Bond Markets Are Breaking and Gold Is Telling You First | Matthew Piepenburg
Summary
Precious Metals Safe Haven: Guest argues gold and silver are surging on a global currency and credit crisis, with central bank demand and debasement driving $5,000 gold and $100 silver.
Bond Market Stress: Rising yields across the U.S., Japan, UK, and France signal eroding trust, carry trade unwinds, and broader risk to equities and currencies.
De-dollarization & Settlement: BRICS are exploring gold-backed trade settlement ratios, flanking rather than replacing the dollar and elevating gold as collateral.
COMEX/LBMA Dysfunction: Constraints on shorting, elevated lease rates, and rising physical delivery demand indicate potential failure-to-deliver risks and more honest price discovery.
Miners Opportunity: With spot well above costs and a tiny sector base, miners could see strong upside; even JPMorgan’s planned minerals fund highlights capital inflows.
Policy & Inflation: “Mouse-click money” and negative real rates prop bonds but debase currencies, making gold a long-term store of value despite expected volatility.
Portfolio Framing: Save in gold and spend in fiat; accept pullbacks in a secular bull while focusing on wealth preservation over speculation.
Transcript
[music] Kitco News on-site coverage of the Vancouver Resource Investment Conference is presented by Discovery Silver. Hey everyone, welcome back to [music] the Vancouver Resource Investment Conference 2026 here in beautiful BC. Vancouver, as you can tell by the name of the conference. Now, it is wonderful outside and it's been very interesting inside. And obviously we're dealing with those $5,000 gold price, $100 silver, but volatility has returned to the currency market. We have seen the Japanese yen surged nearly 2% in a single session, coupled with reports from the Bloomberg that the New York Fed has been conducting rate checks with major financial institutions. Now, in the world of central banking, a rate check is is rarely just a casual inquiry. It often is a warning short and it signals that the bond market is stressed and the central banks are being forced to coordinate possibly in the background. Now the question for investors obviously is simple. If the system requires this level of emergency management just to remain stable, where is the true safe haven and what does that mean for trust? Joining me to discuss this trust horizon and the shift in the global settlement assets is of course Matt Pippenberg. He's a partner of von Greer's AG. Nice to see you. Good to be back Matt. Uh there's so many things to talk about. you just came off stage and I think that the the base of that conversation has been around trust and what that means for the debasement trade. Uh before we do that, I want to start with this data because I mean the Japanese yen surged 1.75% on Friday following reports of the New York Fed doing these rate checks. And I guess the question is is, >> you know, is the US preparing to to intervene because they want to save the the yen or are they kind of preventing Japan from from dumping US treasuries themselves? >> It's all connected and it's all chaotic rates, currencies, spreads, yields, um, and debt of course. And then of course that translates into the end road of all conversations, precious metals of course. But before I was a precious metals person, I was a risk asset person. And the smartest guys in the room are always the bond guys. And I've said in almost every article I've ever written is the bond market is the thing. You have to understand yields doesn't need to be complex, but as bond prices go down, yields go up. And yields are the cost of debt. So yields matter. And all the, you know, all the stock jocks uh were good, but it was the credit guys who got the best plays on equities. And so how does this all tie together to your question? I mean, look, the Japanese carry trade, everyone, most of your viewers know when there was low rate arbitrage, borrowing yen, borrow at low rates, invest in foreign markets, including the S&P, pay it back at a lower interest rate, and hope you don't get caught in a currency squeeze. So, that's a very simple Japanese carry trade that works when yields are low and the yen is cheap, right? If the Japanese have to sell a lot of their JGBs, their Japanese government bonds to save their yen, which is overextended in debt. So, debt is all related. Well, if they have to sell a lot of US treasuries, that puts pressure pressure on the US bond market, pushes yields up there, and so they have to save their yen by selling US assets to keep their yen under control. And for the first time in what seemed impossible, yields in the Japanese yield curve are rising. So that can be a massive well, it's a symbol of bond dysfunction. By the way, French bond markets, UK bond markets, Japanese bond markets, US bond markets, all seeing yield spikes because trust in their fundamental IUs and you talk about debt to GDP, Japan's off the chart. But it's not the home reserve of currency. They have less room. So this is a major thing. But if yields are rising and bonds are falling, that's very bad for Japan. The Japanese carrier trade. It's very bad for the S&P because a lot of that money on the carry trade went into S&P assets. Ironically, it can be very good for gold. I know I'm saying this with my bias selling my book, but a lot of the money used on the Japanese carry trade was used to short the gold price and use other comics. So, it's so convoluted. It's so intentionally complex. But when you see rates rising or yields rising, I've always said that's a shark fin. It's a symptom of danger coming to risk asset markets because yields rising just means the cost of debt is rising. And everything from Japan to the UK, certainly to the US and France is driven now by more by debt than GDP or productivity uh or or real manufacturing. So if we're a debt based system gone way too far and the cost of debt gets higher, that puts a lot of stress on all markets, all politicians, all policies, and they're running out of good options because the only way to get those shark fins underwater again is to buy more bonds that no one else wants. The only way to pay for that is to mouseclick money at a central bank near you. That debases the currency, hence gold and silver all-time highs more. So, the system has gone slowly and as Hemingway says all at once into a crisis. The spikes we're seeing in gold and silver have a lot of reasons. The primary reason goes back to 1971. It's a currency crisis. It's credit crisis. And it's I'm simplifying, but after 50 plus years of playing this game, our currency, your problem is now our currency, our problem for everyone because we've all been living beyond our means in debt, monetizing that debt with mouseplay currencies and the currencies are trusted. It's interesting. I mean, you know, that multi-deade high that we talked about on the Japanese yen trade. I mean, I guess we could ask you if if if that is the signal that that riskfree, you know, status of sovereign debt is is I mean, we're talking about trust. It's gone. >> Well, think about it. Think about that was the pillar the two pillars of America and any country but certainly America was the it its bond and the petro dollar but Japan any national sovereign >> it needs to have trust in its IUs to continue to function and when you see those rising yields what does that mean less trust it needs to be a higher premium to lend to that nation and when you see that in one-off scenarios in developing economies or emerging markets you kind of see that movie before upside down and backwards in South America and other headlines and you see that in Japan And you see that in the UK with the guilt crisis we saw many times already. But this is and obviously with the US Treasury the risk-free return of that sacred cow the 10-year US Treasury the basis of the world trading system derivative system swift system do everything is tied to that and when that yield is rising and trust in that is falling the evidence which is everywhere. Well the risk-free return is really return free risk and when you're measuring that yield against inflation again this is not sensational. Everyone I know on the street from John Williams reports, but it's not an exaggeration, knows that inflation is double digits. I mean, we know this. And so, we're we're really getting no return. You're getting return free risk for the most supposedly safer tier one asset in the world. And the reason is very simple. Nations with their backs against the debt wall on a corner need to run negative real rates. That's wonky language. They need inflation to be higher than the yields so they can inflate away their debt. They just get away with that by reporting it incorrectly. I know that sounds sensational, but this is as old as history 101. And it's an absolute theft because they have their cake in it, too. They run negative real rates to inflate away their debt on the backs of everyone on the street. Top 10% to bottom 10%. We need inflation. Don't want to report politically incorrect. But we just will lie about the inflation rate. It's that simple. So, I mean, you know, the counter the counter when we talk about it. I mean, if the Fed comes in and, you know, stabilizes the yen at a 150, I mean, most people would say, doesn't that prove that they still have the tools to manage this? But does that just give them the ability to kick the can down a little bit further? Anytime you solve a problem with mouse click money to stabilize something, technically you can make sure that the S&P never goes below threshold, never goes below median. You could literally synthetically make it a deficit without tears and a market that never sees a correction. You can always mouse click money and so you can always support another currency or another bond market, but you will always do that at the expense of your own currency which you're mouse clicking to support it. So you're not only running up in roller skates, you're shooting yourself in the foot. You can do that for a decade, two decades. We've been doing it since 1971. The question is when do you go too far? And what we're seeing finally in 2025 now into 2020, I think we've gone too far. Our currency, your problem is our currency, our problem for a lot of nations. It's all tied to debt. The debt is everything and the bond market and the yields reveal it. Yes, you can compress yields by printing money to buy bonds to keep the yields down. But when you print money, you expand credit. When you extend credit, expand credit, you expand the