Stephen Leeb: Gold Price to US$18,000? Here's How it Can Happen
Summary
Dr. Stephen Leeb of Leeb Capital Management shares his outlook for gold, explaining how it could get to US$18000 per ounce.
Transcript
I'm Charlotte McCloud with investingnews.com and here today with me is Dr. Steven Leeb. >> [snorts] >> You can find him at stevenleeb.com, on Substack, and he's head of Leeb Capital Management. Thank you so much for being here. Great to have you. It's a pleasure here. Charlotte, I'm getting off to a poor start in this interview. It's a pleasure, Charlotte. Really is. Really looking forward to your production and your other interviews and I think they're all excellent. Well, it's a pleasure to have you as well and it's our first time talking, so we've got plenty of ground to cover. Where I thought we could start is with gold. When you look at the metal right now, where would you place it overall in the cycle? I I would place us um nowhere near the top. Uh basically I would say that, you know, viewing it as a cycle is probably a mistake at this point. I mean, gold's, you know, high high point I mean, might not ever really be defined because I think at the end of this period that we're in, you're going to find gold at the center of the world's monetary system. I mean, I think it's key to remember that. We're not Gold is not really something that should be thought of it like like stocks in a particular cycle. It's not a Fibonacci uh cycle or anything like that. Uh short-term maybe it applies, but basically we are These These are very unusual times in history. We are at a inflection point, a major inflection point. Uh maybe we've never seen anything like this before. Maybe it does resemble other times in the past, but whatever the case, this is a very, very unusual time. I can find no certainly no recent time that even remotely resembles what we're going through right now on many, many different levels. If you want a benchmark for looking at gold, the only one that comes anywhere possibly close, it would would be the period 1974. Uh in which case, I mean, this is just I mean, economic point of view, but there's also trans There's also transition during that period between uh gold-backed uh US dollar and a dollar that was no longer gold-backed. And then transitioned into a dollar that became the reserve currency because it became the petrodollar. But was How I see the resemblance between that time and this time is that you were in a economic situation in which you're likely to see inflation before you see a recession. Uh and you're seeing certainly some of that right now. And if you kind of step back uh and look at, you know, people will say, "Well, oil's up just because of Iran." Uh no, it's not up just because of Iran. I mean, I think there's genuine shortages of oil. There's certainly shortages of natural gas. And that's likely to continue. And indeed, all commodities, once you get past the precious metals and you go to the industrial commodities, for example, you'll see copper I think 20, 30% above its highs in um 2008 when it made a previous all-time high. I mean, we we we have blown out the all-time highs in copper. And I sing the loud copper because it's the most important industrial metal. I mean, I think people generally accept it. Uh whether you're talking about AI or you're just talking about virtually anything, you name it. There's copper all around me right now as there is around you. And there's a shortage of copper, a profound shortage of copper in the world. Uh and that's why it's at all-time highs. World demand is certainly not at an all-time high. So, just leaves one You don't have to be a genius to figure out if demand's not at an all-time high and copper's soaring past all-time highs, you have a demand problem. And it's certainly not going to be unique to copper. Uh, you know, whether you're talking reverse or you're talking aluminum. I mean, the whole gamut of commodities are in short supply. Oil I I I do believe it's only a matter of time before is in short supply. I mean, you you've had $100 oil before. But everybody is talking about this as if it's a unprecedented oil crisis. No. I mean, you go back to 2008, you saw oil trading at $150. And uh you know, we're not there. Uh, we we still have at least another $50 to go. So, you know, the point being again, the similarity between now and any other time except for 1974 is absent. And 1974, I don't think is a particularly good example. There we were going one way where the dollar was becoming the reserve currency. Here we're going exactly the opposite way where gold is regaining that reserve status. And it's happening every day, which makes these this period of time so difficult. I mean, we are fighting like if fiercely to do whatever we can to keep the dollar in place. It's hopeless. It's just a hopeless fight. And you're seeing all sorts of data points. I'm sort of all over the way and all over this all over everywhere and trying to answer your question. But again, just in terms of 1974, you you could break it up into two periods. I mean, you had inflation and I don't You're much too young to remember, but unfortunately, I'm not. I remember the so-called WIN buttons. Have you ever heard of WIN buttons? That They were buttons everybody was wearing it 1974 as we were entering a recession and even when we were in the recession. What did win stand for? Whip inflation now cuz we had high inflation, shortages of commodities. I mean there they weren't actual physical shortages and that's a big difference. There they were actually uh politically induced uh basically by Saudi Arabia and OPEC. They stopped pumping oil because they were really angry really uh you know about the uh the 7-day war and that 7-day war, the Yom Kippur war in October uh what 1973 with Israel and and we took Israel's side. Uh hasn't changed that much since then. I mean that's one commonality. Uh but anyway, that made the Saudis and other parts of OPEC very, very angry. They embargoed oil and it led to a massive and boom in commodity prices across the board. Massive inflation for that time. I mean inflation eventually hit around 10%. But it also led to a recession. And you know, if you have to choose between, let's say, recession or depression or, you know, very weak economy and inflation, I mean you you've got to be really stupid to choose uh um you'd rather see a depression than uh inflation. Inflation's always going to be the lesser of two evils with the, you know, rare exception and you know, you can always always argue maybe we're facing that rare exception now. I hope not. But you know, the Weimar Republic when you have, you know, unconscionable amount of inflation. I mean if that happens, the only thing you want to own incidentally is gold. I mean, you know, just parenthetically, that was the only asset that served you well. In fact, it outperformed the the uh decline in the currency there. I don't know. You had quadrillion uh fold inflation during that couple of years or especially the last part of that period in the 20s. Uh then the only thing to own is gold. Uh but but hopefully we won't have that and we did not have it in 1974. Uh but you did have the similarity that you're seeing right now. The economy is clearly weakening. Uh I I don't think there's much argument about that. I mean, you know, statistics typically that I don't pay much attention to are these sentiment numbers. I mean, I've been in this business much longer than you are old and I've never paid much attention to the sentiment numbers, but when you see record lows in the University of Michigan consumer sentiment, that's telling you something. With the stock market at record highs and general sentiment among consumers at record lows, I mean, something is messed up. I mean, you don't have to be an economist. You just, you know, doesn't make sense. Economy's not doing well. That's for sure. Uh the only thing that is, you know, basically allowing a lot of people to hang in there is the stock market. I mean, the stock market is thought of as a haven for the rich and, you know, it is. And it's basically because we have such inequalities that you have this market, but on the other hand, another element to it is that uh the market's making everybody wealthier, at least people that are working. I mean, they've got these uh 401k uh plans and uh that's part of the problem, to be very honestly. I mean, I'm not I think everybody should, you know, I [clears throat] think the country's so lopsided, it's hard to describe and I'm not in any way arguing in favor that continuing. But you have this problem is that people, you know, have come become very used to the fact that every, however often their pay periods are, a little bit of their money will be taken out and invested automatically in the stock market. And if you're investing in the S&P 500 today, you're basically investing in these very, very large cap stocks. I mean, there's seven stocks or 10 stocks in the S&P 500. They always say magnificent seven, but they're that the the the seven names of the seven are are sometimes change. Not not often. But anyway, you're investing in seven stocks whose capitalization is roughly about the same as the GDP of this country. Which is just it's crazy in that sense. And you don't make um I mean, let me just stay focused. Okay, so what happened in 1974? That we had whip inflation now, and we were trying to hammer down on inflation uh in the face of a recession that was occurring under our eyes and was threatening to turn into something much, much worse. I mean, it was threatening to turn into something that could have turned out as bad as the depression in 1930. Uh and all of a sudden, they said, "Whip inflation now." And we tore up those buttons, even though inflation still had not been conquered. Uh and basically said, "We've got to do something about what's going on in the economy. My gosh, forget about inflation. I mean, people are starving." Or, you know, maybe I'm exaggerating, but it was really tough going. And then, we flipped. In that sense that you're facing simultaneously inflation and a weakening economy, it's like 1974. So, the natural question, finally in answer to your question, in 1974, you did see gold going up very went up sharply. I don't remember the numbers, maybe 65%, 70%, something like that. Now, that did not do the US very much good because you weren't free to own gold in the US. So, these prices were all based on European markets and London in particular. They they did very well owning gold. We did well. Actually, I take it back. We we did no gold. I don't take back the fact that we could no personal ownership of gold was allowed but you just like in the depression gold did very very well there too but in 1974 the only way you could have participated as was the case during the depression is by buying gold miners and they did spectacularly well during 1974 so if you want to take a literal message from 1974 it would be on gold miners as protection it's maybe even better than gold it's hard to believe because they're so volatile they're up down but they're very fundamentally cheap stocks and if gold holds more or less its value which I think is a you know very very good bet they'll do very well they will be very they will do very well so if to that extent I think it's very similar to 1974 or at least most of them more similar to 1974 than any other period that I can think of it's not at all similar well not at all similar is an exaggeration it's certainly not really similar to 2008 which is a which is the standard comparison mark you see but I would I mean the message no matter what period of time you want to compare this to and I don't think there's any that that really gets it nails it I mean I think the risks today are greater than they've ever been can I say 250 years however long this republic's been around I think we're facing really really great potentially grave times not saying that we won't be able to navigate ourselves out of them but our worst case scenario today and I'm not saying this probable I don't think anyone knows that at this point but certainly our worst case scenario today is much worse and I'm use I use much advisedly than anything not only in even my lifetime but anyone's lifetime and probably in in of this country I mean, we're really facing potential dissolution. I mean, that's an extreme case, but it unfortunately and tragically, it's a case that's not that hard to make. And we're going to have to accept a a number of things in order to to avoid that worst-case scenario. Now, is there even in that worst-case scenario, though, gold, providing you have it stored physically, >> [snorts] >> is very likely to be a shield. Will be a shield. Almost guaranteed will be a shield. Because at the end of that case, gold is going to be at the center of a new monetary system. I have very, very little doubt about that. Originally, uh started writing about that in 2018. Uh [snorts] published a book in 2020, uh Rise of China and the New Age of Gold. That may not be the not be the exact title. I've trouble remembering the titles of my books. But, um it basically described about where we're at now. I mean, I sort of got to the point where most countries in the world would accept gold as a new standard or new center for the monetary system. I've been blogging about that in, you know, other places at the time. And what I never could get past, I mean, I had to stop almost exactly where we are now, because I wasn't sure how the United States