The Fed is Lying; We’re Headed for Times Worse Than Great Depression Warns Insider Bert Dohmen
“Washington is a manufacturer of false economic statistics,” says Bert Dohmen, founder of Dohmen Capital Research. In today’s interview with Daniela Cambone, Dohmen criticizes the Bureau of Labor for inflating job numbers by including part-time positions that ‘don’t pay the bills.’ He also delves into the gold market’s performance cycle, suggesting we’re entering a 30-year bull market fueled by major central banks’ unchecked money printing. Meanwhile, Dohmen’s optimistic outlook on gold extends to the anticipation of retail investors joining the market, driving prices even higher. Lastly, he reiterates his earlier prediction of a tumultuous 2024 marked by ‘riots, wars, and burning cities,’ particularly in the lead-up to the election.
CHAPTERS:
00:00 Stagflation
3:41 April job numbers
4:48 Money supply
7:55 Stagflation compared to 1970s
8:56 What to do with stagflation?
10:11 Gold price
20:34 Market
21:43 AI frenzy
23:59 Great Depression
25:30 1930s and now
27:07 Concluding words
TRANSCRIPT FROM VIDEO:
00:08
Hi, this is Daniela Cambone and welcome back to the Daniela Cambone show here on ITM Trading Well. Jerome Powell has just come out and said he is fed up with hearing about stag inflation and saying he’s not seeing any signs of stagflation or talk that we’re heading into some sort of 1970s environment. But after three hot inflation reports to start the year and some disturbing signs of persistent price pressures in the first quarter GDP report.
00:37
some investors have begun to fear that the US could be headed for a repeat of the stagflationary 1970s. Here to talk about this and so much more is Bert Dohmen, you might know him from the Wellington letter. Bert, always good to be with you. Welcome back to the show. It’s so wonderful to be with you, Daniela. Well, I thought of you when I was listening to Fed Powell because I know that since March at least,
01:06
You’ve been warning that we are in stagflation. So what were your thoughts when you heard Powell push back on this concept? Yeah, okay, let me just explain the stagflation for people who don’t know what it is. Okay. Stagnant economy that is not growing and higher prices, rising prices. So you get inflation and you get a weak economy.
01:34
That is stack inflation. That’s really the nightmare for central bankers because none of their ancient tools that never work anyway, but they totally will not work in that type of an environment because if they fight inflation with tight money, you get a weaker economy, you got a deep recession or worse, as we saw in the 1930s. And so it was incredible when any of these type of people like Powell and so on,
02:03
are so vehement in denying something, you know that that is in fact the truth. Whatever they deny is the truth. The truth is the opposite, in other words. So right now, it depends on what number you use. All of these people use the official statistics for inflation and for labor and for the economy from the Bureau of Labor Statistics.
02:31
And those are false, false, false numbers. They are just like a fairy tale. In every issue of our Wellington, which is usually about two a month, you got about 50 pages of analysis, we talk about the false numbers from the BLS. For example, one month last year, I think it was January last year, they had a gain of 517,000 jobs.
02:57
And then we said, that’s impossible in January. You never have that in January. And so we went to the BLS website, to their own website, and we found out that there were 2.5 million job losses. So they were off by 3 million jobs in their official announcement, you know, because they only take seasonally adjusted numbers. Seasonally adjusted means these are untrue, these are fake.
03:26
And this is a fairy tale. They seasonally adjusted. They never reveal how their seasonal adjustment worked. So let me ask you this, Bert, because the, the April jobs report showed that the U S job market showed signs of cooling with just 175,000 jobs. So they didn’t come out with an exuberant number here, but you still don’t believe it. No, no, they’re actually negative. If you look at the charts that we look at,
03:54
The American born jobs, in fact, they have been declining since 2018. So if you’re American born, you’re likely to be in danger of losing your job. The foreign the foreign born job holders have been increasing slightly. And that is why these statistics are higher. Also, the BLS, they put in there in the numbers, the temporary workers. Like I think it was recently we had three hundred three.
04:22
thousand increases in jobs, you know? Well, they were all part-time jobs, part-time jobs. They don’t pay the bills, you know? And so all of these statistics, you have to not believe them, you know? President Reagan used to say, you know, trust but verify. I always say verify before you trust. I want to bring up another point from your report.
04:50
This one was from April 28th. Sorry, a correction and gold will be a buying opportunity where you talk about the Fed fighting inflation. And for you, you say it’s all talk and you point to the soaring money supply. Talk to me about this. Yeah, money supply M2, which is the important one. We always used M3 in the olden days, but then they did away with M3 because it revealed too much of what they were actually doing.
05:19
So then we have to depend on M2. M2 has been rising since late last year. Money supply rising does not basically confirm any tightening of monetary policy. When monetary policy tightens, then you have a drop in loans, loan creation. We showed the chart of bank loans. They’re going up, up, up every month. There is no sign of any withdrawal.
05:48
And the trick here of the Fed is that they always consider interest rate increases. They call that tightening interest, increasing interest rates without reducing or restricting loans is inflationary. It’s actually achieves the exact opposite. And this is what put my company on the map. My company started in January of 1977. So a long time ago. And that was the start of.
