Latest / Financial Survival Network / Getting to the Bottom of Oil, Platinum, and Palladium Markets - Rick Rule #6086

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Getting to the Bottom of Oil, Platinum, and Palladium Markets - Rick Rule #6086 · Financial Survival Network

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Platinum is a very good play. Platinum have played. Um is a very
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good play, not as not as extravagant of value as either of those,
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But outlook for Platinum and Platium is muted because the big thinkers of the world
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tell us that the internal combustion engine is going away. Platinum is used,
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of course, for catalytic converters. I don't believe the internal combustion engine is
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going away until twenty sixty five or two thousand and seventy. You are listening
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to Carrie Leutz's Financial Survival Network, where you get valuable information you just can't
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0:51
you are listening to and watching the Financial Survival Network. I'm eros Terry Lutz.
0:57
Well Rickrell is on with us now never get you find them at Rural
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Investmentmedia dot com. Rick, great to have you back on the show.
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So you're feeling like a stop bok that's been vindicated once every ten years,
1:11
eight years. You know what I do, seems to lend it to that
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carry reversus come and go in favor. Mercifully, the sector is broadened that
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something's always out of and cheap, and so is always in favor and expensive.
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And I think heat assess in my sector is to buy the stuff that
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nobody wants and sell those stuff that everybody wants, and market pretty generous with
1:38
me in that regard, as I'm and have a lot of patience, right
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I do. So, how do you know when when you're in that position
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and the world is against you, it seems like everything is going against you,
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how do you maintain your confidence and the strength of your convictions. Well,
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let me give you two amples. Twenty twenty two, you interviewed me
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and I was talking uranium. Nobody cared, I remember, but the arithmetic
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was compelling. Worldwide industry was making the stuff for sixty bucks a pound,
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including tax and cost of capital, and they were selling for twenty bucks a
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pound. They were losing forty bucks a pound and being minors track it up
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on volume. The price didn't go up. The lights were going to go
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out. Wite the fact that we believe we were rich enough that we didn't
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need your uranium was twenty percent of baseload power demand in the United States.
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So either the price the uranium would go up with the lights would go out.
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That's how simple it was. I didn't know when it was going to
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happen, but I like the math and the fact that something happened about the
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same point in time. A little later, you know, COVID happens.
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Automobileffic and air traffic decline, so the WOP declines, going sub zero a
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little while, but settling out a twenty bucks a barrel. Uh, you
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had the same circumstance. Oddly, the same circumstance. The fully loaded cost
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produce a barrel of oil, including text and cost of capital in those days
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was about sixty bucks, and the industry was selling for twenty bucks. On
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top of that, act On Mobile got kicked out of the Dow thirty a
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well off event. Yeah, the best capital elevator in the business, selling
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thirteen percent dividend. He because people thought never oil prices were coming back.
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This is pretty simple. You don't want aways get the timing rate. Sometimes
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you're a year and a half early, sometimes you're two years early. But
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if you can get a four hundred percent and move an x on, particularly
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with a thirteen percent dividend deal to keep you comfortable while you wait, you
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can afford to be pretty patient. Hey, it's always good to be paid
3:46
while you're waiting these situations. Looking out at all the sectors that you follow,
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is there anything similar out there? Now? Is platinum that type of
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play th a lady and platinum is a very good Platinum played them in a
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very good play as not as extravagant of value as either of those. But
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outlook for platinum and pladium is muted because the big thinkers of the world tell
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us that the internal combustion engine is going away. Platinum is used, of
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course, for catalytic converters. I don't believe the internal combustion engine has go
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away until twenty sixty five or two thousand and seventy. Until then, I
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don't see an overwhelming public demand for more smog. If you sell an internal
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combustion engine and you want to equip it for Western standards of air quality,
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you need platinum and palladium. And that's really interesting, Carrie. You know
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it takes about one hundred bucks worth of platinum now to put in a catalytic
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convert that enables the sale of a forty year sixty thousand dollars car. If
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the platinum price doubled, it wouldn't change the finished price of a car,
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So I really like that. Meanwhile, platinum and pladium approved really in three
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countries, South Africa, Zimbabwe, and Russia. If if perchance there was
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some social circumstance in one of those three parragonza stability that would cause a disruption
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and production of platinum platium, it would be easy to see the price double.
