Jason Hartman hosts Lynette Zang, Chief Market Analyst at ITM Trading, and dedicates the show to monetary policy. Lynette shares favorite charts shared from the FRED, Federal Reserve Education Department. She explains that the term fiat translates as government decree. They look at a potential total financial reset, explaining where we are in our monetary system. Lynette warns that when you hear the term nominal, you must understand that the truth is being hidden.
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Jason Hartman 0:53
It is my pleasure to welcome Lynette Zang to the show, she is chief market analyst at ITM trading. She has a fantastic YouTube channel, I sort of met her I guess, sort of in a proxy fashion, or virtually, I guess, sort of on George Cameron’s channel. And you know, he’s been on the show several times, and I’ve been on his show as well, many times. We are looking forward to diving into some monetary policy topics today. Talk about the economy in general, how you can prepare what you can do, and a whole variety of things there. Lynette, welcome. How are you?
Lynette Zang 1:27
Oh, I’m great. Jason, I’m very happy to be here today.
Jason Hartman 1:30
And you’re coming to us from my old hometown, Phoenix, Arizona, I lived there for six years. Yes, good stuff. Well, you know, the purchasing power loss. And I always talk about how inflation is a robber and a thief. And it’s just sort of secretly robbing people of their wealth, you can no longer put money in a coffee can pick it up 10 years later, and have it be worth the same amount
Lynette Zang 1:52
of money and silver.
Jason Hartman 1:55
We add we can we can dive into that do and then talk about metals all day long. But talk to us a little bit about that that purchasing power decline that we’ve had over the years, especially since the Federal Reserve was created, I think the dollar has lost about 96% of its value, somewhere around there. And you’ve got a fascinating chart I’m looking at on your website right now, which is just mind blowing. And it shows certain time periods with some big dips. I’d like to ask you about that a little bit as well. Let’s dive into that topic.
Lynette Zang 2:25
Well, you’re looking at one of my absolute favorite charts, and that is probably from the Federal Reserve educational department, the Fred, so anybody has access to it. And we’ve actually lost much officially much closer to 98% when they created the fiat money system. Oh, that one? Yes. When they created the fiat money system, they knew that people do not understand inflation. So the benefit for governments is that they get to tax you almost invisibly, and for corporations, they get to pay you less in actual value. And that’s actually what has enabled this big huge divide in income and wealth inequality. So when you’re looking at it, and up at the beginning, on the left hand side of the graph, it’s kind of flat, that’s when there was a gold and a silver standard. Because that makes governments have a fiscal responsibility, where you start to see that big huge dip. That’s when we first went off the goal. Well, we started the Fiat standard now fiyat is the literal translation is government decree. So
Jason Hartman 3:53
CR and I say by authority is the definition by authority, because the government says so you have to accept it. And of course, we have legal tender laws that enforce that. And by the way, for some who are listening to this only on audio and not watching on video on the YouTube channel, I just want to explain this chart a little bit if I can Lynette it goes way back to the 1700s. And I love it that it’s a long history. And even if you are looking at it on video, it’s a tad blurry, but I think people can make it out. So you know, you see some minor variations in the value of the currency. And then you see the war of 1812. That was, by the way in 1812. For those who
Lynette Zang 4:36
went off the gold standard to fund the war,
Jason Hartman 4:39
right. Okay, got it. So then you see the Civil War and you see a huge decline. And I remember I actually have some of these coins in my coin collection. These protest coins that were right around the Civil War because people were so angry about the loss of value in the currency that they started minting their own coins, right and this is an interesting part of, you know, monetary history that people don’t talk much about anymore because it’s a while back, but then we come up to the creation of the Federal Reserve just over 100 years ago. That was, I believe the US is third central bank experiment. Okay. And I still say it’s an experiment. And then, you know, we see this big massive decline, and it is just falling off a cliff. You know, we taught we see 1933, where they have the gold confiscation, they confiscated gold at like, $21 an ounce and then instantly revalued it at like $33 or $35, I think something like that. Yeah, 35. And wow, Lynette I mean, this is staggering. People don’t realize this. And one of the things that hides it is technology. because technology is a deflationary force. I’m sure we’d agree on that. And so it kind of does mask and hide some of the impacts of this bad fiscal and monetary policy that we’ve had to endure. Can you unpack that for us a little bit? Sure. Because a
