If This Happens, It’s Over!
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Nothing in this program should be considered investment advice. It is for educational purposes only. Please hit pause and read this disclaimer in full. None of this is happening in a vacuum.

If we look against the backdrop that there is, there's the geopolitical tension, there's the de-dollarization, there's the BRICS, social unrest, there is the polarization of politics, particularly in the U.S. that we've seen. There is a lot of uncertainty here. Looking against that backdrop, we're not looking at these things in a vacuum. We're in a very precarious position at this moment in time. The following is the audio version of a video released at peakprosperity.com.

Visit peakprosperity.com to watch the video and to find other insightful content such as articles, discussion forums, and exclusive subscriber-only content. Hello, everyone. Welcome to this edition of FinanceU. We are going to be again talking about all things related to markets, macro, gold, gold and silver with David Russell of GoldCore. David, so good to see you again. Thanks for having me back on, Chris. Always good to chat with you.

Well, here we are. We're coming into the holiday season. Obviously, a lot of cheer and merriment going on. You just went to an LBMA dinner, I understand. I'm just curious, from your perspective, what's going on in the gold and silver markets right now, sort of like wholesale, retail? What's the word on the street? Sure, sure. I suppose let's talk about it from a kind of wholesale perspective anyway.

We're seeing, and you can look at the price, and the price tells the story. Since the election, the prices, we've seen gold sell off. It's moved fairly much sideways. The beginning of this rally was very much a central bank-led rally. And if you go back to, it was primarily Asian central banks, Asian agencies that were buying gold.

And throughout most of the beginning of the year, that's the way that this was. We saw an awful lot on the retail side, a lot of selling into that. There were people taking opportunities of higher prices. As the year progressed, we then started going down the food chain a bit more and we got more kind of high net worth individuals. We got investment funds coming in. And now there's rationale behind why they're purchasing.

And it's the same. It's that kind of element of financial insurance. For the Asian central banks, it's that de-dollarization moving away from that dollar risk as well. We saw then pre-election, we saw a lot of high net worth individuals, particularly in the U.S., that were moving out of the U.S. dollar because of fears. There was so much uncertainty around the election to begin with.

I think if you looked at the polls pre-election, it was looking like there was neck and neck. So there was a lot of uncertainty as to what the future would hold. As events transpired throughout the election, then there became a lot more certainty as to what the next administration would be. We saw that a lot of that stress, tension, anxiety kind of went out of the market for that cohort of people.

But throughout all of that and what I've described there, you'll note that I never mentioned the retail investor once. The retail investor has been fairly absent. And I'm talking about the kind of the Western retail investor has been fairly absent from this rally to a greater degree.

We've seen reductions in a lot of the transactions in the kind of coin and bar market in Europe in particular since over the last year or so. So we're seeing an absence of it. Not a total absence, but...

It hasn't captured the psyche of the retail investor to the same degree that it has captured the psyche of the institutional buyer, the central bank buyer and the high net worth individual.

But we're seeing this since the election. We're seeing a little bit of a cooling of that anxiety. And I think that we're going to see that until we see what the next administration does when post inauguration. And we see what the what the policies that they're attempting to implement are at that stage and how the market thinks they'll be.

I'm just so out of step with all of that because, I mean, A, the election in the United States, obviously not close at all, more of a mandate than a squeaker, a little closer to the mandate side than squeaker side.

But since then, right, we saw the lame duck administration and I'd say Biden, but it's not really him. Right. I don't know. He has the mental faculties for any of this stuff. Right. But whoever is pulling the levers in the White House decided to lob long range missiles into Russia has continued that on. We've had the fall of Syria, which looks like an engineered thing. We have a color revolution in Georgia. We have the Supreme Court of Romania just sort of throwing democracy out the window on and on.

And then we have all this drone stuff going on all over the East Coast. It really feels to me like this lame duck administration is doing everything it can to sort of stir the pot and accomplish some last minute things like, you know, this is this is the deadbeat dad shopping on Christmas Eve, like like whatever you can do, just throw stuff in the basket. You know, that doesn't make me feel confident and like a de-escalation. But clearly the markets think that's just stupid.

that can be ignored, I guess. Yeah, I mean, the markets are just shrugging off absolutely everything at this moment in time. Now, you can look at it as the markets are shrugging off absolutely everything at this moment in time. And I know that there was something that you were showing me there before in relation to new all-time highs in stock markets. We've got Bitcoin going up. We've had gold going up this year. We've got property markets, everything going up, right? And you can look at it through that lens and say, yeah, everything is going up.

Or you can actually just flip that and say the US dollar fiat currency is going down. And there is as much as possible an exodus from fiat currency and moving into stocks, moving into crypto, moving into metals. I mean, if you look at the yield on the S&P, the dividend yield on the S&P is ridiculously low.

