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The Bond Market Is Sending a Warning | Grant Williams · Kitco MINING

• 0:00
  SPEAKER_00: Kitco Mining on-site coverage of the Precious Metal Summit is presented by New Core Gold.
• 0:11
  SPEAKER_01: Bonds are everything.
• 0:13
  SPEAKER_01: Hello and welcome back to Kitco Mining with me, Paul Harris, at the 2026 Precious Metal Summit in Beaver Creek, Colorado.
• 0:20
  SPEAKER_01: Before you fall asleep, this is going to be a very exciting issue.
• 0:22
  SPEAKER_01: We could get into some of the juicy details about the bond market and how it's impacting life, the universe, and everything.
• 0:29
  SPEAKER_01: Joining me is no other than Grant Williams, author, commentator, thinker, and I would hope to say friend as well.
• 0:35
  SPEAKER_01: Absolutely.
• 0:36
  SPEAKER_01: Grant, welcome back to QC.
• 0:37
  SPEAKER_01: Mate, it's good to see you.
• 0:38
  SPEAKER_01: Always good to see you.
• 0:38
  SPEAKER_01: First time in Beaver Creek.
• 0:39
  SPEAKER_01: I'm loving it.
• 0:40
  SPEAKER_01: It's good.
• 0:41
  SPEAKER_01: I've just had John Hathaway of Sprout Asset Management on.
• 0:44
  SPEAKER_01: I'm going to use this as a sort of the walk-off hit into our conversation.
• 0:48
  SPEAKER_01: During our conversation, he he mentioned you know bonds are having a hard time.
• 0:52
  SPEAKER_01: This is going to be the key subject for what we're talking about right now.
• 0:56
  SPEAKER_01: You do the a podcast called The Endgame.
• 0:59
  SPEAKER_01: Is the Endgame here?
• 1:00
  SPEAKER_01: And what's the position or the role of bonds within that?
• 1:04
  SPEAKER_02: Yeah, well, you know, it's such a big question, and it's an important one.
• 1:08
  SPEAKER_02: You know, we're here at a Precious Metals conference, and um everyone's talking about gold and silver and copper as they rightly should.
• 1:15
  SPEAKER_02: But but realistically, the place people should be looking is the bond market because there, you know, there's some serious stress in the bond market.
• 1:22
  SPEAKER_02: And you know, people have forgotten how important the bond market is because it's been a one-way ride for 40 years.
• 1:28
  SPEAKER_02: If you look at charts of the yields on any major 10-year bond, it's gone from you know 20% to zero in pretty much a 45-degree angle for 40 years.
• 1:37
  SPEAKER_02: Um, now that trend has reversed, and it's not they're not bonds and yields are not going back down without a crisis again, and bond yields going up is likely to engineer a crisis.
• 1:46
  SPEAKER_02: So this is a place that people should be paying close attention to.
• 1:49
  SPEAKER_02: And I think if you've if you spent any length of time in the precious metals markets, if you if you were buying gold uh you know at any point over the last 15-20 years, not because you thought the price was going to go up, but you were worried about the future, you're worried about liabilities and worried about financing and the dollar and all those kind of existential worries that are that are much bigger than the price.
• 2:13
  SPEAKER_02: We're now at the point that the people that were buying gold for that reason saw coming.
• 2:18
  SPEAKER_02: We thought it was here in 2008, we thought maybe there was an echo of it in 2012, the European debt crisis, we thought maybe COVID would be it.
• 2:26
  SPEAKER_02: None of those things work because the the authorities were able to just throw an inordinate amount of freshly printed cash at the problem and reverse it.
• 2:34
  SPEAKER_02: And I'm going to talk about this in my presentation this afternoon.
• 2:37
  SPEAKER_02: But now we have inflation here, and so the bond market is in a bind.
• 2:43
  SPEAKER_02: The central banks can't raise rates in a meaningful way without detonating markets, and they can't really cut rates because inflation's there.
• 2:52
  SPEAKER_02: And this is a real problem now.
• 2:54
  SPEAKER_02: So it is a pickle, it is a pickle.
• 2:56
  SPEAKER_02: Uh it's a pickle.
• 2:58
  SPEAKER_02: I'm sure Scott Besson sits down every day and thinks, you know, why don't we sort this little pickle we're in out?
• 3:03
  SPEAKER_02: But it's but it's interesting, right?