Lynette Zang 6:10
lot of it is it’s called nominal confusion. And this is they knew two key things. They knew a lot of things when they put this system in place. But they knew that people do not understand inflation, and they marry the legal money of the state, because inflation causes nominal confusion. So if you had a $20, Bill 20 years ago, and you have a $20 bill today, nominally, they are identical. So you think you have a $20 bill. But in terms of purchasing power, what you could buy with that 20 years ago, 10 years ago, 50 years ago, a year ago, and what you can buy with it is very, very different. I like to tell the story. It was my father was a developer, and this would have been in the early 70s. I don’t know why this stuck with me. But he had this young couple at his house. And he worked as the guy worked for IBM. And I remember my mother banging her fist on the table and saying, he’s a comer. He’s a comer. He makes $12,000 a year. Yeah, well, back then the average wage was about 9500. And a family of four needed one wage earner. And I’m not saying they were rolling in it, but they were quite comfortable. So if somebody was making $12,000 a year, they were doing very, very well. And my father built very nice homes. Well, today, well, wow, look at what they just did with the stem, the 1200 dollar stimulus checks. If you make $75,000, a year or less, you got 12,000, you got a 1200, dollar stimulus check, or 150. So that alone, you know, I think the average wage now is something like 55 or 58,000. So when you stop and think about it, you know, normal person will go well, yeah, I’d much rather have 58,000 or 75,000, than I would 9500. But the difference is in that graph that you showed, it’s your ability to purchase. And I would also like to really point out that it’s because of what you just saw on the graph. And the tool, which were, which are interest rates, that’s the tool that the central banks have to regulate the rate and speed of inflation. So when they’re anchored at zero, where do you go. So that’s why I’m sitting here and really, we’re already we’ve already entered it. And it should be pretty clear to everybody life as we knew it is not the same and it will never be the same. We are 100% inside of a complete reset social, economic and financial.
Jason Hartman 9:09
Okay, so what does a reset mean? From the financial perspective? You know, people have talked that about a debt Jubilee. And, you know, I don’t think this is going to happen. I don’t know why anybody would go for that. You know, I can’t I can see why people, I can see why people that have a lot of debt would like it, but I can’t see why lenders whatever agree to that kind of deal or, yeah, I don’t know. You know, it just seems like a weird idea to me. I’ve never understood that too much. But I’ve done some shows on it was what does this reset mean? What does it look like? And then of course, let’s talk about what we can do.
Lynette Zang 9:46
Well, you know what a reset does. All right. If you have no tools left, the Fed is out of tools. All they can do is create more money, and they can go to negative interest rates and that’s what it’s looking like So just recently, they read, they did do a, an in kind of an invisible reset, where they changed how they were targeting inflation. And the Federal Reserve said, we’re going to allow inflation to rate to run hotter. In other words higher, even though they haven’t officially been able to hit that 2% target, though, your pocketbook would probably tell you different if you paid attention to food and education and insurance and all of the things that we need on a day to day basis. So what they need to do is they need to take us into a new system, because the old system is used up, and that’s the reset the way that they’ve done it, they’ve already started to come out with it. Have you talked with any of your guests about the Fed? Now, what do you mean, okay, the Federal Reserve Program or something? It is a program that the Fed just announced a few weeks ago, and they also announced the the dot the digital dollar. So there’s
Jason Hartman 11:08
a lot about that. Yeah.
