Latest / Kinesis Money / Two Forces Changing Silver Now Ft. Przemysław Radomski - LFTV Ep 276

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Two Forces Changing Silver Now Ft. Przemysław Radomski - LFTV Ep 276 · Kinesis Money

• 0:00
  SPEAKER_02: If this the physical market at any point overwhelms the the futures market, um game's over.
• 0:09
  SPEAKER_02: I mean the silver could uh explode overnight.
• 0:13
  SPEAKER_02: There's always this chance.
• 0:15
  SPEAKER_02: They now have to keep printing while we crash.
• 0:18
  SPEAKER_00: We've got this ticket time bomb talking gold with the one and only Andrew McGuire.
• 0:25
  SPEAKER_00: Welcome to Live from the Vault.
• 0:31
  SPEAKER_00: Welcome to Live from the Vault, brought to you by Kinesis Money.
• 0:34
  SPEAKER_00: And this is the show that goes beyond the headlines to uncover the truth about the gold and silver markets with world-renowned whistleblower and industry expert Andrew Maguire.
• 0:45
  SPEAKER_00: And this week he's joined in the vault by someone who's a returning guest.
• 0:50
  SPEAKER_00: Yes, we're talking about Prem Rodomsky of Golden Metal.
• 0:54
  SPEAKER_00: And uh we're talking gold and silver today, so you're not gonna want to miss a word of this conversation.
• 1:00
  SPEAKER_00: So let's head over to the UK and join Andrew Maguire and our featured guest, Prem Radomsky.
• 1:06
  SPEAKER_00: Over to you, Andrew.
• 1:09
  SPEAKER_01: Well, hey Prem, thanks so much for returning.
• 1:12
  SPEAKER_01: It's been exactly almost six months today.
• 1:15
  SPEAKER_01: So lots has changed, and I know you'll be bursting to tell us um some of the changes that you've been uh studying, looking, reporting on.
• 1:26
  SPEAKER_01: Um, and uh thank you for turning up, and it'll be very interesting.
• 1:30
  SPEAKER_02: Thank you, thank you, Andrew, and uh it's great to be back.
• 1:34
  SPEAKER_02: Uh, I'm excited to be here.
• 1:36
  SPEAKER_02: Um, and uh well, yeah, it's been a very interesting six months.
• 1:41
  SPEAKER_02: Well, that time flies, I can't, I can't believe it's been that long.
• 1:44
  SPEAKER_02: So um silver is still pretty high in the price, as we uh just talked a few minutes ago, still above its 200 uh day moving average, so better looking better than gold from that point of view.
• 2:00
  SPEAKER_02: Um, however, there are uh some significant changes uh to the silver story.
• 2:05
  SPEAKER_02: So uh I'm happy to uh to touch upon both.
• 2:10
  SPEAKER_02: And uh um and I'm very happy to do that because you know the book format um has limitations.
• 2:18
  SPEAKER_02: I I I can go in into in depth into all those 100 catalysts uh that um are likely to drive silver higher.
• 2:30
  SPEAKER_02: However, you know, it's only as good as uh my data at the point of uh publishing the book.
• 2:39
  SPEAKER_02: And uh quite a few things changed.
• 2:43
  SPEAKER_02: Uh, two that I think are major changes are the solar demand and what's changing in it, and the second thing, well, everything related to AI.
• 2:54
  SPEAKER_02: And uh what I think is an AA bubble right now, and uh it's a double-edged sword for silver.
• 3:03
  SPEAKER_02: Uh so um I mean, sure, and which should we uh cover first?
• 3:10
  SPEAKER_01: Well, I think you you do before we started recording, you you were talking about um uh that solar demand.
• 3:18
  SPEAKER_01: Um now you've got a report on that.
• 3:20
  SPEAKER_01: So let's have a look at um, and that that'll obviously have people's attention because that's one side of a picture.
• 3:27
  SPEAKER_01: So perhaps you'd start there.
• 3:29
  SPEAKER_02: Okay, so well, solar demand, um it's basically the biggest part of the silver demand right now.
• 3:36
  SPEAKER_02: So it's uh uh huge deal if there are any changes to it.
• 3:40
  SPEAKER_02: And the thing is that there were some changes to it, and uh one of them which get generated just little press coverage so far, but it's uh it's really important.
• 3:52
  SPEAKER_02: So there are basically two types of cells used in solar panels, and uh about 70 to 80 percent of the cells are the top con cells.
• 4:02
  SPEAKER_02: They use a lot of silver, and we thought, as I mean, the market analysts um and investors alike that this is the um the safe floor for silver prices.
• 4:17
  SPEAKER_02: I mean, it's uh the those cells use a lot of silver, and so far they resisted substitution.
• 4:23
  SPEAKER_02: Um producers um tried with uh improving successes to substitute silver with copper in the uh less efficient cells, but TopCon cells resisted that.
• 4:39
  SPEAKER_02: Well, this changed in April because we got news from um Faunhofer Institute in Germany uh that they figured out a way to use about one-tenth of silver in the cells.
• 4:55
  SPEAKER_02: So they changed the technology, they use uh sil well this they they still have to use some silver, but they mainly use copper, they use uh a bit of nickel and uh silicon in their uh technology.
• 5:11
  SPEAKER_02: And silver is used for coating to prevent uh oxidation, but uh copper is the is the real power horse in the in this um technology, and 10 times less silver used is a lot.
• 5:27
  SPEAKER_02: I mean it could if it was implemented overnight, it could take uh between 100 and 150 million ounces off silver demand.
• 5:37
  SPEAKER_02: So that's not a small, that's not a small small number, right?
• 5:42
  SPEAKER_02: So the thing is how realistic it is that it will be really implemented.
• 5:48
  SPEAKER_02: Um the inventors themselves um expect to be rolling this out to uh to market uh in two to three years.
• 6:00
  SPEAKER_02: So if that happens and it is adopted at scale, then well um uh uh a lot of changes happen to the uh structural uh demand for the for the white metal.
• 6:17
  SPEAKER_02: Um the thing is that so far, uh historically, similar breakthroughs and adoptions um took five to ten years, not two to three years.
• 6:31
  SPEAKER_02: So I would take the conservative approach here, and I wouldn't panic over you know silver being completely, or not completely, but to a large extent, uh substituted uh in case of the solar demand, but it is um something that's looming for the silver market, like this this part of the silver demand uh is probably going to decrease in the future, however, there are still many uncertainties.
