Song Hongbing: Don'T Miss The Biggest Investment Opportunity In Your Life.

Qian Jing: M

M: Recently, currencies have been competing for depreciation and gold prices have been rising continuously. This scene has appeared in your book. What do you think about the future trend of gold?

S: I recommended it in the first book, currency wars.

Why do I value gold? Because I know that the current monetary system is going to go wrong, and the dollar will be in crisis.

Gold is bound to rise when the United States prints money.

Now that the crisis seems to have ended, why is gold still building new heights? I do not think the crisis has ended. The total liabilities of the US account for a very high proportion of GDP.

The next policy is the third round and the fourth round of quantitative easing monetary policy.

Every time they print money, gold will reach a record high.

A professor at Harvard University suggests that gold may rise to $10000 an ounce. In my view, this is entirely possible. This is not a bullshit.

M:10000 dollars! Is it too hard to imagine?

S: we must get rid of the bondage of traditional thinking.

Why is it possible to rise to $10000? The biggest problem in the US is high debt. In the Federal Reserve's balance sheet, the amount of treasury bonds is so large that the whole world is doubting whether there is any credit in the US.

As early as the mid 90s of last century, there was a way to make the balance sheet substantially flat, that is to say, the US gold reserves soared.

The United States has the world's largest stockpile of gold - more than 8000 tons, now priced at US $42.22 an ounce and is not calculated at market prices.

In the Fed's balance sheet, gold is only a small part of the value of $16 billion.

But if it is adjusted to $1360 or even the price rises to $10000, more than 70% of the basic currency issue will be supported by gold.

The dollar immediately became very strong.

It is not impossible for gold to rise to $10000, which is a long-term strategy of the United States, because there is no other way to go when the US dollar is declining.

M: can you explain in detail the principles behind this operation?

S: the US gold reserves are not part of the Fed, but the Treasury Department.

When the price of gold rises, the Treasury can replace Treasury bonds with value-added gold assets.

The issuing process of the US dollar is like this: the US government can not print money directly, but it can issue treasury bonds, then send treasury bonds to the Federal Reserve, and the Federal Reserve provides receipts (banknotes).

Thus, on the Federal Reserve's balance sheet, treasury bonds become assets, with interest income each year, while the debtor is the currency issued.

When the currency expands, the Fed eats a lot of bonds. The more money you eat, the more money you print.

US Treasury bonds account for more than 90% of GDP, and the second round of quantitative easing monetary policy is still buying Treasury bonds and private sector bonds. If this continues, the debt will reach 200% of GDP.

Who dares to hold American assets? Who dares to reserve dollars? If 2/3's overseas dollars return to the US, the United States will immediately be super inflation.

In order to prevent this result, the Treasury can let gold go up to 10000 dollars, and the Federal Reserve will replace the Treasury assets with gold in the same position as the balance sheet, and the balance sheet will be substantially improved immediately.

When the credit of the US dollar has failed, monetization of gold will be realized. This is the implicit motive force for the gold price to continue to rise.

The process of replacing the national debt means that gold is part of the money supply. Behind every dollar, a snipe can be screwed.

M: this view is very new, but what other countries will agree with the United States? So easy to eliminate the huge debt.

S: what disagrees? The adjustment of gold prices in the United States is not subject to any restriction.

For example, a family, such as a collection of many paintings, can also produce many commodities, such as tables and chairs, and so on.

Now it does not produce chairs for the table. In order to represent a wealthy family, these paintings were originally sold for 10 million yuan, and tomorrow they will be valued at one hundred million.

The total assets of the family are still large, but these paintings will not be exchanged.

After the price fixing, the family became rich again, and others had to lend money to him. He kept such assets and worried that I owed you money? {page_break}

In the eight and 90s of last century, the United States lowered the price of gold very much. It just did not want people to realize that gold was money, or else who would use dollars.

How much money is needed to make paper money, and how much the Federal Reserve wants to send out, plus the gold cover, it can not be casually issued.

When the US dollar credit crashes, the 8000 tons of gold left by the US will come in handy.

The central bankers in the world today are a circle. They form a super elite club with the Federal Reserve to control the flow of global capital and credit.

They have no nationalists like De Gaulle. They all support financial globalization, but in fact they form a community of interests.

Who will oppose the us doing so? These people do not even represent their interests.

M: gold has currency attributes.

But now people are using paper money to regard gold as currency directly, which is still hard to accept.

Is it necessary to return to the gold standard? Economists say that the gold standard will lead to deflation and economic depression.

S: let's first consider these two questions: what is money and what is money?

Our generation is a thoroughly brainwashed generation, at least on the currency issue.

Since the breakup of the Bretton Woods system in 1971, gold has not been used as currency, but these 40 years are actually just another test of paper money, which is negligible in the long history.

History has proved that gold coins can not afford the function of money. The government is not credible, and the greed of human nature can not be overcome.

Now we all think that colorful banknotes are natural money. Gold is not money. Don't you think it's too strange?

The gold standard led to economic depression. The industrial revolution happened in the era of gold standard.

Computer prices and TV prices are down. This is deflation. Is this not a way to increase people's wealth? Is it just price inflation that means good economy? There are two reasons why economists like to say this: first, the butt decides the head, inflation is good for the government and it can collect seigniorage.

Two, economists are also brainwashed. They often use theories and mathematical models to analyze problems.

Economics and finance are social sciences, which contain complex human nature. It is necessary to find answers from historical experience and explore in practice.

M: what exactly is money? What is money?

S: in your magazine, "money is the symbol of credit" summed up very well. The US government has no credit, and the dollar's monetary function has weakened.

The unique physical characteristics of gold determine that it contains an inability to credit. It can not be completely divorced from the monetary system.

What is money? Money has the function of value scale and circulation.

In a certain area, the universally accepted, scarce and important things of production and life have monetary attributes.

It is valuable because it is scarce and important; it can be circulated because it can be universally accepted.

In the period of inflation, what is scarce and what is up and the most banknotes is, so it falls.

After the 2008 financial turmoil, the world is quite different from before. The monetary base of the world is undergoing violent turbulence. We call it the active period of earthquakes.

The US dollar led currency system is going to decline. The dollar crash is not a substitution of US dollar with a paper currency. It may well be the dissolution of paper money.

This will subvert all our previous financial concepts, as well as our views on money and wealth. We are living in such a turbulent era, and this era will provide huge opportunities for those who have deep understanding of money.

M: specifically, and gold?

S: silver and silver are better than gold.

London is the largest market for physical silver, and New York is the largest market for silver futures.

The axis of Wall Street and the financial city is setting the price of silver.

Silver is probably the biggest investment opportunity in our life. I also recommend buying real silver.