Latest / Kinesis Money / The West is Last to See What's Coming Ft. London Paul - LFTV Ep 294

Transcript

The West is Last to See What's Coming Ft. London Paul - LFTV Ep 294 · Kinesis Money

• 0:00
  SPEAKER_01: If you look by, I think it was 2024, the value of official gold holdings had risen sufficiently for gold to become the second largest global reserve asset behind the US dollar.
• 0:12
  SPEAKER_01: Where is it now?
• 0:13
  SPEAKER_01: It's ranked first.
• 0:14
  SPEAKER_01: They now have to keep printing a week rent.
• 0:17
  SPEAKER_00: We've got this ticket time bomb talking gold with the one and only Andrew McGuire.
• 0:24
  SPEAKER_00: Welcome to Life from the Vault.
• 0:28
  unknown: Don't get caught up.
• 0:30
  SPEAKER_00: Welcome, London Poor.
• 0:32
  SPEAKER_00: It's been a while, my dear friend.
• 0:35
  SPEAKER_00: Uh, thank you so, so much for coming back to um to visit us, basically.
• 0:41
  SPEAKER_00: Uh, we're gonna obviously um put all your links in.
• 0:45
  SPEAKER_00: Um, people should really check you out.
• 0:47
  SPEAKER_00: There's a lot of stuff that you talk about on a day-to-day basis.
• 0:51
  SPEAKER_00: Uh, you got uh the Cirrus report, there's other things you're doing, and uh happy to talk about those.
• 0:57
  SPEAKER_00: But basically, Paul, you were the years, this is where I came across you, years and years ago.
• 1:03
  SPEAKER_00: I mean, years ago.
• 1:05
  SPEAKER_00: You were so far ahead of the curve.
• 1:07
  SPEAKER_00: No one else was talking about um the shift from a unipolar center of gravity to a multipolar world, and you were so far ahead of that, and bang on, pretty astute stuff.
• 1:19
  SPEAKER_00: So thank you for coming.
• 1:21
  SPEAKER_01: Well, first off, thank you for that for your very kind introduction, and it's always a pleasure to come back and and to have a chat with you.
• 1:28
  SPEAKER_01: And yeah, for me, I was quite fortuitous in a way going back to probably 2012.
• 1:35
  SPEAKER_01: I got to know some people who I would call the architects of multipolarity in the sense that they uh came up with a vision that had a realization that unipolarity was on its last legs.
• 1:50
  SPEAKER_01: Uh, I mean, 2008 was a clear indication of that.
• 1:54
  SPEAKER_01: And they kind of talked to the West and said, look, you know, you need to be aware of this fact.
• 1:59
  SPEAKER_01: Uh, you know, there is going to have to be this huge shift in economics, finance, geopolitics.
• 2:06
  SPEAKER_01: And of course, the West didn't want anything to do with it, because as far as they were concerned, it was business as usual, which is not surprising because even today in 2026, the Americans tend to sit there and go, well, no, it's it's going to be business as usual.
• 2:20
  SPEAKER_01: Somehow we're going to reinvent Bretton Woods, and we'll have Bretton Woods 2.0, but we'll remain the hegemonic power, which of course is absolute nonsense.
• 2:30
  SPEAKER_01: So they then, of course, realizing it was a waste of time talking to the West, went to the Chinese and the Russians, and this was the back end of the 90s, and said to them, look, you know, there is, it's inevitable the unipolar world, the post-Breton Woods world is not going to survive.
• 2:48
  SPEAKER_01: Financialization was already very prevalent at that point in time, because it kind of started really in the 80s.
• 2:55
  SPEAKER_01: We had the whole Thatcher kind of Reagan era.
• 2:58
  SPEAKER_01: And they, for me, were visionaries in saying that this was an inevitability, and that whilst they didn't know exactly what 2008 was going to be or it was even going to be in 2008, they more or less predicted the demise on that basis.
• 3:14
  SPEAKER_01: So the Chinese and the Russians took it very seriously.
• 3:18
  SPEAKER_01: And they kind of realized, particularly from China's perspective, that they were going to have to not be in the Germanic power, but they'd have to start having more of an influence globally.
• 3:30
  SPEAKER_01: And of course, this is why they subsequently joined the WTO, and the rest is kind of history in terms of China's rise as this massive global producer and industrialized country to now lately technology, and is the biggest exporter in the world, and the rest is kind of history.
• 3:50
  SPEAKER_01: And but that was so me getting to know these people, I had kind of had a head start because at that stage there wasn't a lot happening.
• 3:59
  SPEAKER_01: But there was, you know, we had bricks, although it was brick initially, and there wasn't a lot going on, but there was clear indications that what China was intending to do.
• 4:09
  SPEAKER_01: And then there was the big push in 2012 with China for 30 consecutive months, along with Hong Kong, buying a thousand metric tons of gold, which amounted to 30,000, and that was drained from the West.
• 4:24
  SPEAKER_01: So there was a very clear understanding that they regarded gold in some point in the future, whenever that was going to be, would be an important component of the future global financial architecture, okay, in stark contrast to the perspective that the United States and Europe had for that matter.
• 4:45
  SPEAKER_01: But the the seeds were kind of being sown, and then of course, and we've said this before, but it's worth briefly reiterating, we had the Maidan, and then there was the whole overthrow of Yanukovych, and not long after that, lo and behold, the much vaunted so-called power of Siberia won.
• 5:15
  SPEAKER_01: And that was a massive deal that kind of largely went unnoticed.
• 5:20
  SPEAKER_01: But for me, that was a pivotal moment that says, okay, now we the gloves are off, so to speak.
• 5:27
  SPEAKER_01: And I think the Ukraine Maidan was the moment for both the Chinese and the Russians to go, okay, we really are going to have to start uh influencing the world in a multipolar sense, realizing that trading outside the dollar was the way forward because the US was threatening Russia at that point to implement sanctions, including freezing assets, which they subsequently did post-2022 when the Ukraine war started, and also freezing Russian banks and the central banks.
• 6:02
  SPEAKER_01: So they kind of got a forewarning of this and went, okay, and we need to start making moves.
• 6:08
  SPEAKER_01: And the rest is kind of history for the last decade plus, where we've seen this enormous explosion in the global south countries, all trading in non-dollar terms increasingly, and in local currencies, using alternative payment mechanisms, uh, dumping US treasuries and exiting the US dollar, US Treasury complex, and increasingly buying gold and seeing gold as a reserve asset as opposed to the US dollar.
• 6:39
  SPEAKER_01: And it's irrefutably the case.
• 6:42
  SPEAKER_01: Uh, and making a lot of statements, particularly China, with regards to gold being an important component of a future financial architecture.
• 6:51
  SPEAKER_01: And there's an awful lot being going on, and increasingly going on in that regard, which we can discuss a bit later with regards to Hong Kong and China, and obviously Hong Kong, offshore China, China, mainland China, and gold being in a really important component of that, and them extending this architecture internationally and saying there is an alternative, and we believe we can provide that alternative, not uniquely.
• 7:20
  SPEAKER_01: They're not suggesting you're not going to have gold centres in Dubai or Singapore or anywhere else.
• 7:26
  SPEAKER_01: Russia's on the cards to do that, and other global south countries.
• 7:31
  SPEAKER_01: No doubt, I think Africa will figure in that some point in the future, etc.
• 7:34
  SPEAKER_01: But we've seen an awful lot of developments in the last decade that, and yeah, I was fortuitous, but so we kind of were ahead of the game in saying, well, all these things are going to happen, and started as these developments happen, explaining them, and a lot of people thought they were irrelevant, but it all built up into this huge picture.
• 7:56
  SPEAKER_01: I always say they're all little pieces in a gigantic puzzle, and there's little parts of the puzzle that are now becoming very clear and observable for people in different parts of the world, and then you get the interaction between the Chinese and the Russian, or now increasingly Russia and the Asian countries, and by this massive development that's happening in the Russian Far East, which for me will be the biggest global development in human history, because the Russian Far East is this massive region, including Siberia.
