Countries Are Starting To Sell All Their GOLD…Here's Why
Summary
Rebel Capitalist Live VII: Protect & Grow Your Wealth Before the Next Crisis https://rcl.georgegammon.com/live Want the cheat …
Transcript
Hello fellow Rebel Capitals. Hope you're well. I just saw a story in the news. I thought, man, we've got to talk about this one. Because the last live stream I did, I kind of ended it by saying, I'm really worried about the dollar crashing, but not crashing down, crashing up. And I know that confuses a lot of people. Now, to be clear, I'm not talking about the dollar crashing up against goods and services. No way. The dollar is absolutely unequivocally going to lose value versus goods and services over the next year, five years, 10 years. I don't care what time frame you want to look at. The dollar will lose value against goods and services. But what I'm talking about is other currencies. And that's really, really, really, really important even if you're an American. So, let's dive into this story here. Let's get to the details and then really try to think this through in terms of the global monetary system and how this could impact you people watching this video that are sitting in the United States. And even if you're not in the United States, it's really really important because how it impacts the global economy. Okay, so let me do a screen share and we will dive right in. This article is from Zero Hedge. So let's go to the top here and the country a lot of countries are doing this but the one country that uh they're talking about in this article Turkey. So you guys know they've suffered from hyperinflation for quite some time and according to this article and according to the data the charts they're liquidating almost all of their US treasuries. Now, is this to piss off Trump or is this because the debt and the deficits in the United States are just too high and they're not holding these treasuries anymore? They're just selling the treasuries to buy gold. No, no, no, no. It's actually not even close to that. It's that they have to sell their treasuries to get dollars because they're desperate for dollars. And so if they don't sell the treasuries or if they run out of treasuries, then what are they gonna have to do to get the dollars they need to import the oil? They're going to have to sell lera. And what's that going to do to the value of the lera relative to the dollar? It's going to go down, which is going to exacerbate likely their local inflation. So you see this is a perfect example of what I'm talking about when I say that I'm much more worried about the dollar crashing up than crashing down. This is I mean you look it up in a textbook and this is what you see as far as you if you look up dollar crashing up you'll see a picture of Turkey right right there. And uh it it it you know again let's keep going through this here and I think you guys will connect the dots. So here are the gold reserves. I mean we we talked about that in the title of this video but check that out. Now this is interesting. I would have to look at a chart of what were now. Okay. Now I'm really curious. I didn't really notice this part of the chart. I was just looking at this part of the chart which shows you that they're just dumping gold now. They haven't sold all of it. Um but they're just I mean look at that straight down. Looks like they've sold that much in just the last month or so. So they're really drawing down their gold reserves. And who knows maybe they'll keep this pace up. They'll definitely sell all of their gold. Now, let me go over to a chart of oil because I'm after seeing that chart or looking at it more closely. I'm really curious what oil was doing back in 2022. Ah, would you look at that? Oil was Oh, that's right. Because that's when Russia invaded Ukraine. Duh. Oh, boy. Okay. A little out of it today. I haven't done videos in quite some time, so you have to bear with me. Of course, that's when Russia invaded Ukraine. So, that would totally explain why the chart looks like this. Russia invades Ukraine. Oil spikes. AH, WE NEED DOLLARS. QUICK, QUICK, QUICK, QUICK, QUICK. Got to sell gold all the way down to this point. And then once the price of oil subsides, then they can go ahead and replenish their gold reserve until a point where oil does the exact same thing. and then they just go through the same kind of routine. It's like a broken record. Now, let's go back. Ah, what are we doing here? Okay, because now I want to look at a chart of what's happening with treasuries because that's what's just really crazy. But it's the same reason they're selling treasuries for the exact same reason they're selling gold. It's just because they need dollars. So let's go through this article here. Two months ago at the end of March, we reported Turkey was aggressively dumping its gold reserves in a panic scramble to obtain dollar funding which Erdigan regime was using to keep the Turkish layer from crashing and to also pay energy imports which had suddenly soared in uh price. Okay, so a couple different things there. Uh we all know how the energy stuff works. If you got to import oil, you need dollars. And if you don't have the dollars, you're really, really screwed because then you're going to have to sell LRA to get those dollars. And that's going to put downward pressure on the LER. We talked about that at the beginning