What Gold Tells Us About the FUTURE of Our Economy

Keith. Good to have you all the way from Dubai. I think a lot of people are wondering, you know about gold is sell So how do you look at gold? Do you look at it as like. An inflation heade, a soft haven, a store of value? So when you look at gold, how do you see it? You know, it's kind of all the above. But you know, I have to preface my remarks by saying that I'm somewhat of a contrarian guy and my views don't necessarily fit the standard interview. And a lot of these things I break down. You know, people define inflation roughly as you know, rising prices, and a lot of the cause of rising prices is non monetary. You know, if we have teryrrests, for example, that's going to cause prices to go up. If we you know, regulatory issues, or we make energy more expensive with green energy policies, all these things can you know, make crisis skyrocket, But they're not monetary, and therefore the price of gold isn't necessarily going to respond. And then a lot of people, usually the anti gold people, will say, see, I told you gold's not an inflation hatch. Yeah, gold response to monetary debasement, but not necessarily non monetary in a rising prices. When people say safe haven, usually I think what they're referring to is somethime you can put your money that isn't going to go down in price when other things go down. And certainly of late gold has been behaving that way, but not always. You know, the gold price is a two directional market. It can go down, and it's easy to forget that in times of extreme bolishness. Now I don't think the sentiment is extreme bolishness and gold right now, but certainly the price has been relentlessly bullish, you know, just about double where we were at the beginning of last year, which for gold is pretty pretty incredible. But what I think is really driving this is an increasing realization and increasing concern that the fiscal picture is completely hopeless when you look at how much debt we have and how fast it's increasing. You know, is there any possible way that this could be repaid by the American taxpayer? And the you know, the answers, no, of course not. I think that's you know, it's certainly been true for a long time, but people come to that realization and waves and I think we're kind of having a wave between the big beautiful bill between other things going on that people say, Okay, this is this is something I need to think about and how do I protect myself? And gold is the you know, the anti dollar. It's the thing you buy when you don't want dollar exposure. And so that's going on all around the world. Isn't just the US. In most places, they're buying in as the antidote for their own currencies, which your basket case is even compared to the dollar. You know, you look at India, the Indian rupees every year for decades down about eight percent a year against the dollar, and let alone what the dollar is doing right now, you know, objectively, the Turkish era could be hyper inflation imminently. Maybe maybe not, it's hard to tell. But they all buying gold to protect themselves against you know, the Turkish government, the Turkish currency. Uh. In China, everybody is you know, looking for ways to dumple you on and and buy dollars, you know, primarily, but by gold secondarily. And then finally you have the Arab world. That's the only of the four major buyers of gold right now. I think that's the only one that's really thinking about the dollar and geopolitics and monetary policy and not liking the dollar. The other three are really not liking their own currencies even more. But in the Arab worlds you know here in Uee for example, but the other currencies here they're stable. They're pegs of the dollar. Those pegs have been stable for decades. Nobody has any reason to worry if you wake up tomorrow morning that the value of the ue durham is going to be down. And yet they're buying They're buying gold, uh you know, handover, maybe a slight exact adoration as they hand over at fist, but they're buying gold in a way that you can't really picture it in looking at the gold market in the US right now, because retail in the US is sitting sitting on the sidelines. Do you think that that's partially because of the economic tension there between the US and parts of the air world. I think it's part of it, And I think part of it is, you know, the dollar. This was said in nineteen seventy or something. You know, yeah, it's our dollar, but it's your problem. They get on the short end to the stick of it. They don't have dollar swap lines. They have to be very How they maintain that PEG is by moving their interest rate around to try to maintain the PEG, and so that means they can end up with higher interest rates at times that are inconvenient. So I think they just they love America generally here and as an America, and I feel very welcome. I think it's been fantastic, but they don't love our monetary policy, and they probably have some disputes where their feel political policy as well. Oh, Keith, I've been buying gold for twenty years, right, like a long time, and I just slowly have tipped away at it all on the physical, not necessarily on the ETF side at all. But I you know, it's funny because I've been and I've been following monetary policy. I've been following the printing. You know, I was around in the two thousand and eight when they bail out the banks, and obviously we just had the stimmy issue, you know, from the pandemic period, which kind of really went to the people, I would say, you know, and so I've been waiting for you know, gold is just slowly kind of chipped away, and the dollar has been all over the map of the US dollar, right. You know, the thing is is gold is a is a worldwide you know, a medium of exchange. And you know, so a lot of people focus on US dollars, but it's really worldwide. So when you you you named off all those countries and you're you named off all these things that are going on, it really is when international when there's international stress, you know around their currency or even on the US side, you know that I that I see that people kind of fla into the physical metal. Yeah, absolutely. I mean you look at India. It's one a population of one point four billion people now per capita GDP is about three thousand dollars. That they are not just a little bit poorer than Americans, but