Keith Weiner, PhD in monetary science, argues fiat currency’s collapse—from $1.5g gold-backed in 1913 to just 6 milligrams today—threatens civilization as gold backwardation signals systemic distrust, while Western regulators suppress metal investment despite global demand (e.g., Turkey’s 120M gold-denominated accounts). His Monetary Metals leases gold to jewelers like Callian, offering 4% annual interest in ounces, and warns of silver market squeezes due to scarcity. Geopolitical risks, including a U.S.-Iran conflict, could further destabilize fiat, boosting gold’s role as a protective asset against unforeseen crises. [Automatically generated summary]
And I know I always say I'm excited about this week's special guest, but before we meet him, let's have a word from our sponsor.
Actually, I can guess what the sponsor is on this one.
It's probably going to be monetary metals.
You may have noticed that gold has been doing pretty well recently.
In the last year, I think it's increased in value in sterling terms by around 50%.
And if you'd bought gold when I first started recommending it on adverts like this, you would have certainly more than doubled your money.
Now, a lot of you are probably thinking, is it too late?
Have I missed the boat?
Well, I can't definitively answer that question.
Nobody can.
But if I had to guess, I would say gold has got some way to go.
And yeah, sure, there's going to be corrections, but you really ought to be owning physical gold for lots and lots.
Not paper gold, obviously.
You should be owning physical gold.
Now, there are two ways of owning gold.
Either you can actually own it, keep it in a vault or in your own home.
There are risks, obviously, with keeping it in your own home.
You know, what if burglars come, whatever.
The problem with keeping it in a vault is that you then get paid a storage fee.
But there is another way of owning physical gold and actually getting paid interest on it unusually.
And that is with a company that I've recommended before and I use them myself.
They're called monetary metals.
Monetary metals lets you earn a yield on your gold paid in gold.
Right now, you can earn up to 4% annual yield paid in physical gold ounces, not dollars or pounds.
Instead of just storing gold and paying vault fees, your gold actually earns more gold over time.
Monetary metals connects gold owners with real productive businesses like refiners or jewelers that lease the gold.
That's how they can pay interest, by the way.
So they lease the gold and they pay yields back in gold.
This is a way to compound your wealth in ounces of gold.
There are no storage or insurance fees charged while your metal is earning yield.
You can open an account with 10 ounces of gold and start earning yield right away.
You stay in control, deploy how much of your gold you want into lease opportunities.
In today's inflationary environment, saving in paper currency means losing purchasing power.
Earning in gold means growing your real wealth.
Go to the link in the description below or go to monetary, that's M-O-N-E-T-A-R-Y-Metals.com forward slash dellingpole forward slash to learn more about how to participate and start earning a return on honest money again with monetary metals.
Welcome back to the Delling Pod, Keith Weiner.
I think it's been about, what, two years since we last.
Yeah.
And I mean, much has changed recently.
I'm so glad to have you back on the podcast because I mean what about the craziness with silver and gold?
Yeah, gold $5,600, silver, $120.
I mean, wow.
I know.
I mean, I know it's your business, but are you in it just because it's a business?
Or are you a sort of gold and silver bug as well?
So I got my PhD in what I would call monetary science.
So studying monetary system, understanding the failure of, have a second, what happened?
Failing Currency, Destroying World00:10:58
Are you having tech problems?
The screen went black, and that was it.
You know why?
It's the Illuminati.
They hate us.
They want us.
For whatever it's worth, I know why Riverside is a better platform because it records everything locally, so you never get any internet skips and break up on the video or the audio.
But I have a better quality microphone that doesn't work with Riverside.
And it's very temperamental to be able to log into it.
So I couldn't get it to work in my normal browser.
I'm now in a different browser.
And hopefully it's stable.
Well, I hope so.
Keith, aren't you supposed to be good at tech?
Isn't that part of your job description?
I joke about this.
Everybody has a special private hell.
Mine is that my last company developed audio technology for telecommunications like this.
And we literally solved, I invented and patented and we built working code to solve most of, at least on the audio side, the problems that so plague us today.
So I literally built a better system.
And that got sold to Nortel Networks right before they went bankrupt.
Avaya bought the pieces out of bankruptcy, dropped it on the floor.
It's totally done as a platform.
And so I have to live with the unsolved problem I literally solved and patented.
That's my personal hell.
That is quite funny.
That is quite funny.
See, you really are good at tech, and yet you suffer like the rest of us.
That was my first career.
I was a software developer.
So do you want me to just resume where I yeah, yeah.
So you were telling me about how your PhD.
Yeah, so I studied monetary science and I studied how the system is failing, why it's failing.
It's because we have irredeemable currency.
People say fiat currency, it's true.
It's treated as money because of law, but it's irredeemable in the sense that you can't go to the bank and say, now give me my money back.
You give them a $20 bill.
What do you want?
You want change of, you know, you want two fives and 10.
What do you want?
But back in the time of redeemable currency, you'd get a one-ounce gold piece back if you put a $20 bill on the teller window.
So systems failing.
Gold is the solution.
And so I developed the idea for this business based on thinking about the problem that we have.
And there's a very famous quote from John Maynard Keynes.
And most old people would be familiar with the first part of it, where he says, there's no surer way to overthrow the capitalist order, which means overthrow civilization, by the way, than to debauch the money.
And most people then just say, oh, I know what he means.
He's talking about inflation.
But if you read through the quote, he's talking about, especially at the end of the quote, he says, and you can destroy the world by engaging all of the hidden forces of economics.
Now, today we would use the term incentives.
So you're offering incentives to destroy the world in a way that not one in a million can diagnose what's happening to the world.
Now, if you think he meant rising consumer prices, inflation, then that means that he's a moron.
I don't think Keynes was a moron.
I think, I mean, he's evil, but I think he was a genius.
I think he's much smarter than his critics of his day or now.
And I don't think he thought that people wouldn't notice inflation.
And of course, whenever you have a bout of inflation, that's all everybody talks about all day long, every day.
I remember the late 1970s.
It was on the nightly news five days a week.
They talked about inflation.
They talked about unemployment.
And they had something called the Misery Index that was inflation plus unemployment.
So what I think, and Keynes is very explicit elsewhere in his writing, he talks about pushing the interest rate to zero.
Now, if you push the interest rate to zero, asset prices are inverse interest rates, which means asset prices going to infinity.
And the reason why nobody can diagnose what's going on in the world is everybody loves a bull market.
So I think Keynes was absolutely brilliant.
I mean, again, evil.
I don't want to say anybody misthink that I'm praising him in any way.
I just think that if you look at his plan to destroy the world, he was effective in designing a destructive plan because he understood how markets work.
So I designed this company, Monetary Metals, and we pay interest on gold.
And the purpose was thinking about that quote of Keynes and saying, what if you offered an incentive not to destroy the world, but to help the world get to a better place?
Then how would you do that?
And then that was like the aha moment was you offer interest on gold.
And that's the incentive to bring gold back.
You know, we don't say gold standard too much in our discussion because that word is, or that term is so loaded with emotional baggage.
Everybody has a different concept of what they think it means.
We want to bring back the use of gold as savings and as a vehicle for finance.
And so it's got to be able to, you know, one of the criticisms of gold, right, the Warren Buffett objection to gold, it doesn't earn a yield.
It's just the same lump of metal.
And, you know, if gold is money, which I believe it is, then it should be able to earn a return.
And that's, so yes, I'm in it for ideological reasons, not just because, well, it's a business.
Yeah.
I mean, these are sort of good times and bad times for us.
Well, gold bugs, for want of a better word.
I mean, probably like you, I've been telling my friends for years about why I'm in gold.
You've got to be in gold.
Be in silver.
Silver's, you know, gold with rocket boosters on it.