• 3:04
  SPEAKER_02: Because you've now got Kevin Walsh in the uh the Fed um who just raised rates.
• 3:09
  SPEAKER_02: Uh somehow he did it without visibly upsetting Donald Trump, which I think is a very important tell because he needed to raise rates to keep inflation at bay.
• 3:20
  SPEAKER_02: It may not last, but he needed to do it now.
• 3:23
  SPEAKER_02: And Trump didn't call him out the way he called Powell out for every single thing he did.
• 3:26
  SPEAKER_02: There were no you know loud tweets in capital letters about we need to cut rates.
• 3:30
  SPEAKER_02: I mean, there was one tweet that went out ahead of the event, but nothing since.
• 3:34
  SPEAKER_02: So either Trump recognises that we're in a bind and rates do have to go up, or somehow Walsh has got some magic crocodile dundee charm mechanism that's hypnotising.
• 3:45
  SPEAKER_02: But the bond market is where people should be looking because that's going to dictate the next phase of this.
• 3:49
  SPEAKER_01: Okay, let me ask a really basic, ignorant question.
• 3:53
  SPEAKER_01: Why are bond yields important?
• 3:54
  SPEAKER_01: What do they tell?
• 3:55
  SPEAKER_01: What do they show?
• 3:56
  SPEAKER_02: Well, that it look they're important because they're the cost of money, right?
• 3:59
  SPEAKER_02: They're the cost of money, and and and also they're very good at showing stress in the system.
• 4:04
  SPEAKER_02: They're all they're good at showing where credits are potentially poor and going to fail.
• 4:09
  SPEAKER_02: If you see rates spiking, it means people are worried about the chance of getting their money back.
• 4:12
  SPEAKER_02: So it's a really good basic indicator if you see bonds going up.
• 4:17
  SPEAKER_02: What we're also seeing, there's a lot of people talking about AI, if you look at the amount of capital that the AI companies are soaking up in newly issued bonds, they're crowding out the government, they're crowding out private capital.
• 4:30
  SPEAKER_02: Um, there is a massive war on for capital right now, and that is going to push the price of money up.
• 4:35
  SPEAKER_02: There are a lot of wins that are that are pushing yields higher.
• 4:38
  SPEAKER_02: And really, probably the most important part of this is the interest service costs on government debt in the US.
• 4:45
  SPEAKER_02: It's$40 trillion now.
• 4:46
  SPEAKER_02: Uh, interest costs uh have tripled in a very short space of time.
• 4:50
  SPEAKER_02: We're now$1.3 trillion a year in in debt servicing costs, which is that's a big knock when you've got a$2 trillion deficit.
• 4:58
  SPEAKER_02: So the numbers are getting to that point where once we stopped talking about billions with a B and started talking trillions with a T, you saw a lot of people just tune out because it's like one of those playground numbers.
• 5:08
  SPEAKER_02: Yeah, I hate you a trillion.
• 5:10
  SPEAKER_02: It's like, what does it really mean?
• 5:11
  SPEAKER_02: But now we're starting to people starting to actually understand what trillions mean, and now trillions are starting to mean something the way billions did post-TARP in 2008, you know, that$787 billion seemed like a fanciful number back then.
• 5:25
  SPEAKER_02: But of course, now people recognize what that was and how small it was compared with what they need to throw at the problems today.
• 5:32
  SPEAKER_02: So everything is happening around the bond market, and people need to be paying attention to those yields because they are going to dictate a lot of what governments and central banks have forced to do.
• 5:43
  SPEAKER_01: Okay.
• 5:43
  SPEAKER_01: Your your comment there reminds me of the sort of the joke from a long time ago about George W.
• 5:47
  SPEAKER_01: Bush talking about Brazilians.
• 5:49
  SPEAKER_01: This I've got to hear.
• 5:51
  SPEAKER_01: But I'll tell you afterwards.
• 5:52
  SPEAKER_01: Okay.
• 5:53
  SPEAKER_01: Uh we're in the United States, of course.
• 5:57
  SPEAKER_01: Um, we've seen some really interesting action in the space of the past few weeks.
• 6:02
  SPEAKER_01: The US Treasury Secretary Scott Besson is coming over, or Louis XIV Listat Simmoir, you know, I am the house.
• 6:08
  SPEAKER_01: The bond market obviously didn't pay him any credence at all, yields continue to rise.
• 6:13
  SPEAKER_01: You know, what how what's going on in that dynamic?
