Clem Chambers: Gold's Top Driver Now, Silver's Coming Boom Phase
Summary
Gold's Strategic Role: Clem Chambers emphasizes that gold is primarily a strategic reserve for governments, particularly as a hedge against geopolitical tensions, which he refers to as the "currency of war."
Inflation and Interest Rates: Chambers discusses the dynamics of inflation, suggesting that government actions primarily drive inflation, and predicts that interest rates will fall, leading to quantitative easing (QE) and elevated inflation.
Market Intervention: He explains how central banks and governments intervene in markets to prevent crashes by injecting liquidity, which often results in asset inflation rather than consumer price inflation.
Precious Metals Outlook: Chambers is bullish on precious metals, particularly gold and silver, due to geopolitical tensions and increasing demand for strategic reserves, predicting significant price increases.
Silver's Role: Silver is described as "retail gold," accessible for smaller transactions and likely to experience a boom phase driven by retail investor demand and FOMO (fear of missing out).
AI and Resource Demand: The rise of AI is expected to dramatically increase demand for energy and strategic minerals like copper, platinum, and palladium, potentially leading to an economic boom.
Investment Strategy: Chambers advises investors to develop their own market theories and use insights from various sources as raw material for personal investment strategies, emphasizing the importance of being slightly more right than wrong.
Transcript
[Music] I'm Charlotte Mloud with investingnews.com and here today with me is Clem Chambers, CEO of a newfn.com. Thank you so much for being here. Great to have you. Great to be on. Really good to be speaking with you. I think it's going to be a fun conversation. I was thinking just because it's our first time talking, I wondered if you could start with a little bit of introduction to yourself and your work right now. I'm sure many people in our audience are familiar, but I think it's a nice place to start. Well, I I've been um writing uh finance um material since like 1999 when I used to write um the money section for Wired magazine for a couple of years and then um money wasn't so wired when the com crash came along and they killed that page. But anyway, I then started writing for Forbes and I've written for Forbes for them now. So long my contract is uh in Latin and I still write for them. I write for people like Seeking Alpha. Uh I've got my own channel um on YouTube which I just started just for the pure hell of it. uh which is called Clem Chambers Alpha and um I've been working on with uh financial private investor communities investors hub in the US um will be the one that your your um viewers will probably know uh for you know 20 years and now I'm setting up uh a website called a new FN uh which will be coming to a browser near you um actually sometime in September and you know we plan to do something new and kind of funky uh with financial information And um hopefully it will prove that um we'll be able to offer a a platform where investors and for that matter traders um have a a chance at uh making some money cuz we all know that it's very tough to make money in the markets um as a private investor and um not many actually do make decent profits but I try to um help uh people and have over the last 30 years um you know get the best of the market and um build up their own financial resources. is and uh and right now, which is why you've got me on, I've been um singing about gold for about 6 months and it's all come to pass. Um it's, you know, I might be lucky. I might be right. I might be lucky and right. Um but precious metals is is something that's particularly interesting right now for me. Well, very good. Thank you for going into that. We'll include some links in the video description so people can find you online. And yes, today we are here to talk about what's going on in gold and precious metals. So, let's jump right into that. We're coming off a pretty historic week for gold and maybe heading into another historic week. We'll we'll find out soon, I'm sure. But I wanted to get your take on what's going on with the gold price. I've heard you say elsewhere that gold is for war. So, when you look at this current price increase that we're seeing for gold. Is that the main driver that you see or or how are you looking at it? Yeah, absolutely. And you know, if you think about gold, the the old trope is that gold is money and gold's going to be money again and and money's going to be backed by gold and you know, gold's the only true money. It's God's money and blah blah blah. Um, but you know, no, that's not why governments keep gold. Governments keep gold because it's the currency of war. So when you had a period of of dropping uh global tension and when it the world was meant to be uni uniolar um and America was you know the king of the pile and everybody bowed down and there wasn't going to be much fighting. It was all going to be police actions no more war um countries sold down their gold cuz they didn't need it. I mean you don't need gold if you if you're not worried about fighting a war. It's the currency of war. However, if things start to get spicy, if stress goes up, well, a country has to buy it, has to lay it in, it's a strategic reserve in case of the worst. And that's why countries own it, and that's why they're buying it now. So, in the past, where Wall Street and other financial um uh institutions could push private investors around because private investors bought gold and they controlled the market. so they could shake them out and, you know, keep the price down and short it and do whatever they they wanted to do to reap the rewards of being in control of the market. Well, those days are gone now because it's government's buying and you know, you just have to go uh look up Poland holding the finance minister holding up gold bars saying we've got more gold. Well, why would Poland want more gold? Well, the obvious answer is gold is for war, right? And of course, uh, America's come out and said it's got a major problem with China. And guess who's buying lots and lots of gold. I mean, they make enough and then they're buying it. It's China. Because China has to build up its gold reserve. And, you know, Europe has to build up its gold. Everybody has to build up their gold reserve because the the road that all these countries are on are is the road of increasing global stress. And for a strategic reserve, I mean like you should be laying in petroleum, shouldn't you? You should be laying in strategic and critical minerals. Funny enough, America is, but you always have to lay you also have to lay in gold. And there's only 3,200 tons of it made every year. So now the £800 gorillas are buying it, i.e. governments. Well, you know, Wall Street has to get out of the way of the price and the price is only going to go one way. And the thing is, it's not just going up. It's going up in real terms. Now, obviously, people think of gold as an inflation hedge, which it is, and but gold doesn't necessarily run, you know, oh, we've got 5% inflation this year. Gold goes up 5%. It lags, it catches up, it runs ahead, it falls behind. But you know when countries say ah uh we need another 500 tons of gold in our warehouses well it pushes the real value of gold up. So gold outperforms inflation. And that's what you're seeing now. countries like China, like Poland, um like I think pretty much everybody really, if you uh if you could track the gold around is laying in gold because if you're fighting a war and you want to buy, I don't know, tungsten, you have to pay with gold. I mean, I I use tungsten as an example because during the Second World War, this is a fascinating story, but the Nazis were buying tungsten off the Portuguese, who were also a fascist state at the time. They were buying tungsten for armored piercing shells off Portugal in British 5 notes. And after a time the Portuguese said, "Where are you getting these British 5 notes from?" And the answer was the Germans were printing them. So guess what? The Germans had to end up paying for their tungsten with not fake British 5 notes for that matter. Not for their government bonds, not for their own paper notes either. They had to pay with gold because your paper's no good when you're fighting a war. And as you move towards that terrible moment, doesn't mean you have to get there, but as tension rises, if you've got any sort of sense, if you've got any sort of strategy, you have to lay in more resources and just in case there is a conflict, and that means buying gold. Well, and it does definitely feel like tensions are are heating up around the world. So, that makes a lot of sense as as the top driver for gold right now. I want to ask you a little bit more about that inflation angle because I think everybody right now is quite focused on interest rates in the US as well looking toward that Fed meeting and thinking that rates are going to come down but I know there's also concern that if rates come down then maybe inflation is unleashed again because it's not quite under control. So how are you seeing that? How are you seeing those dynamics play out? Well, I'm I'm a little bit contrarian and people are going to say what what's he talking about? Printing money causes inflation. Okay, there's only one um set of people that can create inflation and that's government. Okay, they can create deflation if they want like Japan has done for many many years. They can create inflation if they want. Simplest thing in the world to do. They generate inflation if they want it. They don't want it. They don't have to have it. Now, printing money doesn't necessarily create inflation. In the old days, everybody would say it does. It depends what kind of money you print. Now, most people think money is cash. And when someone says, "Oh, you know, we're going to have a digital dollar." Well, dollar is digital. Most dollars are digital. Most dollars are held on hard drives that go spin, not dollar bills in your pocket. Most dollars are not even dollars really. They're just book entries. Now, if you print money and not literally on paper, but if you print it digitally as most currency is, it depends where you put it. Now, if you inject it into places where people are going to hold it, it's not so inflationary. If you give it to the rich, it's not so inflationary. If you give it to the poor, it's very inflationary, which is what the inflation from COVID was mainly caused by because it was injected at the level of people that not only enjoy spending their cash but also have to. Now, if you give rich people cash, you know what I'm going to do with this? I got all the money I want. I got all the money I need. Well, I think I'll spend it on rich people's assets. I'll spend it on real estate. Up goes real estate. So, you get real estate inflation. Oh, I think I'll put it in stocks. Up goes Nvidia. Yeah. And that money is locked up in those assets. It doesn't go drop immediately down into um the group of people that will take it down the supermarket and push up the price of tomatoes or beer. I mean, back in the day of COVID, it was funny. I was actually um in France and they, you know, handed out um money to people like most countries did to everybody to keep the wheels turning. And immediately all the