GOLD Rally 'Just Getting Started' – $23,000 in PLAY: James Rickards
Summary
Gold Market Outlook: James Rickards predicts a continued bull market for gold, emphasizing that the rally is just beginning, driven by factors such as central bank buying, flat global supply, and gold's role as an "everything hedge."
Central Bank Influence: Since 2010, central banks have been net buyers of gold, providing a floor under the market and creating an asymmetric trade opportunity with limited downside and significant upside potential.
Silver's Potential: Rickards highlights silver's dual role as a precious metal and industrial input, suggesting it could rise faster than expected, potentially reaching $100 an ounce if gold continues its upward trajectory.
Geopolitical Risks: Rickards discusses the internal threats facing America, emphasizing that domestic issues pose a greater risk than foreign adversaries, and criticizes the current administration's handling of these challenges.
Ukraine Conflict: He argues that Ukraine cannot win the war against Russia, and continued conflict will only result in more territorial losses for Ukraine, suggesting a need for a peace treaty.
Investment Strategy: Rickards recommends owning both gold and silver, with silver being more practical for everyday transactions in a crisis, and suggests having a "monster box" of silver coins for potential use as currency.
AI and Financial Markets: In his book "Money GPT," Rickards warns about the dangers of artificial intelligence in financial markets, which could amplify stock market meltdowns, while dismissing the likelihood of AI achieving superintelligence.
Transcript
Hello everybody and welcome into commodity culture where we break down commodities markets, sound money principles and geopolitics all with the goal of making you a better investor in the commodities sector. My name is Jesse Day and on this episode I'm thrilled to welcome James Rickards to the program. An investment adviser, lawyer, inventor, and economist and a New York Times best-selling author of books such as Currency Wars, The Death of Money, and his latest Money GPT. Last time James was on the show, he was calling for $23,000 gold. And now that we've broken to new all-time highs, he reiterates his stance and walks us through how we get there. He also goes deep on the silver market and why he thinks the metal could run faster and rise more dramatically than most people expect. We also dive into geopolitics as James discusses why America's greatest enemy lies within, why Ukraine cannot win the war with Russia, the implications of a military defeat in that conflict, and so much more. So strap yourselves in for my conversation with James Rickards. James Rickards, it is great to have you back on Commodity Culture Culture. I want to start by discussing the gold market because last time I had you on back in November of last year. You outlined a path to gold at $23,000. And as the gold price continues to push to new all-time highs, that prospect is looking more realistic. Give us your thoughts on the recent price action in the gold space and the catalyst that you think will drive us higher. >> Sure. Uh glad to, Jesse. Nice to be with you. Um yeah, the uh obviously gold's been going up. Uh it's up uh well over 200% more like 250% uh just in uh in recent months and uh you know you go back over longer time frames it it's a lot higher than that we're in a major gold bull market. The point I make is that this is going to continue. And a lot of investors uh ask me say, "Well, hey Jim, you know, you you said by goal when it was 1500, it's, you know, $3,700, kind of teasing around $3,800 an ounce right now. Did I miss the boat?" And my answer is, well, you missed, you know, $1,300 worth, but no, or sorry, $2,300 worth, but no, you did not miss the boat. This rally is is really just getting started. There are three main drivers. Um the first one is central bank buying. Now 2010 was the year of inflection meaning from 1970 to 2010 central banks and you know finance ministries basically official institutions were net sellers of gold. Beginning in 2010 they became net buyers of gold. Now different central banks involved you know Switzerland, UK, Australia, Canada were all sellers. still are. The the Swiss have stopped selling. Um, Canada, I think, sold all their gold. Uh, not saying I have a a treasure chest, but I think I have more gold personally than the government of Canada. Um, so uh so th those some of those countries are still sellers, or at least they've kind of dialed it down to zero. The buyers are are new. They're Russia, China, India, uh, Japan, believe it or not, uh, Turkey, Iran. and Iran's not transparent, but there's a whole set of buyers out there. Vietnam, for its size, is buying a lot of gold, and they continue to do so. Now, central banks, to be clear, um they're very savvy buyers. They're not going to they're not going to drive the market a lot higher by themselves, and they don't want to. If you were a buyer, why would you want the price to go up a lot? You' say, "Hey, keep I'm still buying, so I just assume keep it low um for a period of time." But what they do is they put a floor under the market. Um they're they buy the dips. You know, I had to use cliches, but they do buy the dips. They put in standing orders. You know, Russia for a long time was sort of 10 tons a month. Put on the put in the orders with dealers in London. They don't want to disrupt the market, etc. But if you're an investor in gold, if you're any, you know, u individual, everyday American um or hedge fund or whatever, and you're interested, you have limited downside because the central banks are putting in a floor, but unlimited upside for, you know, reasons we'll talk about. So that's what I call an asymmetric trade. Uh it's a very nice trade. The second reason is, you know, good oldfashioned supply and demand. And you know, you learn in your first week of economics courses might be the only thing you learn that's that's really valuable the way they teach it these days. But uh uh global output has been flat around 4,000 metric tons per year. That's all the all the mining in the world. Uh for about six years now, I'm not saying peak gold. Uh it hasn't gone down, but it hasn't gone up, you know, just a little bit around the edges, but not very much. Right around 4,000 metric tons a year. Um so if you have constant supply which we have and increasing demand which we do that means the price goes up. It's just you know limit flat supply increasing demand price goes up. It's pretty much that simple. Um the third factor uh is that people say you know gold's an inflation hedge. It can be an inflation hedge. The correlation between gold and inflation is less strong than most people assume. Um, but I call gold the everything hedge. Meaning, will it hedge inflation? Yeah, it actually hedges deflation. People don't understand. Um, during the Great Depression, uh, the best performing stock on the New York Stock Exchange was Homestake Mining, which was one of the largest mines in the world at the time. That's actually the foundation of the Hurst fortune going back to George uh, George Hurst in the late 19th century. But I visited that mine out in Leed um, South Dakota. Uh it's an open pit mine and an underground mine. You can it's it's they're not producing now. They produced up until around the year 2000. But certainly in 1930s, one of the largest gold mines in the world. That stock went up at a time when the uh Dow Jones Industrial Index fell 82%. from October 19 sorry yeah October 1929 to June 1932 which was the bottom um almost three years the stock market fell over 80% but homestake mining went up and it was the best performing stock on the New York Stock Exchange gold itself went up 75% during the great depression uh it went from $2067 an ounce to $35 an ounce which you know measured in dollars that's a se % increase um during the greatest sustained period of deflation in the US history. So the the history of the great depression says when stocks are crashing and deflation takes over gold goes up significantly. So um it hedges that also hedges inflation because again as we saw in the late 1970s uh you know in 19 oh 19 1979 1980 inflation was uh um 13 15% uh US treasury notes were yielding 10ear maturity was yielding 15%. You could have bought a 10ear treasury note that would pay you 15% a year for for the next 10 years. Uh but from 1971 to uh n January 1980, gold went up 2,100%. So hedges deflation, hedges inflation, hedges, um social unrest, natural disasters, civil wars, you know, regular wars, uh you know, etc., uh and uncertainty in general. So it's very good in that sense. Uh, and one last point, Jesse, and um kind of why I see this continuing getting to much higher levels. There's a little bit of math. You can do calculus if you want, but I try to keep it around the fifth grade level. Uh, because there's no need to be more complicated than that. Um, there's a behavioral psychological phenomena called anchoring. And anchoring just means, you