• 6:15
  SPEAKER_02: Well, I think I think Besson saying that was meant to be a sign of strength, but I think it's really a sign of weakness.
• 6:23
  SPEAKER_02: You know, to say that.
• 6:24
  SPEAKER_02: There's a great quote from Margaret Thatcher, um, which I included on the front of the piece I wrote about this on Sunday.
• 6:30
  SPEAKER_02: She said, you know, being powerful is uh being powerful is like being a lady.
• 6:34
  SPEAKER_02: If you have to tell people you are, you aren't.
• 6:36
  SPEAKER_02: And it's so true, right?
• 6:38
  SPEAKER_02: So for Besson to come out with his come at me, bro, you know, you can test me if you like, that is something that the markets are going to sniff as weakness, and that's why they've gone in his face.
• 6:47
  SPEAKER_02: Uh this is mathematics, right?
• 6:49
  SPEAKER_02: Besson can say everything he likes, but ultimately, as rates go up, the government's interest rate, the interest expense bill gets bigger, the discretionary spending gets squeezed.
• 6:59
  SPEAKER_02: There are the bond market can always hold a government, a treasury, a central bank over the coals.
• 7:06
  SPEAKER_02: They just haven't for 40 years because rates have been going down and bond price have been going up.
• 7:09
  SPEAKER_02: It's been a perfect environment.
• 7:10
  SPEAKER_02: That's changed.
• 7:11
  SPEAKER_01: Just around the corner, we've got uh perhaps a litmus test with the midterm elections in the in the United States.
• 7:17
  SPEAKER_01: Whilst I don't anticipate bonds per se being an election topic, because as you say, most people just tune out, the implications of what happening are being felt by the population at last.
• 7:28
  SPEAKER_01: You know, the the as you mentioned, the the debt payments, elsewhere in uh what we'll be talking about later in the geopolitical sphere, fuel prices increasing, these are very real things that the average American does care about.
• 7:40
  SPEAKER_01: To what extent or not do you think that what's going on in the bond market will have an impact on what happens in the midterm elections?
• 7:47
  SPEAKER_02: Well, uh, I mean, don't forget mortgages, right?
• 7:50
  SPEAKER_02: Mortgages are all priced off the 10-year bond, and mortgage rates are going up, property prices are coming down.
• 7:54
  SPEAKER_02: That's a big concern of a lot of voters.
• 7:56
  SPEAKER_02: Look, I I suspect if you look across what we see in the midterm elections, people are talking about is it going to be a red wave, a blue wave?
• 8:05
  SPEAKER_02: I I think you're far more likely to just see incumbents voted out.
• 8:09
  SPEAKER_02: Whether they're red or blue, people are going to vote for the other guy, right?
• 8:13
  SPEAKER_02: Because things aren't good.
• 8:14
  SPEAKER_02: Their cost of living's going up, they're struggling to pay their heating bills, they're struggling to fill their car with gas, they're struggling to pay their mortgage.
• 8:20
  SPEAKER_02: People are struggling, and the struggle is real, right?
• 8:22
  SPEAKER_02: And on the other hand, they're seeing the top of what my friend Peter Atwater christened the K-shaped economy, which is now a phrase that's everywhere.
• 8:28
  SPEAKER_02: He should have trademarked it.
• 8:29
  SPEAKER_02: I told him that.
• 8:30
  SPEAKER_02: Um, the people at the top are all over TikTok flaunting their wealth and showing how great they've got it.
• 8:36
  SPEAKER_02: So the the the the anger is palpable, you can feel it.
• 8:40
  SPEAKER_02: People aren't happy, and when they're not happy, they just vote against the status quo.
• 8:44
  SPEAKER_02: So whether you're a if you're a died-in-the-wall Democrat, a died in the wool Republican, and you can't feed your kids, and you think the other guy is going to help you do that, you'll switch sides.
• 8:53
  SPEAKER_02: So I I don't I've got no idea how these midterms are gonna go.
• 8:56
  SPEAKER_02: I've I've had a pretty good feel for the last several midterms in the last elections.
• 9:01
  SPEAKER_02: I've got all those right.
• 9:02
  SPEAKER_02: This one, I really don't know how this is gonna go.
• 9:05
  SPEAKER_01: I think that's an important point.
• 9:06
  SPEAKER_01: When when life is hard, you tend to blend in government, whatever colour they're putting.
