Peak Prosperity - Trouble Afoot: Bonds and Gold Are Telling the Tale

Episode Date: May 27, 2025

The long bonds are caving, Japan’s bonds are swan-diving, and the ECB warns that physical demand for gold could cause a systemic crisis for its member banks. By which they mean banks’ derivative exposures to synthetic gold shenanigans. Tune in with with GoldCore CEO David Russell.Click Here for GoldCore

Nothing in this program should be considered investment advice. It is for educational purposes only. Please hit pause and read this disclaimer in full. This is about taking some of your wealth out of the financial system, putting it on the sidelines and saying, okay, I'm not playing with that at this moment in time because I just don't trust the markets. Personally, I don't trust the markets at this moment in time. discussion forums and exclusive subscriber only content. Hello everyone, welcome to this episode of finance you. I am your host Chris Martinson and today very special guest We have Dave Russell the CEO of gold core We're gonna talk macro economics gold, of course, but something is breaking in the world's large bond markets and developed world. So we're gonna talk some macro here. Really important to understand what's happening right now. My thesis is something as big as 2006,

seven, eight is unfolding right now. We're gonna find out what Dave thinks. Dave, so good to be talking to you again. It's good to talk to you, Chris. It's a pity we don't have much to talk about at this moment in time, is it? So before I turned on the record button, you were saying you've been busy. How's business you are in the gold business? So what are you seeing from your end?

It's been really strong. I mean, the last time that I was on, I was telling you that, obviously, as most people who watch your channel know that this has been very much a central bank and institutional led bull market in gold. We're starting to see an awful lot more of the kind of the high net worth, the deeper pockets coming in. It's as if they are finally understanding exactly what is going on. Unfortunately, I mean this unfortunately from everybody's perspective, the retail market is still not getting involved to the degree that you would expect. I think a lot of them have been scared off by watching the headlines, seeing gold prices

going higher, thinking that they've missed the boat because they continue to look at investing in precious metals in the same way as they've talked about investing in stocks and shares and for some people crypto over the years which is oh I want to buy it here and I want to I want to you know and I'll get my 10% to my 20% and I'll get out of the market again rather than actually looking at precious metals and gold in particular and through the lens that it needs to be looked at which is that hedge against inflation and that hedge against uncertainty. So can I put one qualifier on there?

You're talking Western retail because according to the charts I have, the Chinese retail are still flooding in. This is a chart here showing gold ETFs and the price of gold. For whatever reason, the Chinese like to buy their gold cheap and as it's going up in price, they get more interested in it, not less. Yeah, and I think we're going to touch on a few different things, Chris, and it will it'll be the different style of the central banks and their approach to gold. If you look at what's going on in China at the moment, they are continuing to buy gold. The official purchases of gold continue to go higher. But not only that, recently, and

I'm talking within the last 24, 48 hours, there's been announcements out of China saying that they will actually offer coupons for people to buy gold. Coupons? What do you mean? Discounts on buying physical gold being issued by the government to their citizens. Oh, I have not heard this yet. That's exciting. Yeah, this is huge. So on one side of the world, you've got the government encouraging their citizens to buy and hoard gold. And then on the other side of the world, as we spoke briefly about before, and you saw the announcement at the the ECB there's a there's a the stability report thing is called is coming out

this week and there was a note that came out in advance of that it reiterated something that they had spoken about in 2024 which was this note here that's that's the one that's the one let me read that note for people it says over. Yeah, the European Central Bank is warning that gold markets could pose a threat to the eurozone's financial stability I'm laughing because when gold poses a threat, I doesn't speak well of your financial stability in the event of geopolitical stress due to Demand for physical settlement. They just said the quiet part out loud. I Mean it is Remark remarkable. It's wow. It's unbelievable to have the ECB to have any central bank say that any official communication that is saying that you know, the writing is on the wall.

What how decode that for us? What is what are they actually saying? Do you think? Okay, well, what they're saying here is there's such a massive demand for physical gold that this could create a squeeze. They're not worried necessarily. They're more talking about the people taking physical delivery, what that squeeze could do to the price. And it's not just the physical price going higher. It's all of the derivatives, a massive amount of derivatives that is priced off that and what that would mean. And there's massive amount of exposure, particularly to a lot of the bullion banks and other institutions and banks in Europe,

to those derivatives. That if you've got a massive spike higher, like we saw with the zinc market a couple of years ago, if you saw the same thing happening in the gold market, which becomes increasingly more probable or possible with people taking physical delivery of gold, that this could trigger a squeeze and that squeeze is going to cause a massive repricing of derivatives, which means basically these banks taking massive losses. And what does that do? Well, it has a knock on effect to all other asset classes. It has a knock on effect to the stability of European and international banks, which has a knock on effect into how much they're, you know, their credit appetite to lend to you and I or corporates or anybody be able to buy and purchase bonds, everything. So it's a, it's a, it's a triggering event, a potential triggering event. Now, most of the time, when you have potential triggering event events, you have central banks that come out and try and draw a bonus down, you know, to de risk that here's the ECB Pointing a big finger at it

I'm trying to find this because I have to pull up that the derivative report But but that's a remarkable story because to me, I'm just a simple guy. I think well It's a gold as a commodity. The central banks have been bad mouthing it forever Dave. So if if the cure For not having enough supply is for the price to go up, it's just price and demand settled, you know, across supply, right? So that's all. It doesn't sound like a huge crisis to me. The physical demand should not, if physical demand is creating a crisis, it's not that we don't have enough physical, it's because physical and price will always sort themselves out, right? Exactly. The problem here is everything else that is all of the derivatives that are being

based off the price of physical. Okay. And if we see a massive change in, if we see a large change in that price, which becomes increasingly more probable the more people are taking physical delivery, you have a much greater probability of a seismic event. And that's what they're pointing at. Notwithstanding that, the acknowledgement by the ECB that there is a massive appetite for physical, the reason that there's a massive appetite for physical is because there's loss of trust in central banks and their ability to manage the economies. This is fun.