a lot poorer. But all one point four billion of them want gold and they buy whatever they can afford. And in America is so much richer country. Obviously population is about a quarter of that in India, but I would say less than well under one percent of Americans have any gold or any desire to have any. Turkey they have gold bank accounts in Turkey. By we can walk into a bank and get a bank account and nominating gold, you get an ivan. You know international bank account number. There's a population of eighty million people in Turkey, one hundred and twenty million gold bank accounts in Turkey. So they are with gold bank accounts the way Americans are with guns. I mean there's more than one gun per person. Well, they have more than one gold bank account per person. In addition to the physical that, you know, every Turk would have some physical gold, you know as well. I know when I dug into the ETFs, you know, the electronic traded funds, you know, there's more gold stock than there is physical gold. So one of the things that's always concerned me is if there's a run, let's say that there's not enough physical gold to cover, you know. I mean we've seen this with banking and stuff like that. So so when you're looking at you know, gold bank or gold stock or where do you land with regard to that? Because for me, I I you know, if I'm going to do gold, I want I want it physically in my hand, right, how about yourself? I mean that's part of it. But then there's a point at which, okay, what's the risk of robbery, home invasions, theft, fire? You know, you can't ensure you know, gold bullion held at home generally, So I think everybody should have have a dozen or a dozen you know, one ounce gold coins at home. Sure, absolutely beyond that, I think it depends on your home, you know, situation, whether that's safe. There are a lot of things that are unsound. I mean these gold bank accounts in Turkey, all the commercial banks are obliged to give the gold to the central bank, and the central bank is using it to fight the need for you know, because everyone's buying gold, so they're importing it, which causes people to sell the lira to buy dollars to buy the gold. So they don't like what that does to the value of the lira in the international FORX market. So they get all this gold from the people and they're selling it in order to meet the demand. Well, that's unsound. You're lending it to the bank. They shouldn't be just selling it like that. You know, similar things. They've had a scheme in India, you know, the same thing that's that's all about trying to manipulate the value of the of the currency upward. Vain attempt because it doesn't really work. So those things are unsound. You know, I look at the GLD, which is the biggest etf. I don't think that they're committing the simple fraud of not having the bars. It's not usually how things work in America. I mean, the system is messed up in a lot of ways, but not usually kind of the simple like go to prison kind of fraud like that. But the excuse me, it was a problem. It is the counterparty risk. You know, if you read the prospectus, and I have at least years ago hand, if it changed, you know, there's custodians and sub custodians and sub sub custodians. It wasn't clear to me, like what would happen in the case of a bankruptcy of one of those sub custodians. What would happen? And if there's a financial crisis, can any of the shareholders of GLD get any of the gold? I think the answer is pretty clearly no, you can't. You'll realize the dollar value of that. But then in certain kinds of financial crisis, is the dollar value of that kind of gold may not match the value of the gold on the street. So we call that backwardation in gold, which is one of the in fact, that's how I think the system is going to fail in the end. So you know, it's a great trading vehicle, right if you want to that on the price of gold, either short or long. You know, the ETF was a great thing to jump in and out of. The costs of fees are low and it tracks pretty good at least in the short term. But in terms of holding gold, I wouldn't really put holding GLD up there in the same way that I would put you know, holding holding metal or having metal in a brink to counter some other uh you know thing where you have title. The key is title really, because you have title, then it becomes unclear what happens. That's a really good way to say it. Yeah, you got to have title. And you know, I know when you and I met in person, we talked about the best way to store gold. What are some of the best practices is that you've seen? Because I agree you should not have it at your house. Yeah, So you know, if you don't have it at your house, then you're going to have to pay somebody professionally to vault to DeVault it. And you want to look for, you know, somebody that has a reputation and that's their business professionally, and you know, it's variety of ways of doing that depending on the size of the investor. I mean, if you want to put two thousand dollars into gold, you know you're gonna have to sign on to one of those Gold two point zero proper programs because Brinks isn't going to take your account or anything like that. You know, if you're a family office and you're putting ten twenty million into gold, you can open an account of Brinks or anywhere else, and that may be a better option in terms of the safety of it. Obviously I recommend monetrate metals where you get a return on it versus you know, paying for storage costs. But either way, the key is do you have clear title? Do you understand its custodial relationship that has that gold under bailment or safekeeping and not not a credit or some sort which you know in ETF to exchange traded funds. I think it's actually an ETM I change traded note if I'm not mistaken, which means it's a credit right, and that's that's that's an important distinction, you know, is it title to medal or is it a credit to somebody owes you metal. The dollar bill used to be a credit with somebody owes your metal, and then all of a sudden they declared, well, we don't always see you anymore. Sorry. Yeah, yeah, So I think let's just walk. I don't want to gloss over that, you know, because I think people might know that the dollar used to be tied to gold with the Breton Woods Agreement right back in the seventies. That was broken by Nixon, and then from there it we