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I'm not saying it's going to happen, but you know, I mean
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the most stable three countries is Russia, and that's a pretty tough test for
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stability. Africa basket case. Zimbabwe aspires to be a basket case. So
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I think that's a really interesting speculation. Also think North American natural gas over
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the fo of your term is stupidly cheap. It's overproduced right now as a
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consequence of byproduct production around shale the basin. But carry low prices are always
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the cure. For low prices, we're building, gathering and storing the storage
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infrastructure. The European chemical litrey is relocating from the United States. It's advantage
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of our natural gas, and we're building lip fied natural gas the police.
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So the old supply problem that we talk about is going to cure itself.
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So the benefit of natuig natural pardon me, natural gas orient of cheer roles.
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Do you remember the day? I mean we were literally youngsters back then,
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but most of the heating in the Northeast was generated by burning you know
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oil number two thaying is diesel just as dying, it's taxed. So at
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that time there was a mass movement after the first energy crisis to equip all
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these furnaces so they could switch to natural gas on demand. And then there
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was an arbitrage. When that gas got too high, you switched back to
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oil. When oil got too high, you switched back to that gas.
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Or the price of that gas dipped, you went back. That arbitrage went
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away because the premium per BTU of oil as opposed to that gas made everybody
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switch to that gas. And so you only have to look back at history
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where the BTU cost of oil and that gas were pretty close to one another,
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right, I mean, they would switch when that gas was fifteen percent
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cheaper than oil per BTU. Now we look at it like forty to fifty
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seventy percent discounts, and that's been going on for like twenty years, Rick,
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And yes, everything you say is true. And for the carbon centric
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audience, atro gas generates substantially less urbon oil, hence its popularity on some
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global markets. The Chinese as an example, who are not anti fossil fuels,
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they're the biggest consumers of coal in the world. The Chinese note Chinese
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government notes that half a million people here eye of particulars in air pollution,
8:03
and they that importantly for them, not merely because of urbon but also because
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of peculiar air pollution, that their energy future has large measures of both nuclear
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and natural gas. In addition, the BTU price despaired that you so accurately
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described, Yeah, I mean, if they could have figured out how to
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efficiently run cars on that gas, every car would be running on it now.
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But it's just not really efficient distribution wise, and in terms of you
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know, you get more BTUs out of a gallon of gas than out of
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the compressed natural gas. So it's just not practical. But it's always struck
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me at like, but right now to eighty two ninety per mcf, it's
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always been the screaming bargain of the energy industry, and now the fact that
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you're Europe. German companies, in particular petrochemical companies, all of them are
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fleeing over here, and you've seen the results in the capital investment boom that's
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taking place. Not to mention, it's the best way probably to generate electricity
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other than nuclear, other than existing nuclear power plants. New nuclear power plants
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are great, but they're cost prohibitive. At this point, you know,
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it's just a natural thing that the demand is going to go up exponentially and
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the price eventually is going to have to go up to meet that demand.
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Right, agreed on all counts. So how do you play that trend?
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It might be two, it might be five, but it's going to happen.
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I don't think need to be too tricky for mid continent natural gas,
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which is the peration in the Anodarko Babin Devon. This is a good name
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n dividend YU wait for the US Northeast benefiting from home meeting, benefiting from
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the relocation of the German petrochemical industry, also benefiting from the gigantic Marcellus gas
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field in the northeast you probably play equitable EQT if you want to be a
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little cuter. The Canadian natural gas market is even more depressed than the US
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natural gas market. Their prime minister, mister Trudeau, doesn't seem to see
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a business case to quote him for Canadian for selling Canadian natural gas, despite
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the fact that the Germans would like it, the Japanese would like everybody in
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the world sees the business case except for him. And there there are names
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like payto birch Cliff are tormally probably a little higher risk than US names because
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of the implicit political risk around mister Trudeau disdain before his commodities. But I
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believe that the market, the markets ultimately will tell against political stupidity. Yeah.