know, we're all humans. We all have biases, which are, you know, usually a good thing. It kind of kept us alive for, you know, a couple million years. Um, but an anchoring bias is you get a number in your head and you kind of it means something and you anchor on it and you kind of filter out other data uh around it. So people obviously who own gold uh look at price increases and let's just take big chunks. Uh $1,000 $1,000 an ounce is a lot, but you know we've been seeing it go up $100 an ounce every couple days uh for the past uh month or so. Uh, but let's just take bigger chunks. Take a $1,000. When you go from $2,000 an ounce to $3,000 an ounce, that's a 50% increase. When you go from $3,000 an ounce to $4,000 an ounce, that's a 33% increase. And when you go from $4,000 an ounce to $5,000 an ounce, that's a 25% increase. The point is, there's still $1,000 leaps. And if you have uh 50 ounces of gold and it goes up $1,000 an ounce, you just made $50,000. And people think of it that way. They focus on the,000 bucks or in my example, the $50,000 gain and they're like, "Kaching kaching ching. That's great." But what they don't realize right away because they just don't think about it. Each one of those thousand gains is easier than the one before because it's a it's the same thousand gain, but it's a smaller percentage gain because it's calculated calculated off a higher base. So going from $9,000 to $10,000, that's only an 11% increase. I mean, 11% is kind of like a good month these days. Uh so my point, and this is where you get into the frenzy stage. We're not there yet. We're getting closer, but you know, all of a sudden it's going to go eight, nine, 10, 11. And and those thousand chunks are the thousand leaps are going to keep getting easier because they're represent they represent a smaller percentage. When you go from 20,000 to 21,000, that's only a 5% increase. Um, you know, which is is a good week. So, um, so that's one of the ways you get there. From from the perspective of $3,800 an ounce or $3,700 an ounce where we are now, $23,000 seems like I'm ask the far side of the moon, but actually you get closer to it, it gets really easy to to see that kind of uh that kind of spike. So, yeah, that's that's my forecast. Those are the reasons behind it, and they're they're they're not changing. If anything, they're getting stronger. The sponsor of today's episode is Arc Silver Gold Osmium. Owner Ian Everard is praised even by his competitors as one of the most honest and level-headed bullion dealers in the United States. They have some great prices. You can see some of them displayed right now on screen. Take advantage of these specials today by reaching out to Ian at 3072649441 or by email at ianarchsg.com. Make sure to tell them of course that commodity culture sent you. And now back to the interview. Fantastic breakdown. I want to touch on silver here because as gold is breaking out to new all-time highs. Silver is also quietly in its own breakout now sitting around $44.70 the last time I checked today, heading towards 45, outperforming gold by around 10% so far this year. Is it time to potentially look at silver as a metal that could rise faster and more dramatically than people could expect? >> Definitely. I own gold, but I own silver, too, and I recommend it. Uh, silver is a little bit more difficult to analyze because I mean, gold is uh not good for anything except money. So, if you like money, have some gold. It's obviously a precious metal, but the industrial applications of gold are very few. Uh, silver is different. Silver has a lot of industrial applications. So, but it is a precious metal. So you have to think of it as a precious metal money on the one hand and industrial uh input on the other. Those can be moving in different directions. Obviously the precious metal aspect is driving silver high higher but as we get into what looks more and more like an industrial uh recession. Um uh that could be a drag on silver use. But let's let's focus on the precious metal side. A couple things about silver. Number one, it tends to lag gold. You know, there's no way that gold's going to the levels I'm talking about and silver is not going to go to $100 an ounce. You know, if you see $20,000 gold, you're going to see $100 silver or more. But silver tends to lag a little bit. The gold takeoff happens and it makes all the headlines and people get spun up and then silver just kind of sitting there like what's wrong with silver and then all of a sudden silver starts to move. So, I think you're exactly right, Jesse. We're in that mode right now, but it plays catch-up. So, so silver could actually go up faster because it took longer to take off. So, I think the way you described it um is exactly right. But silver uh has a very important monetary use that I would say makes it even uh a little bit easier than gold which is um uh it it's more practical if you had a crisis and you had you know where people lost confidence in money or you had electric uh grid breakdown and we had to kind of use gold and silver to feed our families uh so to speak. Um, silver is a lot more practical because if you have a a 1 ounce gold coin, let's say, okay, that's valuable. It's a form of money. It's bullion. But, um, it's if it's worth 4,000 or $5,000 as we're describing, that's an awful lot of groceries. Uh, if you want to go out and get food for your family, a silver ounce or five silver ounces, which today would be 200 bucks, that's about the right amount of money to go shopping, in other words. So, um, I recommend people have a what's called a monster box. Uh the monster box comes from the US Treasury. It's it's or well well the US Mint but of course the US men is um regulated by the US Treasury. It's Treasury grain. Has a compression strap in it. Inside in sleeves uh plastic containers are 500 1oz American silver eagles. They're pure silver. Um no alloy. Uh beautiful design. Uh but the point is with 500 of them that could be walking around money as we say in Philadelphia. That could be spending money to feed your family. Whereas gold will preserve value by all means have gold uh very valuable form of property. But gold could almost be too expensive in terms of trying to spend it on the street. But silver I think I mean I was a kid even a young adult we had silver dollars were were common. you know, at least be on your 21st birthday, uh, some aunt or uncle would give you 21 silver dollars. Cost 21 bucks. I mean, today that would be what, $800 worth of silver or more. Um, so, uh, yeah, as silver's silver's taking off. It's lagging gold, but it's going to catch up. It's going to do very well, and it's also a very practical, uh, metal to have for basically spending purposes. >> Well, we're going to move a little bit into the realm of politics as well as geopolitics. two areas you're extraordinarily well-versed in. You mentioned recently in an interview on Bannon's war room that the greatest threat facing America today doesn't come from foreign adversaries, but from within the country. Can you walk us through your thought process there and how this enemy within can be dealt with? >> Well, yeah, I'd be glad to, but you don't need much of a thought process. You just need to read the headlines. I mean, the uh uh we saw the tragic assassination of Charlie Kirk by uh uh well, allegedly, although he's pretty much confessed uh to the murder, um uh this this kid from uh Utah, I guess it was 2122 or something. Um yesterday or a couple days ago, uh there was a sniper attack on an ICE uh detention center. Um the the sniper again, I think he was like 20 uh 20some, maybe a college student, but um he uh he killed two people, wounded others, and then committed suicide uh with his own rifle. Um but uh I I guess he didn't know what he was doing. He was trying to he was anti-ICE. We know that because he carved, you know, anti-ICE messages in the showcasings, but he was shooting the detainees. Maybe he didn't know the difference, but I mean they're all innocent. They're all innocent targets. It's all a tragedy. Um but uh he didn't even, you know, kind of get the right the right targets. Um we're seeing this more and more. We're seeing it all over. And it's not, you know, I'm tired of hearing the, you know, the lone wolf, the random shooter, you know, etc. Um, I I'm not saying that every one of these people was um part of a conspiracy that sat down and figured this out, although some of them may have been, but they're definitely um vulnerable to and subject to a lot of encouragement and coaching uh from various, you know, online services. They're not that hard to find. I mean people call it the dark web but it's just the dark web because they have a lot of uh servers in between uh you know the end user and the um the one propagating the information but uh I I am very critical right now of the of the justice department of Panam Bondi and Caspel at the FBI. Uh why aren't you shutting these people down? I mean I I did um uh counterterrorism for the CIA for 10 years. My expertise