• 8:29
  SPEAKER_01: It stretches all the way down to the border with Russia, and they're building that whole area out, and it will be industrialized, it'll be it will be massive infrastructure, it'll be exploitation of resources of which there are vast untapped resources in that region.
• 8:47
  SPEAKER_01: And a lot of this is to provide energy and resources for the Asian countries for Southeast Asia or Southern Asia, and obviously ultimately other maybe South America, etc.
• 9:00
  SPEAKER_01: And it's to build out the global south uh as an entity that where the future is, where this multipolar world's being born, and the West is sat there with all the problems we have, still not recognizing that the world's changing, they have to adapt to that.
• 9:19
  SPEAKER_01: But you know, for the Americans, it just sticks in their throat because they want to somehow recognize the ascent of China, but they're on the one hand terrified that China becomes an hegemonic power because for them it's a zero-sum game, and someone has to win in totality or lose in totality, and of course, that's not the Chinese ethos.
• 9:42
  SPEAKER_01: But the US is going through a very difficult transition to this new world, and one minute they're begging the Chinese to for investment, begging them to buy US treasuries in enormous quantities, like 900 uh billion or whatever it is.
• 10:00
  SPEAKER_01: I mean, look at the recent visit of Xi to Washington when they had this sort of state dinner.
• 10:07
  SPEAKER_01: Who was present there?
• 10:08
  SPEAKER_01: The captains of industry, the big corporate giants of the US.
• 10:12
  SPEAKER_01: Why are they there?
• 10:12
  SPEAKER_01: Because they're begging the Chinese for business, because they know what's coming.
• 10:17
  SPEAKER_01: They know that that the unipolar world's on its knees, and they're recognizing the future, and it's just but politicians are politicians, as we know, and no one wants to be the president who has to admit that unipolarity is dead, but but at some point there will have to be that recognition.
• 10:35
  SPEAKER_01: But the bandwagon continues, and there are developments all the time, be it uh bilateral relations, multilateral relations, as all the developments in the Asian countries, in local currencies, and also rather than just selling resources for a for a pittance and being ripped off by the West, which has happened to continents like Africa, for example, China and Russia are saying, no, we can give you added value.
• 11:03
  SPEAKER_01: You can take those resources, you can develop them, and and therefore that's going to benefit your economies greatly.
• 11:11
  SPEAKER_01: And and uh and as for de-dollarization as just countries, every country in the world is putting their foot down in the global south.
• 11:20
  SPEAKER_01: I mean, Indonesia is a great example of this, where they're actually trading in local currencies, even with US allies like the Japanese, the South Koreans, etc.
• 11:31
  SPEAKER_01: So they're even quietly utilizing non-dollar trade.
• 11:37
  SPEAKER_01: Uh, we're not saying an awful lot about it and hoping the Americans don't notice.
• 11:41
  SPEAKER_01: But, you know, and it's the it's basically something where it just is evolving, and every trade deal that is just another one that is no longer using the dollar, and also we're now getting increasing trade, uh, not just trade, sorry, in non-dollar terms, but also non-dollar denominated debt.
• 12:03
  SPEAKER_01: I mean, look at the rise in all the bond yields in the West, the US.
• 12:08
  SPEAKER_01: Recently, we've had spikes across Europe, there's the United Kingdom, whose bond yields are going the opposite direction, the Chinese, because foreign entities are buying US debt or issuing, uh, sorry, issuing uh buying Chinese debt, but also issuing uh Yuan-denominated debt.
• 12:28
  SPEAKER_01: Why?
• 12:28
  SPEAKER_01: Because why would you go to the West and go, well, I'll pay four and a half, five percent when I can go to Beijing and issue the debt for 1.7%.
• 12:38
  SPEAKER_01: Well, it's so if there's bias, then take advantage because your interest payments on your debt are vastly smaller.
• 12:46
  SPEAKER_01: So, yeah, we could talk forever and a day, but that gives a very sort of 30,000-foot view of what's happening.
• 12:53
  SPEAKER_01: And there's no let up in this, and the world is changing irrefutably.
• 12:59
  SPEAKER_01: And and again, we're back to this point.
• 13:02
  SPEAKER_01: The West needs to understand and adopt it and look for win-win cooperation.
• 13:06
  SPEAKER_01: And I've said it for far too many years.
• 13:08
  SPEAKER_01: The US needs to learn to be a great nation amongst equals, because if it does, it'll massively benefit the American people, but also it will benefit the world.
• 13:19
  SPEAKER_01: But at the moment, we're a million miles away from that.
• 13:23
  SPEAKER_00: Yeah, no, absolutely.
• 13:25
  SPEAKER_00: And and I think um, I think you mentioned yields, rising yields.
• 13:29
  SPEAKER_00: Obviously, you know, why why rising yields?
• 13:32
  SPEAKER_00: Well, obviously, people uh there's a bit of a buyer strike, uh, there, as you said, there's a de-dollarization process going on.
• 13:39
  SPEAKER_00: But what we're looking at here from from our good measure, uh, our gold world, um, where we actually witness, and obviously we face um we face Asia, we face Hong Kong, we face um a lot of these um Asian uh markets from a liquidity uh provider's perspective.
• 13:58
  SPEAKER_00: And what we're seeing is tremendous feedback here is that um uh liquidity um is uh paper market liquidity from the comics you can see it's at uh decade lows.
• 14:11
  SPEAKER_00: Um it's evaporating.
• 14:13
  SPEAKER_00: But that liquidity is actually uh populating itself uh aside from the you're talking about the currencies, it's it's populating itself in physical gold.
• 14:24
  SPEAKER_00: So we've got an increasingly liquid physical measuring stick where good God, good God, you have to actually buy a bar or own the bar before you can sell that bar, and you have to fully pay for that bar.
• 14:42
  SPEAKER_00: And that tends to say, well, you know what?
• 14:45
  SPEAKER_00: I believe that price.
• 14:46
  SPEAKER_00: If you've got enough liquidity, then you know that um, and and to me, that's a high-quality liquid asset.
• 14:54
  SPEAKER_00: That means that if I know I have that I have a trackable physical price and that it's liquid enough and it's in the SGE corridor, and that's it's pro the protocol is such that I can then treat that as the only other first-tier liquid asset that is technically global, and that is debt-ridden US Treasuries or first-tier gold.
• 15:23
  SPEAKER_00: And if I can then lock that down inside such a tightly controlled environment, then I can track it on a day-to-day basis.
• 15:34
  SPEAKER_00: I don't have to sell my gold to use it.
• 15:37
  SPEAKER_00: I can utilize my gold as a high, I can collateralize it, I can use it, I can do all the things I would normally do with any other first-year asset.
• 15:47
  SPEAKER_00: Only I know it's real and I know I can it can't be debased.
• 15:53
  SPEAKER_00: And I think this is what's really interesting to me, uh, Paul, is that and then I take a look, how does that translate?
• 16:01
  SPEAKER_00: Well, okay, so we're looking at the real yields.
• 16:04
  SPEAKER_00: It's a benchmark right in front of our faces.
• 16:07
  SPEAKER_00: So the last time that we saw yields at uh, I think May 2002 levels is pretty much where I was looking this morning.
• 16:18
  SPEAKER_00: Gold was trading at$300, uh,$311 an ounce.
• 16:22
  SPEAKER_00: What does that tell us?
• 16:24
  SPEAKER_00: It tells us that the the debt is being repriced and it's being repriced in physical markets and increasingly out of the hands of the West.
• 16:36
  SPEAKER_00: So this is really interesting stuff to me.
• 16:38
  SPEAKER_00: And the same with the dollar.
• 16:40
  SPEAKER_00: I mean, the same with the dollar.
• 16:41
  SPEAKER_00: I mean, gold is trading almost$4,000 higher, even after the uh a rinse today than it was in 2002.