hard liquor disappeared off the supermarket shelves because everybody traded up to hard liquor from beer and wine. And that's the example of what happens when money is injected to people that are not well off. So in the modern world, you you if you want to print money, you inject it via QE and it goes into rich people's assets and that's where you get the inflation and then it trickles down and everyone complains that they don't get it. Um, and they complain that the rich people get it, etc., etc., etc., but the money goes in, the economy spins up faster, assets inflate, but the price of beer doesn't. So, when they drop interest rates, they're going to have to QE because everyone's going to say, "I don't want your crummy bonds. You're dropping interest rates. Why would I buy those?" So, they're going to say, "Well, we'll buy them ourselves then, won't we?" And they will QE. That's what QE is, basically. It's a way kind of monetizing um government debt. Now, that's strictly taboo to monetize government debt. You're not allowed to do that, but you're only doing that if you're turning it directly into dollar bills. Now, if you turn that into assets that are not so liquid. So, this is the idea. Money um has different levels of liquidity. If I give you $20 bill, it's very liquid. You go and you can spend it. If you put that with your bank overnight, well, it's not so liquid. It takes a day to get it. If you put it into a a treasury bond, well, it's not liquid at all. It could be liquid. You could ring up your broker and he could give you cash in two days, but you're not going to because you've invested it and you've invested it um to get the the coupon on it. And if you take that that cash and you put it into Nvidia, it's even less liquid cuz you you don't really want to sell it. And then if you put it into a house, it's not liquid at all cuz it takes you 90 days to sell it. So that money depending on where it goes depends on how combustible it is and how inflationary it is and central banks have got the knack in the west anyway of of of printing money and pushing it into places where the cash is not liquid. Now if you're in South America you print money and you pay the wages with it. Boom. It creates immediately creates inflation. And that's why when South America prints money, they print money and it creates inflation and it means they don't have to tax their people because that's difficult. Their people run away or pretend they haven't got any money or or just don't fill in the form. Yeah. So in in developing countries, they don't have the ability to knock on your door and say, "Get me taxed." So instead, they tax everybody by just printing money. And that devalues everybody's money. Um and it's um has all sorts of um negative effects. But it's one way of of of of actually taxing people. So, you know, inflation is a tax. It's a way of getting out governments get out of debt and it's a way of juicing the economy. Now, obviously, I'm a politician. I want to get elected. I want interest rates down. I want to print money. I'll blame the inflation on someone else and I'll get elected. So, you have a central bank that's independent. So when I go, "Hello, central bank. Print some money for me." The central bank says, "No, no, that's bad." Oh, no. No. Well, we need to. No, it's bad. We're not going to do that. We'll drop interest rates, will you? No, we're not going to do that. That'll be bad. Well, okay. You're not independent anymore and you're going to do it. And my mate is now the central bank boss, and he'll do, "Oh, hello, friend. Print some money for Oh, you will. Oh, I've got some inflation. Oh, it's someone else's fault. Oh, I got elected." So the reason central banks are independent is to stop politicians bullying their mates in the central bank to print money to create inflation to get them elected. Does that ring any bells? Yes, it sure does. Yes. So we're going to get elevated inflation. We're going to get um uh QE. We're going to get falling interest rates. and any hard assets are going to appreciate in addition to the ones that going to appreciate like gold because of of the ugly increasing geopolitical tension that we're seeing. So good markets unless somebody does something to to crash the market and even then if it does crash they've got that that lever to make the market go back up again. So assets protected uh juiced um but you you you will get elevated inflation. inflation is not real inflation. The inflation you fill in your pocket is not going down and you know that is because they're just going to be printing money to get interest rates down. I think that gives a very good idea of how you see it and you started to talk a little bit about the stock market and maybe we can go a little bit more in that direction because I see a lot of questions from investors about what's going to happen there. Are we going to have a crash at some point? It's it's continued to go. What do you see coming? Well, of course we're going to get a crash. The market always crashes and we've had one this year already. The question is, does that crash create a domino effect that then blows into the wider economy and has um a negative systemic impact? And I think the answer to that is no. Because um you know the central bankers and whether they'll stay independent or not, they do know how to stop a stock market crash. And when they do that, obviously it has inflationary impacts because they have to print money for it. So what actually happens is when the Treasury or the Fed puts money in, all the investment banks are watching. They literally can watch the printing presses. So when say um J Powell says, "Right, I think we need to set the printing press going or the equivalent." And you know, the banks actually hear the printing press go and they go, "Whoa, okay, bye bye." cuz they can see the money coming. They literally see the flow past their desks. So when the government says, "Yeah, I think we need a bit of support here." They push money into the economy which goes to them. Yeah. And they can get a little bit more return from what from this free money they're getting. So they're paid to buy stocks and take the risk. Okay. So, every time bad things happen, as long as the politicians or or the central bankers or wherever it is um considers that a crash will be bad or it's gone down enough or or it's shouldn't go down anymore, they just press that button and the money gushes out the front door or be the Treasury or the Fed and then the banks are there with their binoculars going, "Right, the money's coming. The money's coming. Bye, bye bye bye." Then up it goes. So, that's how it works. That's how the market is manipulated for in a better way. Now, in the old days, it would go down and everybody in the treasury be going, "Oh, well, markets do their thing." And the Fed will go, "Oh, markets do their thing. Oh, this is not good. Oh, this is getting a bit minty. Oh, it's oh no, all these people are going bust and they've gone bust. Oh, it's terrible. Oh, what are we going to do? I don't know. It's all too late." They don't do it like that anymore. Really, 2008 was the first time when they went when it really was on the precipice in 2008. the the whole global uh economy and Americans economy was on a knife edge of absolute meltdown and they went right no there's this new theory of how of money and there's this thing called QE and and it's in textbooks and no one's tried it and we're told it's a lot of old rubbish but if we don't do it it's all over so pull that lever tar and all that thing happened QE happened and it worked and everyone said oh it's going to be inflation now oh no no hyperinflation Oh no. Oh, it hasn't happened. Why? Why didn't happen? What? Oh, theory worked. Oh. Oh, and most people still don't understand it cuz they push the money into illlquid assets or low um low liquidity assets. Real estate, low liquidity asset, equities, buy and hold, buy the dip, low liquidity assets. So, the money went in, went to the rich cuz they don't need it. They don't need to spend it. They got enough of it. So, the money goes into the system. Now, where do the rich put their money? They don't they don't um put it under the bed. They give it to the banks. And what do the banks do? They lend it out. And the companies that are going bust because they can't borrow money, they can borrow it. So, they borrow it and they don't go bust and you keep your job. And you know, the world goes ever on. And um you know, and the trickle down happens and la and everybody's grumpy cuz they didn't get the money. Someone else got it. Um but nonetheless, that's how the system works. And of course it works and it works and it works and things go up and things get better and better and better until the bang they blow up. Um but I think we're some way away from um that happening cuz I don't think many people understand the the new cycle. They just see it happening and go I don't understand. Oh that ah oh why aren't I getting some that's not fair. But actually it keeps the wheels on. So, we could have had a crash. Well, we did have a crash. And they used um the modern economic manipulative tools to stop that crash. So, we didn't have a meltdown. We didn't have a stock market implosion. People didn't lose their um pensions. They didn't lose their 401ks. They didn't end up, you know, buddy, could you can you spare me a dime? Yeah. Because they they know how to they they jump in front of that now and and they preempt it and they fix it. But of course there's there's always a cost and that cost is often and will be inflation and it won't be runaway but it will be elevated. So if you if you realize inflation is going to be elevated and you realize what they're doing you can you know make the most of it. Interest rates are going to go down. So maybe if you can get a high return, you want to borrow money to get that high return. All all that good stuff. All that good stuff that that if you know what's going on um you can take advantage of. even if you don't know what's going on, you can't take advantage of it. And and you're in that minority that's going, "What happened? Why why aren't I making money? What's going on? Why are these people driving purple Lambos and I'm not?" Um, you know, so it's all about unpacking all this stuff. And we're in a elevated inflationary situation. QE is coming, interest rates are coming down, the dollar's going to fall hard, um, and precious metals have got to go up. That lays it out very well. And in terms of cycles, talking about cycles, where would you place gold in the current cycle, what would be your outlook on the price? We mentioned we're we're at all-time highs right now. Where do we go from here? Um, well, you know, I'm not a fan of all-time highs because I'm a contrarian investor. That's that's my DNA. So, you know, when you I buy when nobody wants it and I sell when people start wanting it. That's my normal instinct. And of course, all-time highs, you know, I want to sell cuz it's an alltime high. you know, everybody likes it, but over the years, I've learned to kind of grimly hang on to stuff that's going to continue to run. And um I mean, technical analysis, you know, people either love it or they hate it, but it it's a incredibly incredibly bullish chart. And it says to me somewhere over 4,000 4 and a half thousand. But you know it it's it's only showing you what's happening um under