The Next Global Crisis Starts in Bonds | Alex Krainer
Summary
Precious Metals: Bullish outlook on gold and silver with the trend still intact, supported by geopolitical escalation and long-cycle dynamics.
Risk Management: Advocates systematic trend-following hedging for commodity producers to mitigate extreme price events rather than all-or-nothing approaches.
Short Sovereign Bonds: Expects a brutal bear market in long-duration European government bonds (Bunds, Gilts) and weakness across Western sovereign debt.
Developed FX Weakness: Projects substantial declines in the euro, pound, Canadian dollar, and yen, with the U.S. comparatively better positioned.
AI Sector: Skeptical of sustainability due to credit-fueled chip buying, heavy energy needs, and Chinese AI cost advantages challenging U.S. players.
Commodity Volatility: Notes that 20–50% corrections are common and unfold over weeks to months, enabling hedgers to adjust exposure as trends reverse.
Companies Mentioned: AngloGold Ashanti (AU) and Barrick Gold (GOLD) cited as hedging case studies; Nvidia (NVDA) and OpenAI referenced in AI demand and financing context.
Transcript
Special coverage from the Deutsche Gold Messa is brought to you by First Majestic Silver. There's no substitute for silver. Hello and welcome back to Frankfurt. Welcome back to the Deutsche Gold Mesa and welcome back to the Sore Financially YouTube channel. My name is Kai Hoffman. I'm the Edj Mining guy OnX and of course your host of this channel and I'm really excited to welcome one of our keynotes here in Frankfurt, Alex Kina, one of my favorite geo geopolitical commentators. Alex, it's so great to have you here in Frankfurt. Thank you so much for joining us. >> Thank you. you. It's a pleasure. Uh very good conference. I'm enjoying it. So, it's good to be here. >> I really appreciate it. It's, you know, keynotes like you make it really worth it and really add a lot of extra value uh to our audience as well. Um why do commodity prices matter? It was sort of the the title of of your of your presentation. And let's dissect that a little bit. So, it's it's an interesting topic. Um which angle should we approach it from? >> Well, you see this is this is something we could talk about for many hours. So, it's it's very hard to condense it in in like a bumper sticker thing, >> but you know, I put it a word play on my keynote, commodity prices matter because, you know, black lives matter been like a popular slogan lately. >> But basically, you know, uh this is something that I've been um that that's been like a focal point of my professional career for probably the last uh 30 years. uh when I started working in oil trading, my job actually become became uh fixing the risk to our group from exposure to oil prices. So as I dove deeper and deeper into it, I realized well not only is this a risk, this is the whole business revolves around the price. Uh this is something that in the professional life many people either don't recognize and some of them will just very um they they reject it and they they they think like no we do operations we mine we we transport oil we ext extract oil and we sell it we make our margin and that's that. But the the the more you explore the subject, the more you realize that actually the price is everything. Let's say uh two years ago you could have you you could have sold an ounce of gold for about $2,000. Today it's over $4,000. It's not at all the same. And if you look at the um financial news, you find that sometimes companies sustain multi-billion dollar losses >> because they sold at they they sold their production in advance at a low price and then as the price went in their favor they couldn't benefit from it. Or conversely they are not hedged at all. Right? And then when the price corrects and you know in commodity markets a correction of 20 30 even 50% happens very regularly. Uh so then they s sustain multi-billion dollar losses because they didn't hedge their exposure. So you know managing the risk from price exposure can literally make or break a business and it does. It it it regularly does. So that that is a message that I I I've been trying to convey both to investors and to the industry >> because it's a problem matter that's uh uh let's say it's complex to solve but it can be solved at least to the extent that you're you're you're making yourself more resilient, less vulnerable to severe uh risk events and then you know you can give your business uh extra longevity and and even a difficult to copy competitive advantage over your rivals. So that can that that is really uh I I I think I won't exaggerate if I say it's the most important thing to focus on especially for commodity related businesses. It's it's interesting because you brought us a couple examples like Anglo Gold Ashanti they had a terrible price hedge or would you call it a collar or so they they forward sold gold at $450 an ounce and they made huge losses cuz gold price ran >> correct >> and they lost like $2.4 $4 billion. I have, you know, the presentation here in front of me. That that's massive. Like >> that's huge. >> Should companies in general be hedged? Like let's take it very theoretical. Like let's take it a step back actually. Should they use hedges at all? >> Uh well, okay. So that's that's the whole thing. Uh should companies hedge or should they not hedge? >> That's like the crudest approach to it where you have to answer that question either or. uh in most cases by far uh the management in in such companies makes this kind of a crude thing and I've seen we've seen some of them in this conference where they say oh we're not hedged at all now they look very smart because the prices of gold and silver has gone have gone