means

20:12
that they're not it's not co-mingled you

20:15
actually own that uh bullion that has

20:19
been talking about gold hard just gold

20:21
that you can pick up and put back down

20:24
we're not talking about

20:25
ETS or funds or all the stuff that's

20:27
being pitched out there gold coins and

20:30
you know the guy on TV Etc we're talking

20:32
about gold bullion correct that's

20:35
correct now it can be in the form of

20:38
gold bullion coins if you happen to want

20:40
to have them that way but

20:43
the easiest thing to do is to get

20:46
allocated physical bullion typically in

20:48
small bars which are held in your name

20:51
uh offshore now why do I say offshore

20:53
because the United States government in

20:56
1933 confiscated gold other than jewelry

21:01
uh I remember hearing from my

21:03
grandfather uh who was a young

21:05
entrepreneur at the time and he happened

21:07
to have uh 10 gold coins in his safety

21:12
deposit box at a local bank where he

21:15
lived in Providence Rhode Island and

21:17
where he owned a small business

21:19
and along comes uh FDR and he issues

21:23
these famous executive order uh stating

21:26
that within five months uh every single

21:29
ounce of gold uh held by Americans would

21:32
be confiscated

21:34
and one day my grandfather went to the

21:37
bank to uh put an insurance policy into

21:40
his safety deposit box and they uh the

21:45
bank manager said oh you can't go in

21:47
there unless this fellow goes in with

21:49
you my grandfather says well who's that

21:51
he said oh he's from the Internal

21:53
Revenue Service

21:55
and he said why he says well they need

21:58
to see if you have any gold coins or any

22:00
gold bars in my grandfather said well I

22:03
do have some gold coins and at this

22:05
point you know the IRS guy's ears

22:07
pricked up and he said okay let's go get

22:10
them so they went back there and my

22:12
grandfather gave him the key and the

22:13
bank manager had the other key and they

22:15
turned the locks and they pulled out the

22:17
drawer and indeed there were 10 gold

22:19
coins they were 20 gold pieces so the

22:22
IRS guy hands my grandfather cash uh of

22:27
200 dollars

22:29
and my grandfather takes the cash and he

22:32
hands it to the bank manager and says

22:33
would you please deposit this into my

22:35
account the guy was happy to do it

22:38
but a few months later when FDR had

22:41
confiscated all the gold which added up

22:44
to 261 million ounces of gold making the

22:48
United States government now the proud

22:50
owner of the largest horde of gold in

22:53
the history of the planet

22:55
uh that turned out to be more golden had

22:59
ever been assembled in any place at any

23:01
one time

23:02
and then what he did in order to

23:07
sorry about that what what he did uh

23:11
in order to uh increase

23:15
or or I should say increase the money

23:18
supply

23:19
was simply change the value of gold

23:22
overnight from 20.77 per ounce

23:27
to thirty five dollars that was an

23:30
immediate seventy percent not Seventeen

23:32
seven zero seventy percent devaluation

23:36
uh in what you owned before because they

23:39
took the gold from you at twenty dollars

23:42
and then they said oh too bad the

23:45
government now owns it and we're deeming

23:47
it to be worth thirty five dollars dumb

23:49
question is that where the I mean in in

23:52
all of us out here probably think

23:53
because we're not up to speed on it like

23:55
you are the Fort Knox gold that we all

23:57
know about as kids and people talked

23:59
about is that where that came from

24:01
there is no uh material amount of gold

24:06
at Fort Knox the biggest amount of gold

24:09
there is is a hundred floors below uh

24:14
ground level in the Federal Reserve Bank

24:16
in New York that's where all the gold is

24:20
kept and there are rooms down there and

24:24
each major country has a room

24:27
and when gold is exchanged among

24:30
countries it's transacted there uh so

24:34
let's say that uh Canada wants to pay

24:37
some gold to France uh they just move it

24:40
uh from the French

24:43
rooms of New York City that's correct uh

24:47
now many many countries many countries

24:51
have decided to repatriate their gold

24:53
because they don't trust the Federal