the hood that you're not allowed to look at. Yeah. You know if you are in the Pentagon and you're going home you're saying to your to your spouse, oh blime me. You never guess what's going. Oh no. And she's going down the hair parlor and says she and you know it all trickles out doesn't it? If you're sat there watching satellites and whatever's going on underneath your camera, you know, that's the information flow and before it gets into the newspapers, it gets into the chart of the asset and you know, you're just seeing what's going on. But the big picture is gold is for war. And as we seem to be, you know, hobbling down that road to catastrophe, yeah, the price of gold is going to go up. Now obviously sanity will break out hopefully and we won't all end up in the Holocaust um and gold will be a lot higher as we approach those sort of things but you know I don't know what the price of gold is at 1 minute to midnight and I always thought 5,000 would be you know a very very very bad sign but it looks like it's going to head towards that pretty quick. Um, so I I I don't know. It, as I say, it'll be in the chart before it's in the news. So my my my actual um model um does give a little bit of advanced warning. Bitcoin is for flight. Okay. So before the proverbible hits the fan, crypto will go ape. And if crypto doesn't go ape, people aren't thinking about running away. And of course when things get really spicy, people start wanting to thinking about running away, getting their family safe, getting their money safe and and the rich are the ones doing that and they will um if they haven't got their money out and you know quite often you can't um they will be running to crypto for that cuz crypto is the way that you can exculate I believe that's the old fashioned word for it with you know 100 million or 200 million or 500 million and those people are out there and they will use crypto to do that at short notice. So at short notice and before it's in the news, you will see crypto go up like that. And you saw that when they bonded Iran. Um you saw that when Afghanistan did its thing and you know the minister had to leave his $5 million on the tarmac cuz he couldn't get it in the helicopter. Yeah. Every time somebody's going, "Oh no, I think I might have to leave." You know, if if it gets um really unpleasant in Ukraine, you'll see it in crypto. Suddenly, crypto for no apparent reason. And then if it isn't going to happen, it go back down again. And then gold will go trudge, trudge, trudge, trudge, trudge, trudge, trudge, trudge, trudge, trudge. So, crypto is your advanced warning for really bad developments or just local bad developments. So, you know, if the Houthies are going to sink some super tankers next week, you'll see Bitcoin do that. Yeah. because everybody knows but we don't and the first thing it will move is in Bitcoin and then if it doesn't happen it'll go back down again but the bit Bitcoin is the canary in the coal mine. Gold is basically the hoorde the dust cloud of the of the horsemen of the apocalypse coming over the hill. Yeah. So the two together give you a pretty good steer. And you know I'm uh very much positioned in precious metals because there's another very important uh theme which is completely separate and that's AI. AI is going to boil the oceans. Absolutely boil the oceans. They're already building you know service centers as big as Manhattan. Um and you know it's going to boil the oceans. And for that you need strategic and critical minerals because you know it's cables and it's cooling and it and it's electricity and it's um making electricity and they're making energy and pollution and all that stuff and that all comes back to the periodic table. So things like platinum and other precious metal, palladium and other precious metal, copper are going to be um in great demand. And you know the you can read it right now. you go. Is there going to be a shortage of copper in the coming years? And look, yes, there's a shortage of copper in the coming year, but it's going to be way way way way way more than they predict. I was talking to some energy people only on the weekend and they were and I said, "So, there's going to be a lot more need for energy, isn't it?" And they said, "Yes, it's going to be at least double." I said, "It's not double, is it?" And they looked at me cuz, you know, not really allowed to say how much energy is is going to be needed cuz that's got all this environmental stuff attached to it, which is a big deal. You don't want to go around saying, "Oh, we're going to need twice as much energy in the next 5 years." Because the implications of that are pretty drastic. And he said, "Well, I suppose we're going to need double." I said, "It's going to be 10x, isn't it?" Yeah, it's going to be 10x. They're going to, you know, there's going to be absolutely no cap on the demand for energy of AI because AI is pure energy. Yeah. And there's no second place in AI. If you haven't got as much AI as your your your global competitor, you're toast. If America doesn't have as much as China, America's toast. And if China doesn't have as much as America, China's toast. And if Europe doesn't have as much as as America, Europe's toast. And there's no limit to how much you want. So there's no limit to how much energy you need. You must have. And of course, it's not what energy that that we want, we we need. It's the energy that governments need to be relevant in the world. Well, that's gone infinite now. So, they're going to need infinite energy. They're going to need infinite copper. They're going to need infinite platinum palladium to break down all the pollution that that's going to cause. Yeah. So, that's another fork. And that's probably going to work out brilliantly for everybody. that's going to work out economic boom and prosperity and and you know everything you could possibly imagine um from a materialistic point of view. Yeah. But that is another pathway we're going on. So one pathway we're going heading towards global conflict and another pathway we're heading towards massive global economic boom. And you know the both of one of them is escapable cuz you know the the the idiots that rule us can actually you know stop reading the history books and wanting to be in them and start wanting to look after us. They can you know they can get that sanity can break out. But the AI thing is going to absolutely um 10x everything. Absolutely everything cuz it is the industrial revolution. industrial revolution was um you know artificial muscle. Well, this is artificial brain and and that there is no natural limit for the creation and use of resources because of that. And it's not only is it it's not futurism, it's here now and they're building that stuff. Oh, 600 billion here says Mr. Zuckerberg. You know, take this and it's all energy energy consuming stuff. So they have to make the energy to get it consumed. And then you've got this vast output of energy that's going to go into industry and you know it's just going to be absolutely explosive economic um situation over the next 10 years and huge sums of money to be made. So I want to ask a little bit about silver as well. So we've got gold for war, we've got Bitcoin for flight. What is silver for? Do you have do you have a word for that one as well? Well, I I I I just say that silver is retail gold. Yeah. I mean, I I I I used to be a professional numismaticist. Can you believe that? So, I I used to be, you know, part of the um collectible coin world. And if you look at coins, there's there's three Well, there was actually four, but let's not go back to the Bronze Age. Um, you've got three uh uh currencies, gold, silver, copper. Gold is for cashes and and I don't mean cash. I mean in a pot. You dig a hole in the corner of your house, put your gold in a pot, put it in the corner so you can come back if your house burns down and find it. And then you cover it up and you cash your gold. It it's you bank it effectively. Whether you bank it in your house or or or you bank it with a with a with a goldsmith, it is for only for a store of wealth and for the biggest of transactions. So you don't walk around with it. I mean you might have to if you're going a long way and you're not coming back for a long time. You might have it on you but generally gold is for you know storage of wealth. Silver is for big transactions, biggest transactions. You wouldn't buy a house with silver but you buy. Yeah. or or you would buy a a hotel room with a tiny little coin. You'd maybe get a night night out or a meal. So, it was for mediumsiz transactions, $100 bills effectively in silver. And then you and that's in a purse. So, you have that hung special device to stop you losing it. And then you got copper and copper is for your pocket. It's pocket money. And that's why you find a lot of of copper because it falls out of people's pockets. Still the same today. Yeah. So you've got those um the hierarchy of money. Well, normal people, silver is more um accessible. And for those of us out there who are worrying about the end of the world and and Mad Max, you know, silver is what you would buy if you want to buy a ticket or you want to buy a chicken, a silver coin. Gold coin's too heavy. Yeah. It's got too much value in it. So silver is the retail gold. It's the practical precious metal for the masses. And that's what it's always been. Governments, and I always tell this story. Um, and if you've seen me before, guys and girls out there, I apologize for you hearing this again, but when America retreated from the Philippines, they put the gold on a battleship. It might have actually been a submarine, but let's say a battleship. And they took the silver from the Philippines reserve and bank. They threw the silver in the bay. They literally took all the silver, chucked it in Manila Bay because they couldn't take it with them. There was too much of it. Yeah. So they took the gold, dumped the silver in the bay. Japanese got American prisoners to dive down and pull it out again. But you know that is the difference. Gold gold is for war. Silver is for is is the uh retail um uh sister. But of course, retail when it engages is a juggernaut in the same way as government is a juggernaut when it engages. It's, you know, the private sector and the public sector are basically equal equally balanced. So if all of a sudden the retail world goes, "Oh, I think I need to put some of my paper into into a metal," they would head for gold, but they also head for silver. And of course, if silver's going up, they head for that because they think that it's going up. They're they're they're early to the party. So, you get that effect, that FOMO effect, and you are seeing silver having that FOMO effect right now. Um, and there's no reason it wouldn't go to $50 an ounce or $100 an ounce. And of course, when you get get a FOMO event, you know, that you can't predict the top because it goes boom, bubble, and then of course bust. But um you know we're in a um period where silver is going into that phase of boom and it's the fast horse when it goes it goes. It it it's know gold tends to go grind grind grind grind. Oh I'm going to go sideways for 3 years now or four years. Oh grind grind grind grind grind gr grind. Silver tends to go nobody loves me. Bang bang. And and we're kind of in that that that repricing um event now. Now, the thing that I say and I and and please