Latest / SILVER / GOLD / $UFD Meme Coin Investing & Global Economics / ANDY SCHECTMAN: The FACTS are SHOCKING 🚨 (Silver & Gold)

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ANDY SCHECTMAN: The FACTS are SHOCKING 🚨 (Silver & Gold) · SILVER / GOLD / $UFD Meme Coin Investing & Global Economics

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Today we have 4 questions for Andy Schechtman.
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He's a leading figure in the gold and silver community and
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we're fortunate to have Andy with us today on the show.
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We're going to talk about silver shortage and a number of other
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pertinent pressing issues in the precious metals sector.
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Andy, welcome to Ron's Basement. Thanks for having me.
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You know you. Look, you look so sharp and here
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I am wearing a baseball hat. I figure I'd figure, you know,
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that's perfect for the basement. I feel underdressed, so excuse
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my informality, but it's good to be here, brother.
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Thanks for having me back. That's all right.
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We know there's a there's a sharp mind hidden underneath
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that hat right in. There somewhere.
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It's in there somewhere, right? Well, hey, first first question
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for you, Andy. And I think you are uniquely
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positioned to answer this question better than anybody
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because you've spent decades in the bullion dealer world.
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I have this theory, I call it the the silver 8X theory.
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And I want you to to tell me whether or not you agree with
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me. And and I also like would like
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to hear your thoughts on this. But when it comes to demand and
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I'll focus in on silver, if from a simplicity perspective, we say
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right now we have one in 100 people in the United States who
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are silver enthusiasts, people who are stacking silver.
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And if we have a situation come up like like we had less than a
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year ago with the banking crisis or what happened during C19 or
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during the Silver squeeze where there's a a rush of new people
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coming into silver, maybe that number goes from one in 100 to 4
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in 100 people that are buying silver.
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So we have four times, you know, in theory the demand for the
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ounces of silver that are available.
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But on top of that and again I want to hear your thoughts on
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this. Silver investors typically don't
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like to buy silver when it's cheap they and when the premiums
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are low, they like to buy more when the price shoots up.
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So that would lead me to believe that those four and 100 people
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would even maybe be buying twice as much silver that we could
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have like an 8 time demand spike.
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When you think about what happened a year ago, when I know
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there was an explosion in demand, does that does my, does
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my theory hold any water whatsoever?
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Yeah, I mean I I think so there are look when you take, when you
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take the amount of people, let me straighten this.
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When you talk about the the number of people investing in in
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gold and silver in this country. Ron, you know the the numbers
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that my buddy Rick rule talks about is 1/2 of 1%.
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That would be the entire allocation for from Joe and
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Jane. Six pack to the Harvard.
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Endowment fund and everything in between.
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The average mean or the mean of the past 40 years is 2 1/2%.
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And so using your numbers, you know where you know people end
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up increasing the number of people who are interested in and
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even increasing the amount of silver they buy when premiums
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are low. You know, I I I think you could
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say if all we ever do is just return to the mean or the
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average, you're looking at A5 fold increase.
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People are waking up, but I find us in the eye of the hurricane
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right now. And you know, the people who
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have been buying silver, a lot of them understand what's
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happening and some bought. It for the wrong reasons.
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And I I think we'll end up talking about that today because
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I think they bought it to get wealthy.
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Silver is wealth and it's been wealth through, you know, 5000
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years worth of history and and world wars and hyperinflation,
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Great Depression and everything the world's ever tossed at it.
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But yeah, I do envision a period of time where look.
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This whole school. Of investing this wave theory,
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if you will, human emotions. Elliott wave quadratic wave.
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I think you will see a period of time, whether it be another
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banking crisis or another silver squeeze or whatever it is that
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triggers an awakening. I think we'll see this number
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grow exponentially. I think we'll see the number of
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people who are interested in metals grow exponential because
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most of the asset classes that that that people find themselves
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in traditionally right now have been distorted through a decade
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plus of suppressed interest rate and easy money.
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And the only asset classes that have had the opposite effect
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have been precious metals. And that is, in my mind, a much
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deeper discussion, one that centers around gold and silver
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really, you know, being the, the antithesis of the system.
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It's the emperor doesn't wear, isn't wearing any clothing type
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of thing. It's peeking behind the curtain
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and seeing the Wizard of Oz is just a frail old man.
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So you. Have to hold.
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Down gold and silver. They're not commodities.
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What they? Are is, is.
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You know, the the opposite of this Fiat based system.
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So look, the bottom line is simply this is that people would
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buy twice as much because they don't like low premiums.
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Fine, I agree with that. Buy twice as much when the
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premiums start to rise. This is why people, so few
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people ever really succeed in investing too, Ron, because they
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follow the herd rather than being the ones who should be
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buying right now when it's cheap, just like the central
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banks are doing. You know, the central banks have
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bought more gold and silver than any time in history.
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And so when you talk about, when you talk about, you know this
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this small group of people expanding as the price goes
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higher instead of doing it right now when they should, I believe
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that will happen. That's usually how it does.
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We, we added 14,000 clients in 45 days during Silicon Valley
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Bank and Signature Bank in March and April, which is unheard of.
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And that that was because people woke up to a reality that
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they're not paying attention to. And the people who have been
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paying attention to it, Yeah, you know when the price goes
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down for a large portion of them, the counter intuitive
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nature, it is a lot, it's a lot for them to handle and and a lot
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of people are are hanging on by a thread, not quite
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capitulating. Some do, but I I think as the
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price goes higher, it reinforces the mentality and the decision
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making. People had to go there in the
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1st place. So they're going to double down.
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They're going to add more because yeah, I was right.
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It's getting worse. It's scary, but a whole another
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group of people will jump on board because they just are
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waking up to an alternative to a system that's in its dying
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breaths and they never even looked around to find that there
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were other places to put their money.
