I am very bullish.
I think we're there's a missing piece that I think is coming, and
that's why I think we are where we are today, and why I see it as an
opportunity.
First I have to as I always do stress, was it a prediction?
I don't pretend they knew what would happen.
But the risk to the downside was was clear and imminent, and I think
the most important thing was that instead of predicting what would
happen is they said, it doesn't make sense to deploy more cash now.
And if things worked out the way I hoped or wanted or not didn't
matter, the point is that that call not deploying lady.
Already paying off, even if you think the bottom is in.
Now, you have better prices now that you would have two weeks ago when
we spoke or a month ago when we spoke, and I've been saying the same
thing that answer the question.
My sense is still that there is more risk to the downside than the
upside immediately.
I had died.
Just had some clients asking me, Jesus.
This stock is down 85 percent from its peak.
It's true.
The stock's down, 85 percent from speak.
It's only down, like, 40% for me.
Because I didn't buy it the peak.
So it's, it's still not so compelling that I would want to buy.
And the fact that it's down 85 percent, doesn't mean, it can't take
another, we haven't had the crash yet.
It's down 85 percent, just with resource sector bearishness, which I
think we should come back to.
I think that's wrongheaded.
And I do see it as an opportunity, but it's, you know, we haven't had
paid a come on, the mainstream markets yet for their insane optimism,
on the transitory transitory are
So, no, I'm not just saying the same thing.
I'm actually saying similar thing, but if if anything a more urgent
version, the
Fear that we're starting to see right now in the broader markets, I
think is more intense and and I see it as more alarming now than when
you and I spoke last, it's not a promise.
That's my take all of that.
Is there?
It's it's not just the pressure on the mark.
But so for example, one more thing you didn't put in there is just out
this morning as you and I speak is the the producer price index in the
United States, just hit a another record 11.3%, or something like
that.
Yeah, so and those prices have yet to feed through life is not getting
cheaper.
The supply chain issues are starting to be resolved, but there's still
messed up and just look at the airports and what's going on there.
The bottom line is that the causes of inflation are not something that
interest rate.
Fiddling alone can do anything about absent, going truly vulgar and I
don't see that happening.
So I think things have to get worse before they can get better if they
get
Better.
And there is a real non-trivial chance the powers-that-be.
Trying to fight inflation with the wrong tools.
Will break something in a big way.
Now, let's wrong.
Why is it going?
It's the 70s all over again, stagflation.
Why is it going through the roof?
I think the last time we talked my answer was partly well really,
given the strong Dollar Rising interest rates.
The better question is, why hasn't the whole dropped more or silver
dropped more?
They still name is true but it doesn't satisfy understand.
I understand.
We're starting to see everything I said about stagflation, not
predicting, but saying I thought it was likely it's turning out.
So why is it gold doing better?
And it is a fair question.
My friend, Lynn Alden likes to say that.
A better comparison is the 1940s, but I wasn't there for the 1940s and
I think that as much as the covid situation is compared to World War
Two, it's not the same and the military takeover, the economy, the
consequences of things that were done.
Then I think, okay,
Different from the current constant.
So the 19th and and a critical point is that in 1940 wasn't you know
gold price in 1940 at least theoretically the dollar was gold if you
are foreign government.
Anyway you know you could exchange logs for gold and the dollar, it
wasn't just pegged.
The dollar was defined as a certain amount of gold.
So how gold behaved in that environment is different in the
The post Nixon shock world where the dollars are complete abstraction,
with no relation to anything real in the world at all.
So I think this inclines me more the 1970s and the fact that I
remember the 1970s, even as a kid, I remember, you know, turning my
lawn mower money into silver coins and that sort of thing when silver
was going up.
So here's the thing.
And I remember this, I was there is everybody was talking about gold
and silver at the time.
You had your bartender would brag about the gold coin he bought and I
never saw the, the legendary Bernard Brooke shoeshine, boy, giving me
Silver stock advice.
I would have been the shoeshine boy but it was, it was like that.
Everybody didn't just expect it was like you knew things, were going
to be more expensive tomorrow and if you could buy twice as much today
you did before because it would cost you more tomorrow that was that
was entrenched in thinking and I and this is
Critical to the gold, silver question.