would react to this threat. Now, the sensible thing, faced with a threat that we're faced with today, and I'll point out incidences of how you can tell that we're faced with this threat. I mean, it's around us if we just want to look. I wasn't sure how we were going to react. I mean, it's very tough. I mean, obviously, this doesn't have to mean the dissolution of our country. It doesn't have to mean we give up our Constitution, although I think in some ways we're we're already in the faith already doing it, giving up our Constitution. It just means we have to be willing to cooperate and maybe accept actually a better standard of living uh if everyone cooperates. I mean, that that's the way out. It's very, very simple. And it's very human to want to do this, to cooperate. I believe it's very human. It's not so human to have a war every year for 26 years or however many years. And to, you know, say that you're exceptional and let's pass that exceptionalism around to every other country in the world uh even if it means starting a war and killing everybody and, you know, imbuing them with our exceptionalism. I mean, that's not my idea of exceptionalism, but it's the kind of foreign policy we've been following really since uh in in at least since the uh early '90s in certain sense. Um Brzezinski, et cetera, American exceptionalism, you know, spread it all around the world. Uh Kagan and and Kristol a little bit later. Spread, you know, same idea. Uh even if it involves wars. Well, we've been losing a lot of wars this century. Uh now we're in a situation where we're not going to win the next war. I mean, basically uh what's happening in Iran is not winnable for us tragically. And um it it it's sending a message that the US is no longer a hegemon in any sense of the world. I mean, there's a lot of data that's been floating around for, I don't know, 10, 15 years saying that China has passed us in many ways uh including uh um you know, technologies, uh including um I don't know, any including size. If you measure the economy by what they call purchasing power parity, which is actually, you know, the amount of goods that you produce in constant dollars. If you take currency out of the comparison and just focus on how many goods, what goods you're generating, China's 30% larger than we are. I mean, it's not even close anymore between number one and number two. Unfortunately, we've lost that much. Uh and I think we've lost a lot of our culture, too. And that that's just tragic. It really is. It's just tragic. But let me let me stop. Let me give you a chance to ask me another question cuz I I think I've answered I hopefully I've answered it. I would compare it to 1974 if if you want to compare it to anything. And in 1974, gold was best investment. But, you know, in a general sense of the word, I would say any kind of potential catastrophe, and we certainly are in the midst of one right now, is going to favor gold. That doesn't mean gold's not going to go down to 3,800 before it goes up to about 5 or 10,000. If if if you want a, you know, rough estimate and you want to use statistics, I've used nominal uh real nominal world GDP, nominal world money supply growth. And that that's obviously you get these numbers from Those numbers are never going to be precise. But, if you project those numbers out, >> [gasps] >> you end up with a target for gold, I would say around 18,000. Not tomorrow. Uh that wouldn't be inconsistent. Uh basically, you know, since let's say 1934, if you look at the growth in nominal world money supply, gold should be trading close to 18,000 today. So, as you go forward, it'd be maybe even a little bit higher than that. But, that kind of ballpark makes sense. But, you have to have a, you know, fairly long-term perspective and not go crazy if gold goes down to 3,800. I'm sort of talking to myself cuz I know I'll go crazy if it does. Uh uh but, you know, it's store of wealth, and it will protect you. It definitely will. You can't find any examples I've never found an example in which gold did not do well during very very difficult economic times, whether those times are characterized by horrendous inflation, depression, or just deflation. We've had five periods of deflation in the US. I know you're coming from Canada, so when I say statistics, I'm >> [gasps] >> you know, unfortunately, at through no prejudice whatsoever. I mean, I love Canadians, but just not including them, just including Americans. Uh you we've had five deflations in this country, not just the Great Depression, but there were four others. You know, some actually came in the midst of fairly good times. You can't have def deflation or disin negative inflation doesn't mean automatically bad economic times. It could be very good economic times. We've had some of those, but regardless, anytime that you had extreme volatility in the let's say CPI, gold has been a superior performer. So, I mean, you can just start there. Closest is '74 in terms of exactly what we're going through today, and gold was a superb performer. Boy, if you had nothing but gold, you just stood out from the pack in a way you could never hope to again. So, hope that answers it. I think it does definitely answer the question, and it gives us a lot of directions that we can go in. So, let's let's try to unpack what you see moving forward. So, we've got decline of the US as they're fighting this unwinnable war. Then we have the rise of China moving toward this this new system where we've got gold at the center. Can you talk a little bit more about what that looks like, that transfer, and perhaps a timeline if it's even possible to say at this point? Well, I think it's already in play, and you can see it just in terms of the war in Iran right now. I mean, the dollar became the dollar as a reserve currency when it turned into the petrodollar. And uh there was a quid pro quo. Uh it was negotiated by I think Kissinger in 1974 with the Saudis. And the deal was pretty simple. I mean, you can make it very complex if you want, but you know, the basics of it was were that uh the Saudis would agree to price their oil in dollars. And [clears throat] if you wanted to buy Saudi oil, and everybody in the world did, I mean, very few countries were independent of oil, and it was priced in dollars. And those dollars that the Saudis and the other Gulf state uh economies received were in turn invested in US Treasury bonds and US assets. That was the crux of the deal on the part of the Saudis. Our part of the deal, I mean, we had to get something in exchange for it because it created a hegemon right there. I mean, they extended our hegemony then. And then there was no question we were the hegemon, and there was no question that this would extend it and make it easier to maintain our role in the world. Uh we had to do one thing. We had to agree to protect the Saudis and the other Gulf states from uh any any threats from any other country. We were there. They were the big brother who was always going to protect them, and they could count on us. Back in 1974, our military was totally unmatched. I mean, it was just extraordinary. Uh today, uh suddenly, we find ourselves fighting a war uh >> [snorts] >> in foreign shores, West Asia, and we're fighting along with Israel, who I think is is widely perceived to have had may still, I don't know, the strongest army in West Asia. So, mighty hegemon, the US, and Israel's fighting a war. Now, war went on for 40 days, and I mean, I want to look at my computer to see whether it's still going on because things are that volatile. I mean, as far as I can tell, the war is still going on. I don't notice a switch to all red or all green. Uh, but we've been fighting that war for I now it's going We've had a peace in in interregnum, which is peace. But, the point being Iran 90 million uh, the US and Israel with their mighty militaries have been held to a standstill. If anything uh, Iran has a definite edge. Not because they can really beat us, but because they can wreak so much havoc on the rest of the world uh, in terms of uh, shutting down the Straits of Hormuz. I mean, clearly we don't have the military to um, to overcome that. Why don't we? And and and the other thing I want to emphasize very much, and and here's really a data point for you. If you if you have to sort of step back from the situation, you have to ask yourself, well, Iran during the fighting basically attacked all the other GCC countries, the Gulf Cooperative uh, Cooperation. Maybe I have the two C's mixed up. But, I think that that's you know, the GCC that those Saudi Arabia, Kuwait, uh, UAE, Qatar uh, Bahrain, and maybe I'm missing one, but those countries, they're all oil rich and you know, those are those are countries we're supposed to protect. Let me put it that way. In terms of the 1974 agreement, these are the countries that are pricing oil in dollars in exchange for our protection. Well, Iran has demonstrated the ability to destroy these countries basically during the war. Now, they've gone after uh, the UAE, which is already a shadow of itself. I doubt that the UAE will ever recover. Uh, they've gone after the other Gulf countries, but strangely enough, if you think about it, Saudi Arabia hasn't been really touched. I mean, there've been a few token attacks on Saudi Arabia, but they're still pumping about the same amount of oil that they were before. They're not even impeded. I mean, the Houthis, I mean, they're they're shipping through you know, they're not going through the Straits of Hormuz, they're going around uh and the my geography is so terrible. I think it's the Red Sea. And but they're getting about 7 million barrels out a day or something like that. I mean, they're exporting a lot of oil. Now, Iran could have shut that down. I mean, there's no doubt. They could have, you know, easy even the Houthis could have shut that down. Uh and the Houthis who are >> [snorts and clears throat] >> allies of Iran basically have stayed out of the war. Uh so, so Saudis have been left untouched. So, that's automatically telling you, why are they left untouched? Well, in a new monetary system, they're going to have a major role to play. I mean, they're the world's largest oil uh exporter. And for practical reasons, I know technically we are we we produce more oil than anyone else, but I for for reasons you I mean, it would be too complicated to go into, that doesn't do us very much good. I mean, look at gasoline prices in this country, for example. I mean, you know, we don't have the refining I mean, we have refining capacity, but there's so many bottlenecks everywhere in this country right now. That the Saudis are really what what it comes to when when you're talking about the certainly when you're talking about the ability to export companies, full stop, it's the Saudis. They cut much, much more than we do. We don't have the ability to really export. The Saudis can export because of relatively small size much, much more oil than anyone else. They're center. They're a center of whatever happens. Also significant is um you know, their relationship basically with Russia and China. When you mention China, you have to also have to include Russia, too. I mean, there's an alliance that's very appears to be deeper every day. I mean, it's amazing. I mean, these countries really they they don't share a culture, certainly. They both have a culture, a very strong culture, which I think is one reason they're very strong countries at this point. Uh but, it's certainly a different culture, each one. I mean, after all, China's Buddhist and Confucius, and those are the um you know, the major cultural um end points, I would say. And uh Russia's a Christian country. Now, Russia's been a Christian country for a thousand or 1,200 years. China's been a >> [clears throat] >> um a uh Confucianism and and certainly Buddhism goes back 4 or 5,000 years. I mean, a lot of time. Uh so, they they do share that commonality. They both have very long cultures that have persisted through, you know, the worst of times, which I think gives them a major your edge. I know I'm diverging a little bit, but I think it's really important for people to understand that it's just not a simple question of under you know, why is why is Iran I mean, basically, what I'm getting at is Iran how can this be? How can they be beating us? It's It's just if you step back, it's extraordinary. I mean, Iran has been sanctioned for 47 years. I mean, they've been restricted. Their public has been restricted. And yet, they're able to stand our attacks. And you know, there's been nothing wrong with our weapons. They've worked exceptionally well. But, they basically have created a sort of it asymmetric situation. The only thing that they have on their side, and this is again hard for me to believe. I mean, I grew up in in a world for most of my young life I mean, when I was a young person, I mean, most of that period spent as a young person was spent in the context of which in which America was so supreme. I mean, I think arguably, I not a historian, but I think you'd be hard-pressed to to find any country that ever could match America in the post-war period through 1971, through the early 1970s in any event. It was extraordinary. And you know, basically, you know, we had a culture back then. I mean, I have to emphasize that. I mean, we didn't believe in in a religion, but we believed in religion. You know, religion. I mean, we believed in higher power. This was Jefferson. I mean, Jefferson and I was going