[music] Hey everybody, this is your host of the Freedom Report, Robert Kint, and it is Wednesday, September 23rd, 2026. Welcome back to the program. Today I'm going to be going over which assets have returned the most since 1971 using two different measures or basis. We're going to do it on a log chart so that you can see scale. For example, a log is a base 10 chart. Meaning, if you're seeing something go up on the chart into the next scale, it's a 10x. And so what a log does is tells you, for example, if
you go from 2 to 20, that's a 10x. Well, from going to 20 to 40 is not a 10x. You have to go to 200. So, it's really going to tell us what have been the biggest booms in these various assets since 1971. And then we're going to get into why the winner is what it is. Is it gold and silver? Is it one of these other assets and what that could mean going forward? So, this is really was intended to be a gold and silver focused video, but as I was getting into asset valuations and returns since 1971,
I thought, "Oh, there's a different story being told here as well." So, this presentation is going to morph from just an economic presentation to also a socioeconomic or a uh cultural presentation as well. And I think you guys are going to be interested. So, without further ado, we're going to jump right into it. So here is the presentation called inflation adjusted values what has actually done better go and sorry for the transitions on this presentation that's the template
downloaded and I didn't have time to remove them all right gold since 1971 well first of all why am I using 1971 that was the date at which President Nixon was forced to remove the dollar from gold convertability meaning we were the world's reserve reserve currency and we're no longer on the gold standard. That allowed the US government to take on as much debt and print as much money as it wanted to without worrying about backing it up with gold reserves either bought, mined or whatever the case may
be. And we took gold out of that system. It allowed the market to go to different valuations and levels. So this is in other words which assets done better in the fiat currency era. And I want to use two discounters or I want to use two uh I want to discount it for inflation. In other words, I want to see what the returns are after we deal with dollar price inflation if that makes sense. So this is a chart of gold and you can see uh this is 2025 number. So it has 2820. Uh obviously gold went up to 5,500. So
that's just the graphing software I was using. But gold's now gone up to like it's 4,300 now was 5,500. But it just went 71 to 2025. You can see that nomally gold is much higher than in the gold uh line squiggly line than it was for the BLS real 1971. Meaning if you took CPI and baked it into that cake, what was your return? Well, it was a whole log scale less. In other words, it was at least 10 times less when you factor in inflation. That's why I used a log chart. It shows scale, not necessarily
just bulk prices. If you look at shadow stats, and I use shadow stats because John Williams uh is an economist. He's been an economist since the 80s. He's done he's classically trained economist. And he will graph out uh real inflation as measured in 1980. And people say, "Well, that has to be inferior. We're so much more advanced nowadays." But in reality, what the government has done is they've messed up the inflation number with uh geometric waiting, hydonic adjustments, uh taking out certain
measures of uh uh price inflation, taking things out of the core PCE and CPI and really just confuses things. Well, what I like about John Williams is like I'm just going to use the 1980s version and I'm going to stretch it out over time so you can see you can compare 2026 with 1980s, 1990s, 2000, 2010s and get an accurate representation of where prices actually are when adjusted for real inflation. What's really happened to prices, not with all the goofy government screwing up the numbers and playing around with
the numbers, just the raw numbers. And you can see that um gold started at 40 and $40.80 in 1971 and and if discounted for real inflation through shadow stats, it's only worth 56 bucks. So gold really hasn't risen all that much when discounted for inflation. Now this could be a very damning chart to people in the gold and silver industry. And I'll do silver here in a little bit in the precious metals industry cuz like see see I told you you should be in real estate and stocks and bonds and uh tech startups and investing
in companies you know and even buying a grocery store or convenience store. Why would you be in gold? Look at that return. Wouldn't that seem to make the argument the gold has done very poorly when accounting for real inflation? And no. What it means is gold's done its job. it has accounted for real inflation and taken that value in. And wait till we get to some other charts to see how other assets have done using the same inflation measures. both the official government CPI number uh that we get
through the BLS well that the BLS is reporting we get it through the BLS and then the shadow stats number done by economist John Williams who uses an unfettered unmanipulated measure of inflation that allows us to actually compare with the past without a bunch of fiddling around with the numbers. Moving on to golden real terms. I took out the gold in nominal terms and we drew a line on this chart for where it was in 1971 and you can see that gold if you look at it in CPI terms has gone up a lot. It's