24:56
Reserve yeah now there's an interesting

24:59
story and it's very

25:02
um didactic for people to understand

25:06
when the United States until 19

25:09
uh 33 it was perfectly legal to own gold

25:13
and gold was coins as were silver uh and

25:17
then they made gold coins uh illegal

25:19
They confiscated them all but gold was

25:22
still the standard by which dollar

25:24
values were measured meaning goal was uh

25:27
were 35 an ounce and all International

25:30
Trade uh was based on gold at 35 an

25:35
ounce

25:36
now in 1968

25:39
uh

25:41
Lyndon Baines Johnson who needed to uh

25:44
both pay for the Great Society and the

25:47
Vietnam War simultaneously his famous

25:49
guns and butter approached to

25:52
geopolitics realized that he couldn't

25:55
raise taxes on the American public

25:57
anymore he had already put through a 10

26:00
cent per dollar 10 surtax the year

26:04
before and he realized that it wasn't

26:06
enough so he decided to reduce what they

26:10
called The Reserve requirement uh where

26:13
every dollar had to be backed by 40 gold

26:16
he reduced it down to 25 percent which

26:20
allowed him to increase the money supply

26:21
dramatically and then on March 19

26:25
1968 what he did was he completely

26:29
eliminated the reserve requirement for

26:31
gold

26:32
which you know was shocking to people

26:36
who truly understand it understood it at

26:38
the time but 99.9 of the people on the

26:41
planet didn't know what any of that

26:42
meant but what the result of it was was

26:45
that the dollar was no longer linked to

26:47
Gold so politicians on both sides of the

26:50
aisle had a free shot you know one party

26:53
would say oh we're for uh social justice

26:55
we're going to spend all this money on

26:56
that another party would say oh we're

26:57
for a big strong defense and they would

26:59
spend a bunch of money on that and the

27:01
way that they did it was they borrowed

27:04
and once nobody would loan money to the

27:07
government anymore the Federal Reserve

27:10
would buy up all the bonds with newly

27:13
ex-nihilo created money that's why we're

27:17
in the position we're in today

27:19
in order for a human being

27:21
to have something of value you have to

27:24
work for it and that work is represented

27:29
by let's call it a gold coin you know

27:32
for every let's say you make a hundred

27:35
thousand dollars a year uh at two

27:38
thousand dollars uh per coin uh you

27:41
would have you would be able to earn a

27:42
certain number of coins and those coins

27:45
are like a certificate but let me play

27:47
Devil's Advocate because I think the

27:49
history lesson is in place

27:51
the world Goes to Hell in a hand basket

27:53
you have gold

27:55
and you want to go buy bread how do you

27:56
go buy bread I mean what's the pragmatic

27:59
approach

28:01
your whole goal bullion now what

28:04
very good question and that's why

28:06
everybody should pair

28:08
their gold bullion with silver bullion

28:11
coins

28:13
pre-1965 what's called Junk silver uh or

28:17
modern day uh minted uh

28:22
gold uh one ounce coins either Canadian

28:25
maple leafs or U.S Eagles because you

28:29
can spend those let's say or today with

28:32
silver at about 23 an ounce a a silver

28:35
coin is let's say worth twenty five

28:37
dollars because you got the minting

28:38
costs you can use that for purchasing

28:42
gasoline you can use that for purchasing

28:44
uh food at the grocery store and uh

28:48
people will recognize those things and

28:51
they would understand that that's value

28:54
uh so big money that you save for

28:59
retirement that you never want to take a

29:02
long-term inflationary risk with you

29:05
hold offshore in uh I'm gonna I'm gonna

29:10
I'm gonna I'm gonna push back because

29:11
that's my job

29:13
um first of all it sounds very

29:15
complicated to the normal person and

29:17
second of all you know people don't most

29:20
people don't have the money to put off

29:23
sure they need it liquid they need it

29:25
around

29:26
Etc I mean I just read an article of the

29:29
day that 65 percent

29:31
um of the public regardless of what kind

29:33
of money they make or live in paycheck

29:34
to paycheck obviously we're not talking

29:36
to those people we're talking to the