So this is off of the OCC.gov site, so the Office of the Control of the Currency, and they put out this quarterly derivatives report, which I love. And here we're seeing the precious metals and you see this huge spike. So first thing I need people to know about is that that big spike is because all of a sudden under Basel, they were no longer allowed to miscategorize their precious metals derivatives as currency hedges. They had to report them as precious metals because they had buried them under their swaps before.

So in 2022, they had to stop that. And so they did. But now we can clearly see, you know, just here, and these are stop that. And so they did. But now we can clearly see, you know, just here, and these are just U.S. banks principally, $600 billion of precious metals exposure, mostly with a maturity of less than one year. So they are just constantly hedging out half a trillion or more. That's a lot in this market. It's a huge amount. It's absolutely a huge amount.

So the impact of that, if we've got any sort of repricing around that, the impact of that is significant. It is significant. And these things aren't happening in a vacuum, as you well know, Chris. I mean, there's plenty of things that we could be talking about here. But this feels to me kind of like late 2006-2007, okay, where it just has that sense that there is something on the horizon. I remember back then, I remember sitting on a trading desk, and the one thing that we noticed there, which kind of went missed by a lot of people, was when we saw two Bear Stearns money market funds basically go under. In hindsight,

that was a massive signal for the market. And everything can kind of be traced back to that. The thing that looms large in everybody's memory is Lehons. But it was actually Bear Stearns, really, that was one of the triggering events there. The writing was on the wall from that point. But now we've got so many things to point out, to look at. The appetite of the Chinese, the ECB, we'll even talk about the JGBs, the Japanese government bond situation as well. We've got an increase in continuing increase in the national debt in the US and looking to raise the debt ceiling yet again. So there is a loss of faith and trust in central banks' ability to manage

– central banks and government's ability to manage both the economies and monetary policy in this regard. And I think that that has just the momentum has shifted on that now has significantly shifted on that now. And we are getting people that historically wouldn't have talked about precious metals, where there's the likes of Ray Dalion, who are starting to, who are now bringing, and I do it in air quotes, a degree of credibility to what people have been, like yourself or ourselves, have been saying about precious metals for years. There's a seismic shift in attitude and understanding of the role of gold in a portfolio. And that can be witnessed by the amount of physical gold that has now been taken out. People should always remember that precious metals and gold in particular is your way of taking some or all of your

so-and-so's blood of your wealth out of the financial system. You take out, ultimately gold is, you know, as some people call it a pet rock, it's a lump of metal. It doesn't actually do anything. It doesn't have working parts. But it has the characteristics of gold make it perfect for doing that, for taking some of your wealth out of the financial system, park it on the side and saying, I'm not playing in this market at this moment in time. And what we're seeing is we're seeing that in spades. And we're seeing that from people who usually would spend all day long looking for the opportunities in

the market. And now they're saying, I'm taking some of my wealth out and parking it on the side. Dave, I'm going to tell you my Bear Stearns moment in just a second, as soon as we come back from this message. You know what? Gold and silver are my top choices to protect my wealth against inflation and economic instability. Now, with all the monetary debasement and all these geopolitical risks going on, hedging your wealth has never been more important. I recommend that everybody own some gold and silver physical in your hot little hands. But what if you want to hold it elsewhere?

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slash gold core to secure your six months of free storage. Again that's peak.fan Alright, welcome back everybody. Dave, my Bear Stearns moment, the thing that made my eyebrows shoot up and stay up for quite a while was an $11 billion single day purchase and physical delivery of gold out of ComEx just about a month and a half ago, right? Somebody showed up, took 45,000 plus, I forget what the number was, 635 or something, big huge number of contracts, 45,000 plus contracts, signed up for them, stood for delivery, and those warrants came right off of the eligible category, right? So somebody stepped up and I'm like, who's buying buying 11 billion at once that's one of those moments I

believe people are gonna look back in time and go that's that's when we should have known it yeah when that Bear Stearns money market that that was when the timer actually got set on this whole thing right we didn't know it at the time I think what was that with the reserve America fund or whatever anyway they had to freeze it for a bit yeah under Bear Stearn. I think what was that? The Reserve America fund or whatever. Anyway, they had to freeze it for a bit. Yeah. Under Bear Stearns. I think it happened already. Yeah. I know. Absolutely. Absolutely. And who is it? Steve Jobs, who says you can only join the dots looking backwards. So, you know, in, in, in, in years to come, I think we will look backwards and we'll draw the dots and they'll cross through a lot of the things that we're talking about.