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So I don't know if that's exactly the answer you're
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looking for, but I do believe that as the price goes higher
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instead of lower when everyone should be buying, that's how
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successful investors do business like Stanley Druckenmiller who
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just went into to mining shares into physicals and sold AI.
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You know these people are are sitting on the sidelines or
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doing other things. And when it becomes obvious that
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prices and momentum are moving in the other direction, that's
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typically when you would expect to see much greater
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participation. And yeah, I think very quickly
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it will overwhelm the physical market.
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It won't take, but just returning to 2 1/2% allocation
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to people's portfolios, which really is that's half of what
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traditional financial advisor would say 5%, which I think is
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ridiculously low. But even a 2 1/2% allocation
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would be a 5 fold increase in demand in an industry that would
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not be able to handle that for more than a few days and
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everything would just be blown up.
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Yeah. And it seems like like you
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mentioned when the Silicon Valley Bank situation occurred,
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like like the, the, the retail physical silver and gold market
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can't handle, you know it doesn't, it's a fragile, it's a
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fragile market and that it doesn't take a lot of people
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coming in for it to get overwhelmed and for it to become
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difficult to find silver and gold.
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And you know, you mentioned Rick Rule, I've heard him use this
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example many times of, you know, your standard individual, if
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they go into the grocery store and they usually buy tuna fish
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and tuna fish is on, cans of tuna are on sale for half off,
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they'll probably buy a couple extra cans of tuna because it's
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a great sale. But silver investors are the
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exact opposite. And I think right now we're in a
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situation where by many metrics silver on a per oz basis is, is
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relatively cheap and the premiums are low, but people
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just don't don't want to buy if you're.
8:40
Looking to buy gold, silver, or platinum?
8:43
Do yourself a favor and check out PIM Bex, the online precious
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metals bullion dealer and sponsor of Ron's Basement.
8:51
I was a happy customer before they offered to support the
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channel. You'll find they have the best
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prices, quality and service. I think Pembex is best and you
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will too. And be sure to tell him that
9:04
you're from Ron's basement. It is true, and and I think that
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it's strange that way, but you know, silver to me exhibits
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asymmetrical risk reward right now, where it has the lowest
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downside I've ever seen in my career yet absolutely the best
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upside. And this is exactly the time to
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be buying it. And I don't think people quite
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understand that. And and yeah, you're right, you
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go into a grocery store and you don't say, damn it, you know,
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what I wanted to buy is on sale for half off.
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But you know, buying tuna fish isn't an emotional decision
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buying. Gold and silver.
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Are because it it for many people is is taking a step out
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of the mainstream into what is a lonely existence.
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You're taking accountability for yourself.
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The people who do this who own metals are are free thinkers.
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They're not being told by their advisors to do this.
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They're doing this, you know, on their own accord and and I think
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that's that's, you know, part of the interesting thing about it
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is, is that that's why so few people actually succeed in
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investing because they follow. The herd they don't buy.
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When it's cheap and they buy when it's expensive, you're
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supposed to buy when it's cheap. Understanding the fundamentals.
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And so, yeah, that's exactly what this is.
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But it becomes a whole lot easier for, you know, I think
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for when you talk about buying it at these levels.
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There are so many reasons why I think the smart people
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understand this. I mean, let's just simply say
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that in the last week we've seen five and a half million oz taken
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off of Comex and you know, 350 million ounces in the last 2 1/2
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years. That it, it's.
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It's a situation where the big money like India who's imported
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almost 400 million ounces in the last two years, they understand
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this and they buy when others aren't.
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They use misdirection of rhetoric and price and leverage
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futures prices to to reposition. That's how you succeed.
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You buy when it's cheap and and if you buy silver and gold less
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to get wealthy and more because it is wealth when you realize
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how sick the system truly is, then you're not as upset when
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you see these pull backs. You understand.
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Well hell, it's a subsidy. I might as well double up on my
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tuna fish. Same thing.
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But yeah I I think it it's the opposite of the way it should
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be. But you know what?
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The truth is Buying low is hard and selling high might even be
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higher. It it takes discipline and and
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and a path and a plan. Not something you can usually do
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just off the seat of your pants unless you have a plan because
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emotions come into play too much.
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Well and I think, you know I've, I've read a lot about successful
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investing and trading over the years.
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It's it's a situation where you have to do the opposite of what
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your emotions are telling you and that's very difficult for
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for anybody to do to to remove the emotion from the from the
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decision. You know, you talked about
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Silver as wealth and you know I have a one ounce silver around
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here and you know that is wealth, right?
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That that is a, you know, another YouTube friend of mine,
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bald guy, money, we were talking once and he came up with this
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concept like it's a battery that stores value.
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It is wealth this this one ounce of silver, whether I was holding
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it in my hand 500 years ago or likely 55 or even 500 years from
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now, will be wealth. I mean when I hold this in my
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hand, whether the price measured in dollars is is $20 per oz or
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$50 per oz it makes really makes no difference.
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This this is a is something that I can use at its core to harvest
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value from from something else in the future.
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Yeah, that's exactly it. And they're every single
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currency that's ever existed since the beginning of time has
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failed. They all returned to their
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intrinsic value of 0. And there are very few things
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that not only have lasted the test of time, but as is the case
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with silver, is an asset that is not simultaneously someone
13:08
else's liability. It's in your hand right now, in
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your basement. It's yours have no counterparty
13:14
risk in, in that. And when you talk about most
13:17
assets and and most stores of value, they they have
13:20
counterparty liability, counterparty risk.
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And in the environment we are heading into, I believe that
13:26
will be a very dirty phrase, a dirty set of words is
13:29
counterparty risk because that's you know that's how over
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leveraged and undercapitalized the system is.