gone a whole log scale up meaning it would have done very well. That's why a lot of people look at that red line and say gold's done very well even when discounted for inflation. So I think gold is overpriced. But when you count it for real inflation, not government fiddled numbers, but just straight data that Shadow Stats produces, gold really hasn't gone up that much. Now, it's done pretty well since the pandemic, but and it did pretty well 2008 through 2011, 2009 through 2011, but overall, it's not
up that much when compared to real inflation since 1971. In other words, gold's done its job. If you look at silver since 1971, you see a similar thing. Nominal dollars in silver is at the silver line. And then you have the CPI number uh discounted number in red. Meaning we take the gold price movements from year to year and we back out or we discount by the inflation rate to see what the real return is. Is the asset growing over inflation? Because if I have to pay 5% more this year for my groceries, well, I want an
asset that captures that 5% at least so I'm not losing my purchasing power and hopefully returns something over that. So silver, if you look at it with the BLS line, it looks like it's gone up a whole log scale or over 10 times what it was in 1971. That's how to read the charts. It's not a price chart. It's a log chart. So if you look at it, silver's gone up at over 10 times from 1971. But if you look at it from shadow stats, what I call real, unfettered, unfiddled with inflation, silver has not
gone up 10 times. Silver is actually under the $158 base that it was in 1971. Meaning silver has lost value even though it's a precious metal. Even though it's used in just about any technological, medical, military, and many other uses, EV, solar, you name it. Silver's used everywhere. We think we're in supply deficit, at least yearly mining deficit. How could silver in real terms when discounted for real inflation be worth less than it was in 1971? That doesn't make sense. This would seem to
indicate that silver is undervalued and it hasn't really been doing its job against inflation like gold is. And I would agree with that because since the '9s, silver's really been industrialized. It's treated as a base commodity. And a lot of people think those commodity supply and demand characteristics with the mining shortages is drawing down all this world silver inventory. And eventually we're going to get to the point where silver really pops for those reasons. But right
now silver is not priced as high as it was in 1971 when accounting for real unmanipulated unmolested uh inflation data that John Williams pro provides us at shadowstats.com. By the way, if this interests you, and I'm not affiliated with John directly. I don't have no, you know, he's not been on my show, I think once in the last seven years, like him. But if you like his data, go to shast.com. He has not only inflation data, has a lot of measures in data. Sum's free, and then he has a
subscription service which pays for all the work that he does. All right, silver in real terms. Again, we move out nominal prices and we just look at CPI numbers versus shadow stats inflation numbers. And you can see with the line drawn across since 1971, silver in real terms, unmanipulated data, just straight price terms, uh, straight inflation price terms is under its 1971 average. So when people say that $65 silver is overvalued, it's really not when compared over time. You can see that on the time series
chart and it's been that way. It's been cratering since 1980. And it went up in 7980 because the high oil inflation and came down and except for like 2010. It really wasn't it didn't peak above its 1971 value in real terms when accounting for real inflation. All right, moving on to the S&P 500. Now, this is interesting. The reason I'm bringing in the stock markets is because I was just on Danny's show at Capital Cosm this morning and we were talking about the effect of inflation on assets and I was
saying that I don't think the stock market's really returning what most people think it is when you account for inflation when you account for stuff you got to buy. So, if you're sitting out there and you're a baby boomer or Gen Xer and you're thinking about you're in retirement or you're thinking about getting to retirement and you have a million dollars in different assets, how long is that million dollars going to last if if the returns on the S&P 500 didn't really keep up with inflation or
barely kept up with inflation? So since 1971 when we got taken off the gold standard, the S&P 500 is barely over its inflation adjusted value, meaning it's basically been flatlined for 55 years. Despite the nominal returns you get in the index and what you think you're making off of that, when you take into account real inflation, you haven't made much. And this is one of the reasons the government uses the CPI numbers they do because it effectively covers up how badly those assets are performing when
you consider real inflation and it's kept people in the system. Monies are captured in the stock market and 401ks and pensions and IAS and various retirement plans. And these BLS numbers make it seem like people are getting real value. But when you take into account the cost of things, go look at my real estate presentation from two weeks ago and how expensive houses are and then look at what's happening to diesel and gas prices and the price of the grocery store. You're going to look