• 7:04
  SPEAKER_02: So uh if it's uh five years away from being implemented, we still have a couple of years when we could uh see dwindling um supplies and inventories, and since those are already are very low levels, uh this could cause significant price spikes.
• 7:29
  SPEAKER_02: But on the bullish front, there are very few changes uh to the supplied side of the silver market.
• 7:39
  SPEAKER_02: So um, first of all, peak silver production was most likely achieved.
• 7:45
  SPEAKER_02: Nothing changes that.
• 7:48
  SPEAKER_02: And if anything, the second thing that uh I would like to cover in greater detail, so uh the AI bubble could actually um even lower the silver supply in the future, but uh we'll get to that uh in just uh in just a few minutes.
• 8:06
  SPEAKER_02: The second thing that doesn't change is that the ore grades are declining, so it's more difficult to uh mine silver as the easy-to-get silver with high quality ores is already used up, is depleted.
• 8:23
  SPEAKER_02: So uh the deeper the companies have to drill and the more expensive it becomes.
• 8:32
  SPEAKER_02: Uh so uh the less silver is likely to be available.
• 8:37
  SPEAKER_02: Another thing is that most silver is not uh mined in silver mines, it's mostly mined as a byproduct.
• 8:45
  SPEAKER_02: That doesn't change.
• 8:46
  SPEAKER_02: So in case um the A bubble bursts and um also the stock market declines in a major way, and we see a decline in demand also for other commodities, silver supply declines as well.
• 9:04
  SPEAKER_02: So that doesn't change.
• 9:07
  SPEAKER_02: What doesn't change is that silver um production can't react quickly to higher prices, uh, it still takes over 15 years on average from discovery to production for uh for the mines.
• 9:23
  SPEAKER_02: And uh it doesn't change the fact that we already had the inventory depletion.
• 9:29
  SPEAKER_02: I mean, just because the solar demand structure could change materially in the upcoming years, and again, this is years away, it doesn't change the fact that um the inventories were used up, it doesn't automatically recover them in the following year or two, or even three, most likely.
• 9:51
  SPEAKER_02: All this still applies.
• 9:54
  SPEAKER_02: What shifts is, in my view, is the core engine behind the growth of silver prices.
• 10:02
  SPEAKER_02: So for a long time, it's been the solar demand that was viewed by many as uh as one of the key key reasons that silver will move higher.
• 10:13
  SPEAKER_02: Um right now, I think that uh geopolitics uh threats to Fed's and Fed's independence, and every basically everything that is likely to make gold soar in the long run is also likely to contribute to silver's rally uh in the long run, but I think at a much greater pace as well.
• 10:37
  SPEAKER_02: It's a smaller market, so investment demand can uh cause much bigger price moves.
• 10:43
  SPEAKER_02: And um I think we'll continue to see that in the following years.
• 10:49
  SPEAKER_02: So then again, to be completely objective, um so investment demand can um work both ways.
• 11:01
  SPEAKER_02: I mean, in the long run, I think that uh investment demand will continue to pressure silver prices higher.
• 11:09
  SPEAKER_02: However, if the stock market declines and it declines significantly, I think that silver will still be hurt in the near term, but it will ultimately benefit in the long term.
• 11:25
  SPEAKER_02: Um, we all remember what happened in the two in 2008, in 2020.
• 11:31
  SPEAKER_02: Um when stocks declined, silver plunged, but it didn't last long.
• 11:37
  SPEAKER_02: I mean, in 2008 it it was declining for months, but stocks declined longer and silver's recovery was much faster.
• 11:47
  SPEAKER_02: And why is this eventually bullish?
• 11:51
  SPEAKER_02: Um, remember again 2008, what followed in the following years, actually the rally that took silver from below 10 to 50.
• 12:00
  SPEAKER_02: So if we get this powerful powerful slide in stocks as the A bubble bursts, initially silver could decline in my view, but uh I would see this as a you know huge slingshot that's uh then proppels it uh to much higher levels uh and to new highs.
• 12:25
  SPEAKER_02: So and I don't think that when the you know geopolitical reasons, monetary reasons, and resulting from it, investment demands um really align.
• 12:39
  SPEAKER_02: Um I don't think that uh the decline in solar demands would be able to stop the rally.
• 12:46
  SPEAKER_02: So um, but yes, I do think that on the short term, silver is vulnerable, and uh this is also connected with multiple catalysts driving it higher.
• 13:02
  SPEAKER_02: I mean, a lot of that is based on uh the economic growth.
• 13:06
  SPEAKER_02: Silver has multiple industrial uses, it's the best conductor of electricity and heat.
• 13:12
  SPEAKER_02: Um but and its demand is also connected with how well the world is developing.
• 13:23
  SPEAKER_02: If stock market if stock markets crash, led by bursting a bubble, silver silver demand in the near term uh could crash, but most importantly, investors would likely be spooked out by the decline.
• 13:38
  SPEAKER_02: There would be three mechanisms uh through which it would happen.
• 13:42
  SPEAKER_02: The first, uh, well, liquidation-driven price drop.
• 13:46
  SPEAKER_02: I mean, everything else declines, uh big investors get uh margin calls, they have to liquidate just about anything, so they liquidate also silver, so silver drops as well.
• 13:58
  SPEAKER_02: We've seen that in 2008.
• 14:01
  SPEAKER_02: Was there a shift in uh in fundamental outlook uh in silver before the 2008 decline and after it?
• 14:10
  SPEAKER_02: No, basically not, but in the ad silver price was cut in half, so that could happen.
• 14:17
  SPEAKER_02: Um, another uh mechanism is um well, the industrial demand contraction.
• 14:25
  SPEAKER_02: Uh electric vehicles, electronics, uh things like that.
• 14:29
  SPEAKER_02: If uh stock markets slide, even if the demand is not crushed, and it might not be, but investors are forward-looking, markets are forward-looking, so they would expect okay, this could last for a while, even if it doesn't, people will still be scared, so they might extrapolate that into the future and sell immediately.
• 14:50
  SPEAKER_02: Uh, third mechanism uh the wealth effect.
• 14:56
  SPEAKER_02: So people lose money, so they have less money to invest, so they scale down.