06:16
the double-digit inflation, which got up to 15%. The Fed funds rate got up to 20%. The prime rate got up to 21.5% in 1980. So that was a very inflationary period. And we called that on the button when the new Fed chairman, G. William Miller at that time, he took Arthur Burns’ place, and he came and he said, we’re not gonna fight inflation with tight money. We’re going to do it with interest rate policy. In other words,
06:46
going to keep on raising interest rates. And we wrote at that time, that is a prescription for soaring inflation by gold and silver with everything that you have. And as we saw, we saw the huge bull market in all commodities, in fact, and gold and silver until 1980 when Paul Walker came in. And so this fiction that higher interest rates are threat tightening,
07:13
is should be totally discarded. And unfortunately, every person, every analyst you see coming on to TV says that. And I don’t and my question is, did they really believe this? Or is this just part of the fake story that they always try to perpetuate? Like everything is well, the economy is robust, the economy is not robust. We’re losing people, you know, all the time, jobs, job creations, you know, they’re going to a big downside.
07:42
We show those charts in the Wellington letter, you know, and so we debunk all these false words coming out of Washington. Washington is a manufacturer of false economic statistics. Just getting back to your point about stagflation, because I want to give context to the people back at home, because, you know, we hear we hear all these terms, they’re thrown at us. But explain to us the dangers. I mean, if we are are. Do you think it would be?
08:12
equal or worse or not as worse to this stack inflationary environment that we saw in the 1970s? It really depends how you consider worse. What do you look at? Is it the weak economy that’s bad or is it the high inflation? What is the worst for you? People have a lot of money. They would probably like higher inflation, give them higher interest rates, higher returns.
08:40
on properties that they rent out and so on. Other people who don’t have much money, they don’t like the higher prices, it kills them. It kills the family budget. So it all depends on what situation the person is in. Yeah, valid point. I guess what I’m getting at is when people hear that word stiflation, especially for people new to perhaps economic terms, I mean…
09:05
How should they prepare? What is one to do in a stagflationary environment? How are you best protected? Well, the first thing that you have to do is don’t listen to economists, especially if they have a PhD. When I was in college, my degree, I got in chemistry, but I was very curious, why are economists always so wrong? So I took two years of economics, and I found out why they were always so wrong, these false economic theories.
09:32
You want to educate yourself, read some books on it. It’s called the school is Austrian economics. It was created about a hundred years ago. Ludwig von Mises was in there and so on. So they believe in the free market. The free market is the economy, you know, one to watch. The Fed pretends that they are basically steering the economy. They don’t steer the economy. A friend of mine always used to say, believing that it’s like believing that the little bird sitting on top of a rhino
10:02
going through the jungle, actually steers the Rhino. It doesn’t work that way. I want to bring up something else you wrote. This was from November 14th of 2023. You said inflation hedges like metals, gold and silver should do well, especially as the danger of a sharp plunge in the U.S. stock market is now on the back burner. As we wrote recently, we believe that gold will be at a new record high soon. So…
10:32
You know, congrats on that call. I mean, you called out before gold now reaching all time highs. Talk to me about your thoughts on the gold market and then I’ll get to my second question. Yeah, Danielle, let’s go back to the last gold bull market, late 1970s, 1980. So because of our analysis of the Fed policy, and so we said this is a green light for inflation full speed ahead what the Fed just announced.
11:01
you know, higher interest rates, but not tight money. I said, this is ridiculous and it will never work. And so we called that right now, but the end of gold went up to $800 depending what market you’re using futures or what. But that’s it, it’s called $800. And then it started going down and we use an advanced technical analysis. That means charts and charts are absolutely necessary to watch if you’re investing in gold and silver.
11:28
So because you get some very, very good technical signal signals as we got last year on gold. And so at that time, we said if it breaks $694 on a downside, we’re in a bear market. And then it broke $694. And we said, that’s it. We made a lot of money buying gold and silver. And now we’re going to make a lot of money selling short. And we didn’t make a lot of money selling short. In 1982, I think it was.
11:57
the put options we had on the mining stocks, the put options were worth more than the stocks themselves. So it was very profitable. Timing the market is essential. You cannot just buy and hold forever. Nothing. Nothing goes in one direction forever. I think it’s interesting that you say that there’s a lot of firms that point to the Middle East problem, obviously.
12:22
tensions, China, Taiwan, Ukraine as reasons to buy gold. However, you say those points are not related to the real demand increase for gold as those events all happened before the recent upward move in gold. Talk to me more about that. Yes, monetary policy is the one thing that controls the price of gold. Events like the war, any war, I don’t care if it’s the Middle East or whatever it is, it doesn’t have anything to do with the price of gold. It’s just…
12:51
Basically, you got to maybe a knee jerk reaction for a few days when something happens, but that’s it. How can it affect? It doesn’t mean that people are gonna stuff gold bars in their pockets and run across the border to neighboring country. That’s too heavy to do that. People use diamonds for that. You don’t believe in the fear trade? No, no, not at all. The fear trade does not exist in precious metals unless it’s for a few hours.