to pick up my biography of Madison, but that that'll look too pretentious cuz it's right by my desk. Jefferson and Madison were very religious people, but no one knew what religion they followed. They did but they did but they were part of our founding culture. And this is what really separates, let's say, a country like Iran, even countries like China and countries like Russia from where we are today. We've lost that culture. And that is so important to realize. Getting back to how Iran can come up and and basically hold us to a standstill, not only us, but Israel, too. Bear in mind, Israel has a lot of missiles and a fierce military. They're fighting everybody. I mean, really. I mean, their allies in in the Gulf right now are, you know, Hezbollah and I don't know, these terrorist [snorts] um states that are, you know, off of uh you know, that share a border with Israel. So, the Houthis are legitimate ally, and I think Oman is becoming an ally, and then expect Qatar to become an ally. UAE, I really doubt. But anyway, the question remains, how is this possible? And that's why I introduced the idea of culture. I don't agree with any of these cultures. I don't want people to misunderstand me. I don't have a passport for Russia, or China, or Iran. Not interested in that at all. I mean, do they do terrible things? Awful things. Terrible, horrible things. Uh but on the other hand, there's a cohesiveness that's inherent in these countries. And that's one of the things that's very, very important to understand. If you're asking yourself, how in the world has Iran done what they've done? It's a culture. I mean, you know, they're not so happy with a theocratic government. I mean, who can be? I mean, you know, I have to say that it's gotten better in recent years. Gotten better for women in particular, believe it or not. Iran today has more female college students than male. The first I mean, this is unbelievable as an anecdote. I mean, I I was stunned. I mean, I had to learn this. My impression of Iran, if you had this interview seven or eight or 10 years ago, there's no way I'd be saying anything positive about Russia, China, or Iran. I I honestly. I mean, this is just learned because if you're going to manage money, you owe it to your clients to understand what's going on in the world, and not just react reflexively what you think should be going on. Because typically, that's not a good way of approaching things cuz it's rarely true. No one's that smart to know what's going on. And I was certainly under a tremendous number of misconceptions. What I wasn't under at all as a sidebar is how great this country was. And you know, once I realized a bunch of other things, I realized it's kind of our choice as to whether we want to give give ourselves a chance to get back there again. Okay. Look at Iran as an example of what culture can mean to a country. Iran 90,000 90 million strong, quarter of our size roughly maybe give or take about 25% of our size sanctioned for who knows how long. And yes, coming back to women and how they're treating. I mean that that that's sort of the what what people first point out when they say terrible things about Iran and they're right. I mean Iran's treatment of women has been horrendous for most of this time, but it's changed. It's changed in probably the last I don't know 15 20 years and it's gradually gotten better. I I'm only stressing this because it comes out of a culture and now getting back to that one anecdote that I wanted to mention. Fields Medal is a medal that's awarded every four years for the best mathematician in the world. I mean there's several of them that will get it. In contrast to the Nobel Prize which is awarded every year. So in a way it's probably the most prestigious medal you can win in sciences. We don't have a Nobel Prize for mathematics. We have uh one for physics but not mathematics and mathematics underlies most of the hard sciences. So getting a Fields Medal is an extremely prestigious thing to do. And this is a pox on the world incidentally not not on Iran in fact the opposite. There's there had never been a winner of the Fields Medal that was a woman. No woman had ever won a Fields Medal. There have been very brilliant female mathematicians but I don't know whether they get any Fields Medals when they rose but I'm this there's now a lot of brilliant female mathematicians. The first female mathematician to win a Fields Medal was an Iranian woman great educated at the University of Tehran and brilliant woman and tragically died at 40. I mean you know she did her work before 40 but that came out of of Iranian education system. That woman was born there. With all their prejudices, everything else, they treated women and it's continued. 53% of their college students right now are women. 47% are men. And you know, they make progress. And now what you see is that in the face of all these attacks, you see an entire country coming together. They're not running from the attacks. In fact, when Trump first threatened to blow up all the bridges, you saw Iranians lining the bridges. Come get us. We're together. And that kind of mindset doesn't grow out of anything other than a culture. I mean, Iranian culture is is the Persian culture. I mean, before the mullahs took over in 47 years ago, 1970 in Carter's regime, when you're the Iranian crisis. Um, they [clears throat] they were just Persian. And their their culture extends back 3,000 years. And I think the Persian aspect of that culture has been, you know, is is triumphant. I mean, it's sort of outweighing the theocracy that we see from from the mullahs. And you know, they have elections in Iran. And you know, they have the supreme leader who's a religious leader. And they also have another leader that's elected. I mean, their their elections, as far as we can tell, are free. And you're going to hear a lot of propaganda against Iran. Some of it's true, some of it's not true. But what you can't deny is there's an underlying culture. There's a togetherness there. The same thing can be said about China. The same thing can be said about Russia. They have a culture. There's Mother Russia. There are people during the Second World War, during the Battle of Stalingrad, that, you know, in the face of Stalin, who was a known monster in many, many ways, they still went to their deaths shouting Stalin's name. And it was that victory in Stalingrad that really won the war, not just for Russia, but for the entire West. Yes, the US fought very, very bravely. But the war was largely over. I mean, once Hitler lost in Russia, he had lost. And why did he lose in Russia? Culture. That was it. And you could say similar things about China, too. They They have a culture that goes back 4, 5,000 years. If you just step back from China, I'm not trying to make a case. I I don't want to go to China. I don't really believe in their culture. But I believe in culture writ large. I do. I mean, I think it's essential for a country to be great, they have to have a culture above all. And if the culture's going, you know, stay, it's got to have good leaders. And fortunately for the Chinese, and fortunately for the Russians, both Putin and Xi are pretty good leaders. In fact, I would say superb, just judging from an objective historical distance. I mean, would I want to go out for drinks with either one of them? No, not really. But I wouldn't want to go out with drinks for with Trump, either. There have been a lot of presidents that I would have loved to have gone out with drinks, but Trump's certainly not one of them. But and Xi or Putin, no, I don't think so. I mean, but still, they are doing good things for their country, and they're operating, you know, in a way that benefits their country as they see it. I don't think there's a lot of corruption at the top in either Russia or China. And I will ask a question that is unfortunately >> [clears throat] >> rhetorical. Do you think there's any corruption in the US at the top? That's a rhetorical question. And so, um Yes, okay. So so so, you know, enough said. The fact that Iran can stand and and, you know, in front of uh uh targets that, you know, have been named by its attacker and say, "Come get us." You're not going to be It's going to be very, very difficult to beat that country. Now, come back to education and the first female winner of the Fields Medal being a female whatever. Confuse something or other there. But, they have excellent, superb education. I mean, it was really on display when you saw the negotiating team. The US, and I'm not saying anything against Kushner or Woodcock who were negotiating on the part of the US. They may be wonderful guys, but they're real estate. They they they know a lot about real estate. They don't know anything about the issues involved in negotiating. Yet, they were our negotiators. On the other side of the table were the Iranians. I think the lead negotiator is a PhD in philosophy, expert on Kant. I mean, this is just a different mindset than we have. And I'm not saying anything against real estate people. I mean, you know, but they're You don't want school teachers negotiating with you. You don't want negotiating for you. I mean, maybe Trump was forced to because maybe the country You have to You just don't know what's going on here today. But, maybe the country was at such a point or maybe Trump fits felt so trapped that he felt the only people he could send it were people that he trusted. And he trusted uh Woodcock and Kushner. I mean, that's one interpretation. I've no idea. But, I do know this without any doubt, they were not equipped to do the negotiations. And you know, it's been a disaster since then. Iran, though, has just been straight by and as I, you know, coming back to the education, their weaponry is better than ours. That's it. Their missiles are hypersonic. I mean, we we have one example of a hypersonic missile. I mean, backing up in 2022 in this country, our conception of hypersonic missiles, we didn't have really a hypersonic program. Our conception of hypersonic missiles were missiles that flew very, very fast. Maybe Mach 5, Mach 8, Mach I don't know, even Mach 10. But we didn't think they could go very far. Then all of a sudden, and here you can check what I'm saying, I mean if you can still find it on the internet. If you can't, I can send you copies cuz I'm very wary of this. Um China all of the sudden, out of the blue, well not right out of the blue, they send a hypersonic missile around the world and comes to the other side of the world and strikes down. And you know, I don't know how close fairly close to a target. You can bet it would be almost a bull's-eye today cuz you know, 4 years had passed. The chairman of the Joint Chiefs of the Staff at that point said, "My goodness, this is not something I expected or we expected. This is a Sputnik moment." Okay, I'm not going to go through all the history of Sputnik, but I will say in so many not in so many words in other words, this is a moment that requires our country to together. And we've got to face the fact that we're facing an enemy or potential enemy that is well advanced, well past us. I mean, we didn't even know that there was this possibility. Much less have a program to do it. Now 4 years later, we still don't have anything that comes close to what the hyper the hypersonic weaponry that either China or Russia, and for that matter, Iran possesses. How is that possible? I mean, a similar situation in the 1950s that I unfortunately, I'm that old, can remember very clearly was what the Sputnik moment was. And I'm not going to go through the whole detail of it, but was a moment where Russia jet demonstrated superiority over us. And that was during the Cold War. And what did we do? We all came together as a society, education, the the government, everybody on the same side. And you know, what? 10 years later, we had a man on the moon. No, a little bit more than 10 years, 15, 14 years later. Whatever. I always do in terms of when I graduated. I always get mixed up. But it it wasn't too long later that we had landed a man on the moon. Man has not been back to the moon then since then. But it with the point being not so much, you know, the accomplishment of landing on the moon, the ability to come together, rich, poor, ethnicities, black, white, whatever. You were all Americans, whether you were Japanese, whether you were Jewish, Christian, Muslim, didn't matter. If you were American, you were American and you were going to come together and we did as a country and we surpassed Russia by maybe five or seven, I don't know how many years. And that still stands as a singular accomplishment of man, that we've been to the moon. How long ago was that? I mean, that's 30, 40 years ago that we were on the moon. It's extraordinary. And we did it in such short period of time. No way to do it today. Milly, who was then chairman of the Joint Chiefs of Staff, was censored or told shut up about it. No mention of Sputnik moment anymore. Can't do it today. We're no longer a culture. We've lost our bearings in terms of what we were. We are gone. I mean, and that's comes back to your question about gold, believe it or not. I mean, there is a point to what I'm driving at. This is demonstrated, our failure to overcome Iran. When you would think objectively, man from Mars coming down and looking at the relative advantages would say, "Why bother fighting? Just tell them to lay down their arms." Not only did they lay down their arms, they've beaten