But you should have a bit of both.
You really should.
And I'm talking to people who, oh, I didn't know, sort of spent times working in the investment, the big American investment banks, or professional investors with years of experience with them.
And they were sort of nice to me, but they were slightly patronizing.
Like gold was something you had maybe 5 to 10% of in your portfolio.
And they'd quote that Warren Buffett thing at me.
I mean, I have a much, much cleverer brother, he's like you.
I mean, he's a serious entrepreneur.
And I mean, he indulged me, but he wasn't going, yeah, James, yeah, you're right.
And you're going to be vindicated one day.
So probably like you, I feel good about being vindicated.
At the same time, I'm thinking the fact that gold and silver are doing this crazy stuff right now is not a good sign for the general world economy, is it?
What does it mean, Keith?
So I like to use an analogy of Copernicus.
And, you know, before Copernicus, people believed that everything revolved around the Earth, including the sun.
And, you know, in a certain sense, you look at the sky, things move across.
It makes sense, right?
If you don't know any better.
Now, the problem is if you look at the motion of certain planets, they have this retrograde motion where the planet moves forward and then back a little bit and then forward and back a little bit.
Now, let alone you can't explain why it's moving backwards.
Even describing that backwards motion and trying to write equations for it becomes really complicated.
And of course, you know, it's official church doctrine.
Everything's, you know, the Earth is the center.
You couldn't really just say, look, this makes no sense.
And, you know, if you did, you know, you risked, as Galileo did, you know, being tortured and killed and all that stuff in those days.
But the point being that when you try to work a theory that isn't really right, things become much more complicated.
And when you change your theory and realize, you know, how reality actually is, then, you know, physics becomes much simpler.
And so people today look at, you know, everything is measured in dollars.
I mean, the other currencies, pounds, sterling, euro, or dollar derivatives.
It's a dollar world, for good or for ill, but it is what it is.
And they think, okay, wages are rising, consumer prices are rising, gold is rising, everything's rising at different rates.
And as an artifact, you know, imagine you're standing on the deck of a sinking ship and you're in stormy seas going up and down with the waves.
And you're saying, why is the lighthouse going up and down and mostly up?
Like, you've just got the wrong vantage point.
You're just not seeing it accurately.
So what it means to me is very simple, but this is a profound paradigm shift, which is the dollar and the entire fiat complex with it is going down.
Now, when people hear the dollar is going down, they turn to the dollar index, you know, and you're measuring the dollar essentially in Euros.
Okay, so the Euro is going up a little bit in dollar terms, but that's like climbing one or two decks on the Titanic.
The whole thing is sinking.
And okay, you know, the Euro is moving up a little bit relative to the baseline.
You know, it doesn't matter.
But if you measure things in gold, which is the only way to really measure economic values, you realize, wait a minute, it was a couple of short years ago that the dollar was 16 milligrams of gold.
Today it's six milligrams of gold.
And you realize the whole thing is just losing value.
It's just being degraded, debased, debauched, etc.
And that means every productive enterprise is bleeding out capital.
Obviously, savers are bleeding out capital, and savers can be investors if they see the right pitch.
Everything is losing.
Economic value is just draining out everywhere.
That's really bad.
And then at the margin, you see unemployment.
You see, you know, credit and capital pulling back from marginal markets all over the world.
This is the stuff where people become impoverished in much larger numbers and impoverished people become angry and desperate.
And then horrible things can happen.
I wouldn't say as a direct cause, poor people aren't necessarily violent, but if a large number of people, especially if the poverty is sudden and they don't feel that it was because of their own laziness or stupidity, they feel that the economy is just leaving them out or leaving them behind.
Finding Harwood00:04:58
You get radical political movements, revolutions, violence in the streets, all that stuff.
I was going to ask you, where do you study this stuff?
Because I thought academe was so kind of sold to the mainstream narrative.
Where did you find a professor to work with on this?
I found a very unique professor.
His name was Waz, because he's passed away a few years ago, Antal Fekatek, Hungarian, who escaped Hungary in 1956, along with a lot of other Hungarians, one step ahead of the Russian tanks, made his way to Canada, became a professor in the Canadian university system for, you know, it was his career.
But he was always, and he was a mathematician.
He taught mathematics.
But he was always interested in economics, you know, kind of self-taught, but he had some interesting mentors.
One of whom was an individual named Colonel Harwood, who founded something called the American Institute for Economic Research, AIER, in Great Barrington, Massachusetts.
Now, they became very famous a few years ago for the Great Barrington Declaration against COVID.
Oh, yeah, yeah, yeah.
It's the same.
It's the same Great Barrington.
It's the same AIER.
So I gave a keynote at AIER.
This is years ago, probably 2015 or 2018 or something, many years ago now, talking about some of my theories.
And it was pretty well received.
And afterwards, a bunch of us were sitting.
So AIER is in this old mansion that was built in the 1920s.
Very opulent, very posh, a little bit shabby nowadays, but you sort of picture the building.
And it was a house for a very wealthy guy.
Now there's an institute there.
But anyway, they still have kind of a salon.
So a bunch of us were just talking after dinner in the salon.
And so Colonel Harwood passed away, I think, in the 1980s, a long time ago.
His son, who at that time was then elderly, said to me, your ideas sound like the ideas of my father.
I haven't heard anybody talk like this in many decades.
And someone said, oh, yeah, great minds, you know, think alike.
And it's just kind of haha, you know, laugh it off.
But I was thinking about it, like, I'm not sure if that's true.
And then someone else said, and I hadn't realized this at all, Fekete, when he was much younger, was mentored by Harwood and spent many hours, days, weeks, months on and off visiting with Harwood.
He was editing his journals and his papers and all kinds of things.
And there's no question, picked up a lot of ideas from Harwood.
Now, Fekete would say, and it did say in his classroom, that his ideas come from Carl Menger, who was the essentially recognized founder of the Austrian school.
And I think, and I can't, and I haven't really researched this to put together the last piece, but I think what happened was Harwood must have spoke German, or read German fluently, and read Menger, which was not, Menger wasn't translated into English until long after that.
But read Menger in the original German and developed his ideas, mentored Fekete.
Fekete then I became his student, not really intentionally.
I mean, I dropped out of college in computer science because I wanted to go build, I'm an entrepreneur, not an academic.
I wanted to go build a company.
I got excited by Michael Dell and Bill Gates and all these people that dropped out and do stuff.
And that's what I did.
Built that company, sold it in 2008.
And then I never thought I'd go back to school for anything, let alone a soft science like economics.
But it was fascinating.
It was compelling.
And so I just started to write essays to, you know, you don't know something as well until you try to write about it and teach it.
So I just was writing essays.
And of course, I shared essays with this guy who'd become my professor.
And then at some point, he said, you know, you really have something here.
You should, you know, apply for your PhD.
I was like, okay, you know, it sounds interesting.
It's not accredited.
I want to always put that asterisk up front.
I could never get a job, but this is not a real credential.
But Fekate was a real university man.
My other dissertation examiner is another Austrian school economist that would be somewhat well known in Austrian schools, Juan Ramon Raulio as a professor of economics at Juan Carlos University in Madrid.
So he was my other dissertation examiner.
And, you know, I wrote about kind of the end of the world and how it works with gold backwardation and all these things and just became endlessly fascinated with this.
Backwardation And Wheat Contracts00:13:19
And did you say backwardation?
Yes.
That's a word I've been seeing quite a bit recently.
I don't know what it means.
I think I get credit for introducing that word into the gold community around 2010 or 2011 or 2012.
So very simply, it's when the price of gold in the spot market is higher than the price of gold in the futures market.
Normally, a futures contract should be higher because there's an interest rate and a cost of storage.
