Don Hansen: Gold Bull Run Just Starting, 5 Powerful Price Drivers to Watch
Summary
Secular Gold Bull: The guest outlines five drivers—fiat money supply, central bank gold buying, sovereign debt, demographics, and S&P 500 status—arguing they align to extend a powerful, multi-year gold bull market.
Central Bank Tailwind: A structural shift from central bank selling to aggressive buying post-2011 supports gold, with risks of reserve seizures potentially accelerating diversification away from USD assets into gold.
Macro Backdrop: Sovereign debt above sustainable levels, aging demographics, and likely future money printing are cited as enduring supports for higher gold prices.
US Equities Risk: The S&P 500 is viewed as vulnerable due to extreme valuations, buyback-driven financial engineering, and passive cap-weight concentration, creating downside risk and potential capital rotation to gold/miners.
Gold Miners Leverage: Producers historically offer 2.5–3x beta to gold and can add operating leverage via production growth; preference is for established producers over early-stage explorers due to financing, permitting, and staffing risks.
Silver Exposure: The guest also favors select silver names with large deposits, low costs, strong management, and gold byproducts rather than base-metal byproducts, as a complementary precious-metals play.
Highlighted Companies: AbraSilver Resource (ABRA) and Vizsla Silver (VZLA) are cited as owned/recommended positions expected to benefit from project quality and growth potential.
Strategy & Discipline: Emphasis on staying invested through a secular bull rather than market-timing; the cycle is framed as early innings with potential for a decade-plus of upside.
Transcript
[music] [music] I'm Charlotte Mloud with investingnews.com and here today with me is private investor Don Hansen. Thank you so much for being here. I know our audience has been waiting so long to have you back. Well, I'm delighted to be here and excited to to uh share what I have to share about this particular subject because I think it's very timely as we talked about that a lot of people were wondering the uh duration of this secular bull market that we're in now in gold. So, yes. Yeah, I'll talk a little bit about how we came to the topic for today which we're having a conversation thinking what can we speak about next and I'd mentioned to you there's there's a lot of optimism about the gold market but there's also people who are seeing the price has run and they wonder is is it over because we're in this consolidation right now. So people aren't necessarily sure what's going to be happening and you have put together you've identified I think five factors that show us how different and powerful this bull market is. So that's where we're going to begin. If you could if you could start by giving an overview of those factors. >> I would. Yeah. >> Okay. the the the five factors are the um fiat money supply, the uh central bank buying and selling of gold, the sovereign debt, the demographic shift, and the S&P 500 status. Those are are the five. So, I'll go through those one at a time and discuss where we are with that. The first one being the money supply. And u I brought along a chart that I've used in the past that plots the U M2 money supply of the US against the gold price. And so uh we can put that one up for people to see. And you can see the gold price tracks very closely with the money supply. Not exactly, but over time there's no question that they track together. And a little background, I learned that in fact over this whole 50-year period of time that the central bank in the US has deliberately caused the M2 money supply to grow on average about 7% a year. Uh actually I looked at 35% over five years and the average. But so there's ups and downs of course but that's how it works. The other thing I think is interesting to know about all of this is that so many people in the gold sector talk about the money supply is money printing by the Fed. That's actually not true. The money is primarily created by the banking system lending it into reality because we have a fractional reserve banking system and the Federal Reserve's rules and regulations facilitate that as well as the interest rate to you know the lower the rate then the more borrowing there is and so the the Fed is is manipulating it but they're not actually the ones doing it except when we get into these crazy periods like we've had in the last 25 years called quantitative easing in which case um the Fed is actually printing the money because their uh balance sheet is accumulating US treasuries they're buying it and putting that's the direct issue the other thing I wanted to share uh that I found interesting and I was explaining to you that I came across this structure something that I I woke up with one morning that I remember learning when I was a sophomore in college in 1960 which gives you some idea of how old I am and it's called the equa equation of exchange and what it is it's basically m which is the fiat supply of money times v the velocity of money is equal to the price level of products services and assets times the quantity of products services and assets. And this is useful because a lot of times people wonder about well the money supply is doing this or that in various countries and it doesn't seem to make sense with regard to inflation. Well, there's several reasons for that and this particular structure gives you a way of looking at it that helps to understand what's actually going on. So the one that's particularly significant is the velocity of money and that varies significantly and the primary um cause of that is the savings rate because if people in a different society save the money instead of spend it then obviously there's fewer transactions and the number of transactions is the velocity of the money right and in the era where the Japan was building up all this debt and they were creating money, but yet they couldn't get inflation to happen. Well, the thing is that the Japanese people are the most aggressive savers on the planet. They save 35% of their income. In the long run, the US it was maybe 10%. And recently it's actually down as low as five. So that's a big a big factor. Another factor is that in the um price side we just keep track of the consumer prices which is products and services that consumers buy and just a select group and don't include assets. And in fact during the quantitative easing segment when all that money was going into the system most of it went into assets real estate and stocks which created a major disparity in wealth particularly because when the interest rates were that low then the ordinary person that owned bonds wasn't getting any interest. And so that was another complication in the whole thing that u wasn't a good but most people don't recognize the different issues that are involved but the equation of exchange if you look at it and then you begin to say whoa well what's actually happening in this situation that's another matter another thing about Japan is that they had a very positive uh trade balance for a long time which would really help that situation for am the problem in the US is that they have both a budget deficit and a trade deficit at the same time. That is a no no and it's not sustainable and that's a whole another we could go into that issue but I thought it was interesting for people to