us, basically, or they've held us to a draw, put it that way. We've been unable to make a dent in that country. I mean, made made a lot of dents, but not a dent in the soul or the culture of that country. They stood together. They they basically have figured out ways to launch their missiles from underground, so we cannot hit them with our bombs. And they destroyed a lot of the UAE and Saudi Arabia stands ready to take control of really ready to be along with Iran, believe it or not. I mean, two two years ago she came and negotiate some sort of a rapprochement between Iran and Saudi Arabia, who have been still are kind of enemies, but now they're friend-enemies. I would call them friend-enemies. I mean, but they're never going to be completely together. They I don't know too much about Saudi culture. I From what I hear about them, they're awful. But Iran is not. But what whatever, even if they're good or bad they're they're different religion, even though they're both Muslim. The Saudis Saudis are Sunni. The Iranians are Shia. So they that that's a major major difference. That's probably larger than difference between Jews and Christians. I mean, at least as large, but they're getting along. And it's sort of a reluctant friendship, whatever, like I said. But if they're probably both going to be part of the new security architecture. That security architecture is going to carry with it gold-backed currency. United gold-backed currency. I mean, China sort of already started. I mean, if you you know, this is not well known, but if you're living in China right now, you can go to the Shanghai Gold Exchange and exchange what however many yuan you want for gold. It's a fairly completely backed currency. It's backed totally by gold. And to some extent, you know, if you're buying in yuan, I mean, if you're buying if you if you're trading goods for yuan, there's a part of China where you can go to and theoretically exchange the yuans you may receive for gold. I mean, it it it gets complicated after that because, you know, that's not enough to define a whole new uh broad-based system. But, once you have Saudi Arabia in there on your side, I mean, you you've knocked out the major foundational element that was present with the creation of the uh of the uh petrodollar, which has been the basis of our reserve currency. So, you're seeing when you ask how long, I don't know how long, but I'm we're getting close right now. And I did this is something that I'm speculating on. I think it's China and Russia, ironically, are best friends right now. We just don't know it. I mean, uh in in the sense that that they could really destroy this country monetarily. I believe that they could. Uh you know, their economies, etc. I mean, China's trade tentacles reach out much, much further than we do. They run these massive surpluses, which have been the source of a lot of their funds. I think they'd be delighted not to run surpluses. We should be grateful that they do not want the yuan to ever be the center, the reserve currency. Now, there may be a period of transition in which the yuan does serve as a reserve currency. All we have to do is agree with them. Not agree with them. No, no, no, no. They don't want people agreeing with them. They want people to maintain their own sovereignty. That's really, really critical to China, and it's critical to Russia, too, but especially China. And they're you know, after all, when it comes to monetary and trade, they're the number one country in the world. They they they don't you know, they don't they they'll tolerate almost any kind of sovereignty. They, you know, want to do they want people to have their own culture, their own beliefs. They're very tolerant of that. I mean, in China today, though you're told that they're they were so horrible to Muslims, there's no evidence of that. None. I mean, you know, Muslim countries went up there uh um Um, UN ambassador, you know, went up there to see how horrible things were. She was asked to sign a an agreement saying that China was treat mistreating all their Muslims. She How can I sign such an agreement? I'm sort of conflating a couple of different things, but I'm not misrepresenting anything. She said, "In effect, how can I sign an agreement when I saw more mosques per capita than exist in Muslim countries?" I mean, China's dealing with 50 ethnicities. I mean, the major ethnicities are the Han. Their first First way they wanted to solve the Muslim problem in China, just give you an example, was the intermarrying the Han with the Muslim. But that with the Muslim that didn't work. So, you know, they did everything they could and the only Muslims they were ever battling were the radical Muslims who wanted to destroy China and everyone else. But I mean, I'm just saying China gets a lot of bad publicity. Again, I repeat cuz I don't want anyone to think that's listening to this conversation that I'm really pro-China. No, I'm not. And I've never been pro-Russia until, you know, I'm not pro-Russia. Yeah, but I really understand where they're coming from and I really understand they want a world that's good for everybody, including the United States. They don't want to destroy us. If they did, we'd probably already be feeling it. And it's getting to the point where we might not be giving them a choice and that's what scares the daylights out of me because if we don't make it through this period, we [sighs and gasps] I don't know, maybe another century before we have a chance to come back, maybe never. Who knows? But I mean, they hold all the cards, Charlotte, and I don't want to see that happening. Now, the one thing coming once again back to I know you don't care probably a lot about a lot of this history and stuff or your audience and I apologize for that, but I'm trying to illustrate again how important gold should be for your portfolio. If you're not represented there, you're faced with really being poverty. I don't care who you are. Uh if you are represented there, then you have some salvation. I've been a money manager much less not not nearly as long as I've been an investment advisor, but I've never been in a position I sort of ended here if you want um in which I've not been after my my goal is not been to beat the market or beat other in you know, beat other money managers. I've always you know, been in position where I want to beat the other guy. Doesn't matter where I'm up or down, I just want to beat the other guy. I'm no longer in that position. I don't care someone beats me. It doesn't bother me now. Well, it does bother me. I mean, I'm I want to be honest about it. Of course it bothers me, but I don't think it's the way to be in selecting your portfolio and picking your portfolio. My only goal is to protect my clients. And if they can make money doing it and I believe I can, but could be dead wrong. I think that I want to make sure if there is some sort of collapse, I've kept them in the game. And I think that for me on a personal level, on a level everyday level is probably the most significant thing about what's changed in this country. And I think that you know, any investor, anyone that's interested in stocks, make sure you have investments that are going to protect your wealth. The best way historically and I didn't even get into the spiritual significance of gold, but it really this the reason gold has been around. It's not because it's a brand. It's because it has special significance. If you go to churches or other places, you'll find gold adornments. Uh you know, 5,000 years ago amulets were were put into uh gold uh in into burial uh caskets that were sent down rivers to protect the uh to make sure to to escort the dead into uh he- into a world in which they'll you know be able to thrive, be happy, whatever. Gold has a spiritual significance. It also has an obvious monetary significance. Got to have a bridge between the culture that you have and the monetary because you know you live in a real world and real world means material world. And you don't want materiality to go out of hand. Gold is the only meaningful bridge you can build. So all I'm saying is that there's a reason gold has served this role. It's not going to give up this role. I mean it it's going to remain what it has been for 5,000 or four, I don't know how many thousands of years. Uh, but it's probably more than 5,000 to be honest with you. But right now, coming back to you know again portfolios, gold's got to be a centerpiece. Maybe cash and monopolies. I'm just telling you what we're doing and and you know in case things really go well or you know go well meaning we take the right path, commodities are going to go through the roof. You're going to have a crazy wide-eyed commodity boom. Whether it's copper, you're not going to go wrong no matter what commodity you own including oil. But that's assuming we take the right path. If we take the wrong path, it's only going to be gold. But even you know you still have to bet it bet on turbulence and you know there are other investments that'll serve you well if it's just turbulent uh, before you know we come out on the other side and so that's it. >> [laughter] >> I think I've talked way too much, but I'm sorry about that. But anyway, No, it's fascinating to hear about the cultural angle and I think we did need all the context to eventually come all the way back around to gold. And I like that you tied it into what can investors actually do cuz I imagine if people hear all of this they're going to be wondering how do I approach this. So it sounds like we what we need to have is as you mentioned gold as the cornerstone. I'm going to ask one one small follow-up question. We'll see how this goes. Do you include silver in there as well? You've got this very high price okay. do. silver too. The The ironic problem with silver is that it's also an industrial metal. And that makes it more volatile and it makes it more subject to industry. But yes, I mean this country, you know, the best years in this country I think we're probably a bimetallic standard. I haven't done that research to know that they were better than just a pure gold standard. But yes, silver of course should be in there. And I mean any theoretically anything that you can touch that will have value in case things really go crazy. Like even copper can be in there, you know, small whatever. It's not as essential, but yes, for in answer to your question, yes. And also companies that have monopolies that extend the entire globe. You know what's ironic here is that there are so when 20 years ago there must have been a few dozen companies that had a triple A rating. I only find two right now and I would recommend them. I don't want to recommend them. Johnson & Johnson and Microsoft. Now Microsoft I'm a little bit sure less sure of because of the AI stuff, but both those countries companies have two things in common. They're both triple A rated and at the same time they both have higher credit ratings than the US government. So I probably rather own Johnson & Johnson certainly than US government debt. If you're if if credit rating is basically your concern the the debt that comes out of Johnson & Johnson and or Microsoft. I don't know how much debt Microsoft has, maybe they have none. But whatever, I mean it's a safer bet than US government debt according to Moody's and S&P 500 according to American companies. That's how bad things have come. But those kinds of companies, I'm not saying it's only gold, but gold would be, you know, way up there. I think cash US dollars, yes, they're going to go down in value and I'm sure you've had a lot of guests that talked about, you know, how you measure the dollar in terms of uh uh you know, gold and that's the key thing. And if you're going to look at the dollar today and one thing I would look one thing I would suggest for people who follow these things closely, I think the DXY index is not particularly relevant. It's sort of like which is the worst of the countries that are doing really poorly. If you want to look at If you want to follow the dollar in terms of another currency or we're following in terms of the yuan as a clue to what's really happening. Of course, you're following it in terms of gold. Once you know the gold price, you know how the dollar is performing. And I know that goes without saying. But the yuan is very close. It's very It's going to be, you know, it's going to serve you better than following the DXY. That's just a, you know, a sidebar. It's not really important. But you you summed it up very well. I mean, you summed up what I said. Amazing. I couldn't sum it up that succinctly. Thank you very much. But really appreciate it. Of course. Of course. I try my best. And I think I think we can wrap it up there. I think this was a great conversation and would love to have you back to go over how these things end up progressing. Well, we'll see how it goes. But yes, for now, thank you so much. And And thank you so much for really, you know, summing up a very long and probably hard to follow conversation in a couple of, you know, really succinct sentences. I mean this sincerely. I mean, congrat- I mean, I I could not have done it myself. I really appreciate it. Thank you, Charlotte. Of course. Well, thank you so much. And again, looking forward to having you back. But for now, once again, I'm Charlotte McLeod of course, with investingnews.com. And this is Dr. Stephen Leeb. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts. So, leave us a comment below. >> Mhm.