their way and so they've they've benefited from that from that but then you know you have uh you you you mentioned Angla gold Ashanti uh the following year uh gold made a correction of $500 per ounce from 1,700 to 1200 and Barry Gold lost 8.6 billion in one quarter because they didn't hedge. >> So, you know, uh up until that correction, they looked very smart and then they looked very stupid the next quarter. So, that happens all the time. And I think that the proper question should be, hey, why don't we hedge when prices are moving against us, but we hedge when they're going in our favor? No, >> we don't hedge when they're going in our favor. we do hedge when they're going against us. Now, at this stage, everybody will say, well, you're talking nonsense because this can't be done. This is like you're talking magic, right? >> It's not exactly like that. So, um you can do it. You just have to take a very systematic approach to risk management. And you have to recognize that you know if you run an operative business you're you're a minor you're you're oil producer or any type of commodity uh basically the company will select for skills that serve the operating business. So it will be production uh marketing some form of engineering finance these time type of things. When we're talking about hedging, uh, you're usually talking about speculation, which unfortunately is inevitable and operative companies do not cultivate these types of skills. So you have to make uh you have to really take focus on this problem matter and then practically design a business process to incorporate with the rest of your operations that will basically try to reduce uh the risk from exposure to oil price. Not in a sense, you know, it's not magic, but basically you're So here's a few simple facts. Far and away the biggest risk to to your business if you're in a in commodities is the risk of extreme price events. >> Okay. So that's normal. Everybody can see that. Second of uh thing to recognize is that extreme risk events do not happen overnight. >> Invariably they span a period of let's say a few weeks or a few months or sometimes even a few years. You know, when you see the price of oil going up and and silver, you see that it's been it's been happening for over over span of years. These extreme price events always manifest as trends. And so if you apply systematic trend following to your hedging, then you can basically identify periods of time when the prices are going in your favor. And then depending on your risk appetite, you can decide, okay, we're going to underhedge >> until we read that the trend has reversed. And then when you're uh when you're uh or you you might decide to not hedge at all. >> Yeah. And then when the start price starts moving uh against you uh of course you're not going to identify that at the very peak but at some point after that uh at that point you can begin to hedge a portion of your production or all of your production. And so in that way over let's say long stretches of time you can actually gain an advantage that's based strictly on the movements of of uh the price of your of your commodity. Let's look at the gold price today. Like we're at 4,100 roughly, but we were at 4,400 before as well. So, how do you trade or how do you hedge around those? Like how do you factor that in? Like the trend is probably still intact. >> Yes. >> Right. But you have these massive this price spike for example. How do you account for that? >> Well, okay. So, obviously wouldn't you wouldn't be able to trade it uh so that you lock in the 4,400 the the peak price. But let's say you could recognize that the price is in an uptrend. Mhm. >> So at that point you can say okay this is work. If you're a gold producer you say this is working in our favor let's keep at least a portion of our production unhedged because it's it's good for our top line and uh you will be able to recognize a reversal of that trend at some point which will not is not going to be at the top but usually trend reversals uh span also a space of a couple of weeks. So you'll get on the chart you get a peak and then a correction >> and then maybe the next peak if it's if it's lower than the previous peak it tells you that the that the buying pressure is no longer there and then if the next correction goes lower than the uh than the previous trough then you see like okay this market may be ready to reverse and at that point you might make a decision okay let's now hedge a chunk of for production because maybe this is going to be low. And usually when commodities markets go into uh substantial corrections, those can last a long time. So it can be two years, it can be three years, but usually when that happens, you're not going to go to the next >> to the next peak immediately. So it's it's safe to assume that for a period of time hedging a part of your uh production is is a better bet than leaving it all unhedged. >> So applying that to the gold price today, should we leave should we stay unhedged or should we start hedging now? >> Let's say that at the moment uh you would you would still want to be unhedged because the trend is intact. >> And it only depends on so now we've seen a correction for from uh 4,400 went to about 3980 or something. >> Yeah. like something like that. Then it went back up to 4,200. Now we're back uh in uh it's going back down. But we have to see, you know, because >> the chart, sorry to jump in, but the chart pattern you just mapped out explaining the previous point. Yeah, that reminded me of what I'm looking at in the gold price chart today. That's why I was asking. >> But, you know, at this point, it may not be a reversal. It may be only a consolidation. So, you know, you might