founder of gold silver dot com about the power the us is on and mitt romney we saw defend his record on job creation in private equity he played the capitalism card. i know that people are going to say oh you should only practice it this way or that way and think they know better than the private market my view is capitalism or free enterprise works. that is the mitt model giving capitalism a bad name a millionaire with a fifteen percent tax rate the kind of capitalism causing people to equate it with inequality what about the people fighting for capitalism and true chance at the ones not on that stage just trying to work hard and get ahead we'll talk about them also mega upload the f.b.i. shut it down yesterday one of the world's largest file sharing sites they allege copyright violations now the u.s. worked with other jurisdictions to make arrests and oversee raids around the globe one hundred fifty million use this site to upload files mega uploads lawyers say

the site was shut down with no notice and no opportunity to challenge it we asked what you thought will tell you what you said let's get to days capital account. all right we all know the u.s. is heading into primaries in south carolina and we saw another republican debate just last night lots of talk about taxes and the economy but only one candidate is saying this. the fact that we are the issuer of the reserve currency of the world is a real. blessing for us because it's easy for us to export our money that's our unfortunately our greatest export and they're still taking our money sure they're going to quit

and this whole ball game is going to end and we better get prepared for. an important issue by any measure at least by ours for a country of fifteen trillion dollars in debt but when it comes to ron paul's economic policies let's just say the mainstream reception is not exactly warm i'll give you an example pay attention to c.n.n. anchor erin burnett when she responds to bill gross about ron paul. but those know how the monetary system works and that's something i think they're wrong and others don't have much of a clue on what i mean but that but this is interesting because i know you're saying already goes too far but you know a lot of the people the strike team it's not going to surprise you bill they said ron paul these crazy because he wants to get rid of the fed and i just dismiss that out of hand. he's crazy dismiss that but we ask how can you understand the globe's economic problems without understanding issues of debt currency the impact of federal reserve policies sound money that's what we don't get and what path is the

monetary system and the economy really on you've got to look at those things so here to help us do that founder of gold silver dot com and author of this book rich dad's advisors guide to investing in gold and silver protect your financial future michael maloney is here with us thank you so much for being on the show it's great to have you in studio as i was telling you your book really opened my eyes a decade ago to just reality i guess oh thanks for having me you know one. the biggest problem we have is most people don't understand how the monetary system works and how debt based currency robs all of us and transfers wealth to the banking sector we are really going to get into that but first i want to i want to ask you this because i just playing that clip and watching the debate last night and following all of this especially being in washington the conventional wisdom. from wall street to why in washington seems to be that ron paul's economic policies are loony they're crazy but my question to you how can you can look at the economy

without talking about things like debt money sound currency all those issues he raises well you can't i mean you said conventional wisdom and actually it's conventional ignorance that all of these people are promoting. if you look at monetary history and you look at what has proven to work and what is proven not to work debt based currency system eventually fails sound money always ends up winning . so it is the status quo is conventional ignorance and there's only one person out there that i see that actually really knows anything about it that's running for office and that is ron paul and that's what's so baffling to me because it's being in washington do you have everybody from policy makers to wants to bloggers to ph d. students i mean everyone that is pro kensi and they are pro money printing maybe not maybe they're critical but they're not really looking at the fed as you just

said they you know they have been conventional ignorance when it comes to somebody like ron paul which they dismiss as fringe but your view and the things he talks about ironically whenever i talk to investors people that are independently making money have skin in the game have been successful and are really kind of doing it for real they all talk about the things that you're talking about and that ron paul is talking about why do you think that is. well it's the only thing that we're. you know history proves that these things work that sound money works history proves that fear a currency eventually doesn't work the system always implodes it's a debt based currency system where we're borrowing currency into existence and promising to pay it back plus interest the dollars required to pay the interest don't exist yet so we have to work in the future we always have to go deeper in debt every year than we were the previous year as a society for the whole system to continue functioning and when we save up and we

pay down debt we extinguish those dollars that we borrowed into existence this credit based monetary system so we have to we have to stay ahead of it or the whole thing starts to implode by going deeper in debt that's the reason we're fifteen trillion dollars in debt now and we were only i can't remember what we were when obama took office eleven or twelve trillion dollars. we have to go deeper in debt for the whole thing implodes and it's basically a form of in slave moment it's a feudal system because except the lords are no longer these people living in castles in england the people living that work in the banking sector if you look at all the big buildings and throughout the world it's the banks and we have to when we borrow currency into existence by the federal reserve writing a check and buying a bond that bond is promising to pay back principal plus interest and that interest