Ridiculously low. Absolutely. Back where it was in 2000. Yeah. And look at price earnings. Price earnings ratios is something like 24 or 25. It's huge. Yeah. It's huge. It doesn't warrant these valuations. Right? It's so...

you've got to kind of look at it, you've got to flip this thing on its head and not just say, oh, well, okay, the market is shrugging everything off, everything is rosy. It's also a case of let's get out of, there is that massive amount of uncertainty in the world, let's get into some sort of, whether they're hard assets or digital assets, stocks, et cetera. But it doesn't, because the alternate to that is to say, oh yeah, whereas healthy an economy now

as throughout all of the boom times. We're not. There's so much uncertainty in the world at this moment in time. You could throw a dart at a world map and you're going to hit someplace that there's tension and escalating tension as well. Are you tired of feeling run down, maybe low energy? You know you've got some pounds you'd like to lose. Maybe you've got...

brain fog or something like that. Listen, we think we have the answer to all of that, and it begins with your food. If you're like me, you were shocked to hear testimony recently that unraveled and unearthed and exposed the idea that our food has been made

by addiction specialist scientists, the tobacco scientists out there putting things in our food. Maybe it also shocked you to discover that Europe does not allow all kinds of stuff in our food because they know it's toxic.

What is the combined effect of all of this? Listen, we know what the data is. It's horrifying. The number of children showing up with type 2 diabetes, the total metabolic disasters unfolding across the land, marked by obesity, sure, but we have cardiovascular issues, concomitant rises in cancers, all of these things, and it all sucks.

starts with food. Garbage in, garbage out. So what do we do about that? First, it begins with understanding the context. We've put together a very exciting, comprehensive food webinar that will expose the regulatory side of this and what is being done and why and how this happened to us. We'll be talking with Thomas Massey about that. We've got Dr. Ken Berry talking with us on the practitioner side and the solution side.

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tortillas. Hey, maybe you're even on keto and these are carb wise. So these have low amounts of carbs. See that? Carb wise. Yeah, these are carb wise. So keto friendly. I want to note, you note something. You see how fresh these look? Yeah. You see any mold in there? Any bacteria, any yeast, any sign of anything, any organism in there?

These things expired in June, and it is now November. So what are they putting in our food that even black mold won't eat it? I don't know, but I've decided that if it's not good enough for black mold, it's no longer good enough for me. Once you start down that path, you realize that we have got sugar and preservatives and salt and

and seed oils, all of the chemicals that are unnecessary, and the fact that the food pyramid is absolutely wrong. So if you like effective information that leads to effective action, this webinar is for you. It's going to be the usual thing that my team and I will put on. It'll be organized, digestible, easily understandable, and most importantly, it's going to be actionable in ways that you will understand what to do.

And I've designed it so that you would be easily be able to send this to anybody that you love or care about. Say, can we talk about this and have it as a starting point for conversation? But what we really want, we want you to be healthy because, well, who doesn't want to be healthy? Health is the number one form of personal capital that you can have, of course.

But given everything that's going on in the world, being healthy and vigorous and active are going to be dominant strategies and things you're really going to want to be carrying in. So folks, it's time to get prepared on all levels. It begins here. It starts at home. It begins with our eating. And let's just make sure that we're not eating stuff that even black mold won't touch. With that, thank you very much for listening. And we'll get back to our regular programming now.

Well, let's go to the big news for this week at the time of this recording. Well, you know, the Fed rate cut today is virtually set in stone. At the time of this recording, there will be an announcement, probably another quarter point. That's the guess. I doubt it's going to be different than that. But ripping up its 2025 rate script means, well, maybe fewer of those rate cuts than people had been expecting.

And of course, the first thing that happens on this news is stocks went higher. They would have gone higher if the opposite news had come out. It just feels like the stock market is super well abundantly supplied with liquidity, which Charlie Bilello put out on November 10th. He said, hey, here's the case for the Fed rate cuts. Let's make the case. Stocks, all-time highs. Home prices, all-time highs. Bitcoin, all-time highs, which went even all-time higher after November 10th to now.

National debt, all-time high, and we could talk about that continuing resolution and what a boondoggle that is. Just throw the dollar under the bus is, I guess, what it's looking at. Core inflation high, and of course, that's going to lead to Fed rate cuts. I mean, it's, David, 58 record highs of the year, and the Fed's cutting. What's the... Pretend you're a Fed official for a minute. How do you sell this to the average person? Yeah.

That's tough. I mean, like, you know, there is nothing in what you said there that if you didn't reveal the, you know, the twist at the end that they're cutting rates, there's nothing there to suggest that what we need at this moment in time is more rate cuts. So there has to be a rationale behind it. I don't know how you actually spin the story, but there's a, you know, there's kind of, there's one or two, there's one or two explanations.

One of the things that you can say is, well, we've got 36 trillion in debt. That's going to start, you know, that's repricing. Unless we try and do something to try and bring down the yield curve, we're going to be repricing a lot of that at higher rates.

So, you know, and what does that do to the federal budget? What does that do to the national debt going forward? We're already at basically a trillion dollars a year in servicing the national debt. That's a trillion dollars of taxpayer money. And like we remember, I think we discussed last time, effectively receipts are about five trillion. So 20% of that, of actual tax receipts is spent on insurance.

interest for which you don't get anything, that's a huge figure. But if we have, if we lose control of the yield curve and it goes higher, and it's very difficult for them to even now keep control of the yield curve, those are going to reprice at much higher rates.

So, they're caught between a rock and a hard place because at the same time you've got this theme of de-dollarization. You've had nearly 500 billion in foreign held treasuries sold down over the last year or so. So, you've got to maintain a decent rate on your treasuries in order to attract foreign buyers.