of this live stream. But what they're talking about in addition to that here with Zero Hedge is them needing dollars to sell and to buy back LRA to prop up their currency. Right? So, it's kind of twofold here, but it's the same problem. It's the exact same problem. And that's the dollar wrecking ball. The violent selling by Turkey and other emerging markets was behind a brutal plunge in gold prices which tumbled more than a,000. So why is it that gold prices tumble but bond prices although they've tumbled as well but they're tumbling for a different reason. Why is that? It's actually quite interesting because if you're a bank, you've got to match up your assets and liabilities. So, if you guys watched my last video, you know that the reason why Treasury yields always track nominal growth in uh excuse me, nominal GDP in the United States, in other words, growth in inflation expectations is because the banks will be the marginal buyer and seller. So, if the yields get too high versus growth in inflation expectations, the banks will buy. It's a great arbitrage opportunity, free money basically, and bring that yield back down. And same thing if interest rates get too low, then there'll be a seller and you bring it right back in line more so with nominal GDP. And again, that's just a proxy for kind of global growth and inflation. So anyway, uh they have to match up their liabilities with their assets in terms of FX, right? They can't take that FX risk. So, what happens if they have a dollar liability, but then they buy a euro or a yen asset? They got a big problem there, don't they? Because if you get that FX rate going the wrong way, now all of a sudden you're upside down. You could be bust because your liabilities exceed your assets just because of the FX change or the difference between the yen or whatever's on your asset side of the balance sheet and the dollars that are supposed to be the offset there. So, they don't want to take the FX risk, these banks. No one would. You wouldn't if you were a bank. But what's the exact same thing as taking FX risk is where you have gold as an asset on your balance sheet. So the banks can't come in there and be the buyer or the marginal buyer and the marginal seller of gold like they are of treasuries because again they can't take that FX risk and they can't have dollar liabilities and gold as the offsetting asset because th gold goes up in price okay you're fine but gold goes down in price in terms of dollars now you got big big big problems you could be bust just like that I it's basically Silicon Valley bank right same thing that happened it's just the asset side of the balance sheet took a big hit because interest rates went up. It's the exact same thing if gold the price plunges. If you're a bank and you have those dollarbased liabilities, in other words, checking accounts, that's when I talk about dollar liabilities on a bank's balance sheets, that's what I'm talking about, the bank accounts. So, that's why just I wanted to step outside of this article really quick just to kind of connect those dots for you because I know a lot of you that kind of follow my videos would say, "Okay, well, George, why are the marginal buyers in the Treasury market banks but not the gold market?" And that's why, okay, getting back to this here, the violent selling by Turkey and other emerging markets, brutal plunge in gold prices, which tumbled more than a thousand bucks from near all-time highs. Yep, we all know that. Here's a chart of gold. Earlier this week, we got another confirmation from Turkeykey's wild liquidation spree when the latest central bank data showed Turkeykey's foreign reserves had their biggest monthly decline on record as the Iranian or the Middle East war triggered global selloffs on emerging market assets and strain the LRA. Yeah, I I mean, think about it this way. Let's take it to an extreme. Let's say the DXY is to proxy for all currencies, all currencies versus the dollar, not necessarily, you know, specifically the yen and the euro. And let's just say that the the DXY right now is at 100. Let's say it goes up to 200 as a result of this. Now, all of a sudden, all those other countries, the price of oil just doubled in terms of their local currency. Now, what are you going to do? I I mean, and that's if the price of oil in dollar terms doesn't go up. You see how how the dollar is can be by far the biggest problem to an in an econ an economy other than the United States. So why is it a problem for the US? Because the US depends on all those other economies, right? You can't have a global economy that's just collapsing and have the US come out unscathed. It's not the way it works. According to the balance of payments, Turkeykey's official reserves cratered 43 two 43 billion uh part of decline state intervention to offset portfolio outflows. The current account deficit meanwhile widened to 9.7 billion from 7.3 billion in February as a result of soaring commodity prices. But again, I want to emphasize soaring commodity commodity prices in their local currency. So, what that means is you can have soaring commodity prices even if commodity prices ain't going up. Why? Because they're all priced in dollars. So, if your currency is tanking relative to the dollar, those commodity prices are increasing in your local currency, even though in dollar terms they might be flat to