principle and interest comes from our tax dollars so we have to work in the future to pay taxes for the dollars that exist today that we're spending today are you saying we're all becoming serifs yes ok it's exactly what i'm saying and you know what that's something that is very right now right ok inequality is what everybody is talking about or at least it's kind of what occupy wall street has really and body is concerned about in. quality it kind of moved it into the conversation but yet the solutions or are the problems people are talking about are all things within the system how come nobody is talking about the monetary system as the problem if that's what's creating this massive transfer of wealth it does it is one of the things that creates this huge inequality and i went to occupy wall street and i interviewed a number of people and one of the things i noticed was that they're all protesting a bunch of different things and they don't realize that all the different things that they're protesting have one root cause and that is this debt based currency

system that creates these huge discrepancies of wealth you know. i know that in the short term we have these big economic boom because of this currency system where we borrow currency into existence and we go on a credit binge and there's a boom that goes into a bubble but then the bubble collapses under a hard money system you have slower growth but it's continuous growth i have a feeling that we are level of prosperity today would be far far higher under a hard money system that is fair than it is under this currency system but the fear currency system the people that are in power if they have the power of currency creation they get to direct their spending so it limits our freedom when you have a hard money currency system the government can't do as much deficit spending the government has to be smaller if they borrow too much they slow down the economy because they're borrowing currency out of the private sector. so what drives the

economy is the people in the freedom to vote with your wallet and vote what you want to spend so the economy gets skewed the way the free market wants to go the way that people want it to go when then interesting point so ok let's get into some of these things because you're talking about how money is created now i want to break that down for our viewers because money isn't exactly printed it's a loan into existence and that ties into the debt problems that we have can you explain. it works a little bit well there's basically two forms of debt based currency base money which is created by the federal reserve whenever they write a check and they buy something and they usually end up buying through open market operations u.s. treasury bonds the population of the united states has to work in the future to pay off those u.s. treasury bonds we have to pay taxes in the future so every time the federal reserve writes a true check it creates paper dollars based money. but all those dollars are owed

back plus interest on the bonds that it bought the treasury bonds and then the other form of dollars that exist are the credit dollars that are created through fractional reserve lending when you go and you buy a house or a car you sign a loan document when your signal pen hits that paper those dollars are created and get credited to your account they're just a book entry for the bank but then you go and buy something with them and they go into circulation and they stay in circulation until somebody saves them up and pays down dead and that's a really key point right because a lot of it is think of expansion of money supply just in terms of base money of ok the fed's expanded its balance sheet it's tripled it base money has increased and this is the money supply but you're saying all that credit expands the money supply to that's where the vast majority of our currency supply comes from and i don't call it a money supply that money has to be a store of value over long periods of time you buy cotton ball and i think a currency is a currency so parents are supplying gold and silver are money everything else is

currency it's our currency system a fee based currency system is designed to continually lose value because you have to expand the currency supply supply to be able to pay the interest that is due on the currency supply you know ben bernanke he doesn't say that gold is money it's a part of that conventional ignorance yes he is part of the conventional ignorance but the. base money portion the portion of the federal reserve. it has direct influence over is only six percent of our currency supply it's three trillion dollars the number of dollars that exist as a reflection of total credit and that stands at fifty three trillion so only three trillion out of fifty three trillion is the portion the government created everything else you and i create the public creates when we go out and we borrow to buy a car or a house or we spend money on it spend currency on a credit card that currency is created by us when we signed that document and you argue with me if we had didn't have this debt based system we probably would have

better growth longer term but it sounds like to unwind that might be really painful oh they're realistic going to calamity and financial history i believe i don't as i don't and. it's absolutely coming you know one of the things when i was writing my book i discovered that every thirty to forty years the world has a new monetary system and nobody really has paid attention to this a man made system can't possibly last pressures build up here and there there's misallocations of capital and then the whole thing eventually implodes we had the classical gold standard before world war one the gold exchange standard between the wars the bretton woods system from one thousand nine hundred forty one nine hundred seventy one and now we've had the dollar standard from seventy one until today it's forty years old it's the longest lived of these currency system systems there are tremendous imbalances that have been building up for the fifteen trillion dollar debt all of our exportation of dollars around the planet it's eventually

doomed to suffer some sort of collapse or transition and i believe this is going to happen in this decade but since the dollar's the majority of the world's currency if the dollar has a problem every country on the planet has a problem because more than half of all the dollars that exist exist outside the united states and also very happily why all of our international viewers should be paying very attention close. because this is not just a u.s. debate the u.s. dollar is the global reserve currency we're going to talk about where it's going we're going to talk about gold and silver because mike maloney says thank you spender gold silver dot com and we will be right back with him after a short break. still ahead it's one of the world's largest file sharing sites and the f.b.i. shut it down thursday while your feedback on mega upload and the show but first their closing market numbers.