money supply, you debase the currency. >> So, I mean, if you're sitting on the other side of this and uh you're a career politician and you're being shown, or at least the public is starting to wake up to this. I mean, is that why there's so many talking heads right now? Oh, look, look, anyone who reads me or watches me knows the island of misfit toys that composes the Congress and the Senate from your country to mine at the ECB, which I'm very familiar with. Most of these guys know very little about history, even less about economics, even Bent and more so than Yellen. But I'm saying certainly your average congressman or senator can't count to two. And I know that sounds dramatic. So to rely on them uh to solve an economic crisis of this magnitude is is is really naive. They have to tell a narrative. Certainly central bankers, but the politicians themselves have to tell a narrative to keep calm and carry on. But they don't even understand the magnitude. The other thing about democracies, love them or hate them, is they think like they're careerists. They're mavens to the system. They need to think about reelection. They need to be popular. One way to be popular is to mouse click money to pay for deficit spending. That's oneonone stuff. They will not think about the longer term ramifications of inflation or debasement. I don't think they'd understand it. But even if they did, they would never admit it and they wouldn't admit it to their polic to their constituents. So while they're giving us a CPI scale or an inflation scale or good news about a new spending bill that's going to solve a problem in this circular or that they're they're saying that with their left hand they're hiding the right hand what that means to the purchasing power of the money you measure your retirement your checking account your portfolio it's just an invisible theft it's a slow death by a thousand cuts incremental debasement of the currency but the incremental is now becoming exponential again hence the price rise in gold one of the key drivers and uh these things are all connected and they're meant to be diverse And hard people who have 9 toive jobs, whether they're dentists, brick layers, brain surgeons, whatever. They don't have time to get into the weeds of yields, bunk curves, quantity, tightening, carne this, Powell that. Everyone has their political opinions. It's very derivative and reduxless, but it comes down to really bad, dysfunctional, drunk driving monetary policy. >> Yeah. Amen. And it also comes down to, you know, I guess trust. And again, that brings us to gold. I mean, I know that you've been watching this runup, but let's be honest and just take it out for a second just between two gentlemen here. I mean, >> what the hell happened last year? I mean, it happened quite quick, quicker than most thought. >> Yeah. >> Look, all of us were shocked but not surprised. I mean, we've been talking about this for years, >> for years. >> And by the way, for those many years, uh, well, gold was being mocked by the street as a pawn shop asset or too volatile. Looking back over the last quarter of a century, it's outperformed even this S&P in total return. So there was a deliberate attempt to misunderstand precious metals. We've been talking about precious metals as being a far better store of value, not in appreciation versus the S&P, but in holding its purchasing better [music] than a fiat currency. Um, so what does this mean? When we look at $5,000 gold, if I had talked even a year ago here about a $100 silver that I'll sell on his book, I get it. And and I totally my BS detector when I was allocating money to others I was always where is this becoming extreme and I am very cynical and skeptical as anyone should be listening to me or anyone else but do your own homework and think about this and come with your own conclusions but what we're seeing really in in this what John Rabino rightly call just a horizon of distrust across everything whether it's left or right politics whether it's globalism whether it's immigration whether it's social unrest we all have a different opinion we just don't trust the decisions and we argue about that but I think when You look at $5,000 gold, you say, "This this is a bubble. This looks like Nvidia >> or this looks like Lucent or Qualcomm or Amazon circa 1998." I get it. But it's actually much more disturbing than that. Again, take out my bias if you can. >> It's what we're seeing with $5,000 gold isn't a sign of how bubbly gold is. It's in a bull market. It's a difference. The reason it's in a bull market is not that $5,000 gold should shock you. What should shock you is how bad fiat money has got. That gold has to be 5,000. It's not just a bunch of retailers going crazy to follow the trend. The bulk of this demand is coming from central banks. Retail sector is hardly allocated at all. This you see it on news. The line it's nothing compared to what central banks are buying. And again, when did Noah build his arc before the rain? When do you load your gun before combat? When do you stock up on food before the snow? What we've just been seeing since we weaponized the US Treasury and World Reserve currency in 2022 is a tripling of central bank gold buying. That should be a massive headline. Why are they doing that? They're building the ark before the rain. They see the rain coming. What are they building that arc with? Gold. I'm sorry. I may be a gold guy, but that's not a bias. The world sees this. The BIS sees this. Ray Dalio sees this. Dra Miller, Paul. Again, it's not just the gold camp. Even Morgan Stanley sees this. So again, get past he's selling me something. Do your own homework. $5,000 gold. Of course, it's disturbing. But as many of us in the we meant this, I'm not hoping gold gets to 10,000. I'm afraid it is because if gold gets to 10,000 what that s what that symptomizes what the symptom of that is is a credit system literally burning right in front of our eyes and a currency system melting in front and it has been slowly since 1971. Now it's happening exponentially and that's the real issue. It's the currency. It's the currency derivative of the debt market. It's the explanation of this gold market and of course the comx can't keep up. >> No. No. And we need to get into comx and talk about this squeeze on this. I want to talk because you keep talking about that gold is currency and I mean we've been talking about this for a long time. You have a specific thesis that the next phase might not be gold is currency that we spend in a store but you know the settlement asset for trade. So I mean break this down. What does that actually look like? >> Well here it is. I mean in a way we're getting our we're getting our signals from the east not the west. And it whether you like them or not I have no desire as I said many times live in St. Petersburg. I'm not a shill for Shanghai. I'm a capitalist. I'm an American. I live in Europe. I'm bational. I love the West and I love capitalism. But look, you look at the bricks embbridge all these discussions dd dollaration that's been here since 2022. We all get it. There was never going to be a bricks back currency, a gold back bricks currency that all the bricks nations and what they did because the BRICS countries don't necessarily trust each other, but they do trust gold and what they're coming up with slowly but surely in the laboratories of their long-term thinking is making gold 40% of any net trade settlement in the Brexit world. So they'll do regional currencies and regional trades on anything from energy to widgets and then they'll net settle that in gold which is a brilliant idea. That way each nation has the right to still debase its own currency because every debtstrap nation eventually wants the freedom to debase its currency in an emergency. If you have a gold back currency in those nations you can't do it. So that's being realistic. But if you're going to trade you've got to have a real asset a coverage and that's gold. Even the IMF during the COVID hysteria when they were talking about the new Bretton Woods 2.0, they said in their little chart, if you watch their video, at the bottom of that chart is gold in the new central bank digital currency dystopia. The only good part of that for it to have any credibility, it has to have some gold coverage. So gold doesn't become a new currency, but it becomes part of the ratio. And it's emerging every explains why the bad guys are stacking up. Watch what they do, not what they say. I'm not a fan of any of these parties, but you can't deny don't fight the Feds, don't fight the central banks. They're stacking for a reason. It's not just because it's a trend. >> And I mean, distinguish between I guess we'd call it transferring debt, which is fiat, >> versus paying it off, which is gold. >> Well, well, you could repric gold. You could take the 260 million ounces in the US, repric from $42 to >> whatever price it spot or maybe higher, and that's a little QE with gold. That takes some of your debt level dense down. That's a whole other conversation. But in the meantime, gold will give them some liquidity. But what they'll probably do is they'll just inflate away their debt by debasing the currency and lying about inflation. That's the current mode. And then eventually we'll make it more digital. >> Yeah. CDC, that type of >> some type of dysfunctional reset where Bretton Woods comes in and we say it's they'll blame it on anything but themselves. Before it was COVID, then it was Putin and next it'll be Venezuela. Who knows? They'll be a bad guy. It will never be the bathroom mirror of the very policy makers who for decades have driven us into this wall, in particular the US and the Fed, especially going into an election on the midterm time. I mean, that hybrid system that we've talked about, I mean, does the dollar have to die for that to happen? It doesn't. >> No, it just has to be repriced. >> Who's going to replace the dollar for the world reserve currency? Who has a better bond market than even our bond market? China doesn't. Who has more? Even with us, even with Trump and all the distrust, the US has some more credibility than any other nation. It also has the cognitive the memory of it, the muscle memory of it, but it's its share of FX reserves is getting slower and lower, but it's still a major part of FX swaps. It's still critical to US Treasury is critical to deriv trade, which is another topic of risk. But no, the dollar is not going to be replaced. It's the Chinese and Russians aren't stupid. They're not going to try and beat the dollar. They're