was uh financial warfare uh financial I did financial counterterrorism. Um I did a lot in the sanctions area. I did a lot in foreign investment in the US. Basically going out and doing collections to see if the foreign investor were was uh you know the friend of the US or an enemy or funding for the Communist Party of China, you know, etc. I was immersed in this. I still do a lot of it privately, but as I said, I did it for the CIA for over 10 years. Um, and I know how to do this stuff, but other people do, too. I'm not saying I'm the only one. My point is, you can you can freeze the money. You can seize the money. You can interdict the flows. You can shut down some of these websites. I know, you know, you're entitled to First Amend amendment protection. Yeah, I'm happen to be a lawyer also. I study constitutional law, but you're not entitled to First Amendment protection if you're uh conversation is designed to kill somebody. That that can can and should put you in jail. So, where's where's the Justice Department? Why aren't they tapping into resources like the National Security Agency? I mean, they monitor everything. They're moni Somebody's monitoring this podcast. Okay, sorry to the audience, but they are. They're monitoring your iPhones, your GPS. They know where you are. Um, okay. I'm not saying that's always a good thing. I am saying it's true. And so, why isn't the Justice Department tapping into some of those threads for criminals? These are not uh this isn't like the Biden administration where they went after innocent people who just happen to be political enemies. This is going after actual criminals who are prompting actual crimes. So um yeah thing is we know who our foreign enemies are. You know China is the main enemy. Russia it they're they're a bit of an adversary which too bad. I think there's no there's a natural alliance between the US and Russia. We the US and Russia should have a rap. I'm not saying we have to sign treaties or be, you know, best friends, but we should at least have a an understanding and a mutual working relationship designed to isolate China. Um, India should be a very good friend. Why why Trump why is Trump putting secondary tariffs on India? Because they trade with Russia in connection with the Ukraine war sanctions. Why are we why do we care about Ukraine? Uh, that's a war. I mean, we the United States caused that war. Everyone says Russia invaded. Russia invaded after um 17 years uh oh no 14 years of provocations starting with uh uh George W. Bush's Bucharest declaration 2008 when he said Ukraine should be in NATO, Obama's CIA, MI6, coup d'eta in um in 2014 with the fake Maidan square demonstrations and they send a neo-Nazi uh sharpshooters to kill innocent people just to get rid of the president who was too um uh pro-Russia for uh the liking of the neocons in Washington. Uh you know, and so forth. uh we we caused the war. Now we've got the war. But it wasn't Trump's war. This was the Democrats. This was well Democrats and Republicans. I would fault Bush, but really Obama Obama and Biden I would fault the most. Um remember Trump got impeached in um 2019 for a phone call with Zilinsky. He was just trying to you know uh make some inquiries um about bribery and corruption in Ukraine, including the Biden family. And for that he got impeached. Um, but the message was, you know, don't uh, you know, kind of don't mess with uh with Ukraine. Well, but now it's becoming Trump's war. Trump had the opportunity in effect to get out of this war and he failed to do so. And to me, it's very, very much like LBJ in 1965. You know, Lyndon Mays Johnson didn't start the war in Vietnam. It was started by Eisenhower and carried on by Kennedy. Johnson inherited it. uh but he made it his war and ended up destroying his presidency and withdrew from the race in 1968. Well, that didn't have to happen. He could have there was a never a better time or hardly a better time uh to get out of Vietnam before the major escalation started than 1965. So, I think Trump's making the same mistake as LBJ. He inherited a war. Nobody blames him for it. It wasn't his fault. He had the opportunity to get out. He's failing to do so. and now he's getting kind of sucked into it um with the neocons blood uh blood stain banners as they call them people like Lindsey Graham and others. Um so that's a uh a major uh major mistake on his part. My point is we know who the foreign enemies are. We know who the adversaries are. We know what the issues are. What we don't know is about the internal enemies. And that the point I made on Steve Bannon's war room as I said the nobody invaded France during the French Revolution. That was the Jacabins were French lawyers basically. Nobody invaded Russia during the Boe revolution. That was internal uh radicals you know Lenin Stalin Trosky. I mean Lenin was um you know uh uh you know kind of shipped in by uh by uh by by Switzerland but he was doing everything in um in St. Petersburg and and Moscow. So um the so-called fifth column uh the enemy within is your greatest enemy. You don't see them coming. We need to do more. >> Well, I definitely want to pull on that thread regarding um the war in Ukraine being Trump's Vietnam because it's been a bit of a mess with with him, of course, pledging he was going to end the war as soon as possible after getting into office. And since then, it's been a bit of a back and forth between him favoring Putin or favoring Zalinsky, at least in his outward social media posts and in the media. Who knows what's going on behind the scenes. Um, we're caught in a stalemate here where neither side is willing to accept the other's demands. And now Trump appears to be doubling down on the side of actually not only can Ukraine win this war, they can take all their territory back. Um, which according to most analysts I've spoken to seems a bit outside the bounds of reality. But I wonder what your thoughts are there. How do you think this conflict ends? and and if you see it ending in a military defeat for Ukraine, what are the implications for NATO, the EU, and the United States? >> Well, yeah, there's a lot to uh a lot to unpack there. I mean, just to be clear, I I support Trump. I voted for him like six times. He uh I live in New Hampshire, so we have a big very big primary scene. So, I voted for him in the primary election and the general election. So, I'm a big supporter of Trump, and I think he's doing a lot of things right. Having said that, his foreign policy is amateurish at best and a little bit dangerous. they kind of don't know what they're doing. Um they they don't know diplomacy. You know, Trump may master the art of the deal, but he doesn't understand the art of diplomacy or the art of war. So, I'll give you some examples. Uh Trump had this summit meeting with Putin in Alaska. Well, that was good. It was great that they talked and I'm glad they kept kept the the riff raff, the European vassels and others out of the room. Um but um Trump went in and the benefit of that meeting was that he was talking to Putin unfiltered. By the way, I'm sure they had translators. Putin's English is just fine. So, uh they they most likely spoke in English, even though there were translators there. Uh but Trump got to hear Putin for the f, you know, one- on-one. No filters, no Marco Rubio, no Lindsey Graham, no Steve Woff. um as I say for for the first time now Putin's you can call them demands okay conditions haven't changed he he laid them out before the invasion of Ukraine in late 2021 he repeated them after the invasion they almost got to a peace treaty uh in uh March and April 2022 just uh 30 to 60 days after the invasion and then Boris Johnson went to Kiev and told Zilinsky if you sign this forget it we're done with you and Celestencia said okay and they blew up the deal but they had a peace treaty in uh in March so March and April 2022. Um Putin gave a major address to his foreign policy uh officials and uh you know Russian think tanks establishment uh figures in uh the summer of uh 2024 year ago last summer and he said he said the same thing every time. He said, you know, conditions, no for Ukraine, no NATO, you have to be neutral, demilitarized. You can have a kind of paramilitary police force like, you know, the federalis in Mexico, but no large army or military that's capable of doing anything to any of its neighbors. Um, and uh, and denazification, I mean, get the Nazis out of government and u, you know, just so that they play play no role. Um so uh so demilitarization, denoxification, neutrality, no NATO. Um and then of course they keep Crimea. Now what what has changed and and Putin said this just a couple days ago. He said in Alaska, that was that was my point. Has anything changed in Putin's position in the last um almost four years at this point. One thing they get to keep the territory that they've taken. They they they're keeping Crimea. um Zapasurya uh Kershon um uh Don and Luhansk. Uh collectively the last two are known as the Donbas. They're keeping all that because they fought