13:22
So once folks say to you, Bert, well, is it too high the price now to get into gold? Well, let’s go back to 1980 when the when the tap in gold, so when we broke six ninety four to the downside, they said, OK, we did a long term study on gold prices going back 200 years in the US. And then before it started trading heavily in the US, we had to go back to England.
13:50
So we went down to about, I think 400 or 500 years in time to get an idea of the gold cycles. Cycles are so important because of the cycles of human emotions. And so we found that there was a cycle of 20 year bear markets. So we said in 1980, it’s gonna be a 20 year bear market. People thought that was crazy because everyone was looking for $3,000 gold, everybody. And I think there were a few people who canceled this.
14:20
subscription book, they thought that’s outrageous. 20-year bear market and gold cannot happen. Well, the bear market ended in the year 2000. So exactly 20 years. We were amazed ourselves because cycles usually they shift a little bit to the left, to the right. They’re not that accurate, but this was right on the button. And we said our cycle study also says, and this is in 1980, we wrote this. We said,
14:47
that the next bull market, the secular bull market, will last 30 years. And said, we have no idea what would cause a 30 year secular bull market in gold. Well, now we know it’s this uncontrolled printing of money of the major central banks. They are just creating money, but they used to have to print actual currency at the Bureau of Engraving, which we visited with Congressman Ron Paul one time.
15:16
And, but now they just do with computers. It’s computer money. You know, boom, boom, boom, a few keys on the keyboard and you got another trillion dollars, you know? That’s the way it’s done right now. So there’s no control to the amount of money that they can print. And to even print it faster, we’re gonna have a digital currency for central banks. They’re trying to get away from that name now because it’s gotten a bad reputation. So many people have written about it.
15:46
But we’re going to have that. It’s going to be basically like a Bitcoin except manufactured by the Federal Reserve. So 30-year bull market right now, if that cycle is also accurate, we can look forward to 1930-31. But that doesn’t mean we’ll not have big bear markets. Like this secular bull market that we’re in right now had a big correction in 2011 from a high.
16:09
I did charts of grade, et cetera. People were very enthusiastic about gold and silver, and then a plunge, mining stocks went down 90%. I think there was a hedge fund manager who came out with a special fund for the gold and silver, and they were down over 90%. So it can surprise you, gold and silver is one market where our calls, the long-term calls, have been right on the button. But you don’t trade it.
16:39
We always say we’re not smart enough to trade gold and silver. Those are two markets that are so highly manipulated that you can you cannot trade it very short term. You know, it’s like it is important to recognize that if you don’t recognize the what the risk exposure, you’re going to get killed in markets. You know, the markets are not fair. The markets are manipulated from A to Z, all markets, and especially since 2007.
17:09
when they started the high frequency training in 2007, that these are the computers, they can now control over 80% of the daily volume on the stock exchanges. Can you imagine that? These super fast computers, they can enter 90,000 trades per second. Trades, not shares, trades per second. Okay, how can you hope to compete with that for your laptop computer at home? You cannot, you know?
17:37
So you have to get a little bit smarter. So just getting back to your point then, so has the train not left the station yet for gold? I haven’t seen any trains lately, but I think we’re still in the early phases of this if my forecast on a cycle is correct. And…
18:03
You know, the central banks have been sitting on the price of gold. They did not want gold prices to rise. So the central banks, they leased out their gold to banks. Can you imagine? They leased gold to the banks. The banks would take that. They’d charge, of course, 1% or whatever the interest is. Then they sell it on the free market and so on. So they didn’t want gold to rise for that reason. I think what happened in gold here in the last six months,
18:32
really shows us they stopped their agenda to sit on the price of gold. And now it’s, you gotta have more gold. Actually right now, this is the lowest amount of assets in gold in about the last 30 years. It used to be, I think it was 40 years ago, I’m sorry, 40 years ago, 5% of assets under management were in gold, 5%. Now it’s 3 tenths of a percent. I mean,
19:02
it’s dropped by 90%. There’s so such a lack of interest in gold. Retail investors are not interested in gold. Right. Right. And I love to see it because it shows us we’re in the early phases. Right. Because what happens when the retail investor shows up? I mean, what kind of price forecast is forecast? Could we be looking at BERT? Yeah, I cannot make a forecast on that. But I mean, look at the.
19:29
I don’t want to say it. I mean, we do have price goals on that. But when you say a big number, then everyone plunges in their mortgage, their house, and so on, and start buying this stuff. I don’t want to lead to anybody losing their home. You know, this happens. People think, I’m kidding when I say that. In 1987, the stock market crash, you may remember that. We had a meeting, and just by chance, it happened a few days after that.
19:57
crash or week after a crash with a top vice president of the Wall Street firm. And I said, Well, what are you doing here? And he said, Well, I’m going around the country for closing on houses. And it was a was a major Wall Street firm. And I said, Oh, I didn’t know you guys were in real estate. He said, We’re not. We’re doing margin calls. So we’re selling people’s houses because they couldn’t be the margin call. So
20:22
You read your margin agreement. They can take your watch. They can take your house. They can take your car. And I don’t know if they can take your wife and children. But but those agreements are pretty nasty. You know, we’re speaking today, you know, with stocks jumping after the softer than expected April jobs report boosted hopes that the Fed could start cutting interest rates soon. Just curious to get your thoughts on this this market.