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So getting away from that systemic risk of the banking
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sector of of the markets or the bond market or or even the US
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government and having something in your possession that that is
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has been agreed upon by all of human civilization since the
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dawn of time has been Well, well in this environment we're in.
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I'll. I'll bet on that then on the
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promises of. A of a deal A.
14:01
Broken. And you know, literally a
14:05
government that's on the verge of of default.
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So maybe not really default, but look.
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We're at almost 130% debt to GDP.
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There's never been a country that crossed that line.
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I wonder if maybe this sounds better.
14:17
If you couldn't hear me real good, sorry about that.
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But there's never been a there's never been a country that has
14:22
crossed that line that didn't outright either default or
14:25
hyperinflate and one or the other.
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So, which is basically the same thing.
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So yeah, I I I think that there's a lot to be said and
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I've been on with the bald money guy before.
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He's a smart guy. It's true it it is wealth that
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has lasted the test of time and has been agreed upon as wealth.
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And it also happens to have a lot of utility in industrial
14:45
applications and military applications.
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And so it's very unique in that it has duality in demand where
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it's not just a monetary asset, it has a lot of utility as well.
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It's a very, very important. Asset class and.
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You know, and to boot, you have no counterparty liability when
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it's in your own possession. Yeah.
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You know, when I when I think about the the Comex, you
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mentioned that the other day, I'm not a big, you know, reader
15:13
of the Comex reports, but I dug in and found I think it was as
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of last Friday, they had 42,000,000 ounces in their
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registered category, which means 42,000,000 ounces to back up all
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the paper silver futures contracts that are being sold.
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That was less than a billion dollars worth of silver.
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And it just blew me away to think that the entire, you know,
15:41
inventory that the Comex has could be bought for less than $1
15:45
billion. When you look at and you
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mentioned this earlier in the conference, like just you know,
15:49
the size of the S&P 500, the size of some of the wealth that
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individuals have. I mean Elon Musk could buy all
15:57
the silver on the Comex. And you know when you talk about
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the price on the Comex, which whatever today, right now as
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we're recording this, it's probably 22502270 per oz.
16:10
I just wonder, you know, if that price is really accurate, then
16:15
why if we had a deficit for the last number of years, such a
16:19
huge deficit according to the Silver Institute, like if the
16:22
market were functioning properly, you would think that
16:26
in a normal functioning market, if the price is correct that
16:30
supply and demand would find an equilibrium.
16:33
But instead we're in the situation where again as you
16:36
mentioned earlier, I think over the last two or three years
16:39
we've had 400 million oz drained from the COMEX and the LBMAI
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mean, do you think, do you think that we're we're, I mean that
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can only go on for so long, right?
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It almost feels like they've been kind of plugging the gap
16:53
with allowing inventory to be taken off the Comex and the
16:56
album. At some point that that comes to
16:59
an end, I would think. First, Mining Gold is a
17:02
development company advancing two of the largest gold projects
17:06
in Canada, Spring Pole in Ontario and Duparque located in
17:11
Quebec. Each already has 5 million
17:14
ounces of gold reserves, but exploration initiatives are
17:18
underway at both projects to find even more gold.
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First, mining is well financed, has zero debt and owns an
17:27
interest in four additional Canadian Gold development
17:30
projects. I mean, yeah, if if the market
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was function, if it was a free market, then there would be a
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supply demand balance price would be reflective of of that.
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But you have 1700 and almost 1800% rehypothecation in in the
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registered category, meaning that each contract is 5000
17:51
ounces. In essence, 18 people hold the
17:53
same contract and if everyone stood for delivery, 17 would get
17:57
cash settled, the whole market would implode.
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And you know, so it's also a very skewed mining ratio.
18:04
You know that the price is 90 to one, but it's coming out of the
18:06
ground at 7:00 to 1:00. Why are they holding it down?
18:09
And I think one of the elephants in the room that not enough
18:12
people talk about, and I'll, I'll give the pickaxe credit,
18:16
they they, they wrote a hell of a report.
18:18
You know, I've been saying for years that that there's a lot of
18:21
silver in in high tech weaponry. I I've been saying in many
18:25
podcasts for years that there's 500 ounces of silver in the tip
18:28
of a Tomahawk cruise missile. Well, you know, I was speaking
18:31
in Vancouver just a few weeks ago when a man came up to me and
18:34
he said, you know, I listened to your speech last year and I
18:37
heard what you said. And I just want you to know I
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work for the Department of Defense and I'm a, I'm a
18:42
contractor and what I'm telling you is declassified.
18:45
But you know, I worked on the Patriot missile program and I
18:48
wasn't sure when you said it last year, but you're right.
18:50
There's between 14 and 15 kilograms of silver in the tip
18:54
of a Patriot, a Tomahawk cruise missile rather.
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And and you know and and if you think about it, that's just one
19:01
high tech weapon and you have aerospace, you got all sorts of
19:04
different missiles and you got all sorts of things that need
19:08
silver. And yet the Silver Institute as
19:10
you mentioned doesn't even talk about military usage in their
19:14
supply demand numbers. It's very interesting.
19:16
And then you take a step back and you look at all the wars
19:19
that were involved in and we're bombing two countries right now
19:22
and we're involved in wars all around the world.
19:24
And if we're not directly involved, it seems that the
19:26
companies that may manufacture these weapons are are selling
19:29
them around the globe and becoming very, very wealthy.
19:33
But what is the one thing that you need absolutely to make high
19:37
tech weaponry and and all of these very sophisticated
19:40
munitions, you need silver. So you better keep it down.
19:43
Well, how do you keep it down? You knock the price down.