• 15:02
  SPEAKER_02: Basically, not necessarily as the first mechanism, not because of margin calls, but essential.
• 15:09
  SPEAKER_02: They, you know, now silver, for example, someone wants to have silver as half of their investments, or one-third, or 10%.
• 15:17
  SPEAKER_02: If they now have like half of the money they used to, then this percentage makes up, you know, it's they have to sell something during rebalancing so that it uh all makes sense for them portfolio-wise.
• 15:31
  SPEAKER_02: So in the short term, I think silver is vulnerable, but again, lower prices um would probably attract uh a lot of buyers.
• 15:46
  SPEAKER_02: People will see what's happening in the world, and at this point, if we get a severe decline, and I think we will, uh, then at this point, I fully expect the interest rates to be cut aggressively so, again, like 2008.
• 16:03
  SPEAKER_02: Uh, gold, silver, mining stocks at that time would likely find the floor uh very soon, and that would be an excellent superb buying opportunity.
• 16:14
  SPEAKER_01: That's interesting because um I certainly don't know an awful lot about the AI, um, other than what I watch from Bloomberg, etc.
• 16:23
  SPEAKER_01: I don't really know a lot about how that would affect silver.
• 16:26
  SPEAKER_01: Um, I would obviously uh uh assume um that it that is ultimately boyish, but um perhaps you could tell us what you if um because you're a re you know you're a scientist, you're you you look at stuff in granular detail.
• 16:39
  SPEAKER_01: Tell us what you see.
• 16:41
  SPEAKER_02: All right, all right, thank you.
• 16:43
  SPEAKER_02: Um, so basically, if silver and AI had uh relationship status on Facebook, it would be it's complicated.
• 16:53
  SPEAKER_02: So it's um um it's uh on one hand it is bullish because okay, the AI as it's uh developing because the technology is revolutionary, the data centers uh emerge like mushrooms after the rain.
• 17:09
  SPEAKER_02: Um the um well, there are all sorts of uh ways in which silver is used: semiconductors, uh memory banks, and and and storage and so on and so forth.
• 17:26
  SPEAKER_02: So basically, silver is used directly by those and uh data centers and make um electricity more expensive because they demand it so much.
• 17:39
  SPEAKER_02: Electricity is um a huge cost component in silver mining.
• 17:44
  SPEAKER_02: Some of that directly, some indirectly.
• 17:46
  SPEAKER_02: So making it more expensive makes silver mining more expensive.
• 17:50
  SPEAKER_02: So again, less silver uh as a so on one hand, we have more demand for silver, on the other hand, we have less supply.
• 17:57
  SPEAKER_02: So the um the implication for silver should be bullish.
• 18:02
  SPEAKER_02: However, that makes perfect sense only as long as um the investments in AI uh continue, and right now the investments in AI are continue are um are still present, they increase, and we got to the point uh where some of the metrics are ridiculous.
• 18:26
  SPEAKER_02: Earlier today, I saw a video where someone pointed out that um Nvidia's uh market cap is now uh bigger than the value of all the farm all the farmlands in Australia, right?
• 18:43
  SPEAKER_02: So maybe it is a bubble, right?
• 18:46
  SPEAKER_02: Maybe it is a bubble.
• 18:47
  SPEAKER_02: Um the valuations of those companies which actually continue to invest in themselves.
• 18:52
  SPEAKER_02: I'm you know, every other comp company invests uh like in a circle, uh Microsoft and well, I don't want to talk about this for five more hours, but um the thing is that um we have enormous expectations of the technology.
• 19:18
  SPEAKER_02: Like many of us, myself included, have been using AI, seeing what it can do.
• 19:24
  SPEAKER_02: Um and it's easy to get amazed by it.
• 19:29
  SPEAKER_02: It's it it creates great texts, it produces great product demos, it's excellent at that presentations, emails, you know, stuff like that.
• 19:38
  SPEAKER_02: Um, the problem is if you look under the hood and you actually have to have something that delivers value over time.
• 19:48
  SPEAKER_02: The exp the market evaluations are built on expectations that it all works out and that it scales and that the trend continues.
• 19:59
  SPEAKER_02: While I don't think this is the case, like the again, the tech is revolutionary, so was the internet, and yet the dot-com bubble still happened because people got ahead of themselves, the market got ahead of ahead of itself.
• 20:15
  SPEAKER_02: The valuations were crazy.
• 20:17
  SPEAKER_02: Okay, there was little money generated then.
• 20:20
  SPEAKER_02: Uh, right now, those are businesses making money.
• 20:23
  SPEAKER_02: However, it's still a matter of whether the reality meets the expectations, or is there some kind of delusion here?
• 20:32
  SPEAKER_02: And here's the thing: there is an MIT report from last year uh that analyzed um what is the impact on profitability in companies that implement AI.
• 20:48
  SPEAKER_02: And 95% of those companies had no impact on their profitability.
• 20:54
  SPEAKER_02: The 5%, yeah, they uh they implemented it and saw great successes, but for the vast majority, it did not.
• 21:04
  SPEAKER_02: It did not.
• 21:05
  SPEAKER_02: So the market is pricing the very positive um implications of all this.
• 21:14
  SPEAKER_02: And I think that we are more in a situation like at close to the top of the dot-com 2.0.
• 21:24
  SPEAKER_02: Um, when is it going to end?
• 21:27
  SPEAKER_02: Nobody can tell with a degree of certainty.
• 21:31
  SPEAKER_02: Um, maybe it will be today, tomorrow, next week, next month, maybe when the first of the big AI companies uh has an IPO.
• 21:41
  SPEAKER_02: Um, who knows?
• 21:43
  SPEAKER_02: But the valuations are crazy already.
• 21:46
  SPEAKER_02: And uh expectations are even crazier, and we have those valuation signs um that are astronomical, it's not sustainable.
• 21:59
  SPEAKER_02: And This is exactly the environment that creates bubbles.
• 22:02
  SPEAKER_02: Bubbles crash.
• 22:04
  SPEAKER_02: Um, this time uh the situation is complex because it's not just AI, AI is connected with multiple other industries, um, with the job market, with cryptocurrencies, and in a way, it's slightly more stable.