actually look at and think about the equation of exchange and how those different factors interrelate to each other. But the bottom line here is that the increase in the money supply is a relatively constant in the background and it's been true in the uh uh bull market of the 70s in the bull market of the 2000s and now it's just there and so it's neither new or it just is what it is. Okay. Um the next factor that's really important is the reserve status of the US dollar and US dollar denominated assets. As you know, anything that's money has three characteristics as a store of value, as a medium of exchange, and as a unit of account. Well, what's going on now is that the dollar's store of value is questioned now. It's changed significantly. So that in the uh uh global market of the 2000s, the central banks were actually selling gold a lot and and and in the uh the subsequent u period as of 2011 they've been buying it. And now we'll show that slide so that people can see how dramatic the change in central bank buying has been. But the interesting to thing to know is that then here we had a bull market between 2000 and 2012 in gold and the central bank selling was actually a headwind for it. It was making it more difficult and yet it happened anyway. And the reason that it did is because of the fact that the US stock market was in a bare phase. And we can talk about that as we get a little further along. But that was that was the that one is a significant difference from that bare market to now to keep in mind because it's a powerful one and it's where the uh this particular s secular bull market began. It started in the gold market whereas in the previous one it started in the stock market going down. That was what initiated that one in 2000 and then the gold followed it. So it just gives an idea of the significance of the central bank activity. So, and that one now is definitely a major tailwind for us. And and that's because central banks for their reserves, they want to have something that's not only a store of value, but something that is neutral. By that meaning that it's nobody's liability and and and and it's not something that can be manipulated by a country that issues it because nobody does. It's not that. And so that's why it's such a much better store of value for central banks and that's why you're seeing such a change. But uh just to give you an idea in terms of the central banks in 1980 I think it would have been the uh proportion uh of central bank reserves that was gold was something like 75%. Because they had been buying it through the 60s and then even in the 70s whereas now I think in 2020 it was only 10%. Now it's 20% partially because the gold price has gone up a lot, but still what it tells you is that there's a lot of room for it to run from 20 to 75. So it just indicates that the central bank buying is not going to run out of steam in the near future. That that's not going to happen. And in fact, it's it's probably going to get much worse because we saw in 2022 where the central bank buying went from 500,000 500 tons a year to over a thousand tons a year when the Ukraine war started and the US government sequestered 300 billion dollars worth of US treasuries that belong to Russia. Okay? And that then really lit a fire under the other side of the bank saying they could do that to us. But there's another thing that's now brewing that's even worse and that is that the Europeans want the US to basically take those $300 billion worth and give it to the Ukraine. Basically not just sequester Russia's asset but steal it. If that happens then you're going to see central bank going even higher because everybody is going to figure you can't trust the US government. I'm not going to use that as a store of value when they could steal it from me if they don't like what I did. So, that's another one. It ain't happened yet, but it's being seriously discussed because they want to help Ukraine and yet the Europeans don't have any money. So, they say, "Well, let's go just take the Russians money." So, another issue to keep in mind in this whole thing. Okay. >> Absolutely. >> All right. So then the the next two are somewhat intertwined but I'll talk them about them individually. The sovereign debt level in all the developed countries is now uniquely high. Um all the economists that I've read uh in recent years say that the debt to GDP ratio should stay under 100%. You get beyond that and then you get into serious trouble because the interest expense starts to crowd out other things and make it very very difficult to get anything close to a balanced budget. The US is already at 125% and the Japanese are over 200 and the Europeans are in a mess. Okay. So, this is a unique situation that's much much worse than it was in the 2000s and that is already in play and that's happening and you can just say okay this is going to be a difficulty and and the other thing of course is and we'll get into that because of the demographics is that the expenses for the the developed countries they all have low birth rates and so you're having fewer and fewer people in the working age population yet having to pay for more and more people over 65. And so the expenses for like in the US, Social Security and Medicare is steadily growing now because the baby boomers generation has been retiring for maybe five years. We got another 15 probably to go. Those both of those elements are going to get bigger and bigger. At the same time, the interest expense is growing because the debt's growing. Oh, and then we have the the the world geopolitics and the defense spending going up. So, how are you going to balance a budget? And we haven't had a recession yet. And if we do, then guess what the budget deficit does then? Instead of it being 6% of GDP, it's going to be 12 or 15. So, the whole situation is really scary. and and and the uh the uh demographic shift again as well as the debt is unique now. It's much much worse because that baby boom generation is fullbore into retirement and and yet the population is so much less and the US is actually the best dirty shirt and laundry because the the birth rate in the US is maybe 1.6 six that 2.1 is replacement. In Europe, it's 1.4. In Asia, it's like one. In China, it's less than one. And that's because they had two generations of only one child. Oh, and then Asians preferred male children. So, you don't have just a lower birth rate of females, but you have too few females because there weren't enough of them born in those that one child time. And and I'm I've had experience with Asians to realize that this preference of a male child is is a big deal. I I was doing business with a Korean once in uh the 1980s and I was talking with him about, well, you have a family. He says, well, yeah, I have two children, two daughters, two balls and no strikes. That's the attitude. Okay. And this is why you have a disproportion of males to females. that makes this issue much worse in Asia and nobody's really looking at what is that telling us what's going to happen those people got huge problems and in China now young people who are graduating college can't find a job so China's got a lot more problems than we realize but anyway that's just one more factor that makes this debt problem more serious and of course the real reason why with gold it's serious is Because if they can't raise enough money through taxes or cutting