get like a price consolidation to pick up into the next next leg of the bull market. So, you wouldn't want to go hedge your yourself for a long chunk of time at these levels. But let's say if this uh consolidation turns out to be a correction or a bare market for a year or two or three, >> then at at that point you might want to start putting in your hedges. You're not going to sell your production at 4,400. You have to make peace with that. >> But if you've locked in 4,000 or 300 8 3,800 or something at these levels, if the price ends up going much much lower, you've you've done a good a good thing. Yeah, >> 100%. Um, let's see if we can combine geopolitics a little bit with commodity prices like because like how much can we use commodity prices, gold, oil in particular, for forecasting geopolitical events and other things as well? I think you can, but only uh in terms of very long-term cycles. You know, if you if you if you look at the geopolitical equation today in the world and you determine that we're probably going into some kind of a an escalation of global conflicts, then it's justified to come to the conclusion that prices of gold and silver are probably going to go much much higher in the future. But the nature of commodity markets is such that they can in the short time term and the short term could be a year or two or three they might even have a very substantial correction. So we've seen that you know when when when crude oil was already in an in an uptrend of sorts uh we've seen easily corrections of 30 40 50%. And then you have uh you have events uh like in 2020 we had the pandemic and the oil price crashed by um 76%. Well you know reportedly it was it went negative. So that you know percentage has become meaningless. >> Uh all the commodities had a very very brutal correction. >> So this these are events that you cannot predict. >> Yeah. But even then again you know like if you look at the price chest charts of all this you see that the correction occurred over a period of of two or three months. It didn't happen overnight. >> So usually you can recognize that and you if you if you apply uh certain let's say trend following methods to it you will be able to catch the the move and adjust your exposure accordingly. >> What are some of the most exciting trends you're following right now? I that excite you personally away from gold and silver and maybe oil unless they of course are the most exciting trends for you right now. But uh >> um okay so in addition to gold and silver which are definitely in a really nice bull trends at the moment uh I am anticipating a very powerful bare market trend for European bonds >> you know guilts uh euro bonds uh maybe to a lesser extent American bonds but u basically um most if not all of the western uh powers uh government bonds So I think that there's a we've already had what they called um uh bonds armaged. Yeah, I think the zero hedge labeled it bonds Armageddon that went from 2021 until 2023 more or less >> where you had a huge correction in bond prices. In fact, on the American bond market, it was the biggest correction in 236 years of price history that we have. This has consolidated now over the last uh two years or so. Uh prices have been fluctuating almost horizontally, but there's no buying power and there's no good news on the horizon. So I expect, you know, European bonds, the bond, German bond, they're already looking very bearish. Um, so does guilt, the British government bonds. American bonds appear to have reversed the bare market a little bit. So they're they're heading higher at the moment. But I think that over the next couple of years we might see uh a very brutal bare market in bonds and then by extension in uh in uh in the currencies the the euro uh the um the pound uh Canadian dollar, Japanese yen. >> So I think that all of those currencies are going to see very very substantial uh losses. And I, you know, then when you put geopolitics into that mix >> and then you ask yourself how how big can this event be, I think it can be as big as as uh the collapse of the Vhimmer Republic in 2022 23 and at that point we saw the German imperial bond practically go to zero. So I think that one of the themes for investors to explore today could be shorting the uh the sovereign bonds >> all duration bonds. Is there an indicator you >> I would I would say the longer term but yeah the longer term particularly yes >> that's an interesting >> because the the longer term you go the more volatile you are. So you get you get the bigger bigger and then you know when when when crisis hits hit governments tend to shift their finances to short short short-term uh debt. >> That's what the US is doing. >> Exactly. >> It's pretty much exclusively these >> days. Yeah. Yeah. You you didn't mention the dollar when you mentioned the currencies that might get debased. You mentioned the Euro Canadian dollar. I I think the dollar is in the same basket, but I I think the United States uh have a much much better maneuvering space uh to to handle the crisis. Uh we see that the Trump administration has designs on uh on on Canada. >> Mhm. >> On Greenland. Uh it looks like Venezuela is in the in the crosshairs as well. only I can't tell whether Trump's big show around Venezuela is fake or or genuine because we saw we saw the same thing with Iran. We had the big gathering of forces making it look like they were going to go for a regime change war against Iran and then nothing happened. And now we're seeing the same thing with Venezuela. Why am I saying this? Because Venezuela was never on the radar. So in the uh in the campaign uh discussions there was you know Trump was open about Canada. He was open about Greenland. He was