• 22:22
  SPEAKER_02: Well, it is more stable because multiple systems are connected, but on the other hand, when it crashes, um the domino effect could be bigger than uh even what we saw in 2008.
• 22:36
  SPEAKER_02: So we could have a pretty dramatic uh situation on the stock market.
• 22:43
  SPEAKER_02: Um and if we do, the temporary impact on the price mills market, I think is gonna be negative.
• 22:54
  SPEAKER_02: That's that's what 2008 teaches us.
• 22:57
  SPEAKER_02: The ultimate impact was positive.
• 23:00
  SPEAKER_02: It's uh that was what's uh what actually triggered the slingshot move to 2011 top, but the initial impact was negative.
• 23:09
  SPEAKER_02: So if what I said about AI bubble is not convincing yet, uh let me get to the you know details like from one from a single person's point of view, because I'm using the A models uh to uh well to analyze the markets.
• 23:30
  SPEAKER_02: It doesn't do the analysis for me, but I use it for research, and then I pretty much have to uh you know pick as many mistakes as I can because it's it is making mistakes, it is making wrong assumptions, and and so on.
• 23:45
  SPEAKER_02: It's getting better, but the thing is that it's easy to just get satisfied with really mediocre or poor results because they look good at surface level.
• 24:03
  SPEAKER_02: Um, for example, and uh this is also connected with one of the links that's uh I think will will be visible below the video because um recently I um published a tool that it's called Silver Stock Picker.
• 24:19
  SPEAKER_02: Uh we also have gold and silver stock picker, but basically the tool is an interactive model that you select how many silver stocks you want right now and whether you how what is your investment horizon, and it then takes the up-to-date data because it's being updated on a continuous basis, I mean every day, and it's uh it runs a model and it provides the picks.
• 24:46
  SPEAKER_02: Like, of course, not investment advice.
• 24:49
  SPEAKER_02: Everyone should have should do their own research.
• 24:51
  SPEAKER_02: I don't guarantee any sort of results, and so on.
• 24:54
  SPEAKER_02: However, the model has good results, in my opinion.
• 24:59
  SPEAKER_02: It's a solid model.
• 25:00
  SPEAKER_02: I designed it many years ago, and um on my older website, it's been working very well over there.
• 25:08
  SPEAKER_02: However, we never moved it to the new websites because um it would take the IT team a long time to do this.
• 25:17
  SPEAKER_02: However, with uh AI, it took me two days, just me, two days, uh, to deliver all that from including research, implementation, and so and testing it.
• 25:28
  SPEAKER_02: However, the thing is that the core work, that the the thing that many people would be satisfied, took 30 minutes or one hour, something like that.
• 25:39
  SPEAKER_02: So I know that in order to create something that will look good, it takes just a fraction of time that it really takes to create something useful.
• 25:49
  SPEAKER_02: It does like 5% of work.
• 25:53
  SPEAKER_02: Half of the real work is preparing the work, the model, the care, the design.
• 25:58
  SPEAKER_02: All this uh is what AI doesn't replace, and it actually makes more difficult to uh to do because um it goes against uh human and most employees' instincts because you know people want to you know just do the easy easy work and uh head uh for the break.
• 26:20
  SPEAKER_02: And AI allows them to do that, but it's an illusion.
• 26:24
  SPEAKER_02: So you have to first work really hard to detect where the AI is lying to you, and then you uh you do what you wanted to do, but then you still have to test it, and you have to be extremely picky because AI is seductive, and it will tell you you're right, it's it's all it's all it's all working well, but then when you investigate some of that is is made up, or you know, it's it's just lied about pulling data from somewhere, it invented it.
• 26:54
  SPEAKER_02: So it's if you if someone doesn't want really to for the the final outcome to matter, it's easy to just you know lay it back and see, okay, it looks good, I'm gonna send it to my boss and call it a day.
• 27:11
  SPEAKER_02: So, in a way, it's making productive work more difficult because it's challenging to see when you're actually done a good work.
• 27:21
  SPEAKER_02: It's difficult to see at the first sight that something is of poor value.
• 27:26
  SPEAKER_02: So if unless you're you have high ethics, you're motivated by mission, or and or you're and you're a business owner, then it's you know it's it's kind of it's it's kind of natural, then it's difficult to really make uh you know something really good that will provide long-term value to whoever is using it.
• 27:45
  SPEAKER_02: And I think this is connected with those 95% that I was talking about.
• 27:51
  SPEAKER_02: So in in case of most companies, in my opinion, because well, obviously I haven't visited those companies, but I'm pretty sure, knowing human nature, that that's what's being done.
• 28:01
  SPEAKER_02: Like the surface level implementation, okay, it looks good enough, let's deliver it and call it a day.
• 28:06
  SPEAKER_02: Well, the problem is that no, it doesn't deliver it and uh it bites back.
• 28:10
  SPEAKER_02: The hangover kicks in after a week, a month, a quarter, because you don't what you design looks good, but it doesn't work.
• 28:19
  SPEAKER_02: And it takes time, you know, before you realize.
• 28:23
  SPEAKER_02: And perhaps it is the time that the world is starting to realize that it's not so simple with AI.
• 28:34
  SPEAKER_02: Yeah, the tech is too revolutionary, just like the internet was.
• 28:37
  SPEAKER_02: But in the short term, will this uh be able to keep on rising?
• 28:41
  SPEAKER_02: I mean, driving the stocks higher?
• 28:44
  SPEAKER_02: I don't think so.
• 28:45
  SPEAKER_02: Not I don't think that this will take for much, uh, that it will take much longer for for the top to form, but then again, it's like in all bubbles, right?
• 28:55
  SPEAKER_02: You can't you can't really pinpoint the top.
• 28:58
  SPEAKER_02: This is a cyclical thing.
• 29:00
  SPEAKER_02: I mean, the bubble, the bubble bursts, uh, the markets decline, they find the bottom, and then they soar because at that point the rates will have probably been cut significantly.
• 29:11
  SPEAKER_02: So I don't know about geopolitics at that point, but the way things are looking right now in the world.
• 29:20
  SPEAKER_02: Uh it looks like uh owning physical gold and silver directly or through uh kinesis uh seems uh you know more than justified.
• 29:33
  SPEAKER_02: I mean, the insurance part of one's portfolio.
• 29:37
  SPEAKER_02: Um so there's the structural part, solar demand, that's a long-term threat.