at this and say, "Well, the stock market's really not increasing my purchasing power." And it comes with a ton of risk. Now, this is the top 500 companies in America. Let's go on to look at the Dow. The Dow Jones Industrial is more of a manufacturing industrial index. really looks at manufacturing and physical uh activity uh productive activity in the u in the country and now we're we're less of a manufacturer than we used to be. We make less. We still make things. We just
don't make it as much. And the service economy and the tech economy is much bigger. And interesting to note that that if you look at gold at the Dow in in in real terms discounted for real inflation, shallow stats, it's even. So the Dow has gone exactly nowhere. That means that the productive capacity of our nation in 55 years has not gone up relative to what we're paying to get stuff. That's an astounding an astounding chart. And it means despite all the technological advancements,
despite all of the the wonderful things that we have, we actually can't afford to buy more of it. uh these manufactured things and these companies that manufacture things when discounted for real inflation. Our standard of living really hasn't gone up the way that we think it has. All right. Now, moving on to the NASDAQ, you see a little bit different story here, especially starting around 2009 2010. The NASDAQ when discounted by either CPI or shadow stats has done actually really well. And
you can see it's gone up by a factor of 10 on shadow stats and by a factor of nearly 100 when discounted for inflation. And again log log scale. So I'm going from 10 to 2 to 10 to 3 to 10 to 4 on the left hand side of this chart. If you see here uh it started right here the NAS uh the NASDAQ actually right here in 1980 then went to this 10x scale then went to this 10x scale when you're measuring in this red and this BLS inflation the CPI. So it looks like NASDAQ has actually kicked button taken names really especially
since uh about 1990 when discounted for either inflation because even in shadow stats the number it looks like a 10x there right since about 2008 2009 so since the last since the great recession technology is more than 10xed or at least the value of the NASDAQ has and wait till we get a little bit deeper in the NASDAQ to look and see that it's not the entire NASDAQ it's really a collection of firms at the All right, moving on. What is the winner? Well, if you graph all of these out on a log chart
and you use the CPI, this is the top chart, or the shadow stats, the bottom chart, on both charts, the winner is the NASDAQ in purple. The purple line, whether we discount for shadow stats, real inflation, or the goofy government CPI inflation, the NASDAQ wins. The interesting thing to see is that the NASDAQ really only started consistently winning in 2010. So for the last 16 years, not really since 1971. Since 1971, almost everything did better with the exception of the tech boom in 2000, but the tech boom in 2000 was a little
premature in predicting the tech technology economy, but it came back around the great recession. And uh the top firms and NASDAQ and the technology sector has really been where all the money's been or the capital's been flowing to. Gold has done well. Gold is in blue on this chart. Gold is second place. So gold just by holding value, if you remember the chart we had before, gold's just held value since 1971. And the fact that everything else is below gold, including S&P, Dow, and silver is below gold means
that all of those are basically flatline or less than uh the value or offsetting inflation or your per, you know, maintaining your purchasing power whereas NASDAQ and gold are clearly on top. So, the winner really is NASDAQ. And it's like, okay, Rob, well, if that's the case, why are you keep telling us to invest in gold and silver? Why are you a Gold and Silver channel? Why aren't you just constantly talking about Microsoft and Amazon? We're going to kind of get into that for the
remainder of the presentation. And there's going to be a little bit of a warning there at the end of this presentation about where we may be going. And it doesn't just have to do with economics, but I've got quotes from other people to paint that picture instead of me just doing it myself. And it's interesting to see how long these quotes have been about, but I'm giving it away. So, let's keep going. So, the winner is technology stock. So, I so I said, okay, what are the changes in
technology since 2010, which caused the NASDAQ to separate from everything and just all this money has been flowing into it for 16 years? Well, you had the mobile app store super cycle where we got into the mobile phones like this one and we got into the apps and really technology came home to sit in our laps every day. It's no longer we're lucky to have a computer at work. Even if you're, you know, a construction worker or a plumber or you work on cars or you you're traveling around salesman or