Lynette Zang 11:09
Okay. Well, this leads, this all leads into that, because the the Fed now is about you as an individual having an account directly tied to the Federal Reserve. So when they issue UBI, universal basic income, which I think is going to be here, like within months, then they will make a direct deposit, they’ll just push a button, and there’ll be all of this money that’s set up in your account. And they’re going to do that every week or every month, I don’t know how, what their frequency is going to be. But this is a consumer driven economy, they have to get the consumer to consume in the current system, when the Fed makes a policy, it takes about 18 months to work through the system, they use the banks to distribute that policy. And it takes about 18 months for them to know if the policy is working or not. But with these fed accounts, that is boom, and instant thing. So they push a button, and now you have money in there. If you are not spending that money quickly enough, that money will start to evaporate, which will most likely inspire you to go out and spend it.
Jason Hartman 12:26
And really, it’s already evaporating through basic inflation, but more specific thing and what this is like, think of it this way, folks, this is like a gift card that loses its value over time, or it completely expires. But right. Interestingly, you know, that sounds terrible from an individual perspective. But for the collective. It’s kind of good in a way because they could force the velocity of money. Right? That. Yeah, yeah. And so that forces inflation because when there’s more velocity, that’s an inflationary pressure, meaning that money moves faster through the system, the more it’s traded, it creates inflationary pressure in the system. And that’s why even when you have a lot of money printing, or money creation is really the more proper way to say it, or credit creation, too. You can have like minimal or non existent inflation, because if people aren’t spending or there’s very little velocity, you know, it just doesn’t cause that inflationary pressure very much as as it should. But, you know, it reminds me of george bush’s idiotic remark post 911, where he said, Go shopping, go out and spend money, you know, and yes, that is true, you know, that does stimulate the economy, I get it. But the basis of wealth in any society or any individual is capital formation, you’ve got to save in order to invest in premium, you know, if you’re a business, increase your production capacity, or if you’re an individual, increase your investment capacity, or a family or a nation, say I think individual nation, family, whatever, business all of those categories, so And the thing that scares me the most Lynette is the idea of that, that could be married someday to some sort of social scoring system like they have in China, where they could like, take your money evaporate from your phone, if they if they think you’re a bad kid, you know, maybe you’re posting things critical of the government or the fed on social media, your money could just evaporate. You know, they, they of course do it under the guise of our safety and, and you know, at first they would apply it to true criminals. But then the definition of what is a crime would keep changing change. Make. Yeah, right. Tell us we
Lynette Zang 14:48
are definitely in a surveillance economy. And I did a piece on this maybe a year ago and took a look at and somebody just asked me this question the other day. Well, it We have these direct accounts with the federal reserve the individual does, then what’s the role of the bank? Well, here’s the thing, the banks are sitting in the middle. So the Fed has or any central bank anywhere you are in the world, they can just push a button and create that money, as you indicated, but they don’t have the relationship with the clients. Right? That’s what the bank has. Now the technology has that’s big data, they have the data on your habits. And what we’re seeing is a merger of the three. And when that happens, you’re absolutely right. We’re already living in the surveillance economy go through any street, I was driving in Paradise Valley yesterday. And I noticed cameras in the cactus. Right? I know, I know, we’re like, I actually did a U turn. Because I couldn’t believe what I saw. I know there was very obvious once you really know that that’s what you were looking for.