So you're caught between this rock and a hard place with respect to what you do with what you do with rates.

That's an interesting... So you mentioned $500 billion over the last year of foreign selling. I just read that in the last reported month, both China and Japan kind of record amounts, like big numbers, right? $30, $40, $50 billion in a month of sold-down stuff, which led to the T. Rowe Price head of fixed income saying...

He thinks that we might see 6% rates on the 10-year by the end of 2025 if that continues. And it was a structural fundamental argument he made, right? Rising deficits, out of control. You know, government doesn't seem to know how to fix that. Not really putting a lot of stock in DOGE, the Vivek and Elon endeavor really getting far. Plus foreigners walking away.

6%, 10 years, that would be not what the Fed has in order a year, I would bet, right? Absolutely not. You think, you know, you game that through with respect to what that does to the economy. 6% is, you know, what level of rates can the economy effectively tolerate? 6% is serious implications. If there is, well, you know, I'm kind of...

I think what we're looking at here is what I kind of call, it's like the silent financial crisis. It's like it's not being talked about. There are, if we take, for example, if we take US real GDP, US real GDP at the moment is about 3.1%. Okay. That's based on our inflation rate of about 3%, let's call it. Now, we all know

You know what it's like when you go out to go do your shopping, when you're paying your bills. Does the inflation rate feel like it's 3%? No. No. Nowhere near it. And not only that, there's something I think that's really important for people to understand is that that 3% that is quoted, that's an average rate. Not everybody experiences that 3%.

There are those that experience inflation rates that are significantly higher. And what I mean by that is if you are lower income and you look at the, because we're talking about the core CPI, excluding food and energy. If you're a lower income, a much higher percentage of your discretionary spending effectively goes on food and energy.

I mean, take away your fixed costs. So what you're left with your variable spending, let's call it. A much higher percentage of that goes on food and energy than if you were in a higher income bracket. If you're in a middle income, it's slightly less of a percentage. If you're in a high income, it's a tiny amount. So if you're dealing with...

an inflation rate, you know, food and energy inflation rate being significantly higher. The lower income bracket you are, the bigger the impact that that actually has on you. So inflation is not something, it's an average number. It's not something that is implied across the board. But notwithstanding that, if you look at the idea of real GDP, which is the nominal minus the inflation rate, and you're saying, even yourself, and you don't fall into the lower income bracket,

you are experiencing an inflation rate that's significantly higher than that 3%. And a lot of people would say it's probably closer to something like 7%, 8%, something like that, or even higher. If you actually take that as being the real lived inflation rate, what does that actually mean for GDP? Real GDP. It's significantly lower than...

what we are being told that it is. So first of all, we're being told that the inflation rate is lower than it actually is. And we're being told that GDP is an awful lot higher than it actually is. So effectively, what is happening is that there's this veil being put over

being put over these economic numbers. And it is, it's, it's, it's including this silent financial crash that is going on. We're seeing a movement into, into, into asset classes, stocks, properties, gold, and so on. And it is being sold as isn't everything wonderful. The stock market is, the stock market is going up. And one of the things that there's an interesting statistic, which is,

It is the household exposure to basically to stocks. It's hit an all time high of I think 38.8%. So 38.8% of household investment is now in stock markets, which is at a high.

So what we're finding is not only are people moving into these financial assets driving the market higher, but there's a greater exposure to them now across the board as well. So we are more vulnerable to any sort of a correction that might happen in those as well. That's kind of a scary couple of things to be dealing with at this moment in time, particularly when none of this is happening in a vacuum.

If we look against the backdrop that there is, there's the geopolitical tension, there's the devaluation, there's the BRICS, there has a degree of social unrest, there is the polarization of politics, particularly in the US that we've seen. There is a lot of uncertainty here.

Looking against that backdrop, we're not looking at these things in a vacuum. We're in a very precarious position at this moment in time.

Now, is it possible, David, that the Fed is actually fighting a battle in the line of you think you're saying about the silent crisis that's sort of under there? Right. So so there's some data I can pull up right away. Right. We know that there are unrealized market market losses on bank balance sheets because they're holding a bunch of one percent 10 year paper when it's trading at four plus right now. So that's a loss if they had to sell it.

Right. We also know that the commercial mortgage backed market is failing like crazy right now with levels of of I guess they're in default and also failure to pay. So they're they're delinquent. The D&D on that is now at a level that surpasses on commercial mortgage backed security. CMVS paper surpasses the great financial crisis of 0-9.

Right. That's just sitting there. Nobody talks about it. But these are big losses. Obviously, the Fed would like to lower rates to kind of cure a little bit both of those issues. Right. Yeah. I mean, this is this is why I call it the silent financial crisis. People don't talk about it because you do know exactly what the panic that would ensue if people were talking about it, if they were being honest about it. So to a degree, we're being treated like we're being treated like children that can't

can't handle the truth. I used the analogy a couple of episodes ago when I was chatting to you about the two adults and the two children driving along in the car coming up to a checkpoint. And the analogy was that the oldest one in the front knows exactly what's going on. And when asked by the younger one in the back what's going on, oh, nothing, this is OK, this is perfectly normal. The person sitting in the passenger seat understands that this is a lie, but it's a lie to protect the two children in the background.