• 16:50
  SPEAKER_00: I mean, to me, the evidence is there, and I can't believe that the mainstream media that we listen to, Bloomberg and everything, never talk about it.
• 16:59
  SPEAKER_00: They just literally miss the big story.
• 17:05
  SPEAKER_01: Yeah, absolutely.
• 17:06
  SPEAKER_01: And for me, there's a huge story that as well that gets lost in all this with regards to gold.
• 17:13
  SPEAKER_01: Because for decades, the conventional explanation for a rising gold price was always, well, investors are fearful of inflation and the purchasing power of fiat currencies being eroded.
• 17:25
  SPEAKER_01: So people buy gold as a safe haven.
• 17:29
  SPEAKER_01: Now, okay, that relationship is still relevant, but I think it's wholly inadequate to explain what's been happening to gold in recent years because we have US Treasury yields at multi-decade highs.
• 17:42
  SPEAKER_01: You've got markets pricing in maybe three further uh Fed rate hikes.
• 17:49
  SPEAKER_01: So there's this trade-off between QT with the Fed and QE, but anyway, that's a whole separate subject.
• 17:56
  SPEAKER_01: But gold's around 4,000, 4,100 an ounce, despite that those things happening.
• 18:04
  SPEAKER_01: And that suggests gold is reflecting something far broader than just, oh, well, we're worried about inflation or or interest rates.
• 18:13
  SPEAKER_01: I think one component is fiscal credibility because just look at public debt, look at the refinancing requirements that are going to be required across Western economies.
• 18:25
  SPEAKER_01: So investors have to sit there and go, well, do we think governments will ultimately stabilize debt through taxation and spending?
• 18:32
  SPEAKER_01: Well, no, they're not.
• 18:33
  SPEAKER_01: It's impossible.
• 18:34
  SPEAKER_01: How do we tolerate greater inflation?
• 18:37
  SPEAKER_01: And you know, there's pressure for monetary policy to remain accommodative, or are they going to employ some of the combination?
• 18:47
  SPEAKER_01: And people don't believe, they don't trust these um individuals or don't trust uh governments, don't trust central banks.
• 18:57
  SPEAKER_01: And gold, of course, represents neither someone else's debt nor a government's promise to pay.
• 19:03
  SPEAKER_01: So therefore, it can increase not only when expect investors expect higher CPI, but when confidence in the long-term management of sovereign balance sheets deteriorates to the point that no longer does anyone believe in it?
• 19:19
  SPEAKER_01: And this is why real yields no longer tell the whole story.
• 19:24
  SPEAKER_01: Because the traditional model was well, when inflation adjusted government bond yields rise, gold should be less attractive.
• 19:31
  SPEAKER_01: Because the argument would be investors can earn a positive real return from an asset and inverted commerce carrying interest.
• 19:39
  SPEAKER_01: Well, the longer-term relationships are way more complicated because when you look at the bond value against which gold is compared, it's you know, it's part of the qu itself is part of the question because a higher real yield might be notionally attractive if investors believe it represents genuinely risk-free purchasing power.
• 20:01
  SPEAKER_01: It's far less reassuring when high yields reflect increasing term premium, enormous issuance requirements, fiscal concerns, and that's being diplomatic or greater volatility in sovereign debt markets.
• 20:17
  SPEAKER_01: And this is where at so there is this big shift uh in terms of perceiving gold to not just be this inflation against inflation, hence why central banks continue and other major institutions to buy enormous amounts of gold.
• 20:35
  SPEAKER_01: I mean, there was a bit of a one call it a dip exactly in 2025, where it was about 860 tons, and but prior to that it was a thousand plus tons.
• 20:45
  SPEAKER_01: And this is the official data.
• 20:47
  SPEAKER_01: It was interesting, someone was telling me today, they've finally seen recognition in the West.
• 20:53
  SPEAKER_01: Well, China's officially buying gold now for two years non-stop.
• 20:58
  SPEAKER_01: But unofficially, the West is now going, yeah, but they must be buying huge amounts more, which they are.
• 21:03
  SPEAKER_01: There's the official and the unofficial markets they operate in.
• 21:07
  SPEAKER_01: So even the West is beginning to go, well, okay, they're buying it.
• 21:11
  SPEAKER_01: They just still don't understand why China's doing this.
• 21:15
  SPEAKER_01: But what central banks are not doing is buying gold to speculate on what's going to happen with inflation.
• 21:22
  SPEAKER_01: I mean, that they exist, they want liquidity, they want security, they want resilience.
• 21:27
  SPEAKER_01: They're seeing serious problems coming down the track, and that includes diversification, includes a recognition of the huge geopolitical problems, the financial uncertainty, yeah, and the long term preservation of value.
• 21:43
  SPEAKER_01: Absolutely.
• 21:44
  SPEAKER_01: But there is this big shift, and that shift is being building for years.
• 21:48
  SPEAKER_01: It's not and it's not going away.
• 21:51
  SPEAKER_01: And if you look by, I think it was 2024, the value of official gold holdings had risen sufficiently for gold to become the second.
• 22:00
  SPEAKER_01: And the largest global reserve asset behind the US dollar.
• 22:03
  SPEAKER_01: Where is it now?
• 22:04
  SPEAKER_01: It's ranked first.
• 22:06
  SPEAKER_01: Okay, some people go, oh, that's because of the value of gold.
• 22:09
  SPEAKER_01: It's no, that yeah, you can argue that to some extent, but it's not entirely the case.
• 22:16
  SPEAKER_01: So, and I think that's why this conventional inflation hedge just doesn't wash anymore.
• 22:22
  SPEAKER_01: And it's good that people are recognizing there are all these other reasons why it's important to hold gold, and it's making a judgment against something that's much more broad than just the whole issue of counterparty risk, and then there's the issue of sanctions.
• 22:43
  SPEAKER_01: Uh, but it's also now bringing into question the whole durability of the international monetary architecture, which we know is completely flawed and failed.
• 22:53
  SPEAKER_01: And this is why gold's becoming more and more attractive.
• 22:56
  SPEAKER_01: And so obviously, I've just explained this big shift in mentality globally towards the perception of not just gold being a reserve asset, but why gold is the whole idea of holding it now relates to many other factors, which we all know is a huge problem in the West.
• 23:16
  SPEAKER_01: I mean, and you know, geopolitically, there's no doubt things that are factoring into people's thinking now, is the problems because of the Iran war.
• 23:25
  SPEAKER_01: What's the uncertainty around energy?
• 23:27
  SPEAKER_01: And it's not just oil, but things like diesel.
• 23:29
  SPEAKER_01: And is this going to create massive structural inflation problems?
• 23:34
  SPEAKER_01: So, yeah, then inflation starts to factor more into thinking, but that's not in isolation, it is in combination with all the factors I've just mentioned.
• 23:45
  SPEAKER_01: And I think increasingly uh the question is how much of the West is recognizing this.
• 23:51
  SPEAKER_01: We do see odd countries who keep buying physical metal or gold, countries like Poland, it probably is the major one.
• 24:01
  SPEAKER_01: But most Western nations are just not interested.
• 24:04
  SPEAKER_01: They because they've kind of grown up this idea that, yeah, to some extent gold is this barbarous relic.
• 24:11
  SPEAKER_01: But global South countries are increasingly actually realizing the importance of it.
• 24:19
  SPEAKER_01: And it's interesting, Russia is announced, I think for the next month, they're going to massively increase their buying of gold again.
• 24:27
  SPEAKER_01: They went through a spell of selling it.
• 24:29
  SPEAKER_01: When they do sell it, they always sell it to the Chinese, and that's largely just relates to management balancing their budget because they've got enormous expenditure due to the ongoing war.
• 24:40
  SPEAKER_01: But they're now going to put their foot down and start buying huge amounts by all accounts off the record.
• 24:46
  SPEAKER_01: China's buying enormous amounts.
• 24:48
  SPEAKER_01: So can we read anything into that?