Stephen Leeb: Gold Price to US$18,000? Here's How it Can Happen
Summary
Dr. Stephen Leeb of Leeb Capital Management shares his outlook for gold, explaining how it could get to US$18000 per ounce.Transcript
I'm Charlotte McCloud with investingnews.com and here today with me is Dr. Steven Leeb. >> [snorts] >> You can find him at stevenleeb.com, on Substack, and he's head of Leeb Capital Management. Thank you so much for being here. Great to have you. It's a pleasure here. Charlotte, I'm getting off to a poor start in this interview. It's a pleasure, Charlotte. Really is. Really looking forward to your production and your other interviews and I think they're all excellent. Well, it's a pleasure to have you as well and it's our first time talking, so we've got plenty of ground to cover. Where I thought we could start is with gold. When you look at the metal right now, where would you place it overall in the cycle? I I would place us um nowhere near the top. Uh basically I would say that, you know, viewing it as a cycle is probably a mistake at this point. I mean, gold's, you know, high high point I mean, might not ever really be defined because I think at the end of this period that we're in, you're going to find gold at the center of the world's monetary system. I mean, I think it's key to remember that. We're not Gold is not really something that should be thought of it like like stocks in a particular cycle. It's not a Fibonacci uh cycle or anything like that. Uh short-term maybe it applies, but basically we are These These are very unusual times in history. We are at a inflection point, a major inflection point. Uh maybe we've never seen anything like this before. Maybe it does resemble other times in the past, but whatever the case, this is a very, very unusual time. I can find no certainly no recent time that even remotely resembles what we're going through right now on many, many different levels. If you want a benchmark for looking at gold, the only one that comes anywhere possibly close, it would would be the period 1974. Uh in which case, I mean, this is just I mean, economic point of view, but there's also trans There's also transition during that period between uh gold-backed uh US dollar and a dollar that was no longer gold-backed. And then transitioned into a dollar that became the reserve currency because it became the petrodollar. But was How I see the resemblance between that time and this time is that you were in a economic situation in which you're likely to see inflation before you see a recession. Uh and you're seeing certainly some of that right now. And if you kind of step back uh and look at, you know, people will say, "Well, oil's up just because of Iran." Uh no, it's not up just because of Iran. I mean, I think there's genuine shortages of oil. There's certainly shortages of natural gas. And that's likely to continue. And indeed, all commodities, once you get past the precious metals and you go to the industrial commodities, for example, you'll see copper I think 20, 30% above its highs in um 2008 when it made a previous all-time high. I mean, we we we have blown out the all-time highs in copper. And I sing the loud copper because it's the most important industrial metal. I mean, I think people generally accept it. Uh whether you're talking about AI or you're just talking about virtually anything, you name it. There's copper all around me right now as there is around you. And there's a shortage of copper, a profound shortage of copper in the world. Uh and that's why it's at all-time highs. World demand is certainly not at an all-time high. So, just leaves one You don't have to be a genius to figure out if demand's not at an all-time high and copper's soaring past all-time highs, you have a demand problem. And it's certainly not going to be unique to copper. Uh, you know, whether you're talking reverse or you're talking aluminum. I mean, the whole gamut of commodities are in short supply. Oil I I I do believe it's only a matter of time before is in short supply. I mean, you you've had $100 oil before. But everybody is talking about this as if it's a unprecedented oil crisis. No. I mean, you go back to 2008, you saw oil trading at $150. And uh you know, we're not there. Uh, we we still have at least another $50 to go. So, you know, the point being again, the similarity between now and any other time except for 1974 is absent. And 1974, I don't think is a particularly good example. There we were going one way where the dollar was becoming the reserve currency. Here we're going exactly the opposite way where gold is regaining that reserve status. And it's happening every day, which makes these this period of time so difficult. I mean, we are fighting like if fiercely to do whatever we can to keep the dollar in place. It's hopeless. It's just a hopeless fight. And you're seeing all sorts of data points. I'm sort of all over the way and all over this all over everywhere and trying to answer your question. But again, just in terms of 1974, you you could break it up into two periods. I mean, you had inflation and I don't You're much too young to remember, but unfortunately, I'm not. I remember the so-called WIN buttons. Have you ever heard of WIN buttons? That They were buttons everybody was wearing it 1974 as we were entering a recession and even when we were in the recession. What did win stand for? Whip inflation now cuz we had high inflation, shortages of commodities. I mean there they weren't actual physical shortages and that's a big difference. There they were actually uh politically induced uh basically by Saudi Arabia and OPEC. They stopped pumping oil because they were really angry really uh you know about the uh the 7-day war and that 7-day war, the Yom Kippur war in October uh what 1973 with Israel and and we took Israel's side. Uh hasn't changed that much since then. I mean that's one commonality. Uh but anyway, that made the Saudis and other parts of OPEC very, very angry. They embargoed oil and it led to a massive and boom in commodity prices across the board. Massive inflation for that time. I mean inflation eventually hit around 10%. But it also led to a recession. And you know, if you have to choose between, let's say, recession or depression or, you know, very weak economy and inflation, I mean you you've got to be really stupid to choose uh um you'd rather see a depression than uh inflation. Inflation's always going to be the lesser of two evils with the, you know, rare exception and you know, you can always always argue maybe we're facing that rare exception now. I hope not. But you know, the Weimar Republic when you have, you know, unconscionable amount of inflation. I mean if that happens, the only thing you want to own incidentally is gold. I mean, you know, just parenthetically, that was the only asset that served you well. In fact, it outperformed the the uh decline in the currency there. I don't know. You had quadrillion uh fold inflation during that couple of years or especially the last part of that period in the 20s. Uh then the only thing to own is gold. Uh but but hopefully we won't have that and we did not have it in 1974. Uh but you did have the similarity that you're seeing right now. The economy is clearly weakening. Uh I I don't think there's much argument about that. I mean, you know, statistics typically that I don't pay much attention to are these sentiment numbers. I mean, I've been in this business much longer than you are old and I've never paid much attention to the sentiment numbers, but when you see record lows in the University of Michigan consumer sentiment, that's telling you something. With the stock market at record highs and general sentiment among consumers at record lows, I mean, something is messed up. I mean, you don't have to be an economist. You just, you know, doesn't make sense. Economy's not doing well. That's for sure. Uh the only thing that is, you know, basically allowing a lot of people to hang in there is the stock market. I mean, the stock market is thought of as a haven for the rich and, you know, it is. And it's basically because we have such inequalities that you have this market, but on the other hand, another element to it is that uh the market's making everybody wealthier, at least people that are working. I mean, they've got these uh 401k uh plans and uh that's part of the problem, to be very honestly. I mean, I'm not I think everybody should, you know, I [clears throat] think the country's so lopsided, it's hard to describe and I'm not in any way arguing in favor that continuing. But you have this problem is that people, you know, have come become very used to the fact that every, however often their pay periods are, a little bit of their money will be taken out and invested automatically in the stock market. And if you're investing in the S&P 500 today, you're basically investing in these very, very large cap stocks. I mean, there's seven stocks or 10 stocks in the S&P 500. They always say magnificent seven, but they're that the the the seven names of the seven are are sometimes change. Not not often. But anyway, you're investing in seven stocks whose capitalization is roughly about the same as the GDP of this country. Which is just it's crazy in that sense. And you don't make um I mean, let me just stay focused. Okay, so what happened in 1974? That we had whip inflation now, and we were trying to hammer down on inflation uh in the face of a recession that was occurring under our eyes and was threatening to turn into something much, much worse. I mean, it was threatening to turn into something that could have turned out as bad as the depression in 1930. Uh and all of a sudden, they said, "Whip inflation now." And we tore up those buttons, even though inflation still had not been conquered. Uh and basically said, "We've got to do something about what's going on in the economy. My gosh, forget about inflation. I mean, people are starving." Or, you know, maybe I'm exaggerating, but it was really tough going. And then, we flipped. In that sense that you're facing simultaneously inflation and a weakening economy, it's like 1974. So, the natural question, finally in answer to your question, in 1974, you did see gold going up very went up sharply. I don't remember the numbers, maybe 65%, 70%, something like that. Now, that did not do the US very much good because you weren't free to own gold in the US. So, these prices were all based on European markets and London in particular. They they did very well owning gold. We did well. Actually, I take it back. We we did no gold. I don't take back the fact that we could no personal ownership of gold was allowed but you just like in the depression gold did very very well there too but in 1974 the only way you could have participated as was the case during the depression is by buying gold miners and they did spectacularly well during 1974 so if you want to take a literal message from 1974 it would be on gold miners as protection it's maybe even better than gold it's hard to believe because they're so volatile they're up down but they're very fundamentally cheap stocks and if gold holds more or less its value which I think is a you know very very good bet they'll do very well they will be very they will do very well so if to that extent I think it's very similar to 1974 or at least most of them more similar to 1974 than any other period that I can think of it's not at all similar well not at all similar is an exaggeration it's certainly not really similar to 2008 which is a which is the standard comparison mark you see but I would I mean the message no matter what period of time you want to compare this to and I don't think there's any that that really gets it nails it I mean I think the risks today are greater than they've ever been can I say 250 years however long this republic's been around I think we're facing really really great potentially grave times not saying that we won't be able to navigate ourselves out of them but our worst case scenario today and I'm not saying this probable I don't think anyone knows that at this point but certainly our worst case scenario today is much worse and I'm use I use much advisedly than anything not only in even my lifetime but anyone's lifetime and probably in in of this country I mean, we're really facing potential dissolution. I mean, that's an extreme case, but it unfortunately and tragically, it's a case that's not that hard to make. And we're going to have to accept a a number of things in order to to avoid that worst-case scenario. Now, is there even in that worst-case scenario, though, gold, providing you have it stored physically, >> [snorts] >> is very likely to be a shield. Will be a shield. Almost guaranteed will be a shield. Because at the end of that case, gold is going to be at the center of a new monetary system. I have very, very little doubt about that. Originally, uh started writing about that in 2018. Uh [snorts] published a book in 2020, uh Rise of China and the New Age of Gold. That may not be the not be the exact title. I've trouble remembering the titles of my books. But, um it basically described about where we're at now. I mean, I sort of got to the point where most countries in the world would accept gold as a new standard or new center for the monetary system. I've been blogging about that in, you know, other places at the time. And what I never could get past, I mean, I had to stop almost exactly where we are now, because I wasn't sure how the United States