Luke Gromen: Why the CIA Doesn’t Want You Owning Gold, & Is Fort Knox Lying About Our Gold Reserve?

So it's amazing to me. to watch countries. spending a bunch of countries. spending so much. effort, money. and gold at a. moment where technology is. dominating the conversation. And crypto an are the future, and. gold is the oldest. and most primitive media. medium of exchange. I mean, cultures have been using. gold around the world, every culture. around the world for at least 6000. years as a store of.

value. And they still are. Why? Because it's work. It's. It is when things get. spicy gold has a 6000.

year track record and I think store. of value. Your point store value is. really critical, right? Because it currency has. medium exchange unit of account. store of value. Those are the three functions of. money. And we have moved on. from gold as a unit. of account. We don't our bank. accounts aren't denominated in gold. We moved on from gold. I'm not walking around with gold. coins in my. Pocket, unfortunately. But it is always retain that store. of value component.

of money. and in critically at the at. the highest levels of finance, the. global central banks who are. running our currency and monetary. system, as much. as we have moved away from. gold in those other functions, as. much as we've moved to fiat. currency, as much as technology. developed, as much as our economies. have developed, they have always. continued to hold their gold. And in the last ten, 11. years, I. think one of the big origin. stories of macroeconomics,

as they have developed over. the past ten years, has been the fact that global. central banks onset. in 2014 stopped. growing their holdings of Treasury. bonds. So global central banks have. not bought a Treasury bond on net. In fact, they've sold about $300. billion worth. US. Treasury US Treasury since 2014. In their well, they're called FX. reserves, which is basically. their piggy bank. And they bought about $600 billion. worth of gold.

That doesn't I mean, okay, that. doesn't make any sense at all. in an era of biotech and. nanotechnology and AI and, you know, everything is abstract and digital. Everything is technology. Why would gold, which doesn't. have like, great inherent. like value? And what is gold actually worth? Like what? We can eat it. You can eat your house with it. Why? Why this why this stranglehold. on human beings from gold. And why did it emerge in these? Separate cultures, as we know from.

the archeological record on separate. continents, had no contact with each. other. At roughly the same time, they all decided that gold. was the most valuable thing. Like, what is that? There is a. mystery at the heart of gold now. Yeah, I think it ultimately evolved. to that because it is. because it isn't used for anything. Right. So there's something called. stock to flow in commodities. If you analyze commodities and. stock, the flow is just what. is the stock of inventory. of that commodity. and what is the flow? How much of it do you use a year.

And the lower the stock to flow. ratio, the more it is a commodity. and the higher stock to flow ratio, the more it is like money. And so for. example, oil has a stock. to flow ratio. When oil inventories. globally a really high. stock the flow of oil might be. 1.2. When they're low, they might be 1.1. If they get below 1.1, you're going. to know because you're going to see. prices skyrocketing at the pump. The very low stock of whole wheat, copper, similar types of low stock. to close Sobers is.

I don't know, as of a few years ago, around 30 to 1. Right. Because silver is both a. monetary metal and. an industrial metal. Gold is 60 to 1. or more. And so I think ultimately, I don't know that these ancient. cultures were thinking about gold. in terms of stock to flow, but I think ultimately what they. were looking at is. stock to flow means it. keeps well, right. You can put gold. in. It's the most money like. commodity there is.

And that's why I think independently. around the world, all these. all these cultures, excuse me, arrived at gold as. the savings. store of value par excellence. You know, it doesn't. Show interest to suit your weight. So I said, well, how weird that. gold would be, you know, the. most enduring store of value because. you can't eat it or heat your house. with it, and you're saying that's. why it's the most intense. It's precisely why. I mean, it's. It's easily divisible, right? So in the old, even in old.

days, using old technology thousands. of years ago, you could you could. divide into very small amounts. It doesn't rust. And so there were obviously in the. old days in particular, very. practical applications. You know, you store a bunch of your. wealth in wheat and it gets mold. and it's all gone. Right? You stay oil, you have a spill. It's all gone. The gold, it's much more portable. It's divisible, malleable. It doesn't rust. So there's, I think. some practical things, but I think. ultimately it's the most. money like thing with those.

physical aspects. And has always been for all. recorded history. I do think. there's something at the core there. that I don't understand, but but it's just demonstrable. It is true, it's true. So and it endures even. in this hyper technical age. I would say one more thing about. gold that I find fascinating is that. it is the most private of all. currencies. So the great lie of my lifetime. is that crypto was going to be. private and was going to free us. from, you know, surveillance and.

control. And that is just not proven. true. And no one's really tried hard. to make it true, which tells you a. lot about how much people lie. and what the real agenda is, which. is control. But gold can actually be. moved around privately. and stored privately. I there's not a digital record of. gold. And that leads to my question, which. is like, what the. hell is going on with gold flows. around the world, gold physically. moving from one country to another. Why isn't that transparent? This is public money and this. is the reserves of different.

countries. It's owned by the public. of those countries, and there's no. sort of transparent record of it. Am I missing something? The transparency varies. Right. So. In the end it isn't very. transparent. And it's very. Much a country move. It's part of a gold reserve to. another country without telling its. population. And the funny thing is, is. Like, is that outrageous reminders. missing something? Well, they, they they would say, well, we tell you, you just have to. pay very close attention. Right. So you can look in the UK.

trade statistics, they show you how. much gold is leaving London. They don't want to advertise that. But there are times. They tell you where it's going and. why. The Swiss data are very, very. good. They show you the Swiss data. Right. Well Swiss data are always. good. This was a very precise. So you can you have an idea. But again when I say it's. transparent not those data. As long as what it is what they. classify as non-monetary gold. according to IMF. shipping classifications, we'll call. them however they, you know, industrial.

classification non-monetary gold. gets recorded. Monetary gold to your point. doesn't have to be declared as it. moves is is is. how I understand the rules. And so when you see the monetary. gold movements, there is still very. much an element of. secrecy and non. transparency. And yes, some of that is the. public's money and it's not being. disclosed why it's moving. in and how much exactly. you it's, it's almost like.

it's almost like. the, the like being. in the movie jaws right. Where early on, you know, there's. shark out there and. you see the impact of the shark. And every now and then you'll get a. glimpse of it. But you don't really fully. see the shark very often. Whenever you have secrecy, you. have deception and fraud, period. Generally, that's. The purpose of it. I would argue, privacy. being different from secrecy, but. you know something that should be.

disclosed. This not is not disclosed. for a reason. And so when you have huge. movements in my over, can you tell. me if I'm overstating this? But there are now big movements. of goal between countries right now. Correct? Correct. And we're not exactly sure why. Correct. And. we don't really know the volume as. you just said. And so someone's getting. rich and someone's getting poor. But none of this is public. Like I smell scam. afoot. You know, it's one of these things. where.

gold. has long been the competitor. to the dollar system. And once you start getting. into competitors. to government currencies, which. are, as you noted, the the the method, a very effective method of control, right. This is why we use dollar. sanctions, why we've been using. dollar sanctions. That quickly. gets into the reason.

for, I think, at least some of the. reason for the secrecy around gold. as it relates to governments, which. is number. one. is or excuse me, as Greenspan. said, that, you know, they're the. only currency that's better than the. dollar is gold. And it's been that way for a long. time. And that's that's. He said that in 2013 or 2014. And so that. number one is there's a perception. right, where if you're trying to be. a manager of the dollar, as the US government is,

that is a perception you are trying. to manage. And so I think there's. some element of that. I think there are other. countries that have been, for example, the Chinese. have been buying lots of gold. They have long said, you know, you. can find it in in the. Wikileaks documents from 2009. that China's by buying gold. to kill two birds with one stone as. number one, it will build up and. help internationalize the renminbi. over time. And also the Americans. and the Europeans, they specifically. said, have historically tried to. prevent gold from rising too much.

in order to increase. the prestige and the attractiveness. of their own currencies. And so we're buying gold for that. reason. So. You get into this? Gold is very much a geopolitical. matter because when you think of it. in those terms, if you are China. and you're buying lots and lots of. gold, as China. has done at times over the last 15. years after the great financial. crisis, let's be clear that can be construed. in certain circles in Washington and. in Brussels and in London as a tax.

on those nations currencies. And so it it's it. it is in the interest of nations. that might want to diversify. from the dollar, from the euro reserves, which in which if. I. Want to check and make sure you're. talking. Primarily denominated in. it, it behooves those nations. to have a level of secrecy around it. as well. So it's that element of. Trying to manage currency systems.

from two opposite sides of the coin. Okay. So let me let me that this. is directly to your point. This is the Google result. If you type in which countries. own the most gold, who's got the. biggest gold reserves in the United. States? Have you seen this list? I have. I'm reading this to you because it's. just so clearly bullshit. It's so clearly not true. So this is in order the countries. with the largest gold reserves, U.S. one. Okay. Number two Germany. Number three Italy. Italy.