• 24:51
  SPEAKER_01: Well, we have to be a little bit careful, but there seems to be an indication amongst global south countries that buying gold at the moment is extremely important.
• 25:01
  SPEAKER_01: And maybe they're starting to see certain things that they feel the writing's on the wall.
• 25:06
  SPEAKER_01: And we've certainly seen indications of huge problems in Europe, not least their bond markets, but also their CDS spreads have arisen sharply in France and Italy, for example, which is indicative of a feeling that they have got huge financial problems as well as their economic problems.
• 25:29
  SPEAKER_01: So there is this recognition in the global south of not just uh why holding gold is important from their own perspective, but reflecting upon what is going on in the West and the realization that the US dollar, US Treasury complex is no longer perceived to be a safe haven.
• 25:49
  SPEAKER_01: And increasingly gold is replacing that as being regarded as a safe haven and a reserve asset, which has not happened in history and it is a reflection upon uh what is happening.
• 26:03
  SPEAKER_01: And, you know, therefore, with regards to the price of gold, I don't pay any attention to it.
• 26:08
  SPEAKER_01: For me, ultimately, physical ownership and physical holding will will win through.
• 26:14
  SPEAKER_01: And and whilst the demand's there, and it certainly is, then there's no reason to to at all think too much about what's going on in the paper price world, which I don't think has as much dominance as it once did.
• 26:29
  SPEAKER_01: And then increasingly I think that dominance will weaken.
• 26:33
  SPEAKER_01: And as the world moves more and more towards markets like China, not exclusively Hong Kong, Singapore, Dubai, et cetera, then the influence of Western paper markets will diminish.
• 26:47
  SPEAKER_01: And and therefore their ability to influence the price the way they have done will diminish also.
• 26:54
  SPEAKER_00: One thing we are seeing is um, and and I think that the reasons we're seeing such a big divergence is, and and it's the strange thing is, is that I'm I'm I I I'm not I really do not suggest anybody ever buys an ETF.
• 27:09
  SPEAKER_00: Uh you're buying shares in something which can be shorted that is not necessarily the on-ramp, the off-ramps are unallocated.
• 27:18
  SPEAKER_00: Uh, if you want, if there's a a crisis or black swan event, try and get your bullying out, and and you're gonna end up with with paper, paper, gold, and silver on the off-ramp.
• 27:29
  SPEAKER_00: So, which you then have to negotiate for a higher price.
• 27:32
  SPEAKER_00: So, so yeah, I I don't recognize that.
• 27:34
  SPEAKER_00: But on the other hand, what's interesting is because the physical market is underpinning what we're talking about here is physical underpinning central banks globally, um, sovereigns globally, uh, institutionals, even LBMA uh bullion banks are now saying, yeah, I get it, I get it, I get it.
• 27:54
  SPEAKER_00: We need to, we need some physical, we need to, we need to diversify into physical gold.
• 27:59
  SPEAKER_00: So what that's doing, it is into the last three months of selling, of gold selling, of high yields.
• 28:09
  SPEAKER_00: Um, what's happened is ETF's uh in inflows have ramped and ramped and ramped.
• 28:15
  SPEAKER_00: I mean, even yesterday into the big sell-off yesterday, it went um just GLD on its own rose by 4.6 tons.
• 28:23
  SPEAKER_00: I mean, and and yet, you know, so so really it's interesting that uh we've got the you've got the institutionals who obviously um can't uh uh these are the people, these are the institutions where they're not mandated or geared up to handle physical.
• 28:43
  SPEAKER_00: Uh it's just not in their in their bellywick.
• 28:46
  SPEAKER_00: So so essentially they're forced into these ETFs to get some exposure to gold.
• 28:51
  SPEAKER_00: Uh obviously bullion is far better, physical bullion is far better.
• 28:56
  SPEAKER_00: And but it's interesting to see how into these, as these bond yields have risen and risen and risen, and how the the dollar has risen 102.31 or something today.
• 29:10
  SPEAKER_00: I mean so basically what these guys are doing is saying we're just going to lean into dollar strength.
• 29:19
  SPEAKER_00: Hey, we get more bullion for our money.
• 29:23
  SPEAKER_00: And it's that's basically just what the physical guys are doing.
• 29:26
  SPEAKER_00: So it's an interesting dynamic, which I've never seen ETFs and uh um act like that before in history.
• 29:34
  SPEAKER_01: No, and that's why there is this divergence between what we would have historically seen in the gold market in and between now what's happening today, but I think part of that is this huge story between Hong Kong, China, and gold, which is a is a big story because Hong Kong really is China's new gold market initiative.
• 29:57
  SPEAKER_01: And in the last two years, you've had Beijing and Hong Kong launch this strategy to clearly turn Hong Kong into an international gold trading, clearing, and storage center, and that includes central gold clearing system that was launched in July of this year, the expansion of the bullion vault capacity to at least 2,000 tons.
• 30:20
  SPEAKER_01: They've even planned Yuan denominated gold futures, where that actually is real gold, and a delivery connect that's going to link Hong Kong with the SGE.
• 30:32
  SPEAKER_01: And they want tax and regulatory changes, so they want to attract massive bullion trading, central bank and other high net worth individuals to have gold storage.
• 30:43
  SPEAKER_01: This has huge national and geopolitical significance because what China's saying to the rest of the world is we want more of the world physical gold to move through our infrastructure so that we can influence price mechanisms rather than relying, as they have done, on London and obviously, of course, New York.
• 31:07
  SPEAKER_01: So Hong Kong provides this system which remains attractive to institutions, bullion traders, and it's critically, of course, integrated with mainland China.
• 31:19
  SPEAKER_01: And this is sucking up enormous amounts of gold because Hong Kong acts as, as we know, this offshore gateway between the international financial system and the Shanghai gold exchange.
• 31:33
  SPEAKER_01: And the question people have asked me is why is it Hong Kong rather than Shanghai?
• 31:38
  SPEAKER_01: Well, Shanghai is already the world's largest physical gold exchange by volume.
• 31:44
  SPEAKER_01: But of course, Hong Kong offers a common law legal system, free movement of capital.
• 31:50
  SPEAKER_01: There's still an issue, although increasingly less about doing that in China.
• 31:55
  SPEAKER_01: It has a very large international banking presence, and it has established precious metals, trading infrastructure, and global investment.
• 32:05
  SPEAKER_01: So Hong Kong is this natural bridge between China's domestic gold market and its international participation.
• 32:13
  SPEAKER_01: So this is also adding enormous pressure because huge amounts of gold over and above what was already going is now obviously entering Hong Kong.
• 32:24
  SPEAKER_01: A lot of it ends up in China, but not entirely.
• 32:27
  SPEAKER_01: And also, we now have Hong Kong and Shenzhen of all places who've established this cross-border model for precious metals, but focusing largely on gold.
• 32:39
  SPEAKER_01: So it utilizes Hong Kong's financial trade networks, but leverages Shenzhen's processing and refining infrastructure.
• 32:48
  SPEAKER_01: So it expands the what to term the Greater Bay Area's bullion market globally.
• 32:54
  SPEAKER_01: So you can see, therefore, the gold, overseas gold gets imported, for example, into Hong Kong.
• 33:01
  SPEAKER_01: It then ends up in bonded facilities in Shenzhen, it's then refined.
• 33:07
  SPEAKER_01: Then it's exported globally back via Hong Kong.
• 33:10
  SPEAKER_01: You can see how this whole mechanism is coming together.
• 33:14
  SPEAKER_01: And it's evolving a breakneck speed and has been for the last two years or so.
• 33:20
  SPEAKER_01: This is going to put further strain on the West, and they're not going to be able to cope with the fact that for China, it's not literally but an ounce of gold contract is backed by an ounce of gold.
• 33:34
  SPEAKER_01: In the West, who knows how many ounces of paper gold back is backed by one physical ounce of gold, so to speak.
• 33:42
  SPEAKER_01: We it's impossible to say, but China's making its intentions very clear by opening gold centres up all over the world, not just in Hong Kong, but also in Dubai, in Saudi Arabia.