the budget, what do they do? They have to print the money. And what does that do to gold? Well, we know the price goes up. So, you've got that. Then the fifth one is the US stock market. And the interesting thing, as I mentioned earlier, in the uh bull market, in the secular bull market from 2000 to 2012, that was a bare market in US stocks. It took from 2000 to 2012. In 2012, the US stock market's nominal value, S&P 500, it took them 12 years to get back to where it was in at the peak in 2000. And that's kind of interesting when that tends to pivot in in terms of the end is when they you manage to kind of get back to where you were. And what that means, of course, that you're not making any money through that. So you shouldn't be there. But that was the major issue I think for the secular bull in gold during that time because the central banks were selling. So it had to be that and we know that the mining companies are making money and NASDAQ was down by 85%. So like people are going to go find where there's somewhere to to make money and gold and the miners was it. But of course then that ended in 2012 when you then had the beginnings of the secular bear for gold and the beginnings of the secular bull. And that's where we'll look at this particular list where I basically summarize the uh bull and bear patterns over time. And you can see there then in the early stage where gold is in the is in the bull phase and and the S&P 500 in the bear and then it flips in the next cycle here this long 20-year period where um you have a reverse and and the US stock market it goes astronomically high for a whole lot of reasons. um the end of the cold war, China entering the WTO and and um the so corporations profitable because they could have stuff made in China for cheap and make a big a profit. So all in all that period of the 80s and 90s was phenomenal for the US and so the the gold price didn't go anywhere and and you saw everybody selling it and you know that was a a poor period but then then we started to see a new period here that started when the S&P 500 went in the tank and it took them two years to get it went down and it stayed down for 12 years and so then we saw the inversion where the gold price went up quite a bunch. So now we're in a here we got a a different period where that flipped and of course gold was in a secular bear for that period of time. I picked 2021 as a turning point. It could easily have been 22 or three because again it's not a point really. It's a period of time where you're seeing a shift in in money flows and and how things are are happening. But it's obviously now that we've seen as we include 2025 where gold was up 50% already that now you're seeing this the gold is is is ahead. But this one hasn't shifted yet. But I could go into lengthy discussions of why the US stock market is vulnerable. We could go I just a few it the valuations of is at all-time highs. It it's even higher than in 2000. And then we have and two other things that are unique to this particular secular bull. One is stock buybacks by corporations. It's been higher than ever. Um, in some years it's been over a trillion dollars of buying by corporations partially because they could borrow money for practically nothing and make and enrich the management because the management got paid based on the share price. So is no what's the problem? we'll just borrow all kinds of money and get the company in debt, but it gets the share price up, so we get rich and which is I think tragic in terms of the the moral and ethical attitude of management, but that's another story for another another discussion. But then the other one that's a factor here in the terms of vulnerability is something called passive investing. You're familiar with that, I'm sure, where the ETFs for the S&P 500 are capitalization weighted, which means that the bigger the capitalization, the more percentage of your money that goes into the ATF goes into those. So that now the top 10 in the S&P 500 represents something like 50% of the total market cap of the S&P 500. So half of every dollar that you invest in that ETF goes into those. So it's an enormous leverage to the upside for the for the MAG 10 and that's lovely on the upside, but it's just as powerful on the down and that makes it a very very vulnerable market. And that's just the the highlights of that. There's I could go on about that, but the S&P 500 is at a a very dangerous position and the economy is in a lot worse shape than most people think. Danielle Dorito Muth did a very good talk yesterday explaining about that and how many numbers are actually a lot worse than we think. So that just getting in that part. But so in in summary, what we're looking at here is when we compare the secular bull market in gold in 2000, we had the background of money supply growth and we had the bare market in the S&P 500, but that was against a headwind of central bank selling and the sovereign debt and the and the demographic issue really wasn't a big deal yet because the sovereign debt wasn't out of control yet. Now here we are at this point in time and now we have the background of the M2 growth and we have the central bank buying which is very big and it's ongoing and probably going to get higher and we've got the sovereign debt and the demographics working also in the favor of the gold price d because of the influence that it'll have on uh the money printing of the central bank. And the only one that's not lined up to push the gold price higher yet is the C is the S&P 500, which we know is a very big deal because it was a primary driver of the earlier one. And it hasn't even happened yet. And yet we are already in a very obvious secular bull market in gold. So when the US stock market goes in the tank, there's going to be a lot of money looking for a place to go. And look at how profitable the gold miners are. people are going to find that and the amount of money that's in the US stock market that's going to find look for a home is going to propel the gold market dramatically. So yeah, you you you look at the basic factors and say, you know, pretty soon all five of these are going to be a tailwind for the gold price. So, how is this not going to be a secular bull market that's going to last for at least 10 more years >> and maybe longer? And and the other thing that is interesting to think about this, these factors are so powerful now that we don't know what the world's going to look like in 10 years. One of the possibilities, and this is not negative for gold at all, is that we may end up with a worldwide monetary reset, a new system, like in Bretonwoods 1944. And what we also know is that every new monetary system that's reset always has some aspect to it in gold every time for obvious reasons. Hello. So, so that's not going to be bad, but it's how we get there that could be very upsetting. But I think if if we're in gold and silver, we're going to have a chance to maintain our lifestyle to somewhat of a reasonable level. So then the last thing I wanted to share is to look at the gold miners and what they have done in the first nine months of 2025. And so if you you look at that what I have is of course there's the the price of gold is up about 50%. And then I showed their increase in the share price of all these different gold miners and and that and the relationship of that to the gold price increase. And what you can see