Okay. It's got an economy like the. size of Ohio. France. Russia. China. Switzerland. Japan. India. Netherlands. You're telling me that. China is one, two, three, 4 or 5 is number six, and India is number nine? Okay. That's a lie. That's the flat out lie. Like that is not the actual ranking. That's not there. And there. Is. No. You're telling me France has bigger. gold reserves than China.

And this is why I when I say it's a. political and a geopolitical metal. Right. Because those are those are. the official monetary reserves. Chinese are bringing in thousand. plus tons of gold every year. The Indians are stockpiling gold for. thousands of. I mean, to their great. credit, I'm not criticizing. Oh, yeah? Yeah. The chart of golden. Indian rupees looks like Apple in. dollars. It's up until the right. Forever. So I guess the only point I'm making. again and again and again, it's. at the heart of this incredibly. important phenomenon. The movement of gold around the.

world is a lie. Like, there's, like, we don't. actually know what this is. There's not great clarity. No, there's. Not great clarity. Right? There's massive lying. And again, whenever there's massive. lying, there's going to be massive. fraud. And there's a reason for it. Right? There's always a real reason. why that is why, you. know, for that, for that. So Fort Knox is one of the places, the physical places in the United. States where we're told our gold is. stored, half maybe supposedly. of our reserves or something. Yeah. It's I want to say, yeah, there's some there, there's some in. Denver. There's some of this point. right. Around Fort Knox is the famous one.

And, you know, members of Congress, almost all of them with the last. name Paul have been calling for. an audit of Fort Knox for, I mean, just decades. And if you really press, it doesn't look like Fort Knox has. been actually audited. for close to hundred years, since. the 30s. I think that's right. Well, stand open to correction. They said it was audited in the 70s, but it wasn't actually audited. It was like some of it was audited. Why is it so hard with. the federal workforce, you know,

including contractors like 10. million people, to just. like, go through the contents of the. vaults and weigh them and make sure. that they're not gold plated. titanium and make sure they're. all there and then figure out who. owns them, like, why is that so. hard? We're told, oh, that's too. complicated, really. Now, I don't think it's anything to. do. To your point, it's not. complicated at all. I think it comes down to policy. and that gold is a geopolitical. metal. And if you go back to. again declassified documents. and of of conversations and memos.

around a lot in the 70s. And you'll see some familiar names. there. Volker. Kissinger. Yeah. Weintraub. Some of those types of names. The U.S. in the 60s was losing. a lot of gold, right? The the system was essentially. dollar is pegged to gold, $35. an ounce. Everything else is tied to the. dollar. And it started becoming clear as. we got deeper and deeper in Vietnam. and guns and Butter with LBJ, that.

we didn't have the gold to cover our. debt off shore at $35. And what were countries trying to. redeem that? Well. Yeah, we went from, I want to say, after World War Two, we had 18,000. tons of gold, official gold. And by the time we got to call. it 71, we were down to the 8100. we have today. And that's where. No way. So we we shipped out about 10,000. tons of gold to satisfy these. deficits. Ax system, physical gold. Oh, absolutely. Like here. My dollars. Send me my bars. If I recall the story correctly, the. French sent with the French, sent. warships into New York.

Pick it up. Oh, yeah. No way. Oh, yeah. Yeah. And we were sending, you know, if I recall correctly, we. were sending an airplane a. month to Riyadh with bullion, right, to settle gold deficits, as. we had agreed to it. By the way, in Saudi, when the richest countries per. capita in the world. It's not even in the top ten for. gold holders. Saudi owns so much gold. That's just not on the official. list. Sorry. I'm just again, I'm making. the same point again, which is the. the numbers are lies. Right. So but and I think the reason.

why the numbers are lies is when you. or when why there's not great. clarity right now, why they managed. the optics. And the way they're. clearly managing the optics. is. You can go back once we close the. gold window in 71, Nixon said, hey, no more gold. You know, the dollar's now free. floating. And you can. read from these declassified. documents that the U.S. very much had an interest in. getting gold out of the system we. didn't want, because there were. there was a one.

of the declassified documents in. question. There is. there was a proposal that was a foot. in 73, 74. by the Europeans to revalue their. gold to. settle oil deficits. Right. Because Europe doesn't have a. whole lot of oil. They were. importing much oil. Oil gone up a. bunch in price. So they had a bunch. of oil deficits. They were looking to basically. revalue gold and then settle. deficits with OPEC. in gold. And the Americans in.

question. Excuse me. Kissinger. Weintraub. Volcker. So this is in our interest. This is not we want we want the. Saudis not getting gold. We want them getting Treasury bonds. And so write the famous. Bill Simon deal. And so I think I think so I. Can't believe they took that deal. Yeah, I think it might. have been a gold or the LED type of. deal at that point in time. You know, we'll give you not only, you know, you take the gold, you. take the lead and the gold is will. provide you protection, will provide. you weapons, will let you access to.

our markets. And if you don't do it, we're going to regime change you. And oh, by the way, we'll give you. maybe a sweetener on your you know, I think it's very possible they were. getting higher than market interest. rates on the Treasury bonds for. decades as part of that deal. Who knows. But what do you mean, who knows? It's a it's that's not something. that's ever been disclosed, but. Well, how can we we. It's an we. Give country specific interest rates. on. I think I have heard credible. rumblings from people that were. around then that part of that.

deal may have been the not not just. countries, just Saudi may have. gotten a sweeter deal than other. countries. How could but how can that not be. disclosed? So you get a $10,000 wrench at the. Department of Defense. Wrenches don't cost ten grand. I think it's right. It's the. you move stuff around. This is why they're always. encouraging us to get mad at each. other about race and the tranny. stuff, you know what I mean? It's like, because the big things. are just not even not even when I, you know. In fairness, I, I. think, you know, it's always.

about power and control, right? It's about control of the system. This is the dollar system. Clearly 71 was a default in the. gold. And so we were trying to sort. of get around this. And so I think sort of the original. sin or the original. origin story of the refusal of. wanting to even talk about or, you know, what is an audit, you. know, what is what is is, you know, as it relates to audits. of Fort Knox is. once we close that gold window, I. think that, you know, generation of. leadership, 70s, 80s and.

didn't want to talk about gold, begin going into audit. It brings gold back up and. brings it back up that, hey, we. defaulted on our gold closets. like twice in the past eight years. By the way, FDR defaulted on gold. clauses to that, to the domestic. American. So I think the original. origin story was about. this reticence. about is the gold. There hasn't been audited. What is an audit? Is it been fully. audit as have been fully assayed? All of the things you would think. are pretty easy to do, I think go.

back to that policy. of. petrodollar. We don't want gold back in the. system. The Europeans do. We don't. This is the deal. We threw our weight around in the. 70s, and sending people into Fort. Knox to show them we have the gold. doesn't help us remove gold. from the system. And and ultimately, why do we want to remove gold from. the system control? And it's easier to run deficits. without tears. Sure. Because gold is a is an. anchor. In reality, Joe Biden. may be gone, but that doesn't mean. you got your privacy back.