• 9:09
  SPEAKER_01: And you should, right?
• 9:11
  SPEAKER_02: People send them to Washington, to Parliament in the UK to do things to make their lives better.
• 9:16
  SPEAKER_02: Yeah, that we're in we're in the same boat in the UK, you know we are, it's the same, exactly the same situation.
• 9:19
  SPEAKER_01: Yeah, we're not we're not gonna pick that particular scab.
• 9:22
  SPEAKER_01: Okay, you you're speaking this afternoon, you're given a keynote.
• 9:24
  SPEAKER_01: Um the the general theme is gold, the wolf is back, uh, money becoming honesty again, um, in which you revisit a presentation you gave in 2018 and you used Yellowstone as a metaphor and the apex predators, the wolf, um, to ask whether the global monetary system is now approaching the moment when gold returns as the stabilizing force in the financial ecosystem that's been stripped bare by debt, debasement, and limitless credit.
• 9:51
  SPEAKER_01: Um that's perhaps a summary.
• 9:54
  SPEAKER_01: Can you sort of flesh it out for us what you're gonna be talking about and what you see happening and how you see that playing out?
• 10:00
  SPEAKER_02: Yeah, I think I and for any of your viewers that have heard me talk about this before, they can either switch off or play Candy Crush on their phones or something while we do this.
• 10:08
  SPEAKER_02: But um yeah, look, I I think um the way I the way I've always looked at gold uh in terms of its place in the financial system, it's never been about the price for me, and I've I've I've never really talked about the price because I just don't think that's important.
• 10:22
  SPEAKER_02: It's about what gold represents and about what it ultimately um will be needed for, and it will be needed to stabilize the financial system.
• 10:29
  SPEAKER_02: You know, when the system resets, and the last reset was 1971, so you know, realistically, I'm what I'm coming up on 60.
• 10:38
  SPEAKER_02: Uh I started in financial markets in the mid-80s.
• 10:41
  SPEAKER_02: So, you know, you've you've really got to be in your late 70s, early 80s to have been an active participant in the financial world when we had the last reset.
• 10:52
  SPEAKER_02: People have read about it, people have, you know, done the work to understand the history of it, but they've never lived it.
• 10:58
  SPEAKER_02: No one, and if to to remember the the situation that led up to the last reset with Bretton Woods, you've got to be 90, late 90s, right?
• 11:06
  SPEAKER_02: So those memories have gone, and people don't know what it feels like when you're entering a period where a reset is required.
• 11:12
  SPEAKER_02: Now you can look around the world today and you can feel this tension, you can feel the people are angry with governments, they're angry with politicians and central banks and the UN and the World Bank and all these institutions that were put in place after the last reset, people have had enough and they want to tear all this stuff down.
• 11:29
  SPEAKER_02: You know, Trump is an agent of that.
• 11:31
  SPEAKER_02: He's not the cause of it, he's a symptom of that stress and that anxiety.
• 11:35
  SPEAKER_02: Um, and so when these resets happen, inevitably they ripple through the financial system because everything is built on credit and leverage and debt and money.
• 11:46
  SPEAKER_02: And without some honest money to put at the center of whatever the new system looks like, you've got no way to stabilize the system.
• 11:53
  SPEAKER_02: This is why gold was put at the center of Bretton Woods, right?
• 11:56
  SPEAKER_02: $35 an ounce, gold fixed to the US dollar, and all the other currencies floated around that.
• 12:01
  SPEAKER_02: But you had an anchor and gold was that anchor.
• 12:04
  SPEAKER_02: When this breaks, and it will break, because it always breaks, uh they will need a stabiliser for the entire mileage system.
• 12:12
  SPEAKER_02: And the only thing in my mind that can be or will be is gold.
• 12:16
  SPEAKER_02: So um the the idea of the presentation is just to explain that you know when people talk about gold standard, they will say, ah, don't be ridiculous, we're not going to go back to gold standard.
• 12:25
  SPEAKER_02: Who why would a politician choose to have a gold standard?
• 12:27
  SPEAKER_02: And that's absolutely right.
• 12:28
  SPEAKER_02: There was there's no way they would choose to have a gold standard, it will be forced upon them.
• 12:32
  SPEAKER_02: And in order for it to be forced upon them, you need three things.
• 12:35
  SPEAKER_02: You need political upheaval, you need social upheaval, and you need financial market upheaval.