kind of became free floating. Then the dollar became more fiat, right. Yeah, right, I mean prior to nineteen seventy one, that was no not for Americans. So in nineteen thirty three, President Roosevelt severed that link. For American citizens, it was illegal to hold gold, and you couldn't redeem a dollar bill anymore for gold. Before that, at you know, twenty dollars bill, you'd hand that to a teller and get a one ounce gold coin. And then after nineteen thirty three that wasn't possible. But for foreign governments and foreign central banks up to nineteen seventy one, and you know, well after nineteen thirty three, Roosevelt re valued it at thirty five dollars an ounce, so you had to bring in thirty five bucks to get one ounce of gold. That started to happen in increasing volumes through the nineteen sixties. It was a crisis by nineteen seventy one. And you know, Nixon made his faithful decision. But the point is that used to be a promise to pay gold, and by degrees they you know, they reneged on the promise, and you know, it's it's a it's a real black eye on the US government. It's a dishonorable default because they had. Gold right bankrupt right. And then it's been a printing press ever since. And I know, like we watch if you'll watch it over a long period of time, you can see it was printed for entitlement programs, for wars, for you know. All kinds of things that we did. But the point is, when you put more dollars into circulation, it you know, devalues the dollar. And that's why I was interesting because I was I read a layer of the Parts book, you know, talked about you know, how inflation kind of tracks gold prices in a lot of ways, and it also tracks the decline of the dollar you know you have any sense around that. Yeah, I mean, you know, as as I alluded earlier, when the dollar is going down because of the basement, you'll see that in goal. In fact, I think gold is the best way to measure it. So we on our website we measure the price of the dollar. When people say the dollar's going down, they usually mean the Dollar Index, which is really just a hero. So the hero can move up and down against the dollar. That's like somebody running up in down the stairs on the Titanic. I mean, the whole thing is going down, but the hero may be going up through a higher deck, you know, temporarily. But the way to measure the dollar is gold. So to put this all in perspective, before they created the fad in nineteen thirteen, the dollar was fifteen hundred milligrams of gold. It's now down to about eight milligrams of gold. So you measure the loss well over ninety nine percent ninety nine and a half percent roughly, and so you know that's going to continue, and that's you know, people called it a gold bull market, and they're excited about it. Actually it's just the collapse of the currency with which everybody's capital is held. This is really a tragic and horrible thing. And if you're own gold, at least you're avoiding the losses. Right right, And I think you know, like well, for the longest time, I used to think of gold as kind of a hedge against the dollar, and then you brought this monetary metals concept where you know you're actually leased to the gold. You want to chat a little bit about how that works. Yeah, So you know, very simply, there's about a dozen different verticals that are using gold physical gold as either inventory or work in progress. So think of a refrainer, a mint or recycler. So when you're done with your phone, you drop it off at Walmart or at and T or whatever. You know that there's a lot of different people that are onet of different pieces of that phone. The glass has value, the lissium ion battery obviously has value. I think the chips have value. And then the bare naked circuit board has some gold on it and silver and some other things. So those those things go into very large, you know piles, and they and and there's companies that buy those by the container load based on they expect the gold value, you know, grind them up you know, extract the metal dust out of it, and you know, send that off to the smelter. And you know, the jewelry manufacturers, there's fabricators, there's all kinds of different companies have physical gold inventory. And you know, if this were copper, you just buy it and be done. And the copper is four to fifty a pound, but gold, at even thirty eight hundred dollars an ounce, has to be financed somehow, and normally what they do is they borrow dollars. And then of course you have this mismatch. You have the dollar which is your liability, and you have gold, which is the asset. And so if the gold price drops, you know, ten percent, Let's say you have nine hundred thousand dollar asset against a million dollar liability, you're insolvent. So then they have to hedge. So they're hedging as complexity and moving parts and costs and risks. Or you lease the metal and then as long as you have they agreed upon amount. Let's say we lease you a thousand ounces, as long as you have the thousand ounces in the business, which we are verifying every day. We're very aggressive and monitoring, you know, the metal, then it doesn't really matter what happens at the price. You have no exposure to the price as the business. You have the medal you need to operate the business, and you're paying interest for the privilege of getting that that medal you need, and we pay I mean, we obviously make a feed, but we pay that interest to the people who own the gold. So it's gold with the return versus gold with you know, storage costs, and we think that's the game changer. Yeah, yeah, Well that's congratulations on the success. Like for those people. That are new to gold, you know, like for the first time listening to this, you know, it's it's really an interesting market. You can't find it in a lot of places. You know. I have a guy, I have a couple of guys that call me every once in a while when they get it. What's the best and safest, most effective way to get it? Well, if you want to buy some gold to have in your possession, you know, there's two schools of thought on this. One is you can go to the local coin store, you know, on main street, usually somewhere downtown, and you know, buy a handful of coins, and you could do that with cash, which means nobody knows you have it, hide it on your person, you know, bring it home, and you know, hide it basically, and that's