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Well, economic reality always has to triumph in the end. And you
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know, the whole world wants what you're selling. What about like in New
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York State, you got the I can't remember the name of the trend there
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the basically New York State. In Pennsylvania you can frack pull out the gas,
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but in New York you're not allowed to. And and now they're banning
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gas ranges and doing all sorts of fun things. It's inexplicable didn't criticize New
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York too much. Lived in California because I believe that people who lived in
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glass houses shouldn't throw stones. I now believe in Washington. I now live
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in Washington State, which, while stupid, is not as stupid as either
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California or New York. What you point out is the one of the big
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if not the biggest, and teach you accumulations of natural gas is the Marcellus
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trend, right. Marcellus, Yeah, goes you know, through from West
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Virginia and Ohio up through Pennsylvania into New York and in fact as far north
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as Quebec on the Pennsylvania So the boarder, it's generating lower energy prices,
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jobs, tax revenue, all those types of things. The New Yorker's incided
12:18
in wisdom not access this wonderfuel. It's insane. But yeah, like I
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lived in New York too, but I enjoy throwing rocks at class house as
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even the ones that I'm in. And that's right. Part of the reason
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I got out is to think this socialist model has to fail. I got
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out twelve years ago, but I said it can't work long term, not
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just because you run out of other people's money, as Margaret Thatcher said,
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But because the system is flawed, because there's no price discovery, decisions don't
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get made on an economic basis, and eventually, you know it has to
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fail. Agreed in all regards, all right, So so nat Gas?
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What about silver? Is silver like another gnat gas because it's up everybody's partying
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like it's nineteen ninety nine. Silver is up to thirty bucks, it's going
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back, loses two bucks in a day like the good old days in two
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thousand and eleven, twenty ten. But by all rights, it has a
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long way to go. Based on the same argument you made for platinum.
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Right. In my experience, silver schizophrenic. It's both an industrial material and
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a precious metal. In my experience too, the most important part of the
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price volatility has to do with its it is as a precious metal rather than
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industrial material. In prior precious it's momentum has to be led by gold.
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After the generalists investor buys the precious metal narrative, then silver moves further,
14:11
and it moves faster than my experience. Silver has to move first. What
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I liked about silver stocks at the beginning this year is they were roundly,
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roundly hated. There is no hate as sincere as the hate of a builting
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lever. And all the silver speculate and the silver squeeze hate silver because the
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narrative that custom to buy it cost them a lot of money, and that
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hatred was being expressed in the market, which meant that there was no competition
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for buying either silver or silver stocks, the silvers being even more altle than
14:52
bilvert. That hatred has largely dissipated around the silver stocks, So I would
14:58
suggest that some of the easy money has been made. But carry you will
15:03
recall passed silver equities bull markets. They are well, Katie says. When
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the general investor comes into the silver market, it's like trying to sell snouver
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dam through garden house. There isn't enough market cap in that silo to handle
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the incoming money. I remember well the beginning of my career in the decade
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of the seventies. I was too poor and too stupid to take advantage of
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it. But curd Oline, as an example, went from a penny to
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pardon me ten cents to sixty five dollars, truly a quantum. Later in
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the later part of the decade, of the eighties. In the early part
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of the decade of the nineties, I was involved in that little silver ble
15:50
market. The silver price you know, did pretty well, but things like
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Silver Standard, which we deroteed seventy two cents, went to forty bucks.
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The Pan American, which we underwrote at fifty cents, went to forty five
16:04
bucks. I mean, the upside move in the highest quality of the silver
16:10
juniors, not the really you know, you know, penny dreadfuls, but
16:18
the higher quality development silver juniors. They are formally a tenfold in the course
16:25
of a silver bowl market. So for speculators, that's a wonderful place to
16:29
look, not for people who can't stumm it. Volatility, Yeah, buckle
16:33
your seat belt, yep, absolutely, it's a rodio ride one. I
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love Quadline today. And we don't do stock recommendations, just things you should
16:42
look at. Nothing here is investment advice and all those great disclaimers that they
16:48
make us say. But right now Cordeline is trading at like five and a
16:52
half bucks, and right it's still like the same silver producer it's always been,
16:59
right, I mean, I would argue that Core is a less formidable
17:03
producer simply because they've been producing for forty years. You know, the keystone
17:08
mines in the silver valley in a treasure valley in Idaho are forty years older
17:12
and depleted. They have replaced them with other forms of production. I would
17:17
argue that Core is a less pure play silver producer. I will also tell
17:21
you it shouldn't be like this, but it is. When the silver narrative
17:23
takes hold, the facts won't matter, kind of like the judicial system in
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America. Now right, Yeah, well, it and Heckla will become to
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you know, come to be regarded as silver stocks, the game stocks of
17:42
their epoch. All right, so you brought up meme stocks here, all
17:48
right, give us your honest take on everything that's happened. Because I looked
17:56
at a stock like Costs. They are their original and enter of headphones,
18:02
stereo headphones, stereophonic headphones they called them back then, and it was a
18:06
great company. I even met mister Coss one time, the founder of it.