people, this is not even an opinion. This is just a statement of fact. There's 3,200 tons of gold um mined every year. Okay? So, that's quite a lot of money. There's 25,000 tons of silver. Well, that's only eight times as much silver than there is mined gold. And gold 8:1 is 80 to1 now. It's not going to be 8:1. It wasn't even 8:1 back in the Roman period. it was it like 10 to one. So, um you know that's probably not going to happen. But it gives you an idea of the supply. Although there are other issues with silver being that there's you know hundreds of years of people making silver teapotss and silver plates and silver knives and forks. So there is a big well of of reclaimable recyclable silver out there. Should the price go much higher than it is now, they will be turning, you know, beautiful ancient Victorian and Georgian 300-y old teapotss. So be melting them down for ingots because you know nobody wants the silver teapot anymore but nobody wants to melt them down because it's like seems like sacrilege doesn't it to melt down a 300-y old um tea service for the for the cash but it will happen and it happened back in the 80s everybody you know went round and pulled out all their silver salvas with 200 ounces in them and off they went to be melted down but there's still a lot of that out there so there is a a a a he the the city can be mined for silver. So that lack of supply is just indicative of an imbalance. Now when you go to platinum and palladium, which are two of my favorites, they only mine 200 tons of that. 200 tons. That's like and I always say that's like zero. And you you need to go and check that number cuz I keep checking it cuz I can't believe it. I still can't believe it after all these months of keep checking it. 200 tons and it's in such short supply that America is buying it off Russia even though there's all those sanctions out there. They are still buying it. It's not sanctioned because there's only three places that make it. North America a little bit, South um Africa a little bit and Russia a little bit. And you know it's vital for chemistry and for environmental remediation. And the way I see it, they're going to be burning everything. They're going to be they're going to be, you know, they're going to be burning your car for energy. They're going to be burning everything for energy. And and and making energy is going to need a lot of environmental remediation because it's going to generate pollution. You know, even America saying they're going to um start burning coal again, and coal is not even the cheapest energy source anymore. that they're going to be going back to. Well, you know, you're going to have to remediate that. If you're going to be generating two or three times the amount of energy, and they will. It's not down to me. I'm just telling you they're going to, not I'm not suggesting they should. They're going to have to remediate that. And they're going to have to remediate that with catalysts like platinum and palladium. And they're going to use platinum and palladium on fuel cells for hydrogen hydrogen economy. um which which needs platinum and palladium for all sorts of parts of that um hydrogen economy idea. And they're going to be going gung-ho for that too because they're going to be saying, "How can we get energy?" There's nuclear. Okay, we'll build all that. How much can we build? Yeah, build all that. Um and how are we going to get more energy? Oh, yeah. Geothermal. Yeah. Start drilling holes for that. Yeah. Yeah. And how else can we get energy? Oh, coal. Yeah. Yeah. Yeah. Start digging it up. Yeah. How else uh we're going burn wood? Yeah. Start chopping the trees down. What else? How else can we get it? Oh, hydrogen. Yeah, we need that, too. Windmills. Yeah. Yeah. Solar panels. Yeah. Yeah. Yeah. What else can How else can we get energy? Oh, we can make dams. Make dams. This they are going to boil the ocean. And for that they're going to need platinum and palladium to sort out some of the mess that that will cause. It all really starts to to fit together when you talk about it. And I'm I'm curious about how you're going about getting exposure to the precious metals. I'm thinking about how how are you splitting it between each metal and do you prefer physical? Are you interested in any of the mining stocks? How how are you looking at it? I don't like mining stocks because they don't track and I don't like that. You know, up goes gold. What happened to the gold mines? They've gone down. What? I Oh, what have you done? You've hedged all your gold. Oh. Oh, what you've been doing? You've been digging out all the low quality stuff now that the price is high so you can keep the high quality stuff or when the price comes down. Oh, that you know they they they the mining companies go up to all sorts of monkey business. There's there's the old um phrase that says if you can't see the fool at the table, it's you. Yeah. And I always get that feeling when I'm when I'm meeting miners. Um so they're last on my list. Uh and you know you physicals are good and there's places where you can get physical. Back in the day I had quite a lot of crypto gold but then I got uncomfortable with crypto as a whole. So, I don't hold any any precious metals tokenized, but there are people that can vault it for you and and that's good and they're out there. You know, you can just go to a to a um uh you can go to a a a somebody like a Solomon Gold or a Kitco or or a um a bullion vault, and I'm not sponsored by any of them, but they're good examples. And you send them the money and they say, "We're holding it for you." Or they post it to you. You can do that. I'm I'm not a fan of posting it to me because, you know, I don't want it under my bed. Um, but I like it. I, you know, I get I get physical gold and platinum and silver vaulted in Switzerland mainly if if you have the resources to to make that worth your while. ETFs, I love ETFs. I don't really love them, but I mean, they are it's there. the counterparty risk is is is is lower and the cost of of doing business is lower and they do track and you know if you want to lever up on it you can always lever up an ETF with your um you know with your friendly broker. Not that I'm a fan of levering anything up, but you know, you can lever up ETFs and then you can go into the mines and and you know, I I have some mines, but I I I literally was trying to buy um copper mines and I could only find two that I would touch with a 10-ft barge pot. And you know, that's a reflection. Do your due deal. Every time I do due deal on mining companies, I go, "Oh, no. Oh, I want a a a mine that tracks the price of the metal roughly, doesn't lag too much or run ahead too much, and it's in America and and there's no stories and it's been going grind grind grind for 10 years, it's it's hard to find those guys. It's hard. There's not much out there. But, you know, if if if you like a if you like to um if you like to live dangerously, there's plenty of of mining spectative mining companies, you know, minnows and micro minutiaas out there that have got a mountain of of this here, so they say, somewhere far away where you can't check it. Um, and you know, it goes from those tiny little speculative companies that will, you know, rip the face off, all the way up to the big guys. Um, but it's I find the actual stocks themselves very very difficult to get excited about. And um, the ones I do get excited about, they tend to get bought out before the real action starts. And that also makes me rather Yeah. Uh, I I I like I like ingots. In ingots are good, but you don't get the leverage. But if you want the leverage, you can, you know, go to the ETFs and and lever up on it and you can deal in futures and stuff like that. But you know that that's a that's a that's a very specialist game and and I think that it's much better not to gamble and it's much better to farm better to stake um than than you know uh play play games. And for that um ETFs are ideal for for the average investor. There it is. Whatever GLD or whatever it's called in in your company and and you say, "Well, give me 50 grand of that." And they are you've got it. And um you can sell it like that and you get paid like that and the costs are low and it tracks. That's the important thing. Does it track? And if it doesn't track, why did it go up today when my when the physicals went up? Why is that? I don't understand. So, you know, that that's that's why I have trouble with with the the stocks. I mean, I've literally I've got very very very few stocks. Um, I've got a platinum stock and I've got a copper stock. I haven't got any gold stocks. I I I cannot find one that I can feel I can look in the eye and say, "You're not playing games, are you?" Well, I think that that makes a lot of sense. I I understand the way you explained it there. And I think we've made it through a good number of topics today. So, I'll let you go, but before I do, any any final thoughts you would leave investors with right now? Um, I I I think that the best way to operate in a market like this is to get your theory in place. You know, it doesn't matter how crazy it is. It doesn't matter as long as it someone else didn't tell you what it was. You worked it out yourself and then you benchmark that about what happens. So, you know, when I am I'm not a gold bug, you see. I'm I'm I'm I've been brought up even as a child, I was surrounded by gold bugs and I I built up antibodies to all that stuff about, you know, the collapse in the dollar and all that. I just I hate that. And and I've never really been um I I I just don't dabble in in that end of town because of of history. And then 2000 um and then co came along and started printing money and I thought whoa gold is going to go eight. So I I loaded up on lorries of it and um it didn't go eight at all. Yeah. It didn't go up at all and I thought yeah that'll teach you. And then suddenly I just realized what the devil it was for and then when America comes out and tells Europe to get on with fighting the Russians because they're going to be fighting the Chinese. It's not really, you know, that's my the theory and and you go, "Oh, did he really did they really say that? That can't be right." Oh, why are all the military European military stocks going through the roof? Oh, they did say that. Oh, oh, no, he said that. Oh, no. Oh, so you just benchmark your theory against what happened and you go, "Oh, I must be wrong about that because it's it hasn't actually it that doesn't fit the the model." So you build up your model by trial and error and then you navigate using it. And if you if you do that and are diligent, you won't go far wrong. In fact, you'll you'll do really well and over time you'll you'll um adapt your market model to one that's very useful. And um that's the way that that people should go and they should use uh videos like this as raw material for their own thinking, not as the law. You know, if you're 55% right in the market, you do very well. So, a little bit better calling heads and tails than random, you'll do very well. And, you know, if you're getting 6040, you're doing really, really well. I mean, financially, you're doing well. Not not that you're just being clever. You're doing financially well. So, you know, you have to build up your own theories, your own speculations based on raw material from people like me. you know, just don't take what I say as correct. Check, you know, just read it up on what I've said and half of it will make sense and half of it will appear to be complete rubbish and then you draw up your own conclusions, your own theory and over time that theory will be profitable for you. Maybe you'll be 65% out of 100, right? And that will be, you know, wonderful. Well, I think that's that's great advice to end on. So, thank you very much for that and for coming on to talk today. This was a lot of fun. That's my pleasure and uh hope to hope you'll invite me back so I can tell my crazy theories. Oh, I would love to. Well, we'll definitely have you back. For now, I'm Charlotte Mloud with investingnews.com and this is Clem Chambers. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]