20:50
that’s showing no signs of slowing down, Bert? Yeah, our forecast since beginning of the year was that the market is gonna be in very good shape, meaning it’s going up and not in good shape, but the market is gonna be going up until probably the end of the summer. And that is because the Federal Reserve has no option but to create the money necessary for the US Treasury to sell all their confetti.
21:17
which is called Treasury bonds, Treasury notes, Treasury bills. They have to sell this in order to raise money for so that Biden and the Americans can have more to spend to send to their friends overseas. There’s no money there for Americans, but we have a lot of friends overseas, like in the Ukraine, et cetera, that want our money and we are giving it to them. Where it goes after that is anybody’s guess.
21:42
You are coming out, well, you just actually released a report on AI, how you can thrive in the greatest wealth opportunity in decades, you say. You say the AI frenzy will be bigger than the dot-com bubble in the year 2000. Yes, and that is something we are looking at very, very carefully. I think the way to end this whole bull market phase is with a big frenzy and the
22:11
Best way to generate it does see this all manipulated the best way to generate the frenzy is AI That’s the easiest thing right now Everybody’s AI people don’t have any idea what AI is, but they want to be invested exactly so so we’re getting there and You know, we read a book or two on the AI Bird bird, but is it frenzy like cryptocurrency was frenzy
22:39
Yes, that’s it. And these frenzies last longer than the time. So what I could see is, and this is just a scenario, this is not a forecast. So we always have scenarios and they have to be validated by what actually happens. And so, but right now we can see, you know, bad period for the stock market ahead of the election, because I think there’s going to be lots of turmoil. That was our forecast for the whole year, we said riots.
23:08
burning cities, et cetera. We’re starting to have it right now. Wars, et cetera. It’s going to be 2024 and going into the election. The election, I think for certain people, certain groups of people, an election where people cannot go and vote and where it’s all paper ballots would be more desirable. But that’s a- Without paper ballots? No, with paper ballots. With paper ballots.
23:38
Yeah, so that nobody goes on votes in person because then you have to you can check an ID. But the paper ballots are wonderful if you want to get on with the silence that years ago, Stalin said, it’s not the people who cast the votes that are important. It’s the people who count the votes. Let’s wrap with that. Well, first of all, I just want to let the people know that anyone interested in Burt’s recent report on AI will throw a link down.
24:06
in the description description below in the video. But the last time you were on, you know, the video did extremely well and so many people writing in concerned about your views that we were heading into a Great Depression style era. So let’s just wrap on that. I mean talk to me. We you know, that was about six months ago. Where are you at with that now? I mean you talk about burning cities Wars rides. Unfortunately, we’ve seen all of this unfold in 2024.
24:36
are we headed towards a Great Depression? Yes, in 2020, you know, everyone in our business gives a forecast for the decade. And that was my forecast, that we would see an environment that we like the 1930s, except probably worse than the 1930s. And we listed all these things, including famines, et cetera, droughts, and wars. And wars was the one thing that hadn’t happened yet.
25:05
I was in the one year a few years ago and then Ukraine started. So I said, well, now all the forecasts are correct already very early in the forecasting cycle. So we can have that type of period. Still, I think everything is super ripe for a deep, deep depression. And, you know, looking at history, I mean, a situation today, very similar to what we saw in the 70s, Bert, right, with the Civil War, Vietnam.
25:35
protests on campuses. I mean, what do you make of the similarities between these two decades? These are cycles. There’s a 90-year cycle. You go back 90 years, you get to the 1930s. So these are cycles. They have something to do with human emotions, which are cycles. And what determines those cycles, I don’t think anybody is sure, is that out of speculation and daily way, for example, they have their own theories and so on. Very, very interesting.
26:05
And so we’re human beings. So we get very enthusiastic and then some bad happens and we get very depressed. And these, there are short-term cycles like that and then long-term cycles. And this is the long-term cycle. So in 90 years, we had a depression. So we’re gonna have one again now. And because the politicians are doing all the same things again as in 1930s, just total out of control spending. We’re gonna have out of control.
26:33
tax increases and unless there’s an unexpected election outcome. And so the way you talk about the tax increases, all the Trump tax cuts will be abolished next year. You know, they expire basically. And that should get us immediately into a deep recession. Because reduced taxes create prosperity, increased taxes create recessions and depressions.
27:01
One last point. So what do you tell people when they say to you, Bert, I’m scared for the future. How can we change that mindset?
27:12
You cannot change your mindset. I mean, you’re going against the universe and the laws of nature. You cannot change it. Look at what you have ever expected. Hundreds of, well, actually several billion people going and getting an injection in their arm, which is an experimental drug, which we now know has very bad side effects, like death, if you call that a side effect.
27:40
or blind is a friend who went blind afterwards and so on. So it was terrible stuff, but billions of people, I think it’s two billion people, it’s estimated, got that poison into their arms, you know, just because the big pharma wanted to make a lot of money and they did it. Oh yeah, my doctor says it. You know, just believe in the doctor is really misplaced. If you have a doctor that cautioned you, don’t get the Vax, keep and treasure him like gold.