would react to this threat. Now, the sensible thing, faced with a threat that we're faced with today, and I'll point out incidences of how you can tell that we're faced with this threat. I mean, it's around us if we just want to look. I wasn't sure how we were going to react. I mean, it's very tough. I mean, obviously, this doesn't have to mean the dissolution of our country. It doesn't have to mean we give up our Constitution, although I think in some ways we're we're already in the faith already doing it, giving up our Constitution. It just means we have to be willing to cooperate and maybe accept actually a better standard of living uh if everyone cooperates. I mean, that that's the way out. It's very, very simple. And it's very human to want to do this, to cooperate. I believe it's very human. It's not so human to have a war every year for 26 years or however many years. And to, you know, say that you're exceptional and let's pass that exceptionalism around to every other country in the world uh even if it means starting a war and killing everybody and, you know, imbuing them with our exceptionalism. I mean, that's not my idea of exceptionalism, but it's the kind of foreign policy we've been following really since uh in in at least since the uh early '90s in certain sense. Um Brzezinski, et cetera, American exceptionalism, you know, spread it all around the world. Uh Kagan and and Kristol a little bit later. Spread, you know, same idea. Uh even if it involves wars. Well, we've been losing a lot of wars this century. Uh now we're in a situation where we're not going to win the next war. I mean, basically uh what's happening in Iran is not winnable for us tragically. And um it it it's sending a message that the US is no longer a hegemon in any sense of the world. I mean, there's a lot of data that's been floating around for, I don't know, 10, 15 years saying that China has passed us in many ways uh including uh um you know, technologies, uh including um I don't know, any including size. If you measure the economy by what they call purchasing power parity, which is actually, you know, the amount of goods that you produce in constant dollars. If you take currency out of the comparison and just focus on how many goods, what goods you're generating, China's 30% larger than we are. I mean, it's not even close anymore between number one and number two. Unfortunately, we've lost that much. Uh and I think we've lost a lot of our culture, too. And that that's just tragic. It really is. It's just tragic. But let me let me stop. Let me give you a chance to ask me another question cuz I I think I've answered I hopefully I've answered it. I would compare it to 1974 if if you want to compare it to anything. And in 1974, gold was best investment. But, you know, in a general sense of the word, I would say any kind of potential catastrophe, and we certainly are in the midst of one right now, is going to favor gold. That doesn't mean gold's not going to go down to 3,800 before it goes up to about 5 or 10,000. If if if you want a, you know, rough estimate and you want to use statistics, I've used nominal uh real nominal world GDP, nominal world money supply growth. And that that's obviously you get these numbers from Those numbers are never going to be precise. But, if you project those numbers out, >> [gasps] >> you end up with a target for gold, I would say around 18,000. Not tomorrow. Uh that wouldn't be inconsistent. Uh basically, you know, since let's say 1934, if you look at the growth in nominal world money supply, gold should be trading close to 18,000 today. So, as you go forward, it'd be maybe even a little bit higher than that. But, that kind of ballpark makes sense. But, you have to have a, you know, fairly long-term perspective and not go crazy if gold goes down to 3,800. I'm sort of talking to myself cuz I know I'll go crazy if it does. Uh uh but, you know, it's store of wealth, and it will protect you. It definitely will. You can't find any examples I've never found an example in which gold did not do well during very very difficult economic times, whether those times are characterized by horrendous inflation, depression, or just deflation. We've had five periods of deflation in the US. I know you're coming from Canada, so when I say statistics, I'm >> [gasps] >> you know, unfortunately, at through no prejudice whatsoever. I mean, I love Canadians, but just not including them, just including Americans. Uh you we've had five deflations in this country, not just the Great Depression, but there were four others. You know, some actually came in the midst of fairly good times. You can't have def deflation or disin negative inflation doesn't mean automatically bad economic times. It could be very good economic times. We've had some of those, but regardless, anytime that you had extreme volatility in the let's say CPI, gold has been a superior performer. So, I mean, you can just start there. Closest is '74 in terms of exactly what we're going through today, and gold was a superb performer. Boy, if you had nothing but gold, you just stood out from the pack in a way you could never hope to again. So, hope that answers it. I think it does definitely answer the question, and it gives us a lot of directions that we can go in. So, let's let's try to unpack what you see moving forward. So, we've got decline of the US as they're fighting this unwinnable war. Then we have the rise of China moving toward this this new system where we've got gold at the center. Can you talk a little bit more about what that looks like, that transfer, and perhaps a timeline if it's even possible to say at this point? Well, I think it's already in play, and you can see it just in terms of the war in Iran right now. I mean, the dollar became the dollar as a reserve currency when it turned into the petrodollar. And uh there was a quid pro quo. Uh it was negotiated by I think Kissinger in 1974 with the Saudis. And the deal was pretty simple. I mean, you can make it very complex if you want, but you know, the basics of it was were that uh the Saudis would agree to price their oil in dollars. And [clears throat] if you wanted to buy Saudi oil, and everybody in the world did, I mean, very few countries were independent of oil, and it was priced in dollars. And those dollars that the Saudis and the other Gulf state uh economies received were in turn invested in US Treasury bonds and US assets. That was the crux of the deal on the part of the Saudis. Our part of the deal, I mean, we had to get something in exchange for it because it created a hegemon right there. I mean, they extended our hegemony then. And then there was no question we were the hegemon, and there was no question that this would extend it and make it easier to maintain our role in the world. Uh we had to do one thing. We had to agree to protect the Saudis and the other Gulf states from uh any any threats from any other country. We were there. They were the big brother who was always going to protect them, and they could count on us. Back in 1974, our military was totally unmatched. I mean, it was just extraordinary. Uh today, uh suddenly, we find ourselves fighting a war uh >> [snorts] >> in foreign shores, West Asia, and we're fighting along with Israel, who I think is is widely perceived to have had may still, I don't know, the strongest army in West Asia. So, mighty hegemon, the US, and Israel's fighting a war. Now, war went on for 40 days, and I mean, I want to look at my computer to see whether it's still going on because things are that volatile. I mean, as far as I can tell, the war is still going on. I don't notice a switch to all red or all green. Uh, but we've been fighting that war for I now it's going We've had a peace in in interregnum, which is peace. But, the point being Iran 90 million uh, the US and Israel with their mighty militaries have been held to a standstill. If anything uh, Iran has a definite edge. Not because they can really beat us, but because they can wreak so much havoc on the rest of the world uh, in terms of uh, shutting down the Straits of Hormuz. I mean, clearly we don't have the military to um, to overcome that. Why don't we? And and and the other thing I want to emphasize very much, and and here's really a data point for you. If you if you have to sort of step back from the situation, you have to ask yourself, well, Iran during the fighting basically attacked all the other GCC countries, the Gulf Cooperative uh, Cooperation. Maybe I have the two C's mixed up. But, I think that that's you know, the GCC that those Saudi Arabia, Kuwait, uh, UAE, Qatar uh, Bahrain, and maybe I'm missing one, but those countries, they're all oil rich and you know, those are those are countries we're supposed to protect. Let me put it that way. In terms of the 1974 agreement, these are the countries that are pricing oil in dollars in exchange for our protection. Well, Iran has demonstrated the ability to destroy these countries basically during the war. Now, they've gone after uh, the UAE, which is already a shadow of itself. I doubt that the UAE will ever recover. Uh, they've gone after the other Gulf countries, but strangely enough, if you think about it, Saudi Arabia hasn't been really touched. I mean, there've been a few token attacks on Saudi Arabia, but they're still pumping about the same amount of oil that they were before. They're not even impeded. I mean, the Houthis, I mean, they're they're shipping through you know, they're not going through the Straits of Hormuz, they're going around uh and the my geography is so terrible. I think it's the Red Sea. And but they're getting about 7 million barrels out a day or something like that. I mean, they're exporting a lot of oil. Now, Iran could have shut that down. I mean, there's no doubt. They could have, you know, easy even the Houthis could have shut that down. Uh and the Houthis who are >> [snorts and clears throat] >> allies of Iran basically have stayed out of the war. Uh so, so Saudis have been left untouched. So, that's automatically telling you, why are they left untouched? Well, in a new monetary system, they're going to have a major role to play. I mean, they're the world's largest oil uh exporter. And for practical reasons, I know technically we are we we produce more oil than anyone else, but I for for reasons you I mean, it would be too complicated to go into, that doesn't do us very much good. I mean, look at gasoline prices in this country, for example. I mean, you know, we don't have the refining I mean, we have refining capacity, but there's so many bottlenecks everywhere in this country right now. That the Saudis are really what what it comes to when when you're talking about the certainly when you're talking about the ability to export companies, full stop, it's the Saudis. They cut much, much more than we do. We don't have the ability to really export. The Saudis can export because of relatively small size much, much more oil than anyone else. They're center. They're a center of whatever happens. Also significant is um you know, their relationship basically with Russia and China. When you mention China, you have to also have to include Russia, too. I mean, there's an alliance that's very appears to be deeper every day. I mean, it's amazing. I mean, these countries really they they don't share a culture, certainly. They both have a culture, a very strong culture, which I think is one reason they're very strong countries at this point. Uh but, it's certainly a different culture, each one. I mean, after all, China's Buddhist and Confucius, and those are the um you know, the major cultural um end points, I would say. And uh Russia's a Christian country. Now, Russia's been a Christian country for a thousand or 1,200 years. China's been a >> [clears throat] >> um a uh Confucianism and and certainly Buddhism goes back 4 or 5,000 years. I mean, a lot of time. Uh so, they they do share that commonality. They both have very long cultures that have persisted through, you know, the worst of times, which I think gives them a major your edge. I know I'm diverging a little bit, but I think it's really important for people to understand that it's just not a simple question of under you know, why is why is Iran I mean, basically, what I'm getting at is Iran how can this be? How can they be beating us? It's It's just if you step back, it's extraordinary. I mean, Iran has been sanctioned for 47 years. I mean, they've been restricted. Their public has been restricted. And yet, they're able to stand our attacks. And you know, there's been nothing wrong with our weapons. They've worked exceptionally well. But, they basically have created a sort of it asymmetric situation. The only thing that they have on their side, and this is again hard for me to believe. I mean, I grew up in in a world for most of my young life I mean, when I was a young person, I mean, most of that period spent as a young person was spent in the context of which in which America was so supreme. I mean, I think arguably, I not a historian, but I think you'd be hard-pressed to to find any country that ever could match America in the post-war period through 1971, through the early 1970s in any event. It was extraordinary. And you know, basically, you know, we had a culture back then. I mean, I have to emphasize that. I mean, we didn't believe in in a religion, but we believed in religion. You know, religion. I mean, we believed in higher power. This was Jefferson. I mean, Jefferson and I was going