going to go around the dollar just like a good army would do if they hit a wall like the Magino line. They just go around it. Uh they flank it. So we'll use dollar for commerce but we'll you know we'll we'll central banks will use gold for collateral. What so what I do I save it gold and I spend in fiat when I need to buy something. If I have a big purchase I'll take some of that gold and I'll liquidate it into fiat which is functional. I can't go into a Costco with a 100 grand bar or 100 ounce bar. But I understand I respect I don't see it being money but I see it as being a better store of value just like the banks and the BIS say it is. Just like the evidence shows again why central banks have more of it than treasuries. They've been building that for years. They're saving in it because saving in US treasuries in US dollars is saving in an ice cube that's melting >> and you're even even the pro trade the volatility with that US with that US with that petro dollar it was so much less when they had a gold backing. So even that's getting a little weaker. There's cracks in the oil trade that's a that's another hour. But it's fascinating too. >> Yeah it's interesting. You know you and I were chatting a little bit about you've been in this industry a long time and obviously you have a lot of clients. I'm sure more are coming to you. How many of them are waking up to supply squeezes? Comx, yeah, LBMA. >> Well, look, as we were talking before this things like quantitative easing, swaps, derivatives, the comx, they're meant to be incredibly complex and kind of wonky and they they make your eyes roll. And so, a lot of people don't see what I think was the headline of the year last year was the dysfunction in the complex as they should. They wouldn't see that. Why would they? I don't understand thoracic surgery, but if I had a lump in my throat or my heart that was causing palpitations, some experts probably explain it. So again, it's the COMX is the headline. Most clients aren't necessarily coming in with a sophisticated notion of the comics, but they've read and seen enough of our reports that they get the main theme. And I think this is for your listeners important. They probably many of them already know this. Some will know the comics better than us. Some won't know anything about it. But I'm not exaggerating. The comics very simply is where derivatives are used by a handful of banks to legally and artificially repress the price of gold and silver by going short these levered contracts with 4% gold or silver and 96% paper. They do it every morning and it's been going on since the 70s. Why? Because gold and silver are the antagonist of fiat money. So that it's very important to keep gold and silver under control because it's embarrassing when it rises. It's a middle finger to the fiat monetary system. And so for years the comx was and the the London exchange have been very powerful with this. That's why they created it right after we got off the dollar gold backing. They needed immediately to keep gold suppressed. >> What happened in 2025 in the silver and the gold markets and the comics again is meant to be misunderstood. Even if it was on the headlines, you wouldn't want to read it cuz it's too boring. All it came down to and I'm simplifying dramatically insulting may your comics experts is there wasn't enough allocated segregated postbasle 3 gold and silver on these London and New York exchanges for them to even do the shorts they were used to being doing. If you can't short you can't manipulate the price very simply that means there's actually a hint of free price discovery and gold and silver. So as this debt crisis and currency crisis collided and pushed gold up the comics wasn't there to put it back down again. And that's what was really unique about the price move was in 25. And look, I've been in I've been a trader for decades. I've never seen a lease rate in silver, for example, go above two. It went to five. The comx in the gold market this summer literally it's 1% stands for living. It just gets levered and re and rolled over. Lever and read over. That's the comx. This summer is 100% delivery for gold. The counterparties on the comx wanted physical gold. That's extraordinary. It's extraordinary. Again, for those who don't know the comics, doesn't mean anything. But what that signifies is after decades of price fixing, people would the counterparties would just rather have the gold again because they see the rain. They're building their arc. They have to. So what can the comics do? And and what I think in the silver markets too, they've tried to manipulate. They don't have the silver. So now they press up the margin prices. They're trying to come up with any way. Maybe they'll have limit orders. Maybe they'll make it sell only. But what that is saying is they're running out of bullets. And and when that happens, and I think, and this is just a theory, is I think they're going to have a failure to delivery on the on the Comx and Silver. And what that means, again, this is wonky to anyone else. The ComX is supposed to be able to deliver the counterparty, the silver, if they want to take it out. >> It's not designed for that. It was designed for leverage, >> not designed for a run, not for like what's going to happen is going to be a cash settlement only, not an actual delivery. When that happens, that's effectively saying the ComX has failed. It's what it's contractually obligated to do. That a futures contract is not a contract at all. It's a cash settled bogus contract that would have a contagion effect on other futures contracts. Probably next in gold, then maybe in wheat. That could be that type of domino 08 kind of moment. I'm not saying it will happen, but I think it very likely could. And if you see a failure delivery on the comx, uh that would be extraordinary because the derivative markets are sick. It's sick. It's 10 times higher than it was pre8. And we have 4.4 four times derivatives and we do actual assets in the world. Everything's financialized, extended and pretended, papered and levered. That is a complete clown show. >> And it only works as long as everything is going smoothly. As soon as a counterparty fails or delivery fails and no one, myself included, can time it. It's not sensational. We've seen this movie before can happen again. Only this time in a much more dangerous macro environment where banks are 10 times more livered than they were in '08. Despite DoddFrank, they learned nothing from 08. It's extraordinary. Yeah. >> I mean, if they did learn, does that mean that this would happen? You know, they're trying not to make this happen. I mean, would this happen this year? >> How do I know? You know, how do I know? Even the dot combo, I knew it was over. I didn't know when it was going to pop on April 14th, 2000. I just got out. >> I didn't. No one can time it. And my mentors in the risk asset space where I gave money and where I was mentor was guys like Jeremy Grantham. He's far smarter than me. Dalio knows these assets. But as as Grantham said, you can identify a bubble all day long. No one can time it. And there's so many needles pointing this. It could be an interest rate spike. It could be an official recession by the NBER, a deflationary moment. It could be a failure in the derivatives market. It could be banking failures. You got 800, what is it, 800 million ounces coming out of the ground in silver. You've got banks with 4.4 billion ounces of shorts against it. If those banks get in the short squeeze on silver, they're going to fail. Has that ever happened before? Yes. We've learned nothing. It's out of sight, out of mind. I know this sounds dramatic as you know, but it's I mean history does repeat itself. That's just a fact. Um you know what about you know we started we talked a little bit about lease rates here. We're talking about backwardation. We were talking about the Shanghai exchange in comparison to the to is it still east versus west? I mean is still arbitrageing everything going east? Well look think about it. I mean when you see silver $10 higher in Shanghai than you do in London? That's a problem. And look, if I were a nefarious leader in the east, I'd say and I'm in a currency war with the West and I am playing these type of games, I'd say if New York and London can't give you fair price discovery, the 200 moving day average in gold and silver is X and we can give you real price discovery. Of course, you're going to change banks, so to speak. You're going to change exchanges. That's going to bring flows to the east. So that's what tactically would be the right thing to do. But remember, China and Russia, they may be smart, but they're not without their own problems and their own need to repress gold and silver for their own reasons to stack it. It's not like they're more moral than London or New York. But they are more clever. They're playing chess here and we're playing checkers. They're stacking gold and we're issuing paper IUS and they've been sharpening their knives waiting for this. But it doesn't mean they don't have their own problems. But I think there'll be a fair place there. The problem is, will you trust the contracts? Will you trust the counterparties? Will you trust the liquidity? Will you trust the regulation? Although the OTC market here is unregul self-regulated. Will you trust China? That will take a learning curve, but if they want to win hearts and minds, they got to give better price discovery. So, we'll see. None of us know. It's fascinating. >> You know, everyone here at VR, obviously, it's a little bit of a different attitude. I feel like I was saying to Randy Smaller just earlier that last year it felt like a $3,000 gold. Everyone thought, when's it going to come to an end? This year at 5,000, it's here. >> Yeah. And look and they'll you get no credibility if you're a serious precious metals trader or investor. Uh if you were to say well it just goes up and to the right from here or this is the new floor. You will get no credibility. But on a technical and fundamental basis what I can say and we've seen two ADX moves in my lifetime already um in the gold price. I think the first time was in 7079. Again, this is bear trough to bull high. 8x move 79. Another another one happened in 2001. 