So nobody will sell you a futures contract unless you cover the interest.
However, backwardation can occur, and backwardation in any normal commodity means scarcity.
So imagine, here's how you picture this.
Think of the wheat market.
I don't know how it is in the UK.
It's probably similar here.
The wheat harvest comes in somewhere, July to August.
So imagine July 1, you drive a green, empty grain truck to one of those green towns, you know, with the silos and everything and say, how much to fill this year truck up with a load of wheat?
Well, they'd be laughing at you because you're like a week before the harvest starts to come in.
Nobody has any grain.
I mean, they probably pop the top off those silos.
You can probably see light in there.
They're hosing it all down and cleaning it up, getting ready for the new delivery.
And you say, no, I'm serious, and you take out a wad of $200 bills.
Well, somebody's going to make a phone call and turn some truck around that was halfway to a bakery or to a brewery somewhere, bring it back and say, okay, $17 a bushel will fill your truck.
And so if you do that, you're going to pull the wheat out from some other contract that was paying less.
Whereas if you're willing to wait until September delivery, a month and a half away, then instead of $17 a bushel, it might be $7 a bushel.
So the fact that the price is higher in the spot market versus the futures market is because there's a scarcity.
Now, in wheat, it makes sense, right?
There is going to be a scarcity the day before the harvest starts to arrive.
Gold, mankind has been accumulating gold without any particular limit for at least 6,500 years.
There's no such thing as a glut in gold, and there's no such thing as a scarcity.
However, gold can be scarce to the market.
And so we do have intermittent backward issues in gold.
Much more recently, we've had backward edition in silver.
It got to a pretty severe level in October.
It recurred at the end of the year and into January.
It's not backwardated at the moment.
But that's, you know, part of the rising prices story for the metals is that they become scarcer because people just are reluctant to bring their metal to market.
They'd rather hold it close to the best.
When that happens, when the price goes up, hopefully the higher price draws more metal into the market and the world doesn't just come to an end.
But at the end of the day, if gold withdraws its bid on the dollar, the dollar is finished.
Now, let me explain what I mean by that.
In times of crisis, it's always the bid that is withdrawn, never the offer, right?
So a live market has two prices, bid and offer.
You want to sell your house, you list it at some price, that's the offered price.
That doesn't mean anybody's paying that.
That's just that's the price you'd like to get.
The bid price is what the buyers say, okay, you know, if you if you'd you know, 100,000 pounds lower, you know, I'd be buying it.
That's the bid.
And then it doesn't move because you don't want to come down and they don't want to come up until somebody compromises or whatever.
If there was a real crisis, suppose the U.S. Geological Survey came out and said there's going to be an earthquake in LA, 15 on the Richter scale, nothing taller than a dollhouse would be left standing.
There would be no lack of offers to sell real estate.
Some of them would be just under where it had been previously.
Some of them would be bargaining and trying to come down.
But what you would see is no bid.
No bid from Santiago, Chile to British Columbia and Canada, and probably as far east as the Mississippi River.
There'd be no bid as the entire world holds their breath waiting for the earthquake to hit.
When it hits, then the bid comes back in and perhaps a lot lower, who knows?
But it's always the bid that withdraws.
Now, when you see thoughtful speakers, and I've seen this a couple of times, they say gold is different.
It's the offer that's withdrawn in gold.
This is like, you know, the planets have retrograde motion.
There's a weird anomaly that's complex to explain.
Why is gold different?
It's an offer that's withdrawn.
And then you go, wait a minute, that's because you're looking at it from the dollar, you're inside the dollar bubble.
And when you get yourself out of that and you look at things objectively, no, the bid is being withdrawn.
It's just not the dollar bid on gold.
It's the gold bid on the dollar.
And when the gold bid on the dollar is withdrawn, the dollar has no value.
And you won't be able to buy any commodity from oil, nat gas, wheat, soy, all those prices will be infinity in dollar terms.
And people will call it hyperinflation.
They will assume it was a matter of printing too much quantity of dollars.
That ain't it.
But that will be how people will probably perceive it.
Is that possible?
I mean, because people need stuff.
And I mean, well, they've been using dollars since forever.
What else could they use?
I mean, not everyone's got gold to buy stuff.
Yeah, I was going to say the thing with these kinds of things is when you look at individual incentives, the whole premise of the Austrian school is methodological individualism.
And you can't say, well, people need a currency because they need to buy something.
Yeah, it's all true.
But what is making the individual act?
In this case, what is making the gold owner act?
If the gold owner is losing trust in the counterparty, i.e. the government and the government central bank and the commercial banks, then he says, yeah, sure, I'm going to spend my dollars on food and whatever, but my gold bar, I'm holding it and I won't put it into the market for this arbitrage, the car trade.
And so what you see in backwardation is a risk-free profit on offer.
So the market is saying, give me your gold bar and I'll pay you hypothetically.
And we don't have backwardation in gold today.
I really want to emphasize this is not the current condition.
Suppose you had it where the spot price is $6,000.
So you could sell this for $6,000.
Pretend this is a gold bar, not a Samsung phone.
You could sell this for $6,000 and simultaneously buy a contract to have it delivered in April for $5,600.
So you have the cash in your account.
You bought the futures contract.
There's no risk and it's no margin call because you have 100% of the cash you need to take delivery, right?
You're just waiting for April.
And you pocket 400, you get the same amount of gold back and you pocket $400.
I mean, what a good deal, right?
But the market doesn't offer free deals.
There's only one reason why the market's offering that deal, and that is people are not trusting the counterparty to put their gold into the market like that.
They're saying no, thank you, even in this example, to $400 of free money.
When that happens en masse, so it's the gold owner saying, uh-uh-uh, you're not getting this.
I don't trust you.
If I exchange this for a piece of paper, at the end of the day, I'm going to be stuck with the paper.
The gold is going to be gone.
So I won't do it.
And if everybody with gold does this, then you end up with backquidation.
And by a series of arbitrages, I wrote a paper called When Gold Backwardation Becomes Permanent.
Everybody Should Beat That paper.
Try to write it for a lay audience.
By a series of arbitrages, the prices of all commodities will be driven to infinity.
Now, why is this?
Because people with dollars still desire gold.
It's just that people with gold no longer desire to trade it for dollars.
So you have an ace of massive asymmetry.
So if you have dollars and you're desperate to get gold and you can't get gold directly, what might you do?
You might buy some crude oil and say, oh, there's a gold bid on crude oil, just not on dollars.
I'll buy the crude oil and sell it for gold.
And that's going to drive the price of crude oil up in dollars and down in gold terms.
And that trade will continue until the price of crude and dollars skyrockets so high, so fast that people say, okay, the dollar's done, stick a fork in it.
And, you know, that'll be called hyperinflation.
And then what happens?
How does it resolve itself?
Well, the problem is nobody has any money.
So you wake up, you don't have any money, your employer doesn't have any money, the grocery store doesn't have any money, and so civilization seizes up.
This is a really, really, I mean, I encourage people to read the paper.
It's a really bleak scenario when you can't produce or distribute energy and food at large scale.
When that happens, cities become death zone.
I mean, you know, you think about even 18th century technology, you couldn't sustain the population of London and New York City or whatever, right?
And there's not nearly enough food producers and far too many graphic designers and all that that don't produce food.
So there's a whole reset of society.
And I think the statistic I've read, North America with 18th century technology would support a population of maybe 30 million people.
That's it.
This is a horrible scenario.
I mean, we're not there yet.
And I think we've got years to go.
But you talk about gold of $5,600.
Yeah, this isn't good.
This is like eroding trust and obviously civil liberties all around the world.
And people are becoming more angry, more desperate, more warlike, and poorer, much poorer.
And if you own assets, you feel richer.
But most people don't own it.