The child in the back of the seat goes, oh, OK, this is fine. Everything's normal here. And then the youngest one is too young to understand. They have no, and the analogy is they have no financial knowledge of markets. They just accept everything that is being said. Those that do understand that and understand that what's being given as an explanation is not the truth and will act accordingly and will prepare for what's coming.

That's why, you know, we've got to be very cognizant of this silent financial crisis, because if we don't, if we continue to believe everything that we are being told, we're going to find ourselves in a very precarious situation when this unfolds. Well, to that end, this is a chart from Charlie Bilello. It's Truflation, which is a real-time U.S. inflation gauge. They measure it differently. I think they just use prices, actual prices and, you know, BLS.

and massages and does all kinds of stuff. There's a really sustained and sharp rise starting in mid-September of this year where you can see inflation was sort of moderating a bit, but now it's back up. They're saying it's a 3% rate. Again, this is an average rate. This is across prices. And so this is clearly heading in the wrong direction. So again, if

The Fed, at a minimum, even though they won't say this out loud, but they're going to say, listen, households, we're going to kind of have to throw you under the bus here because there's another monster we're fighting. And like the child in the backseat and your analogy, they're not telling us what it is because they don't want to— or don't want us to worry our pretty little heads. It's like the drone thing, right? Like, we have no idea what they are, where they're coming from, but don't worry, they're not a threat, right? You can't put those two statements together and have it make sense, you know? So—

David, make it make sense. Well, it's difficult to. And this is, you know, this is... And again, I think I talked about it before. My analogy is the Kobayashi Maru, you know, the Star Trek analogy, where no matter what, you cannot win. Effectively... Okay, let's...

the only you've got a 36 trillion in uh debt right that's the on balance sheet there at this moment then you get the uh the unfunded liability so you can add another probably 100 trillion to that uh there's two ways you there's yeah exactly yeah there's two ways that you can deal with this problem all right is one you can uh cut spending

Right. Two, you can inflate away the debt. So now let's talk about the cutting of spending. You take in about five trillion in interest rates each year. And then of that, you've got on the spending side, you could look at, say, the interest on the national debt.

Social Security, Medicaid, Medicaid, Medicare, Medicaid, military spending. That effectively is about four and a half plus trillion in spending. OK, now, if they're the they're the things, they're the big things, they're the largest four or five, six things on the spending side.

If you look to cut those, which has been one of the things that has been talked about by Trump and by Musk, effectively what you do is very quickly you will actually plunge the economy into recession. All right.

And you'll also massively impact receipts. So the cutting of spending is extremely difficult. One of the ways you cut spending is the U.S. government is the largest employer, right? Now, you try and cut employment. What you're going to find is that, okay, well, revenues, they get cut. And secondly, you're making an awful lot of people unemployed.

You are going to plunge the economy into a recession very quickly and potentially a depression. So the one thing that you're actually trying to do is pushed further down the line. So that's option one. Option two is you inflate away the debt. Okay. Now to inflate away the debt, what do you need? You need inflation. Okay. Okay.

So how do you achieve inflation? Well, you keep rates low as you can realistically for as long as you possibly can. You don't want anybody to actually understand that this is what you're doing. You don't want people to understand the true nature of inflation because what happens if you understand the true nature of inflation, that it's not 3%, it's 7% or 10% or 15%, is that you've got wage inflation.

So everybody understands, if everybody realizes that inflation is 10% or 15%, what happens? There's wage pressure.

Because otherwise, all you're doing is you're making everybody poorer, you're increasing the wealth gap, all these things that are bad for society. But if you start to get that increased wage inflation, what does that do? It becomes a self-fulfilling prophecy. It drives inflation higher. And what does that do? It drives further wage inflation before you know it, you've lost control.

So the only way, the way that you have to attempt to manage this is to allow inflation to drift higher, report that it is not as high as it actually is,

And then you have the ability to inflate away the debt. Now that, as people get more used to the kind of 3% narrative, maybe they get used to a 4% and a 5% over time. And this is how you're going to be allowed to inflate away that debt. Eventually, eventually, and we're probably seeing this now, people are realizing that

that the value of the dollar in their pocket is being absolutely eroded. So what is it they do in a situation like that? Well, they move into other asset classes. And what do you see when moving to other asset classes? Well, you see all time highs in stock markets, but you see all time highs in stock markets when you've got a P/E ratio of 25.

So you see all time high in gold, you see all time highs in Bitcoin, you see all time highs in property markets. Why? Because there are people that are effectively getting out of fiat currency because the dollar in their pocket is being eroded and they're trying to put it to work as best that they can. And that's why at the same time you are seeing an increased allocation to stocks in household portfolios.

So the option two looks like the way that the Fed is going at this moment in time. It's an awful lot easier for them and the tools are there for them without having to go down the kind of politically unpalatable option of cutting spending.