8x move from bear trough to bull high. The last bear trough technically was 2015 with gold at 1050. Well, we're in that now. Even when closing at 4,500 last year, that's only a 4x move. We still have another 4x to go technically. fundamentally the gold silver ratio the direction of central banks there's an easy case to be made technically and fundamentally for much higher gold but you also have to recognize that in all bull markets secular bull markets in gold you can see major retracements like we saw midway through 71 to 80 where gold got kneecapped in 75 and 76 so anyone thinking about gold and silver especially as a preservation asset can say look I'm ready for that I can handle it I just know my gold will be worth more 20 years from now than what I bought it today if you're a trader all all power to you. Good luck. Very few people do well. That's more risky. If you just think you can buy gold at five and you're never going to have a problem, that's risky. But if you think you're waiting for a pullback to buy it, that too is risky. So, you've got to know why you're buying gold. You've got to know why. So, I mean, that fundamental that you talked about, central banks, obviously, we see the World Gold Council, the reports, we see what people are kind of holding. Maybe not China. Um, >> the US though, >> maybe not the US. Exactly. Um, but I guess the question is is, you know, is there's finally narrative out there that the banks are the hidden hand here as the buyer from the sovereigns? >> Yeah. Y >> are they starting to accumulate this as a currency product? >> Well, we don't really know who's taking delivery off the comics. And and my guess is if if I were Jamie Diamond, it'd be Jamie Diner. He's not stupid, >> you know. And so that's the great mystery. Who? First of all, let's just do a freaking audit. Come on. And if gold is a major part of the future, whether you believe in it or not, the east certainly does. He who has the most gold wins, as Kissinger said, >> but he also said be careful if you revalue gold because what if some other country if we value gold at 20,000 to cover some of our M0 deficits? Well, then that's a new floor. But then what if China does have more gold than us? Then who has the leverage? I I don't know. What does Russia really have? The World Gold Council does not tell us the not because they're dishonest because they don't know. Why don't we have the audit? Uh, so it's it's very convoluted. If we had more, >> not this year. Not on a midterm year. I don't >> Oh, no. But that was, again, not pro or anti-Trump, but that was another promise. It just hasn't been delivered. Peace in the Ukraine not delivered. Epstein list not delivered. Look, I'm not anti-Trump or pro. I'm just saying just anti I'm cynical about politicians in general, but a lot of things not been delivered. But that Elon Musk, everyone was so excited about this audit. Crickets. Crickets. Usually, there's a reason for that. You know, I got to ask you. I mean, you you track that trust metric that we've talked about a little bit, the faith in sovereign credit. I mean, in this environment after everything we just talked about, I mean, if the Fed is active in the in the foreign exchange markets and, you know, yields are rising despite these cuts, I mean, have we crossed that threshold? I mean, is it is it just math now? >> I think it is just math. And that's that's the hard reality of precious metals. Again, doesn't mean you're just going to get rich overnight with gold and never goes down. But everything is a debt crisis. That means it's a currency crisis. This is as old as history 101. They are just trying to churn and talk and speak around an inevitable sickness. And and so they can technically create mathematically different yields and safer quote unquote flows and help bond markets, but they'll always do that at the expense of the currency. You have you can you can save the US Treasury anytime you want. You can buy them all with mouseclick money from credit expansion, but that will slowly kill your currency. And again, ancient Rome 1500, Portugal, the Dutch, the British Empire, Wimar, Yugoslavia, the extreme examples, but even the US is not immune, has no impunity, can do it longer, but has no impunity from debasing its currency to the point where it's no longer trusted. When trust dies, that's the end. Not the end of the world, just the end of that system. And so, how do you quantify trust? How do you measure trust? Is it how many riots you see a year? How many wars were involved in? How many social unrest events? I don't know. But we all kind of feel it. And we all kind of see it. And the only way to avoid a real crisis is genuine constructive destruction, austerity, honesty, and living within our means. Well, that's going to hurt everybody. And I don't think a politician can get elected on that. I just don't. >> Yeah. Well said. uh you know going into this next year. I mean what what is that kind of I mean you've literally everyone's chasing a price target here at the show as you know and you've called this a smoke alarm. So I mean you know for an investor that doesn't watch this like you and me what what do you think that smoke signal is this year? Well, look, >> however, >> for years when everyone asks me a price target, I always say, and it's not to avoid the question or evade the question, >> I say it's going to be meaningfully higher because it paper money is going to get meaningly weaker. And when you're measuring a price in any asset, including gold and silver, in a fiat currency, it's like trying to put a hockey puck into a movie net or throw a pitch at a catcher club that's moving. You're just measuring something that's inherently melty. You can measure it in Zeon says chickens or barrels of oil or real estate. But again, 5,000 or $7,000 goal is a price target is a smoke signal that's really not about the gold and silver that we're price targeting. It's about how much we distrust the underlying currency. And we have the muscle memory of most people are good. They trust their central bankers and politicians. Not because they're stupid or or naive. They just assume that everyone would say the truth. when you've been in our game, a veteran of this combat long enough and looked under enough hoods, that trust died a long time ago. And in a sense, you're an insider. So, and believe me, many of my clients are bankers and hedge fund managers. They're in the system. They don't trust it. So, what have they been stacking for years? Gold. So, when you when you have the advantage of being a combat veteran of that space, you know what ammo to use, which grenades don't work, which trenches are safe, which trenches are dangerous. That's not genius. It's just experience. And you try to you try to convey that to other people and you make them believe hope they believe you, but if they don't, at least look into it. Don't just be cynical. I would be cynical. I'm the first guy to question anything sold to me. >> But it's history more than it is economics. It's basic math. And it's the history of currency destruction to monetize debt gone wild. >> And the fault of that lies in our policy makers exclusively. And this independent beast from Czechal. It's called the Federal Reserve, which is neither federal nor reserve. That sits on constitutional avenue and is a violation of article 1, section 8 of our constitution, made legal by Woodrow Wilson in 1913 against his will. So, it's fascinating story, >> but again, >> most people, >> most people don't have time for this. Of course not. I wouldn't. Yeah. >> If I were a pediatrician in state St. Joe, Michigan, I wouldn't. >> So, what about it to most people? You there is a a retail crowd there that maybe are looking at the gold price. They've seen it in the headlines. I mean MSNBC is even talking about it at this point for God's sakes. >> What if they say what about the gold miners? I mean we're here at V Rick. Do you think that there's still an opportunity on this run there? Look, I'm not a speculator anymore. I'm not at all. And there's a real fat pitch for the gold miners. >> Whether you know a lot or little, I know a little bit enough to be dangerous, but not enough to be a fiduciary. But it's very simple. When the spot price is significantly higher than the cost of production, that's usually a real tailwind. JP Morgan is creating a trillion dollar 10-year fund to invest in minerals necessary for national interest. Look while buying the gold. Exactly. But I mean that that space is so small. We had 270 billion in the mine space went to 800 billion last year. That little bit of capital does a lot to push those prices up. Not to mention the momentum tourist trade of retailers trying to get rich quick, trying to find alpha where they've been where they can't find anywhere else. Uh there's a lot of technical and fundamental reasons why the miners could do well. You could do the indexes. You could do your homework on the individual miners. That takes some expertise, too. Or you could just put a blindfold on and go with the long index and you'll probably get a 2 or 3x return. But again, I can't promise that. >> But if we're looking at the price of gold secularly or the price of silver secularly, the miners are going to rip. But again, know your entry, know your exit. and don't take my brewers because I am not uh I don't invest in these risk assets on the precious metal side. Not because there there's nothing to be had there. I just don't have enough skill and I'm too old and too boring now. I'm just a wealth preservation guy and I'm nothing against speculation. I would certainly recommend people look into the mining space. But there's the Ross Bees and the Frank Justers of the world and certainly the Rick Rules too who know this space better than me. And uh Amen. Well, here's the thing. We're going to have all three of those gentlemen joining me right here at V-Rick this week. Of course, Matt Pipenberg from uh Von Graers. It's been so great to to talk to you, but also during this run, >> you know, I got to get you on every quarter, I feel like, because there's a little bit of truth here that we don't get from a lot of other people, and maybe that's for a reason. So, I appreciate it. Pleasure. All right, buddy. So, so much, man. >> All right. I'm Jeremy Saffron here, of course, reporting from VRC. We got Paul Harris on location for Mining Tuesday to go and do some due diligence on those companies. But we got some great guests coming up all week long. Tomorrow is Monday. The market's open. In fact, the spot market on the gold and silver uh happens here just in a few hours. So, of course, we're going to continue to watch those prices. We don't know where it'll land, but one thing is for certain, trust is not the same. [music] Thank you. >> Kitco News on-site coverage of the Vancouver Resource Investment Conference is presented by Discovery Silver.