never open about Venezuela. In fact he wasn't even on the radar. So, the fact that they're all of a sudden doing this because it came just out of nowhere, uh, makes me suspect that maybe it's it's like a dog and pony show like with Iran that they will maybe they're distracting attention away from something else. Uh, maybe who knows what, but I'll believe it when I see it. And I think that the risk of United States going to war against Venezuela is extremely high in the sense the risk of adverse outcomes of the war >> because Venezuela would be very difficult terrain for US military. You would need not 10 20,000 troops. You would probably need half a million. It's it's a tropical country. It could become another Vietnam for the United States. And um on the other hand, I think that places like uh Canada and Greenland could be had without a shot being fired >> just through, you know, political maneuvers against Canadian government, against uh the British government and so forth. >> And I I know that they are already doing this. We we can't say how successful they will be and how soon. Um so we'll see. Anyway, you know, if you if you bring those countries under your control politically, >> Canada, Greenland, then you own the collateral informed of their natural resource wealth, their their labor power and so forth. And thereby you're um you're relieving the pressure from the the overhang of bad bad debts in your economy because you brought new wealth into the system. So from that standpoint, I think the United States is in a better position to manage the crisis than is the United Kingdom, Japan, or European powers. And so I'm not I'm not putting any ethical, you know, I'm just I'm just stating the facts as as I as I perceive them. >> Maybe one last follow-up to that topic. So you you touched on it yesterday a little bit as well. It's just the topic of AI and it feels like the US is a AI superpower. Maybe China's got got a say in that as well, but those are the on top of mind like maybe the only AI superpowers right now. Uh is the AI and maybe tech supremacy also supporting the role of the dollar on a global basis? >> Uh I'm not sure if that supremacy is real or perceived, you know, uh is as everything in the United States there's there's a lot of there's a lot of show uh on the facade and then you know you have to ask yourself what's in the back. I think that with AI uh right now it appears that the whole theme is a little bit unsustainable. It appears that way because it uh they invested extremely heavily. You have uh open AI which is buying huge quantities of chips with money they don't have. And so you know it's like the shop is lending money to the client in order to boost their own sales. So we see Nvidia buying hund00 million dollars of >> That's what furniture st stores do. Car manufacturers do that as well. >> Yeah, exactly. But that you know like all of that can work so long as the credit cycle is expanding you know and then you know the the tide is rising and it lifts all the boats but you know if the tide pulls away there's going to be a lot of stranding boat stranded boats and I think that AI is going to be one of the first one ones of them. And then you also have the problem of energy because these things are are are draining a lot of energy from the system and the United States uh will have to invest heavily in electricity generation and they're behind that and they're particularly far behind that uh with respect to uh countries like Russia and China >> and the Chinese uh you know Chinese nuclear power plants generate electricity that's about 80% cheaper than the uh American built power plants. So, they're not competitive. And so, uh we've already seen that Chinese AI companies can underpric American ones by a huge margin and they're very successful and their AI I mean I've tested some of their AI and it's actually very good. There's I I can't say that American AI uh is better. It's at least I cannot see that and in many ways you know even in uh you know people who use AI for coding now new Chinese um coding agents are just as good as the American one and they cost next to nothing. >> It's an interesting development for sure, Alex. Like we we got to put a bow around this unfor I could chat with you for hours. You got so many interesting angles to explore. Um really appreciate you joining us here in Frankfurt. >> Thank you very much. It's a pleasure. I I'm really enjoying the conference and congratulations. You've done a great job organizing it. Thank you. >> And so if there's a if there's occasion to uh do this again in the future, absolutely match for it. >> We'll have to do a geopolitical outlook 2026. >> Oh, absolutely. At some point, right? >> Absolutely. Well, I you know, I have a I have a book coming out on Ukraine war and then uh you know that that's going to that's going to give us some uh some food for thought as well. >> What's the release date? >> Yes. >> What's the date? Awesome. Okay. No, really appreciate it. We'll definitely >> we'll we'll get you back on for that as well, but maybe we'll do a jubilical outlet 2026. I'd like that. Maybe in early January. That'd be fantastic. Absolutely. Alex, thank you so much for joining us. Really appreciate it. Everybody else, thanks so much for tuning in. Hope you enjoyed this show here from the floor of the Frankfurt Deutsche Gold Messa. Much appreciate you tuning in. I tremendously appreciate my guests here. They made all the all the effort to come out here and it means a lot to us. If you enjoyed this conversation, hit that like button and maybe join us in Frankfurt as well. I'm meeting quite a few of you here at this conference. So, thanks so much for tuning in and take care out there.