You know, gold, they don't own assets.
They have their wage and the wage is diminishing.
And they're angry.
But the problem is they're angry at the wrong party.
They're mad at their boss.
I think their boss is being a cheapskate.
That's not really the root cause.
Well, no.
I mean, doesn't this go back, well, at least as far as 1913?
Yeah.
And the creation of the Federal Reserve.
Where the dollar had a sort of self-destruction method built into it, didn't it?
The sort of, is it called the Cantion effect?
Whereby the people who sort of print the money get most of the value.
And yeah, I don't.
I can sort of see the Cantion effect, You know, let's say in medieval Europe, and if let's say there was some gold rush, somebody found some massively rich gold rhine and gold mine, some town in Spain, and gold was gushing forth there.
And so merchants then would come to that town and be paid more than they should for goods, you know, and then they would slowly distribute almost like a wave, like you drop a pebble in the pond and the wave ripples out.
The gold would ripple out across Europe.
But coming from the extreme western part of Europe and Spain, you know, it'd be rippling east and north and south, you know, from there.
Sort of almost see that.
But today, when they change the interest rate, everybody has simultaneous access to credit at the new cheaper rate.
And so the government thinks they benefit.
I mean, this is all, you know, it's like saying cocaine is a benefit because you don't have to sleep.
Or sugar high is a benefit.
It's not really a benefit, but it's a pseudo, it seems like a benefit at the time anyway.
The government has the benefit of being able to borrow, you know, and spend above what it would be able to do if it was just living on tax revenues.
And so the politicians get re-elected.
This is wildly popular.
People love free goodies, right?
And meanwhile, yeah, it's the destruction of the whole damn thing.
And that's the purpose of a central bank.
I mean, people say, well, the 19th, was it 1975 Humphrey Hawkins law?
United States, the Fed has a dual mandate.
Most central banks, many central banks have a single mandate, which is keep inflation under control.
The Fed has a dual mandate, keep inflation under control and keep unemployment under control.
Now, it can't accomplish the one goal, let alone two, but leaving that aside, the real purpose-this is the window dressing.
Window Dressing00:04:30
This is the pretext that they promised the people don't realize any better.
The real purpose is to enable the government to borrow and thereby spend more than they could.
Taxes are unpopular.
You can only get so much.
And so you can only spend so much.
But if you want to buy more votes by spending more, you have a central bank.
That's the real purpose.
And the rest is all, you know, as I say, window dressing.
Well, I've forgotten in our conversations what level of conspiracy theorist you are.
I mean, I would be sorry?
I'm not.
I'm not really a conspiracy.
You're not.
Okay.
So I would be 10 at least.
Well, on a scale of 10, I'd probably be like 11.
Did you ever see Spinal Tap?
Yeah.
The knob goes up to 11, right?
So I definitely go up to 11.
But I mean, so there's no point in my asking you, like, who benefits from the system?
Is it just the systemic nature of sort of corruption and stuff?
Or is it, I mean, do you believe that there is a kind of a narrow elite which arranged this system to screw us all over?
You know, I have a couple of things to say to that.
I mean, in general, I'm a believer that people pursue incentives and you end up with structures that are complex and ordered.
And you say, okay, well, how could that be ordered if there wasn't somebody masterminding it?
But it's something that emerges from the incentive structure.
But I'm saying about elites.
There's another piece of your question I was going to answer.
Global warming is a massive con.
There is no evidence whatsoever that man-made climate change is a problem, that it's going to kill us, that we need to amend our lifestyle in order to deal with it.
It's a non-existent problem.
But how do you explain this stuff to your normie friends?
Well, I've just brought out the revised edition to my 2012 classic book, Watermelons, which captures the story of how some really nasty people decided to invent the global warming scare in order to fleece you, to take away your freedoms, to take away your land.
It's a shocking story.
I wrote it, as I say, in 2011, actually, the first edition came out.
And it's a snapshot of a particular era.
The era when the people behind the climate change scam got caught red-handed, tinkering with the data, torturing till it screamed in a scandal that I helped christen ClimateGate.
So I give you the background to the skullduggery that went on in these seats of learning where these supposed experts were informing us.
We've got to act now.
I rumbled their scam.
I then asked the question, okay, if it is a scam, who's doing this and why?
It's a good story.
I've kept the original book pretty much as is, but I've written two new chapters, one at the beginning and one at the end, explaining how it's even worse than we thought.
I think it still stands out.
I think it's a good read.
Obviously, I'm biased, but I'd recommend it.
You can buy it from jamesdellingpole.co.uk forward slash shop.
You'll probably find it won't.
Just go to my website and look for it, jamesdellingpole.co.uk.
And I hope it helps keep you informed and gives you the material you need to bring around all those people who are still persuaded that, oh, it's a disaster.
We must amend our ways and appease the gods, appease Mother Guy.
No, we don't.
It's a scam.
But I'm saying about elites.
was another piece of your question i was going to answer um you know i lost my train of thought on on the other Yeah, don't worry.
Paul Volcker's World00:05:45
I'm doing that all the time.
We can come back to it.
But, I mean, how does this play out?
Is there a happy way we can...
I mean, for example, where do you think gold and silver are going to go?
I mean, I know everyone's wondering that, but...
To me, it's really how low does the dollar go?
I mean, it fell from, so in 1913, the dollar is 1,500 milligrams of gold, 1.5 grams.
It's now 6 milligrams.
You know, that's a huge loss, but of course, it keeps falling and eventually to be zero.
The question is, how long you get there?
You know, people, the thing about any society is that there's a stable or there's a pseudo-stable social order because everybody slots into that social order in a certain place and everybody, I'll say, likes it.
They may grumble to some degree, but ultimately they want that system.
Maybe they think they should be higher up in the pecking order.
But everybody's invested in it.
Whether it's the person getting the free goodie, whether it's a bureaucrat has a job giving out that free goodie, whether it's a politician who gets re-elected by promising that free goodie, whether it's the do-gooder, productive citizen who feels, you know, kind of assuages some unearned guilt.
Well, I feel, you know, I feel bad that I made so much money, but at least the government is doing good to the poor.
You know, everybody has their reason of why they support this.
But if you said to anybody, let's repeal all the welfare programs and replace them with nothing, everybody would call you a fascist.
It's kind of ironic.
Fascists is a very comprehensive, the government controls everything in the economy.
And you're saying the government should have a reduced role and they call you a fascist because I think fascist means anybody I don't like or anybody whose view I don't like.
But it'd be wildly unpopular.
And I mean among people that are entrepreneurs making money in business.
I mean professionals, doctors, lawyers, architects, engineers, accountants, people working for wages.
The productive people would not go along if you said, let's end.
So it's not the payers versus the moochers.
And it's not like, okay, you have some shadowy.
Oh, that's what I was going to say.
I've met any number of central bankers in my travels around the world.
I haven't met the top people.
I haven't met the Yellens and the Powells and the Mark Carney.
Have you met the really fat one?
Augustine Carstens or whatever you called, the guy from the BIS.
I've met people one to two levels down.
But, you know, talking with them, and I've met a lot of politicians, including, you know, MPs, including, you know, congressmen and senators in the U.S. and around the world as well.
And in my experience, these aren't masterminds that are plotting and scheming.
What they are is operators.
They're the people that have figured out how to play the system.
So they don't really understand how the system is put together.
They don't think any more than if you have a leech biting into your skin and sucking your blood, and then there's a thousand of his brothers trying to do the same thing.
The leech isn't really thinking we're going to suck him dry and he's going to be dead.
And then where are we going to be?
Obviously, they just don't think.
These are people that have figured out how to operate.
The politicians have figured out how to blah, blah, blah, to get elected, how to look at the suit and all that.
But the central bankers are bureaucrats.