And we will be saying to ourselves, why didn't we pay attention? Why didn't we pay more attention to what was going on at that moment? And the thing is, we have the opportunity still to act, people have the opportunity still to act. This is a moment in time in history, I believe, in the Japanese proverb, may you live in interesting times. We're living in very interesting times at this moment. But you really need to be, you really need to be prepared for it. And, you know, I've been in I've been in the market now for, you know, nearly 30 years, I've never seen the degree of uncertainty. And the fire hose of the fire hose of new information, new developments, new news coming out all day, every day. This is the time that everybody needs to have some precious metals. And look, I'm the first one

to put a hand up and go, here's the CEO of a gold dealer and he's saying you should buy gold. I own gold myself. I own gold. I own silver for exactly this. I got interested in gold and silver back in 2004, 2005, when you could see global credit growth continuing to expand at what was a rate that to me seemed unsustainable. So by doing my research, that's when I started getting involved in gold and I bought gold and I bought silver for exactly those type of events. And what I'm seeing at the moment is that there hasn't been the realization other than those with very deep pockets, what is actually going on and that they should be protecting themselves at this moment in time. And that this is not about price, because this is not about taking a trading position in precious metals so they can get a 10% return in a year and cash back out. This is about taking some of your wealth out of the financial system,

putting it on the sidelines and saying, okay, I'm not playing with that at this moment in time because I just don't trust the markets. And I personally, I don't trust the markets at this moment in time. I don't either. And so I was all over them back in 2006, seven, eight, I was actively shorting home builders and mortgage insurers

I saw that writing on the wall now now that I watched the big short the movie where they've they've connected all the dots back There were a precious few people who were both inside the system and could really play that at scale Michael Burry being one You know, etc. So I watched that now and I'd known about these synthetic CDOs that they were doing I read about them. I said this sounds like a terrible idea, but I didn't know the scale I didn't have access to the information. I had no button I could push to say there's three trillion dollars of bets riding on a hundred million of housing or whatever the numbers were I didn't know I just knew it sounded like a terrible idea Fast forward. I have the sense today. I have the same thing. I'm a little alarmed. I can't quite put my finger on it

I'm watching things We'll talk about the popping sounds coming out of say the Japanese bond market, but I'm reading and watching everybody and Dave I feel like it's it's I'm trying to figure out that we're looking at an elephant But you got Brent saying it's the dollar milkshake and he's got his hands on the on the trunk And then you got somebody else on the side. Oh, no, it's the dollar milkshake and he's got his hands on the on the trunk and then you got somebody else on the side. Oh no, it's the euro dollars. You know, Jeff Snyder's over there telling you all about that part of this thing. It's a wall, you know, and I'm listening to all these people and I don't have anybody. I don't think anybody quite knows what's going on. No, absolutely not. Everybody's looking at it through their own narrow lens. And when you look

through a narrow lens, you look at a small part of the market or global economics, you can make sense of that. When you try and take in everything that's going on at this moment in time, the interactions between them, the implications of those, and again, we haven't even touched on what's going on in Japan at this moment in time. There isn't one unifying theory here that we can see at this moment in time. Well, except you mentioned Ray Dalio. Can I just... I subscribe to his theory because he has the same theory I have, so I like his. And his theory is this is the end of a global

credit expansion. Oh yeah. This is the end of a global credit expansion. Like, big macro story, like we went through a big old credit expansion phase and that thing's topping out right now, and then it's going to go the other way. Yeah, when I say there isn't one unifying theory, I'm saying there isn't one unifying theory that exists that explains why we should not be worried at this moment in time. Okay, there we go. why we should not be worried at this moment in time. Okay, there we go. No, this is worrying me. This worries me now. When I get up in the morning and I'm wondering what fresh elevates when you go on social

media and learn what's happened overnight. This is, as I said, after 30 years in the market, I've never seen such uncertainty. I've never seen such contradictory messages coming out from various different central banks. I've never seen… it's like some sort of global scale gaslighting that is going on when we listen to politicians and central bankers. You intuitively know this doesn't make sense, but you have these talking heads that are that are That's like trying to do some sort of Jedi mind trick, you know, these aren't the droids you're looking for this isn't this isn't the This isn't the problem you think it is You know if it looks like a duck walk likes a duck and quacks like a duck

It's it's it's a duck and I don't care how hard you try and convince me. Otherwise, what was it 2019? Right Argentina sold hundred- year bonds with three and 3.4 percent interest or something right Argentina who'd only defaulted eight times and in recent memory right so Yeah, make of it what you will in 2019 remember we had this thing. What did we have like? 18 19 trillion of negative yielding debt whatever that term means I'm a little confused by the idea that I have to pay Germany to lend it money But leaving all that aside Dave, this is global 30 year It looks like nobody wants to own the 30 year paper of any Western country. That's Australia up top. We got Belgium

We got Canada. We got Germany Spain the, the EU, generally France, Great Britain, Italy on the bottom, Japan we're going to talk about, which is that second in from the left on the bottom row. And that everybody else sort of like bouncing around Japan spiking. And we'll show you more on that in a second. The Netherlands and then the US. So I don't see anybody wants to, it seems like there's more buyers than sellers for every piece of long dated Western paper out there. Absolutely. Here's the thing, because I don't know about you,

but I don't know, I don't own any of these bonds. Most people like you and me don't own many of these bonds. It might be some in a pension fund somewhere. These are generally held by governments, they're held by institutions, they're held by banks, they're held by smart money, Chris, what is technically known as smart money. It's time for those air quotes, Dave, bust those out again. Smart money. But here's the thing, the smart money doesn't want to own these at this moment in time, they're getting out of it, right. So, by the time that we understand why they're getting out of it, this thing will have this willing thing will have unraveled further.