18:10
He was like a cool guy. But then the stock like languished for
18:14
forty years doing nothing, and all of a sudden, the mean people discovered
18:18
it, and at that point the cost family still had a large position in
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it. And they sold off thirty five million dollars worth the stock out a
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company that they knew was maybe not worthless, but not really worth anywhere near
18:33
what they were selling for. How does this stuff happen? And how long
18:37
can it go on? Because we just saw like game Stop go through a
18:42
game Stop two point zho or three point zero? Can this keep going on?
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I guess as long as we go without having a major liquidity squeeze.
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This is liquidity driven, you know. Make no mistake, it's purely liquidity
18:57
driven. I'm impervious to it. I only invest in things I understand,
19:04
and I have no fear of missing out. If I didn't buy bitcoin and
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bitcoin goes from a thousand bucks to fifty thousand bucks or whatever it is,
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I'm really happy for the people who made the money. I'm untroubled by the
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fact that I didn't make money. I consider errors of oh mission to be
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interesting. I consider errors of coal mission to be sins. If there was
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money I didn't make, it doesn't matter to me. If there's money I
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lost, that matters to me grievously. So I'm never going to be in
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the game Stop crowd. I can't understand what allegedly makes it a good business,
19:44
if anything, because I don't understand anything about consumer retail. When I
19:48
look at the ballace sheet and the income statement, I puzzle over where the
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games folks find value. I understand the concept that there are trading to techniques
20:00
where you construct short traps. I get that. Yeah, I'm really concerned
20:08
about the online crowd who doesn't understand the dynamics of markets well enough to understand
20:15
how you construct and how you collapse a short trap. Constructing short traps is
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actually something that I did myself in my early thirties. I understand them fairly
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well. But these were very very very small circumstances, in very very controlled
20:34
situations. But what's happening now appears to me to be for most of the
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practitioners, who I wouldn't describe as particularly sophisticated, no, very very dangerous
20:45
activity. Yeah, it's like running in front of a steamroller to pick up
20:49
nicols. Right. Just as a point of fact, the bitcoin's right around
20:55
it's June eleventh today, it's right around sixty seven thousand and so, so
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you could have made even more money offo is at Rick. But hey,
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so let's talk about these short squeezes. Now, if you listen to Elon
21:10
Musk, he thinks that the short selling is, you know, the devil's
21:15
work. And he kind of has a point because once upon a time,
21:19
and you were, you had a brokerage so you know, once upon a
21:23
time that certificates had to catch up with the in order for you to sell
21:30
it. You couldn't sell without a cert It took ten to eleven days for
21:33
that to happen. So they invented short selling to allow companies to not get
21:40
wiped out customers and brokerage houses not to get wiped out. Well, the
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certificates caught up, you know, we're not there anymore. What purpose does
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short selling really serve? Now? And I intellectually understand the argument, but
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we've kind of like crossed the rubicon which selling, haven't we? No?
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I disagree with that. I mean, what social good is going long fulfilled?
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You are trying to make money as an investor on a market. If
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you believe that the company is selling for less than it's worth, you buy
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it. If you believe that the company is selling for more than it's worth,
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if you're sophisticated, you sell it. I think that the shorts I
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mean two comments on shorting personally, well, maybe three. In the early
22:37
part of my career, in the decade of the seventies, when natural resource
22:41
stocks became uniformly overpriced, I sold them because I believed them to be overpriced.
