Latest / Financial Survival Network / Warning to Silver Shorts: Your Days Are Numbered - Rick Rule

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Warning to Silver Shorts: Your Days Are Numbered - Rick Rule · Financial Survival Network

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Speaker 1: The people who are involved in complex hedges in the
0:04
Speaker 1: silver market. I think you're going to get massacred. I mean,
0:07
Speaker 1: I think they're in for some truly religious experiences. To
0:11
Speaker 1: the extent that a short position on silver that has
0:15
Speaker 1: been put in place by algorithms that are looking at
0:17
Speaker 1: silver markets over the last forty years, those leverage guys
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Speaker 1: are really truly in for a world of hurt.
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Speaker 2: You're listening to Carrie Lutz's Financial Survival Network, where you
0:28
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0:51
Speaker 3: And welcome. You are listening to and watching the Financial
0:55
Speaker 3: Survival Network. I'm your host, Carrie Leutz, and with us
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Speaker 3: is one of the savvyest and most successful resource investors
1:06
Speaker 3: on the planet. Rick Rule officially in retirement, but I
1:12
Speaker 3: was with him last week at his investment symposium Resource
1:18
Speaker 3: Investment Symposium. And Rick, if you've retired, you're keeping it
1:22
Speaker 3: a big secret, aren't you.
1:24
Speaker 1: I failed retirement pretty cool, pretty completely. And I'm delighted
1:28
Speaker 1: about that. I joke with my wife that my mind
1:32
Speaker 1: doesn't do well in neutral. It needs to be stimulated
1:35
Speaker 1: or sedated, and working for me is healthier than drinking.
1:39
Speaker 3: But I enjoy both. I feel exactly the same way
1:43
Speaker 3: you got a few years on me. But the thought
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Speaker 3: of retirement is not something I've come to terms with yet.
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Speaker 3: And this is the probably the greatest time to be
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Speaker 3: in this sector of our lifetimes here right.
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Speaker 1: I don't know if this will be more successful than
2:02
Speaker 1: the decade of the seventies was, But coming into the
2:05
Speaker 1: decade of the seventies, I didn't have much experience and
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Speaker 1: I had no money. What's different is that I have
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Speaker 1: both now, so I suspect that I will come out
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Speaker 1: of the next ten years much better than I came
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Speaker 1: out of the decade of the seventies. And I came
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Speaker 1: out of the decade of the seventies pretty well well.
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Speaker 3: Rick. I was going to ask you this question last,
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Speaker 3: but since you raised being broke and having no money,
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Speaker 3: what would you buy right now if you were thirty
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Speaker 3: years old, broke but had knowledge and nerve.
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Speaker 1: Frankly, I'd buy more knowledge. I know that's not the
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Speaker 1: right answer, but your best asset at age thirty is
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Speaker 1: compounding your knowledge and working on your reputation. I suspect
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Speaker 1: that what an investor might do, assuming they have no
3:00
Speaker 1: assets looking at the next ten years, is to begin
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Speaker 1: to save systematically and save probably half of what you
3:09
Speaker 1: say in gold. I say that not because gold will
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Speaker 1: necessarily outperform other assets, but I think that over the
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Speaker 1: next ten years, the purchasing power of the US dollar
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Speaker 1: will decline by seventy five percent, and that gold will
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Speaker 1: maintain at least its nominal purchasing power, which means that
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Speaker 1: it is a high probability savings instrument. That's a boring answer.
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Speaker 1: I'm tempted to say that a thirty year old who
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Speaker 1: believes that he or she will be able to increase
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Speaker 1: their disposable income over ten years, if they're looking at
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Speaker 1: investments simply as investments, should consider buying exon mobile.
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Speaker 3: Yeah. Yeah, you mentioned that during the conference and the
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Speaker 3: you know talk about boring. You can't get any more
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Speaker 3: boring than the Big X, So, you know, interesting, This
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Speaker 3: idea of investing in human capital, mainly your own human capital,
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Speaker 3: I found in my life to be the one surefire
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Speaker 3: investment that has never failed me. In over you know,
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Speaker 3: nearly seven decades, every time I invested in myself it
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Speaker 3: paid back many times over time than anything else I
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Speaker 3: ever invested in.