And it's not just the fact that, okay, so bonds are bonds are selling off, fields are going higher. Okay. People look at that and they go, okay, I don't understand what that means. People look at that and they go, OK, I don't understand what that means. That means that countries cannot fund themselves at current rates because there is not appetite for their debt. And rates have to go significantly higher in order for them to find appetite for their debt. That's the reality of it. And then what does that mean? What's the consequence of countries not being able to fund themselves? How do you have $36 trillion of debt looking to increase the debt ceiling? You've got a

trillion dollars and I'm talking the US obviously in isolation because I know a lot of the most of your audience are US. A trillion dollars in interest annually at current rates. If we continue to see an increase on that and then we understand that there's difficulty in actually funding that and then as a result of that rates are going up, which means interest payments are going up. There's a massive amount of those that are resetting itself. So it's not just the additional debt you have to fund, but you're going to have to refund debt that's maturing, rolling off at higher rates. And now you're spending a trillion at the moment, you could be a trillion and a half, two trillion, on the interest payment. So you're not as citizens of the country, you're not getting anything for all of those tax dollars that were raised from you to go and fund that national debt.

You're not getting anything. All you're doing is you're sending that money effectively in a lot of instances, you're sending that money overseas. And who are the large holders of those debt? Well, you've got Japan, you've got China, you've got the UK. So a lot of tax dollars that are being raised, that people are being taxed in the US are going then overseas. in the US are going then overseas? Well, you know, the Trump administration started out with high hopes, right? Doge was going to find a trillion dollars in savings. I bet they could have, but they ran into the political reality of the DC swamp just, you know, just ate that like piranhas on a cow carcass, right?

So I don't know that we have much coming off of that. We just found that the most recent budget proposal I've seen the CBO finally took a swipe at it two trillion dollar deficits for the next ten years yearly. No change in status. And then this just came up, I'd love to get your take on this. So this sounds a whole lot to me like Scott Bacentious threw the towel in. Several components there. So if unpack it, there is the growth, the potential growth of the debt. But what's more important is that we grow the economy faster. So what we've seen under the past four years and what we inherited,

I inherited 6.7 percent deficit to GDP, which was the highest deficit when we were not at war, not in a recession. So we've been trying to bring down the spending, and we are going to grow the revenue side. So we are going to grow the GDP faster than the debt grows, and that will stabilize the debt to GDP, which even Secretary Yellen and I agree is the most important number. So that feels like a capitulation to me because before they were saying they were gonna bring the spending side down.

Now he said, I will grow the GDP fast enough to eat into that giant GDP deficit situation. Dave, in the last 15 years, we've only ever briefly for one year had the deficit at 3% of GDP. It's been 4, 5, 6, 7% every other year. How is he going to grow the GDP that fast? What's the engine of growth?

What is that exactly that they could be imagining? I mean, if these were benign times, economically, let's call them economically benign times, economically, let's call them economically benign times. But there's so many moving parts going on at this moment in time. I can't see how it is possible to grow the economy at that rate, not in the current situation. We're looking down the barrels effectively of a recession. Ultimately, that's where we're looking. So you're kind of going, our route out of this is that we're going to grow GDP by, you know, 5% or more. Okay. How are you getting on with that? Well, currently it looks like we're going the opposite way. Okay. Marry those two things up to me. Solve that. Riddle that for me. How's that going

to... At this moment in time, it's just not feasible. It's just not feasible. I mean, it's just, they're talking points, they're gaslighting. It's just not feasible. And these things are not happening in a vacuum. Because we look at the debt problem. If you have got this resetting and repricing of debt and an increasing of the debt, you're not dealing with the problem of today, you're dealing with the problems of the next 10 years. So how do you, how do you fund that 2 trillion a year deficit over the next 10 years? That's not the 20 trillion that you're, you're, you're, you're adding on there. And that's probably a conservative estimate in reality.

Totally conservative. That doesn't include wars and unexpected things or recessions. That's that's That's everything coming up roses kind of a projection. That's what that is Absolutely and everybody in the world getting on Yeah, so what I heard in this is Wow, we're gonna continue to run deficits and the Federal Reserve is gonna have to print more money and the next thing I know bonds are under attack all over the place because I I think the smart money on that 30 year bond thing we were looking at, wherever I stashed that, oops, wrong one. Yeah, this one. The whole world has said, yeah, I don't, I don't trust this situation. And it's starting to break. And I want to talk now about this. This

is Japan. Everybody, you've certainly had to come up and they've sort of been stagnant for a couple of years, but Japan is spiking and you saw it gave it away. But this is the this is the 40 year bond yield. This is astonishing. zero and it goes from zero to 3.7 percent and by the way, it went up 17 basis points last night all by itself This is astonishing in the world of to help people understand because you've been in the business a long time That's kind of a this is an earthquake to the to those in the know, right? This is a seismic event Yeah, I can't quite see it there. Well, what odds? What's the 3.19%? Is that what it is? No, this is at 3.7 now. 3.7, 3.7, okay. Now it's different. When you said practically at zero, right, back a couple of years ago, sometimes the maths on that doesn't come easily. So let's just assume that it was at one basis point, right?