And they figured out how to have a career.
So in the U.S., there's kind of this revolving door.
And so it's almost like a board game.
I remember there was a board game called Careers or something back when I was a kid in the 1970s.
And for the people in the central bank, they go to academia to get prestige and maybe a Nobel Prize or something in economics.
They go into government to get power and they go to a big investment bank to get rich.
And the key is to rotate around at just the right timing, just the right amount of time in each of these to end up with the Nobel Prize and the top spot, chairman of the Fed, professor emeritus, have a couple hundred million dollars and you know not all of them achieve that but that's kind of that so so they learn how to operate that system how to write the things that you get them popular
I'll use the example of Paul Volcker.
Most people don't realize Paul Volcker's doctoral dissertation was about gold and real bills.
And Somebody I know, you know, asked was asking him about it and he's like, oh, that dissertation.
I haven't thought about that in 40, 50 years.
And it was pretty clear that it was like, yeah, at that time, that you have to write the things to get, you know, to get the dissertation committee to say, yes, stamp you, and then you go on your career.
He didn't really care about it.
He didn't really believe in it necessarily.
And so, you know, I think a lot of these people are somewhat cynical, but they're not intellectual powerhouses.
Gold-Based System Possibilities00:15:17
They're not masterminds of anything.
The politicians that I've seen, and I did a lot of, you know, the period, I'd say 20, 2012, 2011 to 2018 or 2019, I did a lot of work at the state government level, some at the federal and some internationally, like in the UK and other places, you know, meeting with legislators, testifying on behalf of various gold, you know, bills, laws, whatever.
And I got a chance to see a lot of these legislators in action.
And again, I saw people that were cunning.
I saw people that know how to manipulate, how to use words as, you know, levers.
Spells.
Yeah.
But if there's any masterminds there, I haven't met any of them.
And I think there aren't.
Ayn Rand uses this analogy of, you know, you see evil in the world and you think there's an evil giant behind all of it.
And you finally get to the, you know, you finally get to the point where you're going to discover the evil and you pull away the curtain or whatever.
And what you see is a nest of cockroaches.
There's not like one giant.
There's just like a thousand little mindless insects feeding on the spoils that, you know, the table is tipped over, the food and the beers and the carpet and they're just eating away.
They weren't even capable of tipping the table over, let alone producing all that wealth in the first place.
They're just feeding on it.
Have you ever been bitten by a leech?
I have not.
Well, it's quite interesting.
I went on holiday with my wife once to Malaysia.
And we went on this forest walk, which included a kind of a bit where you go and refresh yourself in the cooling mountain stream or something.
And when we got back to our bedroom, we changed out of our sweaty jungle gear.
And my wife's sock was absolutely drenched with blood.
It was just like sticky with blood.
And you don't feel anything because they inject this anesthetic into you.
But when they burst, it's really pretty messy.
I was just thinking about Augustine Carstens.
If you were to be burst like a leech, there'd be a lot of gore.
But no, I like your analogy about the leeches and cockroaches.
Do you think I read a piece today on Substack?
Really quite interesting.
It was about how some bankers, including the guy in charge of the Polish bank, have worked out that gold is their only way out of this mess and that Poland has been massively buying up gold.
And apparently the magic figure, have you heard this one?
Is 4% of G you need 4% of the ratio, 4% of GDP in gold.
I think France and Germany have got about 4%, the equivalent of 4% of their GDP in gold.
The UK is currently 1% because Gordon Brown should be something Gordon Brown, yeah.
Yeah, exactly.
I mean, is this plausible that there could be a kind of we could be going back to a gold-based system or I don't think, you know, you know, Twitter or whatever, I always say, you know, yeah, we have to go to gold, but ain't nobody wants that.
All people go to the same universities, whether it's Oxbridge, Harvard, MIT.
They're all evil.
Well, they're some of them definitely are.
A lot of them are just confused.
They learned what they learned.
They think what they think.
But they all come from the same university system and they learn the same ideas, which is Keynesianism.
And, you know, I can tell you this, and without naming any names, I have met with legislators who have introduced, let's say, introduced a bill that passed and became law, something related to gold.
And when I read what, you know, the libertarian press and the gold press, right, about the motives and fire, you know, nullify the Fed and fire a shot across the Fed's bound and all these things.
And I was in the meeting with the person who was candidly, it was one-on-one in his office, you know, candidly telling me what his motives were.
And I'm like, I was there.
Everything they're saying isn't true.
He was thinking about real estate utilization and driving jobs and something like that and not at all about the gold standard, not about the Fed.
And so I would bet, you know, and I don't know the Polish central bank guy, so he could be an exception.
I've met a few central bankers who are definitely gold people.
But the ones I have met, they can't really express, I mean, their colleagues know they're into gold, which is fine, but they can't really express the gold thesis in any kind of policy conversation because it's just not, you know, it's just not acceptable.
It's outside the Overton window.
The poll's been on massive gold buying spree, though.
You know that.
Yeah, I mean, there's a lot of central banks, obviously, that have bought some gold.
But I think the reasons, some of it is, okay, what if we end up locked out of the U.S. dollar system and the SWIFT system?
It'll give us something we can spend.
Part of it is, I just think, good old-fashioned price going up, right?
So we have liabilities, we have assets.
If assets go up, we have free capital on the balance sheet, which allows us to create more liabilities.
So I have a funny feeling that without knowing that particular guy, in the cases where I have had conversations, there isn't, I mean, here's the kind of ironic contrast.
I think in many parts of the world, there is a desperate flailing about looking for an alternative to the dollar.
But within the fiat currency system, there is no alternative.
There's no other currency that remotely, remotely comes close to the dollar.
So they're stuck with it.
And, you know, it's a love-hate relationship.
And the more the U.S. does things that aggregate the rest of the world, the more people look for alternatives.
But do they really want to see gold come back as money?
I don't think so.
Do they think that maybe they'll use gold for settlement between governments for international trade?
I think some of them are thinking that.
But the good news in all this, everything I've said so far has been pretty bleak.
I haven't had any good news in any of this conversation so far.
The good news is that when gold starts to be used in settlement, that's the first step.
And to quote Gandalf from Lord of the Rings, things have now been set in motion that cannot be undone.
That will lead to the next thing and the next thing and the next thing.
Not because there's a mastermind scripting it, but because things have an inexorable path.
Water flows downhill.
And so you'll end up with more and more use of gold in a variety of ways.
And obviously we monetary metals want to be there with solutions to facilitate all this.
Yeah.
I was going to ask you this because I think when we first spoke, it was pretty near the beginning of monetary metals.
I mean, has it worked for you?
Has your idea worked?
Yeah, that's the every once in a while I'm almost kind of amazed like, holy cow, you know, it worked.
Because the idea was, right, so there's an economic idea that interest, the interest rate is a regulator of flow and a gold standard.
The lower the interest rate, the more the gold tends to leave the market.
The higher the interest rates, the more the gold is pulled into the market.
Okay.
Economic idea.
But the business thesis was, if we offer interest on gold, people will bring their gold and deposit it.
And that's one of those entrepreneurial ideas that you have to test.
I mean, there's no market research you could do.
There's no poll.
You know, Gartner doesn't have any data on the demand for gold yield because there isn't, you know, at that time wasn't any.
You have to go do it.
And we did it.
And absolutely, it's been an exponential growth curve since 2016.
And it continues on the same curve to this day.
Well, I'm happy for you.
I mean, I thought when I first met you, you're an eccentric guy, you told me the great story about how you sold your first business by the skin of your teeth.
I mean, this could be a completely different story, couldn't it?
If you hadn't been able to sell it before the old buyer went bust or whatever it was.
I would have had to hold it another, you know, three, four years.