• 12:41
  SPEAKER_02: Political upheaval, I think that's a big check.
• 12:43
  SPEAKER_02: Social upheaval, talk to anybody, financial market upheaval, that's the missing point.
• 12:48
  SPEAKER_02: And it came in 2020.
• 12:50
  SPEAKER_02: It came, we saw that, and they threw around the world$12 trillion at stopping that, and it gave us this last little burst of of liquidity that helped markets rise.
• 13:02
  SPEAKER_02: But where do they go now?
• 13:03
  SPEAKER_02: They can't throw another$12 trillion at this.
• 13:06
  SPEAKER_02: Um, so you know what when that happens, when those things happen, it ripples the other way, and gold doesn't cause social upheaval, political upheaval, financial market upheaval.
• 13:16
  SPEAKER_02: It's the answer to those problems.
• 13:17
  SPEAKER_01: Well, let's get into some geopolitics and maybe some real politics because you know it doesn't occur in isolation.
• 13:24
  SPEAKER_01: You mentioned 2020 when the world linked arms to try and stave it off.
• 13:28
  SPEAKER_01: Um, so there is in moments of stress, there is political motivation to sort of try and do something, whether that's effective or not.
• 13:36
  SPEAKER_01: In the current time, just this week, President Trump made the unusual step of meeting China's president Xi Jinping on the tarmac rather than waiting for the president, Chinese president, to travel to the White House as is traditional.
• 13:49
  SPEAKER_01: What should we make of this?
• 13:50
  SPEAKER_01: Is this the perhaps Trump bending the knee to Xinping?
• 13:54
  SPEAKER_02: Look, I honestly it's a great thing for people to write opinion pieces about.
• 14:00
  SPEAKER_02: Does it symbolize something?
• 14:01
  SPEAKER_02: It probably symbolizes more to the Chinese than it does to the Americans, right?
• 14:05
  SPEAKER_02: And and the Chinese are very focused on on finding the meaning in everything.
• 14:11
  SPEAKER_02: You know, every every statement that comes out of the the PBOC or comes out of the Politburo in China, every every stately visit is carefully coordinated.
• 14:21
  SPEAKER_02: They have a real focus on that.
• 14:24
  SPEAKER_02: I'm not so sure that the focus is as intent in America.
• 14:28
  SPEAKER_02: For me, was there meaning to it?
• 14:30
  SPEAKER_02: Probably.
• 14:31
  SPEAKER_02: But is it meaningful in terms of what's going to happen today, tomorrow, and the next month?
• 14:37
  SPEAKER_02: It's unlikely, I think.
• 14:38
  SPEAKER_02: Um, you know, I don't I don't see how that's gonna solve a set of problems that are intractable.
• 14:46
  SPEAKER_02: That's the reality.
• 14:46
  SPEAKER_02: I mean, the reality is China and America need to come together because they both face the same problem.
• 14:51
  SPEAKER_02: And the longer they spend each trying to be the top dog, um, the more problems are gonna build up behind them.
• 14:57
  SPEAKER_02: They need to find a way to work together.
• 14:58
  SPEAKER_02: I I don't know that's gonna happen.
• 15:00
  SPEAKER_02: Uh in fact, I'm pretty sure it won't, but um yeah, no, I don't read too much into that at all.
• 15:04
  SPEAKER_01: Okay, well let's take a trip to the Middle East.
• 15:07
  SPEAKER_01: Um, what do you think is really at play in the Iran conflict?
• 15:12
  SPEAKER_01: The conflict has restrict oil supply, and that's particularly the case now that the Houtis in the in the southern south of Yevun have put pressure on the Red Sea route as well.
• 15:20
  SPEAKER_01: That hurts many countries that uh have to import oil, the US less so, although the US is experiencing uh the pain of higher fuel prices.
• 15:29
  SPEAKER_01: Saudi Arabia had been closing up to sort of Russia, sorry, to China and the BRICS.
• 15:33
  SPEAKER_01: It was looking to break away from the the petrodollar agreement.
• 15:37
  SPEAKER_01: Uh now it seems now it is feeling militarily and economically threatened and exposed.
• 15:43
  SPEAKER_01: Is this a perhaps a manufactured scenario for Saudi and the region in general to acknowledge that it still does need the US?
• 15:51
  SPEAKER_02: Uh it's a good question.
• 15:52
  SPEAKER_02: Um does it still need the US?
• 15:55
  SPEAKER_02: Yes.