What that means now is that what you are funding today is costing you 370 times more than it did a number of years ago. 370 times. Now you imagine how much you can run on your credit card if the charge on that credit card is one basis point. That's one hundredth of one percent. That's all you're paying back. Now imagine that it's slightly less than that, and it's zero. So your interest rate on your credit card is zero. How much can you borrow? Infinity. Infinity. Forever. Now what happens to you if the funding rate goes up by 370 times? Crippling. Crippling. And that's what we're seeing. that's what we're seeing.

That's what we're seeing. And the Japanese economy is already shot through with debt. The debt per household I calculated it years ago was over a million per household. They're just they're just up to their eyeballs in debt and an aging population. And oh, by the way, they kind of have negative point 7%. That was their last quarterly GDP. So weak economic growth. But here's the hard part.

What would you do if you're the Bank of Japan? Because they've already shafted their people. They have the third highest food inflation in the world. And that's just food inflation. Right. So, so, so you have high inflation, low growth and your bonds are blowing out. What do you do? Well, the court between rock and a hard place. But I think one of the bigger stories in relation to this, in relation to Japan, has been the

carry trade, which effectively, while interest rates were so low in Japan for so long, what people were doing is they were borrowing yen, they were converting it into other currencies, primarily euros, mostly dollars, and they were investing those into dollar denominated, neuro denominated assets. Now effectively you're seeing interest rates going up. As interest rates go up and as a result of the interest rate going up the currency is appreciating as well, that carry trade, which is basically the differential between what you're able to borrow it at and what you're able to lend it at, has now collapsed. So therefore there is zero appetite for that to continue. So therefore there's an unwinding of that carry trade. And this carry trade has been

massive in terms of size. And it's going into various different assets. It invested heavily in US Treasuries as well. So here's another thing when we're talking about the funding, funding the the current debt, the repricing debt, the increase in the debt ceiling and what is happening in other parts of the world is the appetite for that debt for one reason or another is being removed, not solely because they're not believing what Scott Besson's strategy is going to be, but because the trade itself no longer makes sense. It's not a profitable trade. So that liquidity that was being provided into the Treasury market, there's another aspect of that that's not coming back. It's not being replaced because the only thing that replaces that is if interest rates in Japan go back down to zero. And they're currently nowhere near that.

There were, you know, you're looking at the you're looking at the 30, the 40 year bond, 3.7 percent. It's not it's not happening. So it's just it's death by a thousand cuts. Do you remember? I don't know if you've ever heard it But I'm back when I was learning trading because I was a day trader for a while Anyway, I was learning trading and this guy was teaching me about the futures market He said oh, there's this old story in the futures traders, which is this man goes out and he decides He's gonna play the futures market. So he's playing the futures market for eggs, right?

So he buys some futures and they go up and his broker says hey your positions up and he's. And he's like, oh, get me some more of those then, you know, I'm going to keep riding the momentum. So he buys some more egg futures, right? Keeps going on about five, six months in he's just, he's just piling, he's piling up and he's buying more and more futures and he rings the phone, ready to ring the cash register calls his broker up says, sell, sell all my positions. I'm ready to cash out. And the broker says, well, to who? He's like, what do you mean to? He said, sir, you are the egg market. So there comes a point.

Who is the bank of Japan? What are they going to do? Because Zero Hedge reporting in the context of all this, the Bank of Japan, that's the BOJ, owns 52% of the entire JGB, the Japanese government bond market. So they've shouldered everybody else out, and now it's imploding on them. What do they do? Yeah. I mean, this is similar to the Fed buying a, buying a poll, buying a poll of the treasuries. It's, yeah, it sounds great in the moment. There are unintended consequences of that long term. You know, do you want to be, do you want to be a holder of an asset where the only person who's actually willing to buy that asset is the issuer? Well, when you put it that way.

Is the issuer? Well, when you put it that way. Well, but the point is, like, this, I think, when they write the history books, Dave, 20 years from now, they look back and they say, what went wrong? I think we're going to realize that markets should be a legitimate place of price discovery between buyers and sellers. What you're saying is that when the Bank of Japan is 52% of the market, we don't know what the legitimate price is. Was one basis point the right price for 40-year debt? Probably not. Right? So those distortions...

Totally distorted. Yeah. So when those distortions suddenly get released, it's the proverbial beach ball held underwater let go. You know, just... Exactly. Exactly. Pops right up. This is going to come. This is going to come. This is going to come. You know, this is going to be a, this is going to be a tsunami. This is going to be a, a financial market tsunami. And I think that we are a lot closer than most people realize. Scarily. So, so well, they say stocks are for show, but bonds are for dough. I would advise people that the

stock markets magically levitate and do things that they haven't been Failed to me. They haven't looked organic in quite a while fine There's lots of reasons markets can remain irrational longer than you can remain solvent as Livermore said right? Yeah I don't care, but when I'm watching gold and I'm watching bonds. I feel like I'm starting to detect real signal again You are and what we have seen over the last three, four or five decades is that during times of economic tension, let's call it flight equality has always been into dollars, it's always been into bonds. And we're not seeing that now. We're seeing the flight to quality