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Speaker 1: I would agree with that completely. Knowledge is an asset. Well,
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Speaker 1: you can lose it, but it can't be stolen. It
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Speaker 1: can't be taxed. The fruits can be taxed, and your
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Speaker 1: reputation the same. What thirty year olds need to focus
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Speaker 1: on is the group of people they choose to be
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Speaker 1: their community, because you become the sum of your friends,
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Speaker 1: your reputation because if you lose it's very difficult to
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Speaker 1: rebuild it. And your knowledge, all the risks that you face, Carrie,
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Speaker 1: probably are manageable. If you manage the risk. This to
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Speaker 1: the left of your right ear and to the right
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Speaker 1: of your left ear.
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Speaker 3: I couldn't agree with you more. And like you said,
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Speaker 3: the knowledge you attain, you know, no one can ever
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Speaker 3: take it away from you. You can't lose it. Health,
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Speaker 3: all those types of things. But assuming your health is good,
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Speaker 3: invest in your health, invest in your human capital. So
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Speaker 3: I wasn't going to go in this direction, but I
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Speaker 3: have to go there with you now because you made
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Speaker 3: me think of something at a connection. Ironies, the ironies
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Speaker 3: of life. So we're in the midst of this green revolution,
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Speaker 3: all right, And the very people who've been espousing the
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Speaker 3: green revolution have been the people who've been holding it
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Speaker 3: back because you can't get a mining permit. They've made
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Speaker 3: the process so impossible to obtain a permit that we've
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Speaker 3: seen companies just throw up their hands and say adios,
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Speaker 3: I'm done. And then our current president, who is the
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Speaker 3: most anti anti electrification. I wouldn't say he's anti technology,
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Speaker 3: he's just maybe common sense about it. His policies speeding
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Speaker 3: up mind permits, things like putting the road through at
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Speaker 3: the Ambler District in Alaska for Trilogy who I worked
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Speaker 3: with in the past, full disclosure. But his policies are
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Speaker 3: making the Green New Deal more accessible than any of
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Speaker 3: his adversaries. Do you find that as ironic as I do?
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Speaker 1: Rick, Well, it's important to understand that the Green New
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Speaker 1: Deal wasn't really about environment.
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Speaker 3: Let's get that out of the way.
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Speaker 1: And I also need to say I'm no particular fan
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Speaker 1: of Trump, but I do note that he has been
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Speaker 1: effective at rescinding executive decrees by prior administrations. And I
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Speaker 1: have noticed myself a real change in the politics of
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Speaker 1: the regulatory agencies, which means frequently in the regulatory agencies.
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Speaker 3: There was.
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Speaker 1: A belief at the staff level the resource projects should
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Speaker 1: go ahead, but the politics of the agency were such
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Speaker 1: were such that at the very least stasis was what
7:39
Speaker 1: you expected. Now at the BLM, which by the way,
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Speaker 1: has really competent technical people working there, They've been hidden
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Speaker 1: well for twenty years, but they're there now. There is
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Speaker 1: an incentive within the organization to get stuff done. They
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Speaker 1: can use the knowledge that they have in the agency
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Speaker 1: to complete the regulatory process in a responsible matter. It's
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Speaker 1: further to what you say, Carrie, mining, look at empirically,
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Speaker 1: is an efficient use of land. You generate an awful
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Speaker 1: lot of economic activity and an awful lot of consumer
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Speaker 1: utility by despoiling a very small piece of earth. The
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Speaker 1: Resolution copper mine in Arizona, when it's built after twenty
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Speaker 1: seven years of permitting, will have substantially less environmental disturbance
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Speaker 1: than one golf course. Golf courses are green and people
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Speaker 1: like to play on them, so they're regarded as not
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Speaker 1: being environmentally deleterious. But if you have a monoculture, which
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Speaker 1: is to say, grass in a Riparian area, the truth
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Speaker 1: is that they're environmentally extremely injuries. So it's important to
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Speaker 1: look at the concept of environmental degradation from an empirical
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Speaker 1: technical lens as opposed to an emotional narrative lens. And
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Speaker 1: I think what mister Trump has been able to do
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Speaker 1: with the regulatory agencies is allow them to return to
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Speaker 1: empirical rather than political or narrative analysis.