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And it was, but of course. Right. You're not making good on. your promise. It's our fault. It's at fault. And they don't talk about gold. The US government does want to talk. about gold ever since then, which is my whole lifetime, people. who are interested in gold have been. derided as, quote, gold bugs. And it just it just occurred to me. it's it's one of those phrases so. devastatingly effective. You're like, you're a nutcase. You're buggy. You're crazy. Bughouse. Yes. Mental patient. And it reminds me so much of the. term conspiracy theorist.

So CIA, possibly with the help of. foreign government, murders the. president of United States. And it's super obvious that that. happened in 1963. And nobody believes the Warren. Commission. And it's like it doesn't. make any sense, actually. And so they start calling anyone who. raises questions about it a. conspiracy theorist. And that was a phrase that was. devised by the Intel community to. discredit people who asked. uncomfortable questions. And you sort of have to wonder if. the phrase gold bugs just occurred. to me now is in a species. of that, right?

It's entirely a gold bug. Yeah, it's entirely fine. Even to this day, people who. and I know some of them who are. interested in gold and sort of. follow, you know, its. global movements and buy gold, physical gold, non abstract. gold. They're embarrassed of. it. Oh yeah I. Mean I, I mean there's like a social. sanction to even talking about gold. Oh, it's it's fascinating. I've been working in investment. research for 30 years and. at high levels at major institutions. around the US, around the world, as you know, doing investment.

research for major money managers. And it's fascinating. what you say, because there is. always not amongst all of them, but amongst a lot. of investment professionals. They watch gold, they're there, they. watch it. Oh, you'd more than you, more than you'd be would think more. than the average American would think. They own it. But there is that stigma where any. sort of, you know, you know, hey, you see gold, you know, it's it's it is there.

is there is a stigma is too strong. a word, but there's a. Kind of a little, perhaps with one. of the richest people in the world, the other very famous investor. I'm sure you know him. Wonderful guy. And somebody said to me, you know, he buys gold. And I said to him off camera, do. buy gold. And he's like, yeah, money. You know, among other things. Sure. I said, do you buy a lot of. gold? Yeah, I like gold. But he clearly didn't want to. It's even even to someone at, you know, open minded, brilliant. person. It's not something that people. talk about in public.

It's almost like admitting you have. some kind of weird fetish or. something. And I dressed up in a chicken. costume when I want to talk about. it. You know what I mean? Well, it's. And it's fascinating, right? Because it is. I think it goes back to that. original point of why those. movements are shrouded in secrecy, which is. gold on some level, is a hedge. or an insurance policy against. the existing system, as it has. been allowed for the last 50. years. And so once. you get to a certain level.

of wealth, power, influence. within that system, you clearly understand. the Achilles heels and the risks. and how that system will at some. point mathematically certainty. It could be next week. It could be 50 years from. now. Will at some point need to. be reset in some fashion. You understand that and. it is not in your interest. socially, financially, etc.

to advocate or advertise. that you are hedging or insuring. against the collapse of that system. No. Right. So it's the restructuring of that. system. So I mean, you know, you make a. great point, and I shouldn't thank. you for saying that because it's. it's not just yet another Intel. community inspired conspiracy, though it is that obviously. But it's also it is in some sense. like almost unpatriotic. to say, you know, I'm all. about gold and land or whatever. about physical assets, because what. you're saying is, I don't I don't. believe in the system of the U.S.

government. Which is which is horribly ironic. because if you go back to 1948, Warren Buffett, famous investor, poop, who's gold every chance he. has, and his. father, Congressman Howard Buffett. from the state of Nebraska wrote a. missive. You can still find it. online saying gold convertibility. is essential to human freedom, in. which on the first page he says, look, the first thing autocrats. and evil empires. And we just got done fighting, right. This is 1948. First thing they did when they got.

to power was. remove the convertibility. of their currency to gold. So it's ironic. It's always ironic. Me people say, well, you want gold, you're. anti-American. I said, there's. nothing more American. No, ten gold. People say, well, what. is gold do? It's useless. I said, no, no gold. The very use of gold. is that as long. as you can convert your currency. into gold, you are still a free. person. When you can no longer do. that, your vote. really doesn't matter because they.

control the currency, right? It's the famous statement give me. control of a nation's currency. I care about who makes its laws. The Warren Buffett thing, man, that's like, I. mean it, right? He's famously Mocking. gold buyers, right? Of course, I would say Warren. Buffett. There's so much to admire. there and be impressed by I am and. all that. But he is a poker player, among many other things. He's a very powerful political. player. And in particularly for the. banks, I think about who they go to. 1989 with are six with Solomon, who is a big player in the 98 long.

term capital bank rescues. Buffett. Yeah, and Buffett. Has lots of great investors out. there. Warren Buffett is, you know, near the top of that list, of. course, I guess. And he's a legendary investor, of. course. Of course. However, massive propaganda. around Warren Buffett, of all. the investors in the world who's. received more slavishly. sort of ask kissing Lee. positive press then. Warren Buffett, like there's never. been a bad word you're not allowed. to see. It's like the Oprah.

It's the yeah, it's the all sharks. out, which are. Not a lot. But no one has been. promoted more aggressively by the. American media than Warren Buffett. I think that's fair. And it's you know, it's interesting. because it's. But he's a hard asset guy. He's absolutely. Literally bought, bought chimes. jewelry store. Oh, yeah. He sells gold. He bought railroads. Right? Exactly. Railroads and. Omaha steaks. And like, this is not. This is a guy whose whole philosophy. is about, you know, buying. physical things. Yeah. Oh, absolutely. The inherent. Value. And he's he's right. You can go back and get gold. Oh, yeah. You he's not against.

gold. He's you can you can see. you know, this goes back to that. conflict of once you become big. enough within the system, it's not. in your interest to, to, to, to to highlight some of. these things. I mean he one of his. Berkshire letters from late. 60s, early 70s highlights that. basically Berkshire made it in the. late 70s. Berkshire stock priced in gold had. gone nowhere for 10 or 15 years. And I mean that flat out shows you. Right. So all of these productive. business and all these things he. says about these productive. businesses over time. 100% true. And there are instances.

in history where. gold outperforms, where gold. preserves purchasing power. Currencies are being debased. It's interesting. He. He frequently talks about. Well, I started investing in. I think it was when I was ten years. old. I bought my first stock, which. would have been 1941 or 42, which. just happened to be basically the. all time generational low of U.S. stocks because we won the Battle of. Midway. And at that point, it was. sort of obvious we're going to win a. world or two, and so on, so forth. But I always say to clients. and friends like, yes, and look back.

15 years, the prior. 15 years from 1918. to 1939, 1915 to 1931. were catastrophic for financial. assets of all of all types in the. West. Gold, like all you. wanted to own, was gold. And so it's interesting, I think. part of, you know, the point being, part of I think your view of the. world depends upon when you're born. and what happens as you're growing. up. It's sort of that cycle theory. of, of, of, you know, the fourth turning. I think it affects your views on.

investments too. Why wouldn't it? Of course in it. affects your views on the future in. general? Sure. And as you just said, the. the degree to which you're vested in. the system currently in place. affects your outlook and affects. very much what you're willing to say. in public. And the bigger you are within that, the more pressure can be. applied to you, right? Or if you don't get deal. flow on Sunday night, if you. are pumping goals, if you're Warren. Buffett or you.

have, you know, you don't get the. approval of. whatever thing you need approved. or from the Congress money. It's just luck. I'm not opining on. It's just how the game is played. And so obviously I'm not a. financial expert, that's for sure. But I have been in the media my. whole life, and I know what a fluff. job looks like. And I know, no, I do. I know a lot about it and I watch. Warren Buffett. I've never been. against Warren Buffett. I'm not. against him now. But I mean, the amount of promotion. that guy received from the system.

told you everything about. his orientation and his the. incentives in place for him. And like they were promoting Warren. Buffett and Warren Buffett's. worldview, like very aggressively. And so, you know, I didn't believe. half of it. And you should neither. That's my view. Yeah. I think you always want to. think critically about this stuff. Good. Thanks. Yeah, I think so. Absolutely. So give us a sense of where. gold is flowing in the world right. now. To extent we know. To the extent we can what we can. see. I would describe it simply as. from the UK and the.