for it and they took it and Ukraine lost. Now uh so what my point to Ukraine, my message to Silinski is the longer you keep fighting, the more you're going to lose. Meaning they're not winning the war. They're not beating Russia. That's not happening. That's I know Trump said that, but that's pretty I I don't know what he was thinking. I would say it's delusional if he has some hidden agenda maybe. But uh Russia's not giving any of the territory back and Ukraine's not taking it back. So what could change if the war continues? Well, Russia will take more territory. Um there's a province called Sunumi which is north of uh Kiev and that's where uh Zilinski launched this uh he invaded the Russian Federation. He invaded Kursk. Um, he actually put his best troops in there. And the Russian way of war, not many people understand it, but it's slow, methodical, and lethal. They take their time. They're not working on your schedule. They don't care about holidays and commemoration or deadlines or 90-day ultimatum that Trump likes to throw around. They don't care about any of that. They care about winning. Uh, and what they do is they surround the target city. It was, you know, um, Marople was first, then Bakmoot, then Abdulka, now they're surrounding Pakk. But the point is they surround it first, which can take a year. You got to capture every village and every road, every place in and out. But once you do that, you've cut off whatever troops are in the city and the target, they're cut off from resupply. They can't Yeah. They can't evacuate. They can't get out. They can't get any supplies in. Uh, and then the Russians give them a chance to surrender. and Zilinski says don't surrender. And the Russians like okay then we'll kill you all. And they do. So that's uh that's how this war has gone and how it will continue to go. Now if you're Zilinski, you're supposed to say, "Okay, fine. Let's do a peace treaty. You can have everything east of the Niper River and south of uh Kkefe. Uh and and we'll keep the rest and call it Ukraine." Um but uh if you don't take that deal, then then they're just going to keep fighting and and Sinski is going to keep losing. You know, it would take nothing. It would be trivial for the Russians to assassinate Zilinski, but why would you? He's an idiot. If you're fighting an enemy with an idiot in charge, you want to leave the idiot in place. You don't want to get rid of him. So, they're very happy to have Zilinski as well, he's not president. He's That's the other thing people don't realize. They say, "We're fighting for democracy in Ukraine." That's nonsense. The uh Zilinski's presidential term expired in May 2024. So he's a year and a half into a military dictatorship. Uh so there's no democracy. He is a military dictator. They're utterly corrupt and they're losing, you know, uh what's not to like, you know, if you're Russia. So uh I don't know what Trump is thinking. His comments made no sense. They're very amateurish at best. Um he although he did you just to add to what you said, Jesse, he did say one thing that was very interesting and you're right. He said, you know, I think, I'm paraphrasing, but I think Ukraine can take back this territory with some support from NATO. Um, they can regain the territory that's been lost to Russia. He did say that, but then at the end of that sentence, he said, and I and I wish them well, which is kind of a way of washing his hands a bit, saying, "Yeah, good luck Europe. Good luck Ukraine. Keep fighting. Get your territory back, but don't count on us." Well, that's a big deal. Now, he didn't again he said he used the phrase I used I paraphrased he didn't say well we're suspending you know weapon sales to Ukraine but what we're doing what the United States is doing is we're selling weapons to NATO and then NATO's supplying them to Ukraine so in a strict sense the US isn't um supplying weapons to Ukraine there's no congressional authorization for that as of now there was before but not now but there's no prohibition on selling weapons to NATO. Begs the question, where's NATO getting the money? Because most of their money comes from the United States. Uh but, you know, and then they're they're stealing um they're in the process of stealing 300 billion dollars of US Treasury securities legally purchased by Russia. Now, at this point, most of those securities have matured. So, you're sitting on a big pile of cash, but still the Russian cash. If you buy a Treasury note and it matures and the Treasury sends the money to your bank account or your brokerage account, still your money. Uh but the NATO's in the process of stealing that to underwrite loans to Ukraine so they can fight Russia. So Russia's own money has been stolen to give to Ukraine to fight Russia. Um how much confidence does that inspire in the US Treasury market? you know, if you're Saudi Arabia or Taiwan or Japan or China or or anybody else, um, and you're like, "Hey, what if the US doesn't like what I'm doing? How do I know they're not going to steal my Treasury securities, etc." I'm not saying the Treasury market's going to collapse? Uh, I'm not saying that at all. In fact, actually, it's it's been pretty strong lately. I'm just saying that the more you weaponize the dollar, the more you drive people to figure out the alternatives. So, um I would say Trump's uh Ukraine policy is is a failure. He uh he heard Putin loud and clear. He walked out of that meeting in Alaska and said, "Oh, there's not going to be a ceasefire." Well, he's right. But Putin had been saying that for two years. He said, "Why would you why would you agree to an unconditional ceasefire if you're winning?" I could understand the loser wanting a ceasefire so they can, you know, rest their troops and get supplies and, you know, get ready to continue the fight, but why would the winner want that? Uh, and the answer is you wouldn't. And Putin has said that. And I guess Trump heard it and said, "Yeah, I guess there's not going to be a ceasefire." Well, why didn't someone tell him that? It was it was pretty obvious. Um, and then he said Putin has these conditions. He wants to go to a full-blown peace negotiation and peace treaty. Okay. But Putin's also been saying that for four years. There was no news there except the president seemed to hear him for the first time. White cop I don't uh you know again I don't know personally. People say he's a nice guy, very smart real estate u dealmaker. I don't doubt that for a minute but real estate and war are two different things. >> Fantastic analysis as always. James Rickards, thank you so much for coming on the show. Before I let you go, tell us about your latest book, Money GPT. And if there's anywhere else you'd like to direct people online, feel free. >> Thank you. Yeah, my my most recent book uh money GPT uh AI and the threat to the global economy. It's about artificial intelligence obviously and GPT in particular which is the um uh it's a technology that g was turned into an app by open AI but everyone's got one now. So Microsoft and Google and Facebook and uh Open AI, Apple, they all have their little artificial intelligence uh uh robots. But um artificial intelligence is real. It's everywhere. It's powerful. It will do some good things. I don't dispute any of that. The point of my book is to issue warnings about a lot of the dangers, particularly in capital markets, how it could accelerate and amplify stock meltdowns. There's nothing new about financial panics. They've been happening since at least the 14th century. But when you put AI into the kill chain, the decision-making chain, and outsource your investment decision- making to AI, you could get some very, very negative results. also talk about nuclear war fighting uh uh and uh it does end on a good note which is there there's not going to be uh super intelligence artificial general intelligence that's the world where you know humans are to AI what apes are to humans you know we're sort of like these slaves to these computers that's not going to happen I explain why but uh a lot else could happen and that's all in the book and also uh if you want to follow me on X it's real Jim Rickards at real Jim Records. >> Great. Well, I will put a link below to MoneyGpt as well as your X account so people can follow along. Thank you so much, James. It's been a blast. >> Thanks. >> And thank you for joining us today. This episode is brought to you by Arc Silver, Gold, Osmium. Take advantage of their specials. They are displayed on the screen right now. Reach out to owner Ian Everard today at 3072649441 or by email at ianarchsgo.com. Make sure to tell them that Commodity Culture sent you. And be sure to pick up your Commodity Culture merch using the link in the description below. Everything backed by a 100% quality guarantee. And I'll see you guys in the next episode. Commodity Culture is a series on commodities and natural resources. If you would like to see more, be sure to subscribe and hit the bell notification so you're always up tod date with the latest episodes.