22:48
Because I lived in Vancouver. Then I was particularly aggressive in short selling
22:52
things that were obvious frauds, that were natural resource stocks but they didn't have
22:56
any natural resources, you know, And that worked out reasonably well for me.
23:00
When I was in the brokerage firm, when we had margin accounts,
23:07
it was prudent if people were on margin too long certain stocks that you use
23:15
a short position in the same stock as credit management. In other words,
23:21
you reduce risk of non payment from the customers on the other side of that.
23:27
In the early part of the decade of the nineties, when there was
23:30
no market for natural resource stocks at all, it was relatively easy for me
23:37
to give the professionals long, broad small upticks to let them establish big short
23:44
positions in tight float companies. And then I asked my friends, who had
23:52
in effect loaned that stock to pay off their mark loans, call the stock
23:56
in and help the promote the stock. When I was involved in stock promotion
24:04
the only part of the decade of the nineties. There was nothing I liked
24:08
more than a good short position where I thought I was right and they were
24:12
wrong. When the stock has already been sold, you have a buyer.
24:18
The question is what price they'll buy back at, and that's basically decided by
24:25
a war in the market. Value always wins out. So we were able
24:30
in the decade of the nineties to do some pretty interesting financings in companies simply
24:37
by allowing the shorts to get short and trapping them. That's blazing them out.
24:41
Yeah, it was fun. Then when they had to come into the
24:45
market to buy stock, the guys that we knew would supply them the stock
24:49
and put that money back in the companies by way of a financing. From
24:53
mister Musk's point of view, a part of his job involves monetizing dreams.
25:00
He needs to put the truth around the technology in a best possible light so
25:04
that you know, he could raise a couple of billion dollars and make that
25:08
dream a reality. During the dream phase, they're overpriced. The question is
25:14
who is going to harvest the economic surplus. Is it going to be mister
25:18
Musk, or is it going to be Wall Street. And so mister Musk
25:22
as a stock issuer regards the shorts who are fighting for the same bids as
25:26
competitors. So of course, uh, he would look down on competitors.
25:33
Right. But we do have a thing called abusive short selling. Is that
25:37
just the management criping, but at mostly mad shorts? Right? When I
25:44
see discussions of abusive short selling in Canada, in particular around resource stocks,
25:49
it usually comes from promoters of stocks that nobody in their right mind would buy
25:53
anyway. The idea that there is a massive conspiracy of naked shorts involves more
26:04
faith in credit than I would have. If I was running a clearing firm
26:10
and I was ultimately responsible for the shorts delivery and they were short, and
26:17
I could see that they didn't either have or have access to the collateral,
26:21
I'd throw the trade out. If there is a massive short selling, naked
26:27
short selling network out there, and there is a clearing firm that is financing
26:33
that because they hopefully have to and the trade they have to make it good,
26:41
and those people have a very different sense of what's a prudent than I
26:45
do. I can tell you that if there was a what's Jersey City market
26:49
maker who was short a broad spectrum of stocks quote on the finger, which
26:56
is to say, bad access to collateral to back up what is in effect
27:03
a stock loan. I wouldn't loan the money. And if you're allowing them
27:08
to maintain a short position, which you are ultimately good for, you are
27:15
in effect loading the money, or if nothing else, you're biting insurance for
27:18
them at backstopping them. Yeah, and that just doesn't make any sense to
27:21
me. I mean, I was in that business for a very long time,
27:22
as you know, Carrie. Sure, Uh, and I was happy
27:26
to be a lender, but I wanted to be a collateralized lender. It's
27:32
always better to be secured than nothing as insecure as an unsecured lender in this
27:37
world. Now, my former partner, who is a very nice guy,
27:44
a very honest guy, a very bright guy named Eric Spratt, believes that
27:48
this is a major problem. Uh. And it may be. I just
27:53
don't understand with my background as a lender, But what lender would be stupid
27:57
enough to allow it to become a major problem because that lender where's all the
28:04
liability for maybe twenty percent of the profit. That just doesn't make any sense
28:08
to me. Yeah, when that squeeze happens and they can't cough up the
28:14
money, Basically, first it's the broker and then it's the clearinghouse. Yep,
28:19
they got to cough up that money, ye, because somebody, everybody's
28:25
got to get paid. Otherwise you have no faith and no confidence in the
28:30
exchange. And that's that's a real negative. So somebody's got to make good,
28:36
right, correct? So interesting? Interesting. I do think there's instances
28:41
of it. I don't think it's perhaps as widespread as many would like to
28:48
believe, but I think it happens on occasion where they just play the rules.