down. And and here's the real problem right here. Turkeyy's a big energy importer like Japan. Hit hard by higher oil gas prices caused by the effective closing of the straits of Hormuz, Turkey will have no choice but to pursue another accelerated devaluation in Turkish lera. Yeah, I mean it's no surprise. This is no surprise. Turkish central bank governor whatever his name is said last week the ratio between current account deficits and gross domestic product would be below historic averages. Yeah that's an understatement. Yet as we said in March while selling gold step is a step of clear desperation for Turkey which had put many uh much effort in recent years of building a substantial gold stock is understandable for the res the regime that suddenly finds itself in dollar funding crisis. Yeah. I mean, look, this is what FX reserves are for at the end of the day. And this is why, you know, sure, you can have all this talk about dd dollararizing and all that stuff, but at the end of the day, have fun with that. You know, the the the um central banks out there aren't necessarily ddollarizing even though they're selling treasuries and buying gold. It's just they're using gold to store those dollars. They still need the dollars at the end of the day. And why is that? The main reason is because the way the monetary system is set up and that the dollars are created by lending them into existence. So if the dollars are created by lending them into existence, that loan in and of itself creates the demand for those dollars at some point in the future. So I mean, think about that for a moment. If all the dollar debt was paid off tomorrow, how many dollars would there be? Zero. Right? So, what I'm doing, of course, is I'm excluding currency in circulation and I'm excluding any part of the Fed's balance sheet where they're actually buying from a non-bank entity. Right? So, there's a a few things that you exclude, but I'm talking about the vast majority of dollars. Let's say there's 75 trillion dollars on banks balance sheets in the world outside of the United States. The vast majority of that, let's say 95% is going to be lent into existence. So what I'm doing there is I'm just saying, okay, maybe it's not 95, maybe it's 100. But you just go through that thought experiment because if you go through that thought experiment, you start to understand why the dollar is such a massive, massive, massive problem in times of stress. when the amount of dollars that are circulating and being created by lending them into existence is slowing down due to geopolitics, due to a global recession, etc. That's why, you know, often that's why you see the dollar really go up in times like this. It it's because it's not necessarily a a safe haven. It's more so there's not enough dollars or at least I should say that differently. There's not enough dollars that are being created and those dollars aren't circulating the ones that do exist because of a riskoff event. See, I mean that's just another reason I'm sure that some people pile into the dollar for a safe haven asset. But I think that plays at times it plays an even bigger role. So the decline Whoa, whoa, whoa. What are we doing here? The decline coincided with a selloff tur turkish markets after the Middle East conflict erupted. And by the way, I've been to Turkey. I was there. What was I there? Three years ago, something like that in Istanbul. And the, you know, people talk about dollarizing all the time. They've already dollarized. Like literally every single thing that you buy in Turkey is either priced in dollars or euros. Like even when I got a tour guide to go around and and show me like old mosques and and whatnot, their their price was price in dollars wasn't pricing lera. It's like nobody uses the lera. I went through the the coffee shop in the airport in Istanbul, the new airport they have. And when I went to the coffee shop, I saw that they opened up the cash register. You know, they had one of those those ones that it comes out right here. And so I just, you know, kind of peeked over there and looked to see the currency that's in their cash register. It's all dollars. It's all dollars. So look, the the the the local economy will dollar far far far far far far sooner than any government will. And even if the government doesn't want to dollarize, effectively they already have. And that's just another reason why the lera tanks even more which again is a big big problem for them because they have to import all those things that are denominated in dollars. So the central bank raised its year-end inflation target to 24%. Well, that's down quite substantially from when I was there, believe it or not. Turkish bond suffered steep losses. Yeah, boy. Want to talk about some bonds that I wouldn't touch with a 10- foot pole? That would be turkey. Wow. Yeah. You wouldn't want to wouldn't want to get even if it's coming at 24% and you're getting 35%. There's no way because I can assure you the LRA is going one way over the next five years. And that is straight down. That is straight. There you go. It's going to look like this. And and by the way, what does the Indian rupee look like versus the USD? It's the exact same chart. And I assure you, the yen would look the exact same if it wasn't for the intervention of the Japanese central bank, the BOJ. And now Japan's in a little bit better