29:37
other people who I deem as you know

29:39
Savers the scrimpers the people that

29:41
have put together a base of money

29:45
um without going in you know because I

29:47
think you might be losing some people

29:49
here on offshore us just seems to to

29:53
far-fetched for a lot of people how do

29:55
you bring it down to the common person

29:58
that wants to take advantage of this

30:00
type of pragmatic thinking but they want

30:03
to do it on a simple level can you bring

30:05
it down to that level you start with

30:07
silver coins that's how you start okay

30:10
silver and gold kind of dance around one

30:12
another uh in terms of value silver is

30:15
more of an industrial metal than gold

30:17
gold has a few industrial uses but it's

30:20
mostly uh for jewelry and also most

30:24
importantly as the base of money but

30:27
silver uh has an increased number of

30:30
industrial uses on a daily basis there's

30:33
already 60 000 different uses for silver

30:35
and it's becoming uh more scarce in the

30:39
Earth's crust because we've mined out

30:41
quite a but what's the percentage of

30:43
yeah you're pounding the table right now

30:44
and you're saying to the listeners and

30:46
viewers you really need go bullion some

30:49
in some part of your portfolio you

30:50
really need real silver coins what's

30:53
that percentage right not Jay zawatski

30:56
yeah percentages but normal human

31:00
people like me

31:01
I would say that the appropriate why do

31:05
you want to hold this you want to hold

31:06
it in case there's an emergency and you

31:08
also want to hold it in order to protect

31:09
yourself from inflation

31:12
in order to do that uh you would need

31:15
between 10 and 15 of your liquid uh

31:19
assets your liquid net worth in gold

31:22
slash silver uh if you have a low net

31:25
worth once again you're not talking

31:27
about gold funds and gold tea ETFs and

31:29
and I say that the name I'm getting

31:32
ready to say I I I listen to this

31:34
podcast but he's always pushing his gold

31:37
funds and and ets's Peter Schiff nothing

31:40
against Peter Schiff I think he's a very

31:42
smart man but he's pushing gold mutual

31:45
funds and gold management that's not

31:47
what you're talking about you're talking

31:49
about gold bullion and silver coins you

31:51
can hold in your hand right I happen to

31:52
know Peter Schiff and I know that he

31:54
also does provide a mechanism for the

31:57
actual purchase of silver and gold coins

31:59
good I didn't know that okay I have

32:01
purchased uh some of my uh silver and

32:04
gold coins from his company and I

32:07
recommend people to listen to his

32:09
podcast as well the Peter Schiff s-chief

32:12
podcast because just like Jay he is a

32:16
believer in the gold

32:17
story for like a better phrase he he

32:21
understands it I don't I'm not sure he

32:22
understands as well as Jay does but he's

32:25
one of the few people that I've heard

32:26
other than Jay talk about it rationally

32:28
seriously

32:31
um and you know a lot of people say oh

32:33
well you must be a crazy prepper or

32:35
whatever it's not that at all it's being

32:38
prepared for a future that many people

32:43
hope never happens but either way there

32:47
was no great Calamity in America between

32:50
1915 and 20 uh 22 but gold still

32:55
retained its value as I indicated on

32:57
that Honda to uh on the uh the Model T

33:01
and the Honda chart

33:02
uh so even if nothing bad ever happens

33:05
it is a perfect way because of its

33:08
scarcity in the world we already talked

33:09
about there's only two Olympic-sized

33:11
swimming pools full of that's the best

33:12
visual I've ever heard on gold ever and

33:16
you also tell me something as well about

33:19
pounding out gold and making it flat you

33:21
saw me another tell that tell that step

33:24
that's an interesting one too well one

33:26
of the elements that make gold true

33:28
money uh you know it's durable uh and

33:31
it's divisible uh you can take one ounce

33:35
of 24 karat gold which is 100 gold and

33:39
you can put it on a table a large table

33:42
with a mallet and you can smash it down

33:46
into essentially uh a tiny film it's

33:50
called gold leaf and you can get 300

33:52
square feet of gold leaf from a single