• 29:46
  SPEAKER_02: But again, that's not the whole picture.
• 29:48
  SPEAKER_02: There's there's there's much more to the silver story.
• 29:51
  SPEAKER_02: But those two factors, solar demand, the AI bubble, as I see it, I think those are the two biggest changes um to the silver story uh that happened since the since we published the second uh version of the book.
• 30:12
  SPEAKER_02: So that that happened in January this year.
• 30:15
  SPEAKER_01: That's fascinating.
• 30:16
  SPEAKER_01: That's absolutely fascinating.
• 30:18
  SPEAKER_01: And and I and this is new territory um for me, and I'm sure for many people.
• 30:22
  SPEAKER_01: This is really interesting.
• 30:24
  SPEAKER_01: Um now, Prem, um obviously one of the things that bring brings to mind is um you know, we've got the physical and the paper market, and clearly what we're looking at is the demise of open interest flowing out of the futures markets, um, gold and silver, um, because it's just it's I mean, in fact, gold is at historic lows, silver is very, very low open interest.
• 30:56
  SPEAKER_01: And so, really, when we're looking at the physical market versus the paper market, and obviously these effects, when, as you say, when a bubble bursts, is it's gonna affect, it's gonna really affect more the it's not like people are gonna sell physical, they're gonna sell, they're gonna sell their paper positions, but they are so much reduced from where they were.
• 31:20
  SPEAKER_01: I mean, uh, for gold, it was 800,000 contracts in May 2020, uh, and now it's down to 320, you know, uh and we were talking really significant outflows.
• 31:32
  SPEAKER_01: So, so I think the question I'm what I think I know I can hear my subscribers saying to me, yes, but what about the physical to paper balance here?
• 31:41
  SPEAKER_01: Um, and especially as silver has been been really named as a critical mineral.
• 31:51
  SPEAKER_01: And I know, for example, our connections to China, um, that they uh this is a military min, this is a military asset, um, and they're not exporting it.
• 32:04
  SPEAKER_01: And then I know the other thing, the other sort of side of things, and I think what brings it to mind is when we have when we capitalise on a low Comex price uh for clients, and then they want delivery, it's not available in New York.
• 32:23
  SPEAKER_01: If you so what happens is it is EFD'd into the stock market, and then the spot market in London then has to go to market and buy it at market to fill it at a much higher price, which is then based pretty much on the Shanghai spot price, which is significantly higher.
• 32:47
  SPEAKER_01: So it's an interesting dynamic.
• 32:49
  SPEAKER_01: You've got and this constant, so so we see outflows of paper market liquidity ultimately ending in lick liquidity, providing liquidity to the physical markets.
• 33:03
  SPEAKER_01: It's an interesting dynamic.
• 33:06
  SPEAKER_02: Absolutely, absolutely, and um you're touching on something uh very important that I I didn't uh that I didn't mention, so that's it's a great thing because I'm talking about silver being vulnerable in the short run.
• 33:22
  SPEAKER_02: Yes, it could decline, but if this the physical market at any point overwhelms the the futures market, um game's over.
• 33:35
  SPEAKER_02: I mean silver could uh explode overnight.
• 33:39
  SPEAKER_02: There's always this chance because it takes uh you know just one or two big industrial buyers to get scared that they might not get enough silver for their production.
• 33:53
  SPEAKER_02: And uh, well, we had that in palladium, like uh almost 30 years ago.
• 33:59
  SPEAKER_02: Like, I think it was Ford that was that panicked and started buying palladium because they had to have it for their cars.
• 34:06
  SPEAKER_02: Palladium soared uh massively, and uh this could happen to silver, uh to to gold in a way as well, but I I would focus on silver here because the market is thinner and the inventories are well so low.
• 34:27
  SPEAKER_02: Uh it's silver was uh well used up, and so go whatever gold was mined is still more or less there somewhere in some form.
• 34:37
  SPEAKER_02: So um, what everything I said about the sharpton vulnerability carries this this asterisk.
• 34:46
  SPEAKER_02: Uh, and it and and the explanation of the asterisk is unless silver explodes.
• 34:52
  SPEAKER_02: Because uh the military demand, for example, that you mentioned uh what if it's uh one or more governments that suddenly realize hey, we have to secure our stockpiles, and they started bidding against each other with unlimited pockets, okay?
• 35:11
  SPEAKER_02: Again, game's over.
• 35:14
  SPEAKER_02: So the implication, uh, in my opinion, is that okay, silver might uh decline in the in the short term, but I wouldn't get rid of uh all the silver that one one's owns.
• 35:35
  SPEAKER_02: And uh, as I'm writing in my premium setter, um I very much prefer to hedge the position rather than to sell it.
• 35:44
  SPEAKER_02: I mean the physical, because like you said, this is not the same thing.
• 35:49
  SPEAKER_02: Uh and during the initial part of the decline as well, um, I expect the future prices to fall much harder than physical prices.
• 36:01
  SPEAKER_02: And it's uh it's been the case during the previous declines.
• 36:05
  SPEAKER_02: Uh, if the price stays low for extended periods, then eventually the physical market will follow, but not fully, not necessarily and also not necessarily right right now, because uh the data uh which I'm basing this on uh is from periods where we had much more silver available, we don't have this luxury right now.
• 36:31
  SPEAKER_02: So, what could happen, and this is you know the emergency situation.
• 36:37
  SPEAKER_02: For example, silver price declines, uh say 20%.
• 36:43
  SPEAKER_02: It's okay, it looks bearish on the price chart, but uh lower prices make uh silver buyers, I mean industrial buyers, um realize that it's a great opportunity to load up on silver at fire sale prices and they start buying.
• 37:04
  SPEAKER_02: Now, it in previous years, like in 2008, for example, where we had much more silver available for delivery and in general, um that wouldn't be that much of a deal.
• 37:18
  SPEAKER_02: But right now, if we get below the threshold where the silver available for the for the real delivery um is making other big industrial buyers panic, they they start bidding against each other, and it's like a game of musical chairs.
• 37:38
  SPEAKER_02: I'm I'm using this analog analogy in my book as well.
• 37:42
  SPEAKER_02: And the music would be playing, and you know, everybody would want to sit when the music stops with their silver bar in their hands, and there would not be enough silver for everyone.