position because they run such a massive surplus that they have a lot of dollars coming in because they manufacture and export so much to the United States. Turkey e not so much. India e not so much. So that's why they run into problems before countries like Japan, although Japan is still in trouble, right? So you can see that you can you can kick this can down the road, the dollar crushing your economy, you can kick that down the road a little bit, but at the end of the day, it's not a question of if, it's just simply a question of when. And Turkeyy's a a perfect perfect example of that. Now guys, one thing I wanted to talk about here, of course, Rebel Capitals Live. You got your got to get your tickets to that. Uh you can just Google Well, actually, that's not a good way to do it. Let me go ahead and take a moment because we're get we're only like two weeks away. In fact, it's next week. What am I saying? Yeah, Rebel Capitals Live is next week. So, let me get the link for you guys and then I want to go over a trade idea that I had the other day that we posted in Rebel Capitalist Pro that turned out incredibly well. Incredibly well. And I'll kind of walk you through why I suggested that in Rebel Capitalist Pro. But let's get the link for you guys. There it is. I'm just going to put it in the chat and then after the video is done, I'll go ahead and put it in the uh description of the video as well. So, here it is in the chat. You guys can check out the speakers and uh Mike Maloney uh just told me the other day that he's going to do a a presentation. So, that's going to be great. I might have him close out the show, in fact. And Barnes is going to be there. Jeff Dice. There's going to be some, you know, freedom kind of libertarian folks there. Uh Rick Rule is going to be there with commodities talking about gold. There's going to be gold guys there, commodity guys. There's going to be dollar bulls and there's going to be dollar bears as well. So, it's great. It's really we've got an awesome awesome mix this year. But like I always say, the best part of it is rubbing elbows at the speaker, having a beer, ask a question. It's very casual and then meeting your fellow rebel capitalist. But anyway, I just put the link in the chat. You guys can check that out. Okay, so now let's just quickly go over this uh trade idea that I mentioned in uh Rebel Capitalist Pro. So, let's do the screen share again and we're going to go over there. This is what the we do it on the school platform which is fantastic. And let's see. Oh, no, no, no, no. I want to do the search. Sorry. So, here was I do these trade alerts whenever I make a change to my portfolio. This one I didn't actually make a change to the portfolio. I just kind of give them a notification because I've been so busy with the personal stuff lately, as most of you know that I haven't had time to really make any changes to the portfolio. But here's what I said. This was 23 days ago. Hey guys, this isn't really a change in the portfolio. As most of you know, I've been too busy being deal dealing with family stuff. But one thing I saw quickly today on my watch list was in it. QuickBooks got a bump ticker inu. If I was focusing on markets in my portfolio right now, I'd be interested in on the short side because of the software AI macro story and the chart. And personally, I hate QuickBooks, which is true. I hate it. Hate it. Hate it. Uh, so I just talked about maybe buying puts or doing like a pairs trade where you have a short position in INTU and then offset that with a long position in the S&P 500. So if you guys weren't watching the news, let me go to another post I did today. Uh, INTU into it was down 20%. They just announced they got to fire 17% of their total workforce. I mean, they're just getting eaten alive by uh AI. And in my view is they'll continue because they're a software company. I mean, pretty soon you're going to be able to have AI just code you any accounting program or software that you need. So, down huge today, 20%. So, I just wanted to highlight that because one thing that I've been thinking about is, you know, with all the market wizards books, well, in business, too, they always say just look at what you're doing. Look at what's working, what's not, doing more of what's working. And one thing that's really worked for me in the past year and a half or so are these pairs trades. I mean, they they have so far outperformed the rest of my portfolio, it's not even funny. And again, that pairs trades is when you look at something on the short side. Another one that I had great success with was CarMax. So I was short CarMax but long S&P 500. So as an example, I'm short $10,000 worth of CarMax. Not now, but I was. And then to offset that, I'm long $10,000 worth of S&P 500. So what you're doing is you're just playing the delta between the two. And I like the S&P because that's getting all the passive flows like Mike Green talks about. But then I don't like stocks that are really tied to the real economy such as CarMax. So anyway, just wanted to highlight that for you guys. All right, enjoy the rest of your evening. As always, make sure you're standing up for freedom, liberty, free market capitalism, and make sure you check out Rebel Capitalist Live. This is an event you're not going to want to miss. I will see each and every one of you here next week in Orlando.