• 33:57
  SPEAKER_01: Uh it's also wanting to do it in Europe, in Switzerland.
• 34:01
  SPEAKER_01: I mean, it's very clear what the Shanghai Gold Exchange is doing and it what's it doing as well, encouraging everyone to have domestic gold ownership.
• 34:13
  SPEAKER_01: So, you know, when you when you add all this up, it critically gold increases is increases confidence in China's financial system because of all the gold that's there.
• 34:25
  SPEAKER_01: And obviously, now you can effectively you do have a gold-backed yuan in trade terms.
• 34:31
  SPEAKER_01: We've spoken about that previously, because if you have a trade surplus with with China, you can keep the yuan, but you could, but equally you can exchange it fully convertible into gold.
• 34:43
  SPEAKER_01: So what this is doing, and and from the Chinese perspective, is they don't have to sharply appreciate the value of the yuan, which they don't want to because they like it.
• 34:54
  SPEAKER_01: Thank you very much at the level it is because it's ideal for their vast export market.
• 34:59
  SPEAKER_01: So it's very clear what their intentions are.
• 35:02
  SPEAKER_01: It's obvious they're developing this ecosystem that connects gold production, refining, storage, clearment, set clearing, settlement, financing, and global investment.
• 35:15
  SPEAKER_01: And Hong Kong is positioning itself clearly as the natural gateway that links China's gold market with international capital, and they're going to continue to do this, and the West is going to be powerless to do anything about it, and it will only eventually create the market for China to be the biggest gold market in the world and ultimately get to price gold how it thinks gold should be priced.
• 35:42
  SPEAKER_01: And yeah, we've seen some arbitrage between ComXL and uh LBMA prices versus Shanghai, but in the end, it will price it, and the world will buy gold on the basis of that pricing.
• 35:56
  SPEAKER_01: And then that comes back to the question: does China reprice gold to whatever at some point in the future?
• 36:02
  SPEAKER_01: Well, it's long been speculated it will do so.
• 36:06
  SPEAKER_01: That speculation hasn't gone away, and China's never denied it will do so, and I think at some point it will do.
• 36:14
  SPEAKER_01: But as long as it can keep buying up physical metal in the West, it will do so because the more metal it has in the east, the bigger its influence over future global markets uh in gold terms will be the case.
• 36:28
  SPEAKER_00: Yeah, and it's one one thing to have 40 odd trillion of um US Treasury debt and then to raise interest rates.
• 36:37
  SPEAKER_00: And that's where we saw a significant uptick in our uh orders coming through.
• 36:44
  SPEAKER_01: Yeah, absolutely, because again, this is a lack of confidence in the fiscal responsibility or the complete lack of it.
• 36:53
  SPEAKER_01: The the fact of the enormous indebtedness, and or I mean, nobody's seriously buying the idea we can inflate our way out of this debt.
• 37:03
  SPEAKER_01: You can't when you're running ever bigger budget deficits.
• 37:08
  SPEAKER_01: There is no answer to this.
• 37:09
  SPEAKER_01: I mean, the debt pile just grows and grows and grows.
• 37:13
  SPEAKER_01: The fiscal irresponsibility continues, and the world's looking at this and going, well, increasingly we need a safe haven because we don't trust the US dollar, US Treasury complex.
• 37:26
  SPEAKER_01: And this is as much as anything why you know yields are rising in the US, because there is a lack of confidence, and also because people are saying, well, I don't really believe inflation is the official figure, which of course it isn't.
• 37:42
  SPEAKER_01: So they have no trust in this.
• 37:44
  SPEAKER_01: So whilst that trust diminishes, uh, and the feeling, therefore, is that they will turn to what they think is a safe haven, and you know, gold's gold's an obvious example of this for all the reasons we've stated today and previously.
• 38:00
  SPEAKER_01: And to some extent, of course, silver's an industrial metal, but it does have a monetary component to a certain extent.
• 38:08
  SPEAKER_01: And and it's interesting that even in China, people are starting to buy silver, okay, in small quantities as a monetary metal.
• 38:16
  SPEAKER_01: We've not seen that either.
• 38:19
  SPEAKER_01: Uh, and and therefore it's very clear what's happening, and the reasons are self-explanatory.
• 38:25
  SPEAKER_01: And excuse me, going to be any let up in this, there's no reason why that would be the case.
• 38:30
  SPEAKER_01: So, you know, if if the West keeps suppressing the price, well, that's just China and the global south countries go, well, great, because we can buy even more at a cheaper price.
• 38:40
  SPEAKER_01: You're fine, no problem.
• 38:42
  SPEAKER_01: The question comes, and it always has been, when the West gets to the point that its paper market versus its physical holdings becomes untenable, then it's going to have to do something about this.
• 38:55
  SPEAKER_01: And that's why we saw gold reach five and a half thousand in dollar terms and silver 120.
• 39:02
  SPEAKER_01: Because the market became intolerable.
• 39:05
  SPEAKER_01: There was insufficient physical in the West to deal with the imbalance with all the paper.
• 39:12
  SPEAKER_01: Eventually, of course, in some senses, China assisted in this because they started after buying enormous amounts of silver dirce.
• 39:21
  SPEAKER_01: They did export it to the world and allowed other countries to have it, but they made an enormous profit in the process.
• 39:27
  SPEAKER_01: So, yes, it started to have some impact on the price, but what is China now doing?
• 39:33
  SPEAKER_01: They're stopping exporting silver.
• 39:36
  SPEAKER_01: So, therefore, you're going to start continue to see this pressure building up.
• 39:41
  SPEAKER_01: And I also think at the moment it suits China very nicely if silver is hanging around$60 an ounce because they can buy it up, and they are buying enormous amounts, covertly and not so covertly.
• 39:57
  SPEAKER_01: Why?
• 39:57
  SPEAKER_01: Because they need it for industrial purposes.
• 40:00
  SPEAKER_00: Yeah, and it was interesting.
• 40:02
  SPEAKER_00: I saw the Goldman um piece at the end of September, which was interesting.
• 40:06
  SPEAKER_00: He was talking, they were talking about doing an assessment.
• 40:09
  SPEAKER_00: It was the internal document.
• 40:12
  SPEAKER_00: Um, and they're talking about because they're capping, because the US is keeping tariff risks alive, clearly Washington is encouraging traders to move critical metals to the US before they put a formal measure in place.
• 40:28
  SPEAKER_00: Um, but what it's doing, as far as silver's concerned, especially, it's removing tradable metal from the rest of the world.
• 40:37
  SPEAKER_00: And that's tightening available supply outside the US, where real physical demand really is.
• 40:44
  SPEAKER_00: So interesting.
• 40:45
  SPEAKER_01: Oh, yeah, absolutely.
• 40:46
  SPEAKER_01: It's all uh just putting more and more squeeze on the paper versus physical.
• 40:52
  SPEAKER_01: And people are keep trying to go, oh, well, the physical demand for silver is going to diminish.
• 40:58
  SPEAKER_01: Well, it's not because we come back to the simple point, which metal is the best conductor?
• 41:04
  SPEAKER_01: Silver.
• 41:05
  SPEAKER_01: What does every semiconductor chip contain?
• 41:08
  SPEAKER_01: Okay, it's small, but it contains silver.
• 41:11
  SPEAKER_01: And whether whatever we think of the AI revolution, I don't know, but they're gonna build enormous data centers.
• 41:18
  SPEAKER_01: They're gonna, you know, there's gonna be enormous demand for silver in that regard.
• 41:22
  SPEAKER_01: Whether it ultimately succeeds isn't the point.
• 41:25
  SPEAKER_01: They're still gonna do this.
• 41:26
  SPEAKER_01: So there is no let up in physical silver demand because people seem to think, well, it only relates to solar panels.
• 41:35
  SPEAKER_01: It doesn't.
