Currency vs. Money is the 1st Episode of Mike Maloney’s Hidden Secrets of Money, a series presented by Mike Maloney as he travels the world to uncover the Hidden Secrets of Money.
Mike Maloney takes you to Egypt to unravel the difference between currency and money. This is one of the most important lessons you will ever learn, and will pave the way for your understanding of future episodes. Because without knowing exactly what money is… how can we expect to understand the ramifications of how it is treated by different civilizations, politicians, and central bankers?
Transcript
00:03
your true wealth is your time and
00:05
freedom money is just a tool for trading
00:08
your time it’s a container to store your
00:10
economic energy until you’re ready to
00:12
deploy it but the whole world has been
00:15
turned away from real money and has been
00:17
fooled into using currency a deceitful
00:20
imposter that is silently stealing your
00:22
two most valuable assets your time and
00:25
your freedom welcome to the rabbit hole
00:31
we are entering a period of financial
00:34
crisis that is the greatest the world
00:36
has ever known the wealth transfer that
00:39
will take place during this decade is
00:41
the greatest wealth transfer in history
00:43
wealth is never destroyed it is merely
00:46
transferred and that means that on the
00:48
opposite side of every crisis there is
00:50
an opportunity the great news is that
00:53
all you have to do to turn this crisis
00:56
into your great opportunity is to
00:58
educate yourself I believe that the best
01:02
investment that you can make in your
01:04
lifetime is your own education education
01:08
on the history of money education on
01:10
finance education on how the global
01:13
economy works education on how all of
01:16
these guys to central bankers the stock
01:18
market how they can cheat you how they
01:20
can scan you
01:21
if you learn what is going on and how
01:25
the financial world works you can put
01:28
yourself on the correct side of this
01:30
wealth transfer Winston Churchill once
01:33
said that the further you look into the
01:35
past
01:36
the further you can see into the future
01:38
this program is all about creating your
01:41
own crystal ball being able to gaze into
01:43
the future being able to change this
01:46
crisis the greatest crisis in the
01:48
history of mankind into your great
01:51
opportunity
02:00
you
02:05
the hidden secrets of money some of them
02:08
are hidden in plain sight they’re like
02:10
right in front of you the way the
02:13
monetary system works is something that
02:15
isn’t actually hidden away from all of
02:18
us it’s out in the open but it’s complex
02:21
and people just don’t they can’t see how
02:23
it works
02:24
it’s hard for them to imagine that we’re
02:26
living in such a hoax others are meant
02:31
to be secret but the truth is slowly
02:32
coming on like the Federal Reserve being
02:35
a private corporation and not really
02:38
part of the US government but when I
02:40
started studying this what I found was
02:43
that there was no place that I could
02:45
point people to where they could get it
02:47
all in one spot and so I basically
02:50
decided to write my book about it and
02:53
consolidate monetary history economics
02:55
the markets fundamentals of gold and
02:58
silver there’s a lot of smoke and
03:00
mirrors in economics and I’ve sort of
03:02
made it my job to lift the fog for
03:05
people
03:15
welcome to Egypt this is where it all
03:18
began
03:19
roughly 5,000 years ago the Egyptians
03:22
started using gold and silver as their
03:24
predominant form of currency but it was
03:26
not yet money the pieces of gold and
03:30
silver that they were using were odd
03:31
sizes and weights odd purities so it
03:35
still was not interchangeable where each
03:38
unit is the same as the next
03:40
this meant that nothing really had a
03:42
price yet you couldn’t put a price of so
03:45
many coins on something because they
03:47
didn’t have coins yet trade was still
03:50
difficult it was still a guessing game
03:52
when it came to the exchange of values
03:55
one of the reasons that we are in the
03:58
financial mess that we are today
04:00
globally is that people do not
04:03
understand the difference between
04:04