Nobody likes cutting spending because that's the austerity plan, and they hate that. So instead, they spread the pain out with this thing called inflation, which you mentioned it's a tax, and it's a highly regressive tax, obviously hitting you harder the lower down the socioeconomic path you are. So all this fancy talk about expectations.

equity, equality. We care about people, you know, that the Federal Reserve somehow represents, you know, caring about humans. They don't care. They're there to protect some other interests. But when you were talking, David, I got, so I just pulled it up. So I had to search a bit and I found it. And this is for 2023. 2024, this deficit number is actually 1.83%.

trillion that's 1393 billion which is 1.393 trillion but to your point this is all the stuff flowing in on this side receipts and is all the stuff flowing out on the other side over here social security can you touch that health which is medicare medicaid health spending can can you touch that nope income security no national defense

You could. You could. It has implications. Net interest, which very cutely has doubled from this chart to the one that comes up the next year. You can't not pay your interest. I've heard people say this, David, but please just put a bullet in that for us, right? So people are like, oh, we'll just not pay some holders of our debt off.

Yeah, do that with your car payments or with your house and see what happens. That kind of breaks the whole thing. Like, if that happens, David, I'll be calling everybody up, like, saying, you know, bullets, beans, and, you know, in a prayer book. Trust is gone from the system.

Yeah, it's all done. Okay, so now we're down, now we're mucking around in this last, you know, veterans benefits, I guess, education, transportation, and then some other stuff. That's where they're going to have to fight around and rummage around for any cuts, I would think. Look how small they are in comparison to the other ones. You could be fighting around in there all day long. You aren't going to get the savings that you need. Yeah.

And those are dogfights down there too, right? That isn't just like people shrug and go, oh yeah, let's just cut education, right? Yeah, cut education. People saying, no, don't do that. You don't need half the teachers. That's, you know, how does that wash? You know? It doesn't. Yeah.

So that's tricky. So this is the only thing the Fed can actually target is net interest. And they're going to try and do this by dragging down the interest costs as we roll over all of our debt. So it rolls over, hopefully, at a new lower rate, which ends up lowering the interest payments. Like our credit card just had a new interest rate, new API. Okay. Yeah. But you're trying to influence as well because you don't roll everything over in the three-month period.

you're trying to influence the whole yield curve all the way out by just influencing the short end of the curve. So it's a difficult job. Well, it is. I mean, if you have 36 trillion, you probably have, I'm just going to make a number up, about 10 trillion of that's kind of long paper, of which only some of that will roll in the next cycle at this new lower rate. Yeah. Right? Yeah, exactly. Exactly. Exactly.

So it takes a long period of time and you need to be able to affect the yield curve all the way out because you've got a maturity profile on that. It's not all three-month paper. It's not all one-year, two-year paper. It's two, five, ten. You go on all the way out the curve out to the 30-year. Yeah. But again, back to the T. Rowe price fixed income guy, if that long paper goes out,

to 6%. That's a problem. Now, so as you were talking, David, I was thinking, you know, the last time I studied it, it's been a couple of years, so this could be old information, but I was looking at, I'm interested what happens when a currency system collapses, right? So I studied Zimbabwe, but Venezuela was our live, you know, current sort of exemplar. And of course, they had this punishing inflation. You saw the confetti, the paper currency literally wafting up the street, not even worth picking up.

They destroyed their productive enterprises. Of course, the wealthy people who were your most productive in Venezuela picked up and left. You know, they brought their factories to other countries, Costa Rica. They went other places. But as that was happening, you would think, wow, this must be miserable. The stock market went up 600000 percent over that time that I studied.

That sounds great. Unfortunately, inflation went up to million percent. So you actually lost. Yeah. And it's, it's, we have a, we have an uncanny knack of looking at the same time, same thing sometimes before these, before these conversations, because I was actually just looking at, at Venezuela and that, you know, there was going to be the question, which was, which is the best performing stock market in 2021, you know, to which the answer is Venezuela. And you go, okay, right. So,

If we look at, I always like to take, to unwrap these things as you look at them at the extremes. And so you say, why is the US stock markets, why are they performing so well? Because obviously they're performing so well because the economy is doing so well. And you go, right, okay, well, let's put that into the grinder and analyze it. You say, well, what was the best performing stock market in the pick, whatever it was, 2021 in Venezuela? You know, and you go, right, wow, it went up by what? A couple hundred thousand percent.

Well, that really must have meant that their economy was doing really well in that case. But obviously that's not the truth. Inflation through the absolute roof there. And the interesting thing, actually, and I looked at this, I haven't had a chance to double check this, but it seems right given your confetti comment there. I think gold in Venezuelan bolivars went up by something like 90 million percent. Yeah.

But that's literally, this stuff is worthless, you know? Yeah. It's like, say, what's the price of gold in toilet paper? Yeah. In used toilet paper. Yeah. It's infinite.

Yeah, are we measuring by sheets or by rolls? Well, so, but I like this as an idea, though. So the idea is that instead of trying to say, you know, is the S&P worth 24 times earnings? The question might be to ask, is big money deciding it would rather hold something other than the dollars in its portfolios and it would like to hold stuff, right? Like stocks or...

But we've seen this huge move into Bitcoin, and that's taking the headlines off of this. But I have to confess...

Bitcoin and the meme coin universe to me is actually one of the best liquidity gauges I have. I don't have access to like the deep plumbing data. So I have to be here on the outside. And so I've noticed, David, that when the Fed at all, that includes all the world's central banks, are busy dumping currency or somehow liquefying or making things easier. There's lots of ways to look at this.