33:57
ounce of gold 300 square feet 300 square

34:01
feet of gold leaf per one ounce of 24

34:06
karat pure gold that's incredible and

34:09
that's what was used to Adorn uh temples

34:13
and

34:15
Christian churches and you name the uh

34:18
the religion they've used it throughout

34:21
you know pan religion all religions have

34:24
had an affinity with gold because it's

34:27
precious it's rare and it has unique

34:31
qualities uh but for the average person

34:35
just knowing that they have something

34:37
that over the grand sweep of time is you

34:41
don't it's not fine art

34:43
uh you don't have to spend you know a

34:46
hundred thousand dollars to buy you know

34:48
a fancy painting and you can't divide

34:51
that painting because if you do now

34:54
someone would say oh well now we have

34:55
nfts and we can tokenize it you know as

34:59
soon as there's a power failure what's

35:00
your token worth exactly but if you own

35:03
physical objects

35:06
then you are okay

35:08
uh because the big takeaway from this

35:10
for me is

35:12
ten percent up to 15 obviously you want

35:14
to do more that's your poison but what

35:16
Jay's saying 10 to 15 you need to

35:19
probably consider according to Jay into

35:21
gold or silver

35:23
correct what's another takeaway for the

35:26
listeners and viewers based upon you

35:29
know your research and education and how

35:31
just how you view the world well I

35:34
mentioned earlier that I you that I

35:35
personally use the barbell well I've

35:37
described one of the bars on the barbell

35:38
which is gold and silver as one of the

35:41
big uh ways to preserve yourself the

35:45
other one is and a lot of people are

35:47
going to be shocked when I say this but

35:49
the other one is cash and cash

35:52
equivalents

35:53
now when I say cash I'm not talking

35:55
about Green money that you put in a jar

35:57
and stick it up on uh your shelf no I'm

36:00
talking about

36:02
um short-term ladders of two types one

36:07
type is treasury bills that go up to you

36:12
know eight week 13 week six months one

36:15
year later them the benefit of treasury

36:17
bills is that you're going to get

36:19
whatever the current rate of return is

36:22
and you won't have to pay taxes on a

36:25
state basis they're not interest on a

36:28
treasury bill is not taxable at the

36:31
state level if you live in Florida you

36:32
don't care but if you live in Maryland

36:33
like I do where it's 8.3 percent it's a

36:37
big deal absolutely and the other way to

36:40
employ your cash is with the migas uh

36:45
there's nothing better than a multi-year

36:47
guaranteed annuity he's not being paid

36:50
for this everyone right away and I don't

36:52
own any right now done any right now

36:54
right but I believe that because of the

36:58
tax advantage nature of migas they beat

37:03
deposits at Banks they beat certificates

37:05
of deposit at Banks they are next to

37:09
treasuries the best possible way to

37:13
invest and I call it an investment

37:15
because you are getting a rate of return

37:18
contract money that is correct and if

37:21
you get a rate of return and it is tax

37:24
advantaged and then you can keep rolling

37:26
those migas over at whatever the then

37:28
current rate is which is going to uh

37:31
reflect whatever the perceived inflation

37:33
is over the next two to five years

37:36
then you can eventually convert that

37:38
tax-free you know by a 1035 Exchange

37:41
into an annuity a single premium or sure

37:45
for Lifetime income yeah absolutely yeah

37:47
we talked that my gonna spea is that the

37:49
uh is that is there another barbell

37:52
two-year plan

37:54
well those are the two Bells there's the

37:57
two big ones then along the skinny Rod

38:00
are other types of uh savings slash

38:04
Investments gotcha I um do not always

38:09
have investments in stocks I use What's

38:11
called the Dow gold ratio to determine

38:16
when to get out of stocks and when to

38:18
get into stocks and it's very simple and

38:21
it always works over time there's never

38:23
been an exception to this okay it's not

38:26
trading in and out it is looking at what

38:29
the uh Dow Jones Industrial Average is

38:33
compared to the price of an ounce of

38:36
gold when the Dow Jones Industrial

