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🚨 Crucial Factors Driving Silver Price - Silver CEO Insights · SILVER / GOLD / $UFD Meme Coin Investing & Global Economics

0:00
I think there's a lot of indicators telling you that the
0:03
suppression of silver prices cannot last for much longer and
0:06
there has to be a new equilibrium price of which the
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market continues to function run. $30 silver, $4050 silver
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When will we see true price discovery for silver?
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Today, we're fortunate to be joined by Mr. John Lee.
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He's the CEO of Silver Elephant Mining.
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They have over 100 million ounces of silver in the ground
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in Bolivia. So to say that he doesn't have
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an interest in the silver price, I think would be an
0:43
understatement. John, welcome to Ron's Basement.
0:46
Yeah, I mean Ron, I've been in the silver industry for.
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I've been in the meadows and mining industry for more than 20
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years and stumbled out to silver.
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Stumbled out to silver was I'm to Vancouver in 2000 after some
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being semi retired from the Silicon Valley and my girlfriend
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was from Vancouver at the time. And then subscribe to the likes
1:07
of James Turk and Ted Butler and David Morgan of of whom I'm a
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very, very good friend of. And then the latter part, the
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latter part of 10 years from 2010 to 2020 I transitioned from
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being a full time investor in the junior mining space to
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running a silver elephant. And you know it's been a bit,
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it's been a wild ride, it's been 14 years.
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Elephant is I think one of the very few companies that has been
1:32
been surviving and not been writing checks to to to keep the
1:37
company afloat. It would be to throw a lot of
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thick and thin and Ron I I I'm a firm believer that the best is
1:43
yet to come and I I don't think we're gonna wait very long maybe
1:46
in the next couple of weeks we we can see some major we can see
1:51
some major spot works. Yeah.
1:53
And and on a, on a big picture level, there's just a huge
1:58
dislocation in the silver price when you look at the supply
2:02
factors which we have a decreasing supply of silver in
2:07
demand which is projected to continue upward, but has already
2:12
been continuing upward. What do you attribute this, this
2:16
mispricing and silver to any any factors that you that you think
2:20
are are are more important than others?
2:25
Ron, I've I've, I've been asked this question probably 30-50
2:30
hundred times and I on what the real reasoning is.
2:36
I don't think it's so much to do with the real supply and demand
2:41
of silver. And the reason I say that is
2:44
we're measuring silver with U.S. dollars and U.S. dollars is
2:49
being close to 100 U.S. dollars is an abstract concept.
2:54
It is being valued by a collective conscience of people
2:59
who believe what it is should be what it is.
3:03
So it is not so therefore you say hey silver is under value
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relative to what and and we're in a we're in.
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I'm getting a little philosophical about hopefully
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it's sort of a different flavor to to your audience.
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We are in a market of which I watch very closely all the
3:24
equity markets. I'm a charter financial analyst.
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I travel over 40 countries is the the count the, the process
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of price discovery has long been distorted and I'm not just
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talking in particular silver, there's the US dollars, there's
3:40
interest rates for example and there's other commodities and
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and I mean just take interest rates for example, right.
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Interest rate was 1% not only two years ago and now we're at
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5%. And if you talk about because of
3:55
inflation, we'll help you measure inflation in terms of
3:59
the oil price. Oil is $70.00 now, but back in
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2010 to 2020 oil averaged at around $70.00.
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The interest rate was very low. Going back to your questions is
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why is this location of of of of the fundamentals of silver price
4:17
measuring U.S. dollars? It is my firm belief that the
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the, the market particular silver is very, very heavily
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managed. And the reason for that is
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because all the different agendas 2030, the WEF, the
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runaway and the the sort of, you know, the US having to keep its
4:41
image as as being a superpower. There's a lot that means that
4:47
the price of real money has to be banished in gold and in
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silver and that's why you're seeing a tremendous amount of
4:54
volume and trading on the in the in the futures contract of which
4:58
the tail is wagging the dog. What I mean by that is the
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current silver price is not dictated by the true physical
5:06
demand but rather you have a lot of physical buyers and sellers
5:12
they don't have, they are mean. We're we're part of attributing
5:18
to this because if you look at the screen of what the price of
5:23
silver is and they take it as as the price for the transaction.
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So but eventually Ron, the the pendulum of the coil is going to
5:31
be sprung for low enough that there's just not going to be a
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lot of physical silver available to be had at these current
5:37
prices and that all the silver mining companies are mining
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silver at a loss. If you look at all the mining
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companies are trading at a decade, 2 decade low.