Clem Chambers: Gold's Top Driver Now, Silver's Coming Boom Phase
Summary
Transcript
[Music] I'm Charlotte Mloud with investingnews.com and here today with me is Clem Chambers, CEO of a newfn.com. Thank you so much for being here. Great to have you. Great to be on. Really good to be speaking with you. I think it's going to be a fun conversation. I was thinking just because it's our first time talking, I wondered if you could start with a little bit of introduction to yourself and your work right now. I'm sure many people in our audience are familiar, but I think it's a nice place to start. Well, I I've been um writing uh finance um material since like 1999 when I used to write um the money section for Wired magazine for a couple of years and then um money wasn't so wired when the com crash came along and they killed that page. But anyway, I then started writing for Forbes and I've written for Forbes for them now. So long my contract is uh in Latin and I still write for them. I write for people like Seeking Alpha. Uh I've got my own channel um on YouTube which I just started just for the pure hell of it. uh which is called Clem Chambers Alpha and um I've been working on with uh financial private investor communities investors hub in the US um will be the one that your your um viewers will probably know uh for you know 20 years and now I'm setting up uh a website called a new FN uh which will be coming to a browser near you um actually sometime in September and you know we plan to do something new and kind of funky uh with financial information And um hopefully it will prove that um we'll be able to offer a a platform where investors and for that matter traders um have a a chance at uh making some money cuz we all know that it's very tough to make money in the markets um as a private investor and um not many actually do make decent profits but I try to um help uh people and have over the last 30 years um you know get the best of the market and um build up their own financial resources. is and uh and right now, which is why you've got me on, I've been um singing about gold for about 6 months and it's all come to pass. Um it's, you know, I might be lucky. I might be right. I might be lucky and right. Um but precious metals is is something that's particularly interesting right now for me. Well, very good. Thank you for going into that. We'll include some links in the video description so people can find you online. And yes, today we are here to talk about what's going on in gold and precious metals. So, let's jump right into that. We're coming off a pretty historic week for gold and maybe heading into another historic week. We'll we'll find out soon, I'm sure. But I wanted to get your take on what's going on with the gold price. I've heard you say elsewhere that gold is for war. So, when you look at this current price increase that we're seeing for gold. Is that the main driver that you see or or how are you looking at it? Yeah, absolutely. And you know, if you think about gold, the the old trope is that gold is money and gold's going to be money again and and money's going to be backed by gold and you know, gold's the only true money. It's God's money and blah blah blah. Um, but you know, no, that's not why governments keep gold. Governments keep gold because it's the currency of war. So when you had a period of of dropping uh global tension and when it the world was meant to be uni uniolar um and America was you know the king of the pile and everybody bowed down and there wasn't going to be much fighting. It was all going to be police actions no more war um countries sold down their gold cuz they didn't need it. I mean you don't need gold if you if you're not worried about fighting a war. It's the currency of war. However, if things start to get spicy, if stress goes up, well, a country has to buy it, has to lay it in, it's a strategic reserve in case of the worst. And that's why countries own it, and that's why they're buying it now. So, in the past, where Wall Street and other financial um uh institutions could push private investors around because private investors bought gold and they controlled the market. so they could shake them out and, you know, keep the price down and short it and do whatever they they wanted to do to reap the rewards of being in control of the market. Well, those days are gone now because it's government's buying and you know, you just have to go uh look up Poland holding the finance minister holding up gold bars saying we've got more gold. Well, why would Poland want more gold? Well, the obvious answer is gold is for war, right? And of course, uh, America's come out and said it's got a major problem with China. And guess who's buying lots and lots of gold. I mean, they make enough and then they're buying it. It's China. Because China has to build up its gold reserve. And, you know, Europe has to build up its gold. Everybody has to build up their gold reserve because the the road that all these countries are on are is the road of increasing global stress. And for a strategic reserve, I mean like you should be laying in petroleum, shouldn't you? You should be laying in strategic and critical minerals. Funny enough, America is, but you always have to lay you also have to lay in gold. And there's only 3,200 tons of it made every year. So now the £800 gorillas are buying it, i.e. governments. Well, you know, Wall Street has to get out of the way of the price and the price is only going to go one way. And the thing is, it's not just going up. It's going up in real terms. Now, obviously, people think of gold as an inflation hedge, which it is, and but gold doesn't necessarily run, you know, oh, we've got 5% inflation this year. Gold goes up 5%. It lags, it catches up, it runs ahead, it falls behind. But you know when countries say ah uh we need another 500 tons of gold in our warehouses well it pushes the real value of gold up. So gold outperforms inflation. And that's what you're seeing now. countries like China, like Poland, um like I think pretty much everybody really, if you uh if you could track the gold around is laying in gold because if you're fighting a war and you want to buy, I don't know, tungsten, you have to pay with gold. I mean, I I use tungsten as an example because during the Second World War, this is a fascinating story, but the Nazis were buying tungsten off the Portuguese, who were also a fascist state at the time. They were buying tungsten for armored piercing shells off Portugal in British 5 notes. And after a time the Portuguese said, "Where are you getting these British 5 notes from?" And the answer was the Germans were printing them. So guess what? The Germans had to end up paying for their tungsten with not fake British 5 notes for that matter. Not for their government bonds, not for their own paper notes either. They had to pay with gold because your paper's no good when you're fighting a war. And as you move towards that terrible moment, doesn't mean you have to get there, but as tension rises, if you've got any sort of sense, if you've got any sort of strategy, you have to lay in more resources and just in case there is a conflict, and that means buying gold. Well, and it does definitely feel like tensions are are heating up around the world. So, that makes a lot of sense as as the top driver for gold right now. I want to ask you a little bit more about that inflation angle because I think everybody right now is quite focused on interest rates in the US as well looking toward that Fed meeting and thinking that rates are going to come down but I know there's also concern that if rates come down then maybe inflation is unleashed again because it's not quite under control. So how are you seeing that? How are you seeing those dynamics play out? Well, I'm I'm a little bit contrarian and people are going to say what what's he talking about? Printing money causes inflation. Okay, there's only one um set of people that can create inflation and that's government. Okay, they can create deflation if they want like Japan has done for many many years. They can create inflation if they want. Simplest thing in the world to do. They generate inflation if they want it. They don't want it. They don't have to have it. Now, printing money doesn't necessarily create inflation. In the old days, everybody would say it does. It depends what kind of money you print. Now, most people think money is cash. And when someone says, "Oh, you know, we're going to have a digital dollar." Well, dollar is digital. Most dollars are digital. Most dollars are held on hard drives that go spin, not dollar bills in your pocket. Most dollars are not even dollars really. They're just book entries. Now, if you print money and not literally on paper, but if you print it digitally as most currency is, it depends where you put it. Now, if you inject it into places where people are going to hold it, it's not so inflationary. If you give it to the rich, it's not so inflationary. If you give it to the poor, it's very inflationary, which is what the inflation from COVID was mainly caused by because it was injected at the level of people that not only enjoy spending their cash but also have to. Now, if you give rich people cash, you know what I'm going to do with this? I got all the money I want. I got all the money I need. Well, I think I'll spend it on rich people's assets. I'll spend it on real estate. Up goes real estate. So, you get real estate inflation. Oh, I think I'll put it in stocks. Up goes Nvidia. Yeah. And that money is locked up in those assets. It doesn't go drop immediately down into um the group of people that will take it down the supermarket and push up the price of tomatoes or beer. I mean, back in the day of COVID, it was funny. I was actually um in France and they, you know, handed out um money to people like most countries did to everybody to keep the wheels turning. And immediately all the hard liquor disappeared off the supermarket shelves because everybody traded up to hard liquor from beer and wine. And that's the example of what happens when money is injected to people that are not well off. So in the modern world, you you if you want to print money, you inject it via QE and it goes into rich people's assets and that's where you get the inflation and then it trickles down and everyone complains that they don't get it. Um, and they complain that the rich people get it, etc., etc., etc., but the money goes in, the economy spins up faster, assets inflate, but the price of beer doesn't. So, when they drop interest rates, they're going to have to QE because everyone's going to say, "I don't want your crummy bonds. You're