And, you know, the market for early stage companies to sell reopened in, I don't know, 2012, 2013.
And, you know.
But yeah, it would have been a tough slog.
But without prying too much, I mean, have you made loads of money from your new venture?
Is it going going really well?
Yeah, this is going really good.
Yeah, yeah.
Well, that's good.
I'm happy for you.
I like a bit of good news and success.
And it's funny, because I've been advertising you on my podcast, mainly.
I mean, I'll be honest.
I mean, I do like the product, but it's mainly because I'm just so damn lazy.
I haven't been, I can't be bothered to go to the effort of looking around for new people to put adverts on.
And there's a slot where I have an advert.
And I just, well, you've probably noticed I hadn't changed the advert for ages.
So I just thought, yeah.
Anyway, somebody said to me the other day, why are you advertising this company monetary metals?
Because isn't this, oh, I can't remember.
They were concerned about it being paper gold or something or, you know, not just dangerous to invest in.
And I said, well, as far as I understand the business model, and I've talked to Keith a couple of times about this at least, it does make sense.
But just briefly, remind people how it is that you are able to pay interest on gold.
And when they invest in monetary metals, the gold or the silver that they're investing in, I mean, it's there, isn't it?
It's not like paper gold.
It's a conventional, or the heart of it is a conventional gold storage program, not too dissimilar from any of the others that have been around for 25 years.
You open an account, you wire some funds, buy gold, gold sitting in your account.
If you want to liquidate it tomorrow, I mean, there's no point to it, but you could liquidate it tomorrow.
We send you the funds back.
Or you can redeem it in metal.
I think a lot of them don't do that, or they make it expensive or difficult.
But we'll redeem you in metal.
Okay, I want bars sent to my address and we'll do that.
But the real point of it, I mean, we're not really a bullion dealer, not efficient setup to do that.
The real point of the whole thing is we, unlike any other gold storage program, we will present to you a series of opportunities to put your metal out to work.
And in so doing, get an interest rate or get a yield on it.
And so leasing at its heart is very simple.
You walk into a jewelry store, you know, here in Dubai, let's say.
I'm in Dubai at the moment.
And jewelry is not like in the West where it's about fine art and it's very fine and very delicate.
And four grams of gold is selling for $17,000 at some designer jeweler.
It's sold by weight here.
And the store will often have a screen displaying the current gold price.
And then they'll charge what they call a making charge, essentially a markup or a premium, which would be 2% or 5% or something like that.
And they're buying it by weight.
And so I always laugh when I talk to the analyst types that talk about whether there's investment demand versus jewelry demand.
In this part of the world, jewelry is investment demand.
They're putting money around their neck on a necklace.
It's that simple.
So jewelry store here, and this is high-purity stuff, 21 to 22 carat generally, depending on the culture.
And that jewelry store will have 50 or more kilos of gold in it.
There's nothing like if you walk into a jewelry store on High Street in London, there'll be nowhere near that much gold.
It's fine, it's delicate, it's hollow.
The weight of the gold just isn't that much.
But here, 50 kilos.
Now, today's prices, 50 kilos is, what is that?
I don't know.
$8, $9 million?
Right?
I mean, gold price has gone up so much that, so that has to be fine, you know, and then, you know, any of these bigger companies, they have hundreds of showrooms globally.
You know, it has to be financed somehow.
I mean, nobody has that, you know, change in the pocket or in between the cushions and the sofa.
That has to be financed.
And conventional finances, you go to the bank and you borrow, you know, you pledge the gold as collateral and you borrow, you know, eight, nine million dollars.
The problem is, what if the gold price drops?
You still owe eight or nine million dollars, but now you have a seven million dollar asset.
You're bankrupt.
You're insolvent.
So what they do is they borrow 10 or 12 million.
They buy eight or nine million worth of gold and they put the rest in a margin account to hedge, which means shorting gold futures.
Now, if the gold price rises, you get a margin call.
It's just a mess.
And given how much the gold price has risen, these guys are sick and tired of all the margin calls.
So what we do is we lease the metal.
We will, you know, so we have the investor's metal sitting in the vault.
We present the deal to the investors and say, okay, you know, here's this jeweler.
And so we've done, we're about to do a couple of showrooms for an Indian jewelry brand called Callian in the UK.
Silver Squeeze Scenario00:15:47
One's in Leicester and the other one, I'm not sure where it is.
And we say, okay, you know, here's the deal.
Here's the interest rate.
Here's the company, whatever.
The investors say yes.
Then we have, we have, let's say, let's say we're doing one showroom.
We have 50 kgs of gold in the vault.
They have 50 kgs.
Actually, there's a haircut.
They have to have 55 or 60 kgs of metal in the store.
Okay, we're going to swap.
So now the investors own the inventory in the store and the jeweler owns the metal in the vault.
Then we will liquidate the metal in the vault.
They want the cash, obviously, wire than the cash.
And the investors own the earrings and the necklaces and the rings and all that in the store.
Every day the jeweler sells a little bit, but that's why there's one of the reasons why there's a haircut.
So the inventory level never goes below the 50 kgs.
Every day they sell a little bit.
Every day they buy more inventory from their suppliers.
There's always, at all times, you walk in that store, it's always very well stocked.
And so they're paying for the privilege of having the capital to stock their store.
That's how the investors get paid.
I mean, we make a spread, we make a fee on it.
The investors are getting paid.
The jeweler is happy to pay because that's how they fill the showroom with inventory.
And as I understand it, particularly with silver, the sort of weird situation, these extraordinary price rises have created a certain amount of chaos in the silver buying and selling markets.
Is that right?
There's some really perverse things that have happened in silver.
And, you know, in the precious metals markets, the primary suppliers of the products that everybody wants are the refiners.
I mean, the mines produce it, but nobody wants to buy the mine.
The mine raw material is called Doray.
It's not pure.
I mean, it might be 90% purity and has all kinds of lead in it.
It could have mercury, whatever.
So it goes to refiner to be refined into bullion-grade metal.
The silver refiners, the cost of hedging, let's say last October, it was $2.15 an ounce to hedge.
Refining margins are nowhere near $2 to silver.
Maybe today, at today's silver prices, maybe they are.
But at that time, silver was a lot cheaper.
They don't make any money near this.
It was unhedgeable.
So the refiners, and these are, so there's a scarcity of silver, which causes backgroundation, which causes the hedging costs to go through the roof.
So the primary producers are saying, we don't want to buy any more feedstock because we can't afford, you can't hedge it.
So that slows down or halts the delivery of metal to the market.
That would be the thing that would alleviate the shortage.
And they can't because of the perverse incentives of this Keynesian system going off the rails, essentially.
The backgroundation prevents them from operating.
It puts a spanner in the gears.
So the silver refiners, they're the cause of the blockage right now, of the lack of...
No, that was October, and that subsided.
But yeah, I mean, generally in silver, it's hard to hedge.
It's hard to, you know, in the London market, they call it leasing.
It's a different product from what we do, but it's hard to lease.
Volatile as hell, and the price is volatile, but, you know, hedging costs and the least rate.
What do you mean by hedging?
So if you, let's say you're a refiner and you have a load of 50 tons of some combination of scrap silver, people's old silverware and tea services and candelabra and whatever.
And your job is to melt that down and turn it into three nines or four nine silver.
Sterling is 925, right?
92.5% pure.
That was the standard for centuries for dinnerware and tableware and all that.
So you need to melt that down.
You can't go and buy, today the silver price is what, $120.
And you buy 50 tons of silver at $120.
You can't take that risk.
What if the price drops to $100?
To do that in a New York minute, you'd be bankrupt.
You would lose so much money, you'd be dead.
So you have to hedge it.