19:45
You make it counter intuitive. You have four or five commercial
19:48
banks as stupid as a mud walls naked, shorting the price when
19:53
everything in the world tells you that the price should be
19:55
going higher. But what they didn't keep in
19:57
mind, what they didn't, I think, factor in when they started
20:01
doing this years ago was that countries would become wealthy
20:04
and industrialized like China and India, and it'll stand for
20:07
delivery. And that's what's happening.
20:09
And that's why we're seeing, you know, guys like Bill Holter, you
20:13
mentioned to me offline, who said that much silver has been
20:16
drained from COMEX. It has.
20:18
And three 350 million in the last two years been and India
20:21
has imported 400 million and that we know of and China is
20:25
massively accumulating it. So when you talk about the need
20:29
for silver as not just an industrial metal in green and
20:31
digital applications, not just a monetary metal that has been
20:35
viewed as money for 5000 years, but as a strategic metal.
20:38
Unfortunately in warfare there is a, there is AI guess you
20:45
could say a smoking gun, no pun intended as to why these you
20:51
know, even when in in the midst of you know several years of a
20:55
structural deficit that the price is doing what it's doing.
20:58
And I I think that that has a lot to do with it, this, this
21:02
need for silver and high tech weaponry.
21:04
Well, again, you know all manipulations have an end game
21:08
built into them and you can only manipulate a market for an
21:12
extended period of time by pushing into the direction that
21:14
it is going. And when countries like China
21:16
and India and and all of these these large institutions are
21:20
accumulating silver, the ability to continue to suppress it
21:24
through naked shorting will end very badly.
21:26
And I think that will happen at some point and who knows how far
21:29
away we are from it. But certainly when you realize,
21:33
and I don't know how many people know this, maybe you do, Ron,
21:36
but the Comac or the LBMA, which has seen massive amounts of
21:40
metal bleed off, you know, we've been hearing rumblings lately.
21:43
Well, they want a price, silver and gold contracts that are
21:47
traded on Shanghai in London. While right now silver in in
21:52
Shanghai is about two and a half $2.75 or more higher than in the
21:56
West on the London Metals Exchange of the Comex.
21:59
And gold's about 80 bucks higher.
22:01
And we hear now we hear rumbling that China wants to warehouse
22:05
metal held on the LBMA in China. Well, how could they do that?
22:09
I'll tell you how they can do that.
22:10
They own the LBMA. People don't really talk about
22:13
that, but they bought the LBMA a few years ago.
22:16
You see this progression? They do things slowly,
22:20
methodically, don't cut off your nose to spite your face.
22:24
Drain the coffers as methodically as you can and then
22:27
bang set it free after the arbitrage Where 2 1/2 or $2.75
22:34
premium to the western price is being offered to those
22:38
sophisticated enough to be able to buy it in London and New York
22:41
and and and deliver it in China. They ain't ever coming back.
22:46
And so this is a methodical process, this little by little
22:49
by little then all at once. I say it all the time,
22:52
logarithmic decay. You can use it in so many, so
22:55
many facets of the world we find ourselves in right now, and this
22:58
is no different. So they're playing chess, we're
23:01
playing checkers and we will wake up at a point in time and
23:05
silver will will have moon shotted and no one will know
23:09
what the hell happened. But guys like you and I who have
23:12
been talking about this forever will have a very good idea what
23:15
had happened and what it to me will ultimately transition is
23:18
the Comex and the LBMA will will no longer be beholden to a
23:22
western rehypothecated of almost 1800% system.
23:26
It will transition to some place like Shanghai which is largely
23:31
cash and carry a reflection of what the price should be in
23:34
right now. They're telling you it should at
23:36
least be almost $3 higher than the the make believe western
23:39
price and we all know that's even way too cheap.
23:42
If they were smart, they'd crank it up even higher.
23:44
But is that smart that's cutting off your nose.
23:47
Now everyone will grab and say well something's not right here
23:50
and but if you do it just enough, just enough to
23:53
incentivize these traders to arbitrage, it's it's really I
23:56
think and you look at how much silver's coming off in gold and
23:59
rare earths and base metals and all of this stuff coming off the
24:03
exchanges. They'll continue to do this
24:05
until no one is foolish enough to let it go at make believe
24:07
prices. And then they switched the flip
24:10
flip the switch rather. And now you see a new price
24:13
setting mechanism for the rest of the world by a country and
24:18
countries that have been the ones understanding it,
24:21
accumulating it and producing it for for years.
24:24
Yeah, Yeah. And and to and to exacerbate the
24:27
situation even more, I think it's important to talk about
24:31
also that because of this artificially low price I have
24:35
the, you know, I'm fortunate to get to talk to a number of the
24:37
CE OS in the silver mining industry, those that are still
24:41
left, I mean, there's like no money in silver mining.
24:45
You can't make any profit in silver mining and there's very
24:48
few companies involved in exploring for silver and it
24:53
seems like even fewer in developing silver mines.
24:56
Like the pipeline for future silver supply is not robust,
25:01
right. And it and it doesn't take talk
25:03
about flipping switches. If you want to flip a switch to
25:07
to start up a silver mine, it takes about 10 years to get that
25:10
switch all the way up. I mean, we could potentially be
25:15
in a situation a year 2 years from now whenever all this
25:19
starts to play out, where there there really is a shortage of
25:22
silver and it could be a prolonged period before these
25:26
miners even have a chance of catching up.
25:29
Yeah. And that's exactly right.
25:31
I mean the, the exploratory silver mining has been left for
25:34
dead and even the the majors have been hit very hard lately.
25:38
So yeah, the the mining, the mining and maybe This is why
25:41
Stanley Druckenmiller buy low, sell high is selling tech and
25:45
buying mining shares. Oh wow, that's revolutionary.
25:49
What you just explained is asymmetrical risk reward is what
25:52
can I invest in that has the lowest downside and the best
25:55
upside. I mean I don't know if I've ever
25:56
seen an asset quite like silver which is decreasing in supply
26:01
globally in terms of mining supply.