38:38
Average is say uh 10 20 30 40 times the

38:44
value of an ounce of gold that's the

38:46
time to get out of stocks

38:49
and buy gold

38:52
and then when when that ratio gets down

38:55
to five or less it's time to sell ninety

38:59
percent of your gold keep holding some

39:01
just in case

39:03
and then you get into dividend paying

39:06
stocks and when I say dividend paying

39:08
stocks I'm specifically talking about

39:10
dividend Kings dividend Aristocrats uh

39:14
Legacy stocks big stocks yeah I agree

39:18
um that's very that's very fascinating

39:20
I've heard versions of that but not put

39:23
as succinctly and simply

39:25
as you as you have done and I think

39:28
that's a that's really really good

39:30
advice let me ask you a couple just

39:32
general questions you know when you see

39:34
chairman chairman Powell Prince up to

39:36
the to the mic do you just laugh

39:39
it sees it is

39:40
or you cry okay because you wonder you

39:44
have to understand when the U.S

39:45
abandoned the gold standard

39:48
they went on what I refer to as the PHD

39:51
standard

39:52
and that means that it violates

39:56
uh reality uh as we have as we learned

40:00
from a very simple essay written by

40:03
Leonard Reed back in the 1950s and

40:06
everybody should read this or watch the

40:09
modern

40:10
uh video on it it's called I the letter

40:14
i

40:15
comma pencil p-e-n-c-i-o eye pencil if

40:19
you have never read or viewed eye pencil

40:23
that you have missed out on the greatest

40:26
uh education synopsis give a give an

40:29
elevator speech on it I can do it in one

40:32
phrase do it there is no Mastermind

40:38
there is not a single human being

40:41
who can even make a pencil

40:45
you there is nobody who has all of the

40:48
CR the ability to combine the resources

40:50
to get the resources or has the

40:53
capability of making a number two ever

40:57
hard pencil

40:59
from the Eraser to the little go you

41:02
know uh Brass Band they call the for

41:04
rule down to the slats down to the

41:06
graphite in the middle those materials

41:09
come from all over the planet the

41:12
graphite comes from Sri Lanka uh the

41:14
wooden slats come from uh tall trees in

41:18
the in the Pacific Northwest the Eraser

41:21
is a mixture of lots of various

41:23
chemicals the for rule comes from you

41:26
know tin and copper to make the brass

41:28
from all over the planet they all have

41:30
to be combined and there's not a single

41:32
person in the who's ever lived who could

41:36
make one of those on their own

41:39
but the somehow they exist why do they

41:43
exist because we have the price system

41:45
and uh we have markets and the markets

41:49
are balanced by the price system now why

41:51
did I go into this because the price

41:53
system has been destroyed by the phds

41:57
the our you know sociopathic overlords

42:00
at the uh Federal Reserve uh who then do

42:04
the bidding of their political Masters

42:07
uh and they think they're smarter than

42:11
the market nobody is smarter than the

42:14
market what you have to do is understand

42:16
what the market is and how to

42:19
participate in it and you take what the

42:21
market gives you and you run away from

42:24
the market when it goes against you

42:26
right and that's that's the best way to

42:30
preserve your wealth over a long period

42:32
of time Jay Powell is uh not an

42:37
economist he's he's a lawyer who was

42:41
born in the Washington area has lived in

42:44
the Washington area his whole life he's

42:46
never had a quote real job he's got no

42:49
dirt under his fingernails he doesn't

42:51
shop at Walmart he doesn't you know dine

42:55
at uh you know casual dining

42:59
he's a very very wealthy guy because

43:01
he's been completely plugged in his

43:03
whole life sure he serves his political

43:06
Masters and his political Masters are

43:10
the guys you know the super Elite the

43:12
globalists who you know have created

43:15
this system for their own benefit let's

43:17
face it who gets the money first when

43:19
it's created by the Federal Reserve the

43:21
big Banks sure what do they do with it

43:23
they loan it to their buddies and they

43:26
they're able to acquire the assets

43:28
before the inflation sets in

43:31
and then all the rest of us are left

