Craig Hemke: Trump & Bessent Want A Weaker Dollar, US Treasury Yields Down, Gold & Bitcoin Higher?
Summary
Market Outlook: The podcast discusses the rally in gold and silver prices, with gold nearing $3,350 and silver just under $38, driven by inflation concerns and Federal Reserve policies.
Inflation and Interest Rates: There is debate over whether lower interest rates are inflationary, with some arguing they can be deflationary due to reduced consumer spending from lower savings returns.
US Treasury and Federal Reserve Dynamics: The discussion highlights potential reforms to align the Federal Reserve and Treasury to manage the national debt, which could be bullish for precious metals.
Economic Data Skepticism: Concerns are raised about the accuracy of US economic data, including job reports and inflation metrics, which are perceived as manipulated for political and economic narratives.
Global Central Bank Actions: Central banks are continuing to buy gold as a hedge against US Treasury bonds, reflecting skepticism about US fiscal policies and debt management.
Yield Curve Control Speculation: There is speculation about the US implementing yield curve control to manage rising interest rates and debt, which could impact gold and Bitcoin prices.
Investment Opportunities: The podcast suggests that the current environment is favorable for investing in physical gold and silver, as well as junior mining stocks, due to strong cash flows and potential for mergers and acquisitions.
Future Economic Predictions: The discussion anticipates a recession in the US, following global trends, and suggests that yield curve control and other monetary policies will be key themes in 2026.
Transcript
Hi everyone, this is Jason Ber of Wall Street from Main Street. Welcome back for another Wall Street from Main Street podcast interview. Today's special guest is a returning guest. He worked in the financial industry for many years and he's been covering the gold and silver markets I think since like 2009 or 2010, over a decade now. We're recording this interview on Wednesday, August 20th, 2025. The dollar gold price, it wasn't in correction mode. It started to rally a little bit after the Fed's Jackson Hole meeting even though the Federal Reserve Bank what there was two dissenting votes and they're fighting about rate cuts. The gold price is still almost at $3,350 when recording this interview. And the silver price is just under 38 at $3783. Craig Humpkey of TF Metals Report, thank you for joining me again. >> Jason, it's always been a a pleasure to visit with you in the past. I look forward to doing it again here. So Craig, I want to get your thoughts on inflation because a lot of our listeners probably aren't aware of this, but the M2 money supply numbers and we're hearing what the headlines, the CPIO inflation is not a problem, but the M2 money supply numbers are at or near an all-time high from the what the um fractional reserve banking, the commercial banks, and then the S&P 500 is what at an all-time high. So I mean, there are signs that we do have inflation, right? >> Well, yeah, by traditional measures as well. Um I I don't know. I you know it's there's this kind of I guess this thought and I don't know maybe it's correct that lower interest rates uh spark inflation and maybe somehow indirectly if they spark economic growth you could say you know that that ultimately causes inflation but I don't I don't think the Fed funds rate and if they trim it you know as is getting bandied about as Trump is demanding is necessarily inflationary if they now if they go turn on the QE machine like they did in CO and they print $5 trillion and just hand it out willy-nilly to everybody, you know, without proof that they need to qualify for the PPP and all that stuff. Well, then all that money slashes out there and gets in the and grows the money supply. And we obviously saw what happened in the nontransitory inflation of 21 and 22. But I'm I don't know. I've always thought that I you can even make the case that lower rates are somewhat deflationary with the amount, you know, with the demographics we have and the amount of people that are, you know, living off their savings and that sort of thing. You start cutting your CD rates and your money market funds from four and a half down to two and a half, they don't spend as much. You know, maybe they don't go out as much, maybe they don't uh have all the same purchases that they have. So, you know, anyway, I don't even know if that relates to your question, Jason, but there's this notion out there that somehow lower interest rates are would be inflationary, and it it's to me, I've never really thought that. >> Well, the CPI, um, the Trump administration, people that are referencing that inflation is not a problem right now. They're setting what the low oil prices, low gasoline prices. So, they just keep repeating that ad nauseium. But look at the S&P 500. I mean, there's a lot of asset price inflation. Look at the the price Bitcoin which has rallied a lot the last 6 months the price of gold in a lot of different currencies the S&P 500 it's just a lot of evidence Craig that um even though they're saying inflation is not a problem that they're still creating what the Cantalon effect and the monetary inflation what it's going into all these different asset prices. So also looks like with the M2's money supply growth do you think that the commercial banks are they buying treasury bonds do you think that that's why the 10ear US Treasury yield is down about 50 basis points recently? Yeah, somebody's got to be buying that stuff, right, Jason? I think that's ultimately uh the biggest problem that the country has. And I think that's ultimately what you've heard Bessant in the last couple weeks talk about, you know, and Trump too, reforming the Fed, kind of melding together the Fed and the Treasury to work kind of handin glove, which is what I kind of thought was going to happen, you know, when they stuck Mother Yellen in charge of the Treasury during the Biden administration. Well, here's a sign that, you know, the two are going to be working together. And so, but this is a little more overt in their language of that because I think that ultimately that's the problem. And I think that's such a problem that they're going to be addressing uh as soon as Powell's out uh or maybe even sooner is how are you going to get the Fed and the Treasury to work together to try to not so much, you know, the original mandate of, you know, controlled inflation and full employment um to fund the debt and the deficit and the ongoing operations of the federal government. Um that's going to be the to me that's going to be the biggest story of next year and it's going to be extraordinarily bullish situation for the precious metals. >> Well, the Fed failed at its goals of full employment, right? Because look at the Bureau of Labor Statistics. The jobs numbers weren't good and now Trump's blaming on a Biden administration uh appointee there at the Bureau of Labor Statistics. Uh there was even uh a lot of evidence coming out that I think 30%, it was up about 3x the amount of fake data that they just used for modeling. So like the um PhD economist what they used to collect a good amount of some of the data at like Target and Walmart and grocery stores and Costco stuff like that. So they used to actually go and have uh send people out to collect some of the data but um over the last like three or four years I guess they they stopped doing that and it's down enormously. So they're just guessing at the data >> I'm sorry I didn't mean to interrupt you Jason. I'm just agreeing. Yes. >> Well I I was just Yeah. So it looks like this the government economic data whether it's the uh inflation data the jobs reports the CPI what it's you think it doesn't even matter which political parties in office is going to be heavily spun or outright propaganda at this point >> oh boy um I could talk about this for hours uh Jason one yes this is what we call mope and spin you got to get the data reported in a certain way to create the environment of the perception of low inflation so that people are willing to buy US treasuries at 3 or 4% % not demand 8 CPI grossly under estimated since 1992 when Alan Greenspan said we got to change how we calculated otherwise we're never going to be able to keep up with all the cost of living adjustments uh in social security and all the divine benefit plans and everything else uh that you referenced that the uh within the CPI the amount of just absolute guesswork has tripled uh over the last couple of years and then then there's just folly in it uh within the CPI they claim that health insurance costs have fallen by 20% over the last 5 years. I mean, I don't know about you, Jay. I mean, Jason, is that true for you? It's not true for me. >> No, they count Medicare and Medicaid reimbursements, though. So, I mean, like they were using what for owner's equivalent rent instead of mortgage payments because uh everyone I speak to, Craig, their mortgage payments are up. So, Right. Right. >> Yeah. Or people my age or younger, they can't even qualify for a mortgage even if they have a pretty good job, >> which is why they're all you get seeing apartments being built everywhere. So that that's one thing. The the jobs report, you mentioned I've been doing this for 15 years. I in the very early stages of TF Metals report, we called it the BLS BS because it's garbage. I mean, seriously, how could anyone how could you I mean, if you stop and think, this last GOBS report was reported on August the 1st at 8:30 in the morning, and we actually have been convinced that somehow that's an accurate total for how many jobs the US created in July. I mean, maybe you could say, well, you know, for April, we've had 90 days to do some surveys and do here here's where we were 90 days ago. But no, they we they've actually convinced everybody that on the first Friday of the month, regardless if it's the first or the second or the third day, that they can tell you an accurate number. It's garbage. It's seasonal adjustments. It's what's called birth death adjustments, which is a historical average of how many businesses were started and lost that month over the last 20 years. There's these surveys that they claim to make and all. I mean, it's it's a joke. And so, um, it was not surprising at all when, uh, we had these two massive downward revisions, uh, for the whatever the May and the June report and you're going to get and then the what the July report came in only 70,000. It's probably going to get revised lower again. We had a thing last year where what month was it last year? About September maybe when about this time of the year I suppose when they came out with a cumulative adjustment. uh uh and re revision for the year and they just took away 840,000 jobs just say well you know we were off by almost a million by the time it was all said and done >> but it helped it tried to help for the election though right for November 2024 along with the Fed cutting what interest rates two months before Jerome Pal cut interest rates 50 basis points a couple months before the election which normally they don't do either >> right and so I I just I thought it was great uh somebody has to be accountable and changes have to be made because this data needs to be accurate You can't just roll out a number on the first Friday of the month, get the market reaction you want, and then come back 30 some odd days later and say, "Ah, no, that number. Yeah, we overestimated it by 6x." Well, wait, wait a second. And I think that's what Powell was or what Trump was so frustrated with because he's trying to get Powell to cut rates. And if Powell had known that the US had only created 20,000 jobs a month in May and June instead of 120,000, maybe he would have cut in July. And so I I think that was part of his frustration as well. But the data has to whether it's BLSBS, whether it's a CPI, they've got and which is cranked out both of those numbers by the Bureau of Labor Statistics, same people. They've got to get a handle on an accurate portrayal