Countries Are Starting To Sell All Their GOLD…Here's Why
Summary
Rebel Capitalist Live VII: Protect & Grow Your Wealth Before the Next Crisis https://rcl.georgegammon.com/live Want the cheat …Transcript
Hello fellow Rebel Capitals. Hope you're well. I just saw a story in the news. I thought, man, we've got to talk about this one. Because the last live stream I did, I kind of ended it by saying, I'm really worried about the dollar crashing, but not crashing down, crashing up. And I know that confuses a lot of people. Now, to be clear, I'm not talking about the dollar crashing up against goods and services. No way. The dollar is absolutely unequivocally going to lose value versus goods and services over the next year, five years, 10 years. I don't care what time frame you want to look at. The dollar will lose value against goods and services. But what I'm talking about is other currencies. And that's really, really, really, really important even if you're an American. So, let's dive into this story here. Let's get to the details and then really try to think this through in terms of the global monetary system and how this could impact you people watching this video that are sitting in the United States. And even if you're not in the United States, it's really really important because how it impacts the global economy. Okay, so let me do a screen share and we will dive right in. This article is from Zero Hedge. So let's go to the top here and the country a lot of countries are doing this but the one country that uh they're talking about in this article Turkey. So you guys know they've suffered from hyperinflation for quite some time and according to this article and according to the data the charts they're liquidating almost all of their US treasuries. Now, is this to piss off Trump or is this because the debt and the deficits in the United States are just too high and they're not holding these treasuries anymore? They're just selling the treasuries to buy gold. No, no, no, no. It's actually not even close to that. It's that they have to sell their treasuries to get dollars because they're desperate for dollars. And so if they don't sell the treasuries or if they run out of treasuries, then what are they gonna have to do to get the dollars they need to import the oil? They're going to have to sell lera. And what's that going to do to the value of the lera relative to the dollar? It's going to go down, which is going to exacerbate likely their local inflation. So you see this is a perfect example of what I'm talking about when I say that I'm much more worried about the dollar crashing up than crashing down. This is I mean you look it up in a textbook and this is what you see as far as you if you look up dollar crashing up you'll see a picture of Turkey right right there. And uh it it it you know again let's keep going through this here and I think you guys will connect the dots. So here are the gold reserves. I mean we we talked about that in the title of this video but check that out. Now this is interesting. I would have to look at a chart of what were now. Okay. Now I'm really curious. I didn't really notice this part of the chart. I was just looking at this part of the chart which shows you that they're just dumping gold now. They haven't sold all of it. Um but they're just I mean look at that straight down. Looks like they've sold that much in just the last month or so. So they're really drawing down their gold reserves. And who knows maybe they'll keep this pace up. They'll definitely sell all of their gold. Now, let me go over to a chart of oil because I'm after seeing that chart or looking at it more closely. I'm really curious what oil was doing back in 2022. Ah, would you look at that? Oil was Oh, that's right. Because that's when Russia invaded Ukraine. Duh. Oh, boy. Okay. A little out of it today. I haven't done videos in quite some time, so you have to bear with me. Of course, that's when Russia invaded Ukraine. So, that would totally explain why the chart looks like this. Russia invades Ukraine. Oil spikes. AH, WE NEED DOLLARS. QUICK, QUICK, QUICK, QUICK, QUICK. Got to sell gold all the way down to this point. And then once the price of oil subsides, then they can go ahead and replenish their gold reserve until a point where oil does the exact same thing. and then they just go through the same kind of routine. It's like a broken record. Now, let's go back. Ah, what are we doing here? Okay, because now I want to look at a chart of what's happening with treasuries because that's what's just really crazy. But it's the same reason they're selling treasuries for the exact same reason they're selling gold. It's just because they need dollars. So let's go through this article here. Two months ago at the end of March, we reported Turkey was aggressively dumping its gold reserves in a panic scramble to obtain dollar funding which Erdigan regime was using to keep the Turkish layer from crashing and to also pay energy imports which had suddenly soared in uh price. Okay, so a couple different things there. Uh we all know how the energy stuff works. If you got to import oil, you need dollars. And if you don't have the dollars, you're really, really screwed because then you're going to have to sell LRA to get those dollars. And that's going to put downward pressure on the LER. We talked about that at the beginning