28:53
And very earlier in my life, I was really attracted to the short
28:59
game because I figured that I could use fundamental analysis on both sides of the
29:03
market. I got trapped myself a couple of times in both circumstances. Arithmetically,
29:10
I was right, yeah, but I lost a lot of money.
29:12
And the bad thing about the short side is that while the probability is high,
29:17
the penalty for failure is extraordinary. The most you can make is hundred
29:19
percent OSI stock and goes to zero. The most you can lose doesn't have
29:25
a top yeah, infinite in theory, in theory. And we saw what
29:30
happened to GameStop when they triggered that short sale. Yep, that short squeeze.
29:37
Truely pretty glorious, and that should be a lesson to anybody who's facilitating
29:44
these kind of practices. You know it can come back and put you out
29:48
of business. Yep. So all right, Well, so looking ahead here,
29:53
I mean we covered undervalued sectors. Anything else in the resource space that's
30:00
available to just six pack or Steve chardonay that we should be paying closer attention
30:08
to and have the attention span of greater than a day trader on amphetamines.
30:15
Probably a couple things. I continue to believe that faith in treasury securities relative
30:26
to inflation will be challenged, and if I'm right, I think precious metals
30:30
will do well. I note that in the American market, the total market
30:37
value, or rather the total market share of precious metals and precious metals related
30:42
equity, is about one half of one percent of total savings and investment assets
30:47
in those states. The four decade mean is two percent. I believe that
30:52
the market share will at least revert to mean. If I'm right, that
30:57
means that demand in the US market, the biggest capital market in the world,
31:03
quadruples, And that's what I think is going to happen. And I
31:07
don't think that you need to come down to the penny dreadfuls to play that
31:08
space. I think that you can borrow Mike, you can buy market beta.
31:15
You can buy the Franklin Nevada's, the Wheat and Precious, the Agnico
31:18
Eagles. You can get eighty five percent of the market beta while de risking
31:25
the trade in terms of operational success or failure by seventy or eighty percent.
31:30
So I'm really, really, really really attracted to that. What about a
31:36
Newmont that profits got to be dirocketing with Newmont, you need to wait before
31:44
you deploy until they have sold off enough of the second tier assets that they
31:48
have. That My knock on new Mod has always been that they managed too
31:52
many mines, not enough big ones, which is why they're all in Sustaining
31:56
capital costs have been too high. They said as a consequence of acquiring New
32:01
Crest that they were going to clean house, they were going to sell a
32:05
bunch of deposits. Well, they would be attractive for smaller companies are too
32:09
small for Newmont to mess with, and by doing so, they would repair
32:14
a balance sheet that was certainly challenged with the New Crest transaction. If they
32:17
do all that, I think you have a renaissance at Numont. There's some
32:22
very good people there. They shouldn't be running the thirty minds, you know,
32:27
they should be running seven or eight minds, and they shouldn't be running
32:30
as much debt as they're running. I don't own Numont, although I will
32:37
admit to have sold some Newmont puts. I'd like to I'd like to either
32:43
acquire it cheaper or just have the put expire worthless and me grab the premium.
32:49
I'm okay with that for most people who don't waste as much of their
32:52
time as I do studying gold stocks, buying the very highest quality ones,
33:00
just capturing de risked beta, I think over the next five years will be
33:05
a very very attractive outcome. Okay. And do you think the dividends on
33:12
these stocks are going to go up? I do. Having so much free
33:15
cash flow, I do pretty much well know what to do with it right
33:19
well, particularly in the royalty and streaming companies. Until the transaction comes up,
33:22
all their cash flows free cash flow you know at Franklin, Nevada in
33:28
effect, you know, eleven percent pardon me, eleven basis point management expense
33:31
ratio their grosses their net and if andy, they may have great deployment opportunities
33:40
coming up, particularly around writing gold streams on big copper assets. I mean,
33:46
that's that's going to be a very good business for the next five years.