26:04
What's in the ground that the gold, silver ratio, mining ratio
26:08
and as an acceleration in in demand both militarily and and
26:14
industrially, green and digital and and monetarily.
26:17
And this, this duality and demand.
26:21
It's not just one demand source for a commodity, it's several.
26:24
Coupled with its diminishing supply and it's suppression
26:28
where you know several years of structural supply deficit issues
26:34
in silver and at the same time you have a lot of the
26:36
speculators in this market who are getting frustrated and
26:39
capitulating. Some are.
26:41
And so this big, big rise that everyone expected that attracted
26:45
in the 1st place, if you believe in contrarian indicators, it's
26:48
got to be getting imminently closer.
26:50
And then you see all of the stuff draining off of COMEX and
26:53
the LBMA and and the Shanghai Gold Exchange.
26:56
And yeah, I mean, to me it it's it's something people should
27:00
stop worrying about in terms of today and tomorrow and just
27:03
realize logically, mathematically, it's pretty damn
27:07
sure, I'm pretty damn sure that we will wake up one day and see
27:10
prices higher than people can really even imagine.
27:13
It takes patience and a lot of people don't have patience.
27:16
But if the underlying thesis which you so brilliantly just
27:21
provided for us, if you still believe in that thesis, right,
27:25
rising demand, decreasing supply, if the story is still
27:30
there, then you wait and then maybe if you're really smart
27:33
you, you know you, you get yourself some more, some more
27:37
Silver, what about, I'm going to ask you to shift gears a little
27:41
bit to gold. Obviously we've had this massive
27:44
amount of buying by central banks around the world and I was
27:49
had a chat with Andrew McGuire a couple weeks ago and he brought
27:52
up he brought up this prospect of a you know we we heard all
27:57
this noise about a bricks gold backed currency last summer
28:01
which didn't come to fruition, still could come to fruition but
28:05
do we really need that I mean could the could the Chinese and
28:09
the Russians actually and and the rest of the bricks and I can
28:13
name all ten of them if you'd like me to the plus the 30 that
28:16
are thinking of joining could they could they decide at some
28:20
point to to flip a switch I mean and it I think could be a fairly
28:24
easy switch for them to flip and have gold revalued and we know
28:29
what that would obviously do for silver as well.
28:32
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28:36
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term, sustainable production of in demand precious and base
29:08
metals. It's not.
29:09
So far fetched. That's what he did.
29:11
You know that's what Roosevelt did in 33 reliquified the
29:15
system. And if it's interesting if you
29:17
look at every central bank balance sheet, the, the account
29:21
on which they gold, gold is called the gold revaluation
29:23
account. You can't make it up.
29:24
That's what it's held in on their balance sheets.
29:27
And so, yes, in, in and and they're the ones, you know,
29:31
Andrew. Will tell you that.
29:33
There are a lot of people who will say they have between 30
29:35
and 40,000 metric tons and and Alistair McLeod will tell you
29:39
40,000 where you know 20,000 plus by the state and 18 to
29:43
19,000 by the people. And they're encouraging their
29:46
people and have for years to accumulate it.
29:48
And so yes, if they could very quickly revalue it to a much
29:53
higher level get their balance sheet in order reliquify their
29:56
country which is experiencing problems as as everyone knows.
30:00
But because they own so much in the way of of the metal and and
30:04
and commodities and have relationships across the globe
30:06
for future production and whatnot.
30:09
Yeah, I think that's that's very, very, very likely actually
30:13
what will happen. I I think indeed and look you
30:16
know and I think that what James Rickards, his mistake was saying
30:21
that it was going to happen in August at the meeting that being
30:23
the common settlement currency backed by gold.
30:26
A lot of people believe that it will still happen.
30:29
I do in some form. You know the finance minister
30:32
from Russia has told us that this was going to happen
30:34
forever. Gold is a Tier 1 reserve asset.
30:36
But even if they don't, right, what we've been seeing is
30:40
settlement in all of these local currencies trading outside the
30:44
dollar where 20% of oil sales this year, last year we're we're
30:48
not in the dollar. That's that's not something
30:50
we're used to seeing. And so when you talk about
30:53
settlement in all, all throughout you know Russia and
30:57
and Iran are not taking dollars anymore.
30:59
United Bear Emirates said they're not going to take
31:01
dollars anymore. All of these countries are
31:03
trading with one another. India and Saudi Arabia and
31:06
Russia and China, they're all in Iran, they're all trading in
31:09
local currencies. And what the Petro dollar is, is
31:12
not just being valued in dollars.
31:15
That's, that's part of it. The other part is taking the
31:18
proceeds, the the reserves, the excess and investing it in U.S.
31:21
Treasuries. Well, the treasury market,
31:23
that's not what they're doing. They're selling treasuries.
31:26
And if you look at what gold has done since 2000, it's
31:29
appreciated by 7.8% per year. That's more than the 7%
31:34
appreciation per year on the S&P and has destroyed the bond
31:38
market And and gold, as we were saying with your silver has no
31:41
counterparty risk. So these countries who have been
31:44
accumulating all the gold, the central banks buying more than
31:47
ever at the same time they're shedding Treasuries, China's
31:49
down to like their lowest level in 1718 years, as are most of
31:53
the BRICS countries, as are a lot of the central banks around
31:56
the world. They're shedding treasuries and
31:58
buying gold, which has much less risk in terms of, you know,
32:02
interest rate risk and inflation risk and default risk.
32:06
It has no counterparty liability and it's way outperformed the
32:09
bond market. So when you talk about all this
32:11
settlement not being done in dollars and and much less demand
32:15
for U.S. Treasuries at a period of time
32:18
where we have we have a government addicted to spending,
32:21
where's it all going to come from?