of this live stream. But what they're talking about in addition to that here with Zero Hedge is them needing dollars to sell and to buy back LRA to prop up their currency. Right? So, it's kind of twofold here, but it's the same problem. It's the exact same problem. And that's the dollar wrecking ball. The violent selling by Turkey and other emerging markets was behind a brutal plunge in gold prices which tumbled more than a,000. So why is it that gold prices tumble but bond prices although they've tumbled as well but they're tumbling for a different reason. Why is that? It's actually quite interesting because if you're a bank, you've got to match up your assets and liabilities. So, if you guys watched my last video, you know that the reason why Treasury yields always track nominal growth in uh excuse me, nominal GDP in the United States, in other words, growth in inflation expectations is because the banks will be the marginal buyer and seller. So, if the yields get too high versus growth in inflation expectations, the banks will buy. It's a great arbitrage opportunity, free money basically, and bring that yield back down. And same thing if interest rates get too low, then there'll be a seller and you bring it right back in line more so with nominal GDP. And again, that's just a proxy for kind of global growth and inflation. So anyway, uh they have to match up their liabilities with their assets in terms of FX, right? They can't take that FX risk. So, what happens if they have a dollar liability, but then they buy a euro or a yen asset? They got a big problem there, don't they? Because if you get that FX rate going the wrong way, now all of a sudden you're upside down. You could be bust because your liabilities exceed your assets just because of the FX change or the difference between the yen or whatever's on your asset side of the balance sheet and the dollars that are supposed to be the offset there. So, they don't want to take the FX risk, these banks. No one would. You wouldn't if you were a bank. But what's the exact same thing as taking FX risk is where you have gold as an asset on your balance sheet. So the banks can't come in there and be the buyer or the marginal buyer and the marginal seller of gold like they are of treasuries because again they can't take that FX risk and they can't have dollar liabilities and gold as the offsetting asset because th gold goes up in price okay you're fine but gold goes down in price in terms of dollars now you got big big big problems you could be bust just like that I it's basically Silicon Valley bank right same thing that happened it's just the asset side of the balance sheet took a big hit because interest rates went up. It's the exact same thing if gold the price plunges. If you're a bank and you have those dollarbased liabilities, in other words, checking accounts, that's when I talk about dollar liabilities on a bank's balance sheets, that's what I'm talking about, the bank accounts. So, that's why just I wanted to step outside of this article really quick just to kind of connect those dots for you because I know a lot of you that kind of follow my videos would say, "Okay, well, George, why are the marginal buyers in the Treasury market banks but not the gold market?" And that's why, okay, getting back to this here, the violent selling by Turkey and other emerging markets, brutal plunge in gold prices, which tumbled more than a thousand bucks from near all-time highs. Yep, we all know that. Here's a chart of gold. Earlier this week, we got another confirmation from Turkeykey's wild liquidation spree when the latest central bank data showed Turkeykey's foreign reserves had their biggest monthly decline on record as the Iranian or the Middle East war triggered global selloffs on emerging market assets and strain the LRA. Yeah, I I mean, think about it this way. Let's take it to an extreme. Let's say the DXY is to proxy for all currencies, all currencies versus the dollar, not necessarily, you know, specifically the yen and the euro. And let's just say that the the DXY right now is at 100. Let's say it goes up to 200 as a result of this. Now, all of a sudden, all those other countries, the price of oil just doubled in terms of their local currency. Now, what are you going to do? I I mean, and that's if the price of oil in dollar terms doesn't go up. You see how how the dollar is can be by far the biggest problem to an in an econ an economy other than the United States. So why is it a problem for the US? Because the US depends on all those other economies, right? You can't have a global economy that's just collapsing and have the US come out unscathed. It's not the way it works. According to the balance of payments, Turkeykey's official reserves cratered 43 two 43 billion uh part of decline state intervention to offset portfolio outflows. The current account deficit meanwhile widened to 9.7 billion from 7.3 billion in February as a result of soaring commodity prices. But again, I want to emphasize soaring commodity commodity prices in their local currency. So, what that means is you can have soaring commodity prices even if commodity prices ain't going up. Why? Because they're all priced in dollars. So, if your currency is tanking relative to the dollar, those commodity prices are increasing in your local currency, even though in dollar terms they might be flat to