The monetary metal people didn't trust them dollar didn't believe in
the dollar or they knew that their dollars were getting worth less
over time despite Richard Nixon's assurances to the contrary.
That is not the case today so it's not just.
Oh, we've got stagflation, what's wrong?
We've got incipient stagflation, but we don't have people giving up on
the dollar and drugs or people convinced that the dollar is going.
It's going to hurt them.
Latest expectation numbers.
We got a not just from Wall Street and not just from the FED, but
consumer expectation numbers show.
Very high, inflation expectations for this year.
But not the three year in the five-year expectations.
Are almost benign by the time Act five year, which means crazy.
As it sounds, the average Joe out there.
They do think the powers that be are going to succeed or inflation
will come down on.
So there's still buying a version of the transitory story.
That's what I'm saying.
And the drawing this to a close
Close.
What this is different from the 1970s.
This is not the popular belief.
We had then that you know the money was just getting more and more
worthless.
And I think when that changes is when we really see the fire lit under
gold and silver, I do think that will happen.
It's close to a prediction.
Is you'll get from me?
Legend, I do think this is coming.
How many times can they move the transitory goalposts?
You know, how many times can they Proclaim?
Peace and spin every month since last December alleged?
Month as they call it speaking now and then we got a higher number and
even by the government's cookbook numbers, you look, it's not just the
headline CPI, and yeah, okay.
They say, oh, core CPI is down four months in a row now.
Well, but look at the month-on-month gains if you had high inflation a
year ago.
So the year-on-year basis effect makes it extra difficult for
inflation to come in high which makes the headline number, you know,
really shocking.
But you look at the monthly numbers recently and both in head
lining core CPI.
That's the real shocker.
So
I don't think I'm just being Pollyanna.
I don't think I'm just being a gold bug.
Yeah, we're going to win in the end.
I think the data supports my thesis I think we're missing that.
Crucial part of the broader public becoming aware and it may be, you
know, asking themselves whether they want to have Bitcoin or gold.
Maybe they'll go for both but as her friend, Rick rule says, you know
the average allocation globally to Golden portfolios historically as
something on the order of 2% recently has dropped 2.5%
Even if everybody doesn't get religion on this or discover things, you
know, even if it back, just to 1%, like, half of the historical
average, you know, the other half goes to bitcoin say, well that would
still double the demand for gold going forward.
So I am very bullish.
I think we're there's a missing piece that I think is coming, and
that's why I think we are where we are today, and why I see it as an
opportunity.
Yes, it will be.
If there is a crash, what we've had so far, I would not yet call a
market crash site.
So yes, that has happened every time that I've seen it, and my
mentors, my teachers, my predecessors, say they've seen that in the
past, but we're that's talking about a cute moments.
When you get that V shape recovered, where gold gets sold not because
people want to but because it's the only thing they can sell they get
margin calls their margin clerks are doing they're selling for them
right?
And we saw that in 2020
You saw that.
I saw that as well and 20 2008 and I would expect that if we do get
this near-term crash but we're not there yet.
So no.
I don't think it's liquidity causing people to sell gold right now.
If anything, the strongest variable would I see in the data just like
this week?
And in the last month in all year, long is absolutely been the dollar,
Brent Johnson, The Dollar milkshake guy, I don't know if you've
interviewed him or not, you probably have heard of his dollar
milkshake Theory which is basically a strong dollar, a thesis that has
clearly in the data shown itself to be the strongest headwind for gold
this year.
More so than the change in interest rates, interestingly enough
And right now, there is, you know, with the global geopolitical
situation, the awareness of, you know, this recession thing becoming
real and its Global.
It's not just us, there is a huge flight to safety into the dollar.
The dollar milkshake.
And that is, I think proving quite challenging to go.
We've seen that.
It's if you saw my digest last Saturday, if you saw the chart a point
in there, but the golden dollar charts, it's like a Rorschach, you
know where they fold the inkblot.
It is so close to a mirror image, very strong explanatory.
So the good news is that, you know, eventually the emperor has no
clothes the dollar strength turns into the dollar weakness and that'll
be good for gold and silver.
The bad news is
That doesn't necessarily happen right away and whether they should or
they shouldn't people are flocking to the dollar right now.
And that is right now, I think why we see gold Under Pressure even
though, you know as an inflation hedge, it should be doing well, in
the time of high inflation.