it. You know, the problem is if you're doing any significant amount of value of it, you're really really uncomfortable. And I've done this, you know, walking out of that store and you just assume everyone can. Everyone knows you're carrying gold, and you get to your car and you're like, I better have a vendor bender. Nothing better happen. You know, it's it's it's an uncomfortable place to be. But maybe for a little bit of gold, you know, everybody having five or six coins in the sock draw as it were, were great. But for larger amounts, for most investors, that's going to mean some sort of program where you know, you have an electronic you know, acts to us, a website, app whatever, And then you want to be mindful of the spread you're paying. So so if the gold price is here, when you buy, you pay something above that, and when you sell back at the end you get something below that. Now, those spreads should be fairly tight on a program. You know, hours are well under one percent, for example, a monofact metals, and you know Obviously, if the price of gold moves out fifty percent, most people don't seat pain, you know, even you know, one percent or two percent or whatever. But you know, mind those spreads. That matters, and then you know, mine the reputation of the party or you're working with. But you know, I guess here's the thing. Gold is literally a commodity, and everybody tries to brand it why their gold is special. But the whole point of gold is it isn't it's element number seventy nine, it's au and you know the periodic table and all gold is the same, which is the whole point. It's fungible. So make sure you're getting the real stuff. Make sure you're dealing with somebody you trust, especially if you're storing it. Make sure you're not overpaying for it. If it's branded special gold, you know whatever, you know, be wary of that. You know you can you can lose a lot of money on that stuff. Is there a world where gold goes down and the dollar goes up, like we're the dollar inflates, but gold loses its value? Yeah, absolutely the best possible. Look what happened in two thousand and eight. You know, gold head over one thousand bucks announced and was in April of eight, and by October, October and November, I don't remember the exact date, the price of gold was just a hair under seven hundred dollars, so thirty percent in dollar terms. Now, what was happening was the dollar was going up in value massively because there was a credit crunch. People were desperate to get their hands on dollars to service their debts. That's the thing about our financial system. People look at the supply of dollars, they don't look at the demand. And every debtor has a relentless demand for dollars because if you don't service your debt, they take your house, that take your business, that take your farm, they take your car, that take everything. And so at times when the FED creates, you know, scarcity conditions in the dollar relative to all this demand, then you know, you get this incredible crunch, and you know, a financial crisis. And in a financial crisis, price of gold can drop substantially. Now, in this particular case, and I've written about this, I think in the next financial crisis, if there is one, the price of gold will drop less than it as a percentage than it did last time. So last time with thirty percent, But for a variety of reasons, I think it will drop less this time around. Well, what are those reasons? One is I think there's less leverage in the gold market than there was at that time. I think another is that there are a lot more people that are aware of what's going on, and that these crises are you know, the dollar itself essentially going off the rails, and so you know, in two thousand and eight you might have had a lot of people just sick and tired of that gold, losing on it, just dumping it out of disgust. I don't think it can be too many people dumping gold out of discovery. Maybe for selling. I forget which trader, a very famous traders said, you know when markets crash, it's not because people are choosing to crash it, it's because the margin clerk has taken over the accounts. Yeah, and he's this indiscriminate selling and unchosen involuntary. But I think I think there'll be less of it this time around. So as a percentage ten to twenty percent, maybe, obviously it's a wild guess and there may not be a crisis of that sort because I think you know, if you listen to what the Fat has been saying, and they've been saying this for a very long time, the FED today thinks that the Fat of two thousand and seven to two thousand and eight was a sleep of the switch, grossly negligent. They think they totally weren't doing all the things that the fat should be doing. Now, whether whether or not you agree with that as a whole different matter, I'm just this is their view. And so therefore they resolve right now to be I call it hyper proactive. The slightest little sign of the slightest little disturbance and they're there, you know, tamping it down. So, you know, if the analogy of the system is maybe like this is a dike in Holland and the water is you know, leaking through, they have a thousand tentacles to plug a thousand weeks, you know, and they're just super super proactive on it. And so they may not be you know, that kind of crisis. The next crisis is going to be maybe very different, maybe much more of a inflationary type versus the defallationary type that we had. I know, it's very hard to say, because you're predicting you know two things, which is one, where's the system headed, which is bad enough to try to predict, and number two what politicians are going to do, and that's impossible to predict. I don't think they know what they're going to do, you know, let alone, do I know what they're going to do? Yeah? Yeah, Ken, and I talk about that. You know, the FED, when they fix something, it's just essentially inflationary because they're going to you know, print money or loosen you know, lower rates, which loosens credit and all of that. They try. But then you know, the forces they're playing with are much bigger than they are, and so you know, you end up with the forces of what people will call deflation from arguably summer of eight, maybe earlier, but certainly at least then through two thousand, end of two thousand and nine for sure, maybe into twenty ten, and so that they don't