of that because again what you're going down the road of, you know, communist China at this point where nobody believes anything and you could actually then go into the whole thing Jason about this is forth turning kind of stuff right >> where nobody believes anything about anything. >> Well, the Soviet Union also had an econ economic propaganda department. I've interviewed Yuri Maltzv who's done speeches at the Misus Institute at their conferences and he was really high up in their economic propaganda department. He defected like 30 something years ago and he was saying that the Soviet Union kept like three sets of books and hardly anyone saw like the real set the real account um economic data numbers. >> That's how they roll, brother. No doubt. And and again, I don't think again the media has portrayed it and you know which way they lean that Trump just didn't like that suddenly his great economy was only cranking out 20,000 jobs. No, what he didn't like was he he wants rate cuts and Powell, you know, sat there 2 days earlier. I mean, we just got the FOMC minutes uh today from the July meeting, 3 weeks later. So, it was Wednesday the whatever 30th of July, and the BLSBS came out on August the 1st. So just two days earlier, Powell sat there in his press conference and talked about, "Oh, no, no, I'm not going to be bullied and we're not going to be cutting rates because the economy is, you know, strong and the job market is robust and all these things." And it was all bogus. I mean, none of that was even true. And I think that's all part of why Trump reacted the way he did. And I'm I'm glad, like I said, I've been railing against uh the the jobs report for 15 years and how they do it. And I hope some changes are coming. Now, if you're a nonG7 country, a central banker there or a BRICS central banker, are you looking like at this phony economic data? You're looking at the interest payments on the debt. Even though Doge said they were going to cut a trillion dollars, they cut barely a hundred billion. Uh I'm in favor of, you know, exposing the fraud, waste, fraud, corruption, abuse to sunlight. But, I mean, they didn't cut anything close to a trillion dollars. I And we both knew before we started uh recording, we both said there was no way they were going to be able to cut a trillion. But if you're a foreign central banker outside the G7 bricks country, are you looking at all this stuff, the spending out of DC, the policies, the sanctions, the interest payments on the debt, and you're just saying, you know what, I I can't buy treasuries anymore. We already have enough treasuries. We have to start hedging with gold tonnage. Do you think that that's like the game plan now? >> Well, that's I think that's been going on for multiple years now. I mean, we're on uh track for at least another uh a big year in central bank gold buying. I mean, what was it? More than a couple hundred metric tons each of the last three years. I think it's 700 over the last three three years. May not be that same run rate this year, but they're still buying. And that creates a kind of an underlying bid for physical gold. That keeps that's all part of why gold's been rallying the way it has. Regarding the other central bankers in the world though, uh Jason, man, even just this week, the blowouts at the long end of JGB, Japanese 30-year bonds or the guilt market in the UK or even the their longerterm German boons, um they're all getting selling and they're all getting blown out. And I think a the global central bankers are probably more worried about their own specific situation and what they're going to do and and you know, this could ripple down. Okay. So they may not they may end up being sellers of treasuries. What if the Bank of Japan, you know, needs cash and so they sell treasuries, they get dollars and then they sell dollars to have yen to prop up, you know, whatever, buy their own, you know, bonds, you know, to try to y, you know, control yields or provide liquidity in their markets. We are, we're getting into a pretty dicey situation. And it's also a rather seasonally a rather dicey time of the year, too. So anyway, to answer your question, I don't know. I I think the the various uh central bankers around the world are probably a little more worried about what's going on for them in their own country than they are what, you know, what the ramifications are what we're doing here. >> Well, I talked about currency swap lines on your podcast. Uh I think like at the end of last year, early this year, I can't remember. It was like seven or eight months ago. >> A lot of people forget that after uh within like a year and a half after the repo crisis in 2019 because there was a lot of secret bailouts and other problems behind the scenes with the repo crisis. It was way larger than the trillion dollars that Fed added to its balance sheet. I mean, a lot of it was covered up and swept under the rug. Craig, the Fed added, I think, a permanent repo facility because the St. Louis Fed was writing research reports on this. I think 2021 they added two types of permanent repo facilities. I don't know if any central banks have tapped it yet. I don't think they have, but I think you brought up a a prime case where Japan potentially instead of the uh the US like having to deal with Japan dumping all their treasuries where they post their treasuries as collateral and the Fed at the permanent repo facility for foreign central banks just said like, "Oh, well, what types of currency swap lines or dollar loans do you need? Just don't sell to treasuries because you'll put problem uh pressure on the yields." I it's funny you mention this uh because I I record a podcast every day on my site and I just had wrapped this up maybe an hour ago and one of the items that I mentioned usually I'm like here's some of the stuff I saw during the day and then we update the charts you know and gets you ready for the next day. Anyway, one of the items I I I mentioned today was something I pulled off of Twitter and it was somebody that noticed that this morning uh before the market open someone, we don't know who, had hit that Fed standing repo facility. Now, they hit it for only $200 million, which is a lot of money to you and me, but you know, in the grand scheme of things, it's not a lot. But it's not, you know, this isn't month end or quarter end or anything like that, but somebody needed $200 million in cash this morning. A bank, I say somebody, it's usually a bank or whatever. Um, so that facility is still there and it's still getting used. And um, uh, brother, you're smart to have uh, caught on with that. And it's I think you're smart to keep watching it too cuz again if we start getting into liquidity issues whether I mean again it could be somebody maybe it's somebody with credit default swaps on UK long debt you know something like who knows but that thing got hit just today. Well, the problem is the banks themselves, right? Because of fractional reserve banking because a lot of these uh large commercial banks, whether it's JP Morgan or European banks or Japanese banks, they're run like hedge funds. So, they they're way overleveraged and you start to see you said overnight repo. You start to see this stuff in the repo markets overnight with the borrowing or banks, what the inter lending, bank inter lending. So, if there's a spike in the yields there, that means then there's problems with one of the counterparties. One of the banks is having immense problems. So if you start to see that one of these facilities were tapped for tens of billions of dollars or I mean there's supposedly like over a hundred billion dollars of losses marked market for Bank of America what their older US treasury bonds but I mean they're not going to go they're not going to go bankrupt. Like I see one of the newsletter writers out there is marketing that like Bank of America is the best short and it's like are they actually going to allow Bank of America to fail for hundreds over hundred billion dollars in bond losses? Well, and and again that this thing like today $200 million is a drop in a bucket, but you don't know maybe that's a margin call essentially. I'm use that term loosely that somebody is overlevered in some other credit default swap bet or something and they need some cash just to you know they come to the shillock to get floated for a day or two, right? Um, yeah, it's a sign. It you're wise to, like I said, to have pointed out that the standing repo facilities that are still there haven't been closed. And, you know, on the on the flip side of that, too, Jason, is that uh reverse repo facility that when I get to uh in 2022 or three, like $2.6 trillion had been parked in that thing. The essentially the excess reserves parked at the Fed. That thing's down to 25 billion now. So, it's going from 2.5 trillion to 25 billion. It's n down 99%. Uh to the extent that was used as like a slush fund or readily available cash for the banks to step up, you know, at auction when when their mother Yellen was floating more bills or whatever over the last couple of years, that money's gone, too. So, we might be getting despite the M2 numbers and everything, we might be getting into a a real liquidity squeeze. Um, again, look at those global bond markets. And if that's the case, you know, again, I'm not trying to say Trump is right, but you know, he keeps talking about what does he call him? Too late Jerome Powell or whatever. Um, it might turn out that Yeah. I mean, well, >> I think I think the macro situation is way worse. So, I I think a lot of these other countries, Europe, emerging markets, China, I think a lot of these other countries are already in a recession. So, I think that's something that a a lot of uh people here in the United States haven't quite figured out yet. >> Well, and I I would I can't remember the last time we did one of these, Jason, but it was probably earlier this year, and it was probably me out there squawking and promoting my my uh annual forecast, which I mean, I you'll remember I I always tell people I write that thing usually between Christmas and New Year. I've been collecting ideas all through December and I write it for me. I don't write it like, hey, you can buy this for $20 or something. I I write it for me so that I can go back at the end of the year and try to figure out, okay, what what what did I I invariably I get a lot of stuff wrong. What was I thinking at the time? How, you know, what can I learn, you know, from all of this as we, you know, begin this year and move into another. And you know this those are all issues uh that I was writing about last year and you talk about uh moving into a recession. I I call the report the inversion reversion because history has shown it's not when the US yield curve inverts that the recession starts. That that's just telling you what's coming. You get these charts from the St. Louis branch or the Federal Reserve, the Fred charts, they'll show you that actually the recession begins after the yield curve uninverts and gets positive sloping again. Well, that happened in about November of last year. So, I was like, well, I mean, I've been expecting recession here in the US for a couple years now. This would be a sign that I mean, unless everything's completely changed and we no longer a business cycle or anything else to be a sign that it's coming here in 2025. And to your point, I think um I think that's starting to bear itself out. I I want to ask you about policies from President Trump and his Treasury Secretary Scott Passan. Do you So obviously they want interest rates down. They want yields lower. They want to refinance the debt. That's one of the goals. They haven't been able to cut the trillion dollars um that they were planning to with Doge. They they are bringing in, I think, a decent amount more in uh tax receipts from from tariffs, although that's hurting a lot of consumers and small businesses. So they are bringing in tax revenue. It's just hurting. It's, you know, the large corporations like Apple and a lot of these large tech companies are getting what exemptions. So, it's