• 15:56
  SPEAKER_02: Does it still trust the US?
• 15:58
  SPEAKER_02: I don't know.
• 16:00
  SPEAKER_02: That's that's I think the issue here.
• 16:01
  SPEAKER_02: It's not whether it needs the US or not, it's whether it can feels it feels it can trust the US to the same extent it once could.
• 16:08
  SPEAKER_02: Um and I think you know that's that's a really important and much broader topic, this idea of trust.
• 16:15
  SPEAKER_02: You know, I gave a presentation in 2022, I think it was, um about uh choice and trust and change.
• 16:24
  SPEAKER_02: Um and the point being we've got so many choices, um, but there is so much change happening, but the biggest change is that trust is declining everywhere.
• 16:32
  SPEAKER_02: Trust in each other, trust in politics, trust in money, most importantly, perhaps.
• 16:37
  SPEAKER_02: And what's happened since then, particularly uh, you know, with with the freezing of those Russian central bank assets in 2022, the US has proven itself to, at a given time, under a certain set of circumstances, to be a somewhat capricious ally.
• 16:53
  SPEAKER_02: And so do the Saudis believe that America has their backs unequivocally like they have done up until the last ten years?
• 17:02
  SPEAKER_02: I don't know.
• 17:02
  SPEAKER_02: You'd have to ask MBS.
• 17:04
  SPEAKER_02: But I would suspect that, along with Saudi, a lot of other countries in the region have probably had their heads turned a little bit by Chinese investment, by um promises from the Chinese of how we can restructure all firms, particularly as now the US is the biggest competitor to Saudi in terms of oil exports.
• 17:23
  SPEAKER_02: Yeah, there are a lot of cross currents here that if you if you stand in the middle as the Middle East, you think put yourself in Saudi shoes, and you look east and you look west, it was a pretty easy choice until recently.
• 17:37
  SPEAKER_02: Now the choice is not so clear.
• 17:40
  SPEAKER_02: And I think this Iran war was miscalculated.
• 17:45
  SPEAKER_02: I understand why people felt that regime had to go, but I think it's been a very poorly judged campaign and it's created uh problems that are going to ripple through those exact relationships you're talking about and create new dynamics that weren't in play before.
• 18:04
  SPEAKER_01: Thank you.
• 18:05
  SPEAKER_01: In terms of trust, uh obviously President Trump and his tariffs have caused most of his allies to view the United States as as capricious at best, hostile even at worst.
• 18:15
  SPEAKER_02: Well, and and and again from this unreliable idea, you know, Trump took away the tariffs on Irish whiskey while he was giving away a trophy at the Irish Open Golf Tournament the other week.
• 18:26
  SPEAKER_02: How do you function in a world where the president might say, oh, you know what, forget the tariffs.
• 18:31
  SPEAKER_02: I'm giving this trophy to Shane Lowry.
• 18:33
  SPEAKER_02: Forget the tariffs.
• 18:34
  SPEAKER_02: Hey, everyone going in.
• 18:36
  SPEAKER_02: How do you deal with a with with a man like that on a state level, right?
• 18:39
  SPEAKER_02: It's it it he's making it difficult for people to to deal with him.
• 18:45
  SPEAKER_01: Yeah, definitely.
• 18:46
  SPEAKER_01: And it's not just um well, another example or or perhaps uh illustration of this is the fact that the Netherlands, France, Germany, they've all been repatriating gold from the US.
• 18:57
  SPEAKER_01: Um, and I the the possibilities there are again the lack of trust or confidence in the United States, the fear that the US may appropriate it or not let them have it back, and perhaps also their own domestic uh issues of lack of confidence in the governments from their own people.
• 19:14
  SPEAKER_02: Well, look, there's there's there's there has been no reason for that gold to come back for what 70, 50 years.
• 19:22
  SPEAKER_02: 50 years.
• 19:23
  SPEAKER_02: It sat there, no problem at all, no reason for it to come back.
• 19:26
  SPEAKER_02: Germany started doing it about a decade ago, and there was a big farah because it was going to take them so long to get their gold back.
• 19:33
  SPEAKER_02: Um and slowly but surely the these countries are starting to want their gold back under their own auspices, and of course they should.
• 19:42
  SPEAKER_02: But why would you, if if you had gold, you would leave it somewhere you trusted.