Jason Hartman 16:06
Right? You know, it’s so scary. This is why I call it COVID 1984. Because COVID has given the government governments around the world. And it’s all starting with China, of course, it’s a great excuse, it’s giving them great cover to do contact tracing, you know, first it’s going to be phones and cameras, then it’s going to be Apple watches. And then it’s going to be it’s going to be chips implanted in our body. And that’s I was just gonna say the chip will be in your wrist, and you’re gonna just put it near the card reader chip reader. And that’s how you’re gonna pay for things. And as
Lynette Zang 16:42
well, you know, I did, I did a research piece a little while ago, a few months ago, where I went to the lab where, where the COVID was, some said it was released from and actually if you read papers that are in there, you can actually see that they’ve known about this for a long time that they admit to engineering and working on creating the superbug. They have beautiful flowcharts that shows how it transmits from animals, the bats to humans. And they also knew that it was a matter of time. And what was interesting to me, I mean, all of that was interesting to me. But it was also interesting that at the same time that they were working on creating the superbug they were not working on creating a cure for the superbug. So that’s number one. Number two, I just found this the other day, I think this is a this is a new development, where they are putting I can’t remember the name of the company. It’s not in front of me, but I can send you the link to it, putting a chip in a vaccine. And the government of Bangladesh is where they are rolling this piece out. Now they’re also this company is that does that chip into the vaccine, which of course, is a GAVI. That’s right. Actually, this is bigger than bigger than just a company that’s doing this. Because this is through, don’t hold me to this. I don’t have it in front of me. But something like the World Economic Forum, which their new their new symposium coming up is called the the great reset, but they’re working with GAVI, who was founded by, let’s see, oh, it was id 2020. I’m sorry, I’m just going through so much data. Sometimes it takes me a minute if I’m thinking about it, but the name of the company of the entity is id 2020. It was created in 2016. The Rockefeller Foundation was funded them initially as well as Bill and Melinda Gates. GAVI is a vaccine alliance that was created by the Bill and Melinda Gates Foundation, and they are working with the city or the country of Bangladesh, the government of Bangladesh to insert these chips through a vaccine
Jason Hartman 19:26
vaccine. Yeah, I know. I know about that. Now, it’s sorry. It’s it’s pretty scary stuff, for sure. And I wouldn’t pursue Bill and Melinda Gates as far as I could throw them. I mean, think about it. Bill Gates, his his career started as he started as a ripoff artist. He basically ripped off. You know, what made him so rich in the beginning, but no one talks about that anymore. You know, and He’s the perfect sort of fatherly figure, you know, wearing a sweater, you know, he’s the perfect guy to pull this off, right? But hey, I want to get back to the On the banks for a minute, and let me show you this chart on my screen here for a second. Because I thought this was interesting. It’s not kind of hopeful. You said, with a Fed coin, can you see this chart about square yet? So this is kind of hopeful it shows that square the payment processing platform. And we’ve all started seeing these alternatives, you know, PayPal Venmo, square stripe, and they’re all a little different. I don’t mean those are at all exactly the same thing. Of course they are, they are different. But the concept being the cashless movement, oh, and this doesn’t require a cryptocurrency. And it’s, you know, it’s a group of private companies. But what’s interesting about this is that squares valuation is rivaling some big giant banks. Now, look at this, for example, at its current valuation, it puts the company closer to the ranks of large us banks, Goldman Sachs, that’s on purpose. Okay. Goldman Sachs with a current valuation of 74 billion is just $20 billion ahead of square. I mean, look at Goldman Sachs has been around for a long, long time, right? larger companies like JP Morgan, Chase and Bank of America are still far ahead, but could be within distance, if square continues to capitalize on the new digital payment environment. And the same concept applies to other companies squares, just the example here. But
Lynette Zang 21:28
we also like to
Jason Hartman 21:30
lay down, we really need a digital currency, you know,
Lynette Zang 21:33
well, we don’t need a digital currency, the central bankers need a digital currency, and they need to get rid of cash. Because what gold did to them is put restrictions around how quickly they could rob us through inflation. Now, the dollar is actually a debt instrument that pays no interest. So they have to get rid, they have to get rid of this piece of paper. Because as long as this piece of paper is out there, they can’t go, well, what’s the dollar, it’s 1.00. Right? In a digital currency, there are no limitations on how far past that that point that they can go, and so keep, but now they would be attacking your principal, not just your purchasing power. However, having said all of that square, and any of those other FinTech companies like that, they may look neat and clean. But if you were to look underneath, I think what you see is Goldman Sachs or Goldman Sachs, or JP Morgan, or all those guys have a big chunk of that. So they’re not really as removed as it would be nice if they were, but the central banks, there’s nothing left, there’s no valuation left, the only thing that is left is our confidence. Remember, it goes back to when they started this whole Scam. what they knew is that people marry the legal money in the state. Hence, we’ve got the US dollar here, and we’ve got a digital dollar. Right? If they change the name, people would know. And I think I might be older than you. I remember all of the chaos and the craziness that was happening back in the 60s in the 70s. With the Vietnam War, women’s lib, civil rights, the oil embargo. I mean, there was a high inflation, the stock market. I remember all of that. But what I didn’t know then as a teenager, I knew that there was a lot of change in the air, I could feel it. I even remember saying to myself, don’t ask me why a 17 year old girl would think about this. But I remember saying to myself, Social Security isn’t going to be there for me by the time I get there. And frankly, you know, here we are. I had a $20 bill in my wallet in June of 1971. I had maybe it was even a brand new $20 bill in my wallet in September of 1971. They looked almost identical. So I didn’t know anything had changed. And you listen to that Nixon speech. And he says,
Jason Hartman 24:27
oh, and he said temporary? Yes. Temporary. Yeah.