is that on average it's about 2.6 six to1 which is what GDX is which is the ETF for the gold miners. Okay, so you would expect that in the uh companies that are marked in X those are the core gold miners in my portfolio and they're up an average of 3.3 and the other zero ones are the big seniors Beric pneumontal etc and and they're up uh 2.8 eight. So you see that and and the reason why I invested is not just because you're getting a bit more here, but because the logic for me is that each one of those companies is unique in that over the next couple years, they're going to expand production by a significant amount, 50% or more. And when that happens, then their earnings is going to go up such that you're going to get a two and a half to three times multiple out of that on top of the three times if the gold price goes up that much. And another if the gold price doesn't go up at all, you're still going to get two and a three times for those. So I I really like that because you're basically investing in an exploration and development story, but you're doing it under the umbrella of a profitable producer so that you don't have financing risk, permitting risk, or staffing risk, which is a huge deal right now because during the bare market, all the mining engineers and geologists got laid off. They died, they got a different job, and the and the universities weren't training. mining engineers or geologists because why would anybody study that? They should study software development, right? Because that's what was booming. But now all of a sudden we're in a global market and all these new companies are propping up. How many of the people running those companies or or staffing them have any experience or training at all and nobody's talking about that. So staffing, if you're going to invest in any these newer companies, what kind of staff have they got? Do they know anything? An awful lot of them aren't going to know diddly. >> And that's a major issue that I encourage people if you're going to go there and buy lottery tickets, which is what like explorers are, at least find out what this what the what this personnel is, what the staffing is. You got anybody on board that actually ever done it before? Probably not because there just isn't enough to go around. whereas the established producers already have the staff and they can train new people and they can grow and so that isn't an issue there either. So that's why I like those and they've done very well as you can see. So I just wanted to share that with people. Yeah, I I also own two silver companies. Uh, and I just mentioned those and they're not producing at the moment, but they're very have very large deposits, very low cost, excellent management, good locations, and um uh they also have a virtue that almost all the other silver producers or quasi producers don't have. All the other ones have revenue of silver that's maybe 50%. Maybe 40, maybe it's 60. But the balance, the byproduct is zinc, lead, and copper, which I'm not too thrilled about. What I like about the ones I'm recommending and that I own is that their byproduct is gold. That works for me. So, that's why I like them. And that's Abra silver and Vizla silver. and uh and and they're not they're not cheap, but they have a phenomenal uh growth history and they're going to do very well. Yeah, >> this was great. Thank you so much. I think that gives such a good overview of how this bull market is different from what we've seen in the past and how much further it has to go and also your approach. Thank you so much. There's one other thing that I want to share that and that I I really think is important >> and that I just ran across on Sunday. >> Yes. Tell us. >> Two days ago. I'm a big fan of Jordan Roy Burn and his newsletter. He's unique in and in being I think the best newsletter in the gold and silver sector primarily because he makes a list of his top 10 and he tells you when he bought it, how much he paid for it, and where it is now. Nobody else does that. By the way, he also recommends producers for their kinds of reasons that I like them as well. But on Sunday, he happened to list some uh questions that come from his subscribers. And he had a subscriber ask him, he said, "Well, you know, this market has gone up so much and I'm a contrarian, so I've sold all mine." And and and Jordan brilliantly responded then say, "Wait a minute. You know, being a contrarian is fine, but the truth of the matter is that the market is right most of the time. It's only wrong at turning points. If you're in a secular bull market, stay in because as long as you do and you're really in a secular bull market, you're going to make money. And if you play around getting in or out, you're going to you're not it's not going to work. that's that you're not going to be smart enough to outsmart the market and the market's right in between the turning points and and the same and in the bare market if you're really in a secular bear be all out and and just so the key then is to follow what's going on in the macro sense of are we in the bull or the bear and that's why the analysis that I'm doing and am talking about here is okay are we in a secular bull market and I think it's pretty obvious in 2025 we're in a secular bull market in gold. Okay. And it's only started I mean on a baseball metaphor I think we're about the second inning of maybe a 15ing game. Okay. Because of all the five factors that I'm talking about and the 2000s one went for 12 years. So that then the question becomes whether we even this system even gets us in at to 10 years. We don't know but that's another whole issue. But do give uh Jordan I want to give him credit because I'd never heard anybody talk about that before and so many of us have been conditioned by the wonderful Rick Rule who I heard him give a speech on the you're if you're not a contrarian you're a victim speech 23 years ago in Vancouver and and and and a lot of us are conditioned to think that way and and and you got to recognize and and Jill Groden brilliantly pointed out well yeah that's true but only in the instances where the turning points happen. >> Yeah, you gota you that the investors really need to can take that seriously and be, you know, not trying to get smart and and f getting in and out in the middle of the barrel bull market, you're just going to hurt yourself. You won't get the full benefit. So, >> yeah. Yeah, you got to have that that nuance is so important. Thank you for sharing that anecdote. I think it's important. I'm I'm just excited because I'd never run across that before and it's so obvious that it makes you go, "Duh, why didn't I think of that?" But yeah. >> Yeah. Well, I think that's that's why it's good to get all these opinions and come to these events and hear from everybody. >> Yeah. >> Yeah. >> Well, this this was so good as usual. I think I think this will be really helpful for anybody who is feeling doubtful. Do did is there anything else we need to cover? >> Oh, I think we've got it. >> Well, thank you so much. Always good to have you >> for having me. It's been great fun and I'm It's been a lot of fun for me to put it all together. It really gives me something to get up in the morning for. >> Oh, I'm so glad. Thank you so much. I'll we'll wrap it up here. We'll have you back again soon hopefully. Once again, I'm Charlotte Mloud with investingnews.com and this is Don Hansen.