you just put a picture of me when i was like nine years old so if you told the truth. i confess and i am a total get of friends that i love driving to pop music and. he was kind of the jester but. i'm very proud of the world with its replays.

you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else some other part of it and realized everything you thought you knew you don't know i'm charged as a big picture of. what drives the world the fear mongering used by politic. who makes decisions to break through it's already been made who can you trust no one who is human view with the global machinery to see where we had a state controlled capitalism it's called sasha when nobody dares to ask we do our tea question more.

welcome back so we heard about where this is all headed and it's not good let's talk about where we are in the well cycle that something that mike mullen he refers to what does that even mean we're going to find out but first do these commercials help illustrate anything look a few years ago it was all about selling gold for cash. money. to. buy. the gold with you know where to go down. now when you look at the t.v. it's all about trading cash for gold. whether you're diversifying your portfolio investing for profit or completing that point collection you can turn to a trusted leader and that's what. let's figure out what this all means the founder of gold silver dot com and author mike maloney is going to break it all down for us now before the break we were talking about you believe that this monetary system is

headed for a collapse i hope i'm not putting your words in your mouth is that what you think well throughout history all fear the currency systems collapse and today you know august fifteenth one thousand nine hundred seventy one we began a grand experiment before that date all currencies on the planet were pegged to the u.s. dollar in the u.s. dollar was pegged to gold so little all currencies were paid to gold through the u.s. dollar nixon severed and before that. currencies were a one hundred percent failure rate there is no example in all of history and it's been tried thousands of times it doesn't work and then on august fifteenth we decided to try it globally so we can only imagine where that is headed if history repeats itself so let's talk about gold because you're not a gold bug at least you've said you're not a gold bug but you think it's in a well cycle right now can you tell us what that means well cyclists basically there are so many different asset classes just a few you know you've got commodities and precious metals you've got real estate

you've got paper assets like stocks and investors run from one to the other and they push one into a bubble well it should be drawing currency away from the ones that are out of favor it doesn't because we keep keep on increasing the currency supply we keep on diluting the currency supply but what's happening is if you have you know in the last decade real estate went up the stocks went up and commodities and precious metals went up that's not really possible that everything went up what's happening is everything is going up in price because the the currency is losing purchasing power but at the same time there are certain things that are going down in value if you have two things that are rising and you're invested in this one and it's rising slower than the other one when you go to sell you can't buy as much of this one if you're invested in this one when you go to sell you can buy a whole lot more of that one and that means that this one is gaining in value and price this one is gaining in price but it's falling in value. and what you see if

you if you take things like the dow jones industrial average or a single family median price home and you you divide those things by other things instead of currency how much is your home worth as far as barrels of oil over a century how much is the dow worth measured in gold you'll see that it goes overvalued under-valued overvalued under-valued in this pattern. and it tends to be about twenty years swings and so by being invested in one sector for well it's rising and then selling and buying the identifying the most valued asset class that you can and moving into that one you're basically taking that next wave and sort of pasting it out of this valuation channel that everything is trapped and we get better man gets better at producing things we make efficiency gains relatively the same for all the different sectors throughout time and.

when you measure one thing against another thing you will find that everything is sort of trapped in this valuation channel this is a true road to wealth if you can understand that your home goes from overvalued to undervalued overvalued under-valued again regardless of whether you think i mean it doesn't go up nothing goes up that is just the illusion that is created by the devaluation of the dollar ok so we're almost out of time because we only have a minute left but i but where is gold and silver because we don't often hear about silver as much and that will cycle well right they've been in their cycle now for the last eleven years or ten years and this should continue for another probably depends on whether we have a currency crisis or not and i do believe we're going to have at least a crisis of confidence if not a full blown hyperinflation eventually i think we're going to deflationary defers

to and then potentially hyperinflation but. gold and silver should continue their accounting of the currency supply we expand the currency supply gold and silver lays in wait and then it does this accounting people realize there's something wrong with the currency they rush back toward real money gold and silver and they bid the value of the gold and silver up until it equals the value of the circulating medium it did this in one nine hundred thirty four it did it in one nine hundred eighty it's doing it again the gold and silver have to. north of five thousand dollars an ounce probably fifteen to twenty pounds for the gold of the treasury to equal the circulating medium today which has a very long way to climb yes i certainly appreciate you being on the show it's interesting to think we're headed to deflation but then going to hit hyperinflation possibly hyperinflation yeah yeah but i think that deflation is you know only six percent of the currency supply is under the direct control of the fed the other ninety four percent they only have influence over and it requires the our

confidence our feeling good to go deeper into debt every year borrow and spend to keep the game going and if we don't borrow and spend then the whole thing starts going into a deflationary collapse ok and that's why i think where we're headed it sounds like thank you yes but gold and silver will still do the accounting and to be way too early one second too late aha there you have it good final words well and on that mike maloney thank you so much for being on the show he's founder of gold silver dot com and author. thank you.