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So I think there's a lot of indicators telling you that the
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suppression of silver prices cannot last for much longer and
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there has to be a new equilibrium price of which the
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market continues to function run.
6:00
I don't it's it's not a very direct answer, but I'm just
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bringing up some of the trends of thought that I have because I
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don't have any any notes prepared for this for this call.
6:09
No and and but you bring up a great point #1.
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The quote UN quote price of silver that we've all been
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trained to look at is measured in U.S. dollars.
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And those U.S. dollars. I'm AUS citizen, I'm a patriotic
6:24
person. But the reality is the dollar is
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is really based on nothing. It's a competence game like you
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said and you know or a con game some people may say as well.
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And at some point the, you know, I I have twin 11 year old
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daughters. We go to water parks and there's
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these giant buckets that fill with water and eventually they
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tip over and all the water comes spilling out.
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At some point we reach this tipping point where, if I heard
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you correctly, the physical demand for the metal overwhelms
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the electronic paper market's ability to continue to
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manipulate the price and. And good example of that Ron is
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about 2018, 2017 ish of the Palladium runoff where Palladium
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went from $500 to $2500 in the spend of months.
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You know the price levels I have to sort of try to recollect, but
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it's that level of magnitude when people are going after
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physical silver, you're going to see some clear signs.
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You know people will be rating the ETFs clearing the bolts to
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get the to get the metal and you're also going to see very
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steady price increases that leading up to the run up.
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And irrespective of the action of the US dollar index which is
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used as a way to manage the metals prices and and and and
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and Ron, I think that we've seen the last few days as a very
7:55
clear signs. I'm I'm very cautiously and
8:00
optimistic and quite excited. Couldn't really withhold my
8:03
enthusiasm because the dollar has been going quite, quite
8:06
strong and been sideways to up. But the silver price is creeping
8:10
up in the last few days even on the days where the dollar index
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was up you know up to 0.5%. So that's telling me maybe
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there's always somebody in the gnome that some that some guys
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are front running what is to happen which I believe is going
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to be a a potential significant correction in the US dollars and
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and also a very strong physical demand from silver and gold
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because of this geopolitics and the and the broken down of the
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hegemony of of the US-led. I would use anymore and and they
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are they are big players that the billionaires and center
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billionaires are are in the central banks are really moving
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away from from your sell into the physical metals.
8:54
You know the store's been talked about wrong for a number of
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years. It's sometimes it's it's almost
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like when it really starts to happen you kind of question your
9:01
own beliefs and and and and you have your own doubts.
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I am, I I am all over in in December and the cocktails been
9:10
working overtime every day to try to get the put the lift back
9:14
below 2000. They weren't able to do that and
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on Tuesday you had a rollover of the of the gold price and that's
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why gold jumped on 2030 to 2050 and looks like it's going to run
9:24
away. There's just a lot of things
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happening. A a confluence of events, both
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physically physical demand, the timing with the Chinese New Year
9:32
coming and then and then in the next I would say before before
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May, certainly before summertime.
9:39
If you're looking to buy gold, silver, or platinum, do yourself
9:42
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9:46
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9:50
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9:53
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9:56
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10:00
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10:03
you're from Ron's basement. It's crazy.
10:05
I I, I have my notes here John and I'll read through these
10:08
quickly and get your and you've touched on some of these points
10:11
already. One thing that I think a lot of
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us in the silver community tend to forget about is that if Gold
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takes off and gold has closed above $2000 on a weekly basis
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for the last 10 weeks straight, if gold goes to $2500, silver
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will react in a much more dramatic fashion.
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And and when we look at the silver to gold ratio which
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recently has been as high as 90 to one, that indicates to us
10:39
that we are primed within the silver market for some potential
10:44
upswing. I heard recently someone say
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that 400 million ounces of silver in the last three years
10:54
have left the vaults at the Comex and basically the LBMA.
10:59
You know that there is this structural deficit within the
11:02
silver industry and it seems like everywhere we every, every
11:06
time I hear of anything that has to do with new technology,
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there's some type of relationship to silver.
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I know that even now with these hydrogen fuel cells, which are
11:17
starting to get a big amount of attention, there's this idea
11:20
that that Stamford and Toyota came up with a way to substitute
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silver for the platinum that's typically used.
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It just feels like everywhere you look there's a great setup.
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And I love you used one of my favorite words, John.
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Confluence, right? Like a confluence of factors are
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coming together of supportive factors.