EU, to a lesser extent into. the US, it's still flowing. into China. It flows into China all. the time. But they're the big. delta. The big change in. since the Trump election essentially. has been a significant ramp. up in the flows of gold out of the. UK into the US. So that would seem good for the US. Yeah. Historically, when you. see where gold is flowing, that's. your economic winner, that's who's.

winning. And we're the countries. that are losing gold. Those are the countries that are. losing. That goes back several. hundred years. That's that's sort of how it works, which makes sense. Several thousand years. Yeah. Exactly. Yeah. Yeah. So do you. And I should have asked this. earlier. Do you anticipate any time. in the future where gold is no. longer regarded as a measure of. economic strength and health? Does it ever get eclipsed by. crypto? No, I don't think so. I don't, you know, at some. point Bitcoin could compete with it.

in my opinion. Possibly. But I think that's far down the. road. And failing. that. It would take something. unforeseeable right. We discover we discover. an asteroid that has, you know, gazillions of dollars of gold on it. And we have developed the ability to. go up there and bring it back. cheaply in a way that competes with. what. About okay, so gold is hovering. at about 3000. A little under 3000 an ounce is. clearly going to make it to 3000, I. would guess. Is there a threshold at which like.

it becomes because there's a lot of. gold actually in the Earth's crust a. lot, and it's just too expensive to. extract it. But is there a threshold. at which, like, gold production just. ramps up dramatically? It becomes worth it to like, extract. a lot more gold, and it affects. the price because of supply and. demand. Yes it is. Ultimately its supply will be. a function of price. And then it's a. there's a lot of in the ocean, right. In theory, if you sort of. dry out the oceans and filter it, filter it. Yeah. You know, you know. you could and that's just a question. of price. And the question of price.

is ultimately a question of. energy efficiency. Right. If you wanted to. you know, that's that's how much. energy do you need to expend to, to dig and get that. out of the crust where it is and. refine it down so that it makes. sense? And right now it's going to cost you. way more in energy in order to. get that. And so they're not you're. not going to do that. And so if. price goes up enough, then. it makes sense for you to expend. that amount of energy to do that. And I think that's a really. important point. It ties back to our stock to flow.

and why gold is valuable. When you think of it in those terms. of is is where you need to expend. a lot of energy to get gold, and the price of gold determines how. much energy you're willing to expend. to get it. It's just a compressed and portable. storage of energy. And so that raises. a deeper and more fundamental. question, which is, do. the great powers have a built in. incentive to keep energy prices. higher than they would naturally. be in a truly free market?

Depends which great power right? The Chinese all else. want to build a consumer society. They would like to have energy. prices cheaper. America. We like cheap oil, but not as cheap as we used to like. it because now we have shale. So we want, you know, we want. Goldilocks oil. So, you know, above $90. starts to be a problem for our. consumer. Below $70 starts to be a. problem for our shale industry. And and so if you look. at the price of West Texas crude. intermediate WTI crude oil. over the last 2 or 3 years now.

oil's been 70 to 90. And I think that's so like we need. Goldilocks oil the Europeans. same kind of thing. They need a. cheaper oil. The Russians. they would probably like more. expensive oil. The Saudis more you. know Saudi has $90 fiscal. breakeven, right. You know anything. anything below 90. They're borrowing money and things. get spicy over there if they. don't maintain their promises to. their people. So but okay, so you're talking about. hydrocarbons. Correct. But you know, there's been for all the talk.

of the Green New Deal. Now we're getting far afield. But I think it's really fundamental. to the world where all the talk, the. Green New Deal and all these new. forms of energy and, you know, renewables and green technology, it's really been pretty shockingly. lame. Really, events like windmills and. solar panels, both of which are just. like kind of absurd. There are like a lot of. advanced technologies, particularly. in biotech, that are moving like. crazy fast AI crazy. crazy fast. Energy generation technologies are. not moving crazy fast at all.

Like no one's like, hey, actually, there's a brand new nuclear. breakthrough. Like when I'm building. any nuclear like you. Conceivably, if you got up, hydrocarbons could. I don't know why. Isn't there a greater effort to. figure out cheaper. ways to produce energy? I think a lot of it is, on some. level, political. Right. I think they're. Right. I see maybe. If maybe the Green New Deal. I mean obviously it's anti. civilization. It's anti-human, it's really. dark and it's built on a lie.

But it's also built on geo. political realities. Right. Like I think I think so yeah I mean. it's like there are things we could. do that would ramp up energy. production fast. and that is nuclear like we. should have. We should be building. nuclear plants a bunch. every year as far as the eye can. see. But if you really got, you know, nuclear. or any form of energy down in. in the hydrocarbon equivalents to. like $10 a barrel oil. equivalent.

You'd like blow up. the like. the world financial system kind of. I think it depends. There's a lot of other puts and. takes. Yeah. You know. and some of that gets into, you know, how you would have to. you'd probably have to restructure. some debt. Some of that is gold. Gold. Right. Because the is at $10 a. barrel. But again that then gets into gold. right where we go. Okay. Well as partly some grand deal.

Now this is far afield but. some sort of grand deal. We are going to revalue. oil and gold reserves. Right. Or we're going to revalue. gold so that Saudi like Saudi. doesn't care how they get paid if. if oil goes to ten but their oil. gold goes up to. 10,000, they still have all the. money they get compensated for. Pass rate. But if energy, as you. just said, if energy prices dropped, you know far below what we can. currently imagine, then the price of. gold would also drop because the. price of extraction of gold would.

drop. So you have a maybe. Well, yes. Yeah. Fair, fair if you can apply. that energy. Yeah. Yeah sure. Right. But I mean you'd have two. competing forces. Your cost of. energy to mine gold would go down. But at the same time that. if you drop energy, there's two. groups of, you know, nations in the. Well, there's the US is a reserve. currency, and then there are U.S. creditors that import energy and. U.S. creditors and export energy. Right. And they own a bunch of bonds. and they own a bunch of financial. assets. And so if oil drops. really low, all of your oil. exporting creditors.

are going to sell their dollar. assets because they're going. to need to because, right, Saudi. owes money at $90 a barrel. And if they don't pay that money for. social programs etc.. Place the place has political. problems. Yes. And so they're going to be selling. Treasury bonds. They're going to be. selling stocks. And that creates. And the U.S. economy is so leveraged. that that it does not going to take. a lot of selling to create an. economic crisis from it. So you'd have to basically, you would get into a situation where.

in some way, shape or form, the fed. would be printing money again as a. result of oil prices getting too. low, which is, in theory a good. thing, which then could actually be. net good for gold. Right? So there's. there's, there's puts and takes. depending on basically. You're describing a world that's so. complex and interconnected. where, you know, global finance, the cost of energy. And then, you know, the geostrategic. stuff, the, you know, military. rivalries. It's all of a piece. So it's like.

pretty scary to mess with any single. factor in that in a dramatic way. That's kind of it's disruptive. Or is potentially the super disrupt. Yeah. It's financially and and. I think that's ultimately the the. power. And the encouraging thing. about gold, gold is always thought. about as a oh you're buying gold. You're a dumber world's going to. end. And no. part of the problem of what I just. described. Change in and of itself isn't a. problem, but rapid change when you. have high levels of debt. It's the debt that creates the. problem. And so if you.

when you look around and you see the. central banks buying all this goal. and having all these countries. buying this gold, if you revalue gold enough. to basically re collateralized. or buy Dow, effectively buy down. your debt so that you have low debt. levels, then you can. make dramatic, more dramatic. changes to the economic system. and its connections without. running the risk. of blowing up the financial system. Right. Because whether gold, you. know, once. you take you introduce.

something deflationary into a debt. based system, the debt starts to go. boom. Bigger people don't and don't. generate the income to pay the. interest. Rate. In any more equity based system. or in a go. I hate to say gold based because. it's I'm not talking about a gold. debt currency, but if. your debt to GDP is low. because you've revalued your gold. much higher and restructured. your balance sheet. A deflationary recession. or a restructuring of the economy. that is deflationary, or a good.

energy introduction, or. AI productivity enhancement that. is deflationary, that. can be weathered and benefited. from without blowing up the debt. based system. So gold is, paradoxically, a way. to form the. runway for a major change, be it geopolitically or energy. or AI something deflation. Foam the runway. So there's been a lot of talk about. changes to the US tax code, especially changes that affect. cryptocurrency investing.