33:50
But until those transactions material is most of their free cash flow surplus and
33:55
just kind of setting on it, waiting for the next big deal. So
33:59
they got to send a little bit to the shareholders benefit, right, yep.
34:04
Interesting? Interesting? So all right, So US dollar, you know,
34:09
like I'm sick of talking about it because you know, it's like Mark
34:15
Twain said, rumors of my death have been greatly exaggerated. Well, maybe
34:21
not death, but maybe aging process setting in here weakness. Our mutual friend
34:31
Doug Casey famously said the US dollars the worst currency in the world, with
34:37
the sole exception of all of the others. So the US dollar has been
34:45
relatively strong. You've, Carrie, been on Earth about as long as I
34:51
and you have noted that the US dollar during the course of your lifetime has
34:54
lost probably ninety five percent of its value, which is pretty good performance when
35:00
you compare with the other currency. We always says, we always say about
35:07
the dollar, it's the best looking house in Baltimore, sure, sure,
35:12
Or or the prettiest mire at the slaughterhouse. That's another wonder, wonderful Doug
35:15
Casey quote. I maintain substantial US dollar liquidity. I do it knowing that,
35:23
at least for the basket of goods and services that I consume, that
35:30
the value of my savings declines by seven and a half percent compounded, while
35:35
the interest in my savings is four point two or four point three percent compounded.
35:38
In other words, I understand that saving money costs me three percent of
35:40
my purchasing ah. But I do it because I found that once every ten
35:47
years there's a liquidity crisis. And so I regard that negative interest rate as
35:52
an option payment in nineteen eighty seven and much more particularly in two thousand and
35:59
eight. Yes, having cash gave me both the tools and the courage to
36:04
take advantage of those circumstances rather than being taken advantage of. And so I
36:09
do that, and I do it primarily in gold and in US dollars.
36:14
Okay, So I just I think we're about one. But I have one
36:17
question for you about cycles. Okay, you know, I talk to a
36:22
lot of cycle the prognosticators, and they all seem to make it seem like,
36:28
you know, cycles are completely predictable. You can see them coming a
36:31
mile away, and you got to be following cycles. But I mean,
36:37
I've talked to like thousands of people different systems, and the cycle guys do
36:42
seem to have something there, But I don't care if it's elliot Wave,
36:46
if it's Gan Numbers or whatever it is. It never seems to be as
36:51
easy as they claim it is. Afterwards, well, there may be some
36:55
of them that are good at it, that's just not the way I think.
37:00
I don't consider the be the market itself to be a subject. I
37:04
consider it to be a facility for buying and selling fractional ownership in businesses.
37:08
And so while what you say and while they say may be true, it
37:14
isn't knowledge that's accessible to me, and frankly, it isn't of particular interest
37:17
to me. I don't trade the market per se. I will sell market
37:24
puts or market calls to hedge positions in businesses that I think are selling for
37:31
less than their worth. But that's really the I mean, I really just
37:36
believe that the market's a facility. I don't believe it's a subject. All
37:39
right, I'll buy it, although a lot of people make a lot of
37:43
money studying it, and God bless them the results, God bless them.
37:46
I know that there's a whole bunch of ways up the mountain. What I
37:51
have learned that works for me is that I invest in either conventional financial services
37:57
firms, brokerage firms, wealth managements, asset managers, banks, businesses I
38:02
understand because I'd help build them, or natural resource companies. I don't go
38:08
outside my sandbox. I do what I understand. I can make mistakes even
38:13
in subjects that I know well, so I have no particular temptation to compound
38:17
my losses by going into subjects I don't understand. So true, and what
38:23
you said about even companies that you think you know from the ground up,
38:29
you can get surprised, right and somehow, like especially in the junior sector,
38:36
they'll almost invariably find a way at times to blow up, right,
38:40
absolutely so. But when you do hit the right one, it can be
38:45
life changing. So that's what keeps everybody going right, Well, it's worked
38:51
for me. I joke. You know, my wife will say that when
38:54
I'm talking, when I have my investment hat on and I'm talking about allocating
38:58
prudely, prudently, she points out that all the money I now invest carefully,
39:02
I made by speculating wildly. So okay, on both sides of the
39:07
card. All right, Hey, so you got a couple of events coming
39:10
up, one virtual and of course your annual conference that takes place in sunny
39:15
South Florida, just the thirty five miles south of me. And we're having
39:21
like massive thunderstorms now and ninety plus degree days, but that's what Florida's like.