• 41:36
  SPEAKER_01: That's just the tip of a gigantic iceberg in terms of the industrial demand for it.
• 41:41
  SPEAKER_01: So, I mean, we're gonna have the sixth year, is it, of deficits between demand and supply.
• 41:47
  SPEAKER_01: There's no evidence that that's gonna let up.
• 41:50
  SPEAKER_01: So eventually there has to come a point where this is totally unsustainable.
• 41:56
  SPEAKER_01: And there's no doubt with pure silver mines, as we know, are very limited.
• 42:01
  SPEAKER_01: Most of it's a byproduct of copper mining, zinc, etc.
• 42:05
  SPEAKER_01: But even silver mines, their production is beginning to diminish.
• 42:11
  SPEAKER_01: So that there isn't any indication of any big new silver mining project coming online anytime soon.
• 42:19
  SPEAKER_01: And we all know from exploration, assuming you get lucky and you end it with a viable uh proposition to build a mine, it takes a decade, at least.
• 42:31
  SPEAKER_01: So we haven't got anything on the horizon.
• 42:34
  SPEAKER_01: So unless someone manages to radically change science in the next year or two, which is not going to happen, the demand is going to cause major problems, and they're going to have to try and find supply somewhere.
• 42:50
  SPEAKER_01: And as China keeps buying it up, the rest of the world, particularly in the West, is going to sit there and go, well, where is the supply?
• 42:57
  SPEAKER_01: China's sat there waving, going, We've been buying it for years, and we will continue to do so, as India does as well.
• 43:05
  SPEAKER_01: So, you know, there is no obvious way of getting around this problem.
• 43:10
  SPEAKER_01: So at some point the price will have to reflect physical reality.
• 43:15
  SPEAKER_00: And with the cost of diesel exploding higher, and there's, I mean, goodness me, uh Paul, I mean, it clearly doesn't look like that's coming back down very quickly.
• 43:26
  SPEAKER_00: I know in this country we're paying uh over two pounds a litre now, and and I think that's it's gonna go up and higher and higher.
• 43:33
  SPEAKER_00: Um, so as far as a miner's concerned, about especially a you know, um a soulless uh gold or a solar silver uh miner, the the cost is gonna be exponentially higher to get it out the ground.
• 43:47
  SPEAKER_01: Yeah, as things done.
• 43:48
  SPEAKER_01: Yeah, it's just gonna, you know, an ounce is gonna cost a lot more to get out the ground.
• 43:53
  SPEAKER_01: And you know, with all due respect, uh there there isn't the appetite for miners to sit there and Go, well, I'll just mine it at a loss and go bust.
• 44:03
  SPEAKER_01: So, you know, the price will have to change.
• 44:05
  SPEAKER_01: Okay, the people will argue and say, well, this is a transient problem.
• 44:10
  SPEAKER_01: Well, eventually it will be, but I think the idea that if the Stratover Moose opens tomorrow, it all gets rectified in a week or two is nonsense.
• 44:19
  SPEAKER_01: It could take years.
• 44:21
  SPEAKER_01: I mean, and also, you know, so and again, it's one of those things with supply chain issues.
• 44:28
  SPEAKER_01: Think you can, even when you've got the right amount of production, it's in the wrong part of the world.
• 44:33
  SPEAKER_01: And and refineries are dedicated to dealing with a certain type of crude.
• 44:38
  SPEAKER_01: You can't just go and get crude from somewhere else and go, right, refine this.
• 44:42
  SPEAKER_01: They can't do it, they don't have the capability.
• 44:45
  SPEAKER_01: So, yes, there are enormous problems.
• 44:47
  SPEAKER_01: And you know, energy is the lifeblood of the world, so miners are no different.
• 44:52
  SPEAKER_01: So eventually that will have to reflect in the price also.
• 44:56
  SPEAKER_01: And but the one interesting thing is if you'd gone back a few years ago and said that you know, the 10-year yield and the the long end of the the US Treasury yield curve is at 5 plus percent and gold was at 4,000 plus, no one would have believed you.
• 45:16
  SPEAKER_01: Well, now it's visible to everyone that that's the case, and uh and that again comes back to this correlation between what the real world is now, as opposed to to the world of the past, which no longer exists, and the financial architecture's changing, and gold's perceived to be an important component of that.
• 45:37
  SPEAKER_01: I mean, China's not just building the biggest uh global gold empire for no reason, just because they felt like doing it, there's a clear strategic purpose to this, because you know, and they did quietly say, and it's worth reiterating, probably two or three years ago now, where a Chinese Beijing official came out and went, well, gold will be an important component of the future global financial system.
• 46:03
  SPEAKER_01: And when asked why, they just basically went, just wait and see.
• 46:07
  SPEAKER_01: Well, there's there's your indication.
• 46:09
  SPEAKER_01: And and again, it doesn't mean we have to have gold-backed currencies in the future.
• 46:15
  SPEAKER_01: But, you know, gold, it's simple terms, let's just imagine a world where gold becomes collateral across the board.
• 46:23
  SPEAKER_01: All these ways where gold will figure in the financial system in the future is coming.
• 46:28
  SPEAKER_01: We're already seeing indications of that.
• 46:31
  SPEAKER_01: That's the role where gold becomes indispensable, and it doesn't matter anymore about having a gold back currency per se.
• 46:40
  SPEAKER_01: But I I don't doubt that that may happen.
• 46:43
  SPEAKER_01: And Zimbabwe is an example who did, and everyone went, it's a joke.
• 46:47
  SPEAKER_01: And well, look at their inflation now, it's fallen to levels no one would have believed very, very quickly, because they have you know a stable monetary policy.
• 46:58
  SPEAKER_01: They're actually doing things properly, so it can work.
• 47:02
  SPEAKER_01: Uh, but I think it's losing the whole ethos of what's happening to get bogged down in gold-backed currencies anymore.
• 47:10
  SPEAKER_01: It's far more that gold will be front, left, and center of the future financial architecture and you know, gold being used as collateral is another great example of this.
• 47:22
  SPEAKER_01: And there'll be far more confidence in that than where what we're currently seeing being used as collateral, where where people are going, well, I don't believe in the US Treasury anymore.
• 47:32
  SPEAKER_01: I don't have confidence in it.
• 47:35
  SPEAKER_01: But if someone comes along and says I want to use gold as collateral, the doors are open for them.
• 47:41
  SPEAKER_01: But not anymore using US Treasuries as collateral for the reasons we know are very obvious.
• 47:47
  SPEAKER_00: Yeah, really interesting because you know, now we've see uh at the LBMA conference, um we see bullion banks coming out and saying we're going to invest in gold.
• 47:59
  SPEAKER_00: We see, I mean, there was a time when it it behoved them to be on the short side.
• 48:06
  SPEAKER_00: Um now every single bullion bank that I interact with, I do interact with um a couple of majors, they're they they're all long physical gold and silver for their own book.
• 48:21
  SPEAKER_00: Yeah, they may trade around it, but they're long gold and silver for their own books.
• 48:26
  SPEAKER_00: And and now uh coming out openly and brazenly in an LBMA uh conference to say we're giving you every reason why we are, and drilling right down into the some of the reasons you're talking about here, why we need to invest uh to uh secure such uh gold as an asset, um, as a first-year asset alternative.
• 48:51
  SPEAKER_00: And that's really interesting because and the LBMA currently being sued.
• 48:57
  SPEAKER_00: And and basically what's interesting there is that what they've got with like 1.4 billion in assets, uh, you know, being a small organization really, and the court cost is supposed to be like something like 4.3 billion.
• 49:11
  SPEAKER_00: Um, they could go down.
• 49:13
  SPEAKER_00: I mean, they could, they could, it could be the end.
• 49:16
  SPEAKER_00: And um, so it's really interesting.
• 49:19
  SPEAKER_00: A lot of things suddenly all coming together at the same time, as the physical markets now already have migrated.
• 49:28
  SPEAKER_00: As far as I'm concerned, everyone that I know, no one wants anything to do with the over-the-counter markets, no one no one wants anything to do with the COMEX markets.