• 37:55
  SPEAKER_02: So there's a there's always a chance that this is going to happen.
• 37:59
  SPEAKER_02: So on one hand, this uh might make some people not want to touch those their silver positions at all, and that's perfectly fine.
• 38:13
  SPEAKER_02: Everyone knows their uh risk tolerance, whether they want to adjust their positions or not.
• 38:20
  SPEAKER_02: Um, for some, it will they will want to adjust, maybe limit their silver position.
• 38:27
  SPEAKER_02: I I wouldn't suggest getting you know rid of all one's silver right now, even despite uh the short-term vulnerability.
• 38:36
  SPEAKER_02: I mean, like limiting the exposure or preferably hedging while keeping the physical intact.
• 38:42
  SPEAKER_02: Okay, fine.
• 38:44
  SPEAKER_02: But you know, do it consciously, make a conscious decision, accept the risk.
• 38:49
  SPEAKER_02: The risk is also not just about you know having to endure the downside, but also risk is about missing the upside.
• 38:59
  SPEAKER_02: So uh so that's that.
• 39:02
  SPEAKER_02: And uh so this is an important uh puzzle of the entire of the entire uh picture.
• 39:13
  SPEAKER_02: You know, it that short-term vulnerability is not the whole uh it's not the whole pit, it's not the whole thing.
• 39:20
  SPEAKER_01: Yeah, absolutely.
• 39:21
  SPEAKER_01: I think I think that's well said, and I think um, you know, you the the the I think the good thing about what you do, Prem, is you look objectively at all the different aspects, the pros, the cons, different influences.
• 39:36
  SPEAKER_01: And essentially what what you're doing really is assisting, it's about education, it's about assisting people in making better choices um for on their own on their own uh based on better information.
• 39:52
  SPEAKER_01: So, and I think this is a very important thing, and and a lot of people um come into uh trade silver, and I think it's dangerous if you trade silver on margin.
• 40:03
  SPEAKER_01: You get in other words, you go to the to the house and you borrow, I mean, you borrow silver that that can be leveraged massively against you, and you go and you wonder why.
• 40:17
  SPEAKER_01: I mean, what we used to see 12, 20, 30 cent moves in a day.
• 40:22
  SPEAKER_01: Now we see 12, 15 buck moves in a day, potentially.
• 40:26
  SPEAKER_01: I mean, enormous moves.
• 40:29
  SPEAKER_01: In fact, um, just on Monday, only 800 lots.
• 40:33
  SPEAKER_01: We I was just watching uh the uh for a client, um 807 lots swapped.
• 40:41
  SPEAKER_01: Physicians, obviously the long and a short and it moved silver down two dollars and six cents.
• 40:49
  SPEAKER_01: Bing bang.
• 40:53
  SPEAKER_01: Now that is ludicrous.
• 40:55
  SPEAKER_01: But it's one of the reasons why I face a lot of institutionals.
• 41:01
  SPEAKER_01: We also have some sovereigns that we interact with.
• 41:05
  SPEAKER_01: It's one of the reasons they've exited the COMEX, completely exited the COMEX.
• 41:11
  SPEAKER_01: They are not trading that, they've taken their liquidity and they put it into the free trade zone areas, they put it into the SGE corridor that is accessible.
• 41:21
  SPEAKER_01: Obviously, you've got to be a size player, a refiner, um, a hedger, um, uh, and in the indeed an institutional of some sort.
• 41:31
  SPEAKER_01: So that they just that price, that price wouldn't have affected them at all um based upon the Shanghai spot price, which didn't move at all into that period.
• 41:45
  SPEAKER_01: In fact, I mean gold into yesterday's PM fix uh was$55 higher at the moment of the PM fix, immediately arbitrised down to$13.
• 41:57
  SPEAKER_01: But the point is, it's this volatility has seen.
• 42:01
  SPEAKER_01: I think the point I'm trying to make is the real money has exited the comix and gone to where they can collateralize in in a in a in a where you in a market in a in an exchange where you have to own the bar before you can sell it.
• 42:20
  SPEAKER_01: What a novel idea.
• 42:22
  SPEAKER_01: Um, rather than you know, 91% leverage uh on a bar.
• 42:28
  SPEAKER_01: This is ludicrous, but anyway, so so I think that flow, we see that flow.
• 42:34
  SPEAKER_01: Now I think that I look at the COMEX and I see it's really held by a bunch of speculators.
• 42:41
  SPEAKER_01: And these are the same momentum traders that race from pillar to post.
• 42:46
  SPEAKER_01: They're wrong at both ends, they're right in the middle, but they control about 80% of all this COMEX uh liquidity.
• 42:54
  SPEAKER_01: And it's it's silver, it's gold, it's oil, and they are active every day.
• 43:00
  SPEAKER_01: And I think this is what is really this is why people get rinsed out, because they decide, well, you know what, maybe they'd be better placed to literally buy physical on an average basis, continue.
• 43:14
  SPEAKER_01: I mean, goodness me, a year ago, you'd be looking very well at the moment if you've just been averaging in.
• 43:20
  SPEAKER_01: And I think that's a a point that you make as well.
• 43:23
  SPEAKER_01: Many, many great points.
• 43:26
  SPEAKER_02: I'm not sure which uh which which one to start with.
• 43:29
  SPEAKER_02: In in short, yes, I agree.
• 43:31
  SPEAKER_02: I mean, the the changes in the market structure are uh of really, really big importance.
• 43:41
  SPEAKER_02: I mean, um biggest players moving out of comics and into places where they can actually be sure that they can get delivery.
• 43:51
  SPEAKER_02: Um, it only makes uh comics less um useful for other market participants and um And it uh actually shows people that this uh the silver the silver futures can't be trusted to uh in terms of price discovery.
• 44:13
  SPEAKER_02: I mean, is this really the silver price?
• 44:17
  SPEAKER_02: Or kind of the silver price?
• 44:20
  SPEAKER_02: Yeah, so because if you can buy silver futures, but ultimately you can't take delivery.
• 44:27
  SPEAKER_02: Well, you can in theory, but then you know the exchange freezes, or there's some error, and you don't end up with your silver bars.
• 44:34
  SPEAKER_02: Was that really the silver price that you were you were answering in the first place?
• 44:40
  SPEAKER_02: I mean, like, was it really what you were getting?