• 19:47
  SPEAKER_02: If you uh had your gold at Brinksmat, you know, other custodians are available, if you had your gold at Brinksmat and you read the company was going to go under, what was the first thing you'd do?
• 19:54
  SPEAKER_02: You'd move your gold to Malk Armitt or somewhere, right?
• 19:58
  SPEAKER_02: You you you would do that.
• 19:59
  SPEAKER_02: And so this is a sign that our most precious asset, which it is, is the only true money that any of these countries have, we'd we'd rather not leave it in the United States' hands for those reasons.
• 20:11
  SPEAKER_02: We don't trust them, we don't trust they won't appropriate it.
• 20:14
  SPEAKER_01: Well, that is a problem.
• 20:15
  SPEAKER_01: I think an interesting twist to that grant is at the same time a big narrative in Europe is the fear of Russia militarily steaming into Europe again.
• 20:24
  SPEAKER_01: So sort of taking the gold from America where it's safe from that, putting it into Europe where if that's your fear, you're putting it in the pathway of if Russia does choose to do something, you you know.
• 20:35
  SPEAKER_02: Yeah, this is true.
• 20:36
  SPEAKER_02: Um this is true.
• 20:37
  SPEAKER_02: And if you look back at those if you look back at the history of how much gold has been in in the Federal Reserve, New York, um, you'll see that during World War II it it skyrocketed because everyone sent from Europe sent their gold to the US, so it was safe from the Nazis, which is the reason why most of it is there.
• 20:55
  SPEAKER_02: It you know, it it started being taken away in the 60s, the French particularly were kind of aggressive in in saying, you know, we'd rather have the gold than the paper.
• 21:04
  SPEAKER_02: Um and of course Nixon put a stop to that.
• 21:06
  SPEAKER_02: It didn't stop people taking their gold out, they knew it was safe there.
• 21:10
  SPEAKER_02: But if you see Russia look more like they're gonna invade another country, which at this moment I don't see it as a base case, but the more the war goes on, the more Putin gets backed into a corner, you can't rule it out that he might decide to expand the war, you yeah, you may well see that gold go back to the US, because uh an untrustworthy United States is probably the lesser of two evils with Putin's army knocking on your door, ready to break into the vault of the bank.
• 21:38
  SPEAKER_02: But for now, it's all going in one direction, and that's away from the United States.
• 21:42
  SPEAKER_01: I guess a very interesting historical parallel there with in the Second World War with both Japan and Germany was the the economic pressure that really backed them into increasing their aggression against other countries.
• 21:55
  SPEAKER_02: Yeah, yeah.
• 21:55
  SPEAKER_02: I mean the German one was the Treaty of Versailles, and that's so that that was stewing ever since the end of the World War.
• 22:00
  SPEAKER_02: War one.
• 22:00
  SPEAKER_02: And when that treaty was signed, there were people saying, This is a bad, you know, this is a bad idea.
• 22:05
  SPEAKER_02: You're punishing them too much.
• 22:06
  SPEAKER_02: This is going to lead to problems in the future.
• 22:08
  SPEAKER_02: Didn't take that long.
• 22:09
  SPEAKER_02: And with Japan, obviously it was oil and steel that were the problems.
• 22:12
  SPEAKER_02: And that eventually pushed the Japanese into lashing out.
• 22:16
  SPEAKER_02: So it's um there's a lot at play here, and we are in as dangerous a period as we've had since the buildup to World War II.
• 22:26
  SPEAKER_02: You know, the the the doomsday clock is at, I think, the closest to midnight it's been since uh the end of World War II.
• 22:33
  SPEAKER_02: And there's a reason for that.
• 22:34
  SPEAKER_02: And you can see it all around you.
• 22:35
  SPEAKER_02: It's very difficult to understand the real risks.
• 22:39
  SPEAKER_02: It's really understand to evaluate them and hedge them because so many extreme events, you know, we're talking about once-in-70-year events here, so it's very difficult to price that risk accordingly.
• 22:52
  SPEAKER_02: You just have to be aware that from your own personal portfolio, coming back to gold for a moment, um the risk of a kinetic conflict in the nature of World War II, but updated to be drone heavy or whatever you want to do, until I don't know, let's call it 10 years ago, it was effectively zero.
• 23:13
  SPEAKER_02: You could say there is no chance of World War III happening, maybe 20 years ago.
• 23:18
  SPEAKER_02: Zero.
• 23:18
  SPEAKER_02: And you'd have been spot on.