have as much control as one would think. And there aer lags when they do something. There are lags before what they do, you know, has any has any effect. There's a lot of debate out there about when they lower interest rates, does that cause asset prices to fall? And certainly there are people that can show data that it correlates with falling asset prices. Now I look at it and say, well, duh. You know that's because at least historically, they've waited until asset prices are collapsing and then the lower rates or right into whatever crisis is causing that. And of course the lower rate don't take effects of market until everyone who's over margined and defaulted in ninety days past two. You know, they all have to be wiped out first, and that takes the process of months, if not a year or two, during which time interest rates have been forced way lower. And so you could say, well interest rates, lowering interest rates causes lower asset prices. No, but if they do that in response to your crisis temporarily, you'll see that that correlation that makes sense. Yeah. Yeah, So I'd like to talk a little bit about you know, the euro dollar, right, which are you know, the world as you know, trades in dollars primarily not everywhere, but I don't know if people recognize that. But when we buy goods from somewhere else, we pay them in US dollars. But that's really not the point I was trying to make. What I was trying to. Make is they're using those dollars to buy gold and a lot of places, and I saw like a lot of these countries are actually getting out of US dollars of buying gold. Could you touch on that a little bit, because it's it's it's quite remarkable, you know, when you look at Russia, you look at China, you look at a lot of these countries actually loading up so. That there's definitely some central bank buying gold. But of course when they buy gold, that means someone's selling it. And when they give up their dollars, that mean someone else is taking those dollars and the euro dollars and not you know, coming back to the US, there's other parties in the world that are desperate for it. Now, I again, as I said earlier, me being contrarian, I don't think China is dumping dollars as a decision to do so. Yeah, they buy some gold, for sure, but I think they are obliged to do so to maintain the currency peg because I think they're such enormous pressure to dump the you want, amongst a billion people in China, everybody who can is dumping, whether they're risking their life to do so, because number one is illegal in China their capital controls. And number two, when you break laws like that that piss off the government, you know, you can die. I mean it's not like you know, the irs comes along and chribes your penalties and interest, you know which I especially for a crime like that. So under that kind of pressure, they're selling dollars to buy their own currency back in order to maintain you know, sort of a managed retreat of the currency in a way. But there's definitely buying of gold as well. So there's two things going on, which is actually a dollarization. All the other paper currencies are failing. First, yes, the dollar will fail last. And in the meantime, all the other ones are failing, and you'll see the Argentinas of the world, and probably sooner or rather than later, the Turkeys of the world end up dollarized. The demand for the stuff is are relentless. You know what the euro dollar really is is when somebody in Turkey lends to somebody in Kenya, they could do it in lira if there was any demand for lira, which they could do it in the Kenyon. I think it's shilling if anybody wants it, If any creditor wants to hold a shilling, which they don't, or they do it in dollars. So you know, you have the Turkish banking system creating dollars completely outside the US and completely outside the Fed's control. That's the euro dollar system essentially, and it's massive, probably a lot bigger than the domestic dollar system, and not that well understood, and the statistics are harder to get. And the dollars in universal demand in these places all over the world, and you know, for a lot of reasons. So for instance, if somebody in Turkey wants to buy coffee from somebody in Kenya, just crossing those two currencies, the lira to the shillings about a ten percent frictional loss due to bid offer spreads. And if they're willing to do business in dollars, it's so much easier and so much less frictional, And so there's there's just a lot of reasons like that. Why uh, you know, the dollar, there's no paper currency that can replace the dollar, but gold will in the end, and you know, more and more people see that and they're and they're buying gold. So those are two trends happening at the same time, and in my opinion, well. Just it just falls back to what originally was, right. Noney, Yeah, I mean gold with you know, gold was here long before paper. That's right, and the paper was just a clean you know, to be paid gold at some point, right, and you know most of the world has lost that. Yes, I wanted to I just wanted to ask you. Are you familiar with the run on silver? Do you do you track that much? Uh? You know, because that's also been interesting. So I followed the silk. I followed obviously the gold end silver markets. What I can say, I mean, I tend to you know, tamp down a lot of the say, the rumors of conspiracy theories and stuff. Now, silver allegedly has been in a structural supply deficit for longer than I've been following it, and that hasn't necessarily correlated to the price, because that's been up and down, you know, quite a lot. But what I can say is that, you know, during the endless bear market, So for silver, the silver price peaked in I believe it was marked maybe early April of twenty eleven. We had just about fifty dollars, not quite and then you know, ever since then, certainly through twenty eighteen into twenty nineteen. It's a bear market. And every time it blipped, I follow a particular a piece of data which I'll describe it a minute. You know, all the gold and silver people were saying that's it, it's a moonshot. It's you know, on every blip, and I'd put out an article saying, not going to happen. Here's a picture of supply demand. So I follow something called the basis. This is all available on our website. We have daily updated asks for free, which is basically the spread