distorting the economy even further. It's not not a real free market, at least not yet with all the tariffs going down. But I want to ask if you think that President Trump and Bent are their goals, do they want a weaker dollar? Do they want a higher gold price? Do they want a higher Bitcoin price? Maybe so they have what um a higher Bitcoin price then brings in more more stable coin demand for treasuries. A weaker dollar is good for a bunch of reasons. Do do you think they want all these different things too and then even a higher gold price on top of that? At least like a gold price where it's not like deflationary what looks like gold price is crashing the dollar is getting strong. Um the the short answer to almost all of that Jason is yes. Um I do think that's the you know Trump this actually the chart of the dollar index is almost identical to what it was after he won election back in 16. and it rallied into January and 17 and then down it went and that's what happened this year as well. I do think that's what they want. I actually refer back to that forecast I wrote in late December last year and and I we might have I don't know I just remember talking about this when I was getting interviewed by various places in January and February when people would say well what's one off-the-wall thing that's in there that that you know might surprise people and I and I remember telling people I said there's a line in there that I said you know by the end of by the December FOMC meeting um there's going to be actual discussion maybe even some questions about whether yield yield curve control is on the horizon. Now you go back a year ago, no wasn't anybody talking about that. In fact, it was, hey, look, that policy didn't work in Japan and that kind of stuff. We are actively moving in that direction. Jason, I think that is the story of 2026, not necessarily this year, but this all ties in with the gold price, you said, and Trump higher gold price and Bitcoin and everything else. Um, the signs are there. They're they're I really believe they're telling you what's coming if you connect all the dots and what's eventually coming. Remember that as I mentioned earlier this Besson has talked about melding the hand and glove of Fed and Treasury together because they got to somehow manage 37 trillion in debt right that's going to be 39 trillion a year from now if not more than that and you know 42 trillion two years from now >> and that's what declining demand for treasury bonds too because the normal buyers in the past of the last couple decades the largest buyers what were Japan and China and they're not net buyers now. >> Right. Right. And so, and they can't have rates go to 8% because we're already, you know, by the time we wrap up this fiscal year next month, we're going to be about 1.1 trillion in net interest expense. And that's at what, 3%. So, they can't have it go to six and have that thing go to 2.2 trillion a year or 3.3 trillion a year. So, that's why I say it's coming. When they talk about putting Fed and Treasury working together, that's because eventually it's just going to be one of these. It's like, remember the London gold pool, Jason? Remember that? You know, >> well, I've read about it. I wasn't alive then. I was 196. Okay. I was two when it broke up, but I've had to learn about it, too. But it basically what it worked, these eight countries pledged a bunch of physical gold in London. Whenever the price moved above 35, they dumped some gold and pushed the price down. If it moved below 35, they'd buy it back. All to create this stable $35 uh you know, where where it was pegged. Um yield curve control be the same thing. Uh the the >> the London gold pool blew up though, right? because they ran out of physical metal to manipulate the gold price. >> Exactly. They they couldn't do it any longer. You're right. And the pressure and the demand just eventually pushed away and they didn't have the metal anymore. So, and that's why obviously Nixon closed the gold window because if you hadn't, God, by what 70 1978, US would not have any gold left. We' already gone from 25,000 tons to 8,000 tons. Anyway, I digress. What's gonna happen is the >> do you think then the do you think there was an old book about 10 years ago by Jim Rickers called the new case for gold and he said that eventually things would get to this point with US government finances and yield curve control where they would want a higher gold price in a weaker dollar and then they would start defending a gold price uh to try to keep it in a trading range say at like uh 3500 or 4,000 or something. Do you think that that's kind of the game plan now? >> I I I don't know about the price thing. I'm not sure they can control anymore. Um but I do think yield curve control is coming where and it it in its simplest form it's something like we're going to lower the short end to one you know 150 basis points you we're going to cut three points off of it from here and then and we're not going to allow rates to go higher like they did last year with that 50 basis point cut in September when the you know long end sold off and so it becomes uh the treasury becomes the buyer of last resort. the Treasury will buy all, you know, everything above, it's like a Fed put. Anything above 3% on a 10-year or 4% on the long bond, we are buyers at that level. Like, like I said, like at the London Gold Pool. If it goes below there, we're not going to do anything and naturally everything's fine. Maybe that's all it takes. Like remember when they announced they were going to be buying like municipal bonds and corporate bonds with all the alphabet soup that came out in March of 2020 and then they didn't do it for like a year because they didn't have to. just simply saying that they were going to do it put a bid under uh the corporate bond market. And so maybe that's what they would hope yield curve would control announcement would do initially. You know, we don't have to, you know, if anything over under 3% of the 10-year note, we don't have to worry about it. And that inspires enough buying that people are like, well, hell's bells. Fed's got my back. But I think that's what's coming. Uh and again, to me, that I mean, this is what the Fed has done before. History has this example. When we got debt to GDP where it was a where it is now after World War II, the Fed did yield curve control back then in the late 40s into the mid-50s. And I they're going to do it again to essentially lock in negative real interest rates to pay off to yesterday's debt with cheaper dollars of tomorrow. All of this is a fantastic stew for owning physical precious metals, gold and silver, and for higher prices for both. And that ended the uh financial repression that you're talking about in the ' 40s post World War II that led in the 60s and 70s to worsen worse stagflation until Paul Vulkar came in and caused a mutiny on Wall Street by continually raising interest rates above the real inflation rate. So, and there's no they can't do that now. mathematically it would bankrupt the US government to keep >> well and and and it's in a different world you know I mean coming out of World War II you had the Marshall plan the US had the only really functioning manufacturing sector in the whole world so you could grow your way out of the problem with yield curve control and everything else from the 40s and the 50s you can't do that now but you'll I mean we don't have we don't we can't do that however you can read that between the lines of what Besson and Trump are saying now remember The Besson's message and Trump's message when he got elected was, "Oh, we're going to balance the budget because we're going to cut out so much fraud and waste and Elon's going to do this and he's going to cut out $2 trillion." No, no, it's going to be more like $1 trillion. No, no, it's going to be more like hundred billion dollars and then Elon's gone. And and so now the message is, well, we're going to grow our way out of it. Bessent just yesterday was using those terms. We're going to grow our we're going to grow faster than the than the debt and the deficit grows, right? Good luck. Then all so you mentioned mope. Our listeners might not be familiar with this. Is that that is that management of perception economics? >> Yeah, that's the old Jim Sinclair term. Yeah. >> Okay. So that's where like the policies might change. The government's going to You mentioned uh the Alphabet Soup program to unfreeze the credit markets. They didn't actually have to go buy a lot of that corporate debt, the municipal bonds. They just issued a press release and magically within what a week or two the credit markets unfroze because the government issued a press release saying we will buy those bonds. And so the bankers and the other people said okay fine. The institutional investors said okay fine if the government's going to step in we'll get back to somewhat normal credit conditions then >> right and that's what they'll be hoping in at least in the initial stages of this yield curve control. they they may not have to you maybe they'll just have the bond market a level they're comfortable with like I I just pick 3% of the 10-year and 4% in the long bond I whatever um and maybe again institutional investors uh foreign governments foreign central banks like you said knowing that the government's got your back you know because what's your risk you buy a 10-year note at 3% you're going to get your three you know you buy 100 whatever however many factor of those things but it's just called $100,000 you're going to get or $3,000 a year for 10 years, then you're going to get your $100,000 back. That's how that works. The problem is, of course, inflation and everything else. And if yields rise in between, yeah, you're going to get your $100,000 back in the end, but the price the value of your bond might go to 70 cents on the dollar in between, and that's going to negatively impact your balance sheet like what the Fed has now and everything else. So if you know the Fed's going to have your back and they're not going to let rates go above 3%, then you will buy at 3% as well because you know that the stability of the price of the asset, you know, everything and all of that. So everything I just said. So anyway, >> I'm not comfortable owning government bonds for you mentioned the real inflation rate. I mean like you look at how the uh US Treasury yields and the the bond bull market was for 40 years. What from Paul Vulker raising interest rates that high up until about 2020. So about 40 years of a government bond bull market in US treasuries. I mean I think we're in a long-term government bond bear market now. Even if there's what yield curve control or financial repression, I'm not comfortable buying and holding any of these government bonds. I think like the S&P 500, gold, Bitcoin, I think all these assets, any inflation hedges will outperform, especially with uh Dbased currencies will outperform those government bonds >> 100%. That's for you. That's for me. That's listening. But these big institutions, the money market funds, you know, money market funds, they don't want to see if they've got anything longer or government bond funds, you know, have duration of four, five, seven years average or something like that. They don't want pressure on their NAV, right? So, they love they love that sort of thing. You and I, no, we're we're more interested in this kind of crackup boom of the Austrian phase, right? Where it's all anything's being done. It's all hands on deck to keep the plates spinning. Man, I'm mixing my metaphors. uh it must be late in the day. Um but the idea is we, you, me, everybody listening, we have to position ourselves to make sure our investments do better than the underlying inflation rate. And that's, you know, what the crackup boom is all about. You got to make sure you own those things where all this cash gets created, where it flows into so that you you are having net real positive returns. So, you used to do a podcast with Eric Sprout and you guys would talk about like junior mining stocks to speculate