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their gold reserves depleted or. weaker. Seems obvious. Over time. Yeah, you're running. right. You're you're saving more. than you're spending essentially. And the United States is acquiring. gold Cause why? That's the $64,000 question. in markets right now. It is the official. nominal reason being given in. markets and in the media is. that Trump administration. may or may not put tariffs. across any number of countries, as.

we've discussed, including possibly. gold hubs like the UK. And if you put a 25%. tariff on the U.K. across all items just to pick a. number, you run. the risk. What the mechanical impact. of that would be to increase the. price of gold, 25%. And the problem is, is that tariffs. Against American imports of British. goods. Yes, exactly. But other than like shortbread, is there a British export? Not really. No. Right.

They are they're they're twinned. destinations. No. So they don't make anything right. Not on that. No, no. Not on that. And so. This is this. This is what the story is, is this. there's been this massive flow of. gold out of the UK to the US. because tariffs might happen, which would impact the price of gold. in a manner such that it. would be very disruptive to. what are called basically spreads. rates that gold traders in. New York or London, bullion banks.

that that traffic in gold bullion. they may have a position. on in gold futures in New York. and a physical gold position in. London. And if a tariff were to change. the price relationship between. those two, it could create. significant losses for them. And so the response is basically. bring the gold here to mitigate. that risk. That is the official. story. There is absolutely. a strong element of truth to that.

With that said, the. longer this goes on and the. gold flows continue, the less That. story holds up as. the sole reason. When we go back in time to 2020. and during Covid, we saw a very. similar spike. in gold futures relative to spot. prices in London. And it was driving a massive flow. of gold out of London here because. of Covid, because supply. chains broke down with the shutdowns. of flights and what have you, a lot.

of gold is shipped on in. in a transatlantic commercial. airliners and the cargo holds. And so those those flow stopped it. It drove a mismatch. And what the Comex, the gold futures exchange. in the US did. ultimately, one of the things to. sort of settle those markets. down was to, well, I'll say change the rules for the. layman. They introduced a gold. futures contract that. made the good delivery. denomination, I think 400oz.

in London, 100oz in New York. They either or. Right. So that okay. Well the gold it's here's fine. So we don't need to move it. So they took a step to change the. rules to settle the market down. Another famous example we were. talking before, talking about before. we got on air was. the Hunt Brothers run on silver. They tried to corner the silver. market in the 80s. This was Comex and they changed the. rules on the hunt brothers. Once it became apparent that the. hunt brothers were successfully. cornering physical silver, they. changed the rules. They said they set the market to.

sell only you could. You couldn't buy gold or silver. futures, and you could only sell. And the market promptly tanked. at any point in time. Trump, Beasant, Rubio, other American. officials could come out and say and. clarify, we're not going. to put tariffs on gold. There will never be tariffs on gold. There's a lot of countries in the. world where there's no that they. have at that. There's no fat on gold. So this is the long my point. being that the longer this goes. on without a rule.

change or a political pronouncement. about tariffs, political. clarification about tariffs. The more likely it. becomes, in my opinion. speculatively, that the tariffs. are on some level as. reason for the gold flows. cover, that the gold being brought. here for some other reason. So just saying, what. Could I mean. And that always is the. likely explanation. that there's something else. that accounts for at least part of. a phenomenon that you're watching. So what could that other reason.

be? I think there's two things. There's a tactical reason. There's a strategic reason. The tactical reason is. if you Google. gold revaluation, you'll find a number of stories in. any mainstream financial media. Over the last two or 3 or 4 weeks, there has been increasing. speculation in the aftermath of. Trump's election, and in particular. in the aftermath of Scott Besson. being approved as Treasury. secretary, that.

there is a gimmicky but. completely legal and mandated. in the rules way by which. the United States could. revalue its gold, which it currently holds on its. books, at $42 per ounce. up to the current market price, and in so doing, or. even higher. And in so doing, it creates a. bank deposit, basically. at the Treasury's bank. account at the fed that.

the Trump administration could then. use to. buy down debt. to not have to borrow as much. It's effectively money printing. through gold. It's creating money. supply, using gold. through basically an accounting. gimmick that is already on the. But that gold. Would never be sold to. Anyone, never be sold anyone. It's just literally an exchange of. paper. So the United States would not lose. its gold reserve? No, there's no. chance of that. Not under that transaction. No. Okay. As I as he's been able.

To get to a point. where the nation has so much debt. backed by nothing other. than its navy, which may. become irrelevant thanks to drones. So you could see this all moving. very fast. And all of a sudden we. know the world. Trillions of. dollars. But where's the collateral? Where policymakers are. forced to sell off physical. assets that belong to the country. Oil. Water is the. world's largest freshwater reserves. and the Great Lakes and gold,

I don't think is that. I don't think it's happening, I. don't think. I think ultimately there'll be no. need to do that because you've got. the assets and you've got a printing. press. Right. So ultimately it's. really just currencies. Of course, as long as you're the. world's reserve currency. And even if we're I mean, I think we. will be, but they'll always have the. ability to print dollars. It's just a question of but what. If nobody wants them. To do it? It would just depreciate. faster. Right? You know, but I mean, like at. some point, like if I, you know, don't take a. loan against my house, or if I have.

a mortgage on my house, and also. if I don't pay it, you know, the. holder of that mortgage gets my. house right. There's collateral. So, like, where's the collateral. in the United States other than, like, I don't know, people like. us, I don't, you know, what is the. call? It's the collateral is. It's a complicated question. It's I mean. On some level, it's the threat of. violence. I think some of what we're. seeing in terms of these, you know, discussions around will we leave. NATO or will we not? Like, this is a this is a discussion. that goes back to the 70s. There was something called the.

blessing letter. Carl Blessing was a. governor of the Bundesbank, the. German booster Bundesbank and. the French were asking for their. gold back. Others around the world. were asking for their gold back in. the in the 60s and 70s. I guess the blessing letter might. have been late 60s. The Germans started hinting about. asking about their gold back, and. the Americans sent a letter that. essentially said, you. know, if you ask for your gold. back, we will have to reconsider. Start stationing U.S. troops in West Germany to protect. you from the USSR.