dropping interest rates. Why would I buy those?" So, they're going to say, "Well, we'll buy them ourselves then, won't we?" And they will QE. That's what QE is, basically. It's a way kind of monetizing um government debt. Now, that's strictly taboo to monetize government debt. You're not allowed to do that, but you're only doing that if you're turning it directly into dollar bills. Now, if you turn that into assets that are not so liquid. So, this is the idea. Money um has different levels of liquidity. If I give you $20 bill, it's very liquid. You go and you can spend it. If you put that with your bank overnight, well, it's not so liquid. It takes a day to get it. If you put it into a a treasury bond, well, it's not liquid at all. It could be liquid. You could ring up your broker and he could give you cash in two days, but you're not going to because you've invested it and you've invested it um to get the the coupon on it. And if you take that that cash and you put it into Nvidia, it's even less liquid cuz you you don't really want to sell it. And then if you put it into a house, it's not liquid at all cuz it takes you 90 days to sell it. So that money depending on where it goes depends on how combustible it is and how inflationary it is and central banks have got the knack in the west anyway of of of printing money and pushing it into places where the cash is not liquid. Now if you're in South America you print money and you pay the wages with it. Boom. It creates immediately creates inflation. And that's why when South America prints money, they print money and it creates inflation and it means they don't have to tax their people because that's difficult. Their people run away or pretend they haven't got any money or or just don't fill in the form. Yeah. So in in developing countries, they don't have the ability to knock on your door and say, "Get me taxed." So instead, they tax everybody by just printing money. And that devalues everybody's money. Um and it's um has all sorts of um negative effects. But it's one way of of of of actually taxing people. So, you know, inflation is a tax. It's a way of getting out governments get out of debt and it's a way of juicing the economy. Now, obviously, I'm a politician. I want to get elected. I want interest rates down. I want to print money. I'll blame the inflation on someone else and I'll get elected. So, you have a central bank that's independent. So when I go, "Hello, central bank. Print some money for me." The central bank says, "No, no, that's bad." Oh, no. No. Well, we need to. No, it's bad. We're not going to do that. We'll drop interest rates, will you? No, we're not going to do that. That'll be bad. Well, okay. You're not independent anymore and you're going to do it. And my mate is now the central bank boss, and he'll do, "Oh, hello, friend. Print some money for Oh, you will. Oh, I've got some inflation. Oh, it's someone else's fault. Oh, I got elected." So the reason central banks are independent is to stop politicians bullying their mates in the central bank to print money to create inflation to get them elected. Does that ring any bells? Yes, it sure does. Yes. So we're going to get elevated inflation. We're going to get um uh QE. We're going to get falling interest rates. and any hard assets are going to appreciate in addition to the ones that going to appreciate like gold because of of the ugly increasing geopolitical tension that we're seeing. So good markets unless somebody does something to to crash the market and even then if it does crash they've got that that lever to make the market go back up again. So assets protected uh juiced um but you you you will get elevated inflation. inflation is not real inflation. The inflation you fill in your pocket is not going down and you know that is because they're just going to be printing money to get interest rates down. I think that gives a very good idea of how you see it and you started to talk a little bit about the stock market and maybe we can go a little bit more in that direction because I see a lot of questions from investors about what's going to happen there. Are we going to have a crash at some point? It's it's continued to go. What do you see coming? Well, of course we're going to get a crash. The market always crashes and we've had one this year already. The question is, does that crash create a domino effect that then blows into the wider economy and has um a negative systemic impact? And I think the answer to that is no. Because um you know the central bankers and whether they'll stay independent or not, they do know how to stop a stock market crash. And when they do that, obviously it has inflationary impacts because they have to print money for it. So what actually happens is when the Treasury or the Fed puts money in, all the investment banks are watching. They literally can watch the printing presses. So when say um J Powell says, "Right, I think we need to set the printing press going or the equivalent." And you know, the banks actually hear the printing press go and they go, "Whoa, okay, bye bye." cuz they can see the money coming. They literally see the flow past their desks. So when the government says, "Yeah, I think we need a bit of support here." They push money into the economy which goes to them. Yeah. And they can get a little bit more return from what from this free money they're getting. So they're paid to buy stocks and take the risk. Okay. So, every time bad things happen, as long as the politicians or or the central bankers or wherever it is um considers that a crash will be bad or it's gone down enough or or it's shouldn't go down anymore, they just press that button and the money gushes out the front door or be the Treasury or the Fed and then the banks are there with their binoculars going, "Right, the money's coming. The money's coming. Bye, bye bye bye." Then up it goes. So, that's how it works. That's how the market is manipulated for in a better way. Now, in the old days, it would go down and everybody in the treasury be going, "Oh, well, markets do their thing." And the Fed will go, "Oh, markets do their thing. Oh, this is not good. Oh, this is getting a bit minty. Oh, it's oh no, all these people are going bust and they've gone bust. Oh, it's terrible. Oh, what are we going to do? I don't know. It's all too late." They don't do it like that anymore. Really, 2008 was the first time when they went when it really was on the precipice in 2008. the the whole global uh economy and Americans economy was on a knife edge of absolute meltdown and they went right no there's this new theory of how of money and there's this thing called QE and and it's in textbooks and no one's tried it and we're told it's a lot of old rubbish but if we don't do it it's all over so pull that lever tar and all that thing happened QE happened and it worked and everyone said oh it's going to be inflation now oh no no hyperinflation Oh no. Oh, it hasn't happened. Why? Why didn't happen? What? Oh, theory worked. Oh. Oh, and most people still don't understand it cuz they push the money into illlquid assets or low um low liquidity assets. Real estate, low liquidity asset, equities, buy and hold, buy the dip, low liquidity assets. So, the money went in, went to the rich cuz they don't need it. They don't need to spend it. They got enough of it. So, the money goes into the system. Now, where do the rich put their money? They don't they don't um put it under the bed. They give it to the banks. And what do the banks do? They lend it out. And the companies that are going bust because they can't borrow money, they can borrow it. So, they borrow it and they don't go bust and you keep your job. And you know, the world goes ever on. And um you know, and the trickle down happens and la and everybody's grumpy cuz they didn't get the money. Someone else got it. Um but nonetheless, that's how the system works. And of course it works and it works and it works and things go up and things get better and better and better until the bang they blow up. Um but I think we're some way away from um that happening cuz I don't think many people understand the the new cycle. They just see it happening and go I don't understand. Oh that ah oh why aren't I getting some that's not fair. But actually it keeps the wheels on. So, we could have had a crash. Well, we did have a crash. And they used um the modern economic manipulative tools to stop that crash. So, we didn't have a meltdown. We didn't have a stock market implosion. People didn't lose their um pensions. They didn't lose their 401ks. They didn't end up, you know, buddy, could you can you spare me a dime? Yeah. Because they they know how to they they jump in front of that now and and they preempt it and they fix it. But of course there's there's always a cost and that cost is often and will be inflation and it won't be runaway but it will be elevated. So if you if you realize inflation is going to be elevated and you realize what they're doing you can you know make the most of it. Interest rates are going to go down. So maybe if you can get a high return, you want to borrow money to get that high return. All all that good stuff. All that good stuff that that if you know what's going on um you can take advantage of. even if you don't know what's going on, you can't take advantage of it. And and you're in that minority that's going, "What happened? Why why aren't I making money? What's going on? Why are these people driving purple Lambos and I'm not?" Um, you know, so it's all about unpacking all this stuff. And we're in a elevated inflationary situation. QE is coming, interest rates are coming down, the dollar's going to fall hard, um, and precious metals have got to go up. That lays it out very well. And in terms of cycles, talking about cycles, where would you place gold in the current cycle, what would be your outlook on the price? We mentioned we're we're at all-time highs right now. Where do we go from here? Um, well, you know, I'm not a fan of all-time highs because I'm a contrarian investor. That's that's my DNA. So, you know, when you I buy when nobody wants it and I sell when people start wanting it. That's my normal instinct. And of course, all-time highs, you know, I want to sell cuz it's an alltime high. you know, everybody likes it, but over the years, I've learned to kind of grimly hang on to stuff that's going to continue to run. And um I mean, technical analysis, you know, people either love it or they hate it, but it it's a incredibly incredibly bullish chart. And it says to me somewhere over 4,000 4 and a half thousand. But you know it it's it's only showing you what's happening um under the hood that you're not allowed to look at. Yeah. You know if you are in the Pentagon and you're going home you're saying to your to your spouse, oh blime me. You never guess what's going. Oh no. And she's going down the hair parlor and says she and you know it all trickles out doesn't it? If you're sat there watching satellites and whatever's going on underneath your camera, you know, that's the information flow and before it gets into the newspapers, it gets into the chart of the asset and you know, you're just seeing what's going on. But the big picture is gold is for war. And as we seem to be, you know, hobbling down that road to catastrophe, yeah, the price of gold is going to go up. Now obviously sanity will break out hopefully and