currency and money currency is a medium
04:09
of exchange a unit of account it is
04:12
portable durable divisible and something
04:15
called fungible fungible means that each
04:18
unit is the same as the next unit a
04:20
dollar in my pocket buys the same amount
04:22
as a dollar in your pocket
04:23
money is all of those things plus a
04:27
store of value over a long period of
04:30
time even financial planners bankers
04:33
your account they don’t understand the
04:36
difference between currency and money
04:38
the currency in your pocket is a medium
04:42
of exchange it’s a unit of account
04:44
because it’s got numbers on it it’s
04:47
somewhat durable it’s portable it’s
04:50
divisible in that you can make change
04:52
and it’s fungible a dollar in my pocket
04:54
buys the same amount as a dollar in your
04:56
pocket but because government’s can
04:59
print more and more and more of it and
05:02
dilute the currency supply it’s
05:04
continually transferring wealth out of
05:07
your pocket out of your bank account to
05:09
the government and to the banking system
05:12
the reason that gold and silver are the
05:15
optimum form of money is because of
05:18
their properties it’s an easy medium of
05:21
exchange because gold and silver store a
05:23
large amount of value in a very small
05:26
area it’s a unit of account pure gold
05:29
has the same value all over the planet
05:32
so an ounce of gold buys the same amount
05:34
here in Egypt as it would in China or in
05:37
the United States it’s durable the same
05:41
gold that Egyptians were using in trade
05:43
5,000 years ago is still here with us
05:46
today
05:47
it does not corrode it’s divisible you
05:50
can make change with it it’s very
05:52
portable you could use something like
05:54
oil as money it’s just that you can’t
05:57
carry around a barrel of oil on your
05:59
back it’s fungible pure gold is the same
06:03
wherever it is on earth
06:05
pure silver is the same wherever it is
06:07
on it’s limited in quantity that’s the
06:10
reason that it maintains its purchasing
06:11
power governments cannot print it over
06:14
the last five thousand years only gold
06:17
and silver have maintained their
06:18
purchasing power there have been
06:20
thousands upon thousands of fiat
06:23
currencies currencies that are unbanked
06:25
by gold or silver and they have all gone
06:28
to zero it’s a one hundred percent
06:30
failure rate
06:32
well fiat currency of course is a
06:35
currency that is exists at the dictate
06:39
or by Fiat from from a government do you
06:42
see they have their printing presses and
06:43
the paper money rolls off the printing
06:46
presses and then they give that the Fiat
06:49
designation which makes the currency
06:52
official it’s just worthless paper but
06:54
when Ben Bernanke gives it to special’
06:56
sign and they have the cult meeting at
06:58
the Federal Open Market Committee
06:59
meetings it suddenly becomes currency
07:03
if you look at what’s really going on
07:05
it’s it’s a con game
07:07
and so there’s confidence well the
07:08
Federal Reserve is very forthright about
07:11
what they’re doing if you read their
07:12
websites they’ll tell you it’s a
07:14
confidence game they tell you that
07:17
there’s no intrinsic value in their
07:19
money they’ll tell you that they print
07:21
it back by absolutely nothing they
07:23
actually display all these facts but if
07:25
you tell somebody in the public that
07:28
this stuff is created out of thin air
07:29
there’s no backing whatsoever it’s
07:31
absolutely worthless it’s about as
07:33
valuable monopoly money
07:34
they’ll look at you like you’re not is
07:37
there an example throughout history of a
07:41
fiat currency a piece of paper that’s
07:43
unbag by anything
07:44
surviving short answer no long answer no
07:50
and here’s one when Addison Wiggin took
07:53
over at the Daily Record I got cranked
07:54
up Bill Warner asked him to catalogue
07:57
all of the fiat currencies throughout
07:59
history what happened to each other
08:01
Addison dutifully went to work within a
08:04
short period of time he had gone through
08:06
the alphabet all the fiat currencies
08:09
started with the letter A were done they
08:11
all went to zero he was halfway through
08:13
the letter B and all the fiat currencies