We see things. And so, yes, the S&P has been ticking up, but it's almost tick for tick with the German DAX. And Germany is just sucking wind at this point in time. I mean, layoffs and losing their energy intensive industries, capital D depression for certain industry types. It's a problem.

Right. And they have high energy costs and it's a tricky thing. Yet their stock market tick for tick yesterday, eight o'clock, all the indices, Japan's United States, Europe's Germany, all ticked up at eight o'clock for no good reason. Right. But so that tells me we have a well liquefied system. The computers suddenly see a bolus of liquidity. They do something. I see a lot of of.

let's call it the digital currency space, or not even currencies, the digital asset space. And perhaps the exemplar for that, which Charlie Bilello pointed out this morning, is that the market cap of a new meme coin called Fartcoin hit a billion dollars today. People are just buying in on this. Now, you can look at this lots of ways. It's a cute name. Obviously, it's all dudes, you know, investing.

However you want to look at this, but I back up, David. I see liquidity. I see just a system that is just awash in liquidity right now.

Which fits with the idea that the Fed at all, they don't want this austerity plan. They want this inflation plan. And here's a canary that's sort of saying maybe that's a correct way to look at it. What do you think? Yeah, this is, you say there we are, fart coin. And it's, you know, it's a load of dudes. It sounds like it's a load of 16-year-old, 14-year-old boys, to be honest. We are awash liquidity, honestly.

This is what it is demonstrating. That's why we're seeing... We've got liquid markets and we are seeing people that do not want to be in fiat currency. That's the reality of it for me. That's what we're seeing. We're seeing that... We're just seeing that migration out of fiat currency and into liquid assets in the most part. And then there's...

and there was a Hawk 2 coin, and there was, my God, I don't know what else. I'm going to be, I'll be long gone, but the history books are going to probably look back at this point in time and deride us. But yeah, that's what I think is underpinning all of this, is just get out of fiat currency because you just don't know how close we are to an event that

financial, geopolitical, whatever that is going to make your currency, whatever that may be, worthless in a very short space of time. We've learned lessons before and we want to make sure that we protect ourselves going forward. Let's talk about my favorite subject, gold, for a bit.

Just yesterday, Zero Hedge reported that China secretly bought up a massive amount of gold, 10x more than officially reported. They reported buying five tons, but actually took 55 tons, which is 11x the way I do math, and

Off of the London OTC market. So that's a big number for one month. Did this come across your transom at all? No, no, but it doesn't surprise me is the reality. What I mean by it doesn't surprise me is it doesn't surprise me that China is underreporting what it is actually buying.

You know, if any of us had the opportunity to under-report figures that, you know, had massive implications for us, you know, we probably would do, but we're bound by stricter rules, it would appear, than the Chinese.

They're continuing to add to their gold holdings. They have added significantly to their gold holdings over the last number of years. We are unsure as to the full extent of that because it's not just the central bank and the PBOC. It is government-type agencies as well.

that are purchasing on their behalf. We don't know the true extent of what it is that they have purchased. We've talked previously on your channel about the de-dollarization, about the rise of the BRICS, about their appetite in that regard, their appetite to create a currency for trading primarily amongst themselves, amongst the BRICS countries.

Which is, you know, I suppose it's because it has involved China and it has involved Russia that we look at, you know, it's been looked on with a high degree of suspicion. But the reality is, and take away the gold-backed element of it, this is what the euro did, you

when the countries came together and effectively said we'd prefer to actually, we do a lot of trade between ourselves, let's create a currency to make this all easier and let's try and harmonize a lot of our economic rules, activities in order to facilitate that. So it's not unprecedented.

But there is a lot of talk about how they will. They are very diverse in culturally, very diverse countries from a legal perspective. So there'd be an awful lot of implications, ramifications and planning going into how do we actually how do we how do we create a stable common currency unit?

And the natural solution to that is one that is backed by precious metals and in a large degree by gold. That's what the suspicions have been. That is what a lot of the talk has been around this. And then we see, you know, eastern central banks and we see Russia and we see them all accumulating gold. So it really lends weight to that idea that they are going to be introducing their

BRICS currency unit and it will be heavily backed by precious metals and they've had the opportunity let's say to under-report exactly how much they're purchasing so now that we see that it lends even more strength to that suspicion

Yeah. And I put secretly around it because it might have been secret from me, but the people inside those vaults knew exactly what was happening. And that went up the official that did not escape official notice. Now, speaking of which, I am such a contrarian, David, if whatever the FDA tells me now, I just do the opposite. Right. Eat red dye number three and yellow 10 and processed foods. I'm like, no, thanks. Right. Off the reservation on that.

I've been seeing a lot lately that I consider to be not just nudges, but pushes by what I call the official narrative machine to get into Bitcoin. Right. We've heard strategic reserve asset across multiple countries. And I think Microsoft shareholders just actually voted against Bitcoin.