• 49:39
  SPEAKER_00: People are saying I need just a high-quality liquid asset collateral that is secure and is ring-fenced inside an undebasable uh uh ecostructure.
• 49:54
  SPEAKER_00: And that's what the SGE provides globally.
• 49:57
  SPEAKER_01: Yeah, and I think to be honest, you can sum this up in in saying the you can sit there and go government bonds offer yield, yes, but they carry duration, they carry fiscal and sovereign exposure.
• 50:12
  SPEAKER_01: You can have foreign reserves, and you might sit there and say they provide liquidity, but they exist inside someone else's financial architecture.
• 50:21
  SPEAKER_01: The one thing with gold is it's an internationally recognized reserve asset that is not simultaneously another country's promise to pay.
• 50:32
  SPEAKER_01: And I think this ongoing repricing of gold is telling us and that something far more than what CPI is, which was the traditional benchmark by reflecting upon a world in which governments are becoming more and more indebted, sovereign bond markets are under enormous stray, real yields no longer give any guarantee and confidence, central banks therefore are diversifying their reserves, and geopolitical blocs like the global south are questioning the wisdom of keeping uh savings inside financial systems controlled by, let's be brutally honest, the Americans.
• 51:13
  SPEAKER_01: So gold's not hedging inflation anymore, to be honest.
• 51:18
  SPEAKER_01: It's hedging the very concept of trust itself in the West.
• 51:22
  SPEAKER_01: And that's and that's vaporized, and that's why it is performing the way it has been in recent years.
• 51:29
  SPEAKER_00: Yeah, no, that is that is exact that is well put.
• 51:33
  SPEAKER_00: And that is that is it it's a big it's bigger than than just a hedge.
• 51:37
  SPEAKER_00: It this is so important.
• 51:39
  SPEAKER_00: And I think I think you mentioned earlier, talk about the uh the the whole arbitrage mechanism.
• 51:45
  SPEAKER_00: If you have if you are the exchange, if you are setting the global price in a in a liquid uh physical environment, it's providing what it's do is imposing discipline on the Western, the the the old legacy paper diluted markets where you know you've got what five to eight hundred tons of of over-the-counter gold uh washing around the system with three to five tons.
• 52:11
  SPEAKER_00: Only the three to five tons that are NS that are deliverable are NSFR compliant on that day.
• 52:17
  SPEAKER_00: So, so really, um essentially the so you've got the HAU or the uh the the physical Asian physical markets are saying, give it to me, give it to me.
• 52:29
  SPEAKER_00: Okay, I I will take that.
• 52:31
  SPEAKER_00: I I I I can't touch over-the-counter market until the fix.
• 52:35
  SPEAKER_00: But the fix, I know it's NSFR compliant, and if I lock it in, I'm T plus one, maybe T plus two.
• 52:43
  SPEAKER_00: But I get it.
• 52:44
  SPEAKER_00: And this is providing an a slow progression of discipline, backwashing into the legacy markets who've had it their own way for so long, just to keep it like today, so 90 tons of gold flash sold at the pit open.
• 53:05
  SPEAKER_00: Uh four uh 1400 tons of silver flash sold at the at the pit open.
• 53:12
  SPEAKER_00: Somebody say thank you, because I'll eat your lunch if you want to do that.
• 53:18
  SPEAKER_01: Yeah, and it ultimately it comes back to the point.
• 53:20
  SPEAKER_01: And I always uh had this discussion with someone a few years ago about this who was adamant that you know that the Western markets are totally bona fide.
• 53:30
  SPEAKER_01: Well, I I said to them all, like you've just highlighted, who sold 1400 tons of physical silver in a in a split second?
• 53:38
  SPEAKER_01: Tell me who this entity is.
• 53:40
  SPEAKER_01: There is no entity selling physical silver like that, or physical gold.
• 53:45
  SPEAKER_01: Everyone knows this is nonsense.
• 53:47
  SPEAKER_01: And and this is why, as China and other countries in global south, build trust and confidence in their gold markets and the idea: well, if I buy gold and I store it in a vault in China, I know it exists, I know it's segregated, I know it's allocated.
• 54:07
  SPEAKER_01: I know that if I ever wanted to take delivery into the West, I can take delivery.
• 54:12
  SPEAKER_01: You're not gonna fob me off with some nonsense about how it's gonna take you years to give me back the gold because that, and then you get it back and find it's a totally different serial numbers on it, because original gold you deposited with them's long since departed.
• 54:27
  SPEAKER_01: So it's that trust and confidence that is going to make an enormous difference.
• 54:33
  SPEAKER_01: And then at some point, China, people people go, but you can't reprice gold.
• 54:39
  SPEAKER_01: Yes, you can, because China could just suddenly come out at some point, whatever that price is, and we're not here to speculate and go, we've decided now we're repricing gold on this basis.
• 54:50
  SPEAKER_01: Now, what's gonna happen if China reprices gold?
• 54:54
  SPEAKER_01: Well, instantly there's gonna you're gonna see this massive exodus of whatever is gold in loose hands and inverted comments heading to China.
• 55:05
  SPEAKER_01: And that and and it will be enormous.
• 55:07
  SPEAKER_01: Then we're gonna see this gigantic market in China stroke Hong Kong, which will dwarf anything in the West.
• 55:15
  SPEAKER_01: And then the question, therefore, then becomes what what's the West answer to this?
• 55:20
  SPEAKER_01: Does it want to continue to play ball and play?
• 55:23
  SPEAKER_01: Well, then it's gonna have to play ball the way China plays ball.
• 55:27
  SPEAKER_01: Therefore, it's then gonna have to go, well, if China's repricing, we'll have to reprice.
• 55:32
  SPEAKER_01: Otherwise, we'll cease to operate as a market because no one's going to be buying or well, people might like to buy the gold, but there won't be any.
• 55:41
  SPEAKER_01: But they're not going to go, I'll tell you what, I'll sell the gold in the West because it's uh X percent lower than what China is selling it for.
• 55:50
  SPEAKER_01: It's not going to work.
• 55:51
  SPEAKER_01: So they're going to have to cut their cloth accordingly.
• 55:55
  SPEAKER_01: And this is why there is very clear evidence that the LBMX such a want to play ball and operate with China in a system that is going to be radically different because it's the only way they're going to survive.
• 56:10
  SPEAKER_01: You either uh accept that the old world's dead, there's a whole new way of doing things, not just gold markets, but you know, in economies, in trade, in finance, geopolitically, you either embrace it or you cease to exist because your capability to function in that market will just be radically diminished on a on a daily basis to the point you become irrelevant.
• 56:36
  SPEAKER_01: So you want to be part of the market, well, you're going to have to play the by these rules.
• 56:41
  SPEAKER_01: And the rules are in future, if someone's got an ounce of gold, they know it's and it's voltage, they know it exists, they know it's real, but also that when the price moves, it's going to be based upon physical supply and demand.
• 56:57
  SPEAKER_01: It will be based on physical trading, not well, I don't like the price being currently what it is.
• 57:04
  SPEAKER_01: Uh we're coming to month end, or oh, we better make sure we try and move people so they'll move to the next uh contract window, or we'll or just squeeze them out.
• 57:16
  SPEAKER_01: Oh no, just smash the price and we'll all pretend we've just sold.
• 57:20
  SPEAKER_01: And we've had times when they've sold the equivalent of of annual silver global production in the blink of an eye.
• 57:28
  SPEAKER_01: And someone expects me to take that seriously.
• 57:31
  SPEAKER_01: Well, of course, you can't take it seriously.
• 57:33
  SPEAKER_01: But that the capability to do that is going to be diminished.
• 57:38
  SPEAKER_01: And of course, as you say, when they smash the price or try to, then China, etc., is going to go, thank you very much.
• 57:46
  SPEAKER_01: We'll just buy even more at an even cheaper price.
• 57:50
  SPEAKER_01: So, no problem.