08:15
start with the letter B and there were
08:17
600 of them in just the first letter and
08:21
a half of the alphabet and every single
08:24
one of them went to zero every one 600
08:31
fiat currencies that start with the
08:32
letter A and half of the ones that start
08:35
the letter B are 600 of these things no
08:39
one ever came close do you think this
08:42
one united states gonna be the first one
08:44
after all that I don’t think so no no
08:48
currency fiat currencies ever survived
08:50
none
08:55
think about money is there actually is a
08:57
fairly well accepted definition of what
08:59
money is the question is as you apply
09:01
that definition to particular things
09:03
that are people claimed to be money do
09:05
they fit the definition well just take
09:07
the paper dollar for example how well
09:09
does it perform those functions well
09:10
store a value the dollars lost 95
09:13
percent of its purchasing power since
09:16
the creation of the Federal Reserve in
09:17
1913 so not very good as a store value
09:19
one of the things I do is just a way to
09:22
get the audience’s attention is I have a
09:23
slide and there are three pictures on
09:26
the slide one is a pile of monopoly
09:27
money
09:28
the other one is a pile of Federal
09:29
Reserve notes what Americans would call
09:31
paper money the other one is a solid
09:34
gold American Eagle one ounce coin and
09:37
the title of the slide is which of these
09:39
is not like the other and if you know
09:41
the show Sesame Street or you have
09:42
children who watch it it’s one of the
09:44
favorite vignettes and Sesame Street and
09:46
what it really is is a kind of IQ test
09:48
for five year-olds they’re supposed to
09:49
look into three things and look at
09:51
characteristics and find the one that’s
09:52
not like the other well I’ve shown this
09:54
slide two groups of you know Ivy League
09:57
university professors and I’ve also
09:58
shown it to you know children you know
10:01
what kind of five result my nieces and
10:03
nephews and so forth and when the
10:05
professor’s look if they say well
10:07
clearly the the dollars are not like the
10:11
others because gold has no role as money
10:12
and monopoly money is junk and the
10:15
American dollars are Stewart value so
10:16
that’s not like the other but the
10:18
children look at it and they say well
10:20
the gold coin is not like the other
10:21
because the other two are just piles of
10:22
paper and the gold coin is clearly
10:24
something different so my question to
10:26
the audience is who’s smarter a
10:28
five-year-old or an Ivy League professor
10:30
before World War one each note that a
10:34
Treasury issue would say that there have
10:36
been deposited with the United States
10:38
Treasury $20 in gold coin payable to the
10:41
bearer upon demand the money was in the
10:44
vault the currency was a note they gave
10:47
you that was a claim check only a claim
10:49
check on the money the same as if you go
10:52
to the drycleaners and you give them
10:54
your shirt and they give you a claim
10:56
check for your shirt the value is that
10:59
shirt at the drycleaners not the piece
11:01
of paper that says that you own that
11:03
shirt
11:04
so our currency that circulate
11:06
was the paper US Dollars and they were
11:09
claim checks on money the next hidden
11:13
secret is the difference between
11:15
currency and money money must be a store
11:18
of value and maintain its purchasing
11:20
power over long periods of time as we
11:23
progress through this series you’ll
11:25
learn that national currencies are
11:27
really a tool used by the government in
11:29
the financial sector to leech away your
11:31
time and your freedom by stealing your
11:34
purchasing power so rather than storing
11:37
your economic energy currencies leak now
11:41
compare that to the gold and silver the
11:43
Egyptians were using like I started with
11:45
it still wasn’t money because it wasn’t
11:48
interchangeable yet but they were on the
11:50
right track as gold and silver have
11:52
proven over thousands of years to be the
11:55
ultimate store of value gold is only
11:58
formed when a star explodes a supernova
12:02
and it stays around forever this is one
12:06
of the properties that make it the
12:07
ultimate money