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Whether you look at the fundamental supply demand,
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whether you look at like you said the the geopolitical
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situation in the world with the bricks like it's a confluence of
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factors that gosh, it's hard to imagine silver, sure, it could
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go down, we both know that. But it seems like the runway for
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price increases far outweighs any risk of potential downward
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price movement. We are.
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I I really. I don't think that a lot, Ron.
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I've appeared to Hunt as the interviews.
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If you think silver is low based on the go to silver ratio then
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the mining equity is the lowest point relative to silver.
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That just shows to you there's a very, very small, there's non
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existent the demand for silver and it's always one of the
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speculative demand that drives the the metal prices or drive
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any market for that matter. If you look at oil for example,
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you know really the negative, right?
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Like do people stop driving and and consuming the oil just
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because of the pandemic? No.
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And so I don't read too much about the industrial demand for
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silver and dictating the trend. It's always they are they are
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they're price takers. They're not the price setters
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it's the IT is the speculative demand that's going to drive
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because Ron, the higher the price go the more you buy
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whereas the industrial side the higher the price go they start
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looking for alternatives. Secondly Ron, I don't read a lot
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on the comics and the on the LBMA trays.
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You know I've been purely purely speculative with somebody with
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over 20 years of experience and and study these these trays,
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these balls are the volumes are negligent are not significant
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relative to the overall metals production.
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But secondly, I think it's it's 99% window dressing, Ron that
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means the the Ruckkefellas is taking some silver out of this
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bowl and give it to the Rochelles.
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And and if you are really a buyer true buyer like Eric
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Sprout or even say Warren Buffett or or or another
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billionaire say even say Elon Musk.
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If they were to place an order for 50 million ounces of silver
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in the futures market and demand delivery from from Comex instead
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of getting those silver out of the vaults commax vote you're
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going to get a call from the Fed and and and it's just not it is
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a window dressing exercise and and and that's that's like all
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that's why I'll be amazed members only and these goal it's
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my belief again all the goal from Switzerland refineries go
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directly to the to the to the to the to the boasting Switzerland
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owned by the Elise that's been running the world in the last
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203 hundred years. And the trays that you see the
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physical metal is just to demonstrate the existence of
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volume and metals changing hands to create that illusion that the
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that the change are functioning as they should.
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Now I want to go back to one one more point about the the the the
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gold and silver ratio. Again that just shows the very
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capped speculative interest in the silver market right now.
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And there's a couple of reasons for it.
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I I think 1 we can attribute to the lack of industrial demand
15:02
right now because the because the China is going through a
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very, very tough time. And so you see the base metals
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and oils are low. But the the other interesting
15:12
observation is that we can trace back to early 2000 and one 2002
15:16
which is very reminiscing some way to today.
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You have a very strong dollar. Your equities are in the verge
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of breaking out and and you have gold that's leading the charge.
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Remember like gold broke out $250 when Gordon Brown dropped
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the last Bank of England's gold in 2001.
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But silver took about two more years to catch up to break out.
15:35
The fiber is a retail market by and large.
15:38
The real billionaires, you know they they're they're not
15:40
interested in in silver as much as gold because they're just
15:44
they just got too much liquidity.
15:45
So they have to go for somebody some something of which they
15:48
could accommodate their their their, their, their their
15:51
sizable investment and and however there's going to be some
15:56
rotation of of gold into silver if gold especially stays above
15:59
2002 thousand and you see this gold to silver ratio of 90 which
16:03
is really being touched upon a few times in history.
16:06
So therefore you know that that ratio doesn't necessarily
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guarantee it's going to revert back to the normal 70 or even
16:12
back to 50 or even 30 by the time it's said and done on the
16:16
peak of the market. But we, I do believe that the
16:22
ratio is going to revert you know back to at least average of
16:25
70. I wouldn't read the read the
16:28
ratio too much wrong because we've also involved in
16:30
exploration for platinum, which I think the the analogy with
16:36
platinum is a little different because silver does have a lot
16:38
of industrial uses as well. But I want to be cautious though
16:42
through technological advances, the amount of silver that goes
16:45
into electronics or going into solar panels would decrease over
16:48
time and there will be, there will be substitutes.
16:51
So I think for now you know in the next three to six months
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we're just going to be purely looking at the goal, the goal,
16:58
the, the action of goal, the movement of the dollar and and
17:02
in the and and and that ratio coming down in, I would say in,
17:05
in, in the next two to four weeks, we're not talking months.
17:10
I want to get your commentary on this as well.