So you're going to keep taking. dollars, or else we're going to. bring our boys home, and you can. deal with the Soviets yourself. And the Germans never ask for the. gold back. And so. what Collateralize is, is. a complicated multi. body, right. It's it is. goodwill protection access. to markets. So the threat of violence military. protection. There's gold is way. way down there. I don't think the gold is thought of. as collateral, but it. could be.

as a reserve asset. If we wanted to change the system, we would need to have it. If we wanted to change from. the system. We've. we've been in for the last 50 years. And that kind of gets to the. strategic side of it. What if we have no choice? What if, I mean, because we're not. the only decision makers in this. process. We're not. Hey, Drew. Lang. I think you would see some sort. of grand deal be. discussed ahead of that. And I think that's, you know, some. of what we're seeing in real time.

when we talk about us and the. Russians and the Saudis and the. Chinese all getting together in. Saudi and talking about, you know, probably not how the Yankees are. going to do this year. And probably not just the end of the. war in Ukraine. No, I will absolutely. I don't think it's only about the. war in Ukraine. Of course. Not. You know, those are think about. what you got there. Because the war in Ukraine is not. about Ukraine and never has been. You know, you've got the four big, you know, Saudi, U.S., China. or Russia or the that's 40% of. global oil production. And U.S. China is. what, probably 60% of global.

oil imports global global oil. So you can. oil's going to have a role there. Now the strategic side. of what I. think we're seeing, the gold. movement is. ultimately what if. you if you take a step back and. try to see the forest for the trees. of what the Trump administration. is trying to do. The Ukraine war showed us we got.

out, produced by the Russians badly. We couldn't produce shells. We couldn't produce Stinger. missiles. We couldn't. We were reliant. on essentially China to supply. our industrial base, to supply our. defense base. We've been borrowing. money from China to build weapons to. face down China using Chinese. components. It's not a good strategy when your. biggest geopolitical adversary. is China. And so. starting with Covid, could it. Be that we were using Chinese. components to arm.

the Ukrainians in a war against. Russia, which is allied with China? I think absolutely could be the. case. And I think that we know what. the Chinese were supplying Russians. with dual use goods as well, and. the. Chinese on both sides. China's on both sides. And critically, think about it, think about the implications of. this. Right. So we. America, when we were the. dominant power. We were the ones supplying. the weapons to these types of. conflicts. Now, we didn't really have the.

ability to to credibly. say Ukraine, Taiwan and Israel. We can supply all of you at once. Empirically, we demonstrated. over the last three years it was. impossible. We were moving patriot. systems out of Israel to talk to. Ukraine and then, you know, having to having to backtrack in. certain areas in, in different conflicts as a result. of that, when. paired with what happened in Covid, which was, hey, we need more. PPE and supplies and what have you,

and China said, just as soon. as we get, you know, ours, we were. depending on China and Covid and. we it was made crystal clear. to Washington that. the defense industrial base has been. too hollowed out by. this currency system, whereby. we export dollars and. and we export our factories and our. workers, and China. sends us stuff and we send them. dollars and they send us. goods, and. I'm sorry, they send us goods, we.

send them dollars. And then they. reinvest those dollars in our. financial markets. And that's fine. That has been how the world has. worked for 50 years, and it's been. great for Wall Street. It's been. great for Washington. It's been. great for China. It's not been great. for the the American middle working. class whose factories got off shore. to China. And Washington. was fine with that until all of a. sudden they realized. this process has gone so far. We cannot credibly fight. a war without Chinese factories. And the Defense Department is saying. and they began saying it ten years. ago. No mas. We're done here. This is we need to start reshoring.

as a matter of national security. And the the origin. problem. is the structure of this dollar. system. And so we. need to get out of the business of. supplying China the dollars. to buy up the world we need. And that means we need to change the. currency system that's been in place. for 50 years. Well, when. you say these types of things, the. instant response, the correct. response is, well, okay. If the U.S. isn't going to run deficits, run. up debt to supply the dollars to. the world, who will?

No one else will. The Chinese won't, and no one else. can. And that is correct. And the answer is, is then you're. going to have to settle deficits. in something else that is nobody. else's debt, nobody else's. liability. And that is gold. And I think that's where this is. going, which is and I think it's. part of the reason why the U.S. is actually buying gold is to try. to turbocharge. this change to the system. When you hear President Trump. say, we want to go back to tariffs. and cut income taxes, when you hear.

Marco Rubio in his confirmation. hearing, say, within. ten years, we are going to be. dependent on China for everything. If we do not take aggressive actions. to change and start to. restore, change this currency system. and restore. When you have Senator Vance say. what he said in 2023. to Powell about. the dollar increasingly being a. resource curse, about which Vance is. very familiar, having grown up in. West Virginia and southern Ohio and. seeing the deindustrialization, the chapter in verse, this.

administration understands this. problem. What. what the current vice president, J.D. Vance, said to the fed. chairman. So in 2023, he said. that the dollar. shows the hallmarks of a resource. curse, which is. it's it's often called Dutch. disease. I might refer to as our. what do we do? Which is effectively, if you're Saudi Arabia and you. discover that you are the biggest, lowest cost producer of oil, you. produce a lot of oil and the rest of.

your economy shrivels up and does. nothing. You know, it withers away. and it ultimately becomes a. strategic handicap. or a strategic risk. And you get corruption. Exactly. And Vance's. point was that the dollar's reserve. status. We are the Saudi Arabia. of money. That's how the system has. worked for 50 years. We produce the world's reserve. currency. We're the Saudi Arabia of money. And what has followed is. the hollowing out of. industries other than those. most closely tied to.

the money printer to the dollar. Washington, Wall Street. And his point. is, it is becoming this resource. curse of of being the Saudi Arabia. of money is increasingly. not good for the American middle. class, the American working class, the US defense establishment. He specifically cited our inability. to to produce shells for Ukraine. In his question to Powell in 2023. And you can find this online. You can Google it. I think it was. April or March of 2023.

And so it showed a fundamental. understanding of this connection. between the structure. of the dollar system over the last. 50 years and the situation. in which we find ourselves, where. our defense industrial base is so. hollowed out and our debt. level so high, we cannot credibly fight a. war against our major adversaries. without them supplying us. And our debt is so high. that they can weaponize. their debt, our debt against us. And so ultimately, I think.

the strategic reason why we're. starting to see gold reenter. the conversation, why central banks. have been buying gold for 10 to 12. years, why the U.S. is is gold. is we're likely moving to a. system advocated. for by the policies of. the United States, if not outright. saying, hey, we want gold to be to. to we want to we want gold to be a. neutral reserve asset. But we can see the policies and they. are functionally this they're. functionally indistinguishable from.

saying we want gold to be the. neutral reserve asset. I think what we're going to do is. move toward a system where. the foreign capital flows. Basically, we bring factories back, we put tariffs on, We. lower income taxes. U.S. consumer spending rises. The dollar. we start to see foreigners. send goods here. Also pay us tariffs start. to reinvest in our factories instead. of just buying our treasury bonds. and our financial assets.

Employment goes up, building goes up, growth goes up. Ultimately, though, if they're not recycling their. dollars into, you know, they can only put so much. in factories. They're not putting them in treasury. bonds anymore. They haven't for some. time. What are they going to put it. in? If they have a surplus left over. from dealing with us, where they can. put their surplus dollars, etc.? I think the answer is gold. And I think that's I think the. flows of gold the longer we. go.

where the tariff story, you know, it's just tariffs and it. just keeps coming and it just keeps. coming, which I'm hearing it is. still to this point continuing to. keep coming. Gold flowing in the. more likely, in my opinion, when. married with the pronouncements from. Trump, Rubio, Vance, Stephen, Mayor and the Council of Economic. Advisers Bezzant. The more likely it is. that these flows of gold into. the US are effectively. front running what will likely be a. higher price of gold, driven. there by the recycling of.

global trade more into. gold and less into. US financial assets than has been. the case over the last 50 years. It's just an incredible story. If what you're saying is right, it's. incredible because. really it's not it's a it's. a it's a move toward the. fundamentals, toward the past. It's actually moving backward. What you're saying is the future is. like building more factories and. buying more gold. Really? I thought, I. thought we were moving to a far more. abstract. I mean, I'm thrilled by.

it, let me just say. But it's the opposite of what I. think many of us anticipate, which. is a world that is increasingly. abstract. And you're describing a world that. is increasingly concrete, I think, or economy and economy. And I think I think there will still. be growth in services. and the abstractions in these. things. The technology. This doesn't mean technology stops. progressing. And when I say. factories, I would use. the broadest possible definition of. factory. Right. So we're making. Things. We're making.