whatever and you don't really on the computer, you're not on the computer a long a lot of time. Everybody gets on a computer with one of these. It's your personal digital assistant. And actually started off as PDAs because I used to work at a technology store back in uh the mid9s and I sold some of the very first PDAs including an Apple PDA and then it eventually morphed into a phone and then they combined the phone and the technology of a digital assistant and made it into like a little uh little
complex supercomput there and Apple transformed consumer electronics into an ecosystem. Then from 2013 to 2018, you had the 10bagger factory of cloud development. Uh Netflix pioneered streaming from the cloud. The stock sword 27x in 10 years. And since 2021, Netflix has been killing it. They can spend a billion dollars on content and make three to four billion dollars in revenues because they have over 300 million subscribers. And not all of their content has to hit. They just have to keep the misses to a minimum. And
when I was studying Netflix over the weekend for a different project, uh the way Netflix did it is they figured out that the middle is where you win. So the mi the middle spend, you know, the the5 to $30 million productions, whether it be seasons of a show or whether it be a movie, are the ones that win the bread and butters. But you got to have the blockbusters to attract new people and to keep people in the game. And then you also have your cheaper content like a lot of children's productions and
simpler content which also keeps the family sticky. And so Netflix has figured out the mix that keeps keeps everybody uh basically attached to what's going on with uh the content with Netflix. And so they're just printing money. Their return on investment of their investors is ridiculous. And they're they're billions of dollars of profit. They have more profit and assets than they do debt. and it keeps growing. Uh the other type of suites, Microsoft Azure launched in 2008. It's up over 20x since the
entire Microsoft company. Adobe put creative suite in the cloud in 2013. Uh AWS, Amazon went from 3 billion to $25 billion revenue. So those five years were about building the cloud. That's about building infrastructure. First, you get the the device that's going to power the apps. Next, you have to build the infrastructure that the apps run on so that people can use this and use their laptops and use their smart TVs. Then from 2010 to 2021, you had the zero interest rate policy. So the funds Fed
funds rate 0% for seven years. And so what happened was at 0% rate, a dollar of 2030 earnings is worth a dollar today. Meaning there there is no discounted time value of money in terms of earnings. And so if at 5% rates that goes down to 61 cents. So the analysis is that 40% of the value of of NASDAQ in these companies increasing was just the fact that we had zero interest rate. They could borrow at zero and then that meant their cost of acquiring capital was near zero. So that allowed them to grow exponentially. You say well why
didn't all the companies do that? And that's has to do with the next few bullet points we're going to get into. This is why it didn't happen in staples and commodities and others. COVID forced digitization. Lockdowns forced daily life onto digital platforms. This and others. Homeschooling on the computer anyone that people didn't weren't allowed to go to school. Worship services online. People ordering more from Amazon and Walmart uh delivery which is now ubiquitous. You have
Walmart drones delivering goods to your driveway. We just all got used to that during 2020 2021 because we couldn't go anywhere. And that forced people to digitize. It forced people to get on the system. and NASDAQ jumped 44% in 2020. The annual returns 19 since 2020 has been 19% which has been higher than any of the other the indices because those lockdowns drove digitization. They drove the online uh technocratic sort of model. Then in 2022 2026 it's AI you have the second cloud now you've got AI
and it requires all these additional data centers so that the computers now can do the thinking. AI and cloud computing demand now uh demand now accounts for 40% of the S&P 500 market cap. That's how powerful it is. And video alone 168.9% market cap growth in 2024. Uh the Magnificent 7, the top seven technology stocks soared to 17.6 trillion in December and they're up more than that. And then it was network effects, buybacks and capex. So this is where the economies of scale of centralization of technology comes into
play. Okay, so the the IT sector increased 450% since 2010. And one key thing I noted through my research is once you win one of these areas, search like Google or Bing or whatever, uh, social media or the operating system, once you win one of these categories of technology, whether it's what helps us do technology or how we're searching technology or what we're consuming over technology, your marginal cost is 0%. And that raises your return on equity, ROE. In other words, when you get money into your stock, you're able
to multiply that because you don't have a marginal cost. You've won the game. Everybody's using you. So, it was a concentration of all the technological functions into these single companies, the top seven single companies, which great gave them market power and it gave them almost unlimited returns. They could borrow money and still make a ton more than what they borrowed. So they were able to almost infinitely scale. Why? Because we had the people addicted to this. We had the lockdowns.