28:09
But anyway, but but this is human emotion. Who would have ever thought that Americans could be locked up in their own homes, that you could be prohibited from going to a restaurant because you didn’t have a vaccine card, that people were getting false vaccine cards? I mean, this is so unheard of in a free country. And we’re supposed to be a democracy. Well, yeah, there was a good economist, I think was the
28:39
you know, because the minority can determine what the majority really wants or gets. So I think right now you have to have the best guidance you can get. Unfortunately, many professionals in the business have not been around since 1980. I said that on, I think it was the Rich Dad program. I said, look for someone who was in the business in the late
29:09
if you have an advisor, if he wasn’t in the business in the late 1970s, he will not know what’s gonna happen next. And we were there and we called it perfectly, including a big turn from inflation to deflation. As Paul Volk came in, he said, we’re gonna do this and this. I said, he’s gonna win, and this is the end of the inflationary boom. So, but in Washington, they don’t learn from history.
29:38
probably nobody reads anymore. The only way you can get knowledge is by reading books. And the younger people, they say, oh yeah, who am I reading on Facebook? Well, that’s, I don’t call that reading, you know, that’s entertainment. But read books. Yeah. Read books, yeah. Bert Domen, always love speaking with you. You could not read more about Bert’s thoughts from the Wellington letter.
30:06
I thank you always for coming on. I’ll let you go surfing now, okay, Bert? Okay, Danielle, thank you very much. And I wish your listeners all the best in the future. And please don’t listen to cocktail party advice, okay? Yes, yes. And don’t listen to TV advice, blogs like yours, et cetera, so much better. You have great guests on. Thank you. And that’s where you get the truth
30:35
They are allowed to say the truth. Yes, yes, I really believe in that. And that’s why I’m so thankful to ITM for giving me this platform to have folks like you, Bert, speaking the truth. Because I say, I really do have the best guests on the show. And I am so privileged to be in this position of getting to speak with you. And to your point about seeking good counsel and speaking to educated people, I invite everyone.
31:03
to reach out to my incredible colleagues over at ITM Trading. You can do so by booking a calendar appointment. It’s in the description below. It’s a free session where one of these incredibly educated people will walk you through concerns or help you build a strategy, of course, surrounding around gold and silver, which we see as the ultimate solution with the times that lie ahead.
31:30
And don’t forget to sign up at danielacambone.com to stay on top of all these great interviews. We will see you soon. Thanks for watching. Thanks, Bert. Daniela, can I say one more thing? Please. We have a free report. I think it’s about 24 pages on the markets now and what may be ahead. It’s free and it’s very seldom because we get good money for our writings and research. There’s a free report you get on our website, dohmencapital.com.
31:59
Dorman Kappa. Thank you very much. And I will put that free report description also below this video. So lots of good information. Read it all, folks. Thank you. Okay, bye.
35:57
robust. The economy is not robust. We’re losing people, you know, all the time. Job creations, you know, they’re going down a big downside.
36:16
We show those charts in the Wellington letter, you know? And so we debunk all these falsehoods coming out of Washington. Washington is a manufacturer of false economic statistics. I’m just getting back to your point about stagflation because I wanna give context to the people back at home because we hear all these terms, they’re thrown at us, but explain to us the dangers. I mean…
36:43
If we are, do you think it would be equal or worse or not as worse to this stack inflationary environment that we saw in the 1970s? It really depends how you consider worse. You know, what do you look at? Is it the weak economy that’s bad or is it the high inflation? What is the worst for you? People have a lot of money.
37:08
they would probably like higher inflation, gives them higher interest rates, the higher returns on properties that they rent out and so on. Other people who don’t have much money, they don’t like the higher prices, it kills them. It kills the family budget. So it all depends on what situation the person is in. Yeah, valid point. I guess what I’m getting at is when people hear that word stagflation, especially for people new to perhaps economic terms,
37:38
I mean, how should they prepare? What is one to do in a stagflationary environment? How are you best protected? Well, the first thing that you have to do is don’t listen to economists, especially if they have a PhD. When I was in college, my degree, I got in chemistry, but I was very curious, why are economists always so wrong? So I took two years of economics, and I found out why they were always so wrong, these false economic theories. So…
38:06
You want to educate yourself, read some books on, it’s called, the school is Austrian Economics. It was created about a hundred years ago, Ludwig von Mises was in there and so on. So they believe in the free market. The free market is the economy you want to watch. The Fed pretends that they are basically steering the economy. They don’t steer the economy. A friend of mine always used to say, believing that is like believing that the little bird sitting on top of a rhino
38:36
going through the jungle, it actually steers the Rhino. It doesn’t work that way. I want to bring up something else you wrote. This was from November 14th of 2023. You said inflation hedges like metals gold and silver should do well, especially as the danger of a sharp plunge in the US stock market is now on the back burner as we wrote recently. We believe that gold will be at a new record high soon. So
39:06
you know, congrats on that call. I mean, you called out before gold now reaching all time highs. Talk to me about your thoughts on the gold market. And then I’ll get to my second question. Yeah, Daniel, it’s a let’s let’s go back to the last gold bull market. Nineteen late 1970s, 1980. So because of our analysis of the Fed policy, and so we said, this is a green light for inflation, full speed ahead. What the Fed just announced.