32:23
How about the $8 trillion just in two year treasuries that are
32:26
rolling over this year that need to be paid for.
32:28
How about the almost 10 trillion in debt we have to issue this
32:31
year just to pay for what we've already promised on top of the
32:35
$1.7 trillion deficit on top of government says they're going to
32:39
lower rates. No, no, no, no, they're not.
32:41
Because who's going to buy those bonds?
32:42
It makes it that much less attractive.
32:44
You have to borrow more just to pay for what you already
32:47
borrowed. It is a very, very, very bad
32:49
situation. So the bond market which is
32:52
cratering, you could argue the worst performance in, I don't
32:55
know, 40-5 years where the 10 year treasury had greater
32:59
volatility than the gold market. For the first time in 45 years
33:03
you have the central banks trading with other currencies,
33:07
not the dollar for energy or for whatever it may be and then
33:11
taking the reserves that they have and buying gold with it.
33:15
Just like on the Shanghai gold exchange, you can trade with
33:17
China. If you're Iran, sell your oil to
33:20
China for the yuan and which is immediately convertible into
33:24
gold on the Shanghai Gold exchange and they are using gold
33:27
in my opinion as their reserve. So all of the settlement not
33:31
done in dollars chips away at the reserve status of the
33:34
dollar. And now you see less interest in
33:36
the US Treasury market which you know Ron think about it in a
33:39
historical perspective of government's debt has a very
33:42
small footprint in terms of historical significance of being
33:45
an asset. Well for a long time now the
33:48
last 50 years of U.S. Treasury has been the most
33:51
liquid sought after asset. But those things, things are
33:54
changing. And now these governments are, I
33:56
think, finding the performance and the safety and the lack of
34:00
counterparty liability more preferential than holding U.S.
34:03
Treasuries. So so do you see a situation
34:07
where gold is rising in importance in the BRICS
34:11
countries in terms of not necessarily officially or
34:17
directly backing their currencies but in terms of their
34:22
trust amongst one another that that it it.
34:26
What I sense is that it feels like gold is rising in terms of
34:30
its level of importance. And my question for you then
34:33
would be this, do you do you envision a day like, like they
34:36
want gold, they don't want U.S. Treasuries.
34:39
Do you? Could you see a day where we
34:41
have the BRICS countries, all ten of them now, maybe 20 at
34:45
some point in the future with a with a, you know, a a majority
34:49
of the world's economy under their belts and, you know, huge
34:53
military power. And in the United States, let's
34:56
say 7 years from now, you know, saying to China, hey, we want to
35:00
buy some, we need some toaster ovens that we can sell at our
35:03
Walmarts. And we we need to buy, we want
35:05
to trade with you and them saying well that's great, but
35:09
kind of similar to what the United States did in World War
35:12
2. But now the the shoes on the
35:14
other foot. The country says the United
35:16
States, We really don't want your dollars, We want gold.
35:22
Yeah, I mean, I think that's exactly it.
35:23
I mean, look, there's no question that the US dollar
35:27
still maintain supremacy, but I believe it's lost.
35:30
It's a Gemini and and just I think what you will see is death
35:35
by 1000 cuts. It won't happen overnight, but
35:37
there will come a point where at some point they just say, yeah,
35:40
no thanks, we don't want dollars anymore, but we're happy to take
35:43
gold if you'd like or we're happy to take this particular
35:46
currency. But yeah, I mean that that's
35:48
just it. I think that.
35:51
I mean, aren't aren't they doing that now Because if they're, if
35:54
they're net sellers of treasuries to a certain degree,
35:57
isn't that essentially them saying, well, we don't really
36:00
want to be in dollars, right. I mean, well, if you.
36:04
Have as money as the Chinese do, you know, call it 3 trillion in
36:07
dollars in Treasuries. You can't dump it here.
36:09
Again, they're methodical and plotted.
36:11
They think they're doing things to not cut off their nose to
36:15
spite their face. But you know, the bottom line is
36:19
gold price in U.S. dollars will continue to rise for the simple
36:22
reason that, you know, the US will continue to to base its
36:26
currency in real terms. They'll continue to print.
36:28
And if no one is buying our treasuries, then you have no
36:33
choice but to find the buyer of last resort.
36:36
And they want us to believe that's the Cayman Islands right
36:38
now. But you know, it's probably the
36:40
Federal Reserve acting as a shell company in the Cayman
36:43
Islands. It's it's it's monetization of
36:45
the debt, it's the road that leads to hyperinflation.
36:47
And that's really what I think a lot of these countries realize
36:51
is that where we are, we we there's really we can't raise
36:54
rates much above 5% or we blow up the system.
36:58
If we choose the latter and we inflate, well ultimately it will
37:02
lead to much higher interest rates.
37:03
Both roads lead to the same place.
37:06
And This is why I've talked a lot about you know how we've
37:08
incentivized a lot of this, this destruction around the world
37:12
through weaponizing the dollar and signing executive order to
37:14
go green, incentivizing these BRICS countries to find
37:17
alternatives. And if indeed you do get not
37:20
just UAE and Russia and Iran to say we're not taking dollars
37:23
anymore, but all of OPEC and and and and say hey, you know you
37:27
guys are going green, we appreciate it.
37:29
We're going a different direction and when that the
37:32
event happens where the world dumps dollars which would create
37:36
an inflationary event to say the least here as everyone dumps
37:38
dollars hitting our shores. Yeah.
37:42
Those that interest rate spike, which is done by the market and
37:45
not by the the Fed chair, enables us to find a villain and
37:49
to point to the, you know, they did this to us and and then we
37:52
go down the road of, well, what do the banks look like?
37:55
Yeah, rates go up. They're all dead.
37:57
OK, well, how about stocks, bonds and real estate?
37:59
Well, if rates go way up, yeah, they're all dead.