39:28
So that is from July seventh to the eleventh, And hey, if
39:34
you guys are out there, I'll have a link in the show notes at
39:37
some point, or if you email me, I'll send you the link so
39:40
you can sign up and we can get together there. And then you've got
39:45
a virtual event coming up on the nineteenth of this month, so a little
39:51
more than a week, that's correct. Oh well, once every ninety days
39:54
we do something called the boot Gap, which is an eight hour long deep
39:58
dive into some subject around now to resources, and I mean we've been doing
40:04
this for years and years and years. Once a year we do an annual
40:08
in person conference, this time in Boca Raton, Florida. In either case,
40:14
if you sign up, there's no financial risk to you. If you
40:19
don't believe, for any reason whatsoever, you didn't get your money's worth,
40:21
email me and I'll give you your money back. I'm the only financial education
40:25
provider that I know of that has an absolute gold plated money back guarantee.
40:31
With regards to the boot camps, you need to be interested in the topic.
40:34
We did, you know, uranium, three years ago, we did
40:37
silver. We've done all those kinds of things. This next one is a
40:43
This is a pretty deep dive. You know. This is a private placement
40:46
in due diligence workshop. If you're not an accredited investor, if you don't
40:52
want to participate in private placements, this is the wrong workshop for you.
40:57
If you want to do deep dives, this is a one full workshop for
41:00
you. The Boca Raton conference is very different. This has gone on for
41:05
twenty eight years. I believe it to be the best conference around natural resource
41:08
investing on the planet. We have great big picture thinkers, the Jim Rickards,
41:15
the Danielle de Martinez Booth's, the Nomu Prinz, the Jim Jim Grants,
41:22
the Bill Bonders of the world, people who tell you about the world
41:23
the way it is, not the way that CBC and ABC want to think
41:28
it is. Yeah, we have great analysts, people who have been investing
41:32
in resources for twenty or thirty years where the rubber meets the road. Importantly,
41:37
we have the living Legends, a group of entrepreneurs who built multi billion
41:40
dollar companies from scratch telling you what it takes to take a company from five
41:45
million market cap to five billion market cap and how to spot the winners early.
41:51
Finally, every public company exhibitor our conference has been vetted. If the
41:54
sponsors of the conference don't own shares and the exhibitors, they can't come.
41:59
There's no guarantee because I advistocking and comy, the price goes up, but
42:02
there is there is an absolute guarantee that the process is early. You know,
42:07
pardon me, is honest that at most conferences the qualification to being exhibitors
42:10
that check that cases. Yeah, what we're able to do as a card,
42:16
what we're able to do as a consequence of all that is offer our
42:21
attendees an absolute gold plated money back guarantee. Whether you attend live in person
42:25
in Boca Ratan July seven through eleven, or if you join thousands of other
42:30
investors in the comfort and convenient of your own home by a livestream, your
42:35
tuition is one hundred percent refundable. If you don't think I've earned it,
42:39
Hey, you're not going to get a better deal than that out there for
42:44
sure. You know. I have been going for years now. Try never
42:50
to miss it, and I will be there this year July seventh to the
42:54
ninth, because I'm taking off for the Freedom Fest conference thereafter, but I
43:00
can't wait to see everybody, and I will attest to the fact that the
43:06
companies that appear at your conference are far and above the creme de la creme
43:13
of the sector, and knowing the people who run them and the results that
43:20
they've achieved and the way they they protect shareholders and their investments. So looking
43:28
forward to it. Hey, the link to both conferences, the virtual and
43:34
the physical. The live conference will be in the show notes this interview on
43:37
Financial Survival Network dot com and Rick, we will see you in a few
43:44
weeks. Harry, thank you so much. I look forward to hosting you
43:46
and Boca. Thanks for listening to carry Lenz's Financial Survival Network, your solution
43:52
to today's trying times. For the latest, go to Financial Survivalnetwork dot com.
43:58
Financial Survival net Work now more than ever,