and you were a little early a couple years ago. There was still a bare market. Are you starting to look at some speculating in some of these junior miners cuz uh aren't they able to raise capital now to go out and do drilling at gold prices and silver prices and copper prices at these current levels? I am I'm so fortunate in doing what I do that I've I've met some amazing people that I would never in a million years I never in a million years would be able to call Eric Sprout a friend, you know, or have his number and my cell phone, that kind of just is amazing. And we had a lot of fun back then. He's just gotten older and doesn't have the time anymore. And his wife had been sick until she passed away last year. Very sick. And so u anyway um that as it goes to the junior minors. Yeah. Then we got into that period from 20 to 24 where things really were I mean the gold price was hanging in there but there was just no money at all. I just talked to somebody yesterday uh who was at Rick Rules thing down in um Bokeh in July and he said there are all kinds of mining companies there that were all just flush with cash that are getting over subscriptions to private placements. Yeah, we tried to raise 10, we were able to raise 20, which you know, not necessarily good for the shareholder, but good for the company. So, yeah, I think that the interest is coming back to the space, for the investor. I, you know, again, I keep referring back to my macro cast. I was just trying to pound the table for people coming out of last year, and it has worked this year, even though the GDX is up whatever 65% year to date, which is fantastic. Um, you you you you're really hurting yourself as you're just passive. If you're willing to do the work and uh find somebody that can do the work for you, whatever, read their work. There are unbelievable growth stories out there. Um there are companies that are their margins, if they keep the cost low in gold, are $2,500 an ounce. And they're just it's a license to print cash. And we haven't yet seen the exploration companies take off. You know, it's some that I've owned for a long time. God, if you'd have told me a couple years ago when I first started buying them that by the summer of 2025, we'd be looking at $3,300 gold. I thought, "Oh my god, these mines now are also now economical and all that stuff, but it hasn't happened yet." And we're waiting for all that to kind of start to trickle down, you know, a little more rather than just the Canadian companies, you know, that that buy these private placements. we start getting some US private equity, you know, and stuff like that that's looking, you know, and seeing the opportunities there, then we'll really start seeing the the real baby ones, the micro caps, the expiration companies start take off. They haven't yet, but there's still a lot of money to be made as generalist investors come to the party and realize that, wow, this gold price is here to stay. And wow, I can't believe the balance sheets now of some of these major miners and how much cash you're making quarter over quarter compared to, you know, some of the mag seven ones that have these all this, you know, growth stock money chasing them, but they don't necessarily make a lot of money either, right? So, you know, >> especially with relatively low oil prices and and gasoline and diesel prices because it's fairly stable. So, you have like good fairly predictable profit margins. I think New Pneumont Mining they were only projected to make under 700 billion uh excuse me 700 I said billion 700 million excuse me for Q2 in free cash flow and they they beat the numbers enormously they uh beat it by I think over a billion dollars. So they had 1.7 billion of free cash flow for this past quarter and it was only projected about 650 million by the Wall Street analyst. A huge beat. You mentioned GDX which is the uh gold miners ETF. I just pulled it up. The all-time high, Craig, is at $64 uh back in 2011. So, we're not far off. We've had a really big rally. I remember about four or five months ago when the GX was not that high yet. So, I mean, we've had a substantial rally now in the gold miners because of the free cash flow, the profit margins that you talked about. >> Yeah. Um I I just here's a stat. I mean, again, it's uh August the 20th today. The GDX closed at 58.29. That is the highest daily close in that ETF since December the 7th of 2011. [Laughter] >> I remember that too. I remember 2011 too. I I remember the top. >> But and if you look at the chart of that thing again, it's you know changed over the years and all that kind of stuff. But if you go back uh and look at a like a monthly chart of it, there's a massive what we call a head and shoulder top on there where it goes up, it forms like a you know like a silhouette. A shoulder and then a head and then a second shoulder and it's almost perfect. The shoulders are at 55, the head's at 65. Took a while to blast through 55. Took about three or four months for it to get above there and then it did. um once it gets above like you said 64 or whatever and we're talking new all-time highs be interesting to see what happens now. I mean look at gold once gold got above 2000 and then pulled back tested that level for support and once it broke out in 1 of March of last year I mean it's almost doubled. I mean it was 1,800 this at this point two years ago. And so once you get in that alltime, you know, new all-time high category, I mean, it's like like silver. I mean, I I don't think I think next year is going to be the year for silver, you know, lay a nice base, maybe get into the 40s at some point, maybe here in the late third quarter, early fourth. But if I'm right about yield curve control and Trump putting in, you know, some uber doubbish person at the Fed and everything that's going to go with that, I think next year is going to be a big year for silver. And everyone's it's going to get to 48 and everyone's like, "Okay, you know, oh, it can't get through that level." And it it probably won't on its first try. But boy, if it starts if it does or when it does and it starts trading into I mean people are going to freak out and there's going to be a rush, you know, this momentum chasing rush to get into it. And look, I'm well positioned at ahead of time. I know you are too. But all these things are coming. If I'm right and all the signs point to me connecting these dots, right, we're going to have a crazy year next year. >> Well, one of my top in uh companies, my largest holding, Santorm Gold, was bought by Royal Gold. So that deal looks like they have the shareholder votes that's going to go through. But I expect more of those types of mergers and acquisitions especially if there's a pullback. So you were talking about potentially with the head and shoulders pattern of correction if there is say for some of these uh uh juniors that have a good project or a producer let's say like an Artemis gold that just went into production there with a lowcost gold mine in Canada that has scalable. If some of these shares were to drop 20 30% Craig I could see a larger company wanting to come in and try to buy them up for pennies on the dollar. I could see a lot of mergers and acquisition cuz you said the larger companies are flushed with cash and they do not have a lot of debt >> and they've been talking about some of them just issuing a cash dividend. You know, they're already buying back stocks or paying a regular dividend just like a you know, here's $2 to all of our shareholders uh because they they think it things are too expensive or the projects that they might want to buy maybe aren't necessarily near where their existing projects are. I mean, there's all kinds of things that factor into that, but that type of M&A is I almost certainly coming because these big companies are flushed with cash. And you'll see it, Jason, you can see it in the trading right now. Um, after all the earnings of the second quarter, a lot of the big miners went down for about a week uh because gold was going down. And I think there's still this disbelief that gold's at 3,300. You know, the generalist investor thinks, well, it's got to go back down. It's got to go to its 200 day moving average. It's going to fall back to 2500. Remember, like Croup was saying that a couple months ago. And so, here we are now halfway through the quarter, right? And this third quarter is halfway done. Gold is still higher right now. It's averaging this quarter higher than what the average price for most of these miners were selling at in the second quarter. And so every time gold goes down and people start doubting that like Tuesday, yesterday the 19th, then the miners get dumped and the GDX goes down 3%. Well, then today gold comes right back and the miners go straight back up because everyone's like, well, yeah, maybe they are going to hold in there for another quarter. So, it's a it's a fascinating time uh to be fiddling uh with the mining shares. That's for sure. But if you you got to do your own homework. I mean, it's worked out for you so far this year. If you're just a passive investor, if you're just like, well, I don't know anything about these, so I'll just buy the ETF. But if you were if you did do your homework and instead of just buying the ETF, you bought Ken Ross or Agico Eagle or, you know, any anyone there are multiples that have doubled and you think, well, yeah, but I still made 60%. Well, yeah, but you also could have doubled if you just put a little effort into it. And that's what that would be the advice I'd have to everybody listening. But if there is mergers and acquisition, I mean some of the acquiring company, their upside is going to get capped because Royal Gold, they had a high valuation. They didn't have a lot of growth in their pipeline. They only had the Great Bear Royalty in Canada with the Santorm Gold acquisition once that goes through uh over the next like couple quarters, they're going to have an enormous amount of growth. Although Santorm Gold shareholders are very, very grumpy at this point because, you know, a lot of their upsides capped. They're not getting like all those uh royalties and streams that are under construction right now that are going to cash flow. >> Yeah. again, specific stories like that for sure. Um, but at the same time, you know, if you're a midsize mid-tier company, which you know, many that would that have the very low all-in sustaining costs are, then you know what? Hey, if they're going to keep driving our valuation higher because we're just making a ton of money every single day, week, month, and quarter, then it is what it is, you know? And if that means that some acquiring company's going to have to pay more for them, fine. If nobody wants to acquire them, well, you know what? Pretty soon we're not going to be a mid- major anymore. We're going to be a major. And that that works out to your advantage as well. >> Yeah. I think that's what Inquonox Gold does plan with Ross Batty. They've been doing so many acquisitions the last couple years. So, he's bought a ton of assets now. He bought them too quickly. I'd say they they loaded a ton of debt on the balance sheet. They've had some operational issues, but I think that was the goal. >> I I want to thank you so much for your time today, Craig. Um, if my listeners want to check out your podcast or your newsletter, how do they do so? >> It's all right there on the website. um tfmetalsreport.com coming up on our 15th year. It's not an expensive website. Uh I made a decision early on. I wasn't, you know, going to run one of these newsletters. It's like $100 a month or anything like that. I mean, it's $15 a month and we do more than just talk the precious metals. This is all you if you're going to be following gold, you got to all this stuff you and I have been talking about. I mean, you got to macro policy and monetary policy and politics and geopolitics, all this stuff. So, we try to cover it every day. kind of everybody's eyes and ears for the world with a post in the morning and a podcast in the afternoon. A lot of interaction between so that's it.