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Speaker 3: Yeah, I think we'd agree. There are probably some places
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Speaker 3: minds should not be built, you know, due to geographical population,
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Speaker 3: many factors. But you know, invoking his emergency authority to
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Speaker 3: push these projects through something that we really only saw
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Speaker 3: happen during wartime or run ups to wartime. Is this
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Speaker 3: a good thing? I mean from our standpoint, yes, it's
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Speaker 3: a good thing. We agree a healthy mining sector, not
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Speaker 3: just for the United States but for the world in general,
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Speaker 3: is essential to our continued prosperity and well being. But
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Speaker 3: invoking emergency authority to push a copper mind through, what
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Speaker 3: are your thoughts?
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Speaker 1: What I would like to see mister Trump do, and
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Speaker 1: he won't do it, by the way, but what I'd
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Speaker 1: like to see him do is require upfront bonding environmental
10:25
Speaker 1: bonding for resource development the United States, including exploration, which
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Speaker 1: means that the company would need to propose a reclamation
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Speaker 1: budget which the regulator would accept, and that would need
10:39
Speaker 1: to be funded upfront by way of an insurance policy.
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Speaker 1: What happens right now is that the risk was socialized.
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Speaker 1: People promise to reclaim, but you know what a promise
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Speaker 1: is worth, particularly for a bankrupt company, It's worth nothing.
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Speaker 1: The best way to ensure environmental compliance would be for
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Speaker 1: the company planning to do the mind to convince the
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Speaker 1: insurance company to take the risk and pay them the
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Speaker 1: price for the risk that they assumed. That lets the
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Speaker 1: taxpayer off the hook. Then the regulatory process comes to
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Speaker 1: be involved in prohibiting the discharge of deleterious materials from
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Speaker 1: the mind sight to the environment. Stop. That's what I'd
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Speaker 1: like to see mister Trump do. That's not what he
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Speaker 1: will do. What he will do will be to solicit
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Speaker 1: campaign contributions and political favors from elements in society, like
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Speaker 1: the oil and gas industry that he thinks are more
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Speaker 1: aligned with him than the other side, Which is to say,
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Speaker 1: carry the old saw that mankenhead about events elections being
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Speaker 1: advanced option of stolen property. First to book, Democrats and
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Speaker 1: Republicans in equal measure.
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Speaker 3: For property yet to be stolen, and couldn't agree with
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Speaker 3: you more on that. On the other hand, maybe this
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Speaker 3: policy aligns more with societal good than just stopping everything
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Speaker 3: this kind of luddite response to anything that happens. I mean,
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Speaker 3: I'm not justifying it, but I'm saying it's kind of
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Speaker 3: like I live in Florida. So there's no state more
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Speaker 3: corrupt than Florida than except for every other state. But
12:27
Speaker 3: the difference between Florida and New York is well, like
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Speaker 3: in the Illinois there was a saying an honest judge
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Speaker 3: is one who's fixed and stays fixed. In Floriday, you
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Speaker 3: pay the price of admission, whatever it is, zoning variants,
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Speaker 3: law change, whatever, but you pay for it and you
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Speaker 3: get what you paid for. In New York, you pay
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Speaker 3: for it and you keep paying for it and paying
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Speaker 3: for it, and maybe one day you'll get it. And
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Speaker 3: that's why Florida is more prosperous than New York. Maybe
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Speaker 3: this corruption is just built in, and maybe we need
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Speaker 3: the most effective corruption we can find.
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Speaker 1: They used to say a Mouisiana, the good thing about
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Speaker 1: Leander Perez was he stayed bribed.
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Speaker 3: Yeah, I'm just saying So let's talk about metals markets
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Speaker 3: silver gold divergence. Is there a lagging silver squeeze that's
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Speaker 3: about to really hit and does forty dollars silver matter? Uh?
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Speaker 1: Let me answer that in parts. My experience has been
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Speaker 1: that in precious metals bull markets, gold leads, and when
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Speaker 1: gold momentum attracts the generalist investor into the space, leadership
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Speaker 1: transfers to silver.
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Speaker 3: Whether were there or not, I don't know.
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Speaker 1: What I do know is you won't need to tell
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Speaker 1: me when it occurred. They're usually pretty dramatic events. I've
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Speaker 1: seen him happen three times before in my life, and
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Speaker 1: you don't need a weatherman to tell you which way
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Speaker 1: the wind blowing when that happens. As to a silver squeeze,
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Speaker 1: I am not one of those who believes that there's
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Speaker 1: been an ongoing conspiracy to depress the price of silver
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Speaker 1: over time. I worked for great, big financial institutions, and
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Speaker 1: the idea that they would take a negative carry a
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Speaker 1: short position over ten years or twelve years, which affected
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Speaker 1: quarterly cash bonuses. The probability of that occurring is nil.