GOLD Rally 'Just Getting Started' – $23,000 in PLAY: James Rickards
Summary
Transcript
Hello everybody and welcome into commodity culture where we break down commodities markets, sound money principles and geopolitics all with the goal of making you a better investor in the commodities sector. My name is Jesse Day and on this episode I'm thrilled to welcome James Rickards to the program. An investment adviser, lawyer, inventor, and economist and a New York Times best-selling author of books such as Currency Wars, The Death of Money, and his latest Money GPT. Last time James was on the show, he was calling for $23,000 gold. And now that we've broken to new all-time highs, he reiterates his stance and walks us through how we get there. He also goes deep on the silver market and why he thinks the metal could run faster and rise more dramatically than most people expect. We also dive into geopolitics as James discusses why America's greatest enemy lies within, why Ukraine cannot win the war with Russia, the implications of a military defeat in that conflict, and so much more. So strap yourselves in for my conversation with James Rickards. James Rickards, it is great to have you back on Commodity Culture Culture. I want to start by discussing the gold market because last time I had you on back in November of last year. You outlined a path to gold at $23,000. And as the gold price continues to push to new all-time highs, that prospect is looking more realistic. Give us your thoughts on the recent price action in the gold space and the catalyst that you think will drive us higher. >> Sure. Uh glad to, Jesse. Nice to be with you. Um yeah, the uh obviously gold's been going up. Uh it's up uh well over 200% more like 250% uh just in uh in recent months and uh you know you go back over longer time frames it it's a lot higher than that we're in a major gold bull market. The point I make is that this is going to continue. And a lot of investors uh ask me say, "Well, hey Jim, you know, you you said by goal when it was 1500, it's, you know, $3,700, kind of teasing around $3,800 an ounce right now. Did I miss the boat?" And my answer is, well, you missed, you know, $1,300 worth, but no, or sorry, $2,300 worth, but no, you did not miss the boat. This rally is is really just getting started. There are three main drivers. Um the first one is central bank buying. Now 2010 was the year of inflection meaning from 1970 to 2010 central banks and you know finance ministries basically official institutions were net sellers of gold. Beginning in 2010 they became net buyers of gold. Now different central banks involved you know Switzerland, UK, Australia, Canada were all sellers. still are. The the Swiss have stopped selling. Um, Canada, I think, sold all their gold. Uh, not saying I have a a treasure chest, but I think I have more gold personally than the government of Canada. Um, so uh so th those some of those countries are still sellers, or at least they've kind of dialed it down to zero. The buyers are are new. They're Russia, China, India, uh, Japan, believe it or not, uh, Turkey, Iran. and Iran's not transparent, but there's a whole set of buyers out there. Vietnam, for its size, is buying a lot of gold, and they continue to do so. Now, central banks, to be clear, um they're very savvy buyers. They're not going to they're not going to drive the market a lot higher by themselves, and they don't want to. If you were a buyer, why would you want the price to go up a lot? You' say, "Hey, keep I'm still buying, so I just assume keep it low um for a period of time." But what they do is they put a floor under the market. Um they're they buy the dips. You know, I had to use cliches, but they do buy the dips. They put in standing orders. You know, Russia for a long time was sort of 10 tons a month. Put on the put in the orders with dealers in London. They don't want to disrupt the market, etc. But if you're an investor in gold, if you're any, you know, u individual, everyday American um or hedge fund or whatever, and you're interested, you have limited downside because the central banks are putting in a floor, but unlimited upside for, you know, reasons we'll talk about. So that's what I call an asymmetric trade. Uh it's a very nice trade. The second reason is, you know, good oldfashioned supply and demand. And you know, you learn in your first week of economics courses might be the only thing you learn that's that's really valuable the way they teach it these days. But uh uh global output has been flat around 4,000 metric tons per year. That's all the all the mining in the world. Uh for about six years now, I'm not saying peak gold. Uh it hasn't gone down, but it hasn't gone up, you know, just a little bit around the edges, but not very much. Right around 4,000 metric tons a year. Um so if you have constant supply which we have and increasing demand which we do that means the price goes up. It's just you know limit flat supply increasing demand price goes up. It's pretty much that simple. Um the third factor uh is that people say you know gold's an inflation hedge. It can be an inflation hedge. The correlation between gold and inflation is less strong than most people assume. Um, but I call gold the everything hedge. Meaning, will it hedge inflation? Yeah, it actually hedges deflation. People don't understand. Um, during the Great Depression, uh, the best performing stock on the New York Stock Exchange was Homestake Mining, which was one of the largest mines in the world at the time. That's actually the foundation of the Hurst fortune going back to George uh, George Hurst in the late 19th century. But I visited that mine out in Leed um, South Dakota. Uh it's an open pit mine and an underground mine. You can it's it's they're not producing now. They produced up until around the year 2000. But certainly in 1930s, one of the largest gold mines in the world. That stock went up at a time when the uh Dow Jones Industrial Index fell 82%. from October 19 sorry yeah October 1929 to June 1932 which was the bottom um almost three years the stock market fell over 80% but homestake mining went up and it was the best performing stock on the New York Stock Exchange gold itself went up 75% during the great depression uh it went from $2067 an ounce to $35 an ounce which you know measured in dollars that's a se % increase um during the greatest sustained period of deflation in the US history. So the the history of the great depression says when stocks are crashing and deflation takes over gold goes up significantly. So um it hedges that also hedges inflation because again as we saw in the late 1970s uh you know in 19 oh 19 1979 1980 inflation was uh um 13 15% uh US treasury notes were yielding 10ear maturity was yielding 15%. You could have bought a 10ear treasury note that would pay you 15% a year for for the next 10 years. Uh but from 1971 to uh n January 1980, gold went up 2,100%. So hedges deflation, hedges inflation, hedges, um social unrest, natural disasters, civil wars, you know, regular wars, uh you know, etc., uh and uncertainty in general. So it's very good in that sense. Uh, and one last point, Jesse, and um kind of why I see this continuing getting to much higher levels. There's a little bit of math. You can do calculus if you want, but I try to keep it around the fifth grade level. Uh, because there's no need to be more complicated than that. Um, there's a behavioral psychological phenomena called anchoring. And anchoring just means, you know, we're all humans. We all have biases, which are, you know, usually a good thing. It kind of kept us alive for, you know, a couple million years. Um, but an anchoring bias is you get a number in your head and you kind of it means something and you anchor on it and you kind of filter out other data uh around it. So people obviously who own gold uh look at price increases and let's just take big chunks. Uh $1,000 $1,000 an ounce is a lot, but you know we've been seeing it go up $100 an ounce every couple days uh for the past uh month or so. Uh, but let's just take bigger chunks. Take a $1,000. When you go from $2,000 an ounce to $3,000 an ounce, that's a 50% increase. When you go from $3,000 an ounce to $4,000 an ounce, that's a 33% increase. And when you go from $4,000 an ounce to $5,000 an ounce, that's a 25% increase. The point is, there's still $1,000 leaps. And if you have uh 50 ounces of gold and it goes up $1,000 an ounce, you just made $50,000. And people think of it that way. They focus on the,000 bucks or in my example, the $50,000 gain and they're like, "Kaching kaching ching. That's great." But what they don't realize right away because