The Trouble with a $5 Coke
I just wanted to give you a quick video about coke. Not the coke that you might be thinking about. I’m talking about cocaine. Just I’m completely joking. We’re talking about-didn’t even think I was gonna go that way, did you?
We’re talking about the reason that we’re having so many issues right now and the reason that people like Bernie Sanders and the Alexandria Ocasio Cortez, the candidate in New York, the socialist candidate outward openly socialist candidate. The reason why we, you know, 20, 30 years ago we as a country were vehemently fighting people like that and now a lot of the countries, especially young people are embracing that and it hasn’t mainly to do with currency. It’s something we talked about all the time and is something that we don’t generally, I don’t generally talk about the ramifications of it necessarily, but this is one of the results and the ramifications of easy money and printing money. You have inflation. The Federal Reserve was created in 1913 and we’ve talked about that many times. The dollar has lost 95% of its purchasing and purchasing power since then.
Gold vs Hourly Wage
I have an email I got from the Palm Beach Daily, which is a Tikka Tory runs that and is a newer mentor of mine actually that I found and they actually took a manuscript from the Casey Report, Casey Research, which is an awesome outlet as well. They actually talk about just US hourly wages and what it is priced in gold. I’m gonna show you a graph or two here briefly that convey that and just kind of show you a little bit about this.
Now like I said, I’ll show you this one in a write up a couple of stats here. Really, for instance, when priced in gold, and again, like I said, I don’t talk about the results of the money or currency creation that we’ve been in and the things that we’ve been doing as a country. I don’t talk about the results, well, this is what we’re seeing, we’re seeing are ramifications of people being talked about right in here. People being squeezed. You know, obviously, health care is extremely high now. A lot of people losing their coverage, promise that we could be on it and now people are losing it. You know, I lost my coverage four or five times in the last six or seven years and it’s incredibly high now. I mean, it’s gone up hundreds of percent from what we were paying before initially.
Dollar Loses its Purchasing Power
People are feeling that squeeze, you know, the $5 coke, right? People that are working at fast food chains, for instance, they want this. There’s a reason they want that. You know, there’s a reason, everyone says, your grandfather was telling you about the home he bought a five grand and now it’s $500 grand. There’s a reason for that is because the dollar has lost purchasing power. It’s because they printed money and there are more dollars in existence. So it’s not as rare. It’s not as valuable. So it takes more currency to buy that same exact home, that same exact three bedrooms, two bathroom house in San Francisco is now a million dollars and it used to be $50,000, 35 years ago, 40 years ago. It used to be, less obviously you be $8,000, $12,000, 50 years ago, 60 years ago. So it’s just currency, 1971 rates and took us off the gold standard. We are unpacking from gold then. There was no reason we can’t print as much money as we want.
Minimum Wage Then and Now
So I have this chart right here actually, that you can see. This is “When priced in gold, US wages have fallen 94% since 1971. So since Nixon took us off the gold standard, let’s see, this is 1971, wages fall in 94% in gold. So when compared to gold, it’s fallen 94%. So again, we always talk about measuring things in terms of value in that you have to measure against other things of value when you’re doing that. That’s why this chart looks like this. It is this, we’re talking the same dollars and cents. We’re talking gold across the board. Since we’re left the gold standard, it’s fallen, Wages have fallen 94%. This, here, something I highlighted, note that the federal minimum wage was a $1.60 in 1968. So in 1968, the minimum wage was $1.60. It’s $7.25 today. So $7.25 today and then is or $353 or 353% higher. So think about the kind of turned us down. The biggest thing about that though is at $7.25 buys 87% less than $1.60 did back in 1968. So let me write this down here. That $7.25 here buys 87 percent less than $1.60 back in 1968.
So, and as they say, that’s a story you won’t hear in the mainstream press. That’s why this is so important. This is why we talk about this all the time. 1971, Nixon took us off the gold standard. Other countries are repatriating money from us and we were going to run out a gold in essence, so Nixon took us off the gold standard because he didn’t want the world, in essence, to go into default, which wasn’t that many countries at the time. We didn’t want to be in default because we had sold too much gold and we didn’t have actually had that much so people were repatriated or taken their gold back. There’s a run on goal. There was a run from the country is coming. France for instance, with the first one, I believe that French president was like, “they don’t have the gold and basically called our bluff” instead of repatriating. Then he had to take us off the gold standard because of that and since then, but to printing money into oblivion.