• 44:42
  SPEAKER_02: You're getting some proximity, the silver price, essentially.
• 44:47
  SPEAKER_02: For some, this is enough, like you said.
• 44:50
  SPEAKER_02: Some people choose to trade it.
• 44:52
  SPEAKER_02: Um, and I fully agree that this is dangerous for for most people.
• 44:59
  SPEAKER_02: I mean, silver is um a killer market for those that just completed their technical analysis course and want to make big money on silver because they they like gold, but silver is more volatile, so they think okay, so we'll make more money.
• 45:18
  SPEAKER_02: No, silver is silver does a few things completely opposite to what the technical rules in the classical way would have you believe.
• 45:28
  SPEAKER_02: Like silver is known for fake breakouts, for example.
• 45:31
  SPEAKER_02: It's break, I mean the the futures price.
• 45:33
  SPEAKER_02: That's you know, not the the prices in Shanghai or uh what the wholesale buyers are are getting.
• 45:40
  SPEAKER_02: But uh on an immediate term basis, you know, you get a move up, people cheer, okay, yeah, we're buying silver, and then it collapses.
• 45:48
  SPEAKER_02: And it's uh some would say that it's a proof of market manipulation.
• 45:54
  SPEAKER_02: And uh, well, there were investigations, there were uh JP Morgan was convicted, and and and so on.
• 46:02
  SPEAKER_02: Those mechanisms still persist.
• 46:05
  SPEAKER_02: So um, I don't want to claim that uh anyone's at fault here.
• 46:10
  SPEAKER_02: I don't have direct evidence, but it is behaving very dangerously.
• 46:15
  SPEAKER_02: And well, I would say that it is possible to trade it successfully, but I think that one should get experience and or ideally both, uh professional assistance in this.
• 46:29
  SPEAKER_02: Because even if not, you know, I don't I'm never suggesting that people blindly follow someone, but if they follow someone who's been doing the market analysis for precious smells for many years, then they can at least you know see the moments where silver might not behave normally, then they have a better chance of uh you know making money and trading it.
• 46:56
  SPEAKER_02: However, it's not definitely not necessary for people to trade uh the silver market.
• 47:04
  SPEAKER_02: Um for traders, I think mining stocks would be preferred, they behave more technically uh on a short-term basis.
• 47:14
  SPEAKER_02: Um, as far as long-term investment is concerned, um nothing bit nothing beats physical um start uh and ideally geographically diversified, and perhaps some in uh you know in uh um tokenized as uh as uh as kind as what you provide through in in kinesis.
• 47:39
  SPEAKER_02: Um one more thing that I uh wrote down when you're saying silver leaving the market and uh big buyers not necessarily paying attention to all those short-term moves.
• 47:54
  SPEAKER_02: I think this is um smoothening the price moves uh over the long term.
• 48:02
  SPEAKER_02: I mean, it's uh this is one of the factors that I think uh can make the upcoming decline, if it happens, um short-lived.
• 48:16
  SPEAKER_02: Because the supply, I mean, the futures markets will crash, but since the physical market is likely to be supported, then people will realize that, and uh and the price will soon start reflecting that because even those buying futures will look at the spot markets also outside of Comics, uh, you know, to get their data, and they will see, okay, so the demand actually is still there, so if the price is so low, then it's a buying opportunity, right?
• 48:52
  SPEAKER_02: Right, okay, so let's buy, and the mechanism will itself correct.
• 48:57
  SPEAKER_02: But if if the futures market if if it turned out that the futures market market's decline is not just brief, then ultimately the physical market would probably follow through.
• 49:17
  SPEAKER_02: Because if, for example, if we have this uh solar demand destruction, if if Fauenhoff Institute is correct and they will actually bring their innovation to the market in two years, so like super optimistic uh version, then it could affect um uh physical markets as well.
• 49:41
  SPEAKER_02: So there's there is this risk.
• 49:43
  SPEAKER_02: I don't think it's likely.
• 49:45
  SPEAKER_02: I think we're gonna have a more of a flash crash.
• 49:47
  SPEAKER_02: Okay, well, okay, not flash crash, because that would uh imply an intraday move only, but uh again, something that will last maybe a couple of months, several months, um, not I a decline that lasts years.
• 50:05
  SPEAKER_02: And again, at any point silver is vulnerable to a decline, but also during the decline, it's vulnerable to a dramatic uh reversal and a rally due to the physical market being uh intact and um kind of detached from the futures market.
• 50:28
  SPEAKER_01: Well, Prem, I think what what you've summed up pretty much here is you need to have you need to um follow the knowledge.
• 50:39
  SPEAKER_01: You have to follow, and if you don't have the knowledge yourself, you need to seek that knowledge.
• 50:44
  SPEAKER_01: Now that's a service that you provide, and I think um it is um I we're gonna put the links on that.
• 50:52
  SPEAKER_01: But could you just very quickly outline before we wind up here?
• 50:56
  SPEAKER_01: Quickly outline um the various components, because that your book obviously continuously gets updated.
• 51:03
  SPEAKER_01: And and I think this is the kind of information that people who are listening to this need, absolutely, because most of the the silver people the people most of the people that we're talking about here are very, very in in involved in silver.
• 51:16
  SPEAKER_01: So we talked about miners, we've talked about an AI project, which I blew my mind.
• 51:22
  SPEAKER_01: I never heard anything like this before.
• 51:25
  SPEAKER_01: And and and you offer all these services.
• 51:28
  SPEAKER_01: Can you just very quickly outline um and what their costs would be?
• 51:34
  SPEAKER_02: Thank you.
• 51:34
  SPEAKER_02: Thank you for the invitation to talk about what we provide.
• 51:39
  SPEAKER_02: Um basically, the book, the silver rising book is comprehensive, it's 300 pages, 100 catalysts, um, in-depth knowledge of the silver market.
• 51:53
  SPEAKER_02: However, it's six months old right now.
• 51:56
  SPEAKER_02: It's I think it's still the newest comprehensive book on silver.
• 52:00
  SPEAKER_02: Okay, I might be wrong, but it's probably it probably is.
• 52:03
  SPEAKER_02: But still, as we spoke, uh many things change, and that's why I never wanted the book to be the sole silver-oriented thing that we do.