they just don't think about it. Each one of those thousand gains is easier than the one before because it's a it's the same thousand gain, but it's a smaller percentage gain because it's calculated calculated off a higher base. So going from $9,000 to $10,000, that's only an 11% increase. I mean, 11% is kind of like a good month these days. Uh so my point, and this is where you get into the frenzy stage. We're not there yet. We're getting closer, but you know, all of a sudden it's going to go eight, nine, 10, 11. And and those thousand chunks are the thousand leaps are going to keep getting easier because they're represent they represent a smaller percentage. When you go from 20,000 to 21,000, that's only a 5% increase. Um, you know, which is is a good week. So, um, so that's one of the ways you get there. From from the perspective of $3,800 an ounce or $3,700 an ounce where we are now, $23,000 seems like I'm ask the far side of the moon, but actually you get closer to it, it gets really easy to to see that kind of uh that kind of spike. So, yeah, that's that's my forecast. Those are the reasons behind it, and they're they're they're not changing. If anything, they're getting stronger. The sponsor of today's episode is Arc Silver Gold Osmium. Owner Ian Everard is praised even by his competitors as one of the most honest and level-headed bullion dealers in the United States. They have some great prices. You can see some of them displayed right now on screen. Take advantage of these specials today by reaching out to Ian at 3072649441 or by email at ianarchsg.com. Make sure to tell them of course that commodity culture sent you. And now back to the interview. Fantastic breakdown. I want to touch on silver here because as gold is breaking out to new all-time highs. Silver is also quietly in its own breakout now sitting around $44.70 the last time I checked today, heading towards 45, outperforming gold by around 10% so far this year. Is it time to potentially look at silver as a metal that could rise faster and more dramatically than people could expect? >> Definitely. I own gold, but I own silver, too, and I recommend it. Uh, silver is a little bit more difficult to analyze because I mean, gold is uh not good for anything except money. So, if you like money, have some gold. It's obviously a precious metal, but the industrial applications of gold are very few. Uh, silver is different. Silver has a lot of industrial applications. So, but it is a precious metal. So you have to think of it as a precious metal money on the one hand and industrial uh input on the other. Those can be moving in different directions. Obviously the precious metal aspect is driving silver high higher but as we get into what looks more and more like an industrial uh recession. Um uh that could be a drag on silver use. But let's let's focus on the precious metal side. A couple things about silver. Number one, it tends to lag gold. You know, there's no way that gold's going to the levels I'm talking about and silver is not going to go to $100 an ounce. You know, if you see $20,000 gold, you're going to see $100 silver or more. But silver tends to lag a little bit. The gold takeoff happens and it makes all the headlines and people get spun up and then silver just kind of sitting there like what's wrong with silver and then all of a sudden silver starts to move. So, I think you're exactly right, Jesse. We're in that mode right now, but it plays catch-up. So, so silver could actually go up faster because it took longer to take off. So, I think the way you described it um is exactly right. But silver uh has a very important monetary use that I would say makes it even uh a little bit easier than gold which is um uh it it's more practical if you had a crisis and you had you know where people lost confidence in money or you had electric uh grid breakdown and we had to kind of use gold and silver to feed our families uh so to speak. Um, silver is a lot more practical because if you have a a 1 ounce gold coin, let's say, okay, that's valuable. It's a form of money. It's bullion. But, um, it's if it's worth 4,000 or $5,000 as we're describing, that's an awful lot of groceries. Uh, if you want to go out and get food for your family, a silver ounce or five silver ounces, which today would be 200 bucks, that's about the right amount of money to go shopping, in other words. So, um, I recommend people have a what's called a monster box. Uh the monster box comes from the US Treasury. It's it's or well well the US Mint but of course the US men is um regulated by the US Treasury. It's Treasury grain. Has a compression strap in it. Inside in sleeves uh plastic containers are 500 1oz American silver eagles. They're pure silver. Um no alloy. Uh beautiful design. Uh but the point is with 500 of them that could be walking around money as we say in Philadelphia. That could be spending money to feed your family. Whereas gold will preserve value by all means have gold uh very valuable form of property. But gold could almost be too expensive in terms of trying to spend it on the street. But silver I think I mean I was a kid even a young adult we had silver dollars were were common. you know, at least be on your 21st birthday, uh, some aunt or uncle would give you 21 silver dollars. Cost 21 bucks. I mean, today that would be what, $800 worth of silver or more. Um, so, uh, yeah, as silver's silver's taking off. It's lagging gold, but it's going to catch up. It's going to do very well, and it's also a very practical, uh, metal to have for basically spending purposes. >> Well, we're going to move a little bit into the realm of politics as well as geopolitics. two areas you're extraordinarily well-versed in. You mentioned recently in an interview on Bannon's war room that the greatest threat facing America today doesn't come from foreign adversaries, but from within the country. Can you walk us through your thought process there and how this enemy within can be dealt with? >> Well, yeah, I'd be glad to, but you don't need much of a thought process. You just need to read the headlines. I mean, the uh uh we saw the tragic assassination of Charlie Kirk by uh uh well, allegedly, although he's pretty much confessed uh to the murder, um uh this this kid from uh Utah, I guess it was 2122 or something. Um yesterday or a couple days ago, uh there was a sniper attack on an ICE uh detention center. Um the the sniper again, I think he was like 20 uh 20some, maybe a college student, but um he uh he killed two people, wounded others, and then committed suicide uh with his own rifle. Um but uh I I guess he didn't know what he was doing. He was trying to he was anti-ICE. We know that because he carved, you know, anti-ICE messages in the showcasings, but he was shooting the detainees. Maybe he didn't know the difference, but I mean they're all innocent. They're all innocent targets. It's all a tragedy. Um but uh he didn't even, you know, kind of get the right the right targets. Um we're seeing this more and more. We're seeing it all over. And it's not, you know, I'm tired of hearing the, you know, the lone wolf, the random shooter, you know, etc. Um, I I'm not saying that every one of these people was um part of a conspiracy that sat down and figured this out, although some of them may have been, but they're definitely um vulnerable to and subject to a lot of encouragement and coaching uh from various, you know, online services. They're not that hard to find. I mean people call it the dark web but it's just the dark web because they have a lot of uh servers in between uh you know the end user and the um the one propagating the information but uh I I am very critical right now of the of the justice department of Panam Bondi and Caspel at the FBI. Uh why aren't you shutting these people down? I mean I I did um uh counterterrorism for the CIA for 10 years. My expertise was uh financial warfare uh financial I did financial counterterrorism. Um I did a lot in the sanctions area. I did a lot in foreign investment in the US. Basically going out and doing collections to see if the foreign investor were was uh you know the friend of the US or an enemy or funding for the Communist Party of China, you know, etc. I was immersed in this. I still do a lot of it privately, but as I said, I did it for the CIA for over 10 years. Um, and I know how to do this stuff, but other people do, too. I'm not saying I'm the only one. My point is, you can you can freeze the money. You can seize the money. You can interdict the flows. You can shut down some of these websites. I know, you know, you're entitled to First Amend amendment protection. Yeah, I'm happen