This is why the wages have fallen 94% in the last 40 years. Whatever, 48, 47 years. In 1968, the minimum wage of $1.60, in 2018 $7.25, but the purchasing power is 87% less. So that $7.25 buys 87% less house, 87% less meat, groceries, commodities. It doesn’t matter. What if they buy 87% less than just that $1.60 did back in 1968. That’s why your house, your grandfather bought for $500 in San Francisco is now worth a million dollars is now worth $500,000. You know, whatever it may be. It’s because the dollar has declined in value. Like I said, the dollar’s purchasing lost 95% of its purchasing power over the last 105 years since 1913, since the Federal Reserve was created and the same year the income tax was instituted, which we are sold that was just to help pay for the war. We’re going to have it just for a little bit and then we’re going to get rid of it. That was sold to the people like that. Unfortunately, we took the pill and still in our system, unfortunately. So, this is why this is so important. Then like I said, this is stuff that’s not being talked about anywhere. It’s really sad, to be quite honest.
See, it’s one of those things, like I said, that it’s important to talk about and it’s important to know what’s going on. That way, again, the results we have, the whole country is being squeezed. People all around the world are being squeezed. You look at Japan says stagflation, really sideways growth over the last couple of decades. China’s really starting to feel that right now. They have the ghost cities. People, literally they built up the last 10 years and there are empty cities. Cement, just ghost towns. This is being felt everywhere. Again, no one knows the answer. Who knows what’s gonna happen? We don’t know what’s gonna happen. That’s why preparing is so important and ways to prepare. I had many debates with people here and people everywhere about what’s gonna happen and different things you can do to prepare. This is why the different asset classes are so important. It’s combating the narrative of just the stock paper asset class. That’s an okay asset class, but you have to understand how it works and you have to understand that there are different cycles. Right now we’re up. It’s in an up cycle, you know, so I generally want to buy low, sell high. Some people are good at buying high and doing their thing and being amazing and using options and calls and puts and different things.
That’s not for me. I’m not intelligent enough to do that. So being smart about asset classes, I wanna make it dummy proof for myself and for those people around me. I want it to be, you know, “hey, what are they undervalued things and let’s get into those things and then ride that wave up.” That’s what it’s all about. Again, this is why people are feeling that squeeze. This is why socialism is so accepted now, you know, just 20-30 years after we just got done fighting a communist regime. But socialism leads to communism. That’s just a step stepping stone on the way there.
It’s the system that’s got us into this.
So why are we dipping right back into that? It’s because of currency, it’s because we have an issue with our currency system. It’s not the 23-year old’s fault that he’s feeling that way. It was all the generations before him that led to this mess. This is kicking the can down the road. This is what happens when we keep kicking the can down the road. We keep basically borrowing our children’s future into existence right now are basically borrowing that from all of them and they’re going to have to pay all that. So it’s because of this, because of this right here, took us off the gold standards. We had like I said, the Federal Reserve was created 1913, income tax and then we’re doing things like this, taking ourselves off of a standard. It doesn’t necessarily have to be the gold standard. It’s some type of system or a cryptocurrency, some type of gold standard. Some system where there is backing, there’s true backing of money and the ability to control out of control international monetary funds in Control Central Banks, the Bank of Japan, the IMF, the Federal Reserve, the Eurozone, all those different places, European Central Bank. This is why this is important. You start drafting everything, you start losing those freedoms when you have, you’re a slave to what’s going on here.
Again, hope you guys got something out of this. There’s a little bit more detail today on our Q and A today, our Macro Level Q and A. Something I’ve been talking to people a lot about lately. You know, it’s not the fast food worker or whoever is wanting a pay raise to a $15 minimum wage. They’re doing that because they’re hurting, in some way they’re hurting. They need more money because their daughters they already have are worth lesser. They used to make $1.60, you know, and now they make $7.25 minimum federally and they’re buying 87% less of stuff with the same minimum wage.
So that’s why again we will use everything measured in gold and silver or using things measured in the median house price, federal medium house price and overuse it based in a barrel of oil. We’re measuring it against other things of value. That’s when you start to see the market doing a lot of different things and say the stock market is showing you. So you started to see some different patterns. So anyway, hope you guys learn something. This is again, it’s a little bit more, I apologize. It’s a little bit drier, it’s a little bit more numbers and just down and dirty today. So I apologize for that, but I hope you got something out of it. I just look forward to having more conversations with all of you about what’s going on because I love doing that and we can’t wait to bring you more of these all the time. So keep the questions coming and we look forward to seeing you soon. Thank you for your time and energy because it’s truly the most important asset we have and humbled and honored to have it. So signing off, we’ll see you soon.