Don Hansen: Gold Bull Run Just Starting, 5 Powerful Price Drivers to Watch
Summary
Transcript
[music] [music] I'm Charlotte Mloud with investingnews.com and here today with me is private investor Don Hansen. Thank you so much for being here. I know our audience has been waiting so long to have you back. Well, I'm delighted to be here and excited to to uh share what I have to share about this particular subject because I think it's very timely as we talked about that a lot of people were wondering the uh duration of this secular bull market that we're in now in gold. So, yes. Yeah, I'll talk a little bit about how we came to the topic for today which we're having a conversation thinking what can we speak about next and I'd mentioned to you there's there's a lot of optimism about the gold market but there's also people who are seeing the price has run and they wonder is is it over because we're in this consolidation right now. So people aren't necessarily sure what's going to be happening and you have put together you've identified I think five factors that show us how different and powerful this bull market is. So that's where we're going to begin. If you could if you could start by giving an overview of those factors. >> I would. Yeah. >> Okay. the the the five factors are the um fiat money supply, the uh central bank buying and selling of gold, the sovereign debt, the demographic shift, and the S&P 500 status. Those are are the five. So, I'll go through those one at a time and discuss where we are with that. The first one being the money supply. And u I brought along a chart that I've used in the past that plots the U M2 money supply of the US against the gold price. And so uh we can put that one up for people to see. And you can see the gold price tracks very closely with the money supply. Not exactly, but over time there's no question that they track together. And a little background, I learned that in fact over this whole 50-year period of time that the central bank in the US has deliberately caused the M2 money supply to grow on average about 7% a year. Uh actually I looked at 35% over five years and the average. But so there's ups and downs of course but that's how it works. The other thing I think is interesting to know about all of this is that so many people in the gold sector talk about the money supply is money printing by the Fed. That's actually not true. The money is primarily created by the banking system lending it into reality because we have a fractional reserve banking system and the Federal Reserve's rules and regulations facilitate that as well as the interest rate to you know the lower the rate then the more borrowing there is and so the the Fed is is manipulating it but they're not actually the ones doing it except when we get into these crazy periods like we've had in the last 25 years called quantitative easing in which case um the Fed is actually printing the money because their uh balance sheet is accumulating US treasuries they're buying it and putting that's the direct issue the other thing I wanted to share uh that I found interesting and I was explaining to you that I came across this structure something that I I woke up with one morning that I remember learning when I was a sophomore in college in 1960 which gives you some idea of how old I am and it's called the equa equation of exchange and what it is it's basically m which is the fiat supply of money times v the velocity of money is equal to the price level of products services and assets times the quantity of products services and assets. And this is useful because a lot of times people wonder about well the money supply is doing this or that in various countries and it doesn't seem to make sense with regard to inflation. Well, there's several reasons for that and this particular structure gives you a way of looking at it that helps to understand what's actually going on. So the one that's particularly significant is the velocity of money and that varies significantly and the primary um cause of that is the savings rate because if people in a different society save the money instead of spend it then obviously there's fewer transactions and the number of transactions is the velocity of the money right and in the era where the Japan was building up all this debt and they were creating money, but yet they couldn't get inflation to happen. Well, the thing is that the Japanese people are the most aggressive savers on the planet. They save 35% of their income. In the long run, the US it was maybe 10%. And recently it's actually down as low as five. So that's a big a big factor. Another factor is that in the um price side we just keep track of the consumer prices which is products and services that consumers buy and just a select group and don't include assets. And in fact during the quantitative easing segment when all that money was going into the system most of it went into assets real estate and stocks which created a major disparity in wealth particularly because when the interest rates were that low then the ordinary person that owned bonds wasn't getting any interest. And so that was another complication in the whole thing that u wasn't a good but most people don't recognize the different issues that are involved but the equation of exchange if you look at it and then you begin to say whoa well what's actually happening in this situation that's another matter another thing about Japan is that they had a very positive uh trade balance for a long time which would really help that situation for am the problem in the US is that they have both a budget deficit and a trade deficit at the same time. That is a no no and it's not sustainable and that's a whole another we could go into that issue but I thought it was interesting for people to actually look at and think about the equation of exchange and how those different factors interrelate to each other. But the bottom line here is that the increase in the money supply is a relatively constant in the background and it's been true in the uh uh bull market of the 70s in the bull market of the 2000s and now it's just there and so it's neither new or it just is what it is. Okay. Um the next factor that's really important is the reserve status of the US dollar and US dollar denominated assets. As you know, anything that's money has three characteristics as a store of value, as a medium of exchange, and as a unit of account. Well, what's going on now is that the dollar's store of value is questioned now. It's changed significantly. So that in the uh uh global market of the 2000s, the central banks were actually selling gold a lot and and and in the uh the subsequent u period as of 2011 they've been buying it. And now we'll show that slide so that people can see how dramatic the change in central bank buying has been. But the interesting to thing to know is that then here we had a bull market between 2000 and 2012 in gold and the central bank selling was actually a headwind for it. It was making it