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Speaker 1: Wouldn't happen markets. All markets are manipulated in the short term,
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Speaker 1: and they're manipulated in whatever direction is easy and is
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Speaker 1: easier to manipulate. For forty years, you have manipulated silver
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Speaker 1: markets down because that was their natural direction. I remember
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Speaker 1: the nineteen seventies when trading desk would manipulate the price
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Speaker 1: of silver up because that was the easiest direction. The
14:53
Speaker 1: manipulation takes place because the futures markets, the paper markets
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Speaker 1: often trade two hundred times the available silver to cover
15:05
Speaker 1: on a daily basis. They are much more liquid. So
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Speaker 1: the game works like this. A short syndicate gets involved
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Speaker 1: over the last forty years short in the futures market
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Speaker 1: six year duration, twelve month duration, twenty four months duration,
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Speaker 1: that kind of thing, and they get what would be
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Speaker 1: for you and I massively short two billion dollars short,
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Speaker 1: three billion dollars short in a market where the nominal
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Speaker 1: value of the positions is four hundred billion, and then
15:37
Speaker 1: they borrow fifty or sixty million dollars worth a billion,
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Speaker 1: and they pound it into the market physically at whatever
15:47
Speaker 1: point in time the market has the least volume, and
15:52
Speaker 1: they use the impact of the physical market on the
15:56
Speaker 1: futures market to cover their shorts and pay off their
16:00
Speaker 1: physical loss. I mean, you see it happen time and
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Speaker 1: time and time again. That supports long term price manipulation.
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Speaker 1: I think that there's an aggregate of short term price manipulations.
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Speaker 1: The eurobond market has been manipulated, the Euro market's been manipulated,
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Speaker 1: the US treasury market's been manipulated. If you can manipulate
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Speaker 1: markets that are that big, the silver market's a piece
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Speaker 1: of cake. What will change, Carrie, is that the easiest
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Speaker 1: way to manipulate the market is going to go from
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Speaker 1: down to up.
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Speaker 3: I got it. Yeah, that makes total total sense, and
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Speaker 3: so a short squeeze because some of the players aren't
16:42
Speaker 3: going to figure this out until it happens. Right.
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Speaker 1: The people who are involved in complex hedges in the
16:50
Speaker 1: silver market, I think are going to get massacred. I mean,
16:53
Speaker 1: I think they're in for some truly religious experiences. To
16:57
Speaker 1: the extent that a short position on silver that has
17:01
Speaker 1: been put in place by algorithms that are looking at
17:03
Speaker 1: silver markets over the last forty years, those leverage guys
17:07
Speaker 1: are really truly in for a world of hurt. Those
17:11
Speaker 1: I mean, you know, long term capital management worked until
17:14
Speaker 1: it didn't. It was a convergence trade, but the convergence
17:17
Speaker 1: trade wasn't set up for a third standard deviation anomaly.
17:21
Speaker 1: And I think the silver market's going to see a
17:23
Speaker 1: third standard deviation anomaly, which means that the people who
17:28
Speaker 1: are using silver as an unhedged corollary to some economic bet,
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Speaker 1: and they're doing it from algorithms that are based on
17:38
Speaker 1: forty years of trading history, they aren't prepared for a hiccup,
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Speaker 1: and they're gonna get a hiccup.
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Speaker 3: What you're describing is blood in the streets. Fortunately, nobody
17:47
Speaker 3: works in Wall Street anymore, so you don't have to
17:50
Speaker 3: worry about walking down the street and having a body
17:54
Speaker 3: you know, crashed to the ground before you because everybody's
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Speaker 3: in their in their home office doing these trades here. Rick.
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Speaker 3: But but seriously, this is like an existential event, what
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Speaker 3: you're saying, and it could spread to other markets as well,
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Speaker 3: because like you said, silver is tiny. You got thirty
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Speaker 3: five billion dollars worth of shorts in silver, man, like
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Speaker 3: this could just spread in one counterparty hits the hits
18:27
Speaker 3: the bricks, and we're talking to from the fledge meltsound
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Speaker 3: about that.