Having that as a strategic asset in their treasury, but you can feel the push And then just last week we had this surprising result come out where IBM, you know, big splash No, Google big splash says hey, we've got this new quantum chip called willow It solves stuff that was formerly unsolvable and of course the entire premise for Bitcoin is that it has this currently unbreakable encryption that gives makes your keys stay private and

David, I'm no expert in this area. I don't know a lot, but it seems to me that if you're going to call something a strategic reserve asset, maybe it shouldn't potentially go poof, you know? You can put gold in a vault and it just, you can open it up a million years later and it's still there, right? It's still there. It's still gold. Yeah. And the technology you need to move it about, it will still be the same. Yes. Shouldn't they have to account for that, just at least with lip service to say, here's why we're not worried about that? Right.

Yeah, I mean, the reality of it is this is still, if you compare it to gold, this is still very new technology. It's sexy technology. It's hit the headlines. It has performed extremely well. It is still not very widely held. It is not as widely held as precious metals or precious metals related assets are.

In terms of a market capitalization, it is growing. It has done very well over the last couple of months. It's done very well since the Trump administration has been elected in. It's supported as well by Elon Musk, who is a very big supporter of Bitcoin and other coins. But in terms of...

You know, it's not too long ago that we saw Bitcoin fall from 65, 68,000 all the way back down to the teens very quickly.

That's not the type of volatility that you want in a reserve asset. It's just not. It would be precarious. I mean, there was an interview that I was listening to there with Michael Taylor of Micro Strategies. And, you know, he was suggesting that what the US should do is sell all of their gold and buy Bitcoin with it. It's what he called his evil genius strategy. This is...

This is ridiculous. This is nonsense. This is nonsense stuff on so many levels. It's actually, I don't know, I have it here. I'll actually read, I'll read you, I'll read you what the final part of what he called his evil genius strategy after he kind of explained it, which was effectively sell your gold and buy Bitcoin. He goes, what I've described here replaces every currency in the world with the dollar.

which the US controls. And it siphons off hundreds of trillions of dollars of 20th century capital assets and half of the capital in the rest of the world. And most 75% of the capital of our enemies gets siphoned into Bitcoin. And the beneficiary is the US government. And after that, every US company, because we're the ones who own and run it.

Now, I put a little note on that scribble down there. I said, Michael, I think you said the quiet part out loud there, because that's part of the reason that we have found ourselves in a situation where the East has been buying up so much gold. And there's been this talk of de-dollarization is because when financial markets were weaponized after the invasion of Ukraine,

There were a lot of countries that looked at those actions and said, I could be next. We could be next. We want to reduce our exposure to the dollar. We want to reduce our exposure to the US economy as well. What he's talking about there has serious geopolitical implications. It's

It falls at the first hurdle for me based purely on those comments. That is not to say that Bitcoin should not make a part of a portfolio. It's not to say it should make a part of

Most people's portfolios. Does it have a role in there? Yeah. It's performed well, but as we all know, past performance is no guide to future returns. It has been extremely volatile. So if you've got the appetite, you've got the risk appetite for that type of volatility, go for your life. But as with anything, our gold core, we sell gold.

But we don't advise anybody, you should put absolutely everything that you have into gold. And you can say, well, why is Michael Saylor saying it? Well, MicroStrategy is the fourth largest holder of Bitcoin. They hold something like 439,000 Bitcoins. So should we be taking advice from the guy who's the fourth largest holder on Bitcoin as to what everybody else should be doing? What the US government should be doing? Who benefits most out of that? Well, he does.

So it's kind of biased. It's kind of biased advice. You know, as I said, like we said, we sell gold.

We sell silver. We talk about it. We try and talk about it in a balanced way. When we recommend it to people as part of their investment portfolio, we don't, as I said, tell people that they should put 100% in. This is a surefire bet. Stick it in. You're going to make millions out of it. No, it has a role in a portfolio. It provides that element of financial insurance. It provides that hedge against uncertainty. It provides that hedge against inflation. So it has a role.

It should not be all of your portfolio. There's the old Wall Street saying, put 10% of your money into gold and hope it doesn't work because that means that the rest of your portfolio is performing because it is that kind of contrarian asset. It has such a low correlation to other asset classes that it performs well in those situations.

So, you know, advising an individual to sell everything that they have and put it into Bitcoin is bad advice. Advising the US government that they should sell their gold and put it all into Bitcoin. Well, I'll let you decide as to how good an advice that is.

Ultimately, though, as I said, we sell gold and silver. We do comment on the markets. But, you know, listening to commentary from or judging a gold dealer on their comments about the markets is about as useful as judging your mechanic based on whether he knows what the fastest lap in the Indy 500 was. It's irrelevant. Is he a good mechanic? That's the important part here.

So, you know, choosing somebody who is going to advise you based on how to buy Bitcoin, on how to buy, how to invest, how to buy gold, how to buy silver. You know, you've got to look at their ability to actually do what they say rather than purely just advise you on whatever outcome that there is. Because I could sit here all day long and say gold's going to $10,000. Everybody's got to load up.

You know, and people, my credibility ultimately would take a, would be affected by that. But at the same time, you're just talking your own book here. Well, and speaking on that front, this is one of my prime objections. I believe in power structures in the world. I believe that there are, we live in a hierarchical society. There are powerful, powerful people who've been in those positions for many, many generations, and they know how to play the game.

So to slip into Michael Saylor's world, all of a sudden what we're going to have is because a new technology comes along, we are going to completely upend the winners and losers that have been established carefully over millennia.