more difficult and yet it happened anyway. And the reason that it did is because of the fact that the US stock market was in a bare phase. And we can talk about that as we get a little further along. But that was that was the that one is a significant difference from that bare market to now to keep in mind because it's a powerful one and it's where the uh this particular s secular bull market began. It started in the gold market whereas in the previous one it started in the stock market going down. That was what initiated that one in 2000 and then the gold followed it. So it just gives an idea of the significance of the central bank activity. So, and that one now is definitely a major tailwind for us. And and that's because central banks for their reserves, they want to have something that's not only a store of value, but something that is neutral. By that meaning that it's nobody's liability and and and and it's not something that can be manipulated by a country that issues it because nobody does. It's not that. And so that's why it's such a much better store of value for central banks and that's why you're seeing such a change. But uh just to give you an idea in terms of the central banks in 1980 I think it would have been the uh proportion uh of central bank reserves that was gold was something like 75%. Because they had been buying it through the 60s and then even in the 70s whereas now I think in 2020 it was only 10%. Now it's 20% partially because the gold price has gone up a lot, but still what it tells you is that there's a lot of room for it to run from 20 to 75. So it just indicates that the central bank buying is not going to run out of steam in the near future. That that's not going to happen. And in fact, it's it's probably going to get much worse because we saw in 2022 where the central bank buying went from 500,000 500 tons a year to over a thousand tons a year when the Ukraine war started and the US government sequestered 300 billion dollars worth of US treasuries that belong to Russia. Okay? And that then really lit a fire under the other side of the bank saying they could do that to us. But there's another thing that's now brewing that's even worse and that is that the Europeans want the US to basically take those $300 billion worth and give it to the Ukraine. Basically not just sequester Russia's asset but steal it. If that happens then you're going to see central bank going even higher because everybody is going to figure you can't trust the US government. I'm not going to use that as a store of value when they could steal it from me if they don't like what I did. So, that's another one. It ain't happened yet, but it's being seriously discussed because they want to help Ukraine and yet the Europeans don't have any money. So, they say, "Well, let's go just take the Russians money." So, another issue to keep in mind in this whole thing. Okay. >> Absolutely. >> All right. So then the the next two are somewhat intertwined but I'll talk them about them individually. The sovereign debt level in all the developed countries is now uniquely high. Um all the economists that I've read uh in recent years say that the debt to GDP ratio should stay under 100%. You get beyond that and then you get into serious trouble because the interest expense starts to crowd out other things and make it very very difficult to get anything close to a balanced budget. The US is already at 125% and the Japanese are over 200 and the Europeans are in a mess. Okay. So, this is a unique situation that's much much worse than it was in the 2000s and that is already in play and that's happening and you can just say okay this is going to be a difficulty and and the other thing of course is and we'll get into that because of the demographics is that the expenses for the the developed countries they all have low birth rates and so you're having fewer and fewer people in the working age population yet having to pay for more and more people over 65. And so the expenses for like in the US, Social Security and Medicare is steadily growing now because the baby boomers generation has been retiring for maybe five years. We got another 15 probably to go. Those both of those elements are going to get bigger and bigger. At the same time, the interest expense is growing because the debt's growing. Oh, and then we have the the the world geopolitics and the defense spending going up. So, how are you going to balance a budget? And we haven't had a recession yet. And if we do, then guess what the budget deficit does then? Instead of it being 6% of GDP, it's going to be 12 or 15. So, the whole situation is really scary. and and and the uh the uh demographic shift again as well as the debt is unique now. It's much much worse because that baby boom generation is fullbore into retirement and and yet the population is so much less and the US is actually the best dirty shirt and laundry because the the birth rate in the US is maybe 1.6 six that 2.1 is replacement. In Europe, it's 1.4. In Asia, it's like one. In China, it's less than one. And that's because they had two generations of only one child. Oh, and then Asians preferred male children. So, you don't have just a lower birth rate of females, but you have too few females because there weren't enough of them born in those that one child time. And and I'm I've had experience with Asians to realize that this preference of a male child is is a big deal. I I was doing business with a Korean once in uh the 1980s and I was talking with him about, well, you have a family. He says, well, yeah, I have two children, two daughters, two balls and no strikes. That's the attitude. Okay. And this is why you have a disproportion of males to females. that makes this issue much worse in Asia and nobody's really looking at what is that telling us what's going to happen those people got huge problems and in China now young people who are graduating college can't find a job so China's got a lot more problems than we realize but anyway that's just one more factor that makes this debt problem more serious and of course the real reason why with gold it's serious is Because if they can't raise enough money through taxes or cutting the budget, what do they do? They have to print the money. And what does that do to gold? Well, we know the price goes up. So, you've got that. Then the fifth one is the US stock market. And the interesting thing, as I mentioned earlier, in the uh bull market, in the secular bull market from 2000 to 2012, that was a bare market in US stocks. It took from 2000 to 2012. In 2012, the US stock market's nominal value, S&P 500, it took them 12 years to get back to where it was in at the peak in 2000. And that's kind of interesting when that tends to pivot in in terms of the end is when they you manage to kind of get back to where you were. And what that means, of course, that you're not making any money through that. So you shouldn't be there. But that was the major issue I think for the secular bull in gold