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Speaker 1: To be honest with you, thirty five billion dollars is
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Speaker 1: a lot to you and me, But the notional value
18:38
Speaker 1: of derivatives is more like five trillion dollars. I'm not
18:43
Speaker 1: so concerned about that. I'm much more concerned about things
18:47
Speaker 1: like unfunded entitlement liabilities and the imbalance between the nominal
19:01
Speaker 1: and the real interest rates. I mean, if you want
19:03
Speaker 1: me to scare your audience, carry I can really truly
19:06
Speaker 1: do that. I'm less. I'm less concerned about the impact
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Speaker 1: on Wall Street and the deriven's markets by a silver short.
19:13
Speaker 1: I think it'll be you know, I think there's probably
19:15
Speaker 1: a couple of quantitative hedge funds that'll go broke.
19:22
Speaker 3: Good riddance. No one cares about them anyway.
19:25
Speaker 1: Yeah, you know, the derivatives market is, it's truly vast.
19:30
Speaker 1: There are other counterparty scenarios that scare me a lot more.
19:34
Speaker 1: If if maws and paws in the United States that
19:40
Speaker 1: own high yield ETFs junk bond ETFs get a whiff
19:46
Speaker 1: of the beginnings of a credit crisis like they did
19:48
Speaker 1: in two thousand and eight around real estate, and they
19:51
Speaker 1: go to sell those high yield ETFs. The ETFs are
19:55
Speaker 1: extremely liquid, they trade billions of dollars a day, but
19:59
Speaker 1: they're comprised assets that are totally illiquid. Yes, if they
20:03
Speaker 1: redeem the ETF and the manager has to sell the
20:05
Speaker 1: bonds and can't. Now that's a scenario that's truly scary.
20:12
Speaker 3: And I remember reading Benjamin Graham. You know, he only
20:15
Speaker 3: wrote this almost one hundred years ago. They had junk
20:18
Speaker 3: bonds then. Junk bonds aren't a new thing. The liquidity
20:22
Speaker 3: of junk bonds are. But he said that, you know,
20:27
Speaker 3: no individual investor should ever buy a junk bond because
20:31
Speaker 3: you cannot understand it. And we've seen even the guys
20:35
Speaker 3: who understand the market get slaughtered by it. And yet
20:39
Speaker 3: there's a lot of junk out there.
20:42
Speaker 1: Harry, in shows like yours where there's live Q and A.
20:45
Speaker 1: I've talked to investors that held I high yield ets
20:48
Speaker 1: that didn't understand that the assets were comprised of junk bonds.
20:52
Speaker 1: They just looked at the cover yield, not how the
20:55
Speaker 1: yield was generated. When I was a younger man, wasn't
20:58
Speaker 1: the young man, but in the eighties I was pretty
21:02
Speaker 1: active in the high yield credit market because I understand
21:05
Speaker 1: how to read bond covenants. And I remember that when
21:10
Speaker 1: Drexel Burnham started to blow apart and blew apart the
21:13
Speaker 1: junk bond market. We had a we had a description
21:17
Speaker 1: for these ill liquid bonds. We called them owl blonds.
21:20
Speaker 1: And we called them owl blonds because when you called
21:23
Speaker 1: your broker to sell, your broker would say to who too.
21:30
Speaker 3: I had some friends that worked at Drexel, and you know,
21:33
Speaker 3: but then Leon Black picked over the carcasses of all
21:38
Speaker 3: those owls and made billions of dollars because, like you said,
21:43
Speaker 3: he could read a convenant.
21:44
Speaker 1: It's a great, great, great market if you understand it.
21:49
Speaker 1: The oil and gas industry junk bonds in the eighties
21:53
Speaker 1: and the nineties made me, relative to my net worth,
21:57
Speaker 1: a large amount of money forever, great full. But I
22:01
Speaker 1: understood about oil and gas and understood about covenants. You know,
22:04
Speaker 1: I remember buying bonds with a cover yield of twelve
22:08
Speaker 1: percent that we're selling at sixty. So you know, I
22:14
Speaker 1: got a running yield of twenty percent and a yield
22:18
Speaker 1: maturity of thirty five percent in a dead instrument. Life
22:22
Speaker 1: doesn't get better than that. But that's not what's on
22:24
Speaker 1: offer today.