You have to go into the futures market or some market and short silver so that if the silver price goes down, your short is adding just as much cash as the metal is losing so that you're not neutral to the price.
Otherwise, it's too risky.
And that's how everybody who deals in metal, the larger ones, I mean, there could be really small coin dealers that don't hedge.
But anybody who's larger scale, especially if they're using finance, they have to hedge.
They have to be neutral to the price.
Right.
Or otherwise they're taking a risk of bankruptcy if the price drops.
And the more the price rises, you get that parabola, which certainly has occurred in silver, arguably even in gold to a lesser degree.
When that happens, there's a risk of, you know, you wake up and silver is minus $27.
I'm not saying that's going to happen, but it could.
And so would you bet your entire business, I mean, your family's been in the silver refinery business for generations.
Do you want to be the idiot who lost it all in one price move over a weekend?
A Monday morning, you wake up to bankruptcy?
Nobody wants to be in that position.
That's really interesting.
So that explains why people have still, despite this insanely rising market, people have still got these short positions in silver as a hedge.
Well, just anybody who has a physical metal inventory or work in progress or anything like that, you know, has got a hedge.
And so, yeah, they are one of the groups that use the futures market.
They're, you know, futures market users, absolutely.
And what does it mean when there's a silver squeeze?
Are we having a silver squeeze now?
I'm not sure I would say that.
You know, a squeeze, the same thing can happen in a stock.
A lot of people are short.
I mean, the hedgers wouldn't really be squeezed in the same way.
But people can also use futures to speculate, either long or short.
Because futures give you 20 to 1 leverage.
So if you want to make a price bet, it doesn't take that much capital to make a very big bet if you want to.
So, you know, when a lot of people, especially if something's falling, when something is rising, everybody wants to bet on the long side.
And they want to bet it's going to go up further.
When something's falling, they want to bet it's going to go down.
So they short it.
And so it goes down and down.
When the market goes down, more people are shorting it.
At some point, it doesn't take that much buying.
And the short sellers had their stop loss orders.
And then so that causes the price to rise.
And the next guy hits his stop loss and that causes the price to rise.
And so you can destroy all the short positions.
And the only way to close the short position is to buy, buy to close.
So all that short has pushed it down from here to here.
And then the squeeze will push it from here right back to here or maybe, you know, maybe beyond.
So, you know, playing with leverage is a dangerous, you know, if you just own metal and you're stacking it, there's no danger to it.
So even if you bought silver at 120 bucks and then hypothetically drops to 60, okay, you may not be happy about it, but it's not going to take food off the table.
It's not going to threaten your solvency, right?
If you do that with leverage, I mean, you could be ruined.
Yeah.
So it's dangerous stuff.
And we generally say, you know, don't play with leverage unless you really know what you're doing, unless you're really going to be on it, monitoring it, being awake at night, looking at your position, because your nighttime is day somewhere else, and somebody's trading and the price could move, and then you're in deep trouble.
Yes.
Yes.
I mean, I'm presuming there's going to be a correction at some point.
You would think there would have to be.
Now, what I can tell you is that if I look at the gold basis chart, the gold basis has been pretty steady as the price has been rising a lot, which means that the demand for metals has been there.
It's not just people buying futures.
It's people buying metal.
And silver, the basis was holding steady until the last, I don't know, maybe $15, $20.
At that point, the basis began rising.
So now it's people piling into futures, which pushes the price up further.
And then that's the setup for, you know, the correction.
So you look at a priority, even if the fundamentals are strong, which I think they are, and the macro, you know, background drop and the geopolitical backdrop, you know, it is what it is.
You know, all the people that were buying this story are buying this narrative at 40 bucks, obviously absolutely right.
And then the narrative and the story remain, is it still right to buy at $120?
Arguably maybe, yeah.
But, you know, there's a much greater risk of a big correction, you know, given the parabolic run that we've had.
Yes.
But I was like hunting with this guy this week, an old English squire.
And I was just chatting as you do about stuff and I was talking about silver.
And he was completely unaware of anything that had been happening in the silver markets.
And I was thinking that that guy is probably more representative of the world than...
I mean, this is a guy who probably had money in his family and stuff.
But I'm sure that guy is more representative of the world than me, nutcase, chatting about silver.
The Western world.
You go to India.
There's a population of 1.4 billion people and all of them are screaming mad for gold.
I mean, you have that untouchable guy who's cleaning the poop out of the streets and he's being paid a minimum wage of $2 a day, right?
And he will have some tiny little fleck of gold that he saved up to buy and be super proud of it and want more, right?
You go to Turkey.
So the Turkish banking system offers gold-denominated bank accounts.
Like it's a real bank account with an I-band.
You could pay, you know, send and receive gold the way you would, you know, cash.
There's a population of 85 million people in Turkey.
There's 120 million gold bank accounts in Turkey.
And people don't really trust the banking system all that much there.
That's not the preferred way of owning gold.
And yet there's more than one gold bank account per capita.
It's kind of like guns in the U.S. Can we open an account in Turkey like that?
I don't know.
Open the count of Muslims with Turkey.
So that explains why you're in Dubai.
Yeah, I mean, we're kind of at the crossroads of the Arab world, which loves gold, maybe arguably slightly less than the Turks who love gold, maybe arguably slightly less than the Indians.
And those three worlds are here.
The fourth world that loves gold would be Asia and the Chinese.
Yeah, I was going to say, the Chinese big on it as well.
And you know, and there are Chinese people here in this market, but not that many.
So that, I mean, in a way, we have a completely distorted view in the West about gold and silver.
We have no feeling for it.
You know, it was destroyed by making it illegal in the U.S.
That was never illegal in the UK.
But, you know, three or four generations of kids going to school being taught that money was pieces of paper printed with government pictures and government slogans on it have eventually done their done their magic to indoctrinate and program people's brains.
And then it's financial regulation.
If you're a financial advisor, there's a reasonable and prudent standard.
And if you put something in somebody's portfolio or too much of it and the price moves against them, you could be censured by the regulator, lose your license, etc.
You know, if you have too much gold in somebody's portfolio, that's not reasonable and prudent, according to the state.
Is that right?
Are there still regulations on that?
Well, the standard, I mean, in the US at least, the standard be, you know, you're responsible for reasonable and prudent investment decisions.
Now, I don't think the regulation names gold specifically, but the financial world regards gold as a volatile commodity.
So if you're a financial advisor and you say, okay, I want 50% gold in your portfolio or whatever, some big number like that, and the gold price drops 30%, I think you're on your back foot at best in a defensive posture, arguing this was reasonable and prudent.
And they're going to say, gold's a risky commodity.
And the proof is it just lost 30%.
You know, you just hurt your client by 30%.
So everybody, you know, out of I hate the term abundance of caution, but you know, fear of the regulator, chilling effect, whatever term you want to use, financial advisors will shy away from it.
You know, kids are learning.
You know, if you go to Google Images or Bing Images, you type in money, you want pictures of money, you'll get page after page after page after page of pieces of paper with green ink on them.
You won't see gold points.
This is, there has been so much brainwashing.
I mean, I speak from personal experience here.
If I had my way, I would have put everything into gold and silver because it was like, or silver miners and gold miners.
But when I proposed this to my wife, she started quoting back at me all the stuff she'd read in the financial sections of newspapers and all the friends saying where you've got to have a balanced portfolio and you've got to allow for different and I said, but gold and silver are really going to go stratospheric.
Why what's the point of investing in things that aren't going to go stratospheric?
And she was like, yeah, but what if?
I said, but it's not even a what it's a one-way bet.
Do you not understand?
But but I mean, again, this is how most people have been trained to think.
Well, you know, there was, there was a genius to Keynes evil and FDR's evil in 1933 that by divorcing gold from what then became to be understood as money, which is a wrong understanding, but whatever, then, you know, gold has price volatility.