during that time because the central banks were selling. So it had to be that and we know that the mining companies are making money and NASDAQ was down by 85%. So like people are going to go find where there's somewhere to to make money and gold and the miners was it. But of course then that ended in 2012 when you then had the beginnings of the secular bear for gold and the beginnings of the secular bull. And that's where we'll look at this particular list where I basically summarize the uh bull and bear patterns over time. And you can see there then in the early stage where gold is in the is in the bull phase and and the S&P 500 in the bear and then it flips in the next cycle here this long 20-year period where um you have a reverse and and the US stock market it goes astronomically high for a whole lot of reasons. um the end of the cold war, China entering the WTO and and um the so corporations profitable because they could have stuff made in China for cheap and make a big a profit. So all in all that period of the 80s and 90s was phenomenal for the US and so the the gold price didn't go anywhere and and you saw everybody selling it and you know that was a a poor period but then then we started to see a new period here that started when the S&P 500 went in the tank and it took them two years to get it went down and it stayed down for 12 years and so then we saw the inversion where the gold price went up quite a bunch. So now we're in a here we got a a different period where that flipped and of course gold was in a secular bear for that period of time. I picked 2021 as a turning point. It could easily have been 22 or three because again it's not a point really. It's a period of time where you're seeing a shift in in money flows and and how things are are happening. But it's obviously now that we've seen as we include 2025 where gold was up 50% already that now you're seeing this the gold is is is ahead. But this one hasn't shifted yet. But I could go into lengthy discussions of why the US stock market is vulnerable. We could go I just a few it the valuations of is at all-time highs. It it's even higher than in 2000. And then we have and two other things that are unique to this particular secular bull. One is stock buybacks by corporations. It's been higher than ever. Um, in some years it's been over a trillion dollars of buying by corporations partially because they could borrow money for practically nothing and make and enrich the management because the management got paid based on the share price. So is no what's the problem? we'll just borrow all kinds of money and get the company in debt, but it gets the share price up, so we get rich and which is I think tragic in terms of the the moral and ethical attitude of management, but that's another story for another another discussion. But then the other one that's a factor here in the terms of vulnerability is something called passive investing. You're familiar with that, I'm sure, where the ETFs for the S&P 500 are capitalization weighted, which means that the bigger the capitalization, the more percentage of your money that goes into the ATF goes into those. So that now the top 10 in the S&P 500 represents something like 50% of the total market cap of the S&P 500. So half of every dollar that you invest in that ETF goes into those. So it's an enormous leverage to the upside for the for the MAG 10 and that's lovely on the upside, but it's just as powerful on the down and that makes it a very very vulnerable market. And that's just the the highlights of that. There's I could go on about that, but the S&P 500 is at a a very dangerous position and the economy is in a lot worse shape than most people think. Danielle Dorito Muth did a very good talk yesterday explaining about that and how many numbers are actually a lot worse than we think. So that just getting in that part. But so in in summary, what we're looking at here is when we compare the secular bull market in gold in 2000, we had the background of money supply growth and we had the bare market in the S&P 500, but that was against a headwind of central bank selling and the sovereign debt and the and the demographic issue really wasn't a big deal yet because the sovereign debt wasn't out of control yet. Now here we are at this point in time and now we have the background of the M2 growth and we have the central bank buying which is very big and it's ongoing and probably going to get higher and we've got the sovereign debt and the demographics working also in the favor of the gold price d because of the influence that it'll have on uh the money printing of the central bank. And the only one that's not lined up to push the gold price higher yet is the C is the S&P 500, which we know is a very big deal because it was a primary driver of the earlier one. And it hasn't even happened yet. And yet we are already in a very obvious secular bull market in gold. So when the US stock market goes in the tank, there's going to be a lot of money looking for a place to go. And look at how profitable the gold miners are. people are going to find that and the amount of money that's in the US stock market that's going to find look for a home is going to propel the gold market dramatically. So yeah, you you you look at the basic factors and say, you know, pretty soon all five of these are going to be a tailwind for the gold price. So, how is this not going to be a secular bull market that's going to last for at least 10 more years >> and maybe longer? And and the other thing that is interesting to think about this, these factors are so powerful now that we don't know what the world's going to look like in 10 years. One of the possibilities, and this is not negative for gold at all, is that we may end up with a worldwide monetary reset, a new system, like in Bretonwoods 1944. And what we also know is that every new monetary system that's reset always has some aspect to it in gold every time for obvious reasons. Hello. So, so that's not going to be bad, but it's how we get there that could be very upsetting. But I think if if we're in gold and silver, we're going to have a chance to maintain our lifestyle to somewhat of a reasonable level. So then the last thing I wanted to share is to look at the gold miners and what they have done in the first nine months of 2025. And so if you you look at that what I have is of course there's the the price of gold is up about 50%. And then I showed their increase in the share price of all these different gold miners and and that and the relationship of that to the gold price increase. And what you can see is that on average it's about 2.6 six to1 which is what GDX is which is the ETF for the gold miners. Okay, so you would expect that in the uh companies that are marked in X those are the core gold miners in my portfolio and they're up an average of 3.3 and the other zero ones are the big seniors Beric pneumontal etc and and they're up uh 2.8 eight. So you see that and and the reason why I invested is not