22:26
Speaker 3: I remember making twenty percent on Ford bonds myself. But yeah,
22:32
Speaker 3: so talking about the junior resource sector, which is revivified,
22:38
Speaker 3: that's the right word as witnessed by your recent conference.
22:42
Speaker 3: You know you always said the junior resource sector is
22:47
Speaker 3: a broken model if you will, composed of lifestyle companies
22:53
Speaker 3: that aren't real businesses, and you know, look, we got
22:59
Speaker 3: a lot of AI going on. Do you think the
23:01
Speaker 3: AI can pick out the lifestyle companies from the real
23:05
Speaker 3: companies five years from now?
23:09
Speaker 1: But you have to know how to ask AI the questions.
23:12
Speaker 1: What AI does is aggregate misinformation often, So if you
23:18
Speaker 1: ask AI to search the Edgard database or the Cedar
23:24
Speaker 1: database for companies where general and an administrative expenses less
23:28
Speaker 1: than twenty five percent of total expenditures, that's a great
23:31
Speaker 1: use of AI. But if you ask AI to look
23:34
Speaker 1: for lifestyle companies without defining what a lifestyle company is,
23:38
Speaker 1: they'll go to CNBC or Kitko or places and they'll
23:42
Speaker 1: aggregate a whole bunch of narrative and misinformation. AI is
23:47
Speaker 1: really good for what the Bloomberg gobots have been good for.
23:52
Speaker 1: It can search databases if you give it very very
23:57
Speaker 1: very specific correlations, and you can do it instantaneously. AI
24:03
Speaker 1: can do in terms of comparative balance your analysis. If
24:06
Speaker 1: you know how to ask the question tasks in two
24:10
Speaker 1: minutes that would take me two months and I'm good
24:14
Speaker 1: at it. The important part, though, is that you have
24:18
Speaker 1: to understand how to ask it the right question.
24:22
Speaker 3: That is so true. I've been using it for three
24:24
Speaker 3: and a half years now, and you know, like could
24:28
Speaker 3: they talk about prompt engineers and all that, Well, that's nice,
24:35
Speaker 3: but I'll tell you what, Like for law, I had
24:38
Speaker 3: a friend and the legal profession doesn't even see what's
24:41
Speaker 3: coming here. Adam Ray, friend of mine. She wanted to read.
24:46
Speaker 3: She wanted to amend her trust a mendor will and
24:50
Speaker 3: quit claim her condo over to her trust. And she
24:53
Speaker 3: goes to one lawyer forty five hundred dollars. She goes
24:57
Speaker 3: to another lawyer thirty five hundred. Now I'm a recovering attorney,
25:01
Speaker 3: in fact, in America's top recovering attorney. She comes to me.
25:06
Speaker 3: I said, fuck it, I'm not writing papers. Let's throw
25:10
Speaker 3: it into the AI and see how it works. I
25:12
Speaker 3: think it'll do, okay, Rick. Twenty minutes later, I had
25:17
Speaker 3: all her documents done, multiple copies stapled, and they were
25:23
Speaker 3: ready to be witnessed and notarized. And they worked. They
25:28
Speaker 3: were perfect. In fact, they were better than the documents
25:32
Speaker 3: I would have created myself. Because I'm a master of typos,
25:36
Speaker 3: and there wasn't one typo. And that's just one area.
25:40
Speaker 3: So I had the legal expertise, I could look at
25:42
Speaker 3: the docs and know that they were.
25:44
Speaker 1: You edit it, you can shape the product, and then
25:48
Speaker 1: you can consume the product. That's important. I asked AI
25:52
Speaker 1: to try to do some work for me in anticipation
25:54
Speaker 1: of an interview about six weeks ago talking about debt
25:59
Speaker 1: deficit on baalllot sheet liability stuff like that. I didn't
26:02
Speaker 1: specify source, and so they went through Twitter and CNBC
26:10
Speaker 1: and ABC and CBS, and what I got was an
26:15
Speaker 1: aggregation of misinformation. They didn't, as an example, talk about
26:20
Speaker 1: They talked about one balance sheet liabilities, you know, thirty
26:23
Speaker 1: seven trillion. They talked about net on balance sheet liabilities
26:28
Speaker 1: thirty trillion net of the seven. But they don't talk
26:31
Speaker 1: about unfunded entitlements. They missed completely the one hundred trillion
26:38
Speaker 1: dollar elephant in the room. So it's important that somebody
26:42
Speaker 1: be like Harry Lutts, somebody use AI in a subject
26:49
Speaker 1: that they know well enough that they can frame the
26:51
Speaker 1: question and they can judge the product.