The Next Global Crisis Starts in Bonds | Alex Krainer
Summary
Transcript
Special coverage from the Deutsche Gold Messa is brought to you by First Majestic Silver. There's no substitute for silver. Hello and welcome back to Frankfurt. Welcome back to the Deutsche Gold Mesa and welcome back to the Sore Financially YouTube channel. My name is Kai Hoffman. I'm the Edj Mining guy OnX and of course your host of this channel and I'm really excited to welcome one of our keynotes here in Frankfurt, Alex Kina, one of my favorite geo geopolitical commentators. Alex, it's so great to have you here in Frankfurt. Thank you so much for joining us. >> Thank you. you. It's a pleasure. Uh very good conference. I'm enjoying it. So, it's good to be here. >> I really appreciate it. It's, you know, keynotes like you make it really worth it and really add a lot of extra value uh to our audience as well. Um why do commodity prices matter? It was sort of the the title of of your of your presentation. And let's dissect that a little bit. So, it's it's an interesting topic. Um which angle should we approach it from? >> Well, you see this is this is something we could talk about for many hours. So, it's it's very hard to condense it in in like a bumper sticker thing, >> but you know, I put it a word play on my keynote, commodity prices matter because, you know, black lives matter been like a popular slogan lately. >> But basically, you know, uh this is something that I've been um that that's been like a focal point of my professional career for probably the last uh 30 years. uh when I started working in oil trading, my job actually become became uh fixing the risk to our group from exposure to oil prices. So as I dove deeper and deeper into it, I realized well not only is this a risk, this is the whole business revolves around the price. Uh this is something that in the professional life many people either don't recognize and some of them will just very um they they reject it and they they they think like no we do operations we mine we we transport oil we ext extract oil and we sell it we make our margin and that's that. But the the the more you explore the subject, the more you realize that actually the price is everything. Let's say uh two years ago you could have you you could have sold an ounce of gold for about $2,000. Today it's over $4,000. It's not at all the same. And if you look at the um financial news, you find that sometimes companies sustain multi-billion dollar losses >> because they sold at they they sold their production in advance at a low price and then as the price went in their favor they couldn't benefit from it. Or conversely they are not hedged at all. Right? And then when the price corrects and you know in commodity markets a correction of 20 30 even 50% happens very regularly. Uh so then they s sustain multi-billion dollar losses because they didn't hedge their exposure. So you know managing the risk from price exposure can literally make or break a business and it does. It it it regularly does. So that that is a message that I I I've been trying to convey both to investors and to the industry >> because it's a problem matter that's uh uh let's say it's complex to solve but it can be solved at least to the extent that you're you're you're making yourself more resilient, less vulnerable to severe uh risk events and then you know you can give your business uh extra longevity and and even a difficult to copy competitive advantage over your rivals. So that can that that is really uh I I I think I won't exaggerate if I say it's the most important thing to focus on especially for commodity related businesses. It's it's interesting because you brought us a couple examples like Anglo Gold Ashanti they had a terrible price hedge or would you call it a collar or so they they forward sold gold at $450 an ounce and they made huge losses cuz gold price ran >> correct >> and they lost like $2.4 $4 billion. I have, you know, the presentation here in front of me. That that's massive. Like >> that's huge. >> Should companies in general be hedged? Like let's take it very theoretical. Like let's take it a step back actually. Should they use hedges at all? >> Uh well, okay. So that's that's the whole thing. Uh should companies hedge or should they not hedge? >> That's like the crudest approach to it where you have to answer that question either or. uh in most cases by far uh the management in in such companies makes this kind of a crude thing and I've seen we've seen some of them in this conference where they say oh we're not hedged at all now they look very smart because the prices of gold and silver has gone have gone their way and so they've they've benefited from that from that but then you know you have uh you you you mentioned Angla gold Ashanti uh the following year uh gold made a correction of $500 per ounce from 1,700 to 1200 and Barry Gold lost 8.6 billion in one quarter because they didn't hedge. >> So, you know, uh up until that correction, they looked very smart and then they looked very stupid the next quarter. So, that happens all the time. And I think that the proper question should be, hey, why don't we hedge when prices are moving against us, but we hedge when they're going in our favor? No, >> we don't hedge when they're going in our favor. we do hedge when they're going against us. Now, at this stage, everybody will say, well, you're talking nonsense because this can't be done. This is like