12:15
you know people are amazed that after
12:18
5,000 years the pyramids are still here
12:21
but what I’m more amazed at is that the
12:25
currency that the people that built this
12:27
we’re using that currency that gold and
12:29
silver that they were using and trade on
12:31
a daily basis is still around today it
12:35
may have been melted down and re refined
12:38
and it’s in a coin or a bar or in some
12:41
piece of jewelry but it’s still with us
12:43
today and it still purchases something
12:48
yes it is the ultimate money because
12:50
there is nothing else even in the same
12:52
league it’s divisible it’s permanent
12:55
it’s store of value it’s all in the unit
13:00
of accounts got everything you want out
13:02
of money but it doesn’t go away and it
13:06
can’t be increased that is what makes
13:09
gold the most beautiful money of all
13:11
what more can you ask out of a money
13:14
it keeps governments under control you
13:17
can maintain a solvent system
13:19
governments don’t like gold at present
13:22
because they’re getting away with the
13:24
fiat currencies and they’ll do
13:26
everything they can to discredit it as
13:28
an asset class I mean my goodness gold
13:30
is outperform the Dow Jones Industrial
13:33
Average in each of the last seven years
13:35
yet it’s not considered a legitimate
13:38
asset class why again it’s the fear that
13:42
maybe gold will be imposed on the system
13:44
that it will constrain government
13:47
ability to spend beyond
13:49
they can’t print it the kemper touch
13:52
know the proper definition of inflation
13:56
I use Milton Friedman’s definition
13:58
inflation is an expansion of the
14:00
currency supply deflation is a
14:02
contraction of the currency supply if
14:04
you expand the currency supply
14:07
eventually prices will rise and if you
14:11
contract the currency supply eventually
14:14
prices will fall this is a pool but it’s
14:19
not a pool of water thus the currency
14:21
pool and these are prices and if you
14:25
expand the currency supply prices like a
14:27
sponge in water have to rise to suck up
14:30
the excess currency governments never
14:33
stop printing more currency and adding
14:36
currency to circulation therefore prices
14:40
keep on going up not because the stuff
14:43
that you’re trying to buy is changing
14:45
the real estate doesn’t change what has
14:48
changed is the currency purchases less
14:51
and less it’s the currency going down
14:53
not prices going up the truth is what we
14:57
have that makes our world work right now
14:59
is a big story
15:00
not if it’s real it’s all just promises
15:03
and if you think about it that’s our
15:04
currency began to work in beginning you
15:07
know before we had currency we had
15:08
butter I’ll give you three coconuts and
15:10
you give me four fish because that’s
15:12
kind of a fair exchange on coconuts to
15:13
fish but that got complicated so we had
15:15
to invent this thing called money to be
15:17
a divisible portable medium of exchange
15:20
and challenges is that we lost that a
15:23
long time ago we lost having things of
15:25
value be our currency now we have this
15:27
thing called numbers and accounts but
15:29
trust me it is not real it’s a big
15:31
made-up story one of the biggest
15:34
make-believe stories ever is called
15:36
quantitative easing which sounds complex
15:38
but it’s really just a smoke and mirrors
15:40
term for currency
15:42
qe started with the banking bailouts
15:44
back in 2009 this currency was created
15:48
out of thin air and then given to the
15:49
banks who paid themselves record bonuses
15:52
and reward for crashing the world
15:54
economy this is a global phenomenon but
15:58
all you have to remember for now is that
16:00
whether it’s QE bailouts or stimulus
16:02
programs these are all just voodoo hocus
16:05
pocus terms for increased currency
16:07
creation I believe gold and silver will
16:11
reassert themselves as money and when
16:14
they do there just isn’t enough and
16:17
their purchasing power is going to go up
16:20
many many many times
16:24
Egypt is an amazing place there’s a
16:27
franticness about it uh tur chaos
16:30
especially like the traffic but when it
16:33
comes to like all of the merchants that
16:35
are trying to get every last dime out of