Craig Hemke: Trump & Bessent Want A Weaker Dollar, US Treasury Yields Down, Gold & Bitcoin Higher?
Summary
Transcript
Hi everyone, this is Jason Ber of Wall Street from Main Street. Welcome back for another Wall Street from Main Street podcast interview. Today's special guest is a returning guest. He worked in the financial industry for many years and he's been covering the gold and silver markets I think since like 2009 or 2010, over a decade now. We're recording this interview on Wednesday, August 20th, 2025. The dollar gold price, it wasn't in correction mode. It started to rally a little bit after the Fed's Jackson Hole meeting even though the Federal Reserve Bank what there was two dissenting votes and they're fighting about rate cuts. The gold price is still almost at $3,350 when recording this interview. And the silver price is just under 38 at $3783. Craig Humpkey of TF Metals Report, thank you for joining me again. >> Jason, it's always been a a pleasure to visit with you in the past. I look forward to doing it again here. So Craig, I want to get your thoughts on inflation because a lot of our listeners probably aren't aware of this, but the M2 money supply numbers and we're hearing what the headlines, the CPIO inflation is not a problem, but the M2 money supply numbers are at or near an all-time high from the what the um fractional reserve banking, the commercial banks, and then the S&P 500 is what at an all-time high. So I mean, there are signs that we do have inflation, right? >> Well, yeah, by traditional measures as well. Um I I don't know. I you know it's there's this kind of I guess this thought and I don't know maybe it's correct that lower interest rates uh spark inflation and maybe somehow indirectly if they spark economic growth you could say you know that that ultimately causes inflation but I don't I don't think the Fed funds rate and if they trim it you know as is getting bandied about as Trump is demanding is necessarily inflationary if they now if they go turn on the QE machine like they did in CO and they print $5 trillion and just hand it out willy-nilly to everybody, you know, without proof that they need to qualify for the PPP and all that stuff. Well, then all that money slashes out there and gets in the and grows the money supply. And we obviously saw what happened in the nontransitory inflation of 21 and 22. But I'm I don't know. I've always thought that I you can even make the case that lower rates are somewhat deflationary with the amount, you know, with the demographics we have and the amount of people that are, you know, living off their savings and that sort of thing. You start cutting your CD rates and your money market funds from four and a half down to two and a half, they don't spend as much. You know, maybe they don't go out as much, maybe they don't uh have all the same purchases that they have. So, you know, anyway, I don't even know if that relates to your question, Jason, but there's this notion out there that somehow lower interest rates are would be inflationary, and it it's to me, I've never really thought that. >> Well, the CPI, um, the Trump administration, people that are referencing that inflation is not a problem right now. They're setting what the low oil prices, low gasoline prices. So, they just keep repeating that ad nauseium. But look at the S&P 500. I mean, there's a lot of asset price inflation. Look at the the price Bitcoin which has rallied a lot the last 6 months the price of gold in a lot of different currencies the S&P 500 it's just a lot of evidence Craig that um even though they're saying inflation is not a problem that they're still creating what the Cantalon effect and the monetary inflation what it's going into all these different asset prices. So also looks like with the M2's money supply growth do you think that the commercial banks are they buying treasury bonds do you think that that's why the 10ear US Treasury yield is down about 50 basis points recently? Yeah, somebody's got to be buying that stuff, right, Jason? I think that's ultimately uh the biggest problem that the country has. And I think that's ultimately what you've heard Bessant in the last couple weeks talk about, you know, and Trump too, reforming the Fed, kind of melding together the Fed and the Treasury to work kind of handin glove, which is what I kind of thought was going to happen, you know, when they stuck Mother Yellen in charge of the Treasury during the Biden administration. Well, here's a sign that, you know, the two are going to be working together. And so, but this is a little more overt in their language of that because I think that ultimately that's the problem. And I think that's such a problem that they're going to be addressing uh as soon as Powell's out uh or maybe even sooner is how are you going to get the Fed and the Treasury to work together to try to not so much, you know, the original mandate of, you know, controlled inflation and full employment um to fund the debt and the deficit and the ongoing operations of the federal government. Um that's going to be the to me that's going to be the biggest story of next year and it's going to be extraordinarily bullish situation for the precious metals. >> Well, the Fed failed at its goals of full employment, right? Because look at the Bureau of Labor Statistics. The jobs numbers weren't good and now Trump's blaming on a Biden administration uh appointee there at the Bureau of Labor Statistics. Uh there was even uh a lot of evidence coming out that I think 30%, it was up about 3x the amount of fake data that they just used for modeling. So like the um PhD economist what they used to collect a good amount of some of the data at like Target and Walmart and grocery stores and Costco stuff like that. So they used to actually go and have uh send people out to collect some of the data but um over the last like three or four years I guess they they stopped doing that and it's down enormously. So they're just guessing at the data >> I'm sorry I didn't mean to interrupt you Jason. I'm just agreeing. Yes. >> Well I I was just Yeah. So it looks like this the government economic data whether it's the uh inflation data the jobs reports the CPI what it's you think it doesn't even matter which political parties in office is going to be heavily spun or outright propaganda at this point >> oh boy um I could talk about this for hours uh Jason one yes this is what we call mope and spin you got to get the data reported in a certain way to create the environment of the perception of low inflation so that people are willing to buy US treasuries at 3 or 4% % not demand 8 CPI grossly under estimated since 1992 when Alan Greenspan said we got to change how we calculated otherwise we're never going to be able to keep up with all the cost of living adjustments uh in social security and all the divine benefit plans and everything else uh that you referenced that the uh within the CPI the amount of just absolute guesswork has tripled uh over the last couple of years and then then there's just folly in it uh within the CPI they claim that health insurance costs have fallen by 20% over the last 5 years. I mean, I don't know about you, Jay. I mean, Jason, is that true for you? It's not true for me. >> No, they count Medicare and Medicaid reimbursements, though. So, I mean, like they were using what for owner's equivalent rent instead of mortgage payments because uh everyone I speak to, Craig, their mortgage payments are up. So, Right. Right. >> Yeah. Or people my age or younger, they can't even qualify for a mortgage even if they have a pretty good job, >> which is why they're all you get seeing apartments being built everywhere. So that that's one thing. The the jobs report, you mentioned I've been doing this for 15 years. I in the very early stages of TF Metals report, we called it the BLS BS because it's garbage. I mean, seriously, how could anyone how could you I mean, if you stop and think, this last GOBS report was reported on August the 1st at 8:30 in the morning, and we actually have been convinced that somehow that's an accurate total for how many jobs the US created in July. I mean, maybe you could say, well, you know, for April, we've had 90 days to do some surveys and do here here's where we were 90 days ago. But no, they we they've actually convinced everybody that on the first Friday of the month, regardless if it's the first or the second or the third day, that they can tell you an accurate number. It's garbage. It's seasonal adjustments. It's what's called birth death adjustments, which is a historical average of how many businesses were started and lost that month over the last 20 years. There's these surveys that they claim to make and all. I mean, it's it's a joke. And so, um, it was not surprising at all when, uh, we had these two massive downward revisions, uh, for the whatever the May and the June report and you're going to get and then the what the July report came in only 70,000. It's probably going to get revised lower again. We had a thing last year where what month was it last year? About September maybe when about this time of the year I suppose when they came out with a cumulative adjustment. uh uh and re revision for the year and they just took away 840,000 jobs just say well you know we were off by almost a million by the time it was all said and done >> but it helped it tried to help for the election though right for November 2024 along with the Fed cutting what interest rates two months before Jerome Pal cut interest rates 50 basis points a couple months before the election which normally they don't do either >> right and so I I just I thought it was great uh somebody has to be accountable and changes have to be made because this data needs to be accurate You can't just roll out a number on the first Friday of the month, get the market reaction you want, and then come back 30 some odd days later and say, "Ah, no, that number. Yeah, we overestimated it by 6x." Well, wait, wait a second. And I think that's what Powell was or what Trump was so frustrated with because he's trying to get Powell to cut rates. And if Powell had known that the US had only created 20,000 jobs a month in May and June instead of 120,000, maybe he would have cut in July. And so I I think that was part of his frustration as well. But the data has to whether it's BLSBS, whether it's a CPI, they've got and which is cranked out both of those numbers by the Bureau of Labor Statistics, same people. They've got to get a handle on an accurate portrayal of that because again what you're going down the road of, you know, communist China at this point where nobody believes anything and you could actually then go into the whole thing Jason about this is forth turning kind of stuff right >> where nobody believes anything about anything. >> Well, the Soviet Union also had an econ economic propaganda department. I've interviewed Yuri Maltzv who's done speeches at the Misus Institute at their conferences and he was really high up in their economic propaganda department. He defected like 30 something years ago and he was saying that the Soviet Union kept like three sets of books and hardly anyone saw like the real set the real account um economic data numbers. >> That's how they roll, brother. No doubt. And and again, I don't think again the media has portrayed it and you know which way they lean that Trump just didn't like that suddenly his great economy was only cranking out 20,000 jobs. No, what he didn't like was he he wants rate cuts and Powell, you know, sat there 2 days earlier. I mean, we just got the FOMC minutes uh today from the July meeting, 3 weeks later. So, it was Wednesday the whatever 30th of July, and the