And I'm looking at a chart right now that says 1.94% of the total addresses of Bitcoin currently hold 92.73% of Bitcoin. It's just this tiny little handful. So those are going to be the new winners, right? Many of them wear baseball caps backwards and, you know, live loud lives in Puerto Rico. Those are your new royalty and ruling class. And everybody else is just going to say, I guess we lost. They're the new winners. Right.

buy that narrative, but I'd like to see how that plays out. It doesn't make sense to me, because that's not how the world works. It's not how the world works. And there's...

There's a way in which you construct portfolios, either on a personal investment level or whether it's looking at the kind of reserve assets that you have as a nation and being over-concentrated on any one thing is a very dangerous situation. You know, the reality is that if for whatever reason somebody was actually to take that advice seriously, sell all gold and buy Bitcoin, yeah, you'd probably see the gold price fall initially.

which would probably mean that the eastern central banks would buy up all of the US gold. And there was this meme that's been going across the internet over the last year, which is kind of guys in suits on a tennis court and one's throwing chunks of dollar bills one way and the other's throwing gold bars the other way. And it's the US economy throwing the dollar bills one way and it's throwing the

Yeah. Old bars. You got it. Yeah. So the East ends up with the gold bars and the West ends up with the dollars. So that's exactly what would happen in a situation is, okay, fair enough. The West will end up with a lot of Bitcoin and the East will end up with a lot of gold in that scenario. So, yeah, it's...

It's ridiculous advice, as I think he said. And he even titled it his evil genius strategy. The evil genius plan is not normally revealed in a Bond movie until quite close to the end. He seems to be kind of setting it out at the beginning. Was there a name for this strategy where you use a rising asset price to justify floating more assets?

or equity to buy more of the rising asset price so you can buy more of the rising asset so you can float more debt. What was the name for that? It was an Italian guy, I think. Yeah. The guy with the P? I don't know what that is.

No, I mean, it ticks the boxes. Because obviously it works great on the way up and works horribly on the way down. That's the nature of that particular scheme we were just discussing. Yeah. Yeah.

Indeed, indeed. Nothing new under the sun. That's the world that we find ourselves in, you know. What's more important than substance is headlines. That's the reality of it. Nice, sexy headlines to talk about.

rather than actually doing the work, digging in, seeing what the implications of all these things would actually be. I don't know whether you agree with this or not, but this is similar to the tariffs argument. What's going to happen? We're going to whack 25% tariff on Canada, 60% tariff on China, and that will sort everything out. Will it? Really? Who's going to pay for this? That's going to be massively inflationary.

It might, you know, ultimately the goal here is to encourage those companies to open up in the US and employ people over there. Okay, but that would take an awful long time. And do you have the skilled labor to be able to do those jobs in those industries? Yeah, okay. If you do, you train them up, great. But at what costs? So the actual end of costs of the cost of the goods will be significantly higher than they were when you're making them in countries where the cost of labor was a lot lower.

So these things have unintended consequences. On the surface, they sound great and they sound like quick fixes. But reality is no, you know, massive deportations. Well, again, yeah, you can understand why there's political will to do that. But you're then reducing down the labor force. One implication of that.

So all of these things have potential for negative and inflationary consequences. But on the very surface of them sound like wonderful stories, headlines, soundbites. But you've got to dig in and see what the real implications of these things would be. So as we close this out and we're coming into the holiday season, I might not see you until the new year, as we look into 2025,

Is it going to be a year of, in your mind, inflation or deflation? Where are we headed? Well, I mean, you look at the charts that we've shown there, the trend is up. You know, as a former trader, I would be very much a trend follower. The trend is up. And particularly when the trend is up and the Fed is doing all it can to fuel that trend, that trend will sustain.

I think 2025 is going to be a very interesting year. I do think that we're probably going to see some more all-time highs in stock markets. I definitely think we're going to see some more all-time highs in gold. It's about time silver played catch up. I think we're going to start to see some moves in silver.

But we are going to see increased volatility. None of these things are happening in a vacuum. We've got a world on fire in a lot of places. The geopolitical tension is through the roof. We've got hot wars on the continent of Europe. We've effectively got hot wars in the Middle East. We have this silent financial crisis.

that is going on. The more people that understand that, the better. The more people that are watching your videos, the better to understand what is actually happening and what they can do to address it. I think we are going to see 2025, particularly post-inauguration. I think there's going to be a little bit of a honeymoon period after the inauguration where there are going to be a lot of talk about what policies are going to be coming in.

and how wonderful that these policies are going to be. But then when the rubber hits the road, that's when that's what we'll really understand what the situation that we're going to be in and facing for the next couple of years, because I think what you're going to find is that there's a lot of the things that are planned to right this ship aren't actually going to be as effective as they think that they are.

There's so many underlying issues there, particularly in relation to the budget deficits and the national debt, that when these things are happening that aren't happening in a vacuum, have serious implications long term and they won't be turned around in a short space of time.

Indeed. So it's going to be more of the same. Indeed. Well said. So, Dave, Russell, thank you so much for your time today, as always. And we'll be back as soon as we can, probably sometime in the new year. So we'll be checking those predictions out. And I track with most of those. So we'll see. All right. Well, listen, as always, really enjoyed it. Talk to you soon, Chris.