39:35
higher interest rates but not tight money. I said, this is ridiculous and it will never work. And so we called that right now, but the end of gold went up to $800 depending what market you’re using futures or what. But that’s it, it’s called $800. And then it started going down and we use an advanced technical analysis, that means charts. And charts are absolutely necessary to watch if you’re investing in gold and silver.
40:02
And so because you get some very, very good technical signal, signal says we got last year on gold. And so at that time, we said if it breaks six hundred ninety four dollars on a downside, we’re in a bear market. And then I broke six ninety four and we said, that’s it. We made a lot of money buying gold and silver. And now we’re going to make a lot of money selling short. And we didn’t make a lot of money selling short. In the 1980, 82, I think it was.
40:30
the put options we had on the mining stocks, the put options were worth more than the stocks themselves. So it was very profitable. Timing the market is essential. You cannot just buy and hold forever. Nothing. Nothing goes in one direction forever. I think it’s interesting that you say that there’s a lot of firms that point to the Middle East problem, obviously.
40:56
tensions, China, Taiwan, Ukraine, as reasons to buy gold. However, you say those points are not related to the real demand increase for gold, as those events all happened before the recent upward move in gold. Talk to me more about that. Yes, monetary policy is the one thing that controls the price of gold. Events like the war, any war, I don’t care if it’s the Middle East or whatever it is, it doesn’t have anything to do with the price of gold. It’s just basically you got to
41:26
maybe a knee-jerk reaction for a few days when something happens, but that’s it. How can it affect? It doesn’t mean that people are gonna stuff gold bars in their pockets and run across the border to neighboring country. That’s too heavy to do that. People use diamonds for that. You don’t believe in the fear trade? No, no, not at all. The fear trade does not exist in precious metals unless it’s for a few hours.
41:56
So once folks say to you, Bert, well, is it too high, the price now to get into gold? Well, let’s go back to 1980, when the top in gold, so when we broke 694 to the downside, they said, okay, we did a long-term study on gold prices, going back 200 years in the US, and then before it started trading heavily in the US, we had to go back to England.
42:24
So we went down to about, I think 400 or 500 years in time to get an idea of the gold cycles. Cycles are so important because of the cycles of human emotions. And so we found that there was a cycle of 20 year bear markets. So we said in 1980, it’s gonna be a 20 year bear market. People thought that was crazy because everyone was looking for $3,000 gold, everybody. And I think there were a few people who canceled this.
42:53
subscription book, they thought that’s outrageous. 20-year bear market and gold cannot happen. Well, the bear market ended in the year 2000. So exactly 20 years. We were amazed ourselves because cycles usually they shift a little bit to the left, to the right. They’re not that accurate, but this was right on the button. And we said our cycle study also says, and this is in 1980, we wrote this. We said,
43:21
that the next bull market, the secular bull market, will last 30 years. And said, we have no idea what would cause a 30 year secular bull market in gold. Well, now we know it’s this uncontrolled printing of money of the major central banks. They are just creating money, but they used to have to print actual currency at the Bureau of Engraving, which we visited with Congressman Ron Paul one time.
43:50
And, but now they just do with computers. It’s computer money. You know, boom, boom, boom, a few keys on the keyboard and you got another trillion dollars, you know? That’s the way it’s done right now. So there is no control to the amount of money that they can print. And to even print it faster, we’re gonna have a digital currency for central banks. They’re trying to get away from that name now because it’s gotten a bad reputation. So many people have written about it.
44:19
But we’re going to have that. It’s going to be basically like a Bitcoin, except manufactured by the Federal Reserve. So 30-year bull market right now, if that cycle is also accurate, we can look forward to 1930-31. But that doesn’t mean we’ll not have big bear markets. Like this secular bull market that we’re in right now had a big correction in 2011 from a high discharge sort of grade, et cetera. People were very enthusiastic about gold and silver.
44:49
and then a plunge, mining stocks went down 90%. I think there was a hedge fund manager who came out with a special fund for the gold and silver, and they were down over 90%. So it can surprise you, gold and silver is one market where our calls, the long-term calls, have been right on the button, but you don’t trade, we always say, we’re not smart enough to trade gold and silver.
45:17
Those are two markets that are so highly manipulated that you cannot trade in very short term. Right, right, right. It is important to recognize that. If you don’t recognize the risk exposure, you’re going to get killed in markets. The markets are not fair. The markets are manipulated from A to Z, all markets, and especially since 2007.
45:43
when they started the high frequency trading in 2007, that these are computers, they can now control over 80% of the daily volume on the stock exchanges. Can you imagine that? These super fast computers, they can enter 90,000 trades per second. Trades, not shares, trades per second. Okay, how can you hope to compete with that for your laptop computer at home? You cannot, you know?
46:11
So you have to get a little bit smarter. So just getting back to your point then. So has the train not left the station yet for gold? I haven’t seen any trains lately, but the I think we’re still in the early phases of this. If my forecast on a cycles is correct and.