to be a lawyer also. I study constitutional law, but you're not entitled to First Amendment protection if you're uh conversation is designed to kill somebody. That that can can and should put you in jail. So, where's where's the Justice Department? Why aren't they tapping into resources like the National Security Agency? I mean, they monitor everything. They're moni Somebody's monitoring this podcast. Okay, sorry to the audience, but they are. They're monitoring your iPhones, your GPS. They know where you are. Um, okay. I'm not saying that's always a good thing. I am saying it's true. And so, why isn't the Justice Department tapping into some of those threads for criminals? These are not uh this isn't like the Biden administration where they went after innocent people who just happen to be political enemies. This is going after actual criminals who are prompting actual crimes. So um yeah thing is we know who our foreign enemies are. You know China is the main enemy. Russia it they're they're a bit of an adversary which too bad. I think there's no there's a natural alliance between the US and Russia. We the US and Russia should have a rap. I'm not saying we have to sign treaties or be, you know, best friends, but we should at least have a an understanding and a mutual working relationship designed to isolate China. Um, India should be a very good friend. Why why Trump why is Trump putting secondary tariffs on India? Because they trade with Russia in connection with the Ukraine war sanctions. Why are we why do we care about Ukraine? Uh, that's a war. I mean, we the United States caused that war. Everyone says Russia invaded. Russia invaded after um 17 years uh oh no 14 years of provocations starting with uh uh George W. Bush's Bucharest declaration 2008 when he said Ukraine should be in NATO, Obama's CIA, MI6, coup d'eta in um in 2014 with the fake Maidan square demonstrations and they send a neo-Nazi uh sharpshooters to kill innocent people just to get rid of the president who was too um uh pro-Russia for uh the liking of the neocons in Washington. Uh you know, and so forth. uh we we caused the war. Now we've got the war. But it wasn't Trump's war. This was the Democrats. This was well Democrats and Republicans. I would fault Bush, but really Obama Obama and Biden I would fault the most. Um remember Trump got impeached in um 2019 for a phone call with Zilinsky. He was just trying to you know uh make some inquiries um about bribery and corruption in Ukraine, including the Biden family. And for that he got impeached. Um, but the message was, you know, don't uh, you know, kind of don't mess with uh with Ukraine. Well, but now it's becoming Trump's war. Trump had the opportunity in effect to get out of this war and he failed to do so. And to me, it's very, very much like LBJ in 1965. You know, Lyndon Mays Johnson didn't start the war in Vietnam. It was started by Eisenhower and carried on by Kennedy. Johnson inherited it. uh but he made it his war and ended up destroying his presidency and withdrew from the race in 1968. Well, that didn't have to happen. He could have there was a never a better time or hardly a better time uh to get out of Vietnam before the major escalation started than 1965. So, I think Trump's making the same mistake as LBJ. He inherited a war. Nobody blames him for it. It wasn't his fault. He had the opportunity to get out. He's failing to do so. and now he's getting kind of sucked into it um with the neocons blood uh blood stain banners as they call them people like Lindsey Graham and others. Um so that's a uh a major uh major mistake on his part. My point is we know who the foreign enemies are. We know who the adversaries are. We know what the issues are. What we don't know is about the internal enemies. And that the point I made on Steve Bannon's war room as I said the nobody invaded France during the French Revolution. That was the Jacabins were French lawyers basically. Nobody invaded Russia during the Boe revolution. That was internal uh radicals you know Lenin Stalin Trosky. I mean Lenin was um you know uh uh you know kind of shipped in by uh by uh by by Switzerland but he was doing everything in um in St. Petersburg and and Moscow. So um the so-called fifth column uh the enemy within is your greatest enemy. You don't see them coming. We need to do more. >> Well, I definitely want to pull on that thread regarding um the war in Ukraine being Trump's Vietnam because it's been a bit of a mess with with him, of course, pledging he was going to end the war as soon as possible after getting into office. And since then, it's been a bit of a back and forth between him favoring Putin or favoring Zalinsky, at least in his outward social media posts and in the media. Who knows what's going on behind the scenes. Um, we're caught in a stalemate here where neither side is willing to accept the other's demands. And now Trump appears to be doubling down on the side of actually not only can Ukraine win this war, they can take all their territory back. Um, which according to most analysts I've spoken to seems a bit outside the bounds of reality. But I wonder what your thoughts are there. How do you think this conflict ends? and and if you see it ending in a military defeat for Ukraine, what are the implications for NATO, the EU, and the United States? >> Well, yeah, there's a lot to uh a lot to unpack there. I mean, just to be clear, I I support Trump. I voted for him like six times. He uh I live in New Hampshire, so we have a big very big primary scene. So, I voted for him in the primary election and the general election. So, I'm a big supporter of Trump, and I think he's doing a lot of things right. Having said that, his foreign policy is amateurish at best and a little bit dangerous. they kind of don't know what they're doing. Um they they don't know diplomacy. You know, Trump may master the art of the deal, but he doesn't understand the art of diplomacy or the art of war. So, I'll give you some examples. Uh Trump had this summit meeting with Putin in Alaska. Well, that was good. It was great that they talked and I'm glad they kept kept the the riff raff, the European vassels and others out of the room. Um but um Trump went in and the benefit of that meeting was that he was talking to Putin unfiltered. By the way, I'm sure they had translators. Putin's English is just fine. So, uh they they most likely spoke in English, even though there were translators there. Uh but Trump got to hear Putin for the f, you know, one- on-one. No filters, no Marco Rubio, no Lindsey Graham, no Steve Woff. um as I say for for the first time now Putin's you can call them demands okay conditions haven't changed he he laid them out before the invasion of Ukraine in late 2021 he repeated them after the invasion they almost got to a peace treaty uh in uh March and April 2022 just uh 30 to 60 days after the invasion and then Boris Johnson went to Kiev and told Zilinsky if you sign this forget it we're done with you and Celestencia said okay and they blew up the deal but they had a peace treaty in uh in March so March and April 2022. Um Putin gave a major address to his foreign policy uh officials and uh you know Russian think tanks establishment uh figures in uh the summer of uh 2024 year ago last summer and he said he said the same thing every time. He said, you know, conditions, no for Ukraine, no NATO, you have to be neutral, demilitarized. You can have a kind of paramilitary police force like, you know, the federalis in Mexico, but no large army or military that's capable of doing anything to any of its neighbors. Um, and uh, and denazification, I mean, get the Nazis out of government and u, you know, just so that they play play no role. Um so uh so demilitarization, denoxification, neutrality, no NATO. Um and then of course they keep Crimea. Now what what has changed and and Putin said this just a couple days ago. He said in Alaska, that was that was my point. Has anything changed in Putin's position in the last um almost four years at this point. One thing they get to keep the territory that they've taken. They they they're keeping Crimea. um Zapasurya uh Kershon um uh Don and Luhansk. Uh collectively the last two are known as the Donbas. They're keeping all that because they fought for it and they took it and Ukraine lost. Now uh so what my point to Ukraine, my message to Silinski is the longer you keep fighting, the more you're going to lose. Meaning they're not winning the war. They're not beating Russia. That's not happening. That's I know Trump said that, but that's pretty I I don't know what he was thinking. I would say it's delusional if he has some hidden