just because you're getting a bit more here, but because the logic for me is that each one of those companies is unique in that over the next couple years, they're going to expand production by a significant amount, 50% or more. And when that happens, then their earnings is going to go up such that you're going to get a two and a half to three times multiple out of that on top of the three times if the gold price goes up that much. And another if the gold price doesn't go up at all, you're still going to get two and a three times for those. So I I really like that because you're basically investing in an exploration and development story, but you're doing it under the umbrella of a profitable producer so that you don't have financing risk, permitting risk, or staffing risk, which is a huge deal right now because during the bare market, all the mining engineers and geologists got laid off. They died, they got a different job, and the and the universities weren't training. mining engineers or geologists because why would anybody study that? They should study software development, right? Because that's what was booming. But now all of a sudden we're in a global market and all these new companies are propping up. How many of the people running those companies or or staffing them have any experience or training at all and nobody's talking about that. So staffing, if you're going to invest in any these newer companies, what kind of staff have they got? Do they know anything? An awful lot of them aren't going to know diddly. >> And that's a major issue that I encourage people if you're going to go there and buy lottery tickets, which is what like explorers are, at least find out what this what the what this personnel is, what the staffing is. You got anybody on board that actually ever done it before? Probably not because there just isn't enough to go around. whereas the established producers already have the staff and they can train new people and they can grow and so that isn't an issue there either. So that's why I like those and they've done very well as you can see. So I just wanted to share that with people. Yeah, I I also own two silver companies. Uh, and I just mentioned those and they're not producing at the moment, but they're very have very large deposits, very low cost, excellent management, good locations, and um uh they also have a virtue that almost all the other silver producers or quasi producers don't have. All the other ones have revenue of silver that's maybe 50%. Maybe 40, maybe it's 60. But the balance, the byproduct is zinc, lead, and copper, which I'm not too thrilled about. What I like about the ones I'm recommending and that I own is that their byproduct is gold. That works for me. So, that's why I like them. And that's Abra silver and Vizla silver. and uh and and they're not they're not cheap, but they have a phenomenal uh growth history and they're going to do very well. Yeah, >> this was great. Thank you so much. I think that gives such a good overview of how this bull market is different from what we've seen in the past and how much further it has to go and also your approach. Thank you so much. There's one other thing that I want to share that and that I I really think is important >> and that I just ran across on Sunday. >> Yes. Tell us. >> Two days ago. I'm a big fan of Jordan Roy Burn and his newsletter. He's unique in and in being I think the best newsletter in the gold and silver sector primarily because he makes a list of his top 10 and he tells you when he bought it, how much he paid for it, and where it is now. Nobody else does that. By the way, he also recommends producers for their kinds of reasons that I like them as well. But on Sunday, he happened to list some uh questions that come from his subscribers. And he had a subscriber ask him, he said, "Well, you know, this market has gone up so much and I'm a contrarian, so I've sold all mine." And and and Jordan brilliantly responded then say, "Wait a minute. You know, being a contrarian is fine, but the truth of the matter is that the market is right most of the time. It's only wrong at turning points. If you're in a secular bull market, stay in because as long as you do and you're really in a secular bull market, you're going to make money. And if you play around getting in or out, you're going to you're not it's not going to work. that's that you're not going to be smart enough to outsmart the market and the market's right in between the turning points and and the same and in the bare market if you're really in a secular bear be all out and and just so the key then is to follow what's going on in the macro sense of are we in the bull or the bear and that's why the analysis that I'm doing and am talking about here is okay are we in a secular bull market and I think it's pretty obvious in 2025 we're in a secular bull market in gold. Okay. And it's only started I mean on a baseball metaphor I think we're about the second inning of maybe a 15ing game. Okay. Because of all the five factors that I'm talking about and the 2000s one went for 12 years. So that then the question becomes whether we even this system even gets us in at to 10 years. We don't know but that's another whole issue. But do give uh Jordan I want to give him credit because I'd never heard anybody talk about that before and so many of us have been conditioned by the wonderful Rick Rule who I heard him give a speech on the you're if you're not a contrarian you're a victim speech 23 years ago in Vancouver and and and and a lot of us are conditioned to think that way and and and you got to recognize and and Jill Groden brilliantly pointed out well yeah that's true but only in the instances where the turning points happen. >> Yeah, you gota you that the investors really need to can take that seriously and be, you know, not trying to get smart and and f getting in and out in the middle of the barrel bull market, you're just going to hurt yourself. You won't get the full benefit. So, >> yeah. Yeah, you got to have that that nuance is so important. Thank you for sharing that anecdote. I think it's important. I'm I'm just excited because I'd never run across that before and it's so obvious that it makes you go, "Duh, why didn't I think of that?" But yeah. >> Yeah. Well, I think that's that's why it's good to get all these opinions and come to these events and hear from everybody. >> Yeah. >> Yeah. >> Well, this this was so good as usual. I think I think this will be really helpful for anybody who is feeling doubtful. Do did is there anything else we need to cover? >> Oh, I think we've got it. >> Well, thank you so much. Always good to have you >> for having me. It's been great fun and I'm It's been a lot of fun for me to put it all together. It really gives me something to get up in the morning for. >> Oh, I'm so glad. Thank you so much. I'll we'll wrap it up here. We'll have you back again soon hopefully. Once again, I'm Charlotte Mloud with investingnews.com and this is Don Hansen.