• 57:51
  SPEAKER_01: We'll just keep and the next squeeze in the market, as we saw with five and a half thousand and one twenty for silver, it is going to those highs probably will get tested.
• 58:02
  SPEAKER_01: Now, I can't say when that's going to happen because we don't have a crystal ball and we're not privy to every single aspect of what's going on.
• 58:11
  SPEAKER_01: But there's a logical argument to say that those highs will get tested again because physical demand for gold and silver is not going to diminish anytime soon.
• 58:21
  SPEAKER_01: So when the squeeze becomes unbearable again for the West, they've only got one choice.
• 58:27
  SPEAKER_01: They're going to have to let the price move and hope eventually someone sells somewhere, and then they can readdress the massive imbalance between paper and physical, because like today, they're just paper trades.
• 58:43
  SPEAKER_01: So someone somewhere is now in deficit for 1400 tons of silver.
• 58:48
  SPEAKER_01: Well, how do they get that back?
• 58:50
  SPEAKER_01: Where do they get it from?
• 58:52
  SPEAKER_01: Who's selling?
• 58:53
  SPEAKER_01: You know, at some point, the things have to balance up even themselves out.
• 58:58
  SPEAKER_01: So, you know, when people get upset about it, I say leave them to it, because ultimately it's to their detriment if they continue to do this.
• 59:07
  SPEAKER_01: It's not beneficial to them.
• 59:09
  SPEAKER_01: And they're not doing it from a position of strength.
• 59:11
  SPEAKER_01: They're doing it from a position of weakness because they're clearly trying to shake people out.
• 59:16
  SPEAKER_01: Because they're really, again, getting concerned that suddenly enormous amounts of people stand for delivery.
• 59:24
  SPEAKER_01: How are they going to satisfy that demand?
• 59:26
  SPEAKER_01: Where are they going to get the physical gold and silver from?
• 59:31
  SPEAKER_01: When people say, I want, I want my silver.
• 59:36
  SPEAKER_01: They won't have it.
• 59:37
  SPEAKER_01: And if that imbalance becomes enormous, the risk is force majeure.
• 59:42
  SPEAKER_01: And if force majeure was to ever happen, really that's the end of the West.
• 59:47
  SPEAKER_01: No one will ever have any dealings with them in the future because you know, then they will have exposed themselves to ridicule in the process of going, well, hang on a minute.
• 1:00:00
  SPEAKER_01: What does this demonstrate to us?
• 1:00:02
  SPEAKER_01: Well, it demonstrates the the accusations that have been left levied at you for for decades or years, and particularly more so in recent years.
• 1:00:13
  SPEAKER_01: There's no way out of this.
• 1:00:15
  SPEAKER_01: It will be the end of them.
• 1:00:16
  SPEAKER_01: And therefore they're acutely aware they can't get to the point when force majeure would be a realistic proposition.
• 1:00:24
  SPEAKER_01: So some point they're going to have to do what they did last time and allow the price to move.
• 1:00:31
  SPEAKER_01: Okay.
• 1:00:31
  SPEAKER_01: We can't rule out the fact that the Western financial system has some serious systemic event.
• 1:00:39
  SPEAKER_01: Well, as we saw in 2008, that does impact gold and silver prices, but it only impacted short term.
• 1:00:47
  SPEAKER_01: And what did we see through 2009, 10, and 11?
• 1:00:50
  SPEAKER_01: Gold went all the way back to 1920, and silver nearly went back to the all-time high of 50.
• 1:00:58
  SPEAKER_01: So that's an indication when you know reality kicks in and people start to understand what 2008 meant.
• 1:01:06
  SPEAKER_01: Gold and silver became assets that people wanted to hold.
• 1:01:11
  SPEAKER_01: And of course, what will also happen in if there is a systemic event, the financial system, and this has also impacted gold and silver, or particularly gold to some extent, was the Iran war because it was high net worth individuals who were who were massively leveraged, suddenly having margin calls and having to dump whatever they could to raise capital.
• 1:01:34
  SPEAKER_01: So that can happen globally with regards to another layman event and inverted commerce.
• 1:01:41
  SPEAKER_01: So we can't rule that out.
• 1:01:43
  SPEAKER_01: And that is possibly could happen this year into next year.
• 1:01:47
  SPEAKER_01: There's again no crystal ball in that regard, but there are huge problems.
• 1:01:52
  SPEAKER_01: But the argument would be if they think a systemic event's going to happen, they're going to do what they always do.
• 1:01:59
  SPEAKER_01: Print like there's no tomorrow, any this time.
• 1:02:02
  SPEAKER_01: It will be printing that makes the printing they did during the pandemic look like a drop in the ocean.
• 1:02:10
  SPEAKER_01: Well, we all know that means they're going to slash interest rates.
• 1:02:14
  SPEAKER_01: And that would obviously then be very good for gold and buy extension silver.
• 1:02:18
  SPEAKER_01: And because they're not just going to sit there and go, we'll just let everything blow up.
• 1:02:23
  SPEAKER_01: They're going to they're and they'll do the only thing they can do.
• 1:02:26
  SPEAKER_01: Print like there's no tomorrow and somehow think that's resolved the problem, which of course it won't either.
• 1:02:33
  SPEAKER_00: And nicely put, nicely put, Paul.
• 1:02:35
  SPEAKER_00: And do you know what I can't believe it?
• 1:02:37
  SPEAKER_00: Time just flies here.
• 1:02:39
  SPEAKER_00: Um but you know, we've got to have your back more often.
• 1:02:42
  SPEAKER_00: Uh I mean, I've we've covered just a fraction of what I've covered, but you have summed up some very important fact uh points here.
• 1:02:50
  SPEAKER_00: Um, but in the meantime, because obviously we're an hour in or just after, so it we it limited.
• 1:02:57
  SPEAKER_00: So what we'll do is I'm gonna put put some links up, um, or we're gonna put some links up for your uh Syrus report.
• 1:03:06
  SPEAKER_00: You've got a couple of other links uh that you would um that you'd like us to put up.
• 1:03:11
  SPEAKER_00: And um, you know, people should check you out because I know that you've got um you you put you've you've got stuff on X as well, uh, and it's all like available to people.
• 1:03:23
  SPEAKER_00: A lot of it's free.
• 1:03:24
  SPEAKER_00: So, you know, I would encourage people to do that.
• 1:03:27
  SPEAKER_00: But I just want to thank you so much for actually, you know, parachuting in, spending some time with us today.
• 1:03:34
  SPEAKER_00: And definitely let's circle back um certainly before the end of this uh fourth quarter and have a really good look at what uh we should be positioning for for 2027.
• 1:03:47
  SPEAKER_00: But I just want to thank you so much for coming in and joining us.
• 1:03:52
  SPEAKER_01: Well, it's a pleasure and thank you for asking.
• 1:03:54
  SPEAKER_01: And anytime, honestly, when I I mean, you wouldn't do this literally, but if you said to me, can we do it once a month, I'd happily do it.
• 1:04:02
  SPEAKER_01: I mean, I'm very happy to talk to people and express my perspective on things and please ask.
• 1:04:08
  SPEAKER_01: It's always a pleasure and thank you for asking.
• 1:04:11
  SPEAKER_00: Well, thank you so much.
• 1:04:12
  SPEAKER_00: And um, so yeah, we will circle back.
• 1:04:14
  SPEAKER_00: And uh, as I say, I would encourage people to click on your links, join your next, do all the things that really uh in a where you're enabling people to get information.
• 1:04:25
  SPEAKER_00: And it's all about information to make better decisions and a really you've covered a lot of turf here today, uh, including Force Negro, including there's a lot of things here that uh I want people to drill down into and probably listen twice to.
• 1:04:39
  SPEAKER_00: But thank you so much, and we'll see you again soon.
• 1:04:42
  SPEAKER_00: Thanks.
• 1:04:43
  SPEAKER_01: Yes, thank you very much, Dave.