between the spot, the futures market in the spot and its future is mind a spot and that is telling you a lot, but very simply, if you see the price going up and you see the spread between futures and spot is widening, that's telling you the buying is in the futures market, and the arbitragers will pull up their spot price, you know, to make the spread. But there it's with a lag, and you know, with not not as much enthusiasm. So the spot price comes up but a little bit less. So you see, you see the basis spread widen, and every time that happens, you know, I can say look, this price increase is endurable. They're buying it in the futures market only, and in the futures market's a short term trade. I mean using twenty to one leverage up to and there are costs in that market. If you really wanted to hold metal, you wouldn't be doing the futures market. So if the only buying is in the futures market, it's you know, probably going to reverse and kind of right back down. And that's every one of those blads for you know, what's seven eight years, That's what it looked like right now. What's what's remarkable is a very different pattern. We see the price is silver rising and we see the basis falling, and that's been that way for you know, at least ten dollars of this price rise something like that, and that means that this is buying of metal, and the futures market isn't really yet responding to that. To my comment earlier about less leverage, so this is more durable. You know, are we going to break fifty dollars? That's the first thing everybody wants to ask. I don't know, but I think we got a really good shot at it. And the more that you know this this basis pattern holds with now the prices you know, forty seven and forty eight bucks. Yeah, this seems it seems more likely. Now. Could there be correction in the short term? Yew, they could, But this is this is a buy the depths market. This is not a Cello blips market that we had for all those years. And the supplying demand picture in silver is stronger than that of gold, notably right now. So let's talk about kind of the economy and where you see it heading over the next few months, right because you know, the Fed just switched positions on keeping interest rates high and now they're starting to lower that. So do you think that this is like a traditional cycle where the Fed drops the rates, asset prices increase, you know, we stay out of a recession or what is kind of your outlook? So I think there's been a lot of pressures for lower rates this whole time that you know that they were hiking and then said they would hold it higher for longer. And I've been you know, writing and saying you can't you're fighting the tide with us now. Of course President Trump wants lower interest rates, and I think he's going to get what he wants. But I also think he's going with the tide in this case, is not fighting the tide. The trend is going to be down anyway, and now he wants to force that faster, and he's going to replace you know, fed governors and other things. He's can do whatever he needs to do. So in any case, Powell retires, you know, his term is up in twenty twenty six. So yeah, I think interest rates are coming down. Do we avoid the recession? That's a very interesting one. There's a lot of indicators right now that seem pretty ugly, so they may order to be one baked in the cake. You know, I'm not necessarily the best guy to you know, try to jump all that and cite this data versus that data versus whatever. Anecdotally, I think things are getting softer, but I think that the economic damage of the tariffs is something people aren't really grappling with. It takes a lot of time for that to work its way through its First of all, the tariffs are very well telegraphed. Everybody who could bought inventory right and so now there's a lot of cases still working off inventory that was bought pre tariff and then secondly, even domestic manufacturers rely on imports to make their various things. You know, farmers near the Canadian border buying fertilizers, you know, from a Canadian supplier, and the nearest US supplier could be one hundreds of miles away, and it doesn't pay the truck. You know, fertilizer is pretty low value. So there's a lot of things like that that I think are going to hit jobs and hit prices in counterintuitive ways. Like if the fertilizer from Canada is more expensive and the farmer near the border can't really afford a truck and domestic produced fertilizer, he may just go out of business and then we have a slightly reduced supply of whatever it was he was farming. But I think that stuff takes time to work its way through the job losses and you know, the rising prices. So there's a term which I don't like, stagflation, and we don't like the term because the Canesians thought that you have a trade off between unemployment and inflation. And then we get to the nineteen seventies and I'm just old enough a kid in the late seventies to remember we had really high. Both unemployment was you know what twelve or fifteen percent, inflation was thirteen percent, and so they coined the trim stagflation because it seemed to be violating all the Canesian rules. The whole theory should have been thrown into the dustbin of history, but instead they coined this term. But I'm reasonably confident to say we could be in appeared at least for a while. We're going to see continued rising prices as the effect of fiscal policies and you know, falling employment as the effect of you know, kind of the credit cycle, which is going to be a very not fun place to be. And I hope that we reversed ourselves on tariffs. I hope they negotiate with all these other countries and you know, go back to free trade again. But I don't know that that my wish is going to be granted. It is sneaky, Like we had some money on our YouTube live today, say, you know they supply freezers, they manufacture freezers. You know, the freezer prices are going to go up fifteen percent. So like there's all these weird things that you don't think of that are kind of like you said, baked in the cake where you know, prices have to go up because the expense of doing business is going. To go up, and you know, minimum wages gone up in a lot of places, and you know just I mean, people think, Okay, well then the restaurant's going to charge morew It doesn't work that way. What has to happen is you just