Robotic. Factories. They're making things. Exactly. And that I think. is where this. is going. And again, critically, I think the reason it's going there, and I think the reason these. policymakers again, Trump, Besson, Rubio, Vance, like chapter and verse. is it has become clear. that the status quo dollar system. has become an acute national. security threat to the United States. on two fronts. We can't make weapons, which we keep.

hearing. We can't make them fast. enough to credibly defend. our allies. and and and. project power and. our debt has gotten so high. that that too has become a national. security threat. And this sort of checks both. boxes of, of in terms. of this systemic change. And it it makes. America great again. So the people that built this. country built it because they wanted. freedom. One word freedom. They wanted freedom from oppressors.

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And there's an entire class. of people, some of the richest. people in our society, some of whom. I know you know, too, who've gotten, you know, rich beyond the dreams. of Croesus by really doing nothing. and adding nothing just as parasites. on the financial system. He probably would be more generous. than I am in describing what they. do. But but they're they're useless. people who've looted the country. and but they're really powerful. They're the biggest donors. And so they're going to stand by and. just let their. world collapse. Well, let's think so.

I mean, I know, you know, it's one. of these things where I. think, you know, what's Charlie. Munger say? You show me an. incentive, I'll show you an outcome. Right. It was one of Charlie. Munger's famous quotes. And so I don't I don't see them as I. don't see them as as parasites. or whatever. I think I see them as. rational people responding to what. they are. I just say, I don't think you can. stand back and say like, you know, I don't know. I don't want to know finance, financing. I don't want to be too. mean, but like, it's it's harder for. the layman, me to understand. sort of the added value is that the.

term that they use of some. of these quote industries. It all seems fake. It all seems. sort of the project short term. thinking. It seems very mercenary. It seems disconnected from the. national interest, it seems. greedy, among other things, and. and basically disgusting. And it hasn't made the country. stronger. It's made it, in fact, weaker. It's just it's made the. country you just described, it's. like totally overwhelmed by debt. and can even produce artillery. shells. Like it's like when think about it. Right. So like like the system. we set up when you're.

the Saudi Arabia of money, as. we've been since 71. You're going to have dollar Dutch. disease. Yeah. This is the resource. curse. Fans talk about 23. And so you're going to have two. sectors grow to the detriment. of all other sectors. The federal government. Yep yep. And finance insurance real estate. right. Fire industry finance. Now both of those. industries are absolutely bet. And I'm not calling them parasites. but they are parasitic industries. They make money by taking.

a small cut of everything that comes. in. Yeah. And if you just think about. this intuitively, biologically, in the natural world, if you have. a small parasite on you, you have a. small whatever gut parasite, it takes a little bit of every meal. you eat. Maybe you don't feel 100%, but you're fine. The parasite is great and you're. fine, right? At some point, the parasite gets. so big. If it's allowed to get so big that. it's taking too many. of your calories, You start. to wither and you die ultimately.

And that is where we're at. And unfortunately, that's the. symptoms of this are 100,000. people a year dying of drug. overdoses, the inability. to make shells, the. hollowing out of the defense. industrial base. And these are the things. that this fix it. I mean, it's it's you. know, I look at myself, I was. a fairly smart kid. I was going into architecture. I didn't like architecture. I could have done engineering. But I absolutely, 35 years ago looked at. and said, okay, well, I.

guess I'm really hard, right? And never go out to the bars. and graduate in five years. in engineering. Or I. could get really good grades, a. lot less effort, go out to the bars. 3 or 4 nights a week and graduate in. four years in business and in. finance. And I you know, I made a self. you know, I made a it's a tragedy of. the commons problem. Right? I did what is best for me. I and my family. Most of my friends made the same. choice. I'm not. You know, I hope. people respond to incentives, of.

course. And this but this, this. fundamentally changes the. incentives. And when you do this. neutral reserve asset. So to answer your question. There are a lot of people vested in. a lot of people's vested. Yes. Powerful. How are they going? I think what we have been watching. over the last five years, and I. think this part of the, the, you know, the Trump versus, you know, the. The no, no question. The, the the the animosity to him. Manifest in party politics. Oh yeah, I think absolutely. And I think there has been a. sort of the.

a progression of the US, you know, what was, you know, 1960. to 1980, what's good for GM is good. for America. And then from 1980. to 2020, what's good for. Goldman Sachs is good for America. And I think starting Trump. introduced some of these concepts 16. to 20 being Covid. and then. The war in Ukraine reinforced it. I think we're shifting to a what's. good for the U.S. defense industrial base and middle.

and working class is good for. America. And so there's. you know, this to your point, this. old what's good for Goldman Sachs. is good for America wing of the. world, the Robert Rubins and the, you know, the Larry Summers. And a lot of these guys you're. seeing lament against all the. tariffs and all the stuff they're. absolutely fighting. I don't know that it is terrible. for their interests if. because what you're talking about, the two most pronounced dynamics. are going to be the. real value of long term.

Treasury bonds, long term dollar. bonds fall relative. to industrial assets production. Exactly. Equities, etc. so these guys. may have less political power. But the reality is, is that's just. a market to market. Their worldview has been proven. wrong. We can't make shells. There are 100,000 people dying of. drug overdoses every year. You do have a hollowed out defense. industrial base. We do have too much. debt. Like those things are no. longer debatable. They're all empirically true. They're all empirically shown to be.

hurting the U.S. so they can't argue. on the merits. So they've got to. attack the people. trying to implement it. But in the end, I don't think. they can win this argument anymore. because events have proven them. wrong. The system is is going. to change because the US military. is not going to sit here and go, you know what, guys? You're right. Let's keep that system. and we'll just have China make. everything for us in five years. And then, you know, when you. want us to face down the Russians. over in, you know, Georgia or. in, you know, Lithuania,

you know, will ask the Chinese to. make weapons for it. Like, that's. not going to happen. So if that's. not going to happen, and if. we're not going to default on our. debt, then the. only outcome is. they're going to have to restructure. the system in this way, which will. be good for these people's equity. based. Right. They'll be allowed. with bank loans. So it's just more It's not. catastrophic. It's just catastrophic to a. worldview. But the worldview, like to any. objective observer, is already dead. I mean, just to ask a kind of Google. question, because I can't control.

myself, but, you know, you'd. hate to see manufacturing come back. and then discover the only. manufacturing is like machines. that kill other people. Could you also. Because that's. Yeah, that's that's totally. A stunt for you. What? You can be proud of a country. whose only export is bombs. I mean, that's, you know, you can't be proud of that. That's totally immoral. So you need military, you need. weapons, but you also want to build. things that are beautiful and. uplifting and life enhancing also. Could you get that, too?