is into hard assets. And that's the reality of it. And we're seeing the smart money buying hard assets. We're seeing the central banks buying hard assets. You talk there about the stock markets. We've had inflation, we've had monetary inflation, we've had a lot of dollar printing. One of the release valves for printing of dollars has been the stock market. It's effectively inflation in another guy's. It's a sign of inflation in another way, and that's what we're seeing. What I think happens at a certain stage is we're already seeing the pressure in the bond market. I think that that actually infects the stock market next. And we get people who are worrying that, okay, I have it in an asset rather than holding it in paper currency because that's going to be eaten away by inflation, rather than holding it in bonds because they're selling off because

trust long term in central banks ability to manage this situation is deteriorating. I've been holding it in paper assets in terms of stocks. People are going to very quickly start to become very uncomfortable holding those paper assets and they're going to go for hard assets and they're going to rush towards the exits. There's a lot of money that's going to be rushing towards those exits at that moment in time and we are going to see a significant repricing in the precious metals. Again, as I said, this is not about a trade, okay, I'm going to buy gold so that I can make my 5, 10%, 20% over the next couple of years. This is about taking some, some, for some people that's all, but some of your wealth out of the financial system and parking it on the side. As I said, this is gold, it's a lump of metal, it

doesn't do anything, it doesn't have any moving parts, unlike the bond market, unlike the derivatives market, unlike the stock market. There is no counterparty. It's you and the metal. And that's what is the appealing, attractive characteristics of precious metals in these times. These are exactly the times that you want to have an allocation to it. And it is for protection. And some people will say, oh, well, you know, I'll buy a bar of gold, I'm not gonna be able to go to the shops and exchange my bar of gold. No, but you're probably just going to be able to

market for it. So if you get a inflationary pressure or a hyper inflationary pressure, you are going to be able to sell some of your gold at the prevailing price. This is not about saying, okay, now's the time I'm selling everything. You're going to be able to sell some of your gold at the prevailing price, convert it into dollars or euros or whatever your currency of choice is. Spend those and you still have your wealth. It's like becoming your own central bank. You're still holding your wealth in precious metals. It doesn't matter what happens to the currency during that time.

But if you were to just hold it all in paper assets, the ability for those paper assets to come under significant pressure has not been greater, I believe, at any stage in the last 30, 40 years than they are now You know what's surprising to me? It really surprised me. So I first went kind of irresponsibly long gold in 2000 and early 2001 It was $300 and 50 cents an ounce or something at the time, right? So it looks like oh look, you know, yeah Yeah, I've made all this money but I think I've just kept pace with inflation because when I when I look at how many ounces of gold it would have taken to buy an average house then and today, it's the same number, right? It still takes the same number of ounces. So I think true inflation

that compounds out at almost 9.6% over those 24 years, right? I think that that's the true rate of inflation, honestly, because houses are one of the bigger things you can buy and it has a lot of components and it has labor, it has copper, it has wood, it has all kinds of things embedded in it. So I think it's probably, you know, the replacement cost of a house over time, probably pretty fair judge of what we would call commodity and labor inflation. Fine. But that also happened to beat the stock market, the S&P, including dividend

reinvestment over that same 20-some-odd-plus years. So, and I didn't have to go through all this rigmarole of, oh no, the stock market's overvalued, it's undervalued, I just bought gold and I held on to it. Very unexciting investment strategy, right? But I think of it as a wealth preservation strategy. So now, one of my proudest moments, one of my good friends called me up and said, okay, I think I get it, Chris. I don't care about the price of gold, I care how many ounces I have, right? I'm like, now we're thinking. So the way I think about it, I think about my retirement, I say if I ever do, I probably

won't because I like working too much, but if I did I would say I plan to live say 20 more years after retirement, okay? so that's 240 months. How many ounces do I think I need to live on every month? Right? If that's what I'm, if I'm going after a goal and then I would seek to have that many ounces of gold. That would be sort of my approach. Yeah, and I suppose to flip it back to how most people think about it and the problem that they run into is to say, okay, I'm going to retire now this year, maybe I'll live for 20 years. How much cash do I need? Well, currently I live on, let's just round it, so currently I live on $10,000 a month or $5,000,

whatever the figure is. So I'm going to multiply that monthly amount by the amount of months. And say, oh, that's what I need to live. And then you go, well, that assumes that everything stays at the same price. And the reality is, as we've seen over time, it doesn't. There's inflation. So now you have to factor in inflation into that. Or else, rather than factoring into inflation, you take your strategy and you say, right, well, what I need that amount of cash at today's value, I put that amount of cash into precious metals and then sell off the answers I need each month to live. I don't have to worry about the inflation. The inflation takes care of itself. It is such a much simpler process. And then and so then my friend said, but Chris, what if what if prices crash, you know, like,

well, then I'll need fewer number of ounces to to it won't change. I'm pretty convinced that the price of gold X other factors like manipulation or whatever or seizure or confiscation, which are separate issues. But but barring that, I trust the gold will sort itself out and will track inflation or deflation it just it makes it easy right exactly you know that's what I'm it that is why it is it is a hedge against inflation it's a proven hedge against inflation and you can look back over the years you can go back just you know as recently as 2000 and you're looking at about an 8% per annum and that's taking the last couple of years

out of where it's appreciated slightly more. It's about 9.8% I think it is if you take it up to the end of 2024. So that has a hedged inflation. It is a hedge against inflation and you throw in there, you say, all right, well, listen, things are looking a little bit dicey at the moment. We've got a number of elements of geopolitical tension. Maybe that spills into more hot wars. That's going to throw another spanner into the works. Right. Well, what's the asset that performs best during those times? It's precious metals.