46:37
You know, the central banks have been sitting on the price of gold. They did not want gold prices to rise. So the central banks, they leased out their gold to banks. Can you imagine the least gold to the banks? The banks would take that right. They charge, of course, one percent, whatever the interest. And they sell it on the free market and so on. So they didn’t want gold to rise for that reason. I think what would happen in gold here in the last six months.
47:06
really shows us they stopped their agenda to sit on the price of gold. And now it’s, you gotta have more gold. Actually right now, this is the lowest amount of assets in gold in about the last 30 years. It used to be, I think it was 40 years ago, I’m sorry, 40 years ago, 5% of assets under management were in gold, 5%. Now it’s 3 tenths of a percent. I mean,
47:36
it’s dropped by 90%. There’s such a lack of interest in gold. Retail investors are not interested in gold. Right. Right. And I love to see it because it shows us we’re in the early phases. Right. Because what happens when the retail investor shows up? I mean, what kind of price forecasts could we be looking at, Bert? Yeah, I cannot make a forecast on that. But I mean, look at the…
48:02
I don’t want to say it. I mean, we do have price goals on that. But when you say a big number, then everyone plunges in their mortgage, their house, and so on, and start buying this stuff. I don’t want to lead to anybody losing their home. You know, this happens. People think, I’m kidding when I say that. In 1987, the stock market crash, you may remember that. We had a meeting, and just by chance, it happened a few days after that.
48:30
crash or week after a crash with a top vice president of the Wall Street firm. And I said, Well, what are you doing here? And he said, Well, I’m going around the country for closing on houses. And it was a was a major Wall Street firm. And I said, Oh, I didn’t know you guys were in real estate is that we’re not we’re doing margin calls. So we’re selling people’s houses because they couldn’t be the margin call. So
48:56
Read your margin agreement. They can take your watch. They can take your house. They can take your car. And I don’t know if they can take your wife and children. But but those agreements are pretty nasty. You know, we’re speaking today, you know, with stocks jumping after the softer than expected April jobs report boosted hopes that the Fed could start cutting interest rates soon. Just curious to get your thoughts on this this market.
49:24
that’s showing no signs of slowing down, Bert. Yeah, our forecast since beginning of the year was that the market is gonna be in very good shape, meaning it’s going up and not in good shape, but the market is gonna be going up until probably the end of the summer. And that is because the Federal Reserve has no option, but to create the money necessary for the US Treasury to sell all their confetti.
49:51
which is called treasury bonds, treasury notes, treasury bills. They have to sell this in order to raise money for, so that Biden and the Americans can have more to spend to send to their friends overseas. There’s no money there for Americans, but we have a lot of friends overseas, like in the Ukraine, et cetera, that want our money and we are giving it to them. Where it goes after that is anybody’s guess.
50:16
You are coming out, well, you just actually released a report on AI, how you can thrive in the greatest wealth opportunity in decades, you say. You say the AI frenzy will be bigger than the dot com bubble in the year 2000. Yes, and that is something we are looking at very, very carefully. And I think the way to end this whole bull market phase is with a big frenzy.
50:45
Best way to generate it does see this all manipulated the best way to generate the frenzy is AI That’s the easiest thing right now Everybody’s AI people don’t have any idea what AI is, but they want to be invested exactly so so we’re getting there and You know, we read a book or two on the AI so you find out what is Bert Bert But is it frenzy like? cryptocurrency was frenzy
51:12
Yes, that’s it. And these frenzies last longer than the time. So what I could see is, and this is just a scenario, this is not a forecast. So we always have scenarios and they have to be validated by what actually happens. And so, but right now we can see, you know, bad period for the stock market ahead of the election, because I think there’s going to be lots of turmoil. That was our forecast for the whole year.
51:42
the burning cities, et cetera. We’re starting to have it right now. Wars, et cetera. It’s gonna be 2024 and going into the election. The election, I think for certain people, certain groups of people, an election where people cannot go and vote and where it’s all paper ballots would be more desirable. But that’s- Without paper ballots? No, with paper ballots. With paper ballots.
52:12
Yeah, so that nobody goes on votes in person, because then you have to, you can check an ID. But the paper ballots are wonderful if you want to, you know, just Stalin said it years ago, Stalin said, it’s not the people who cast the votes that are important. It’s the people who count the votes. Let’s wrap with that. Well, first of all, I just want to let the people know that anyone interested in Burt’s recent report on AI, we’ll throw a link down.
52:40
in the description description below in the video. But the last time you were on, you know, the video did extremely well and so many people writing in concerned about your views that we were heading into a Great Depression style era. So let’s just wrap on that. I mean talk to me. We you know, that was about six months ago. Where are you at with that now? I mean you talk about burning cities Wars rides. Unfortunately, we’ve seen all of this unfold in 2024.
53:09
are we headed towards a Great Depression? Yes, in 2020, you know, everyone in our business gives a forecast for the decade. And that was my forecast that we would see an environment that we like the 1930s, except probably worse than the 1930s. And we listed all these things, including famines, et cetera, droughts and wars. And wars was the one thing that hadn’t happened yet.