• 23:21
  SPEAKER_02: I don't know what that percentage is now, but I know for damn sure it's not zero.
• 23:27
  SPEAKER_02: And if there is a non-zero possibility of a once-in-70-year catastrophic event happening, then you need to think about how do I insure myself against that?
• 23:38
  SPEAKER_02: You know, bullets and beans and all that sort of stuff.
• 23:41
  SPEAKER_02: But from a portfolio standpoint, you want to own something resilient, you want to own something that can't be closed.
• 23:48
  SPEAKER_02: Um markets can get closed, bond markets can get closed.
• 23:50
  SPEAKER_02: Yeah, there are almost financial repression, there are so many things that can be done.
• 23:54
  SPEAKER_02: So the exercise of thinking through okay, if you still believe there is no chance there's a war going to happen or some catastrophic event, carry on.
• 24:04
  SPEAKER_02: Nothing to see here, move long.
• 24:06
  SPEAKER_02: If you think there is, then you need to, as I've said, and I've said this many times before, you need to at least take the time to think about how would that impact me.
• 24:13
  SPEAKER_02: And I think if you start the exercise, you'll find out it will impact you pretty severely.
• 24:17
  SPEAKER_01: Okay, we've covered a lot of ground grant.
• 24:19
  SPEAKER_01: Are there any particular indicators that our viewers can watch out for or hints that some of what we've been talking about is is happening or taking effect or things of that nature?
• 24:29
  SPEAKER_02: Honestly, I really think the gold price and the bond market are the two things that everybody should be watching now.
• 24:34
  SPEAKER_02: The gold price, not for the fact that all it's going up, but for the signals it's sending about trust in the system, about trust in money.
• 24:42
  SPEAKER_02: And the bond market for the pressures of this day of reckoning between the balance sheets of countries and governments and the point where the market says, no, you you are not financially sovereign.
• 24:55
  SPEAKER_02: We are not gonna lend you money at that level.
• 24:57
  SPEAKER_02: We demand higher interest rates because that will force all kinds of actions on the part of governments who have to sell bonds at a price they can afford.
• 25:05
  SPEAKER_02: Um, so you're gonna read a lot about the bond market.
• 25:09
  SPEAKER_02: Um, there will be a lot of hysteria in it because financial journalists know enough to know that it's important, and so if it goes through the 5% level, now there's a lot of ink been spilled about it going through 5%.
• 25:25
  SPEAKER_02: Um, and if you go back through history, you will see 5% littered throughout literature.
• 25:30
  SPEAKER_02: Jane Austen would write about 5%.
• 25:32
  SPEAKER_02: That was that was the going rate of interest.
• 25:34
  SPEAKER_02: Everyone understood that if you lent someone money, you were effectively entitled to 5%.
• 25:39
  SPEAKER_02: That was a fair return.
• 25:40
  SPEAKER_02: In fact, the the Usury Act of 1713 in the UK stipulated that 5% was the maximum interest you could charge for any loan, down from 6% previously.
• 25:49
  SPEAKER_02: Um, so there's going to be a lot of hyperbolic headlines about this, but just try and tune into the drum beats.
• 25:56
  SPEAKER_02: The more you're reading about the bond market being a problem, and the more you're reading about the fact that rates are going up and things are becoming problematic for the government, that's the sign.
• 26:07
  SPEAKER_02: Not necessarily the the articles themselves, if you don't understand the bond market, but if you find that you're watching CNN and they're talking about the bond market, or you're reading USA Today and they're talking about the bond market, there is information in that.
• 26:19
  SPEAKER_01: If it makes it to those places, it's something you need to be concerned about.
• 26:23
  SPEAKER_01: Okay, there's some frequency there.
• 26:24
  SPEAKER_01: Well, Grant, this has been wonderful.
• 26:26
  SPEAKER_01: Grant Williams, thank you very much for joining me today.
• 26:28
  SPEAKER_01: Anytime, my friend, good to see you.
• 26:29
  SPEAKER_01: And we have a lot more to come for the 2026 Precious Metal Summit here in Beaver Creek, Colorado.
• 26:34
  SPEAKER_01: So stay tuned and hit that subscribe button.
• 26:36
  SPEAKER_00: I'm Paul Harris, and this is Kitco Mining.
• 26:40
  SPEAKER_00: Kitco Mining on site coverage of the Precious Metal Summit is presented by Newcore Gold.