So again, it's that hedge against inflation. It's that hedge against uncertainty. And at the same time, it's a highly liquid asset. So if you do need to realize some of the value of your gold or your silver, it's very liquid. It can be done and it can be done in a very short space of time. It's highly recognizable. So it can be done in a very short space of time. It's highly recognisable. So it can be done in practically every country in the world. They're highly recognisable products that adds to this, the liquidity argument for this is these are characteristics that are not common to other asset classes that you will hold. So it should be imperative for everybody to have an allocation to precious metals for exactly this reason. If you believe, sorry, if you believe you're a great

stock picker and you're able to trade through markets like this that we haven't seen before, okay, go for it. So therefore you might want a smaller allocation and let you leave the rest of your portfolio for for for playing in the stock market. But ninety nine point nine nine nine percent of people are not in that camp and will lose a lot of money in that situation. So a higher allocation to precious metals at this moment in time is absolutely warranted. And you keep saying precious metals. We've been talking gold. How about silver? Silver doesn't really seem to, it has these mysterious price

slamoramas that seem to happen about between eight and ten Eastern and it's been happening the entire time I've been invested in. I'm a huge believer in silver, full disclosure, it's actually one of my favorite things. And I plan to buy more of it at these prices. But it really, I mean, it really hasn't gone anywhere in a price appreciation way for a while. Yeah, it hasn't. But we've got to remember that the investment case for silver is extremely strong. Now, it does have, there's a fundamental difference between gold and silver. Gold has primarily been, although it does have some

industrial applications, it's primarily viewed and treated as a monetary metal. Silver, on the other hand, it has been a monetary metal, but it has massive industrial applications. And those industrial applications are very key at this moment in time because it's all to do with the electrification of the planet, their use in solar panels, their increased use in solar panels, increased growth in the solar panel market, electric vehicles, solid-state batteries. And this is not even to start mentioning of the medical applications. In terms of an investment case for an asset class, silver is fantastic because you've got all of these demand-side fundamentals. And then on the supply side, there's a current and projected supply deficit. Silver is mined basically as a byproduct of other metals. So when they're mining copper and zinc, that's where they're mining silver as well,

which makes the supply side very inelastic. There's been underinvestment in the mining side of things, so much so that although the gold-silver ratio is hovering around the 100 level, so much so that although the gold silver ratio is hovering around the hundred level and the natural ratio, as they call it, what should be in the ground is about 15 to 1. There should be 15 ounces of gold for every one ounce of, 15 ounces of silver for every one ounce of gold, excuse me. But the rate at which they are mining it is at a rate of seven to one. So here you've got an asset that is in high demand, supply constraints is trading at a rate of 100 to one and being mined at a rate of seven to one. That's a very, very strong investment case. It's such a unique metal so industrially we need it but every single year the supply and silver supply Institute well I'm not sure how much I trust the Silver Institute right but

their supply data I'm not sure I'm a little worried because you know if you look at where their headquarters are it's like three doors down from the White House like it's very it's a very political beast right so make of that what you will, right? I'm that kind of guy. I'm like, why is the Silver Institute not in Coeur d'Alene, Idaho? You know, why is it right there in K Streetville?

But leave that aside. By their own statistics, they show that every one of the past six years, we've been in a structural deficit of supply over demand, right? So supply has not been keeping up and it's not short It's not small. These are upwards of 100 200 250 million ounces per year Coming from somewhere And over those same six years the price has gone almost nowhere relatively speaking

So it just doesn't it just doesn't add up Dave. I like things that don't add up because I'm a contrarian investor first and foremost indeed And it just doesn't add up. Dave, I like things that don't add up because I'm a contrarian investor first and foremost. Indeed. It doesn't add up and things that don't add up like that, eventually something breaks. Eventually something breaks. It has been in the interest of, you know, the room would be obviously in the interest of a number of parties to keep the price of silver where it is. But we're now trading around the $32, $33 level. If you look at it even from a technical analysis perspective, it's very, very strong.

There's one thing I forgot to mention in there, a fundamental difference between gold and silver, is given the difference in price, recovering, it's economic to recover gold from the likes of electronics. So there's electronics, there's gold in your phone, this is more than a gold in your phone and your laptop and a lot of electronics. It's economic to recover that gold, to recycle that gold because it's trading at $3,200 an ounce. It's a hundred at these price levels to recycle that silver, to recover that silver. A dollar a gram, no good. recovering it would be multiple times the value of what you would be recovering. So there's a, there's a, there's a, all of the silver that is used in electronics in this way, it's like it's consumed, it's lost. So we don't get that with gold, with massive amount of recycling

of gold because of the differential in the gold-silver ratio ratio because it's 100 times the value. So it's another aspect of the investment case. At these prices, the recycling of metal into the market is uneconomic in a lot of instances. No brainer, as they say, right? Yeah. And the other thing that I track for anybody who hasn't seen it so far is I'm tracking as well that to me, the surprise, the huge surprise announcement, I'll be talking about this at Ken McElroy's limitless thing, which is coming up end of July in Dallas. And he said, what do you want to talk about? And I said, I have to talk about the fact that the energy information agency, the EIA just said, oh, kind of looks like shale oils is peaking.