We already had the first version of cloud. Then we added the AI cloud and now everything's automated. Now you have less people in jobs and you have less people in small to medium companies and you have the centralization of power to the big companies. And now they're getting rid of labor. They're cutting jobs and letting AI take over some of those functions. And so the cost of these technology companies to do business is really falling really low. And that's put every other industry at a
distinct disadvantage. And what we're what we're seeing happen since 2010. And the reason NASDAQ has done so well is a concentration of wealth that's being sucked into these top seven companies and it's creating a juggernaut that nobody can defeat because it's technologydriven. It's lower cost. uh they have almost zero cost of capital. It doesn't matter what interest rates get to, they're going to beat it. And let's go to another chart here, which I think you guys will be interesting to
see. I've got a couple of three companies here at the top. We got uh Apple, Microsoft, where which are a combination of hardware and software, mostly software, and then Nvidia, which is a chip manufacturer. And you can see that their return on equity is very high. The return on investment capital, which is ROIC, is high. And then you got the whack. That's the weighted average cost of capital. So, let's talk through this. The last column, the weighted average cost of capital is the cost to
acquire a stock or pay out a dividend or whatever the stock costs are plus the cost to borrow debt. So, it's debt and stock. You go back to the original balance sheet equation of liabilities u the cost to acquire uh or issue stock and the cost to acquire debt. In other words, the cost of money. The weighted average cost capital is a cost of money that businesses use to finance their functions. Well, if they're getting a return on the equity, uh, that is return on stock and a return on invested
capital, which is a return on debt or other investments is twice as much as their cost of capital, then there's no reason for them not to take on that debt or issue that stock or even buy back stocks, which has a cost of its own, because they're going to get more back. They're going to get a rate higher than whatever that is. So, they almost can't lose whichever one they choose. They can take debt or they can recycle stocks. Nvidia, the same thing. It's 60% return on equity as a chip company, 50% return
on capital, and only has a 10% cost of capital. So, it's making five to six times what it borrows or pays back in stocks. Now, the broad NASDAQ composite, including a thousand companies, is much less. Their return on equity and return on capital is less than their their average cost capital. So, it's not all technology companies. It's the Magnificent 7 and Apple, Microsoft, Nvidia are really leading here into which they can do no wrong. It's like their business can do no wrong. Why?
Because all that capital is already in. They've won their various fields. Apple's won the the mobile phone war. I don't care about Samsung and the others. Apple really dominates in a lot of technology fields. Uh Microsoft dominates a lot of software fields. Nvidia dominates in a lot of chip fields. And so those companies basically have so much concentration of power. It's like how do you stop them? They're a juggernaut. And the rest of the technology companies are trying to catch
up. And so what happens is you have the power of all technology, the internet, AI, and all that stuff in a a very small group of companies including these AI companies which are rising. AI companies rising is going to be the next guys to take over the crowns from the Apples and Microsoft's Nvidas here in a few years. What is the outlook? What is the effect of this? Well, I've already talked about job loss. We've already talked about um lack [clears throat] of growth in uh opportunities for small and medium
business which businesses which create most of the jobs. But here are some quotes from people that talked about the effect of centralization of power and technology in the past. We're going to start with Dwight Eisenhower in his 1961 farewell address as president. We must also be alert to the equal and opposite danger that public policy could itself become the captive of the scientific technological elite. What he was saying is the companies are going to have more power than the government and they're
going to capture it. That's called regulatory capture and the government's not going to be able to stop them and neither would the people by extension of that because the government is the enforcement arm of the people. And Dwight was basically saying and you know we had the bomb and stuff like that had already gone off back then and he was looking at technology going uh this is the biggest existential threat. He also talked about other things. uh this isn't as quoted from his farewell address but
it's very important and relevant to the day and very preient for him to say that all the way back in 1961 you also have Aldis Huxley the famous author uh dystopian author who had a couple of dystopian books was very well connected and things that he wrote about seemed to in some to some extent be coming true in many areas of life and he said but the progress of technology has led and is still leading to just such a concentration and centralization of power Okay, connecting technology growth