16:37
you you get fleeced to the point where
16:41
you come back with an empty wallet but
16:48
you know what they’re amateurs compared
16:51
to Wall Street in the past several years
16:57
I’ve spoken in many countries about the
17:00
crisis that’s coming and a lot of people
17:02
think that they’re going to be okay in
17:04
their country that it’s only going to
17:06
happen to the United States or maybe the
17:07
United States in Europe but what they
17:10
don’t realize is that this is a global
17:11
phenomenon I got to show you something
17:13
here this is base currency in the United
17:20
States this is a number of paper dollars
17:22
that exist basically it took 200 years
17:25
to go from no dollars in existence to
17:27
eight hundred and twenty five billion
17:29
and then we had the bailouts and then we
17:33
had QE one quantitative easing one then
17:36
qe2 and then we had QE three and then QE
17:40
four and then soon we’re going to have
17:42
QE 57 and QE 382 and it isn’t just here
17:49
this is what the Canadian currency
17:52
supply looks like this is Australia
17:56
South Africa Russia now this starts out
18:01
in just the year 2001 and this is like
18:04
18 times more currency in existence in a
18:09
little over a decade
18:11
here’s Singapore same story look at that
18:14
since the crisis just BAM India China
18:20
every government on the planet is doing
18:23
this insane deficit spending and
18:26
expanding their currency supplies doing
18:29
bailouts and history shows that there is
18:32
no example of this turning out well it
18:35
is sometimes amazing that we haven’t
18:38
experienced more inflation than we have
18:42
if they keep expanding the money supply
18:44
so vastly why aren’t our price is
18:47
growing faster than they really are and
18:49
the answer is that a good chunk of the
18:52
money that the Fed created has been
18:54
shipped overseas I remember early in my
18:56
research I heard this expression that
18:58
the Americans have exported their
19:00
inflation nothing when is that how can
19:02
you export your inflation put it in a
19:04
box and send it what do you do well now
19:06
I understand you export your inflation
19:08
by simply sending all these dollars that
19:11
you created to these other countries and
19:13
then they send you their refrigerators
19:15
and their cars and whatever their TV
19:17
sets so you get hardware and they get
19:19
little pieces of paper it’s a great deal
19:21
for the American people for a while for
19:25
a while sooner or later all of those
19:27
pigeons come home to roost when the time
19:31
comes as it looks like it’s now coming
19:33
when the rest of the world is saying we
19:36
don’t want to play this game anymore
19:37
Uncle Sam’s dollars are just becoming
19:39
worthless they’re too many of them we’ve
19:41
got to find something else other than
19:43
American dollars then those dollars
19:46
start to come back to America people we
19:48
don’t want them anymore what do we do
19:49
with them once this revs up and we’ve
19:52
got this this little trickle of money
19:55
coming back that we previously exported
19:57
when once it becomes a flood and it
20:00
starts to rush back now we are getting
20:03
our former exported inflation brought
20:06
back to us and then we’ll see the
20:08
quantity of money inside the United
20:10
dates grow much more rapidly even than
20:13
the Federal Reserve can create it
20:14
because we’re getting a previous money
20:16
back and that’s when we will really see
20:19
the tanking of the US dollar in terms of
20:22
what it will buy during the second round
20:24
of quantitative easing global food
20:27
prices went up 60 percent and this
20:30
created a humanitarian disaster for the
20:32
two billion people on earth who live on
20:35
less than $2 a day these people were
20:37
hungry to start with that became
20:39
hungrier and some of them started
20:41
overthrowing their governments in North
20:43
Africa and around the Middle East so
20:46
quantitative easing was the spark that
20:48
ignited the Arab Spring so that’s that’s
20:51
it when you create money you get some
20:53
sort of inflation it just depends on
20:55
where the inflation goes given the
21:07
premise that you have a permanent
21:10
underclass or poor class and how does
21:12