agenda maybe. But uh Russia's not giving any of the territory back and Ukraine's not taking it back. So what could change if the war continues? Well, Russia will take more territory. Um there's a province called Sunumi which is north of uh Kiev and that's where uh Zilinski launched this uh he invaded the Russian Federation. He invaded Kursk. Um, he actually put his best troops in there. And the Russian way of war, not many people understand it, but it's slow, methodical, and lethal. They take their time. They're not working on your schedule. They don't care about holidays and commemoration or deadlines or 90-day ultimatum that Trump likes to throw around. They don't care about any of that. They care about winning. Uh, and what they do is they surround the target city. It was, you know, um, Marople was first, then Bakmoot, then Abdulka, now they're surrounding Pakk. But the point is they surround it first, which can take a year. You got to capture every village and every road, every place in and out. But once you do that, you've cut off whatever troops are in the city and the target, they're cut off from resupply. They can't Yeah. They can't evacuate. They can't get out. They can't get any supplies in. Uh, and then the Russians give them a chance to surrender. and Zilinski says don't surrender. And the Russians like okay then we'll kill you all. And they do. So that's uh that's how this war has gone and how it will continue to go. Now if you're Zilinski, you're supposed to say, "Okay, fine. Let's do a peace treaty. You can have everything east of the Niper River and south of uh Kkefe. Uh and and we'll keep the rest and call it Ukraine." Um but uh if you don't take that deal, then then they're just going to keep fighting and and Sinski is going to keep losing. You know, it would take nothing. It would be trivial for the Russians to assassinate Zilinski, but why would you? He's an idiot. If you're fighting an enemy with an idiot in charge, you want to leave the idiot in place. You don't want to get rid of him. So, they're very happy to have Zilinski as well, he's not president. He's That's the other thing people don't realize. They say, "We're fighting for democracy in Ukraine." That's nonsense. The uh Zilinski's presidential term expired in May 2024. So he's a year and a half into a military dictatorship. Uh so there's no democracy. He is a military dictator. They're utterly corrupt and they're losing, you know, uh what's not to like, you know, if you're Russia. So uh I don't know what Trump is thinking. His comments made no sense. They're very amateurish at best. Um he although he did you just to add to what you said, Jesse, he did say one thing that was very interesting and you're right. He said, you know, I think, I'm paraphrasing, but I think Ukraine can take back this territory with some support from NATO. Um, they can regain the territory that's been lost to Russia. He did say that, but then at the end of that sentence, he said, and I and I wish them well, which is kind of a way of washing his hands a bit, saying, "Yeah, good luck Europe. Good luck Ukraine. Keep fighting. Get your territory back, but don't count on us." Well, that's a big deal. Now, he didn't again he said he used the phrase I used I paraphrased he didn't say well we're suspending you know weapon sales to Ukraine but what we're doing what the United States is doing is we're selling weapons to NATO and then NATO's supplying them to Ukraine so in a strict sense the US isn't um supplying weapons to Ukraine there's no congressional authorization for that as of now there was before but not now but there's no prohibition on selling weapons to NATO. Begs the question, where's NATO getting the money? Because most of their money comes from the United States. Uh but, you know, and then they're they're stealing um they're in the process of stealing 300 billion dollars of US Treasury securities legally purchased by Russia. Now, at this point, most of those securities have matured. So, you're sitting on a big pile of cash, but still the Russian cash. If you buy a Treasury note and it matures and the Treasury sends the money to your bank account or your brokerage account, still your money. Uh but the NATO's in the process of stealing that to underwrite loans to Ukraine so they can fight Russia. So Russia's own money has been stolen to give to Ukraine to fight Russia. Um how much confidence does that inspire in the US Treasury market? you know, if you're Saudi Arabia or Taiwan or Japan or China or or anybody else, um, and you're like, "Hey, what if the US doesn't like what I'm doing? How do I know they're not going to steal my Treasury securities, etc." I'm not saying the Treasury market's going to collapse? Uh, I'm not saying that at all. In fact, actually, it's it's been pretty strong lately. I'm just saying that the more you weaponize the dollar, the more you drive people to figure out the alternatives. So, um I would say Trump's uh Ukraine policy is is a failure. He uh he heard Putin loud and clear. He walked out of that meeting in Alaska and said, "Oh, there's not going to be a ceasefire." Well, he's right. But Putin had been saying that for two years. He said, "Why would you why would you agree to an unconditional ceasefire if you're winning?" I could understand the loser wanting a ceasefire so they can, you know, rest their troops and get supplies and, you know, get ready to continue the fight, but why would the winner want that? Uh, and the answer is you wouldn't. And Putin has said that. And I guess Trump heard it and said, "Yeah, I guess there's not going to be a ceasefire." Well, why didn't someone tell him that? It was it was pretty obvious. Um, and then he said Putin has these conditions. He wants to go to a full-blown peace negotiation and peace treaty. Okay. But Putin's also been saying that for four years. There was no news there except the president seemed to hear him for the first time. White cop I don't uh you know again I don't know personally. People say he's a nice guy, very smart real estate u dealmaker. I don't doubt that for a minute but real estate and war are two different things. >> Fantastic analysis as always. James Rickards, thank you so much for coming on the show. Before I let you go, tell us about your latest book, Money GPT. And if there's anywhere else you'd like to direct people online, feel free. >> Thank you. Yeah, my my most recent book uh money GPT uh AI and the threat to the global economy. It's about artificial intelligence obviously and GPT in particular which is the um uh it's a technology that g was turned into an app by open AI but everyone's got one now. So Microsoft and Google and Facebook and uh Open AI, Apple, they all have their little artificial intelligence uh uh robots. But um artificial intelligence is real. It's everywhere. It's powerful. It will do some good things. I don't dispute any of that. The point of my book is to issue warnings about a lot of the dangers, particularly in capital markets, how it could accelerate and amplify stock meltdowns. There's nothing new about financial panics. They've been happening since at least the 14th century. But when you put AI into the kill chain, the decision-making chain, and outsource your investment decision- making to AI, you could get some very, very negative results. also talk about nuclear war fighting uh uh and uh it does end on a good note which is there there's not going to be uh super intelligence artificial general intelligence that's the world where you know humans are to AI what apes are to humans you know we're sort of like these slaves to these computers that's not going to happen I explain why but uh a lot else could happen and that's all in the book and also uh if you want to follow me on X it's real Jim Rickards at real Jim Records. >> Great. Well, I will put a link below to MoneyGpt as well as your X account so people can follow along. Thank you so much, James. It's been a blast. >> Thanks. >> And thank you for joining us today. This episode is brought to you by Arc Silver, Gold, Osmium. Take advantage of their specials. They are displayed on the screen right now. Reach out to owner Ian Everard today at 3072649441 or by email at ianarchsgo.com. Make sure to tell them that Commodity Culture sent you. And be sure to pick up your Commodity Culture merch using the link in the description below. Everything backed by a 100% quality guarantee. And I'll see you guys in the next episode. Commodity Culture is a series on commodities and natural resources. If you would like to see more, be sure to subscribe and hit the bell notification so you're always up tod date with the latest episodes.