BLSBS came out on August the 1st. So just two days earlier, Powell sat there in his press conference and talked about, "Oh, no, no, I'm not going to be bullied and we're not going to be cutting rates because the economy is, you know, strong and the job market is robust and all these things." And it was all bogus. I mean, none of that was even true. And I think that's all part of why Trump reacted the way he did. And I'm I'm glad, like I said, I've been railing against uh the the jobs report for 15 years and how they do it. And I hope some changes are coming. Now, if you're a nonG7 country, a central banker there or a BRICS central banker, are you looking like at this phony economic data? You're looking at the interest payments on the debt. Even though Doge said they were going to cut a trillion dollars, they cut barely a hundred billion. Uh I'm in favor of, you know, exposing the fraud, waste, fraud, corruption, abuse to sunlight. But, I mean, they didn't cut anything close to a trillion dollars. I And we both knew before we started uh recording, we both said there was no way they were going to be able to cut a trillion. But if you're a foreign central banker outside the G7 bricks country, are you looking at all this stuff, the spending out of DC, the policies, the sanctions, the interest payments on the debt, and you're just saying, you know what, I I can't buy treasuries anymore. We already have enough treasuries. We have to start hedging with gold tonnage. Do you think that that's like the game plan now? >> Well, that's I think that's been going on for multiple years now. I mean, we're on uh track for at least another uh a big year in central bank gold buying. I mean, what was it? More than a couple hundred metric tons each of the last three years. I think it's 700 over the last three three years. May not be that same run rate this year, but they're still buying. And that creates a kind of an underlying bid for physical gold. That keeps that's all part of why gold's been rallying the way it has. Regarding the other central bankers in the world though, uh Jason, man, even just this week, the blowouts at the long end of JGB, Japanese 30-year bonds or the guilt market in the UK or even the their longerterm German boons, um they're all getting selling and they're all getting blown out. And I think a the global central bankers are probably more worried about their own specific situation and what they're going to do and and you know, this could ripple down. Okay. So they may not they may end up being sellers of treasuries. What if the Bank of Japan, you know, needs cash and so they sell treasuries, they get dollars and then they sell dollars to have yen to prop up, you know, whatever, buy their own, you know, bonds, you know, to try to y, you know, control yields or provide liquidity in their markets. We are, we're getting into a pretty dicey situation. And it's also a rather seasonally a rather dicey time of the year, too. So anyway, to answer your question, I don't know. I I think the the various uh central bankers around the world are probably a little more worried about what's going on for them in their own country than they are what, you know, what the ramifications are what we're doing here. >> Well, I talked about currency swap lines on your podcast. Uh I think like at the end of last year, early this year, I can't remember. It was like seven or eight months ago. >> A lot of people forget that after uh within like a year and a half after the repo crisis in 2019 because there was a lot of secret bailouts and other problems behind the scenes with the repo crisis. It was way larger than the trillion dollars that Fed added to its balance sheet. I mean, a lot of it was covered up and swept under the rug. Craig, the Fed added, I think, a permanent repo facility because the St. Louis Fed was writing research reports on this. I think 2021 they added two types of permanent repo facilities. I don't know if any central banks have tapped it yet. I don't think they have, but I think you brought up a a prime case where Japan potentially instead of the uh the US like having to deal with Japan dumping all their treasuries where they post their treasuries as collateral and the Fed at the permanent repo facility for foreign central banks just said like, "Oh, well, what types of currency swap lines or dollar loans do you need? Just don't sell to treasuries because you'll put problem uh pressure on the yields." I it's funny you mention this uh because I I record a podcast every day on my site and I just had wrapped this up maybe an hour ago and one of the items that I mentioned usually I'm like here's some of the stuff I saw during the day and then we update the charts you know and gets you ready for the next day. Anyway, one of the items I I I mentioned today was something I pulled off of Twitter and it was somebody that noticed that this morning uh before the market open someone, we don't know who, had hit that Fed standing repo facility. Now, they hit it for only $200 million, which is a lot of money to you and me, but you know, in the grand scheme of things, it's not a lot. But it's not, you know, this isn't month end or quarter end or anything like that, but somebody needed $200 million in cash this morning. A bank, I say somebody, it's usually a bank or whatever. Um, so that facility is still there and it's still getting used. And um, uh, brother, you're smart to have uh, caught on with that. And it's I think you're smart to keep watching it too cuz again if we start getting into liquidity issues whether I mean again it could be somebody maybe it's somebody with credit default swaps on UK long debt you know something like who knows but that thing got hit just today. Well, the problem is the banks themselves, right? Because of fractional reserve banking because a lot of these uh large commercial banks, whether it's JP Morgan or European banks or Japanese banks, they're run like hedge funds. So, they they're way overleveraged and you start to see you said overnight repo. You start to see this stuff in the repo markets overnight with the borrowing or banks, what the inter lending, bank inter lending. So, if there's a spike in the yields there, that means then there's problems with one of the counterparties. One of the banks is having immense problems. So if you start to see that one of these facilities were tapped for tens of billions of dollars or I mean there's supposedly like over a hundred billion dollars of losses marked market for Bank of America what their older US treasury bonds but I mean they're not going to go they're not going to go bankrupt. Like I see one of the newsletter writers out there is marketing that like Bank of America is the best short and it's like are they actually going to allow Bank of America to fail for hundreds over hundred billion dollars in bond losses? Well, and and again that this thing like today $200 million is a drop in a bucket, but you don't know maybe that's a margin call essentially. I'm use that term loosely that somebody is overlevered in some other credit default swap bet or something and they need some cash just to you know they come to the shillock to get floated for a day or two, right? Um, yeah, it's a sign. It you're wise to, like I said, to have pointed out that the standing repo facilities that are still there haven't been closed. And, you know, on the on the flip side of that, too, Jason, is that uh reverse repo facility that when I get to uh in 2022 or three, like $2.6 trillion had been parked in that thing. The essentially the excess reserves parked at the Fed. That thing's down to 25 billion now. So, it's going from 2.5 trillion to 25 billion. It's n down 99%. Uh to the extent that was used as like a slush fund or readily available cash for the banks to step up, you know, at auction when when their mother Yellen was floating more bills or whatever over the last couple of years, that money's gone, too. So, we might be getting despite the M2 numbers and everything, we might be getting into a a real liquidity squeeze. Um, again, look at those global bond markets. And if that's the case, you know, again, I'm not trying to say Trump is right, but you know, he keeps talking about what does he call him? Too late Jerome Powell or whatever. Um, it might turn out that Yeah. I mean, well, >> I think I think the macro situation is way worse. So, I I think a lot of these other countries, Europe, emerging markets, China, I think a lot of these other countries are already in a recession. So, I think that's something that a a lot of uh people here in the United States haven't quite figured out yet. >> Well, and I I would I can't remember the last time we did one of these, Jason, but it was probably earlier this year, and it was probably me out there squawking and promoting my my uh annual forecast, which I mean, I you'll remember I I always tell people I write that thing usually between Christmas and New Year. I've been collecting ideas all through December and I write it for me. I don't write it like, hey, you can buy this for $20 or something. I I write it for me so that I can go back at the end of the year and try to figure out, okay, what what what did I I invariably I get a lot of stuff wrong. What was I thinking at the time? How, you know, what can I learn, you know, from all of this as we, you know, begin this year and move into another. And you know this those are all issues uh that I was writing about last year and you talk about uh moving into a recession. I I call the report the inversion reversion because history has shown it's not when the US yield curve inverts that the recession starts. That that's just telling you what's coming. You get these charts from the St. Louis branch or the Federal Reserve, the Fred charts, they'll show you that actually the recession begins after the yield curve uninverts and gets positive sloping again. Well, that happened in about November of last year. So, I was like, well, I mean, I've been expecting recession here in the US for a couple years now. This would be a sign that I mean, unless everything's completely changed and we no longer a business cycle or anything else to be a sign that it's coming here in 2025. And to your point, I think um I think that's starting to bear itself out. I I want to ask you about policies from President Trump and his Treasury Secretary Scott Passan. Do you So obviously they want interest rates down. They want yields lower. They want to refinance the debt. That's one of the goals. They haven't been able to cut the trillion dollars um that they were planning to with Doge. They they are bringing in, I think, a decent amount more in uh tax receipts from from tariffs, although that's hurting a lot of consumers and small businesses. So they are bringing in tax revenue. It's just hurting. It's, you know, the large corporations like Apple and a lot of these large tech companies are getting what exemptions. So, it's distorting the economy even further. It's not not a real free market, at least not yet with all the tariffs going down. But I want to ask if you think that President Trump and Bent are their goals, do they want a weaker dollar? Do they want a higher gold price? Do they want a higher Bitcoin price? Maybe so they have what um a higher Bitcoin price then brings in more more stable coin demand for treasuries. A weaker dollar is good for a bunch of reasons. Do do you think they want all these different things too and then even a higher gold price on top of that? At least like a gold price where it's not like deflationary what looks like gold price is crashing the dollar is getting strong. Um the the short answer to almost all of that Jason is yes. Um I do think that's the you know