you're talking magic, right? >> It's not exactly like that. So, um you can do it. You just have to take a very systematic approach to risk management. And you have to recognize that you know if you run an operative business you're you're a minor you're you're oil producer or any type of commodity uh basically the company will select for skills that serve the operating business. So it will be production uh marketing some form of engineering finance these time type of things. When we're talking about hedging, uh, you're usually talking about speculation, which unfortunately is inevitable and operative companies do not cultivate these types of skills. So you have to make uh you have to really take focus on this problem matter and then practically design a business process to incorporate with the rest of your operations that will basically try to reduce uh the risk from exposure to oil price. Not in a sense, you know, it's not magic, but basically you're So here's a few simple facts. Far and away the biggest risk to to your business if you're in a in commodities is the risk of extreme price events. >> Okay. So that's normal. Everybody can see that. Second of uh thing to recognize is that extreme risk events do not happen overnight. >> Invariably they span a period of let's say a few weeks or a few months or sometimes even a few years. You know, when you see the price of oil going up and and silver, you see that it's been it's been happening for over over span of years. These extreme price events always manifest as trends. And so if you apply systematic trend following to your hedging, then you can basically identify periods of time when the prices are going in your favor. And then depending on your risk appetite, you can decide, okay, we're going to underhedge >> until we read that the trend has reversed. And then when you're uh when you're uh or you you might decide to not hedge at all. >> Yeah. And then when the start price starts moving uh against you uh of course you're not going to identify that at the very peak but at some point after that uh at that point you can begin to hedge a portion of your production or all of your production. And so in that way over let's say long stretches of time you can actually gain an advantage that's based strictly on the movements of of uh the price of your of your commodity. Let's look at the gold price today. Like we're at 4,100 roughly, but we were at 4,400 before as well. So, how do you trade or how do you hedge around those? Like how do you factor that in? Like the trend is probably still intact. >> Yes. >> Right. But you have these massive this price spike for example. How do you account for that? >> Well, okay. So, obviously wouldn't you wouldn't be able to trade it uh so that you lock in the 4,400 the the peak price. But let's say you could recognize that the price is in an uptrend. Mhm. >> So at that point you can say okay this is work. If you're a gold producer you say this is working in our favor let's keep at least a portion of our production unhedged because it's it's good for our top line and uh you will be able to recognize a reversal of that trend at some point which will not is not going to be at the top but usually trend reversals uh span also a space of a couple of weeks. So you'll get on the chart you get a peak and then a correction >> and then maybe the next peak if it's if it's lower than the previous peak it tells you that the that the buying pressure is no longer there and then if the next correction goes lower than the uh than the previous trough then you see like okay this market may be ready to reverse and at that point you might make a decision okay let's now hedge a chunk of for production because maybe this is going to be low. And usually when commodities markets go into uh substantial corrections, those can last a long time. So it can be two years, it can be three years, but usually when that happens, you're not going to go to the next >> to the next peak immediately. So it's it's safe to assume that for a period of time hedging a part of your uh production is is a better bet than leaving it all unhedged. >> So applying that to the gold price today, should we leave should we stay unhedged or should we start hedging now? >> Let's say that at the moment uh you would you would still want to be unhedged because the trend is intact. >> And it only depends on so now we've seen a correction for from uh 4,400 went to about 3980 or something. >> Yeah. like something like that. Then it went back up to 4,200. Now we're back uh in uh it's going back down. But we have to see, you know, because >> the chart, sorry to jump in, but the chart pattern you just mapped out explaining the previous point. Yeah, that reminded me of what I'm looking at in the gold price chart today. That's why I was asking. >> But, you know, at this point, it may not be a reversal. It may be only a consolidation. So, you know, you might get like a price consolidation to pick up into the next next leg of the bull market. So, you wouldn't want to go hedge your yourself for a long chunk of time at these levels. But let's say if this uh consolidation turns out to be a correction or a bare market for a year or two or three, >> then at at that point you might want to start putting in your hedges. You're not going to sell your production at 4,400. You have to make peace with that. >> But if you've locked in 4,000 or 300 8 3,800 or something at these levels, if the price