43:33
dealing with inflation

43:35
uh and and the fruits of their failure

43:38
to labor on our behalf that's what's

43:41
going on

43:43
um and he serves them as they all have

43:45
Ben Bernanke

43:47
finally admitted in 2010 that in

43:51
addition to the two mandates of the

43:54
Federal Reserve the first one which was

43:57
a good mandate was to provide liquidity

44:00
for good collateral that's why the

44:03
Federal Reserve was created so that if

44:05
there was a run on a bank the bank could

44:07
call up the local Federal Reserve branch

44:10
and say there's a run on the bank and

44:12
the chairman of the local branch of of

44:15
the Federal Reserve would say all right

44:16
send us down your good collateral

44:19
meaning you know your good house loans

44:21
your good uh auto loans Etc and we will

44:25
pay you 80 of the value of those we'll

44:28
swap it and then people will see there's

44:30
money in your bank and the bank run will

44:33
end uh it's sort of like what happened

44:35
in that movie uh It's a Wonderful Life

44:40
then the second uh mandate was given by

44:43
Congress after the war it was to

44:45
maintain full employment well those two

44:47
things don't work together

44:49
uh because you can either maintain the

44:52
value of the dollar or you can

44:55
facilitate uh Keynesian economics which

44:59
means uh increase employment decrease

45:02
employment by using the tools of the

45:05
Federal Reserve sure which are all blunt

45:07
instruments but in in 2010 Ben Bernanke

45:10
created a third mandate all on his own

45:13
and that mandate was

45:16
uh let's create the wealth effect

45:19
and he even wrote an article that was

45:21
published in the Washington Post where

45:22
he admitted it he says I am going to do

45:25
what it takes to create a wealth effect

45:27
so that people will think they're rich

45:29
and spend more money and that will save

45:31
the economy well it didn't work because

45:34
all we got out of that was bubble bubble

45:38
bubble bubble and the bubbles are going

45:39
to turn to trouble and they're beginning

45:41
to crack now

45:45
we're going to kind of close this up but

45:47
I want to

45:49
um let's kind of close out with

45:52
predictions whether they be gloom and

45:54
doom it is what it is I need your brain

45:56
here and I need you to be honest with my

45:58
listeners and viewers about

46:00
where we're headed in your opinion and

46:02
then you've already given them some good

46:04
ideas on how to hedge that but but

46:06
what's your opinion here as a country

46:09
I'm going into at the time of this

46:11
taping

46:12
um you know we're getting close to 2023

46:14
where do you see 2023 and 2024 what's

46:17
that look like to you it all depends on

46:20
one thing if America once again becomes

46:23
an energy Powerhouse as it was fairly

46:26
recently we will be able to save America

46:30
if we do not

46:32
uh then we will fail as a country

46:35
meaning we will become

46:38
Venezuela Argentina uh we will become a

46:43
third world kind of country when people

46:45
hear you say that

46:47
because we're all patriotic to to

46:49
probably to a fault in a lot of cases

46:52
you're not you're not kidding around you

46:55
you really think it's word that

46:57
teetering that close if things don't

46:59
happen correctly right right well

47:02
Society has already split

47:04
um into two uh metaphysically warring

47:08
camps let's hope it never comes to the

47:10
other kind of Warring sure yeah uh I

47:13
pray every day that that doesn't happen

47:15
yeah

47:16
now the problem is that we have changed

47:21
policies

47:22
and we have taken a turn that we are

47:25
trying to reach some kind of new energy

47:27
Nirvana before the technology is there

47:29
so they're changing these policies and

47:32
then stripping out our ability to have

47:34
cheap affordable power

47:38
um and

47:39
it may take 40 years for their to

47:42
actually be clean

47:45
cheap

47:46
reliable energy and that will come from

47:49
one of two sources and there are only

47:51
two that can do it one is Fusion which

47:53
is who knows whether that's ever going

47:55
to come and the other one is eventually

47:57
the hydrogen economy that is conceivable

48:00
if they start investing the money