we won't all end up in the Holocaust um and gold will be a lot higher as we approach those sort of things but you know I don't know what the price of gold is at 1 minute to midnight and I always thought 5,000 would be you know a very very very bad sign but it looks like it's going to head towards that pretty quick. Um, so I I I don't know. It, as I say, it'll be in the chart before it's in the news. So my my my actual um model um does give a little bit of advanced warning. Bitcoin is for flight. Okay. So before the proverbible hits the fan, crypto will go ape. And if crypto doesn't go ape, people aren't thinking about running away. And of course when things get really spicy, people start wanting to thinking about running away, getting their family safe, getting their money safe and and the rich are the ones doing that and they will um if they haven't got their money out and you know quite often you can't um they will be running to crypto for that cuz crypto is the way that you can exculate I believe that's the old fashioned word for it with you know 100 million or 200 million or 500 million and those people are out there and they will use crypto to do that at short notice. So at short notice and before it's in the news, you will see crypto go up like that. And you saw that when they bonded Iran. Um you saw that when Afghanistan did its thing and you know the minister had to leave his $5 million on the tarmac cuz he couldn't get it in the helicopter. Yeah. Every time somebody's going, "Oh no, I think I might have to leave." You know, if if it gets um really unpleasant in Ukraine, you'll see it in crypto. Suddenly, crypto for no apparent reason. And then if it isn't going to happen, it go back down again. And then gold will go trudge, trudge, trudge, trudge, trudge, trudge, trudge, trudge, trudge, trudge. So, crypto is your advanced warning for really bad developments or just local bad developments. So, you know, if the Houthies are going to sink some super tankers next week, you'll see Bitcoin do that. Yeah. because everybody knows but we don't and the first thing it will move is in Bitcoin and then if it doesn't happen it'll go back down again but the bit Bitcoin is the canary in the coal mine. Gold is basically the hoorde the dust cloud of the of the horsemen of the apocalypse coming over the hill. Yeah. So the two together give you a pretty good steer. And you know I'm uh very much positioned in precious metals because there's another very important uh theme which is completely separate and that's AI. AI is going to boil the oceans. Absolutely boil the oceans. They're already building you know service centers as big as Manhattan. Um and you know it's going to boil the oceans. And for that you need strategic and critical minerals because you know it's cables and it's cooling and it and it's electricity and it's um making electricity and they're making energy and pollution and all that stuff and that all comes back to the periodic table. So things like platinum and other precious metal, palladium and other precious metal, copper are going to be um in great demand. And you know the you can read it right now. you go. Is there going to be a shortage of copper in the coming years? And look, yes, there's a shortage of copper in the coming year, but it's going to be way way way way way more than they predict. I was talking to some energy people only on the weekend and they were and I said, "So, there's going to be a lot more need for energy, isn't it?" And they said, "Yes, it's going to be at least double." I said, "It's not double, is it?" And they looked at me cuz, you know, not really allowed to say how much energy is is going to be needed cuz that's got all this environmental stuff attached to it, which is a big deal. You don't want to go around saying, "Oh, we're going to need twice as much energy in the next 5 years." Because the implications of that are pretty drastic. And he said, "Well, I suppose we're going to need double." I said, "It's going to be 10x, isn't it?" Yeah, it's going to be 10x. They're going to, you know, there's going to be absolutely no cap on the demand for energy of AI because AI is pure energy. Yeah. And there's no second place in AI. If you haven't got as much AI as your your your global competitor, you're toast. If America doesn't have as much as China, America's toast. And if China doesn't have as much as America, China's toast. And if Europe doesn't have as much as as America, Europe's toast. And there's no limit to how much you want. So there's no limit to how much energy you need. You must have. And of course, it's not what energy that that we want, we we need. It's the energy that governments need to be relevant in the world. Well, that's gone infinite now. So, they're going to need infinite energy. They're going to need infinite copper. They're going to need infinite platinum palladium to break down all the pollution that that's going to cause. Yeah. So, that's another fork. And that's probably going to work out brilliantly for everybody. that's going to work out economic boom and prosperity and and you know everything you could possibly imagine um from a materialistic point of view. Yeah. But that is another pathway we're going on. So one pathway we're going heading towards global conflict and another pathway we're heading towards massive global economic boom. And you know the both of one of them is escapable cuz you know the the the idiots that rule us can actually you know stop reading the history books and wanting to be in them and start wanting to look after us. They can you know they can get that sanity can break out. But the AI thing is going to absolutely um 10x everything. Absolutely everything cuz it is the industrial revolution. industrial revolution was um you know artificial muscle. Well, this is artificial brain and and that there is no natural limit for the creation and use of resources because of that. And it's not only is it it's not futurism, it's here now and they're building that stuff. Oh, 600 billion here says Mr. Zuckerberg. You know, take this and it's all energy energy consuming stuff. So they have to make the energy to get it consumed. And then you've got this vast output of energy that's going to go into industry and you know it's just going to be absolutely explosive economic um situation over the next 10 years and huge sums of money to be made. So I want to ask a little bit about silver as well. So we've got gold for war, we've got Bitcoin for flight. What is silver for? Do you have do you have a word for that one as well? Well, I I I I just say that silver is retail gold. Yeah. I mean, I I I I used to be a professional numismaticist. Can you believe that? So, I I used to be, you know, part of the um collectible coin world. And if you look at coins, there's there's three Well, there was actually four, but let's not go back to the Bronze Age. Um, you've got three uh uh currencies, gold, silver, copper. Gold is for cashes and and I don't mean cash. I mean in a pot. You dig a hole in the corner of your house, put your gold in a pot, put it in the corner so you can come back if your house burns down and find it. And then you cover it up and you cash your gold. It it's you bank it effectively. Whether you bank it in your house or or or you bank it with a with a with a goldsmith, it is for only for a store of wealth and for the biggest of transactions. So you don't walk around with it. I mean you might have to if you're going a long way and you're not coming back for a long time. You might have it on you but generally gold is for you know storage of wealth. Silver is for big transactions, biggest transactions. You wouldn't buy a house with silver but you buy. Yeah. or or you would buy a a hotel room with a tiny little coin. You'd maybe get a night night out or a meal. So, it was for mediumsiz transactions, $100 bills effectively in silver. And then you and that's in a purse. So, you have that hung special device to stop you losing it. And then you got copper and copper is for your pocket. It's pocket money. And that's why you find a lot of of copper because it falls out of people's pockets. Still the same today. Yeah. So you've got those um the hierarchy of money. Well, normal people, silver is more um accessible. And for those of us out there who are worrying about the end of the world and and Mad Max, you know, silver is what you would buy if you want to buy a ticket or you want to buy a chicken, a silver coin. Gold coin's too heavy. Yeah. It's got too much value in it. So silver is the retail gold. It's the practical precious metal for the masses. And that's what it's always been. Governments, and I always tell this story. Um, and if you've seen me before, guys and girls out there, I apologize for you hearing this again, but when America retreated from the Philippines, they put the gold on a battleship. It might have actually been a submarine, but let's say a battleship. And they took the silver from the Philippines reserve and bank. They threw the silver in the bay. They literally took all the silver, chucked it in Manila Bay because they couldn't take it with them. There was too much of it. Yeah. So they took the gold, dumped the silver in the bay. Japanese got American prisoners to dive down and pull it out again. But you know that is the difference. Gold gold is for war. Silver is for is is the uh retail um uh sister. But of course, retail when it engages is a juggernaut in the same way as government is a juggernaut when it engages. It's, you know, the private sector and the public sector are basically equal equally balanced. So if all of a sudden the retail world goes, "Oh, I think I need to put some of my paper into into a metal," they would head for gold, but they also head for silver. And of course, if silver's going up, they head for that because they think that it's going up. They're they're they're early to the party. So, you get that effect, that FOMO effect, and you are seeing silver having that FOMO effect right now. Um, and there's no reason it wouldn't go to $50 an ounce or $100 an ounce. And of course, when you get get a FOMO event, you know, that you can't predict the top because it goes boom, bubble, and then of course bust. But um you know we're in a um period where silver is going into that phase of boom and it's the fast horse when it goes it goes. It it it's know gold tends to go grind grind grind grind. Oh I'm going to go sideways for 3 years now or four years. Oh grind grind grind grind grind gr grind. Silver tends to go nobody loves me. Bang bang. And and we're kind of in that that that repricing um event now. Now, the thing that I say and I and and please people, this is not even an opinion. This is just a statement of fact. There's 3,200 tons of gold um mined every year. Okay? So, that's quite a lot of money. There's 25,000 tons of silver. Well, that's only eight times as much silver than there is mined gold. And gold 8:1 is 80 to1 now. It's not going to be 8:1. It wasn't even 8:1 back in the Roman period. it was it like 10 to one. So, um you know that's probably not going to happen. But it gives you an idea of the supply. Although there are other issues with silver being that there's you know hundreds of years of people making silver teapotss and silver plates and silver knives and forks. So there is a big well of of reclaimable recyclable silver out there. Should the price go much higher than