to destroy marginal restaurants, right, so then the survivor, the raining survivors can raise their prices. But you know, prices are set in this market, and the wage is set in this market, and they're not you know, directly connected like that. Yeah, so there's more unemployment coming almost certainly. Whatever else may happen, but I think this unemployment is going to be tied to reduced supplies of a lot of things, which your entire prices. So Keith, I don't you know when inflation jumped to nine point one. I guess it was in June twenty two. You know, I think people kind of woke up during that period time, regardless. Of what it was for. Maybe it was a steamy check, who knows, you know what what gave it that temporary spike, But we started to see kind of a flight from dollars, I guess, you know, like my dollars buying less. And you know, so we obviously part of that's gone into metals, another piece of that went into bitcoin, as you know, and we've had this kind of a wild run. You know. So where do you I mean, I know you follow this, well, where do you stand on bitcoin? Obviously the blockchain. And you know, how does it compete as another form of value? I mean, I know the bitcoiner say it's a store of value and all these other things. And there's a lot of marketing around bitcoin, just like there is around goal and just like there's around the dollar. But where do you think this is all headed? You know, I think there's a lot of interesting technologies there blockchain and not just the Bitcoin blockchain, to other blockchains. That's really interesting innovations, uh, you know for sure. But Bitcoin as such, it is just an irredeemable currency. Now, unlike the dollar is an irredeeable currency. The dollar is back by debt, which is really important because it's the struggles of the debtors that give it value. You know, there is a ferocious, relentless bid on the dollar by everybody who's in debt. If you're a farmer and you owe a million dollars, you must go out and grow as much crops or as much livestock as you possibly can, bring it to market and dump it on the dollar bid price desperately to raise enough dollars to service your debt. Well, bitcoin doesn't have that. It isn't back by any debt. It is just a fee out. It's just there. It is. You know, somebody printed it, but they have rules around who can print it and how much and how fast and all that. But that's what it is. And so the value of the price a price and value of bitcoin is just set completely by the marginal speculator. And when the marginal speculator has got the bit in his teeth and wants to run, you see this thing running up, you know, massively. And when the marginal speculator gets bored, or there's another asset class, or there's a scare, or there's a needful liquidity or whatever, then bitcoin and have these vicious allofs. And so you know my comment about bitcoin being store of values, I would say, even during phase one skyrocketing, it's not a store, you know, a value, it's it's something else. The skyrocketing, which is great. You know, if you can pick the timing of that, you can make a lot of make a lot of real money. I eight dollars. But you know, bitcoin isn't suitable for lending. Nobody in their right mind would borrow bitcoin, and in fact, even the even the cryptocurrency companies don't. So we put out an article. This is years ago now. Coinbase announced they did a billion dollar bond issuance, and we put out an article that said gold one bitcoin zero because we had sold a gold bond. And you know, the biggest crypto one of the biggest crypto companies or biggest crypto changes sold a dollar bond. So what do they really believe, really believe in when they need to raise capital for their own purposes? Dollars? And I think that just that just says it all right there, leaving aside all the hype about bigcoin is money and this and that and the other thing. Nobody would borrow it. Why because it's supposed to go up like a million billion times. Why would you borrow something that's going to go up? I mean, imagine, you know, you buy a house and you have a mortgage payment of five thousand dollars a month. But everyone's telling you the your mortgage payment is going to be fifty billion dollars a month and ten years you'd be ruined, obviously, and then it's not suitable for savings. So I had a debate. There's something called the SOHO Forum, which is sponsored by the Reason Foundation invited me to debate Pierre Rochard, who's a prominent bigcoin guy, and the debate took place at the Mesa's Institute in Auburn, Alabama. So there was a live crowd of a couple hundred people, and then it was on the internet. You know, I don't how many people participated live. And we're talking about this, you know, savings, And I said to my opponent, you know, are you saying when you say savings, you know, let's be clear, are you saying like suitable for an oxygenarian widow who was no further income potential in remaining in her life. He said absolutely. And then so that's abait. Happened to take place right after a seventy nine percent draw down at the bidclin price, because they went from sixty nine thousand dollars to thirteen thousand whatever. This was shortly after that, and I said, well, what would you say to the oxygenery. She's eighty seven years old, widow, no more income potential, she has all of her savings at bitcoin and it drops seventy nine percent? What would you say for her to do? You know, I didn't quite hold the microtrone up to him, and he said, he said buy more. Now. I kind of cheated a little bit because the rule was where I wasn't this is like his final rebuttal, I wasn't supposed to say anything, So I kind of mind to the audience, I'm like, you know, and geene Epstein, the moderator, who's kind of like, now now, you can't. You can't be saying anything. It's not your turn any not sorry, you know, but I think a couple of moments where I think he and I won by a landslide. I think there's a couple of moments when I tell he really he really lost, and that was one of them. Tell her to buy more after it drops ninety percent. And by the way, all I supposed Oliver Safers is already in. She's already only any one of the things that you articulated was what if she didn't have income. If she's that ocome, she's not buying more. Right, So you know for people that are millennials and you know, and retirement is thirty