Bond Markets Are Breaking and Gold Is Telling You First | Matthew Piepenburg
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[music] Kitco News on-site coverage of the Vancouver Resource Investment Conference is presented by Discovery Silver. Hey everyone, welcome back to [music] the Vancouver Resource Investment Conference 2026 here in beautiful BC. Vancouver, as you can tell by the name of the conference. Now, it is wonderful outside and it's been very interesting inside. And obviously we're dealing with those $5,000 gold price, $100 silver, but volatility has returned to the currency market. We have seen the Japanese yen surged nearly 2% in a single session, coupled with reports from the Bloomberg that the New York Fed has been conducting rate checks with major financial institutions. Now, in the world of central banking, a rate check is is rarely just a casual inquiry. It often is a warning short and it signals that the bond market is stressed and the central banks are being forced to coordinate possibly in the background. Now the question for investors obviously is simple. If the system requires this level of emergency management just to remain stable, where is the true safe haven and what does that mean for trust? Joining me to discuss this trust horizon and the shift in the global settlement assets is of course Matt Pippenberg. He's a partner of von Greer's AG. Nice to see you. Good to be back Matt. Uh there's so many things to talk about. you just came off stage and I think that the the base of that conversation has been around trust and what that means for the debasement trade. Uh before we do that, I want to start with this data because I mean the Japanese yen surged 1.75% on Friday following reports of the New York Fed doing these rate checks. And I guess the question is is, >> you know, is the US preparing to to intervene because they want to save the the yen or are they kind of preventing Japan from from dumping US treasuries themselves? >> It's all connected and it's all chaotic rates, currencies, spreads, yields, um, and debt of course. And then of course that translates into the end road of all conversations, precious metals of course. But before I was a precious metals person, I was a risk asset person. And the smartest guys in the room are always the bond guys. And I've said in almost every article I've ever written is the bond market is the thing. You have to understand yields doesn't need to be complex, but as bond prices go down, yields go up. And yields are the cost of debt. So yields matter. And all the, you know, all the stock jocks uh were good, but it was the credit guys who got the best plays on equities. And so how does this all tie together to your question? I mean, look, the Japanese carry trade, everyone, most of your viewers know when there was low rate arbitrage, borrowing yen, borrow at low rates, invest in foreign markets, including the S&P, pay it back at a lower interest rate, and hope you don't get caught in a currency squeeze. So, that's a very simple Japanese carry trade that works when yields are low and the yen is cheap, right? If the Japanese have to sell a lot of their JGBs, their Japanese government bonds to save their yen, which is overextended in debt. So, debt is all related. Well, if they have to sell a lot of US treasuries, that puts pressure pressure on the US bond market, pushes yields up there, and so they have to save their yen by selling US assets to keep their yen under control. And for the first time in what seemed impossible, yields in the Japanese yield curve are rising. So that can be a massive well, it's a symbol of bond dysfunction. By the way, French bond markets, UK bond markets, Japanese bond markets, US bond markets, all seeing yield spikes because trust in their fundamental IUs and you talk about debt to GDP, Japan's off the chart. But it's not the home reserve of currency. They have less room. So this is a major thing. But if yields are rising and bonds are falling, that's very bad for Japan. The Japanese carrier trade. It's very bad for the S&P because a lot of that money on the carry trade went into S&P assets. Ironically, it can be very good for gold. I know I'm saying this with my bias selling my book, but a lot of the money used on the Japanese carry trade was used to short the gold price and use other comics. So, it's so convoluted. It's so intentionally complex. But when you see rates rising or yields rising, I've always said that's a shark fin. It's a symptom of danger coming to risk asset markets because yields rising just means the cost of debt is rising. And everything from Japan to the UK, certainly to the US and France is driven now by more by debt than GDP or productivity uh or or real manufacturing. So if we're a debt based system gone way too far and the cost of debt gets higher, that puts a lot of stress on all markets, all politicians, all policies, and they're running out of good options because the only way to get those shark fins underwater again is to buy more bonds that no one else wants. The only way to pay for that is to mouseclick money at a central bank near you. That debases the currency, hence gold and silver all-time highs more. So, the system has gone slowly and as Hemingway says all at once into a crisis. The spikes we're seeing in gold and silver have a lot of reasons. The primary reason goes back to 1971. It's a currency crisis. It's credit crisis. And it's I'm simplifying, but after 50 plus years of playing this game, our currency, your problem is now our currency, our problem for everyone because we've all been living beyond our means in debt, monetizing that debt with mouseplay currencies and the currencies are trusted. It's interesting. I mean, you know, that multi-deade high that we talked about on the Japanese yen trade. I mean, I guess we could ask you if if if that is the signal that that riskfree, you know, status of sovereign debt is is I mean, we're talking about trust. It's gone. >> Well, think about it. Think about that was the pillar the two pillars of America and any country but certainly America was the it its bond and the petro dollar but Japan any national sovereign >> it needs to have trust in its IUs to continue to function and when you see those rising yields what does that mean less trust it needs to be a higher premium to lend to that nation and when you see that in one-off scenarios in developing economies or emerging markets you kind of see that movie before upside down and backwards in South America and other headlines and you see that in Japan And you see that in the UK with the guilt crisis we saw many times already. But this is and obviously with the US Treasury the risk-free return of that sacred cow the 10-year US Treasury the basis of the world trading system derivative system swift system do everything is tied to that and when that yield is rising and trust in that is falling the evidence which is everywhere. Well the risk-free return is really return free risk and when you're measuring that yield against inflation again this is not sensational. Everyone I know on the street from John Williams reports, but it's not an exaggeration, knows that inflation is double digits. I mean, we know this. And so, we're we're really getting no return. You're getting return free risk for the most supposedly safer tier one asset in the world. And the reason is very simple. Nations with their backs against the debt wall on a corner need to run negative real rates. That's wonky language. They need inflation to be higher than the yields so they can inflate away their debt. They just get away with that by reporting it incorrectly. I know that sounds sensational, but this is as old as history 101. And it's an absolute theft because they have their cake in it, too. They run negative real rates to inflate away their debt on the backs of everyone on the street. Top 10% to bottom 10%. We need inflation. Don't want to report politically incorrect. But we just will lie about the inflation rate. It's that simple. So, I mean, you know, the counter the counter when we talk about it. I mean, if the Fed comes in and, you know, stabilizes the yen at a 150, I mean, most people would say, doesn't that prove that they still have the tools to manage this? But does that just give them the ability to kick the can down a little bit further? Anytime you solve a problem with mouse click money to stabilize something, technically you can make sure that the S&P never goes below threshold, never goes below median. You could literally synthetically make it a deficit without tears and a market that never sees a correction. You can always mouse click money and so you can always support another currency or another bond market, but you will always do that at the expense of your own currency which you're mouse clicking to support it. So you're not only running up in roller skates, you're shooting yourself in the foot. You can do that for a decade, two decades. We've been doing it since 1971. The question is when do you go too far? And what we're seeing finally in 2025 now into 2020, I think we've gone too far. Our currency, your problem is our currency, our problem for a lot of nations. It's all tied to debt. The debt is everything and the bond market and the yields reveal it. Yes, you can compress yields by printing money to buy bonds to keep the yields down. But when you print money, you expand credit. When you extend credit, expand credit, you expand the money supply, you debase the currency. >> So, I mean, if you're sitting on the other side of this and uh you're a career politician and you're being shown, or at least the public is starting to wake up to this. I mean, is that why there's so many talking heads right now? Oh, look, look, anyone who reads me or watches me knows the island of misfit toys that composes the Congress and the Senate from your country to mine at the ECB, which I'm very familiar with. Most of these guys know very little about history, even less about economics, even Bent and more so than Yellen. But I'm saying certainly your average congressman or senator can't count to two. And I know that sounds dramatic. So to rely on them uh to solve an economic crisis of this magnitude is is is really naive. They have to tell a narrative. Certainly central bankers, but the politicians