inflation affect them disproportionately
21:15
it affects them basically in the
21:19
percentage of their income that goes to
21:22
food and we see this as a ratio and we
21:25
know that there are some danger points
21:26
for example in Egypt recently once that
21:29
ratio got to 40 percent of income going
21:33
to food and the price of food rising due
21:35
to inflation when he got to 40 percent
21:37
that’s historically a point where people
21:40
actually staged a revolution that’s
21:42
exactly what we saw the French
21:44
Revolution similarly was all around the
21:46
price of food getting to a certain
21:48
critical point where people simply the
21:50
risk reward for revolution was favorable
21:52
toward revolution when they branded
21:58
well exactly right because when you have
22:01
a runaway inflation it’s punishing the
22:04
very people who are most productive in
22:06
society in other words the people that
22:08
produce more than they consume and save
22:11
the difference the problem is is that
22:14
those productive people the savers save
22:17
in their national currency and
22:18
unfortunately the national currency is
22:20
just a Fiat piece of paper at this point
22:23
so when it’s destroyed through runaway
22:26
inflation that $100,000 that you are
22:29
hoping to retire on doesn’t exist and
22:32
the things that you are going to buy
22:34
with it and provide for others don’t
22:35
exist either now what are you going to
22:37
do
22:40
so that all seems pretty scary
22:43
however the you know this is going to
22:46
happen and you can only play the hand
22:48
that you’re dealt but the great news is
22:50
that gold and silver always end up doing
22:52
an accounting of the expansion of the
22:54
currency supplies basically the will of
22:57
the public in the free markets when
22:59
governments do this kind of stuff to
23:01
their currency supply they debase it
23:03
eventually it comes back in inflation
23:05
people sense the loss of their
23:07
purchasing power they rush back to gold
23:09
and silver and they bid the value of the
23:11
gold and silver up in the country until
23:14
it meets or exceeds the value of all the
23:16
currency in circulation this is a
23:18
process that’s been going on over and
23:20
over again throughout history except
23:23
this time it’s happening on a global
23:25
scale it has never before happened in
23:28
all countries at once and that means
23:31
that this is the greatest wealth
23:32
transfer in history therefore it’s the
23:35
greatest opportunity in history and it’s
23:38
not going to happen again in your
23:39
lifetime so now we’ve learned that your
23:44
true wealth is your time and your
23:46
freedom money is a trading tool that
23:49
stores the economic energy that is your
23:51
time and freedom whereas currencies leak
23:54
them away gold and silver are the
23:57
ultimate money simply because of their
23:58
properties fiat currencies are based
24:01
solely on confidence and always return
24:03
to their intrinsic value of zero
24:05
governments don’t like gold because it
24:08
imposes restraint rising prices are a
24:11
symptom of an expanding currency supply
24:13
and gold and silver always account for
24:15
an expanding currency supply so that’s
24:19
it for this episode join me next time as
24:21
we begin to investigate how monetary
24:23
history just repeats and repeats and how
24:25
gold and silver always win the battle
24:27
between currency and money until then my
24:30
challenge to you is to stop calling
24:32
currency money it’s a crucial first step
24:35
towards setting your mind free of all
24:37
this economic voodoo and changing your
24:39
context you can learn more by watching
24:41
the bonus features on our website and if
24:43
you have any questions you can post them
24:45
there and we’ll answer some of your
24:47
questions in future bonus features
24:49
so good luck thanks for watching and
24:52
we’ll see you next time
25:05
with this fiat me it comes from the
25:08
latin for crappy car the desert in a
25:23
suit my camel died you’re not too sure
25:30
about that
25:35
I am ready for a good long nap
25:40
hi welcome to this bonus feature for the
25:44
very first episode of hidden secrets of
25:46
money and this is currency versus money
25:49
so that’s the major topic