Why Invest in Gold?00:07:37
So if you're conservative, if you know you have expenses you have to cover, only gold in the short term could go down and you could get hurt.
And there are longish periods.
I mean, God help anybody that was buying gold in 1980, you know, thinking we're going to have imminent hyperinflation.
They would have had to hold it as it went down from, what, $850 to $200 by 2000 and Gordon Brown and all that.
And then the gold bull market.
But, you know, like somebody could, you know, get old and pass away.
And now their kids have the gold before the price recovered.
Now, was it 2000 or 2001 to 2008?
The price was rising.
In 2008, there was a 30% drop.
Yeah.
Now, gold dropped a lot less than anything else.
And it was the first to make new all-time highs.
By January of 09, it had recovered the high that it had in spring of 08.
It was past $1,000 again in January of 2009.
But that, you know, and then, so the price of gold went bananas from January 09 to August of 2011.
Then it made its peak at just short of $2,000, as everyone knows.
And then, what, eight-year period, seven-year period of downward, you know, price action.
So during that time, you know, if you think in dollar terms, your value was eroding away.
After that, you know, if you bought it in early 2019, let's say, yeah, it's been an explosive upside.
And so it goes through these, goes through both sides of the cycle.
And, you know, it creates risk, especially if you need your money in the meantime.
So have you personally got lots of money in, I mean, sorry, lots of money, lots of silver, physical silver.
I don't have a huge amount in silver.
I tend to be more skewed towards gold, but I do have some silver.
Yeah.
So, I mean, you must be feeling a bit flusher at the moment than you were six months ago.
The so-called wealth effect.
Now, my vast disproportion of my net worth is in monetary metals equity.
So that's really interesting.
Since our revenues are gold, for every ounce of revenue we make, that's now worth $5,600 versus, say, $2,600 a couple years ago.
So monetary metals share price has gearing to the gold price.
And so, yeah, I feel pretty good about my net worth from the monetary metal side.
So not only are we growing revenue in gold ounces, but the value of each of those ounces is massively higher in dollar terms.
So that's a pretty good place to be.
Are you living in Dubai now?
I am, yeah.
Right.
Well, I mean, so better tax arrangement.
You know, if you're an American, you don't benefit from that.
So if you're British, once you leave the, you know, the borders of the UK, you make income somewhere else, you don't get taxed.
Yeah.
As an American citizen, no matter where I live, I have to pay tax to the U.S. government.
That sucks.
You know, you could shelter, I think, what, $130,000 according to the tax code.
That's it.
I mean, are you happy in Dubai?
Does it suit you?
Dubai is a cool place.
You know, the U.S., like everywhere else, you know, in the West, you know, the culture has become divisive, you know, a bit nasty.
You know, where I used to live in Arizona was pretty good.
We didn't have all the idiots in the streets blocking traffic and doing vandalism and all these things.
But that got pretty nasty.
And the other thing is in the West, a lot of people will look at you askance if you're successful.
There's this envy thing going on.
And in Dubai, you don't have either of those things.
There's no social unrest here.
People are happy.
And people are here to make money.
So if you're making money, it's like hey, great.
And there's people that are fantastically wealthy driving around gold-plated Rolls-Royces and all these things.
And, you know, there isn't, at least not visibly, you know, envy.
Everyone's looking on you.
You know, this is cool.
So, you know, the culture is pleasant here.
It was absolutely a first world city.
You know, the lifestyle is fantastic here.
Weather is bloody hot in the summer, I will say that.
And summer means like May through October.
Yeah, yeah, yeah.
Yeah.
I'm not a big fan of AirCon.
And also, I think the lack of sort of organic vegetables might be a bit of a deal breaker for me.
You can get any food you want here.
I mean, it's obviously important, but if you want to eat organic veg, you certainly can.
Oh, okay.
But pork's not too available here, but that's about it.
Alcohol is plentiful and everywhere.
I mean, it's become a very metropolitan, cosmopolitan city.
Oh, I suddenly thought, you know what?
My friend Michelle is in Dubai at the moment.
And she was asking me, did I know anybody in Dubai?
And I didn't think I did.
But now I know that you're there.
But I think she's going.
She'll probably be back flying home by the time this thing finishes.
Okay.
What's the other thing I wanted to ask you?
Dubai and oh, I don't know.
I think we've sort of something about silver, gold.
Oh, there probably are questions I should have asked you, Keith, but you know, whatever.
Can always, anyway, I'm really glad that it's worked out.
And so I shouldn't be not advertising you because it sounds like you're a good thing.
I mean, it's been a good thing, and we advertise on your show because it's working.
It's pulling customers.
Well, yeah.
Well, you know, you haven't actually paid me any money for advertising anymore.
I just get my cut from the – that's the thing.
I'm so bad at business that I don't even like.
I can't.
I'm much interested in making the product and talking to interesting people and just like anyway.
It's good.
It's been good.
So, well, if I'm in Dubai, I'll come and say hi.
Because, you know, we didn't, we never had that thing when you were in London, did we?
The trains broke or something.
It didn't work.
That's right.
You were stuck halfway between.
I was stuck at Northampton or something.
Yeah.
I remember that.
And it was like, I mean, you sent me the text message, like you were stranded on a train in the middle.
It wasn't even at a station.
It was like between.
That's right.
It was really annoying.
Estimated three and a half hours.
I was like, oh, that's not going to work.
Tension Pulling Snap00:03:21
No.
I might as well head back home.
So we still haven't actually met, have we?
No.
I'll let you know the next time I'm in London and then we'll try to get together.
Yeah, yeah.
Okay.
That's good.
Well, thank you.
So where?
Well, I suppose I'll put down the thing where they can find monetary metals.
So you don't think it'd be because I also hear people saying, like, I've missed a boat, haven't I?
Why should I get silver or gold now?
You know, if you want to make a trade, there's definitely some risk at this price point.
What I say to people is: if you don't own any gold, you should go out and buy some.
And it's not a function of price.
It's a matter of copies in gold.
Not as a speculation, not as something you would ever sell for currency, but because it protects you against all kinds of unknown, you know, black swans and unforeseeable things that I think are coming.
For a trade, you know, on our website, we publish daily updates of the basis and some analysis related to that so people can see where supply and demand is currently running.
And that gives you some idea.
It's not a timing indicator, but it gives you some indication of the tension in the market.
Is the tension pulling the price up?
And reversion is going to tend to want to snap back down.
Is the tension pulling down?
It's going to want to snap up.
We give you that sort of picture.
There's going to be a war soon.
What effect would war have?
I mean, Trump's definitely going to probably have invaded Iraq.
I mean, sorry, Iran, attacked Iran by the time this podcast goes out.
What effect is war going to have on the gold and silver price?
I mean, generally, higher.
You know, when trust is in decline, you know, people want to dump.
I mean, a currency is an unsecured credit.
So as you lose trust or lose confidence, you think, you know, I'm going to trade some of those currency units for something real.
So, you know, the gold price goes up.
We'll see.
I don't really know what's going to happen geopolitically.
I don't pretend.
Excuse me.
I don't pretend to have any particular knowledge about what's going to happen.
I mean, I see what he says like everybody else, but we'll have to see on that.
But war tends to support a higher gold price.
Right.
Okay.
So I'm keeping you up.
It's probably, what time is it there?
It's 10 p.m.
I hate, I hate doing podcasts late at night.
So I'm sorry to have to catch you up.
Well, that's great, Keith.
And everyone else, I hope you've enjoyed my relationship with military metals over the year.
And some of you have bought some.
I kind of think those of you who did the right thing.
You know, what do I know?
I mean, I'm just a kind of crazy gold bug conspiracy theorist.