38:01
How about the dollar? Well, it's being globally
38:02
dumped. There's your Klaus Schwab
38:04
moment. Everything is is in essence,
38:08
inversely correlated to that moment.
38:10
And the benefit to the US would be if you realize you're so far
38:13
down the rabbit hole there's no way out other than the default
38:17
or inflate. As Richard Russell always said
38:19
15 years ago he said that was their only way out.
38:22
And then yeah, you have a villain now to point to, to
38:24
usher in a new system. But anyway you look at it when
38:27
you see the most knowledgeable investors on the planet, forget
38:30
about how well funded they are. The central banks know the
38:33
playbook and the fact that they're buying the amount that
38:35
they are to me is is concerning. It should be to everyone out
38:39
there. The only problem is that you
38:41
know media doesn't tell us what's really happening.
38:43
You got to listen to people like you and I.
38:45
And and our reach only goes so far that we we've added last
38:52
week I was doing some math and we added 47 billion in debt one
38:57
day alone last week. The debt is up $3 trillion since
39:02
the debt crisis ceiling and and we've added about 10 billion a
39:05
day per day since October 1st and and for the next year plus
39:10
the debt ceiling is uncapped. And so when you talk about, you
39:14
know, a, a situation where from in one year, from from 2023 to
39:20
2024, January to January, we added $2.4 trillion, it took 230
39:25
years to do that. The first time we're paying a
39:27
trillion dollars in interest payments a trillion seconds ago
39:30
was 31,688 years ago. And for people to think that
39:34
this won't have consequences at some point and a lot of the
39:38
world sees it already and is taking the active steps to do
39:41
something about it slowly and methodically.
39:43
Everyone here expects things to happen so fast that if it
39:46
doesn't happen that's a nothing burger and they just keep on
39:48
walking Well they're the ones that will be run over by it when
39:51
it does happen on a Monday morning and I don't know how it
39:54
looks and I you know I'm sure the US will will be will put up
39:58
quite a fight but then you look at what's happening here at home
40:02
and see the all of the lack of unity and.
40:05
And all of the craziness and the lawlessness and the problems
40:08
with, you know, the election and the border and all of are we
40:11
really in a position to stand up and push back?
40:13
I don't know. I hope we are.
40:14
But we're record indebted have the lowest level of savings ever
40:18
and we're we've lost a lot of the good graces of the world who
40:22
looked at this as a as a beacon of justice which you know our
40:26
two tier justice system I think has people questioning that and
40:29
and as a place to aspire to be. And you look at our inner cities
40:32
and how woke everything has become.
40:34
And the lack of respect for the nuclear family and for for
40:37
police or principle or for any type of authority.
40:41
That I'm not talking to the authority that is here to to
40:45
hold you down but the authority that we all respected as young
40:49
kids when you and I grow up grew up.
40:51
Yes Sir. Yes ma'am.
40:52
Whatever that stuff's gone. And when you beat up a police
40:54
officer in broad daylight in Manhattan and get away.
40:57
I mean the whole thing is just upside down.
41:00
So are we in a position to push back?
41:02
I don't know. I hope we are.
41:04
But these are the reasons why you own gold and silver.
41:06
It is not to get wealthy it is wealth.
41:08
And look at the biggest money in the world.
41:10
They see something's coming and if whether or not you want to
41:13
believe it by the by the counter intuitive price action, just
41:16
look at the actions that they are doing that speak much louder
41:19
than the words and the and the the, you know, the the rhetoric
41:24
that's leading people off the trail.
41:27
Thank you, Andy. It's always enlightening.
41:31
And I learn every time I talk to you.
41:35
One of the things you brought up earlier that I'd never thought
41:39
of when it comes to revaluing gold was that that ex president
41:43
of ours, Roosevelt, I think he's above your right shoulder.
41:47
That's essentially what he did, right?
41:49
I mean he he he was, he was he was constrained by the price of
41:54
gold because the dollar was backed by gold.
41:57
So he got all the gold and then revalued.
42:00
Essentially allowed him to to in in in the in his form in that
42:04
time print some extra money so. He paid everyone $20 and 63, or
42:10
something like 2056 or 2067, and then revalued gold to $35.00 an
42:15
ounce. In other words, devalued the
42:17
dollar by 40%. And so anyone who had held gold
42:20
immediately made 40%. That's exactly what he did.
42:23
And and when you realize that every central bank on the planet
42:27
holds gold in what is called the gold revaluation account on
42:30
their balance sheet, you got to wonder, yeah, the head of the
42:32
Dutch National Bank say the exact same thing.
42:34
Let's do this. Let's revalue gold so that all
42:37
of our debt becomes on, you know, equal with our assets, and
42:41
we'll reliquify the system. And believe me, they see it and
42:45
maybe that's why they're all buying it.
42:46
Who knows? But all I can tell you is that
42:49
this is one of those times, Ron, where if you're not a
42:51
contrarian, you're doomed to be a victim in my opinion.
42:54
And if you hold all your money and dollars, you're destined to
42:56
go broke. And you can see the biggest
42:58
money in the world is doing exactly the opposite of just
43:01
that. Yeah, it's heartening for me to
43:06
to to realize that like you said the silver that I own the in in
43:11
for me some precious metal mining stocks like they are real
43:15
assets. And when I think you know it, it
43:19
and you mentioned this earlier about why people buy silver.
43:22
I tell people that when I buy silver I I buy silver with money
43:27
that I I think I'll never need that.
43:30
It's a generational type investment when I think I really
43:33
do, I mean and that just feels like you know I have twin 11
43:36
year old daughters and and whatever precious metals I I may
43:40
have, I think about it in terms of them and in terms of
43:44
grandchildren and and and if I think of if I think if I if I
43:48
contrast that with money in the bank, there's no comparison, you
43:53
know. Yeah, well, and and that's,
43:55
that's the way to look at it. Money that you hope you never
43:57
need to use. And it's not just for an
44:00
emergency like most people think.