• 52:12
  SPEAKER_02: And the book star the book launch uh was corresponding to the launch of the silver catalyst newsletter.
• 52:22
  SPEAKER_02: This is where we provide the continuous analysis of the silver market with regard to the fundamentals.
• 52:29
  SPEAKER_02: We provide it at least every two weeks, and through those newsletters, uh we we dig deep.
• 52:37
  SPEAKER_02: We have we literally call them deep dives.
• 52:40
  SPEAKER_02: So, what I uh told you today about uh Fauenhoff Institute and their discovery that was taken from the late April issue, actually.
• 52:50
  SPEAKER_02: So subscribers knew about that for a couple of weeks now.
• 52:55
  SPEAKER_02: There are other things like solid-state batteries and many other things that uh changed the picture.
• 53:02
  SPEAKER_02: We cover it all, and um so that's the second component that is uh that we provide uh for silver investors.
• 53:11
  SPEAKER_02: It's all under one package.
• 53:13
  SPEAKER_02: That's the book, Silver Rising, that's the silver catalyst newsletter, keeps people up to date, and also the newest edition, the silver stockpicker tool.
• 53:23
  SPEAKER_02: So if it's updated after each market uh day, so always up to date, basically uh available to subscribers whenever you want to use.
• 53:35
  SPEAKER_02: And um uh the best thing is that um this is available for only$39 a month, and the first two weeks of access are for just one dollar, so a single buck.
• 53:50
  SPEAKER_02: So I think it's I I wanted this to be for anyone's pocket, so there's literally no excuse not to have uh all those details on silver, also including the up-to-date ones.
• 54:02
  SPEAKER_02: So uh the link is uh also I think visible below my face right now, and definitely in the video, so it's it's super simple to remember silver2006.com.
• 54:14
  SPEAKER_02: And yes, it will change next year to silver2027.com.
• 54:19
  SPEAKER_02: Um, and uh there's also one uh one extra thing if people are interested.
• 54:25
  SPEAKER_02: We recently started a YouTube channel.
• 54:28
  SPEAKER_02: We're experimenting with the content, but it's it's a short form videos, like uh five to seven minutes.
• 54:34
  SPEAKER_02: Uh we're posting them right now weekly or two times per week.
• 54:38
  SPEAKER_02: And uh uh it is provided by the uh AI Avatar by of the Silver Engineer.
• 54:46
  SPEAKER_02: A Silver Engineer was uh is a brand name.
• 54:50
  SPEAKER_02: I founded it, and I'm I'm reviewing all this, so I make sure that the quality is there.
• 54:56
  SPEAKER_02: But we wanted to this to you know to have its own voice.
• 55:00
  SPEAKER_02: Um, and I think we're doing a good job, but I invite people to take a look.
• 55:05
  SPEAKER_02: It's just you know five to seven minutes each time.
• 55:08
  SPEAKER_02: So uh again, uh it's called silver structure.
• 55:13
  SPEAKER_02: That's and that's the point.
• 55:14
  SPEAKER_02: That's that's what you said.
• 55:16
  SPEAKER_02: We the aim is to educate.
• 55:18
  SPEAKER_02: Uh we don't want to be you know focused on only the bullish side, we don't want to be focused only on the bearish side.
• 55:26
  SPEAKER_02: The goal is to be objective.
• 55:28
  SPEAKER_02: The goal is to find claims circulating in the um in the social media, in the in general media that regard silver, and then analyze them thoroughly within the within each segment.
• 55:42
  SPEAKER_02: So uh so in so I invite everyone to to take a look uh once they already take up on the dollar offer for for the book and uh the 2000 weeks of of uh of silver catalyst access.
• 55:59
  SPEAKER_02: So thank you.
• 56:00
  SPEAKER_01: And I really do recommend people do do this and do do and bear in mind you're talking about people who are entering a minefield, and to me, I look at it like there's a minefield, but but what you need to do is is help people to steer their way through um without getting blown up along the way.
• 56:18
  SPEAKER_01: So essentially I honestly recommend people check you out.
• 56:23
  SPEAKER_01: I mean, for goodness me, for a dollar, I mean, come on, you know, give your head a shake if you don't do it, because you know, obviously you aren't interested in self-vigues, you wouldn't be looking at this.
• 56:33
  SPEAKER_01: And for a buck, you get all that information.
• 56:36
  SPEAKER_01: And I I guarantee you that kind of information, we know information is power.
• 56:43
  SPEAKER_01: And and and and how can we possibly make decisions without as much information as possible?
• 56:50
  SPEAKER_01: So thank you, Prem, for joining us today.
• 56:53
  SPEAKER_01: No, not six months from now, we've got to do this more regularly.
• 56:58
  SPEAKER_01: But people have a link now where they can, you'll put up the link for for where they can access your your your more regular updates, uh, your website, where I can uh obtain all the all the um information.
• 57:12
  SPEAKER_01: But thank you for sparing your time to join us for an hour today, which really was time well spent.
• 57:18
  SPEAKER_02: Thank you.
• 57:19
  SPEAKER_02: Thank you, Andrew.
• 57:20
  SPEAKER_02: Thank you for the invitation.
• 57:21
  SPEAKER_02: I'm looking forward to speaking with you much sooner than in six months.
• 57:27
  SPEAKER_02: Thank you.
• 57:28
  SPEAKER_02: Absolutely, thank you, man.
• 57:31
  unknown: Thank you.
• 57:32
  SPEAKER_00: All right, thanks for joining us on this episode of Life in the Vault, brought to you by Kinesis Money.
• 57:38
  SPEAKER_00: And a huge thanks goes out to Andrew McGuire and our featured guest, Prem Radomsky for of Golden Medals, for cutting through the noise and sharing insights that you just won't find anywhere else.
• 57:51
  SPEAKER_00: Now, if you like this episode, subscribe right now by hitting that subscribe button, turn on your notifications so you never miss out as these episodes go live.
• 58:00
  SPEAKER_00: And uh don't also forget to share this episode with someone who really needs to hear the real story behind the headlines.
• 58:07
  SPEAKER_00: And we're back soon with more hard-hitting truths from inside the precious metal space.
• 58:13
  SPEAKER_00: And until then, thanks for watching, and we'll see you right here next time on Live from the Vault.
• 58:18
  SPEAKER_00: Bye for now.