48:02
properly uh because hydrogen unlike

48:05
fossil fuels has no CO2 component to it

48:09
now I personally don't believe that man

48:12
is the cause of so-called global warming

48:14
if that exists but that's for a whole

48:16
different yeah that's our next that's

48:18
our next podcast let me do this when we

48:20
got to close it up but with every

48:22
celebrity guest host at the very end I

48:25
do what's called a mic drop moment which

48:27
means that I'm going to count you down

48:29
from five and then I'm gonna hand you

48:31
the mic you're going to say something

48:33
within about a one to two minute close

48:35
to close this thing out and then we'll

48:37
close it out from there so here we go

48:39
mic drop moment Jay zawatski one of the

48:41
smartest dudes on the planet you're

48:44
probably you probably can't believe what

48:46
you just heard and he will be on again

48:48
so here's the mic drop moment in five

48:50
four three two one go

48:53
well Stanford I want to thank you for

48:55
the opportunity to meet your audience I

48:57
do hope to come back and talk about

48:58
absolutely other topics but you see that

49:01
hat I have on it says save comma America

49:04
yeah for the people that are on the

49:05
podcast platforms listening and your car

49:07
is he's wearing a red hat that's not the

49:10
red hat you think but it says save

49:11
America so go right and it says save

49:14
comma America meaning this is my uh

49:18
imploring you to do one thing for

49:21
yourself because remember you're

49:23
supposed to pay yourself first

49:25
always the basic rule of personal

49:28
finance the reason they call it personal

49:30
finance is that you are supposed to uh

49:34
care about yourself if you care about

49:36
yourself and your family the rest will

49:38
take care of it and the only way to

49:40
ultimately take care of you yourself and

49:43
your family is to save because the only

49:45
thing that can get you from day one

49:48
today Thousand and One and day hundred

49:51
thousand and one uh for your you know

49:53
children and grandchildren is to save

49:56
and the way you save is using the

49:58
barbell approach use gold and silver on

50:01
one end use cash uh short-term cash

50:05
Investments including you know

50:07
treasuries and migas and the other thing

50:09
you have to do is constantly read you

50:13
must read all the time don't spend your

50:16
time on Tick Tock don't spend your time

50:18
on Netflix read the classics and stand

50:21
if if you want me to I can provide you

50:23
with a list of three Sim simple starter

50:26
books that are accessible to anybody

50:29
with an eighth grade plus education

50:30
email me that list and we'll get it to

50:32
you then Jay let me tell you something

50:33
let me close with this

50:35
you know when I invite guests on and my

50:37
PR firm does a very good job finding

50:40
Superstars like Jay but I never never

50:42
ever know

50:44
what's going to happen I never know if

50:47
they're good or talented and I'm just

50:49
going to say this right now

50:50
that was incredible and and if you've

50:53
listened this podcast a lot and we've

50:55
been on for a long long time that was

50:57
one of the best things I've ever heard

51:00
and I'm looking forward to having Jay on

51:02
he is an absolute rock star and it you

51:05
know when I hear people like Jay

51:07
I'm I'm always amazed that he's not on

51:10
CNBC and he's not on Fox Business and

51:13
you know we can go down that rabbit hole

51:15
but that's the reason this podcast

51:17
exists and it exists to find the

51:20
smartest people in the world to talk

51:23
about other things other than annuities

51:25
that will help you in life and in

51:29
retirement and with your lifestyle and

51:32
to hedge against crazy things that are

51:34
happening this world whether it be

51:35
political whatever you however you want

51:37
to frame it

51:38
but I'm just proud to have it all have

51:40
him on and I really want to thank every

51:42
single person out there on all the major

51:44
podcast platforms and the fun with

51:47
annuities YouTube channel so glad you

51:49
join us and we're going to continue to

51:51
bring this type of Talent on thank you

51:54
so much for joining us I will see you

51:56
next time

52:02
[Music]