ends up going much much lower, you've you've done a good a good thing. Yeah, >> 100%. Um, let's see if we can combine geopolitics a little bit with commodity prices like because like how much can we use commodity prices, gold, oil in particular, for forecasting geopolitical events and other things as well? I think you can, but only uh in terms of very long-term cycles. You know, if you if you if you look at the geopolitical equation today in the world and you determine that we're probably going into some kind of a an escalation of global conflicts, then it's justified to come to the conclusion that prices of gold and silver are probably going to go much much higher in the future. But the nature of commodity markets is such that they can in the short time term and the short term could be a year or two or three they might even have a very substantial correction. So we've seen that you know when when when crude oil was already in an in an uptrend of sorts uh we've seen easily corrections of 30 40 50%. And then you have uh you have events uh like in 2020 we had the pandemic and the oil price crashed by um 76%. Well you know reportedly it was it went negative. So that you know percentage has become meaningless. >> Uh all the commodities had a very very brutal correction. >> So this these are events that you cannot predict. >> Yeah. But even then again you know like if you look at the price chest charts of all this you see that the correction occurred over a period of of two or three months. It didn't happen overnight. >> So usually you can recognize that and you if you if you apply uh certain let's say trend following methods to it you will be able to catch the the move and adjust your exposure accordingly. >> What are some of the most exciting trends you're following right now? I that excite you personally away from gold and silver and maybe oil unless they of course are the most exciting trends for you right now. But uh >> um okay so in addition to gold and silver which are definitely in a really nice bull trends at the moment uh I am anticipating a very powerful bare market trend for European bonds >> you know guilts uh euro bonds uh maybe to a lesser extent American bonds but u basically um most if not all of the western uh powers uh government bonds So I think that there's a we've already had what they called um uh bonds armaged. Yeah, I think the zero hedge labeled it bonds Armageddon that went from 2021 until 2023 more or less >> where you had a huge correction in bond prices. In fact, on the American bond market, it was the biggest correction in 236 years of price history that we have. This has consolidated now over the last uh two years or so. Uh prices have been fluctuating almost horizontally, but there's no buying power and there's no good news on the horizon. So I expect, you know, European bonds, the bond, German bond, they're already looking very bearish. Um, so does guilt, the British government bonds. American bonds appear to have reversed the bare market a little bit. So they're they're heading higher at the moment. But I think that over the next couple of years we might see uh a very brutal bare market in bonds and then by extension in uh in uh in the currencies the the euro uh the um the pound uh Canadian dollar, Japanese yen. >> So I think that all of those currencies are going to see very very substantial uh losses. And I, you know, then when you put geopolitics into that mix >> and then you ask yourself how how big can this event be, I think it can be as big as as uh the collapse of the Vhimmer Republic in 2022 23 and at that point we saw the German imperial bond practically go to zero. So I think that one of the themes for investors to explore today could be shorting the uh the sovereign bonds >> all duration bonds. Is there an indicator you >> I would I would say the longer term but yeah the longer term particularly yes >> that's an interesting >> because the the longer term you go the more volatile you are. So you get you get the bigger bigger and then you know when when when crisis hits hit governments tend to shift their finances to short short short-term uh debt. >> That's what the US is doing. >> Exactly. >> It's pretty much exclusively these >> days. Yeah. Yeah. You you didn't mention the dollar when you mentioned the currencies that might get debased. You mentioned the Euro Canadian dollar. I I think the dollar is in the same basket, but I I think the United States uh have a much much better maneuvering space uh to to handle the crisis. Uh we see that the Trump administration has designs on uh on on Canada. >> Mhm. >> On Greenland. Uh it looks like Venezuela is in the in the crosshairs as well. only I can't tell whether Trump's big show around Venezuela is fake or or genuine because we saw we saw the same thing with Iran. We had the big gathering of forces making it look like they were going to go for a regime change war against Iran and then nothing happened. And now we're seeing the same thing with Venezuela. Why am I saying this? Because Venezuela was never on the radar. So in the uh in the campaign uh discussions there was you know Trump was open about Canada. He was open about Greenland. He was never open about Venezuela. In fact he wasn't even on the radar. So, the fact that they're all of a sudden doing this because it came just out of nowhere, uh, makes me suspect that maybe it's it's like a dog and pony show like with Iran that they will maybe they're