to pick up my biography of Madison, but that that'll look too pretentious cuz it's right by my desk. Jefferson and Madison were very religious people, but no one knew what religion they followed. They did but they did but they were part of our founding culture. And this is what really separates, let's say, a country like Iran, even countries like China and countries like Russia from where we are today. We've lost that culture. And that is so important to realize. Getting back to how Iran can come up and and basically hold us to a standstill, not only us, but Israel, too. Bear in mind, Israel has a lot of missiles and a fierce military. They're fighting everybody. I mean, really. I mean, their allies in in the Gulf right now are, you know, Hezbollah and I don't know, these terrorist [snorts] um states that are, you know, off of uh you know, that share a border with Israel. So, the Houthis are legitimate ally, and I think Oman is becoming an ally, and then expect Qatar to become an ally. UAE, I really doubt. But anyway, the question remains, how is this possible? And that's why I introduced the idea of culture. I don't agree with any of these cultures. I don't want people to misunderstand me. I don't have a passport for Russia, or China, or Iran. Not interested in that at all. I mean, do they do terrible things? Awful things. Terrible, horrible things. Uh but on the other hand, there's a cohesiveness that's inherent in these countries. And that's one of the things that's very, very important to understand. If you're asking yourself, how in the world has Iran done what they've done? It's a culture. I mean, you know, they're not so happy with a theocratic government. I mean, who can be? I mean, you know, I have to say that it's gotten better in recent years. Gotten better for women in particular, believe it or not. Iran today has more female college students than male. The first I mean, this is unbelievable as an anecdote. I mean, I I was stunned. I mean, I had to learn this. My impression of Iran, if you had this interview seven or eight or 10 years ago, there's no way I'd be saying anything positive about Russia, China, or Iran. I I honestly. I mean, this is just learned because if you're going to manage money, you owe it to your clients to understand what's going on in the world, and not just react reflexively what you think should be going on. Because typically, that's not a good way of approaching things cuz it's rarely true. No one's that smart to know what's going on. And I was certainly under a tremendous number of misconceptions. What I wasn't under at all as a sidebar is how great this country was. And you know, once I realized a bunch of other things, I realized it's kind of our choice as to whether we want to give give ourselves a chance to get back there again. Okay. Look at Iran as an example of what culture can mean to a country. Iran 90,000 90 million strong, quarter of our size roughly maybe give or take about 25% of our size sanctioned for who knows how long. And yes, coming back to women and how they're treating. I mean that that that's sort of the what what people first point out when they say terrible things about Iran and they're right. I mean Iran's treatment of women has been horrendous for most of this time, but it's changed. It's changed in probably the last I don't know 15 20 years and it's gradually gotten better. I I'm only stressing this because it comes out of a culture and now getting back to that one anecdote that I wanted to mention. Fields Medal is a medal that's awarded every four years for the best mathematician in the world. I mean there's several of them that will get it. In contrast to the Nobel Prize which is awarded every year. So in a way it's probably the most prestigious medal you can win in sciences. We don't have a Nobel Prize for mathematics. We have uh one for physics but not mathematics and mathematics underlies most of the hard sciences. So getting a Fields Medal is an extremely prestigious thing to do. And this is a pox on the world incidentally not not on Iran in fact the opposite. There's there had never been a winner of the Fields Medal that was a woman. No woman had ever won a Fields Medal. There have been very brilliant female mathematicians but I don't know whether they get any Fields Medals when they rose but I'm this there's now a lot of brilliant female mathematicians. The first female mathematician to win a Fields Medal was an Iranian woman great educated at the University of Tehran and brilliant woman and tragically died at 40. I mean you know she did her work before 40 but that came out of of Iranian education system. That woman was born there. With all their prejudices, everything else, they treated women and it's continued. 53% of their college students right now are women. 47% are men. And you know, they make progress. And now what you see is that in the face of all these attacks, you see an entire country coming together. They're not running from the attacks. In fact, when Trump first threatened to blow up all the bridges, you saw Iranians lining the bridges. Come get us. We're together. And that kind of mindset doesn't grow out of anything other than a culture. I mean, Iranian culture is is the Persian culture. I mean, before the mullahs took over in 47 years ago, 1970 in Carter's regime, when you're the Iranian crisis. Um, they [clears throat] they were just Persian. And their their culture extends back 3,000 years. And I think the Persian aspect of that culture has been, you know, is is triumphant. I mean, it's sort of outweighing the theocracy that we see from from the mullahs. And you know, they have elections in Iran. And you know, they have the supreme leader who's a religious leader. And they also have another leader that's elected. I mean, their their elections, as far as we can tell, are free. And you're going to hear a lot of propaganda against Iran. Some of it's true, some of it's not true. But what you can't deny is there's an underlying culture. There's a togetherness there. The same thing can be said about China. The same thing can be said about Russia. They have a culture. There's Mother Russia. There are people during the Second World War, during the Battle of Stalingrad, that, you know, in the face of Stalin, who was a known monster in many, many ways, they still went to their deaths shouting Stalin's name. And it was that victory in Stalingrad that really won the war, not just for Russia, but for the entire West. Yes, the US fought very, very bravely. But the war was largely over. I mean, once Hitler lost in Russia, he had lost. And why did he lose in Russia? Culture. That was it. And you could say similar things about China, too. They They have a culture that goes back 4, 5,000 years. If you just step back from China, I'm not trying to make a case. I I don't want to go to China. I don't really believe in their culture. But I believe in culture writ large. I do. I mean, I think it's essential for a country to be great, they have to have a culture above all. And if the culture's going, you know, stay, it's got to have good leaders. And fortunately for the Chinese, and fortunately for the Russians, both Putin and Xi are pretty good leaders. In fact, I would say superb, just judging from an objective historical distance. I mean, would I want to go out for drinks with either one of them? No, not really. But I wouldn't want to go out with drinks for with Trump, either. There have been a lot of presidents that I would have loved to have gone out with drinks, but Trump's certainly not one of them. But and Xi or Putin, no, I don't think so. I mean, but still, they are doing good things for their country, and they're operating, you know, in a way that benefits their country as they see it. I don't think there's a lot of corruption at the top in either Russia or China. And I will ask a question that is unfortunately >> [clears throat] >> rhetorical. Do you think there's any corruption in the US at the top? That's a rhetorical question. And so, um Yes, okay. So so so, you know, enough said. The fact that Iran can stand and and, you know, in front of uh uh targets that, you know, have been named by its attacker and say, "Come get us." You're not going to be It's going to be very, very difficult to beat that country. Now, come back to education and the first female winner of the Fields Medal being a female whatever. Confuse something or other there. But, they have excellent, superb education. I mean, it was really on display when you saw the negotiating team. The US, and I'm not saying anything against Kushner or Woodcock who were negotiating on the part of the US. They may be wonderful guys, but they're real estate. They they they know a lot about real estate. They don't know anything about the issues involved in negotiating. Yet, they were our negotiators. On the other side of the table were the Iranians. I think the lead negotiator is a PhD in philosophy, expert on Kant. I mean, this is just a different mindset than we have. And I'm not saying anything against real estate people. I mean, you know, but they're You don't want school teachers negotiating with you. You don't want negotiating for you. I mean, maybe Trump was forced to because maybe the country You have to You just don't know what's going on here today. But, maybe the country was at such a point or maybe Trump fits felt so trapped that he felt the only people he could send it were people that he trusted. And he trusted uh Woodcock and Kushner. I mean, that's one interpretation. I've no idea. But, I do know this without any doubt, they were not equipped to do the negotiations. And you know, it's been a disaster since then. Iran, though, has just been straight by and as I, you know, coming back to the education, their weaponry is better than ours. That's it. Their missiles are hypersonic. I mean, we we have one example of a hypersonic missile. I mean, backing up in 2022 in this country, our conception of hypersonic missiles, we didn't have really a hypersonic program. Our conception of hypersonic missiles were missiles that flew very, very fast. Maybe Mach 5, Mach 8, Mach I don't know, even Mach 10. But we didn't think they could go very far. Then all of a sudden, and here you can check what I'm saying, I mean if you can still find it on the internet. If you can't, I can send you copies cuz I'm very wary of this. Um China all of the sudden, out of the blue, well not right out of the blue, they send a hypersonic missile around the world and comes to the other side of the world and strikes down. And you know, I don't know how close fairly close to a target. You can bet it would be almost a bull's-eye today cuz you know, 4 years had passed. The chairman of the Joint Chiefs of the Staff at that point said, "My goodness, this is not something I expected or we expected. This is a Sputnik moment." Okay, I'm not going to go through all the history of Sputnik, but I will say in so many not in so many words in other words, this is a moment that requires our country to together. And we've got to face the fact that we're facing an enemy or potential enemy that is well advanced, well past us. I mean, we didn't even know that there was this possibility. Much less have a program to do it. Now 4 years later, we still don't have anything that comes close to what the hyper the hypersonic weaponry that either China or Russia, and for that matter, Iran possesses. How is that possible? I mean, a similar situation in the 1950s that I unfortunately, I'm that old, can remember very clearly was what the Sputnik moment was. And I'm not going to go through the whole detail of it, but was a moment where Russia jet demonstrated superiority over us. And that was during the Cold War. And what did we do? We all came together as a society, education, the the government, everybody on the same side. And you know, what? 10 years later, we had a man on the moon. No, a little bit more than 10 years, 15, 14 years later. Whatever. I always do in terms of when I graduated. I always get mixed up. But it it wasn't too long later that we had landed a man on the moon. Man has not been back to the moon then since then. But it with the point being not so much, you know, the accomplishment of landing on the moon, the ability to come together, rich, poor, ethnicities, black, white, whatever. You were all Americans, whether you were Japanese, whether you were Jewish, Christian, Muslim, didn't matter. If you were American, you were American and you were going to come together and we did as a country and we surpassed Russia by maybe five or seven, I don't know how many years. And that still stands as a singular accomplishment of man, that we've been to the moon. How long ago was that? I mean, that's 30, 40 years ago that we were on the moon. It's extraordinary. And we did it in such short period of time. No way to do it today. Milly, who was then chairman of the Joint Chiefs of Staff, was censored or told shut up about it. No mention of Sputnik moment anymore. Can't do it today. We're no longer a culture. We've lost our bearings in terms of what we were. We are gone. I mean, and that's comes back to your question about gold, believe it or not. I mean, there is a point to what I'm driving at. This is demonstrated, our failure to overcome Iran. When you would think objectively, man from Mars coming down and looking at the relative advantages would say, "Why bother fighting? Just tell them to lay down their arms." Not only did they lay down their arms, they've beaten