53:38
was it one year a few years ago and then Ukraine started. So I said, well, now all the forecasts are correct already very early in the forecasting cycle. So we can have that type of period still explained. I think everything is super ripe for a deep, deep depression. And you know, looking at history, I mean, the situation today,
54:03
very similar to what we saw in the 70s, Bert, right, with the Civil War, Vietnam, protests on campuses. I mean, what do you make of the similarities between these two decades? These are cycles. There’s a 90-year cycle. You go back 90 years, you get to the 1930s. So these are cycles. They have something to do with human emotions, which are cycles.
54:27
And what determines those cycles, I don’t think anybody is sure, is that out of speculation and the Elliott wave, for example, they have their own theories and so on. They’re very, very interesting. And so we’re human beings. So we get very enthusiastic and then some bad happens and we get very depressed. And these, there are short-term cycles like that, and then long-term cycles. And this is the long-term cycle. So in 90 years, we had a depression. So we’re gonna have one again now.
54:57
And because the politicians are doing all the same things again as in 1930s, just total out of control spending. We’re going to have out of control tax increases and unless there’s an unexpected election outcome. And so they’re really talking about the tax increases, all the Trump tax cuts will be abolished next year. You know, they expire basically. And that should get us immediately into.
55:26
deep recession. Reduce taxes create prosperity. Increased taxes create recessions and depressions. One last point. So what do you tell people when when they say to you, Bert, I’m scared for the future? How can we change that mindset?
55:45
You cannot change the mindset. I mean, you’re going against the universe and the laws of nature. You cannot change it. Look at what you have ever expected. Hundreds of well, actually several billion people going and getting an injection in their arm, which is an experimental drug, which has which we now know has very bad side effects. Like death, if you call it a side effect.
56:13
or blind is a friend who went blind afterwards and so on. So it is terrible stuff, but billions of people, I think it’s two billion people, it’s estimated, got that poison into their arms, you know, just because the big pharma wanted to make a lot of money. And they did it. Oh yeah, my doctor says it. You know, just believe in the doctor is really best placed. If you have a doctor that cautions you don’t get the Vax, keep him, treasure him like gold.
56:43
But anyway, but this is human emotion. Who would have ever thought that Americans could be locked up in their own homes, that you could be prohibited from going to a restaurant because you didn’t have a vaccine card, that people were getting false vaccine cards. I mean, this is so unheard of in a free country. And we’re supposed to be a democracy. Well, there was a good economist, I think it was the parmesans he wrote. Democracy is just a soft form of country.
57:13
you know, because the minority can determine what the majority really wants or gets. So I think right now you have to have the best guidance you can get. Unfortunately, many professionals in the business have not been around since 1980. I said that on, I think it was the Rich Dad program. I said, look for someone who was in the business in the late
57:43
you have an advisor, if he wasn’t in the business in 19 late 1970s, he will not know what’s going to happen next. You know, and we were there and we called it perfectly, including a big turn from inflation to deflation. As Paul Volk came in, he said, we’re going to do this and this. I said, he’s going to win. And this is the end of the inflationary boom. So, but, you know, in Washington, they don’t learn from history.
58:11
probably nobody reads anymore. The only way you can get knowledge is by reading books. And the younger people, they say, oh yeah, who am I reading on Facebook? Well, that’s, I don’t call that reading, you know, that’s entertainment. But read books. Yeah. Read books, yeah. Bert Domen, always love speaking with you. You could not read more about Bert’s thoughts from the Wellington letter.
58:39
I thank you always for coming on. I’ll let you go surfing now, okay, Bert? Okay, Danielle, thank you very much. And I wish your listeners all the best in the future. And please don’t listen to cocktail party advice, okay? Yes, yes. And don’t listen to TV advice, blogs like yours, et cetera, it’s so much better. You have great guests on. Thank you. And that’s where you get the truth,
59:09
They are allowed to say the truth. Yes, yes, I really believe in that. And that’s why I’m so thankful to ITM for giving me this platform to have folks like you, Bert, speaking the truth. Because I say, I really do have the best guests on the show. And I am so privileged to be in this position of getting to speak with you. And to your point about seeking good counsel and speaking to educated people, I invite everyone.
59:36
to reach out to my incredible colleagues over at ITM Trading. You can do so by booking a calendar appointment. It’s in the description below. It’s a free session where one of these incredibly educated people will walk you through concerns or help you build a strategy, of course, surrounding around gold and silver, which we see as the ultimate solution with the times that lie ahead.
01:00:03
And don’t forget to sign up at danielacambone.com to stay on top of all these great interviews. We will see you soon. Thanks for watching. Thanks, Bert. Can I say one more thing? Please. We have a free report. I think it’s about 24 pages on the markets now and what may be ahead. It’s free and it’s very seldom because we get good money for writings and research. There’s a free report you get on our website, dohmencapital.com.
01:00:33
Bert Dohmen. Thank you. And I will put that free report description also below this video. So lots of good information. Read it all, folks. Thank you. Thank you. Okay, bye.
SOURCES:
https://www.wsj.com/livecoverage/stock-market-today-earnings-05-03-2024
https://goldprice.org/gold-price-charts/1-year-gold-price-history-in-us-dollars-per-ounce
https://fred.stlouisfed.org/series/M2SL