it is now, they will be turning, you know, beautiful ancient Victorian and Georgian 300-y old teapotss. So be melting them down for ingots because you know nobody wants the silver teapot anymore but nobody wants to melt them down because it's like seems like sacrilege doesn't it to melt down a 300-y old um tea service for the for the cash but it will happen and it happened back in the 80s everybody you know went round and pulled out all their silver salvas with 200 ounces in them and off they went to be melted down but there's still a lot of that out there so there is a a a a he the the city can be mined for silver. So that lack of supply is just indicative of an imbalance. Now when you go to platinum and palladium, which are two of my favorites, they only mine 200 tons of that. 200 tons. That's like and I always say that's like zero. And you you need to go and check that number cuz I keep checking it cuz I can't believe it. I still can't believe it after all these months of keep checking it. 200 tons and it's in such short supply that America is buying it off Russia even though there's all those sanctions out there. They are still buying it. It's not sanctioned because there's only three places that make it. North America a little bit, South um Africa a little bit and Russia a little bit. And you know it's vital for chemistry and for environmental remediation. And the way I see it, they're going to be burning everything. They're going to be they're going to be, you know, they're going to be burning your car for energy. They're going to be burning everything for energy. And and and making energy is going to need a lot of environmental remediation because it's going to generate pollution. You know, even America saying they're going to um start burning coal again, and coal is not even the cheapest energy source anymore. that they're going to be going back to. Well, you know, you're going to have to remediate that. If you're going to be generating two or three times the amount of energy, and they will. It's not down to me. I'm just telling you they're going to, not I'm not suggesting they should. They're going to have to remediate that. And they're going to have to remediate that with catalysts like platinum and palladium. And they're going to use platinum and palladium on fuel cells for hydrogen hydrogen economy. um which which needs platinum and palladium for all sorts of parts of that um hydrogen economy idea. And they're going to be going gung-ho for that too because they're going to be saying, "How can we get energy?" There's nuclear. Okay, we'll build all that. How much can we build? Yeah, build all that. Um and how are we going to get more energy? Oh, yeah. Geothermal. Yeah. Start drilling holes for that. Yeah. Yeah. And how else can we get energy? Oh, coal. Yeah. Yeah. Yeah. Start digging it up. Yeah. How else uh we're going burn wood? Yeah. Start chopping the trees down. What else? How else can we get it? Oh, hydrogen. Yeah, we need that, too. Windmills. Yeah. Yeah. Solar panels. Yeah. Yeah. Yeah. What else can How else can we get energy? Oh, we can make dams. Make dams. This they are going to boil the ocean. And for that they're going to need platinum and palladium to sort out some of the mess that that will cause. It all really starts to to fit together when you talk about it. And I'm I'm curious about how you're going about getting exposure to the precious metals. I'm thinking about how how are you splitting it between each metal and do you prefer physical? Are you interested in any of the mining stocks? How how are you looking at it? I don't like mining stocks because they don't track and I don't like that. You know, up goes gold. What happened to the gold mines? They've gone down. What? I Oh, what have you done? You've hedged all your gold. Oh. Oh, what you've been doing? You've been digging out all the low quality stuff now that the price is high so you can keep the high quality stuff or when the price comes down. Oh, that you know they they they the mining companies go up to all sorts of monkey business. There's there's the old um phrase that says if you can't see the fool at the table, it's you. Yeah. And I always get that feeling when I'm when I'm meeting miners. Um so they're last on my list. Uh and you know you physicals are good and there's places where you can get physical. Back in the day I had quite a lot of crypto gold but then I got uncomfortable with crypto as a whole. So, I don't hold any any precious metals tokenized, but there are people that can vault it for you and and that's good and they're out there. You know, you can just go to a to a um uh you can go to a a a somebody like a Solomon Gold or a Kitco or or a um a bullion vault, and I'm not sponsored by any of them, but they're good examples. And you send them the money and they say, "We're holding it for you." Or they post it to you. You can do that. I'm I'm not a fan of posting it to me because, you know, I don't want it under my bed. Um, but I like it. I, you know, I get I get physical gold and platinum and silver vaulted in Switzerland mainly if if you have the resources to to make that worth your while. ETFs, I love ETFs. I don't really love them, but I mean, they are it's there. the counterparty risk is is is is lower and the cost of of doing business is lower and they do track and you know if you want to lever up on it you can always lever up an ETF with your um you know with your friendly broker. Not that I'm a fan of levering anything up, but you know, you can lever up ETFs and then you can go into the mines and and you know, I I have some mines, but I I I literally was trying to buy um copper mines and I could only find two that I would touch with a 10-ft barge pot. And you know, that's a reflection. Do your due deal. Every time I do due deal on mining companies, I go, "Oh, no. Oh, I want a a a mine that tracks the price of the metal roughly, doesn't lag too much or run ahead too much, and it's in America and and there's no stories and it's been going grind grind grind for 10 years, it's it's hard to find those guys. It's hard. There's not much out there. But, you know, if if if you like a if you like to um if you like to live dangerously, there's plenty of of mining spectative mining companies, you know, minnows and micro minutiaas out there that have got a mountain of of this here, so they say, somewhere far away where you can't check it. Um, and you know, it goes from those tiny little speculative companies that will, you know, rip the face off, all the way up to the big guys. Um, but it's I find the actual stocks themselves very very difficult to get excited about. And um, the ones I do get excited about, they tend to get bought out before the real action starts. And that also makes me rather Yeah. Uh, I I I like I like ingots. In ingots are good, but you don't get the leverage. But if you want the leverage, you can, you know, go to the ETFs and and lever up on it and you can deal in futures and stuff like that. But you know that that's a that's a that's a very specialist game and and I think that it's much better not to gamble and it's much better to farm better to stake um than than you know uh play play games. And for that um ETFs are ideal for for the average investor. There it is. Whatever GLD or whatever it's called in in your company and and you say, "Well, give me 50 grand of that." And they are you've got it. And um you can sell it like that and you get paid like that and the costs are low and it tracks. That's the important thing. Does it track? And if it doesn't track, why did it go up today when my when the physicals went up? Why is that? I don't understand. So, you know, that that's that's why I have trouble with with the the stocks. I mean, I've literally I've got very very very few stocks. Um, I've got a platinum stock and I've got a copper stock. I haven't got any gold stocks. I I I cannot find one that I can feel I can look in the eye and say, "You're not playing games, are you?" Well, I think that that makes a lot of sense. I I understand the way you explained it there. And I think we've made it through a good number of topics today. So, I'll let you go, but before I do, any any final thoughts you would leave investors with right now? Um, I I I think that the best way to operate in a market like this is to get your theory in place. You know, it doesn't matter how crazy it is. It doesn't matter as long as it someone else didn't tell you what it was. You worked it out yourself and then you benchmark that about what happens. So, you know, when I am I'm not a gold bug, you see. I'm I'm I'm I've been brought up even as a child, I was surrounded by gold bugs and I I built up antibodies to all that stuff about, you know, the collapse in the dollar and all that. I just I hate that. And and I've never really been um I I I just don't dabble in in that end of town because of of history. And then 2000 um and then co came along and started printing money and I thought whoa gold is going to go eight. So I I loaded up on lorries of it and um it didn't go eight at all. Yeah. It didn't go up at all and I thought yeah that'll teach you. And then suddenly I just realized what the devil it was for and then when America comes out and tells Europe to get on with fighting the Russians because they're going to be fighting the Chinese. It's not really, you know, that's my the theory and and you go, "Oh, did he really did they really say that? That can't be right." Oh, why are all the military European military stocks going through the roof? Oh, they did say that. Oh, oh, no, he said that. Oh, no. Oh, so you just benchmark your theory against what happened and you go, "Oh, I must be wrong about that because it's it hasn't actually it that doesn't fit the the model." So you build up your model by trial and error and then you navigate using it. And if you if you do that and are diligent, you won't go far wrong. In fact, you'll you'll do really well and over time you'll you'll um adapt your market model to one that's very useful. And um that's the way that that people should go and they should use uh videos like this as raw material for their own thinking, not as the law. You know, if you're 55% right in the market, you do very well. So, a little bit better calling heads and tails than random, you'll do very well. And, you know, if you're getting 6040, you're doing really, really well. I mean, financially, you're doing well. Not not that you're just being clever. You're doing financially well. So, you know, you have to build up your own theories, your own speculations based on raw material from people like me. you know, just don't take what I say as correct. Check, you know, just read it up on what I've said and half of it will make sense and half of it will appear to be complete rubbish and then you draw up your own conclusions, your own theory and over time that theory will be profitable for you. Maybe you'll be 65% out of 100, right? And that will be, you know, wonderful. Well, I think that's that's great advice to end on. So, thank you very much for that and for coming on to talk today. This was a lot of fun. That's my pleasure and uh hope to hope you'll invite me back so I can tell my crazy theories. Oh, I would love to. Well, we'll definitely have you back. For now, I'm Charlotte Mloud with investingnews.com and this is Clem Chambers. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]