themselves have to tell a narrative to keep calm and carry on. But they don't even understand the magnitude. The other thing about democracies, love them or hate them, is they think like they're careerists. They're mavens to the system. They need to think about reelection. They need to be popular. One way to be popular is to mouse click money to pay for deficit spending. That's oneonone stuff. They will not think about the longer term ramifications of inflation or debasement. I don't think they'd understand it. But even if they did, they would never admit it and they wouldn't admit it to their polic to their constituents. So while they're giving us a CPI scale or an inflation scale or good news about a new spending bill that's going to solve a problem in this circular or that they're they're saying that with their left hand they're hiding the right hand what that means to the purchasing power of the money you measure your retirement your checking account your portfolio it's just an invisible theft it's a slow death by a thousand cuts incremental debasement of the currency but the incremental is now becoming exponential again hence the price rise in gold one of the key drivers and uh these things are all connected and they're meant to be diverse And hard people who have 9 toive jobs, whether they're dentists, brick layers, brain surgeons, whatever. They don't have time to get into the weeds of yields, bunk curves, quantity, tightening, carne this, Powell that. Everyone has their political opinions. It's very derivative and reduxless, but it comes down to really bad, dysfunctional, drunk driving monetary policy. >> Yeah. Amen. And it also comes down to, you know, I guess trust. And again, that brings us to gold. I mean, I know that you've been watching this runup, but let's be honest and just take it out for a second just between two gentlemen here. I mean, >> what the hell happened last year? I mean, it happened quite quick, quicker than most thought. >> Yeah. >> Look, all of us were shocked but not surprised. I mean, we've been talking about this for years, >> for years. >> And by the way, for those many years, uh, well, gold was being mocked by the street as a pawn shop asset or too volatile. Looking back over the last quarter of a century, it's outperformed even this S&P in total return. So there was a deliberate attempt to misunderstand precious metals. We've been talking about precious metals as being a far better store of value, not in appreciation versus the S&P, but in holding its purchasing better [music] than a fiat currency. Um, so what does this mean? When we look at $5,000 gold, if I had talked even a year ago here about a $100 silver that I'll sell on his book, I get it. And and I totally my BS detector when I was allocating money to others I was always where is this becoming extreme and I am very cynical and skeptical as anyone should be listening to me or anyone else but do your own homework and think about this and come with your own conclusions but what we're seeing really in in this what John Rabino rightly call just a horizon of distrust across everything whether it's left or right politics whether it's globalism whether it's immigration whether it's social unrest we all have a different opinion we just don't trust the decisions and we argue about that but I think when You look at $5,000 gold, you say, "This this is a bubble. This looks like Nvidia >> or this looks like Lucent or Qualcomm or Amazon circa 1998." I get it. But it's actually much more disturbing than that. Again, take out my bias if you can. >> It's what we're seeing with $5,000 gold isn't a sign of how bubbly gold is. It's in a bull market. It's a difference. The reason it's in a bull market is not that $5,000 gold should shock you. What should shock you is how bad fiat money has got. That gold has to be 5,000. It's not just a bunch of retailers going crazy to follow the trend. The bulk of this demand is coming from central banks. Retail sector is hardly allocated at all. This you see it on news. The line it's nothing compared to what central banks are buying. And again, when did Noah build his arc before the rain? When do you load your gun before combat? When do you stock up on food before the snow? What we've just been seeing since we weaponized the US Treasury and World Reserve currency in 2022 is a tripling of central bank gold buying. That should be a massive headline. Why are they doing that? They're building the ark before the rain. They see the rain coming. What are they building that arc with? Gold. I'm sorry. I may be a gold guy, but that's not a bias. The world sees this. The BIS sees this. Ray Dalio sees this. Dra Miller, Paul. Again, it's not just the gold camp. Even Morgan Stanley sees this. So again, get past he's selling me something. Do your own homework. $5,000 gold. Of course, it's disturbing. But as many of us in the we meant this, I'm not hoping gold gets to 10,000. I'm afraid it is because if gold gets to 10,000 what that s what that symptomizes what the symptom of that is is a credit system literally burning right in front of our eyes and a currency system melting in front and it has been slowly since 1971. Now it's happening exponentially and that's the real issue. It's the currency. It's the currency derivative of the debt market. It's the explanation of this gold market and of course the comx can't keep up. >> No. No. And we need to get into comx and talk about this squeeze on this. I want to talk because you keep talking about that gold is currency and I mean we've been talking about this for a long time. You have a specific thesis that the next phase might not be gold is currency that we spend in a store but you know the settlement asset for trade. So I mean break this down. What does that actually look like? >> Well here it is. I mean in a way we're getting our we're getting our signals from the east not the west. And it whether you like them or not I have no desire as I said many times live in St. Petersburg. I'm not a shill for Shanghai. I'm a capitalist. I'm an American. I live in Europe. I'm bational. I love the West and I love capitalism. But look, you look at the bricks embbridge all these discussions dd dollaration that's been here since 2022. We all get it. There was never going to be a bricks back currency, a gold back bricks currency that all the bricks nations and what they did because the BRICS countries don't necessarily trust each other, but they do trust gold and what they're coming up with slowly but surely in the laboratories of their long-term thinking is making gold 40% of any net trade settlement in the Brexit world. So they'll do regional currencies and regional trades on anything from energy to widgets and then they'll net settle that in gold which is a brilliant idea. That way each nation has the right to still debase its own currency because every debtstrap nation eventually wants the freedom to debase its currency in an emergency. If you have a gold back currency in those nations you can't do it. So that's being realistic. But if you're going to trade you've got to have a real asset a coverage and that's gold. Even the IMF during the COVID hysteria when they were talking about the new Bretton Woods 2.0, they said in their little chart, if you watch their video, at the bottom of that chart is gold in the new central bank digital currency dystopia. The only good part of that for it to have any credibility, it has to have some gold coverage. So gold doesn't become a new currency, but it becomes part of the ratio. And it's emerging every explains why the bad guys are stacking up. Watch what they do, not what they say. I'm not a fan of any of these parties, but you can't deny don't fight the Feds, don't fight the central banks. They're stacking for a reason. It's not just because it's a trend. >> And I mean, distinguish between I guess we'd call it transferring debt, which is fiat, >> versus paying it off, which is gold. >> Well, well, you could repric gold. You could take the 260 million ounces in the US, repric from $42 to >> whatever price it spot or maybe higher, and that's a little QE with gold. That takes some of your debt level dense down. That's a whole other conversation. But in the meantime, gold will give them some liquidity. But what they'll probably do is they'll just inflate away their debt by debasing the currency and lying about inflation. That's the current mode. And then eventually we'll make it more digital. >> Yeah. CDC, that type of >> some type of dysfunctional reset where Bretton Woods comes in and we say it's they'll blame it on anything but themselves. Before it was COVID, then it was Putin and next it'll be Venezuela. Who knows? They'll be a bad guy. It will never be the bathroom mirror of the very policy makers who for decades have driven us into this wall, in particular the US and the Fed, especially going into an election on the midterm time. I mean, that hybrid system that we've talked about, I mean, does the dollar have to die for that to happen? It doesn't. >> No, it just has to be repriced. >> Who's going to replace the dollar for the world reserve currency? Who has a better bond market than even our bond market? China doesn't. Who has more? Even with us, even with Trump and all the distrust, the US has some more credibility than any other nation. It also has the cognitive the memory of it, the muscle memory of it, but it's its share of FX reserves is getting slower and lower, but it's still a major part of FX swaps. It's still critical to US Treasury is critical to deriv trade, which is another topic of risk. But no, the dollar is not going to be replaced. It's the Chinese and Russians aren't stupid. They're not going to try and beat the dollar. They're going to go around the dollar just like a good army would do if they hit a wall like the Magino line. They just go around it. Uh they flank it. So we'll use dollar for commerce but we'll you know we'll we'll central banks will use gold for collateral. What so what I do I save it gold and I spend in fiat when I need to buy something. If I have a big purchase I'll take some of that gold and I'll liquidate it into fiat which is functional. I can't go into a Costco with a 100 grand bar or 100 ounce bar. But I understand I respect I don't see it being money but I see it