Trump this actually the chart of the dollar index is almost identical to what it was after he won election back in 16. and it rallied into January and 17 and then down it went and that's what happened this year as well. I do think that's what they want. I actually refer back to that forecast I wrote in late December last year and and I we might have I don't know I just remember talking about this when I was getting interviewed by various places in January and February when people would say well what's one off-the-wall thing that's in there that that you know might surprise people and I and I remember telling people I said there's a line in there that I said you know by the end of by the December FOMC meeting um there's going to be actual discussion maybe even some questions about whether yield yield curve control is on the horizon. Now you go back a year ago, no wasn't anybody talking about that. In fact, it was, hey, look, that policy didn't work in Japan and that kind of stuff. We are actively moving in that direction. Jason, I think that is the story of 2026, not necessarily this year, but this all ties in with the gold price, you said, and Trump higher gold price and Bitcoin and everything else. Um, the signs are there. They're they're I really believe they're telling you what's coming if you connect all the dots and what's eventually coming. Remember that as I mentioned earlier this Besson has talked about melding the hand and glove of Fed and Treasury together because they got to somehow manage 37 trillion in debt right that's going to be 39 trillion a year from now if not more than that and you know 42 trillion two years from now >> and that's what declining demand for treasury bonds too because the normal buyers in the past of the last couple decades the largest buyers what were Japan and China and they're not net buyers now. >> Right. Right. And so, and they can't have rates go to 8% because we're already, you know, by the time we wrap up this fiscal year next month, we're going to be about 1.1 trillion in net interest expense. And that's at what, 3%. So, they can't have it go to six and have that thing go to 2.2 trillion a year or 3.3 trillion a year. So, that's why I say it's coming. When they talk about putting Fed and Treasury working together, that's because eventually it's just going to be one of these. It's like, remember the London gold pool, Jason? Remember that? You know, >> well, I've read about it. I wasn't alive then. I was 196. Okay. I was two when it broke up, but I've had to learn about it, too. But it basically what it worked, these eight countries pledged a bunch of physical gold in London. Whenever the price moved above 35, they dumped some gold and pushed the price down. If it moved below 35, they'd buy it back. All to create this stable $35 uh you know, where where it was pegged. Um yield curve control be the same thing. Uh the the >> the London gold pool blew up though, right? because they ran out of physical metal to manipulate the gold price. >> Exactly. They they couldn't do it any longer. You're right. And the pressure and the demand just eventually pushed away and they didn't have the metal anymore. So, and that's why obviously Nixon closed the gold window because if you hadn't, God, by what 70 1978, US would not have any gold left. We' already gone from 25,000 tons to 8,000 tons. Anyway, I digress. What's gonna happen is the >> do you think then the do you think there was an old book about 10 years ago by Jim Rickers called the new case for gold and he said that eventually things would get to this point with US government finances and yield curve control where they would want a higher gold price in a weaker dollar and then they would start defending a gold price uh to try to keep it in a trading range say at like uh 3500 or 4,000 or something. Do you think that that's kind of the game plan now? >> I I I don't know about the price thing. I'm not sure they can control anymore. Um but I do think yield curve control is coming where and it it in its simplest form it's something like we're going to lower the short end to one you know 150 basis points you we're going to cut three points off of it from here and then and we're not going to allow rates to go higher like they did last year with that 50 basis point cut in September when the you know long end sold off and so it becomes uh the treasury becomes the buyer of last resort. the Treasury will buy all, you know, everything above, it's like a Fed put. Anything above 3% on a 10-year or 4% on the long bond, we are buyers at that level. Like, like I said, like at the London Gold Pool. If it goes below there, we're not going to do anything and naturally everything's fine. Maybe that's all it takes. Like remember when they announced they were going to be buying like municipal bonds and corporate bonds with all the alphabet soup that came out in March of 2020 and then they didn't do it for like a year because they didn't have to. just simply saying that they were going to do it put a bid under uh the corporate bond market. And so maybe that's what they would hope yield curve would control announcement would do initially. You know, we don't have to, you know, if anything over under 3% of the 10-year note, we don't have to worry about it. And that inspires enough buying that people are like, well, hell's bells. Fed's got my back. But I think that's what's coming. Uh and again, to me, that I mean, this is what the Fed has done before. History has this example. When we got debt to GDP where it was a where it is now after World War II, the Fed did yield curve control back then in the late 40s into the mid-50s. And I they're going to do it again to essentially lock in negative real interest rates to pay off to yesterday's debt with cheaper dollars of tomorrow. All of this is a fantastic stew for owning physical precious metals, gold and silver, and for higher prices for both. And that ended the uh financial repression that you're talking about in the ' 40s post World War II that led in the 60s and 70s to worsen worse stagflation until Paul Vulkar came in and caused a mutiny on Wall Street by continually raising interest rates above the real inflation rate. So, and there's no they can't do that now. mathematically it would bankrupt the US government to keep >> well and and and it's in a different world you know I mean coming out of World War II you had the Marshall plan the US had the only really functioning manufacturing sector in the whole world so you could grow your way out of the problem with yield curve control and everything else from the 40s and the 50s you can't do that now but you'll I mean we don't have we don't we can't do that however you can read that between the lines of what Besson and Trump are saying now remember The Besson's message and Trump's message when he got elected was, "Oh, we're going to balance the budget because we're going to cut out so much fraud and waste and Elon's going to do this and he's going to cut out $2 trillion." No, no, it's going to be more like $1 trillion. No, no, it's going to be more like hundred billion dollars and then Elon's gone. And and so now the message is, well, we're going to grow our way out of it. Bessent just yesterday was using those terms. We're going to grow our we're going to grow faster than the than the debt and the deficit grows, right? Good luck. Then all so you mentioned mope. Our listeners might not be familiar with this. Is that that is that management of perception economics? >> Yeah, that's the old Jim Sinclair term. Yeah. >> Okay. So that's where like the policies might change. The government's going to You mentioned uh the Alphabet Soup program to unfreeze the credit markets. They didn't actually have to go buy a lot of that corporate debt, the municipal bonds. They just issued a press release and magically within what a week or two the credit markets unfroze because the government issued a press release saying we will buy those bonds. And so the bankers and the other people said okay fine. The institutional investors said okay fine if the government's going to step in we'll get back to somewhat normal credit conditions then >> right and that's what they'll be hoping in at least in the initial stages of this yield curve control. they they may not have to you maybe they'll just have the bond market a level they're comfortable with like I I just pick 3% of the 10-year and 4% in the long bond I whatever um and maybe again institutional investors uh foreign governments foreign central banks like you said knowing that the government's got your back you know because what's your risk you buy a 10-year note at 3% you're going to get your three you know you buy 100 whatever however many factor of those things but it's just called $100,000 you're going to get or $3,000 a year for 10 years, then you're going to get your $100,000 back. That's how that works. The problem is, of course, inflation and everything else. And if yields rise in between, yeah, you're going to get your $100,000 back in the end, but the price the value of your bond might go to 70 cents on the dollar in between, and that's going to negatively impact your balance sheet like what the Fed has now and everything else. So if you know the Fed's going to have your back and they're not going to let rates go above 3%, then you will buy at 3% as well because you know that the stability of the price of the asset, you know, everything and all of that. So everything I just said. So anyway, >> I'm not comfortable owning government bonds for you mentioned the real inflation rate. I mean like you look at how the uh US Treasury yields and the the bond bull market was for 40 years. What from Paul Vulker raising interest rates that high up until about 2020. So about 40 years of a government bond bull market in US treasuries. I mean I think we're in a long-term government bond bear market now. Even if there's what yield curve control or financial repression, I'm not comfortable buying and holding any of these government bonds. I think like the S&P 500, gold, Bitcoin, I think all these assets, any inflation hedges will outperform, especially with uh Dbased currencies will outperform those government bonds >> 100%. That's for you. That's for me. That's listening. But these big institutions, the money market funds, you know, money market funds, they don't want to see if they've got anything longer or government bond funds, you know, have duration of four, five, seven years average or something like that. They don't want pressure on their NAV, right? So, they love they love that sort of thing. You and I, no, we're we're more interested in this kind of crackup boom of the Austrian phase, right? Where it's all anything's being done. It's all hands on deck to keep the plates spinning. Man, I'm mixing my metaphors. uh it must be late in the day. Um but the idea is we, you, me, everybody listening, we have to position ourselves to make sure our investments do better than the underlying inflation rate. And that's, you know, what the crackup boom is all about. You got to make sure you own those things where all this cash gets created, where it flows into so that you you are having net real positive returns. So, you used to do a podcast with Eric Sprout and you guys would talk about like junior mining stocks to speculate and you were a little early a couple years ago. There was still a bare market. Are you starting to look at some speculating in some of these junior miners cuz uh aren't they able to raise capital now to go out and do drilling at gold prices and silver prices and copper prices at these current levels? I am I'm so fortunate in doing what I do that I've I've met some amazing people that I would