17:12
You mentioned that the investment community, they are
17:15
the price makers within the silver market and all the all
17:21
the indications that I get are that you know sentiment is
17:24
pretty low right now within the investor community when it comes
17:28
to silver in particular. But I want to paint a positive
17:34
stroke onto that, which is that gives so much room for
17:39
improvement. I've heard a few people say that
17:42
for silver to do well, we don't need it to be loved necessarily.
17:48
We just need it to not be hated so much like it is right now.
17:53
To me that's positive because you know $23 silver, yeah I
17:57
believe that's that's a not a not a good price.
17:59
But if it if we've been able to hold that level in an
18:02
environment where the metal has not been looked upon very
18:08
favorably with all this room for improvement and sentiment that
18:12
gives us you know some hope for a a big runway in terms of price
18:17
increases. And and and you know you we talk
18:21
about investor demand, retail investor demand.
18:24
We do know what's happened during some recent circumstances
18:27
like the banking crisis that we had eleven months ago, you
18:31
couldn't find physical silver, people were paying outrageous
18:34
premiums to get their hands on silver and even during the the
18:38
C19 crisis the same situation unfolded.
18:42
So we we do know that these waves of demand definitely come
18:46
back. Ron, I wouldn't say that there
18:50
is no speculative interest or it's being hated or it's been.
18:57
I would just say they're being ignored the the people, the
19:00
money managers, the the, the power that be the people have
19:04
money including Warren Buffett's or even Ellen Greenspan.
19:09
The people know that silver is money.
19:12
However, because the price is being so well managed, they
19:15
don't see the upside of that. So they rather be channel into
19:19
into into crypto currencies or into dollar, dollar index trades
19:24
between the EUR and the pounds and etcetera.
19:28
So they're being LED, it's almost like a sheep right.
19:30
They're being shepherd to to to to sort of play within the
19:36
bounds of what they are that what they that what they're
19:39
being led to Ron. I think that the question then
19:44
becomes and there's just been a lot of die hard people that
19:48
disheartened lose their shirts and you know they never seen the
19:52
light of the day something they kick the buckets.
19:54
So I think these guys are always in there and and there's always
19:57
a lot of people. I think, Ron, the the point is
19:59
this the the players are waiting for the green light to be good
20:04
to go into the market. And and now the question is, you
20:09
know what, John, what, what's the reason, what's the point to
20:11
study all those things, the fundamentals and what, you know,
20:14
I have a lot of shareholders. I was just with one earlier
20:16
today, John, you talk about all the fundamentals and in the end
20:20
I'm losing money with you guys and all my silver is the worst
20:23
performing guys. I bought silver at $20 fifteen
20:25
years, 1015 years ago. Now it's still $20.00, right.
20:28
If I bought anything else even Simpsons stamps, I would have
20:32
made by 10 times more money. So I I think the the the point
20:37
is the the players are waiting for the green light and that's
20:40
why you know what I've been at it for 20 years.
20:42
I'm not advocate of of of of of doing this a full time basis or
20:47
trying to all of your investment in there.
20:50
But it's always good to keep an eye and and in the market and
20:53
just watch where sort of where things are moving and just put
20:55
your sort of you know thumb in the air to see which way the
20:58
wind blows because the the the markets can stay irrational then
21:02
you can stay solvent or you can you know before so that you
21:05
retire but once every 10 or 20 years the cartels would lose
21:11
grip Iran and and because they have been suppressed of course
21:15
because another knowledge if if the cartels and and can manage
21:18
to whatever price level they can why don't they why don't we
21:21
manage to sober back to $2.00 right Ron I think there are some
21:25
equilibrium levels and there's some extreme of coil you can
21:29
only wind it to so tight And we're at that point Ron because
21:34
first of everything has doubled or tripled in the last 20 years
21:38
and yet silver first touched $20 in in in early in in in in early
21:44
2010. So it's been, it's been over 14
21:47
years where silver has to still just from a gut feeling of
21:51
travelling around the world and looking at different price
21:53
levels like a Big Macs or even real estates or earnings or
21:56
salaries, Silver should be at around $50.00 in in today's
22:01
relative purchasing power and and just not even take the
22:05
dollars inside just on the exchange of goods.
22:09
The way I look at it Ron, is there are some players, you
22:14
know, we're almost looking at sort of the white night versus
22:16
the black versus the white, right.
22:18
Then the the battles of the Titans, the good versus the bad.
22:23
There are my belief is the the silver is going to be given a
22:27
run up and they will be green people they will be green
22:30
lighted and the shorts going to cover and and the same players
22:35
sort of you know neutrality players, they're going to go
22:38
into the silver market because there's money to be made and the
22:41
reason I think the cartel is going to be given the green
22:43
light for silver bucks this time is the price has been suppressed
22:46
for so long already and then the the a new equilibrium has to be
22:51
re established just like the dam right.