as being a better store of value just like the banks and the BIS say it is. Just like the evidence shows again why central banks have more of it than treasuries. They've been building that for years. They're saving in it because saving in US treasuries in US dollars is saving in an ice cube that's melting >> and you're even even the pro trade the volatility with that US with that US with that petro dollar it was so much less when they had a gold backing. So even that's getting a little weaker. There's cracks in the oil trade that's a that's another hour. But it's fascinating too. >> Yeah it's interesting. You know you and I were chatting a little bit about you've been in this industry a long time and obviously you have a lot of clients. I'm sure more are coming to you. How many of them are waking up to supply squeezes? Comx, yeah, LBMA. >> Well, look, as we were talking before this things like quantitative easing, swaps, derivatives, the comx, they're meant to be incredibly complex and kind of wonky and they they make your eyes roll. And so, a lot of people don't see what I think was the headline of the year last year was the dysfunction in the complex as they should. They wouldn't see that. Why would they? I don't understand thoracic surgery, but if I had a lump in my throat or my heart that was causing palpitations, some experts probably explain it. So again, it's the COMX is the headline. Most clients aren't necessarily coming in with a sophisticated notion of the comics, but they've read and seen enough of our reports that they get the main theme. And I think this is for your listeners important. They probably many of them already know this. Some will know the comics better than us. Some won't know anything about it. But I'm not exaggerating. The comics very simply is where derivatives are used by a handful of banks to legally and artificially repress the price of gold and silver by going short these levered contracts with 4% gold or silver and 96% paper. They do it every morning and it's been going on since the 70s. Why? Because gold and silver are the antagonist of fiat money. So that it's very important to keep gold and silver under control because it's embarrassing when it rises. It's a middle finger to the fiat monetary system. And so for years the comx was and the the London exchange have been very powerful with this. That's why they created it right after we got off the dollar gold backing. They needed immediately to keep gold suppressed. >> What happened in 2025 in the silver and the gold markets and the comics again is meant to be misunderstood. Even if it was on the headlines, you wouldn't want to read it cuz it's too boring. All it came down to and I'm simplifying dramatically insulting may your comics experts is there wasn't enough allocated segregated postbasle 3 gold and silver on these London and New York exchanges for them to even do the shorts they were used to being doing. If you can't short you can't manipulate the price very simply that means there's actually a hint of free price discovery and gold and silver. So as this debt crisis and currency crisis collided and pushed gold up the comics wasn't there to put it back down again. And that's what was really unique about the price move was in 25. And look, I've been in I've been a trader for decades. I've never seen a lease rate in silver, for example, go above two. It went to five. The comx in the gold market this summer literally it's 1% stands for living. It just gets levered and re and rolled over. Lever and read over. That's the comx. This summer is 100% delivery for gold. The counterparties on the comx wanted physical gold. That's extraordinary. It's extraordinary. Again, for those who don't know the comics, doesn't mean anything. But what that signifies is after decades of price fixing, people would the counterparties would just rather have the gold again because they see the rain. They're building their arc. They have to. So what can the comics do? And and what I think in the silver markets too, they've tried to manipulate. They don't have the silver. So now they press up the margin prices. They're trying to come up with any way. Maybe they'll have limit orders. Maybe they'll make it sell only. But what that is saying is they're running out of bullets. And and when that happens, and I think, and this is just a theory, is I think they're going to have a failure to delivery on the on the Comx and Silver. And what that means, again, this is wonky to anyone else. The ComX is supposed to be able to deliver the counterparty, the silver, if they want to take it out. >> It's not designed for that. It was designed for leverage, >> not designed for a run, not for like what's going to happen is going to be a cash settlement only, not an actual delivery. When that happens, that's effectively saying the ComX has failed. It's what it's contractually obligated to do. That a futures contract is not a contract at all. It's a cash settled bogus contract that would have a contagion effect on other futures contracts. Probably next in gold, then maybe in wheat. That could be that type of domino 08 kind of moment. I'm not saying it will happen, but I think it very likely could. And if you see a failure delivery on the comx, uh that would be extraordinary because the derivative markets are sick. It's sick. It's 10 times higher than it was pre8. And we have 4.4 four times derivatives and we do actual assets in the world. Everything's financialized, extended and pretended, papered and levered. That is a complete clown show. >> And it only works as long as everything is going smoothly. As soon as a counterparty fails or delivery fails and no one, myself included, can time it. It's not sensational. We've seen this movie before can happen again. Only this time in a much more dangerous macro environment where banks are 10 times more livered than they were in '08. Despite DoddFrank, they learned nothing from 08. It's extraordinary. Yeah. >> I mean, if they did learn, does that mean that this would happen? You know, they're trying not to make this happen. I mean, would this happen this year? >> How do I know? You know, how do I know? Even the dot combo, I knew it was over. I didn't know when it was going to pop on April 14th, 2000. I just got out. >> I didn't. No one can time it. And my mentors in the risk asset space where I gave money and where I was mentor was guys like Jeremy Grantham. He's far smarter than me. Dalio knows these assets. But as as Grantham said, you can identify a bubble all day long. No one can time it. And there's so many needles pointing this. It could be an interest rate spike. It could be an official recession by the NBER, a deflationary moment. It could be a failure in the derivatives market. It could be banking failures. You got 800, what is it, 800 million ounces coming out of the ground in silver. You've got banks with 4.4 billion ounces of shorts against it. If those banks get in the short squeeze on silver, they're going to fail. Has that ever happened before? Yes. We've learned nothing. It's out of sight, out of mind. I know this sounds dramatic as you know, but it's I mean history does repeat itself. That's just a fact. Um you know what about you know we started we talked a little bit about lease rates here. We're talking about backwardation. We were talking about the Shanghai exchange in comparison to the to is it still east versus west? I mean is still arbitrageing everything going east? Well look think about it. I mean when you see silver $10 higher in Shanghai than you do in London? That's a problem. And look, if I were a nefarious leader in the east, I'd say and I'm in a currency war with the West and I am playing these type of games, I'd say if New York and London can't give you fair price discovery, the 200 moving day average in gold and silver is X and we can give you real price discovery. Of course, you're going to change banks, so to speak. You're going to change exchanges. That's going to bring flows to the east. So that's what tactically would be the right thing to do. But remember, China and Russia, they may be smart, but they're not without their own problems and their own need to repress gold and silver for their own reasons to stack it. It's not like they're more moral than London or New York. But they are more clever. They're playing chess here and we're playing checkers. They're stacking gold and we're issuing paper IUS and they've been sharpening their knives waiting for this. But it doesn't mean they don't have their own problems. But I think there'll be a fair place there. The problem is, will you trust the contracts? Will you trust the counterparties? Will you trust the liquidity? Will you trust the regulation? Although the OTC market here is unregul self-regulated. Will you trust China? That will take a learning curve, but if they want to win hearts and minds, they got to give better price discovery. So, we'll see. None of us know. It's fascinating. >> You know, everyone here at VR, obviously, it's a little bit of a different attitude. I feel like I was saying to Randy Smaller just earlier that last year it felt like a $3,000 gold. Everyone thought, when's it going to come to an end? This year at 5,000, it's here. >> Yeah. And look and they'll you get no credibility if you're a serious precious metals trader or investor. Uh if you were to say well it just goes up and to the right from here or this is the new floor. You will get no credibility. But on a technical and fundamental basis what I can say and we've seen two ADX moves in my lifetime already um in the gold price. I think the first time was in 7079. Again, this is bear trough to bull high. 8x move 79. Another another one happened in 2001. 