26:55
Speaker 3: So true. We used to say garbage in, garbage out.
26:59
Speaker 3: Now it's garbage in landfill out. I mean, it's so
27:04
Speaker 3: true because you can ask it questions and they're theoretically correct,
27:10
Speaker 3: but they're absolutely on a factual level they're wrong. And
27:15
Speaker 3: I see it all the time. But if you can't
27:18
Speaker 3: recognize it, then you're going to spout out garbage that
27:22
Speaker 3: you don't really understand. That's the whole problem with AI.
27:25
Speaker 3: It's a black box and nobody really understands how it's
27:31
Speaker 3: producing its results at this point, right.
27:34
Speaker 1: We're seeing now in the exploration business. In exploration, we
27:38
Speaker 1: have a thing called coincident anomalies where you might look
27:42
Speaker 1: at ten different factors and you might look you look
27:46
Speaker 1: for areas where favorable data overlays itself geographically right. And
27:52
Speaker 1: AI has the potential to do that spectacularly well. It
27:55
Speaker 1: has the potential to look, as an example, at two
27:59
Speaker 1: thousands square miles of Earth from a landsat photo, look
28:02
Speaker 1: at spectral differentiation so that you can understand how different
28:06
Speaker 1: landforms respond to light differently from space. Merge that with
28:14
Speaker 1: visible structures you know callederas or faults. Merge that with
28:20
Speaker 1: historical ground data, historical geophysical data. Each of those inputs
28:27
Speaker 1: might take a researcher two or three weeks to do.
28:32
Speaker 1: In the old days, we used to actually make vellums
28:36
Speaker 1: overload them. AI can do that. AI can take two
28:40
Speaker 1: thousand square miles of earth and define a thousand acre
28:46
Speaker 1: target so that geologists don't have to look at two
28:50
Speaker 1: thousand square miles, they can look at one square mile.
28:53
Speaker 1: That's a great use of AI. It's a great use
28:57
Speaker 1: of AI. And over the next five years we're going
28:58
Speaker 1: to learn how to do this, and we're to develop
29:00
Speaker 1: data sets that are AI usable. You know, it's going
29:04
Speaker 1: to actually change the way we develop in store data
29:07
Speaker 1: to make it assimilable on AI. That's that's going to
29:10
Speaker 1: be fantastic.
29:12
Speaker 3: And then if the Elon Musk starts taking as tunneling
29:16
Speaker 3: machines and devotes them to mining, we might really have
29:20
Speaker 3: a revolution in the mining space.
29:23
Speaker 1: That's coming the you know, the oil and gas business
29:27
Speaker 1: has undergone as spectacular transformation the last thirty years through technology.
29:31
Speaker 1: My mining friends will hate this, but the oil and
29:33
Speaker 1: gas guys are smarter. That's coming to mining. You know,
29:37
Speaker 1: it really truly is coming to mining. The technology that's
29:40
Speaker 1: worked in oil and gas around geophysics will come to mining.
29:44
Speaker 1: I don't know what it'll be, you know, maybe it'd
29:46
Speaker 1: be Robert Friedan's typhoon typhoon. Who knows what it'll be.
29:51
Speaker 1: But eventually we will have some form of tool the
29:55
Speaker 1: human I sees an ankstrum into the earth. We'll have
29:58
Speaker 1: some form of tool that will allow us to do
30:02
Speaker 1: for mineral deposits what we can do for oil and
30:04
Speaker 1: gas deposits today. That may or may not be an
30:07
Speaker 1: AI enabled tool, but technology will truly transform mining. It's
30:12
Speaker 1: interesting that a rocket scientist, Elon Musk is the guy
30:18
Speaker 1: who came to us with a more efficient, boring technology,
30:24
Speaker 1: given that our industry had been boring for three hundred years.
30:27
Speaker 1: It's interesting that the technological innovation came from outside of
30:31
Speaker 1: the experienced class.