They just quietly slipped that out there, right? And by their measure, it hits a peak at 2027, spends three years bouncing, and then it just goes down from there, right, as things do. The problem is that shale oil hasn't grown anywhere in over two years already. And every major CEO has said we can't grow it at these prices. So ba-ba-ba-ba-ba. It just means that the United States has this really weird out of cadence narrative, which is drill baby drill, it'll just come out of the ground, but it's not going to at these

prices. It's already not going to at these prices. Drill rigs are already at the lowest level that they've been in many, many years. If you don't drill for it, it doesn't come out of the ground yada yada yada big story Point being from a contrarian standpoint I think that oil is going to be the surprise in this story and we're going to have a surprise amount of like all of The sudden is going to be expensive again Because when you under invest in commodities you have a price shock later on and I don't care what the commodity is oil

Gold copper doesn't matter Silver same story. So I see that story happening there But of course as you know I think energy is foundational to all of these things It is a very very large input cost to agriculture mining daily life commuting you name it everything So I think that's a setup that's coming and I don't think it's avoidable at this point But the narrative has just not gotten through to people because all things reality-based have been so abused for so long.

People just, well, what's Nvidia doing? We need AI. You know, that's much more exciting than this dirty, grubby thing of getting minerals to be released from the Earth, which is parsimonious. Yeah. Yeah, I mean, well, at the released from the earth, which is parsimonious. Yeah. Yeah. I mean, well, at the end of the at the end of the day, when it comes to energy or metals or all commodities,

they make up everything. You know, if there's if there's supply, if the supply constraints on that, if there's under investments in it, if there's, you know, the shortages that you're talking about, that factors through to that factors through to everything, you know, oil is oil is the energy, it's the blood that keeps this global machine moving for the foreseeable future anyway, because it's not just the energy, it's oil in absolutely every near enough every product that is produced, whether it's a component part or it fuels the production of it.

So yeah, I mean, we can be looking at what AI is going to be doing, but at the end of the day, if we've got commodity constraints, that's the first kind of canary in the gold mine, ultimately. Indeed. So last question I have to ask, is that a silver diver behind you over your left shoulder there? Unfortunately it's not silver. I could lie and pretend that it is. But I have to commend you for actually recognizing that it's a diver because everybody thinks it's an astronaut. All right well Dave where can people find out more follow you I know you've got a great channel going on on YouTube as well now so.

Yeah gocore TV on YouTube we have got plenty of interviews there with with industry experts in the precious metals and global macroeconomics. But my colleague Jan Schoiles as well, she does some regular videos on there. Jan's an economist. She has a wonderful way of taking complex ideas and making them digestible. And I recommend anybody who's trying to make sense of what we're going through at the moment, which a lot of times, you know, I'm 30 years in the market and I get confused by these things. So having somebody that can break these down into digestible bite sizes and communicate complex situations and complex events in a very straightforward, understandable way. So check out Goldcore TV. Our website

is goldcore.com for anybody looking in the States, goldcore.ie for anybody in Ireland, goldcore.co.uk for anybody in the UK. We sell, we buy, sell and store physical gold and silver bullion. So if you're looking to take delivery of it, we do that. If you're looking to store some of your precious metals in your own country or elsewhere around the globe, we use about seven different vaults around the globe to give people some geographic diversification. It's done in a highly secure way. We've got what we call our six-point locking system. Three of those things are rather than just having access to see what you hold in storage through our website, it's done through the vaults websites,

but we've also annually ordered it as well. We use a network of professional specialist precious metals vaults around the globe. Everything that we do it's allocated and segregated so if you buy bars offices they're your bars, your bar numbers sitting there on the Allocated and segregated so if you buy bars offices, they're your bars your bar numbers sitting there on the on the vault in your subaccount so everything is done with a view to Increasing the levels of security around your storage But if you prefer to take delivery of your precious metals, we do that as well But there's plenty of information to be found on our website goldcore.com In full disclosure we have at peak Prosperity an affiliate relationship with Goldcore. I store and hold gold and silver at

Goldcore's vault so big believer in it and by the way if you do check them out just tell them Chris sent you or come by the Peak Prosperity website because Dave every so often we run you have great specials for the people at the Peak site and and they've been very well received there so sometimes there are deals. We do indeed and we've got one we've got one going at the moment so if you go to the peak site and they've been very well received there. So sometimes we do indeed. And we've got one we've got one going at the moment. So if you go to the peak sites, you should be able to see that one. And it's around 90 percent silver bags. And we talked a lot about silver during this conversation, which is wonderful.

Ninety percent silver bags are that they're a fantastic product. First of all, at this moment in time, they are literally for sale. These things are, I've seen times in my career where these are trading at 10%, 15% above the spot price of silver. Basically, the moment we're doing an offer, it's approximately because we do it in percentages, but approximately a dollar over spot for a 90% silver bag. That's about 715 ounces of pure silver. These things I believe over the next couple of years in terms of the premiums I think they'll probably shoot up. You understand what

mine and Chris's opinion is with respect to the silver market itself and the silver price. So if you want to check that out, go through Chris's website and you'll see the offer. Fantastic. All right, Dave, thank you so much for your time and insights. As always, let's do this again as soon as necessary. Who knows? It might be later today the way things are going. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed.

I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed.

I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed.

I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed. I'm going to go to bed.