all right it's friday so now let's wind up with your feedback mega upload the f.b.i. shut it down yesterday it's one of the world's largest file sharing sites the f.b.i. alleged copyright violations the u.s. worked with other jurisdictions in at least eight countries across europe hong kong new zealand to make arrests of the founder and associates at oversea raids now one hundred fifty million use this site to upload files make uploads lawyers say the site was shut down with no notice and no opportunity to chat. so we asked you what you thought about due process and the safety of your files online and of course this is just after we've heard that congress put. the online piracy bills on hold after the blackouts and protests earlier this week so what did you have to say you were tweeting up a storm michael proc up i hope i got that right said feds really send a public message or message to the public at large with timing of mega uploads action a day after so online blackout protest interesting point and anonymous in

reaction to mega upload took down the d.o.j. and universal music sites some others two and ronald james davo tweeted about that telling me bad news about mega upload but pirates can't be defeated we're finally at a point in time where it doesn't take money to defeat government hackers work cheap a little bit on the backlash there and dan coldwater shower tweeted us and said the fact that the us exercise arrest warrants and nine different countries to shut down mega upload is terrifying and on concerns about file storage for users because i asked you about that so i. said no concern regarding cloud storage upload shared files publicly private storage doesn't servers outside us jurisdiction our best so little advice there from a viewer and d.c. b. via twitter said i'm just wondering why youtube hasn't been taken down search for a copyrighted song and you'll get hundreds of results now i don't know if they

answer to that question but in c. net and the article about meg upload they quoted the lawyer for blood saying this he dismissed the government's attempt to file criminal charges against his clients saying many of the allegations made are similar to those in the copyright case filed against you tube and that was a civil case and you tube one so i don't know the details but there's just a little bit on that case moving on earlier this week i got a tweet from could be. who said just a shot saw your show for the first time great work glad you can be seen in the u.k. now which is a great way for me to tell you with great pleasure that we are now being broadcast internationally so all of our international viewers have another option rather than just online you can watch us five thirty six thirty nine thirty six thirty am if you're in london western europe moscow or new zealand and moving on we had mohamed el erian on the show on friday and someone via you tube we had

a great response to it and they said great interview well i think is right on the light at the end of the tunnel keep some powder dry for opportunities just ahead of us he was pointing out something i hope you'll go back and listen to we talk about a lot of the doom and gloom going on in the economy but mohamed el erian had some advice for savers which he said are financially repressed but he said that there may be some opportunities in pimco his view towards the end of the year if things get all dislocated around the world good assets may trade at a very low price so some good news to end on this friday that's all we have time for thanks so much for tuning in feel free to follow me on twitter at lauren lyster give us feedback on the show at you tube dot com slash capital account and be sure to tune in next week i will be off i will be at the world economic forum the annual meeting in davos switzerland dmitri kofi anna is our producer will be filling in we have some great interviews lined up and i will be bringing you daily reports from

davos on the back room hallway deals and schmoozing going on so i can give you an insider's look but until then i am lauren lyster have a great night and we'll see you next week. this is claude. allen sitting on the edge of past and present. mixing reality that's nothingness. but if you enter this time. the mystery of supernatural will reach you.

shaman of siberia. download the official anti up location to i phone on pod touch from the i choose ops to. watch on t.v. life on the go. video on demand parties mine gold costs and says feeds now in the palm of your. questions on the dot com. admission free accreditation free in-store charges free. range month of free risk free. to tide free. download free broadcast quality video for your media projects and a free media dog r t v dot com. culture is that so much about the taxpayers'

money and it is a shame because a lot of people at various supporters of the spawn line piracy act claim they are losing billions of dollars a year to step on the internet opponents of sopa worry the internet. hello. we are anonymous. don't adjust your computer setting the internet is working. right but several notable websites have been knocked off line it's the largest attack ever organized by the hacktivist group anonymous it looks like vengeance is just a click away. and internet hackers are the only ones ready for radical changes seems many americans are ready to shake up the system well had to the streets of times square to find out what huge change. america is with great nation because we're united nations and those who are trying to run.