years in the future. Yeah, sure, okay, I get it, but there's a lot of problems with it. So I know, we got to run out of time here. But Crystal Ball, you got trumpet office for the next three years. How much is a iministration president. A fact? You know, obviously in this particular case, this president monetary policy, gold prices, bitcoin, et cetera. I think in general, if that is a lot less you know, control and certainly over things like the gold price, then is sort of presumed or assumed. And I would say the president has even last power. But I think Trump is trying to take much more direct control over fad policy than any other president I've ever seen. But even that said, I think we're in a durable bull market for gold, which means a durable bear market and the dollar. So if the dollar is eight milligrams of gold today, yeah, we're going to see seven. We're going to see six, you know, and so on how fast that happens. I think, God help us all if that if that really starts to accelerate because I think that's that's what the end of civilization looks like. And I'm not saying that just to be dramatic or you know, scary. Be careful what you wish for. I've been saying that to the gold people for a long long time. If gold hits five or ten thousand dollars, and we're not that far for five anymore, you know, it's not so crazy. But let's say ten thousand dollars. Now, yeah, you have a lot more dollars if you want to sell your gold. But number one, you probably don't want to sell your gold in that scenario. Number two, you know, let's say you did and you bought a Ferrari. That's not a world you necessarily want to be seen driving the Ferrari. Hopefully that doesn't happen, and hopefully we stabilize and you know, hit whatever the new normal is, and you know, people can get jobs or welfare or whatever, and I'm not indifferent to that. Hopefully jobs are not welfare. But hopefully we stabilize and this doesn't just keep running up. But on the other hand, I think it is going to keep running up. And I mean, only thing I can say is hopefully not too fast. Well, you've messed it. You mentioned earlier in the interview the system will fail in the end, and I wrote that down, So I'd love for you to talk about what you see. So at the end of the day, it's the people who own the gold, you know. I'm sure you've heard sort of the alternative, you know, tongue in cheek, you know, golden rule. The people with the gold make the rules, not the classic Golden rule. But at the end of the day, it's the people with the gold that decide the fate of any currency. And it's when gold stops bidding on the dollar. And that's what I call permanent gold backwardation. My most important article. Maybe you can put a link in at the bottom. When gold backwardation becomes permanent describes the death of the system. It's when gold withdraws its bid on the dollar. Now what do I mean by that? In any time crisis, it's always a bid that's withdrawing, not the offer. So I suppose the US Geological Survey says there's going to be an earthquake in LA fifteen on the Richter scale, nothing taller than a dollhouse. We left standing no, they're not saying this. I want to be really clear, but this is a hypothetical. Then what I would expect to happen is will be no lack of offers. This our real estate in LA but there will be no bid, probably from Santiago, Chile, all the way up to British Columbia and maybe as far east as the Mississippi River that we know bid as everybody just pauses, holds their breath and waits for the earthquake to happen. When it finally does, a new bid will come in and perhaps lower and perhaps not so. The bid with draws now gold. A lot of smart people have observed when things get crazy, gold with draws its offer. Gold is the one unique, different thing that behaves the opposite of any other asset. Ever, No, it's everything is the same. It's the bid being with drawn. But you have to understand that we're living in this dollar bubble where we think gold is offered. Gold is the money, the dollar is the credit. Gold is bidding on the dollar. So when when gold when the gold holzer say, nah, I'm good, I'm holding my gold. I'm not interested in the dollar anymore. Then that's that's the collapse of the people will call it hyperinflation. The price of every real thing will go to infinity because the people with the dollars still want gold. It's the gold people who don't want dollars anymore. And so the people with the dollar say, well, I could buy crude oil and trade the crude oil for gold, and that trade will drive the price of crude oil to infinity. And the same thing with you know, every other commodity, soy, copper, iron, ore, et cetera. Will all go to infinity until finally we just say stick a forekin, it's done. And it won't be because of the quantity of the dollar being printed to infinity. It would be because gold withdraws its bid. And so you know, the process of the price rising, especially if it's rising really fast, starts to look look like you know, gold was drawing its bid, which is exciting if you have a lot of gold on the trade and you want to sell it, but scary for thinking about what happens to society, you know, in a scenario like that. Well it's interesting too, because, as you were saying, a lot of countries want to be in dollars or you know, they're they're based in dollars, right, and so it would be more of a worldwide issue onlike when we've seen hyperinflation and like Zimbabwe, where it's just a one country issue. That's right when the dollar goes and which I think all the other currencies will be gone anyways, at that point, it will be the whole world on the dollar. None of the other currencies will probably be around at that point, right, it'll it'll take down the whole world. It's not it's not one you know, random third world country looks Zimbabwe when this happens. Well, Keith, of course, Well I just wanted to end on that pud. Yeah, appreciate the relationship we have with you guys, Monetary Metals. What you built is an incredible company. So congrats on your success. Thank you. Yeah, and we'll put those links in that you mentioned for the audience. You guys can click on that link below on some of these articles. We'll tie you back to the Monetary Metals website. And Keith, be safe out in Dubai and appreciate your wisdom on this topic. Thanks for having me, you bet, we'll talk to you soon.