us, basically, or they've held us to a draw, put it that way. We've been unable to make a dent in that country. I mean, made made a lot of dents, but not a dent in the soul or the culture of that country. They stood together. They they basically have figured out ways to launch their missiles from underground, so we cannot hit them with our bombs. And they destroyed a lot of the UAE and Saudi Arabia stands ready to take control of really ready to be along with Iran, believe it or not. I mean, two two years ago she came and negotiate some sort of a rapprochement between Iran and Saudi Arabia, who have been still are kind of enemies, but now they're friend-enemies. I would call them friend-enemies. I mean, but they're never going to be completely together. They I don't know too much about Saudi culture. I From what I hear about them, they're awful. But Iran is not. But what whatever, even if they're good or bad they're they're different religion, even though they're both Muslim. The Saudis Saudis are Sunni. The Iranians are Shia. So they that that's a major major difference. That's probably larger than difference between Jews and Christians. I mean, at least as large, but they're getting along. And it's sort of a reluctant friendship, whatever, like I said. But if they're probably both going to be part of the new security architecture. That security architecture is going to carry with it gold-backed currency. United gold-backed currency. I mean, China sort of already started. I mean, if you you know, this is not well known, but if you're living in China right now, you can go to the Shanghai Gold Exchange and exchange what however many yuan you want for gold. It's a fairly completely backed currency. It's backed totally by gold. And to some extent, you know, if you're buying in yuan, I mean, if you're buying if you if you're trading goods for yuan, there's a part of China where you can go to and theoretically exchange the yuans you may receive for gold. I mean, it it it gets complicated after that because, you know, that's not enough to define a whole new uh broad-based system. But, once you have Saudi Arabia in there on your side, I mean, you you've knocked out the major foundational element that was present with the creation of the uh of the uh petrodollar, which has been the basis of our reserve currency. So, you're seeing when you ask how long, I don't know how long, but I'm we're getting close right now. And I did this is something that I'm speculating on. I think it's China and Russia, ironically, are best friends right now. We just don't know it. I mean, uh in in the sense that that they could really destroy this country monetarily. I believe that they could. Uh you know, their economies, etc. I mean, China's trade tentacles reach out much, much further than we do. They run these massive surpluses, which have been the source of a lot of their funds. I think they'd be delighted not to run surpluses. We should be grateful that they do not want the yuan to ever be the center, the reserve currency. Now, there may be a period of transition in which the yuan does serve as a reserve currency. All we have to do is agree with them. Not agree with them. No, no, no, no. They don't want people agreeing with them. They want people to maintain their own sovereignty. That's really, really critical to China, and it's critical to Russia, too, but especially China. And they're you know, after all, when it comes to monetary and trade, they're the number one country in the world. They they they don't you know, they don't they they'll tolerate almost any kind of sovereignty. They, you know, want to do they want people to have their own culture, their own beliefs. They're very tolerant of that. I mean, in China today, though you're told that they're they were so horrible to Muslims, there's no evidence of that. None. I mean, you know, Muslim countries went up there uh um Um, UN ambassador, you know, went up there to see how horrible things were. She was asked to sign a an agreement saying that China was treat mistreating all their Muslims. She How can I sign such an agreement? I'm sort of conflating a couple of different things, but I'm not misrepresenting anything. She said, "In effect, how can I sign an agreement when I saw more mosques per capita than exist in Muslim countries?" I mean, China's dealing with 50 ethnicities. I mean, the major ethnicities are the Han. Their first First way they wanted to solve the Muslim problem in China, just give you an example, was the intermarrying the Han with the Muslim. But that with the Muslim that didn't work. So, you know, they did everything they could and the only Muslims they were ever battling were the radical Muslims who wanted to destroy China and everyone else. But I mean, I'm just saying China gets a lot of bad publicity. Again, I repeat cuz I don't want anyone to think that's listening to this conversation that I'm really pro-China. No, I'm not. And I've never been pro-Russia until, you know, I'm not pro-Russia. Yeah, but I really understand where they're coming from and I really understand they want a world that's good for everybody, including the United States. They don't want to destroy us. If they did, we'd probably already be feeling it. And it's getting to the point where we might not be giving them a choice and that's what scares the daylights out of me because if we don't make it through this period, we [sighs and gasps] I don't know, maybe another century before we have a chance to come back, maybe never. Who knows? But I mean, they hold all the cards, Charlotte, and I don't want to see that happening. Now, the one thing coming once again back to I know you don't care probably a lot about a lot of this history and stuff or your audience and I apologize for that, but I'm trying to illustrate again how important gold should be for your portfolio. If you're not represented there, you're faced with really being poverty. I don't care who you are. Uh if you are represented there, then you have some salvation. I've been a money manager much less not not nearly as long as I've been an investment advisor, but I've never been in a position I sort of ended here if you want um in which I've not been after my my goal is not been to beat the market or beat other in you know, beat other money managers. I've always you know, been in position where I want to beat the other guy. Doesn't matter where I'm up or down, I just want to beat the other guy. I'm no longer in that position. I don't care someone beats me. It doesn't bother me now. Well, it does bother me. I mean, I'm I want to be honest about it. Of course it bothers me, but I don't think it's the way to be in selecting your portfolio and picking your portfolio. My only goal is to protect my clients. And if they can make money doing it and I believe I can, but could be dead wrong. I think that I want to make sure if there is some sort of collapse, I've kept them in the game. And I think that for me on a personal level, on a level everyday level is probably the most significant thing about what's changed in this country. And I think that you know, any investor, anyone that's interested in stocks, make sure you have investments that are going to protect your wealth. The best way historically and I didn't even get into the spiritual significance of gold, but it really this the reason gold has been around. It's not because it's a brand. It's because it has special significance. If you go to churches or other places, you'll find gold adornments. Uh you know, 5,000 years ago amulets were were put into uh gold uh in into burial uh caskets that were sent down rivers to protect the uh to make sure to to escort the dead into uh he- into a world in which they'll you know be able to thrive, be happy, whatever. Gold has a spiritual significance. It also has an obvious monetary significance. Got to have a bridge between the culture that you have and the monetary because you know you live in a real world and real world means material world. And you don't want materiality to go out of hand. Gold is the only meaningful bridge you can build. So all I'm saying is that there's a reason gold has served this role. It's not going to give up this role. I mean it it's going to remain what it has been for 5,000 or four, I don't know how many thousands of years. Uh, but it's probably more than 5,000 to be honest with you. But right now, coming back to you know again portfolios, gold's got to be a centerpiece. Maybe cash and monopolies. I'm just telling you what we're doing and and you know in case things really go well or you know go well meaning we take the right path, commodities are going to go through the roof. You're going to have a crazy wide-eyed commodity boom. Whether it's copper, you're not going to go wrong no matter what commodity you own including oil. But that's assuming we take the right path. If we take the wrong path, it's only going to be gold. But even you know you still have to bet it bet on turbulence and you know there are other investments that'll serve you well if it's just turbulent uh, before you know we come out on the other side and so that's it. >> [laughter] >> I think I've talked way too much, but I'm sorry about that. But anyway, No, it's fascinating to hear about the cultural angle and I think we did need all the context to eventually come all the way back around to gold. And I like that you tied it into what can investors actually do cuz I imagine if people hear all of this they're going to be wondering how do I approach this. So it sounds like we what we need to have is as you mentioned gold as the cornerstone. I'm going to ask one one small follow-up question. We'll see how this goes. Do you include silver in there as well? You've got this very high price okay. do. silver too. The The ironic problem with silver is that it's also an industrial metal. And that makes it more volatile and it makes it more subject to industry. But yes, I mean this country, you know, the best years in this country I think we're probably a bimetallic standard. I haven't done that research to know that they were better than just a pure gold standard. But yes, silver of course should be in there. And I mean any theoretically anything that you can touch that will have value in case things really go crazy. Like even copper can be in there, you know, small whatever. It's not as essential, but yes, for in answer to your question, yes. And also companies that have monopolies that extend the entire globe. You know what's ironic here is that there are so when 20 years ago there must have been a few dozen companies that had a triple A rating. I only find two right now and I would recommend them. I don't want to recommend them. Johnson & Johnson and Microsoft. Now Microsoft I'm a little bit sure less sure of because of the AI stuff, but both those countries companies have two things in common. They're both triple A rated and at the same time they both have higher credit ratings than the US government. So I probably rather own Johnson & Johnson certainly than US government debt. If you're if if credit rating is basically your concern the the debt that comes out of Johnson & Johnson and or Microsoft. I don't know how much debt Microsoft has, maybe they have none. But whatever, I mean it's a safer bet than US government debt according to Moody's and S&P 500 according to American companies. That's how bad things have come. But those kinds of companies, I'm not saying it's only gold, but gold would be, you know, way up there. I think cash US dollars, yes, they're going to go down in value and I'm sure you've had a lot of guests that talked about, you know, how you measure the dollar in terms of uh uh you know, gold and that's the key thing. And if you're going to look at the dollar today and one thing I would look one thing I would suggest for people who follow these things closely, I think the DXY index is not particularly relevant. It's sort of like which is the worst of the countries that are doing really poorly. If you want to look at If you want to follow the dollar in terms of another currency or we're following in terms of the yuan as a clue to what's really happening. Of course, you're following it in terms of gold. Once you know the gold price, you know how the dollar is performing. And I know that goes without saying. But the yuan is very close. It's very It's going to be, you know, it's going to serve you better than following the DXY. That's just a, you know, a sidebar. It's not really important. But you you summed it up very well. I mean, you summed up what I said. Amazing. I couldn't sum it up that succinctly. Thank you very much. But really appreciate it. Of course. Of course. I try my best. And I think I think we can wrap it up there. I think this was a great conversation and would love to have you back to go over how these things end up progressing. Well, we'll see how it goes. But yes, for now, thank you so much. And And thank you so much for really, you know, summing up a very long and probably hard to follow conversation in a couple of, you know, really succinct sentences. I mean this sincerely. I mean, congrat- I mean, I I could not have done it myself. I really appreciate it. Thank you, Charlotte. Of course. Well, thank you so much. And again, looking forward to having you back. But for now, once again, I'm Charlotte McLeod of course, with investingnews.com. And this is Dr. Stephen Leeb. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts. So, leave us a comment below. >> Mhm.