distracting attention away from something else. Uh, maybe who knows what, but I'll believe it when I see it. And I think that the risk of United States going to war against Venezuela is extremely high in the sense the risk of adverse outcomes of the war >> because Venezuela would be very difficult terrain for US military. You would need not 10 20,000 troops. You would probably need half a million. It's it's a tropical country. It could become another Vietnam for the United States. And um on the other hand, I think that places like uh Canada and Greenland could be had without a shot being fired >> just through, you know, political maneuvers against Canadian government, against uh the British government and so forth. >> And I I know that they are already doing this. We we can't say how successful they will be and how soon. Um so we'll see. Anyway, you know, if you if you bring those countries under your control politically, >> Canada, Greenland, then you own the collateral informed of their natural resource wealth, their their labor power and so forth. And thereby you're um you're relieving the pressure from the the overhang of bad bad debts in your economy because you brought new wealth into the system. So from that standpoint, I think the United States is in a better position to manage the crisis than is the United Kingdom, Japan, or European powers. And so I'm not I'm not putting any ethical, you know, I'm just I'm just stating the facts as as I as I perceive them. >> Maybe one last follow-up to that topic. So you you touched on it yesterday a little bit as well. It's just the topic of AI and it feels like the US is a AI superpower. Maybe China's got got a say in that as well, but those are the on top of mind like maybe the only AI superpowers right now. Uh is the AI and maybe tech supremacy also supporting the role of the dollar on a global basis? >> Uh I'm not sure if that supremacy is real or perceived, you know, uh is as everything in the United States there's there's a lot of there's a lot of show uh on the facade and then you know you have to ask yourself what's in the back. I think that with AI uh right now it appears that the whole theme is a little bit unsustainable. It appears that way because it uh they invested extremely heavily. You have uh open AI which is buying huge quantities of chips with money they don't have. And so you know it's like the shop is lending money to the client in order to boost their own sales. So we see Nvidia buying hund00 million dollars of >> That's what furniture st stores do. Car manufacturers do that as well. >> Yeah, exactly. But that you know like all of that can work so long as the credit cycle is expanding you know and then you know the the tide is rising and it lifts all the boats but you know if the tide pulls away there's going to be a lot of stranding boat stranded boats and I think that AI is going to be one of the first one ones of them. And then you also have the problem of energy because these things are are are draining a lot of energy from the system and the United States uh will have to invest heavily in electricity generation and they're behind that and they're particularly far behind that uh with respect to uh countries like Russia and China >> and the Chinese uh you know Chinese nuclear power plants generate electricity that's about 80% cheaper than the uh American built power plants. So, they're not competitive. And so, uh we've already seen that Chinese AI companies can underpric American ones by a huge margin and they're very successful and their AI I mean I've tested some of their AI and it's actually very good. There's I I can't say that American AI uh is better. It's at least I cannot see that and in many ways you know even in uh you know people who use AI for coding now new Chinese um coding agents are just as good as the American one and they cost next to nothing. >> It's an interesting development for sure, Alex. Like we we got to put a bow around this unfor I could chat with you for hours. You got so many interesting angles to explore. Um really appreciate you joining us here in Frankfurt. >> Thank you very much. It's a pleasure. I I'm really enjoying the conference and congratulations. You've done a great job organizing it. Thank you. >> And so if there's a if there's occasion to uh do this again in the future, absolutely match for it. >> We'll have to do a geopolitical outlook 2026. >> Oh, absolutely. At some point, right? >> Absolutely. Well, I you know, I have a I have a book coming out on Ukraine war and then uh you know that that's going to that's going to give us some uh some food for thought as well. >> What's the release date? >> Yes. >> What's the date? Awesome. Okay. No, really appreciate it. We'll definitely >> we'll we'll get you back on for that as well, but maybe we'll do a jubilical outlet 2026. I'd like that. Maybe in early January. That'd be fantastic. Absolutely. Alex, thank you so much for joining us. Really appreciate it. Everybody else, thanks so much for tuning in. Hope you enjoyed this show here from the floor of the Frankfurt Deutsche Gold Messa. Much appreciate you tuning in. I tremendously appreciate my guests here. They made all the all the effort to come out here and it means a lot to us. If you enjoyed this conversation, hit that like button and maybe join us in Frankfurt as well. I'm meeting quite a few of you here at this conference. So, thanks so much for tuning in and take care out there.