down. And and here's the real problem right here. Turkeyy's a big energy importer like Japan. Hit hard by higher oil gas prices caused by the effective closing of the straits of Hormuz, Turkey will have no choice but to pursue another accelerated devaluation in Turkish lera. Yeah, I mean it's no surprise. This is no surprise. Turkish central bank governor whatever his name is said last week the ratio between current account deficits and gross domestic product would be below historic averages. Yeah that's an understatement. Yet as we said in March while selling gold step is a step of clear desperation for Turkey which had put many uh much effort in recent years of building a substantial gold stock is understandable for the res the regime that suddenly finds itself in dollar funding crisis. Yeah. I mean, look, this is what FX reserves are for at the end of the day. And this is why, you know, sure, you can have all this talk about dd dollararizing and all that stuff, but at the end of the day, have fun with that. You know, the the the um central banks out there aren't necessarily ddollarizing even though they're selling treasuries and buying gold. It's just they're using gold to store those dollars. They still need the dollars at the end of the day. And why is that? The main reason is because the way the monetary system is set up and that the dollars are created by lending them into existence. So if the dollars are created by lending them into existence, that loan in and of itself creates the demand for those dollars at some point in the future. So I mean, think about that for a moment. If all the dollar debt was paid off tomorrow, how many dollars would there be? Zero. Right? So, what I'm doing, of course, is I'm excluding currency in circulation and I'm excluding any part of the Fed's balance sheet where they're actually buying from a non-bank entity. Right? So, there's a a few things that you exclude, but I'm talking about the vast majority of dollars. Let's say there's 75 trillion dollars on banks balance sheets in the world outside of the United States. The vast majority of that, let's say 95% is going to be lent into existence. So what I'm doing there is I'm just saying, okay, maybe it's not 95, maybe it's 100. But you just go through that thought experiment because if you go through that thought experiment, you start to understand why the dollar is such a massive, massive, massive problem in times of stress. when the amount of dollars that are circulating and being created by lending them into existence is slowing down due to geopolitics, due to a global recession, etc. That's why, you know, often that's why you see the dollar really go up in times like this. It it's because it's not necessarily a a safe haven. It's more so there's not enough dollars or at least I should say that differently. There's not enough dollars that are being created and those dollars aren't circulating the ones that do exist because of a riskoff event. See, I mean that's just another reason I'm sure that some people pile into the dollar for a safe haven asset. But I think that plays at times it plays an even bigger role. So the decline Whoa, whoa, whoa. What are we doing here? The decline coincided with a selloff tur turkish markets after the Middle East conflict erupted. And by the way, I've been to Turkey. I was there. What was I there? Three years ago, something like that in Istanbul. And the, you know, people talk about dollarizing all the time. They've already dollarized. Like literally every single thing that you buy in Turkey is either priced in dollars or euros. Like even when I got a tour guide to go around and and show me like old mosques and and whatnot, their their price was price in dollars wasn't pricing lera. It's like nobody uses the lera. I went through the the coffee shop in the airport in Istanbul, the new airport they have. And when I went to the coffee shop, I saw that they opened up the cash register. You know, they had one of those those ones that it comes out right here. And so I just, you know, kind of peeked over there and looked to see the currency that's in their cash register. It's all dollars. It's all dollars. So look, the the the the local economy will dollar far far far far far far sooner than any government will. And even if the government doesn't want to dollarize, effectively they already have. And that's just another reason why the lera tanks even more which again is a big big problem for them because they have to import all those things that are denominated in dollars. So the central bank raised its year-end inflation target to 24%. Well, that's down quite substantially from when I was there, believe it or not. Turkish bond suffered steep losses. Yeah, boy. Want to talk about some bonds that I wouldn't touch with a 10- foot pole? That would be turkey. Wow. Yeah. You wouldn't want to wouldn't want to get even if it's coming at 24% and you're getting 35%. There's no way because I can assure you the LRA is going one way over the next five years. And that is straight down. That is straight. There you go. It's going to look like this. And and by the way, what does the Indian rupee look like versus the USD? It's the exact same chart. And I assure you, the yen would look the exact same if it wasn't for the intervention of the Japanese central bank, the BOJ. And now Japan's in a little bit better