never in a million years I never in a million years would be able to call Eric Sprout a friend, you know, or have his number and my cell phone, that kind of just is amazing. And we had a lot of fun back then. He's just gotten older and doesn't have the time anymore. And his wife had been sick until she passed away last year. Very sick. And so u anyway um that as it goes to the junior minors. Yeah. Then we got into that period from 20 to 24 where things really were I mean the gold price was hanging in there but there was just no money at all. I just talked to somebody yesterday uh who was at Rick Rules thing down in um Bokeh in July and he said there are all kinds of mining companies there that were all just flush with cash that are getting over subscriptions to private placements. Yeah, we tried to raise 10, we were able to raise 20, which you know, not necessarily good for the shareholder, but good for the company. So, yeah, I think that the interest is coming back to the space, for the investor. I, you know, again, I keep referring back to my macro cast. I was just trying to pound the table for people coming out of last year, and it has worked this year, even though the GDX is up whatever 65% year to date, which is fantastic. Um, you you you you're really hurting yourself as you're just passive. If you're willing to do the work and uh find somebody that can do the work for you, whatever, read their work. There are unbelievable growth stories out there. Um there are companies that are their margins, if they keep the cost low in gold, are $2,500 an ounce. And they're just it's a license to print cash. And we haven't yet seen the exploration companies take off. You know, it's some that I've owned for a long time. God, if you'd have told me a couple years ago when I first started buying them that by the summer of 2025, we'd be looking at $3,300 gold. I thought, "Oh my god, these mines now are also now economical and all that stuff, but it hasn't happened yet." And we're waiting for all that to kind of start to trickle down, you know, a little more rather than just the Canadian companies, you know, that that buy these private placements. we start getting some US private equity, you know, and stuff like that that's looking, you know, and seeing the opportunities there, then we'll really start seeing the the real baby ones, the micro caps, the expiration companies start take off. They haven't yet, but there's still a lot of money to be made as generalist investors come to the party and realize that, wow, this gold price is here to stay. And wow, I can't believe the balance sheets now of some of these major miners and how much cash you're making quarter over quarter compared to, you know, some of the mag seven ones that have these all this, you know, growth stock money chasing them, but they don't necessarily make a lot of money either, right? So, you know, >> especially with relatively low oil prices and and gasoline and diesel prices because it's fairly stable. So, you have like good fairly predictable profit margins. I think New Pneumont Mining they were only projected to make under 700 billion uh excuse me 700 I said billion 700 million excuse me for Q2 in free cash flow and they they beat the numbers enormously they uh beat it by I think over a billion dollars. So they had 1.7 billion of free cash flow for this past quarter and it was only projected about 650 million by the Wall Street analyst. A huge beat. You mentioned GDX which is the uh gold miners ETF. I just pulled it up. The all-time high, Craig, is at $64 uh back in 2011. So, we're not far off. We've had a really big rally. I remember about four or five months ago when the GX was not that high yet. So, I mean, we've had a substantial rally now in the gold miners because of the free cash flow, the profit margins that you talked about. >> Yeah. Um I I just here's a stat. I mean, again, it's uh August the 20th today. The GDX closed at 58.29. That is the highest daily close in that ETF since December the 7th of 2011. [Laughter] >> I remember that too. I remember 2011 too. I I remember the top. >> But and if you look at the chart of that thing again, it's you know changed over the years and all that kind of stuff. But if you go back uh and look at a like a monthly chart of it, there's a massive what we call a head and shoulder top on there where it goes up, it forms like a you know like a silhouette. A shoulder and then a head and then a second shoulder and it's almost perfect. The shoulders are at 55, the head's at 65. Took a while to blast through 55. Took about three or four months for it to get above there and then it did. um once it gets above like you said 64 or whatever and we're talking new all-time highs be interesting to see what happens now. I mean look at gold once gold got above 2000 and then pulled back tested that level for support and once it broke out in 1 of March of last year I mean it's almost doubled. I mean it was 1,800 this at this point two years ago. And so once you get in that alltime, you know, new all-time high category, I mean, it's like like silver. I mean, I I don't think I think next year is going to be the year for silver, you know, lay a nice base, maybe get into the 40s at some point, maybe here in the late third quarter, early fourth. But if I'm right about yield curve control and Trump putting in, you know, some uber doubbish person at the Fed and everything that's going to go with that, I think next year is going to be a big year for silver. And everyone's it's going to get to 48 and everyone's like, "Okay, you know, oh, it can't get through that level." And it it probably won't on its first try. But boy, if it starts if it does or when it does and it starts trading into I mean people are going to freak out and there's going to be a rush, you know, this momentum chasing rush to get into it. And look, I'm well positioned at ahead of time. I know you are too. But all these things are coming. If I'm right and all the signs point to me connecting these dots, right, we're going to have a crazy year next year. >> Well, one of my top in uh companies, my largest holding, Santorm Gold, was bought by Royal Gold. So that deal looks like they have the shareholder votes that's going to go through. But I expect more of those types of mergers and acquisitions especially if there's a pullback. So you were talking about potentially with the head and shoulders pattern of correction if there is say for some of these uh uh juniors that have a good project or a producer let's say like an Artemis gold that just went into production there with a lowcost gold mine in Canada that has scalable. If some of these shares were to drop 20 30% Craig I could see a larger company wanting to come in and try to buy them up for pennies on the dollar. I could see a lot of mergers and acquisition cuz you said the larger companies are flushed with cash and they do not have a lot of debt >> and they've been talking about some of them just issuing a cash dividend. You know, they're already buying back stocks or paying a regular dividend just like a you know, here's $2 to all of our shareholders uh because they they think it things are too expensive or the projects that they might want to buy maybe aren't necessarily near where their existing projects are. I mean, there's all kinds of things that factor into that, but that type of M&A is I almost certainly coming because these big companies are flushed with cash. And you'll see it, Jason, you can see it in the trading right now. Um, after all the earnings of the second quarter, a lot of the big miners went down for about a week uh because gold was going down. And I think there's still this disbelief that gold's at 3,300. You know, the generalist investor thinks, well, it's got to go back down. It's got to go to its 200 day moving average. It's going to fall back to 2500. Remember, like Croup was saying that a couple months ago. And so, here we are now halfway through the quarter, right? And this third quarter is halfway done. Gold is still higher right now. It's averaging this quarter higher than what the average price for most of these miners were selling at in the second quarter. And so every time gold goes down and people start doubting that like Tuesday, yesterday the 19th, then the miners get dumped and the GDX goes down 3%. Well, then today gold comes right back and the miners go straight back up because everyone's like, well, yeah, maybe they are going to hold in there for another quarter. So, it's a it's a fascinating time uh to be fiddling uh with the mining shares. That's for sure. But if you you got to do your own homework. I mean, it's worked out for you so far this year. If you're just a passive investor, if you're just like, well, I don't know anything about these, so I'll just buy the ETF. But if you were if you did do your homework and instead of just buying the ETF, you bought Ken Ross or Agico Eagle or, you know, any anyone there are multiples that have doubled and you think, well, yeah, but I still made 60%. Well, yeah, but you also could have doubled if you just put a little effort into it. And that's what that would be the advice I'd have to everybody listening. But if there is mergers and acquisition, I mean some of the acquiring company, their upside is going to get capped because Royal Gold, they had a high valuation. They didn't have a lot of growth in their pipeline. They only had the Great Bear Royalty in Canada with the Santorm Gold acquisition once that goes through uh over the next like couple quarters, they're going to have an enormous amount of growth. Although Santorm Gold shareholders are very, very grumpy at this point because, you know, a lot of their upsides capped. They're not getting like all those uh royalties and streams that are under construction right now that are going to cash flow. >> Yeah. again, specific stories like that for sure. Um, but at the same time, you know, if you're a midsize mid-tier company, which you know, many that would that have the very low all-in sustaining costs are, then you know what? Hey, if they're going to keep driving our valuation higher because we're just making a ton of money every single day, week, month, and quarter, then it is what it is, you know? And if that means that some acquiring company's going to have to pay more for them, fine. If nobody wants to acquire them, well, you know what? Pretty soon we're not going to be a mid- major anymore. We're going to be a major. And that that works out to your advantage as well. >> Yeah. I think that's what Inquonox Gold does plan with Ross Batty. They've been doing so many acquisitions the last couple years. So, he's bought a ton of assets now. He bought them too quickly. I'd say they they loaded a ton of debt on the balance sheet. They've had some operational issues, but I think that was the goal. >> I I want to thank you so much for your time today, Craig. Um, if my listeners want to check out your podcast or your newsletter, how do they do so? >> It's all right there on the website. um tfmetalsreport.com coming up on our 15th year. It's not an expensive website. Uh I made a decision early on. I wasn't, you know, going to run one of these newsletters. It's like $100 a month or anything like that. I mean, it's $15 a month and we do more than just talk the precious metals. This is all you if you're going to be following gold, you got to all this stuff you and I have been talking about. I mean, you got to macro policy and monetary policy and politics and geopolitics, all this stuff. So, we try to cover it every day. kind of everybody's eyes and ears for the world with a post in the morning and a podcast in the afternoon. A lot of interaction between so that's it.