to power just like Eisenhower. George Packer, a famous journalist said, "Today we have our own concentrations of economic power." This is in 2025. Instead of Standard Oil, US Steel and Union Pacific Railroad and JP Morgan and Company, we have Amazon, Google, Apple, Facebook, and Microsoft. The technology companies can consolidate powers better than the other industries. Even the energy industry because the energy industry uses what? Technology. technology is the pillar beneath the entire economy. That's why they're doing
so well because everybody uses them. Uh Christian Lewis Lang, Nobel Peace Prize 1921. Technology is a useful servant but a dangerous master. So what happens when AI basically is running everything in society? Is it a servant now or is it a master? And what does that mean for us? What does that mean for the economy? What does that mean for freedom? What does that mean for jobs? What does that mean for us as a society? That's one of the existential questions of our generation of our time. Uh technology uh oh going down to Marshall
McLuhan, philosopher, professor and intellectual. We shape our tools and thereafter our tools shape us. We create the technology and then the technology takes over and shapes the direction of our lives. And the last one by Jacques Ulu, the technological society, a book in 1954. Technique has become autonomous. It has become a reality in itself. It is the new sacred. And by technique, he means technology or how you do things. Technique and technology have the same base in in uh language. And he's basically saying technology.
There is the risk. look at the only thing that's outdone gold uh since 1971 and really since 2010 if we're really looking at the chart and that's NASDAQ and that's a concentration of power in technology and that is a real threat AI social credit scores uh things like that and it seems as though uh technology is is is on this this train that won't stop it's just going to keep going I would say that the only thing that's going to protect you from that is gold because gold at least
captures inflation and at least gold gives you an alternative way to to trade outside of technology like uh digital currencies or the digital dollar or the the online systems and I would advocate that gold is probably your safe haven if you're worried about those things you know so to answer one of the original questions that was po has been posed to me by my friends and has been posed lately to me is why would I invest in gold? Well, gold beats everything except for NASDAQ and technology, the top seven
firms. And so, everybody's piling money into there, but I would rather put my money in gold because I'm not so sure. I want those firms to have all this power and control because you see all the people that warned against it and what's going to happen over time and it seems like everything they're saying is coming true. So, I'd rather be in gold for those reasons. People that were in, you know, in NASDAQ since 2010, 2009 really when I started investing in gold had beaten me. But that's okay. I don't want
to put my money into that system. I love technology. I'm sitting here broadcasting to you over technology, using technology, but there's a limit to which I want that to affect my life. And I think having a real physical asset is something that is going to help uh me uh dealing not only with inflation, but dealing with whatever's coming down the pike with this new technological future. Uh and just to remind people, I spent 30 years in tech. I started off as administrator, then I did auditing and
consulting, then I did cyber security. My masters is in information assurance which is cyber security. Uh my bachelor's is a hybrid business technology degree called management of information systems. I have an associates in applied sciences which was basically Cisco networking and Unix system administration internet technologies that I got in 2002 when the internet was growing. I spent a lot of time in tech and I know tech very well and I think some of the advancements really caused me to have some concern.
So the presentation started off as what's done best. Well, it turns out only one of the stock market indices since 1971 has done best, but really since 2010, but gold's the runner up and I think gold probably is going to lead to more freedom than the other one. But if you want to simplify this this whole presentation down, why investing in the Dow, the S&P, bonds, and all those other things when gold is simply beating it? Because it maintains your purchasing power. If you're looking for the most
economically beneficial, lowest risk of these things to put your money into, it would be gold. Silver a little bit to a less extent because it's become industrialized. But if you consider the supply and demand characteristics and how we're likely eventually to get to real world shortages while all of our available stocks are being used up in all this technology by the way that uh and this this rampant increase in technology silver I think will explode past gold at some point but right now gold is the
stronger of the two. That's going to do it for today. This has been your host Rob Ke with the Freedom Report. >> [music]
MoneyMan
·Extended Studies
·4 months ago