position because they run such a massive surplus that they have a lot of dollars coming in because they manufacture and export so much to the United States. Turkey e not so much. India e not so much. So that's why they run into problems before countries like Japan, although Japan is still in trouble, right? So you can see that you can you can kick this can down the road, the dollar crushing your economy, you can kick that down the road a little bit, but at the end of the day, it's not a question of if, it's just simply a question of when. And Turkeyy's a a perfect perfect example of that. Now guys, one thing I wanted to talk about here, of course, Rebel Capitals Live. You got your got to get your tickets to that. Uh you can just Google Well, actually, that's not a good way to do it. Let me go ahead and take a moment because we're get we're only like two weeks away. In fact, it's next week. What am I saying? Yeah, Rebel Capitals Live is next week. So, let me get the link for you guys and then I want to go over a trade idea that I had the other day that we posted in Rebel Capitalist Pro that turned out incredibly well. Incredibly well. And I'll kind of walk you through why I suggested that in Rebel Capitalist Pro. But let's get the link for you guys. There it is. I'm just going to put it in the chat and then after the video is done, I'll go ahead and put it in the uh description of the video as well. So, here it is in the chat. You guys can check out the speakers and uh Mike Maloney uh just told me the other day that he's going to do a a presentation. So, that's going to be great. I might have him close out the show, in fact. And Barnes is going to be there. Jeff Dice. There's going to be some, you know, freedom kind of libertarian folks there. Uh Rick Rule is going to be there with commodities talking about gold. There's going to be gold guys there, commodity guys. There's going to be dollar bulls and there's going to be dollar bears as well. So, it's great. It's really we've got an awesome awesome mix this year. But like I always say, the best part of it is rubbing elbows at the speaker, having a beer, ask a question. It's very casual and then meeting your fellow rebel capitalist. But anyway, I just put the link in the chat. You guys can check that out. Okay, so now let's just quickly go over this uh trade idea that I mentioned in uh Rebel Capitalist Pro. So, let's do the screen share again and we're going to go over there. This is what the we do it on the school platform which is fantastic. And let's see. Oh, no, no, no, no. I want to do the search. Sorry. So, here was I do these trade alerts whenever I make a change to my portfolio. This one I didn't actually make a change to the portfolio. I just kind of give them a notification because I've been so busy with the personal stuff lately, as most of you know that I haven't had time to really make any changes to the portfolio. But here's what I said. This was 23 days ago. Hey guys, this isn't really a change in the portfolio. As most of you know, I've been too busy being deal dealing with family stuff. But one thing I saw quickly today on my watch list was in it. QuickBooks got a bump ticker inu. If I was focusing on markets in my portfolio right now, I'd be interested in on the short side because of the software AI macro story and the chart. And personally, I hate QuickBooks, which is true. I hate it. Hate it. Hate it. Uh, so I just talked about maybe buying puts or doing like a pairs trade where you have a short position in INTU and then offset that with a long position in the S&P 500. So if you guys weren't watching the news, let me go to another post I did today. Uh, INTU into it was down 20%. They just announced they got to fire 17% of their total workforce. I mean, they're just getting eaten alive by uh AI. And in my view is they'll continue because they're a software company. I mean, pretty soon you're going to be able to have AI just code you any accounting program or software that you need. So, down huge today, 20%. So, I just wanted to highlight that because one thing that I've been thinking about is, you know, with all the market wizards books, well, in business, too, they always say just look at what you're doing. Look at what's working, what's not, doing more of what's working. And one thing that's really worked for me in the past year and a half or so are these pairs trades. I mean, they they have so far outperformed the rest of my portfolio, it's not even funny. And again, that pairs trades is when you look at something on the short side. Another one that I had great success with was CarMax. So I was short CarMax but long S&P 500. So as an example, I'm short $10,000 worth of CarMax. Not now, but I was. And then to offset that, I'm long $10,000 worth of S&P 500. So what you're doing is you're just playing the delta between the two. And I like the S&P because that's getting all the passive flows like Mike Green talks about. But then I don't like stocks that are really tied to the real economy such as CarMax. So anyway, just wanted to highlight that for you guys. All right, enjoy the rest of your evening. As always, make sure you're standing up for freedom, liberty, free market capitalism, and make sure you check out Rebel Capitalist Live. This is an event you're not going to want to miss. I will see each and every one of you here next week in Orlando.