Lynette Zang 24:31
Yeah. Well, not only is it temporary, but you don’t have to worry about inflation. Because if you buy American goods, your dollars gonna buy exactly the same amount. And as you pointed out in that first graph, lies, lies lies. Yeah, but but I want to just go back and talk a little bit more about this COVID thing, because there are so many coincidences that I don’t think it’s a coincidence.
Jason Hartman 24:59
Right? Hollings are amazing. It’s the handiest thing for government ever. I mean, this is, if you’re a government control freak, this is your dream come true. What’s going on right now?
Lynette Zang 25:14
it if you just start to read all of the IMF, the BI s and the federal government, the state was just start reading those documents. You don’t have to think about conspiracy theory. It’s actually all out there in open language. It’s just that nobody goes and reads there. But remember, you have you talked much about the library or the the created benchmark that created it in the 80s. And then I don’t know not
Jason Hartman 25:43
a lot we talked about that we covered. We covered the library scandal back then. But we haven’t talked much about lightboard. Tell us more. Oh,
Lynette Zang 25:52
let me tell you, Well, okay, in 2012, it came to light that this was a stated rate. So banks would get together and say, Oh, this is what I think the interest rate should be. This is this is so shocker that it’s manipulated. It’s not even a market rate. But once the public knew about it, they had to get rid of it, you covered it back then, well, the date that it goes away is December 31 2021. So since that period of time, you have about five or six central banks that have attempted to create a new benchmark, and they’ve created it in this country is the ES, Fr. But then they attempted to create a market for this new benchmark. And guess what they couldn’t get, they couldn’t get cooperation, they could not create that market. Now, in this recent turmoil, especially when they came out with the main street lending program, or all these other lending programs, frankly, they had the opportunity to really develop that market, look at the trillions that they’ve created. So they could have in my opinion, but apparently I’m wrong. They could have created that market and forced it. Instead, they went back to the library or knowing full well, that it’s going away in how many months do we have left? 15 months, 16 months? So that was that that is failing? And the problem is, is you have about nominal again, there’s that term nominal. Whenever you hear that term nominal, you have to know that the truth is being hidden in
Jason Hartman 27:41
any way. Nominal means you name the number. That’s the definition of nominal.
Lynette Zang 27:46
Yeah, right. So we have about 6 trillion in nominal contracts that are tied to lie bore that must be reset restructured is the way they the term they used and tied to this new benchmark, which nobody’s been able to really create that market for and it was a big experiment anyway. So you know, the timing of all of this, the fact that they were instrumental in helping create the superbug and then it magically came out and the way that it impacts people.
Jason Hartman 28:25
There’s there’s a lot of good questions for sure. And you know, we may never know or at least not know for a long time this will be continued on the next episode. Thank you for listening and happy investing.
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