8x move from bear trough to bull high. The last bear trough technically was 2015 with gold at 1050. Well, we're in that now. Even when closing at 4,500 last year, that's only a 4x move. We still have another 4x to go technically. fundamentally the gold silver ratio the direction of central banks there's an easy case to be made technically and fundamentally for much higher gold but you also have to recognize that in all bull markets secular bull markets in gold you can see major retracements like we saw midway through 71 to 80 where gold got kneecapped in 75 and 76 so anyone thinking about gold and silver especially as a preservation asset can say look I'm ready for that I can handle it I just know my gold will be worth more 20 years from now than what I bought it today if you're a trader all all power to you. Good luck. Very few people do well. That's more risky. If you just think you can buy gold at five and you're never going to have a problem, that's risky. But if you think you're waiting for a pullback to buy it, that too is risky. So, you've got to know why you're buying gold. You've got to know why. So, I mean, that fundamental that you talked about, central banks, obviously, we see the World Gold Council, the reports, we see what people are kind of holding. Maybe not China. Um, >> the US though, >> maybe not the US. Exactly. Um, but I guess the question is is, you know, is there's finally narrative out there that the banks are the hidden hand here as the buyer from the sovereigns? >> Yeah. Y >> are they starting to accumulate this as a currency product? >> Well, we don't really know who's taking delivery off the comics. And and my guess is if if I were Jamie Diamond, it'd be Jamie Diner. He's not stupid, >> you know. And so that's the great mystery. Who? First of all, let's just do a freaking audit. Come on. And if gold is a major part of the future, whether you believe in it or not, the east certainly does. He who has the most gold wins, as Kissinger said, >> but he also said be careful if you revalue gold because what if some other country if we value gold at 20,000 to cover some of our M0 deficits? Well, then that's a new floor. But then what if China does have more gold than us? Then who has the leverage? I I don't know. What does Russia really have? The World Gold Council does not tell us the not because they're dishonest because they don't know. Why don't we have the audit? Uh, so it's it's very convoluted. If we had more, >> not this year. Not on a midterm year. I don't >> Oh, no. But that was, again, not pro or anti-Trump, but that was another promise. It just hasn't been delivered. Peace in the Ukraine not delivered. Epstein list not delivered. Look, I'm not anti-Trump or pro. I'm just saying just anti I'm cynical about politicians in general, but a lot of things not been delivered. But that Elon Musk, everyone was so excited about this audit. Crickets. Crickets. Usually, there's a reason for that. You know, I got to ask you. I mean, you you track that trust metric that we've talked about a little bit, the faith in sovereign credit. I mean, in this environment after everything we just talked about, I mean, if the Fed is active in the in the foreign exchange markets and, you know, yields are rising despite these cuts, I mean, have we crossed that threshold? I mean, is it is it just math now? >> I think it is just math. And that's that's the hard reality of precious metals. Again, doesn't mean you're just going to get rich overnight with gold and never goes down. But everything is a debt crisis. That means it's a currency crisis. This is as old as history 101. They are just trying to churn and talk and speak around an inevitable sickness. And and so they can technically create mathematically different yields and safer quote unquote flows and help bond markets, but they'll always do that at the expense of the currency. You have you can you can save the US Treasury anytime you want. You can buy them all with mouseclick money from credit expansion, but that will slowly kill your currency. And again, ancient Rome 1500, Portugal, the Dutch, the British Empire, Wimar, Yugoslavia, the extreme examples, but even the US is not immune, has no impunity, can do it longer, but has no impunity from debasing its currency to the point where it's no longer trusted. When trust dies, that's the end. Not the end of the world, just the end of that system. And so, how do you quantify trust? How do you measure trust? Is it how many riots you see a year? How many wars were involved in? How many social unrest events? I don't know. But we all kind of feel it. And we all kind of see it. And the only way to avoid a real crisis is genuine constructive destruction, austerity, honesty, and living within our means. Well, that's going to hurt everybody. And I don't think a politician can get elected on that. I just don't. >> Yeah. Well said. uh you know going into this next year. I mean what what is that kind of I mean you've literally everyone's chasing a price target here at the show as you know and you've called this a smoke alarm. So I mean you know for an investor that doesn't watch this like you and me what what do you think that smoke signal is this year? Well, look, >> however, >> for years when everyone asks me a price target, I always say, and it's not to avoid the question or evade the question, >> I say it's going to be meaningfully higher because it paper money is going to get meaningly weaker. And when you're measuring a price in any asset, including gold and silver, in a fiat currency, it's like trying to put a hockey puck into a movie net or throw a pitch at a catcher club that's moving. You're just measuring something that's inherently melty. You can measure it in Zeon says chickens or barrels of oil or real estate. But again, 5,000 or $7,000 goal is a price target is a smoke signal that's really not about the gold and silver that we're price targeting. It's about how much we distrust the underlying currency. And we have the muscle memory of most people are good. They trust their central bankers and politicians. Not because they're stupid or or naive. They just assume that everyone would say the truth. when you've been in our game, a veteran of this combat long enough and looked under enough hoods, that trust died a long time ago. And in a sense, you're an insider. So, and believe me, many of my clients are bankers and hedge fund managers. They're in the system. They don't trust it. So, what have they been stacking for years? Gold. So, when you when you have the advantage of being a combat veteran of that space, you know what ammo to use, which grenades don't work, which trenches are safe, which trenches are dangerous. That's not genius. It's just experience. And you try to you try to convey that to other people and you make them believe hope they believe you, but if they don't, at least look into it. Don't just be cynical. I would be cynical. I'm the first guy to question anything sold to me. >> But it's history more than it is economics. It's basic math. And it's the history of currency destruction to monetize debt gone wild. >> And the fault of that lies in our policy makers exclusively. And this independent beast from Czechal. It's called the Federal Reserve, which is neither federal nor reserve. That sits on constitutional avenue and is a violation of article 1, section 8 of our constitution, made legal by Woodrow Wilson in 1913 against his will. So, it's fascinating story, >> but again, >> most people, >> most people don't have time for this. Of course not. I wouldn't. Yeah. >> If I were a pediatrician in state St. Joe, Michigan, I wouldn't. >> So, what about it to most people? You there is a a retail crowd there that maybe are looking at the gold price. They've seen it in the headlines. I mean MSNBC is even talking about it at this point for God's sakes. >> What if they say what about the gold miners? I mean we're here at V Rick. Do you think that there's still an opportunity on this run there? Look, I'm not a speculator anymore. I'm not at all. And there's a real fat pitch for the gold miners. >> Whether you know a lot or little, I know a little bit enough to be dangerous, but not enough to be a fiduciary. But it's very simple. When the spot price is significantly higher than the cost of production, that's usually a real tailwind. JP Morgan is creating a trillion dollar 10-year fund to invest in minerals necessary for national interest. Look while buying the gold. Exactly. But I mean that that space is so small. We had 270 billion in the mine space went to 800 billion last year. That little bit of capital does a lot to push those prices up. Not to mention the momentum tourist trade of retailers trying to get rich quick, trying to find alpha where they've been where they can't find anywhere else. Uh there's a lot of technical and fundamental reasons why the miners could do well. You could do the indexes. You could do your homework on the individual miners. That takes some expertise, too. Or you could just put a blindfold on and go with the long index and you'll probably get a 2 or 3x return. But again, I can't promise that. >> But if we're looking at the price of gold secularly or the price of silver secularly, the miners are going to rip. But again, know your entry, know your exit. and don't take my brewers because I am not uh I don't invest in these risk assets on the precious metal side. Not because there there's nothing to be had there. I just don't have enough skill and I'm too old and too boring now. I'm just a wealth preservation guy and I'm nothing against speculation. I would certainly recommend people look into the mining space. But there's the Ross Bees and the Frank Justers of the world and certainly the Rick Rules too who know this space better than me. And uh Amen. Well, here's the thing. We're going to have all three of those gentlemen joining me right here at V-Rick this week. Of course, Matt Pipenberg from uh Von Graers. It's been so great to to talk to you, but also during this run, >> you know, I got to get you on every quarter, I feel like, because there's a little bit of truth here that we don't get from a lot of other people, and maybe that's for a reason. So, I appreciate it. Pleasure. All right, buddy. So, so much, man. >> All right. I'm Jeremy Saffron here, of course, reporting from VRC. We got Paul Harris on location for Mining Tuesday to go and do some due diligence on those companies. But we got some great guests coming up all week long. Tomorrow is Monday. The market's open. In fact, the spot market on the gold and silver uh happens here just in a few hours. So, of course, we're going to continue to watch those prices. We don't know where it'll land, but one thing is for certain, trust is not the same. [music] Thank you. >> Kitco News on-site coverage of the Vancouver Resource Investment Conference is presented by Discovery Silver.