22:53
The water is exceeded that level the water has to be still So the
22:57
dam needs to be erect higher and the level of water needs to go
23:00
higher. I cannot think of a better
23:02
analogy. So and the way I look at it is
23:06
it's almost like a battle of chess eventually run there
23:11
there's no way to prevent with bulletproof with fail proof that
23:15
if you have money Fiat that you go and buy silver there's really
23:19
not they can discourage it but they cannot really stop people
23:22
from doing that and that's why they're they're being so heavily
23:25
managed. But at at some point in time,
23:28
there's going to be some players that's going to say you know
23:31
what, I've had enough this, OK like the Putin's and the XI
23:33
Jinping's and the Saudis. You know I'm done with this.
23:36
Like you know, I've been playing this game because because it's a
23:40
matter of convenience. I buy my, you buy my oil I I buy
23:44
your weapons and that's it. On the dollars.
23:47
I might own business. I might own my I might I might
23:49
mind business you you mind yours.
23:51
And it's a it's a temporary marriage of convenience.
23:55
I think at some point I think we're at that point that people
23:57
are saying you know what, screw this, right?
23:59
They are going to they're going to band it together and they're
24:02
just going to make a statement like Charles Segal in 1970s.
24:05
You know they say hey here's my $1,000,000 owe my $35.00 an hour
24:09
and they're I think that we're doing that right now.
24:11
I think gold's a very strong towards the end of December
24:13
right run running up and you know day on a daily basis gold
24:17
is exhibiting that right now as well despite the dollar 103 gold
24:22
is never really come below 50 day moving average, certainly
24:25
above 200 moving average of 17/19/19 hundred $70.00.
24:30
So that tells me that there are some big time players are making
24:34
a very subtle yet strong statement to the cartels and
24:37
say, you know what? I'm not like I, there's more for
24:40
me to lose for than for me to gain.
24:42
And they are. And these guys are going to,
24:45
these guys are like a freight train, right?
24:47
They're just going to be a diesel power just going to
24:49
they're just going to March and they're just going to say, hey
24:52
you know, I'm showing my cars, I'm doing this and these are the
24:55
guys that cartels cannot, cannot really go to war with, right?
25:01
This is like clash of Titans and for the little guys or the
25:05
speculators they can call the fact and give a call and say hey
25:08
unwant your positions. The Meadows market is not where
25:11
you want to be and IRS can be knocked on the door, but these
25:15
Titans, big time players, they're not going to be deterred
25:19
from just a subtle warning. So the question is, is cartels
25:23
are going to step up to their their sort of sort of you know
25:26
last showdown remains to be seen because we, I believe that you
25:31
know the the guys that that they own 7080% of the gold in the
25:34
world. I believe all the central bank
25:36
gold is being being emptied out already and nobody's at home.
25:42
And so the question is, you know, are are we gonna see the
25:44
clash of Titans? I think that we, we were likely
25:47
gonna see that in the next four to six weeks.
25:49
It goes stays above $2000. Yeah, I mean we're, we are
25:52
certainly in a time of geopolitical change like none
25:58
that I think most of us have seen during our lifetime.
26:01
When you talk about this clash of Titans, it almost and I guess
26:05
you're alluding to this when you say possibly four to six weeks,
26:08
four to six months sometime this year that it's already
26:12
happening. That we already know that that
26:15
that China and Russia and the BRICS countries are banding
26:18
together and have made it very clear, you know that they're
26:24
that that that they're tired of the games that have been played
26:27
in the West in in many ways. You know and I the other thing I
26:31
like to think of that came to mind as you were talking is just
26:35
how small the silver market is, right?
26:37
I mean if you figure about a billion oz a year of silver are
26:41
produced by the mining industry and recycling efforts that makes
26:45
it a $23 billion market in terms of annual production.
26:49
Compare that to the market cap of of Microsoft or Apple or
26:54
something like that, like this is not a a huge market and has a
26:58
lot of room for for growth as well.
27:01
John, thank you for sharing your in depth knowledge and your
27:06
insights into what's going on. I want to remind our viewers
27:09
that John and I are going to do another video where we're more
27:12
focused on the company that he runs, Silver Elephant Mining.
27:17
They happen to have 100 million of Oz of silver in the ground
27:22
which likely explains why John has such an in depth knowledge
27:26
of the silver market. So be sure to watch that video
27:29
as well. John, thank you for joining us
27:32
and we'll talk to you soon.