30:34
Speaker 3: And all from well, I don't know if the origin
30:36
Speaker 3: story is true or not that he got fed up
30:38
Speaker 3: with traffic in La one day and said I'm just
30:41
Speaker 3: going to dig a tunnel. That's a little too pat Well,
30:45
Speaker 3: if it's true, having been to Vegas and ridden on
30:50
Speaker 3: that thing, and the people they can't see the potential
30:55
Speaker 3: for this rick Like I live in Florida, we have
30:58
Speaker 3: nothing but traffic. The idea of being able to go
31:01
Speaker 3: under it all and not have traffic lights and Florida drivers.
31:07
Speaker 3: I mean, I don't see how that's just for tunneling
31:10
Speaker 3: for transportation, but for mining to be able to bore
31:14
Speaker 3: through an entire mountain you know exactly where you need
31:17
Speaker 3: to go and not have to worry about collapses and
31:20
Speaker 3: all that. I mean, who cannot see the potential of this.
31:23
Speaker 1: At a quarter of the cost?
31:25
Speaker 3: Yep?
31:25
Speaker 1: Yeah, I mean you know, we we do more we
31:28
Speaker 1: do boring in mining. And by boring I mean tunnels.
31:32
Speaker 1: I don't mean the fact that our business is boring,
31:34
Speaker 1: which is also true. But the idea that you can
31:38
Speaker 1: increase the efficiency and cut the cost substantially changes things.
31:43
Speaker 3: And the environmental aspects of it too, and the safety
31:47
Speaker 3: mining when you get down to it, you start going
31:50
Speaker 3: into those tunnels, it's dangerous down there and anything could happen.
31:56
Speaker 3: So well, I always appreciate your coming on the show.
32:00
Speaker 3: So Rick, where's the best place to find your work
32:03
Speaker 3: and your latest missive?
32:05
Speaker 1: The best place to reach me and the one with
32:08
Speaker 1: the most current incentive is it Rule Investment Media. If
32:11
Speaker 1: you go there and list your natural resource stocks, I will,
32:14
Speaker 1: for no obligation review them. Please no textoks, please no
32:18
Speaker 1: pot stocks please, no crypto resource stocks only Rule Investment Media.
32:23
Speaker 3: Give me a little while.
32:24
Speaker 1: I'm about two hundred and fifty responses behind because of
32:27
Speaker 1: the conference last year. The other thing is if for
32:30
Speaker 1: some reason you missed that conference, maybe you have a
32:31
Speaker 1: life or something like that. The conference tapes are valuable.
32:36
Speaker 1: We sell the conference tapes after the fact with a
32:39
Speaker 1: full money back guarantee. If you play the tape and
32:42
Speaker 1: think I didn't give you your money, I'll give you your money back.
32:45
Speaker 1: Rule Symposiums look forward to seeing your listeners either place.
32:51
Speaker 1: I'm glad you enjoyed the conference. Carry I hope we
32:53
Speaker 1: see you there next year. We're going to bring it
32:56
Speaker 1: back to a neighborhood in Florida, close to you, all.
32:58
Speaker 3: Right to thirty five miles down the road. Maybe you
33:03
Speaker 3: should think about using some AI to to update those
33:09
Speaker 3: emails that are stacking up there. Rick, Well, we have.
33:14
Speaker 1: A person who is looking at bringing the entire Rule
33:19
Speaker 1: Investment Media business into the century kicking and starting as
33:26
Speaker 1: a person is less than half my age, and I
33:28
Speaker 1: suspect we'll be able to cause some minor miracles to occur.
33:33
Speaker 3: No surprise there. I would expect somebody half our age
33:36
Speaker 3: to be in the thick of it. Hey, if you've
33:38
Speaker 3: got a question for Rick myself, shoot me an email
33:41
Speaker 3: kl at Kerrie lets dot com. We'll get you an
33:44
Speaker 3: answered quick and you'll find a link to rickcite in
33:49
Speaker 3: the show notes of this interview on Financial Survival Network
33:52
Speaker 3: dot com. And if you go there, just sign up
33:55
Speaker 3: for your free newsletter. Rick, always a pleasure. Talk to
33:58
Speaker 3: you again real.
33:58
Speaker 1: Soon, my pleasure carry Thank you. I welcome the opportunity
34:01
Speaker 1: to come back.
34:02
Speaker 2: Thanks for listening to Carrie Lenz's Financial Survival Network, your
34:06
Speaker 2: solution to today's trying times. For the latest, go to
34:10
Speaker 2: Financial Survivalnetwork dot com. Financial Survival Network now more than ever,