44:01
Well, right. But it could be a hell of an
44:03
opportunity when the dust settles.
44:05
And if not, that's right, you leave a legacy that long after
44:09
you know these are hanging from A-frame and a Smithsonian as an
44:14
example of what was it will still be considered wealth the
44:17
way it was 5000 years ago. You leave a legacy where you can
44:20
rest assured that you know at least it will be worth
44:23
something. And I think that is the right
44:25
way to look at your your metals holdings and if you don't buy it
44:28
to get wealthy realizing it is wealth that will help you leave
44:31
a legacy that will prepare you for what's coming, that will
44:34
help you take advantage of distortions or opportunities or
44:38
or problems. That's the way to look at it.
44:41
And then when it does go on sale you know you're you're much
44:46
happier to to go buy that even double up on that tuna fish
44:49
because it did go on sale and it's not crap.
44:52
I now I you know the money that I thought I was going to buy my
44:55
new Lambo with, well, it just crashed.
44:57
So in other words, the point of it is is look at it in the
45:00
proper context like that and it takes on a whole new
45:02
significance of importance and easy.
45:05
Err To deal with the counter intuitive price action and and
45:08
all of the ups and downs. But rest assured that will end
45:12
too and you can only manipulate for an extended period of time
45:16
by push it in the direction it's going in the world's buying it.
45:19
This is a fool's game. It's as dumb as a mud wall to be
45:22
naked short in this market as we continue down this path.
45:26
So I think you'll see the big money the commercial banks
45:28
they'll at some point like right now.
45:31
I mean maybe this is who knows right now the the managed money
45:34
is short right And the commercial banks aren't well
45:37
when the switch gets flipped I guarantee you it'll be the
45:41
managed money who left are left holding the bag and it'll put
45:43
them out of business. These hedge funds who go short
45:46
naked short. Good luck trying to find silver
45:48
when the price starts to go moon shot and and you can't find it
45:52
and and then you can lose everything and and that's the
45:55
the nature of being make it short the the losses are
45:57
unlimited and I think that's when it will happen when the
46:01
commercial banks are on the other side as they are right
46:03
now. Now this has happened many times
46:05
before and but maybe one of these days they just let it run
46:10
instead of shorting a rising market like they normally do.
46:13
And they will catch a lot of these managed money traders in a
46:17
very bad place. And that's when you know things
46:19
have have changed, maybe for for good, at least for the period of
46:22
time. But I appreciate coming here,
46:25
Ron. I always enjoy coming to the
46:27
basement and you can invite me anytime and I only wish I could
46:30
be sitting next to you with a beer and and continue the
46:33
conversation. But maybe some other meantime.
46:36
I'll look forward to picking up where we left off not too far
46:40
down the road. Yeah.
46:41
Yeah well you're you're you're the CEO of Miles Franklin our
46:45
mutual friend Jake from Jake's custom parts refers to you as as
46:49
the time traveler. Yeah we love Jake's a good a
46:52
good man I think. I think I'm going to refer to
46:55
you today at least as the almost like the Michael Jordan of the
46:59
precious metals sector. But if people, if people you're
47:02
you are you are a leading figure in this factor and and and in
47:06
providing education and you do it in a way that I really
47:11
respect and that is that you you you kind of share your opinion
47:15
with people and I've heard you say this you encourage people
47:18
listen to other people come up with your own opinion but you
47:21
speak from your heart and you speak your truth and you know I
47:26
think I can say that I I do the same thing.
47:28
So I have the utmost of respect for you.
47:32
If people want to learn more about your company, do you want
47:35
to give Miles Franklin Go to our.
47:37
Website ofcoursemilesfranklin.com They
47:39
can send us an e-mail at info@milesfranklin.com.
47:42
I request a price sheet that will be much more competitive
47:45
than what we have on our website or anything that we've talked
47:47
about here. Ask questions precious metals
47:50
Iras or any of the topics that we discussed.
47:52
There's no obligation info@milesfranklin.com or a
47:55
question for me and we will reply with a price sheet or
47:59
answer your questions or I'll personally type out a response.
48:02
But the info milesfranklin.com and like I said Ron I love
48:06
coming coming by and I watch your stuff as well and and I and
48:10
I admire the way that you do it too.
48:12
You know I'm not the smartest guy in the room but I I do speak
48:16
from the heart and I I my perspective is from 34 years of
48:19
doing this. So, you know, I think, I think
48:23
that if if if you listen to all sorts of people, like you said,
48:27
not just myself, but lots of people, and then, you know, use
48:31
your own mind and come to a conclusion, taking
48:33
accountability is better than relying upon someone else to
48:36
manage your money. When you've worked your whole
48:38
life to to accumulate it, why, why not put a little bit of
48:43
effort into keeping it? And there's that old saying,
48:45
it's easier to make money than to keep it.
48:47
It's because we don't put the same effort into keeping it as
48:49
we do to making it. That's exactly why.
48:51
Yeah. Yeah, well Andy, I live in a
48:54
city that is definitely a premier vacation destination, So
48:59
when you come through town, make sure you stop by and we'll have
49:02
you in person here in the basement, OK?
49:05
I would love that. The same goes for you down in
49:07
southern Florida. Come on by, we'll play golf,
49:10
we'll go fishing, we'll have a beer, whatever.
49:13
They don't have basements here, so I can't bring you to the
49:16
basement, but I'll show you a good time nonetheless.
49:19
And Ron, I do appreciate it very much and I hope you and everyone
49:22
else out there has a great rest of your day and a great weekend.
49:25
Looking forward to it myself. Thanks, Andy.
49:28
See you, brother.