I think absolutely. I mean, ultimately. you think about everything we've. shifted to, you know, the this. system has required offshoring, infrastructure, manufacturing, etc. that stuff needs to be rebuilt, right? We're sort of when you look. at the flows of the last 50 years. and we are in our. infrastructure. Looks like we lost a. war. It's it's back. Home. It's been hollowed out, it's been. dilapidated. And so there's decades of.

open field running of. us. I mean, I'm an investor in a. private equity investment in. US electrical infrastructure. It's a boring business. They just make metal bending stuff. that goes into transformers. No, it's not boring at all. It's that it's. It's absolutely the future. And they've got so. much demand. They can't hire enough. people. They can't, you know. And so there's once you get. the right incentives in place in. them in terms of the monetary system. and the energy flows, the markets will start to work and. they'll start to feed on themselves.

and then we can get into things. Okay. Wow. We have enough. You know, we've got enough the. demand now we need to build the. power plants. Once we build the. power plants, then we can build more. high speed rail. We build more high speed rail. We need more masking stations. We we need we need more. electricians. We need more money, and it can feed on itself. It's not easy. There's a high degree of executional. risk, not least of which is. because we have dawdled so long, because this other wing of. Washington has been so successful. in fighting off what has long been. obvious to the military and others,

we got to run fast. We got to run. Not quite on a. Manhattan Project type of time. frame, but we like we don't have, you know, we need to be aggressive. in doing this. And I think part of. the reason why we've seen the Trump. administration be. so aggressive with some of their. moves so early on, I mean, it has. been fascinating how quickly. they've been doing things and moving. fast and breaking stuff. And some of the stuff is that. groups, we didn't need to do that. Let's try it. But I think that speed. reflects, in my opinion, my read of. that speed of action by the Trump.

administration is a. nod towards understanding that this. needs to get going fast. So big picture. It's just so impressive. You know, just from a management. perspective like that. They're thinking in these terms. And I think we know that they're. thinking in these terms. We they absolutely are. You can see it in their public. pronouncements. JD Vance specifically, maybe I'm. And tell me if you think I'm giving. him too much credit. But he seems. to have thought about this like. holistically, like in a big way.

that you describe that. exchange with Trump Powell. I mean, are you getting indications. that Vance has has a big. picture in mind? I think Vance understands. that at a level. as good as any politician. that I've seen in this country, in. my, in, in, in decades. And I think some of that is, you know, if if viewers haven't. watched Hillbilly Elegy or.

read the book Hillbilly Elegy, he understands that it's such an. intuitive level because he lived it. He was in Middletown, Ohio. He saw what happened in Middletown, Ohio. He saw what happened to his. family. He saw he saw the hollowing. out. I mean, so much so that Larry. Summers, one of the people that. trying to fight this was. publicly praising. Vance and Hillbilly Elegy. in 2017. You can find it on X saying, oh my. gosh, I had no idea this was. happening, said. So I think Vance is. Such a foolish man. Larry Summers. Damn. That's a whole different.

topic. No, but just like for it's I mean, I'm as. Smart as he is. It's. Yeah. He's smart is he is I mean air. quotes because I mean, we're. constantly a part of this propaganda. about how smart all these different. people are. Are so smart. Really? Are they so smart? How are they? How do they order. their own lives? For one thing. The smart like common sense. Doing like your kids respect to you. Like how smart are you actually. what's the you know, what's the your. output? What have you created that's. worth having like smart. people almost by definition, would. have sort of successes, right? What's his success? I don't really get it. Gathering,

you know, merit badges, whatever. I'm sorry. Anyway, so, yeah, the. Whole leadership classes like that, there's a there. Yeah. So smart. Really. Show me how. That's, you know. So Vance I think really gets. it. He lived it. He saw, like, more. than anyone in that seat. that we've seen in our lifetimes. I would argue saw. and is spoken about. has spoken about. the resource curse. And so, Vance, you know, the.

the dollar, Dutch disease, what. happened in manufacturing, what. happened to families, what happened. to the social fabric of. the middle and working class across. America? And he wrote about it. You know, the movie is about him and. and and. In 2023, he. specifically linked. reserve currency status of the. dollar, specifically said it. might not be a good thing for the. US. Specifically said we are. getting wildly out produced by the. Russians in Ukraine, and we can't. credibly maintain our defense. obligations because we don't have. the industrial base to do so because.

of the dollar system and the. resource curse, and kind. of left it open for Powell to kind. of say, hey, you know, you got two. minutes to answer, you know, what do. you think? And and. I think he gets it. so fundamentally from. we talked earlier about, you know, where you grow up leads. and influences your views on. investing in the world, etc., the. time frame in which you grow up and. where you grow. Think about the time frame in which. he grew up and where he grew up. and and he's brilliant.

And his ability to just synthesize. data and understand. not just the direct linkages, but the second and third derivative. implications and the policies. that could be taken, the levers that. could be pulled to move. those second and third derivatives. in a way that is beneficial. to fix, to really fix. the issue and not just, you know, print money and try to pay for. Totally. Right. It's he's he's. very encouraging in my opinion.

Kind of shocking. I think what I mean, and, you know, I curse him. He's the vice. president, not the president. So but on the other hand, I think. some people in the last month have. looked at some of the things J.D. Vance has said and written, and been sort of stunned by how deep. and well expressed they are. Think about how they. Used to that. Know and you know, last week is a. perfect example. And again, I. it goes to that whole the existing. system that's empirically been. proven to not be. what's right for us. All you heard about last weekend was. how he had insulted.

free speech in the UK. and in the EU, and. I thought that what they were. saying, oh, I don't think. Oh my goodness, they were they. every. The. Monkeys old thing flower about. oh the liberal free speech. and blah blah. And I think they missed that. They buried the lead. They missed. The points. I mean they're just. liars. He said Germany, you were the only country. that did not follow. And I quote the stupid. Washington consensus of. the 70s, 80s and 90s.

that deindustrialization wrecked all. of us. And now you're choosing. to industrialize like that. Just passage alone tells you the. Biden administration blew up their. effing natural gas pipeline. I mean, it did industrialize the. country for them, and they're such. self-hating kooks that they said not. a word about it. They've been. trained for 80 years to hate. themselves, and the net result is. the total destruction of the heart. of Europe, which is Germany. Sorry. It is. It's been it's it was shocking to. me. How was lack of reaction to. world. It's not how is this good for the. United States to destroy Europe?

It makes no sense. It's vandalism on a scale that most. people don't understand. And I. Anyway, God bless J.D. Vance for saying that he's. absolutely right. And he's. And yeah, and that ties back into. this whole point of these. policymakers. Or when was the last time you, the. vice president of the United States, call the 70s, 80s, 90s. holy Grail? This is the dollar system, stupid, the stupid. Washington consensus. I don't ever remember hearing that. And if it was a one off, okay,

whatever. But we've heard it. The interactions with Powell, Trump. saying, I want to make us like, great. Like we were 1870, 1913, which is tariffs, low income tax, no income tax. Rubio saying, listen guys, we. can't make stuff in ten years. We're going to be dependent on China. for everything we need. Bezzant saying in his. confirmation hearing Wall Street's. had a great run. Main Street has really suffered its. main streets time. We need to pursue policies to. bolster Main Street. Wall Street will still be okay.

They'll still do fine. Maybe not as well, but it's main. streets time. We need a main street. These policymakers are telling us. And it all, in my opinion, goes. back to the structure of the system, which is as long as we store. global surpluses in our financial. markets and in particular. treasuries, that system is going. to continue. You move to a neutral. reserve asset like gold, because now when they store money in. gold, price of gold goes up. Currencies can move around. We can. It's a natural rebalancing. mechanism.

The dollar will weaken against other. against the yuan. Right. What have we been saying? We want. the Chinese a week. And you want. week in the. You want. Excuse me? Strengthen. You want strengthen. You want strengthen. You want strengthen. You want. If gold goes up in dollars and. doesn't go up as much in yuan, buy virtual flows into, you know, dollar flows into gold and. fewer yuan flows into into. gold. The dollar's going to go down versus. the yuan, which is the very thing. we've been trying to get the Chinese. to do to stop dumping so much. cheap product here. Goal to take care of it. It.

it just does what it's the whole. just. Fighting the new administration. No. I hope you will. The I see only criticism. I would have your critique, which I. think is kind of brilliant. and very well explained, is that I think you may be. undervaluing or underestimating. the ferocity of the response. I just I. Don't disagree. From DC, I'm from DC and I, I just think the state, the. stakeholders as we call them, the. people who are benefiting from the. system in place can be really. ferocious in protecting that.

I agree, and one of the things I, I don't have as much familiarity. with that. And so I would admit. naivete towards the degree of that. to a certain extent. One thing I would say to me. Like a million people in Ukraine for. like no reason. So clearly they don't care. about the human cost. And it's the from a layman's. perspective. I thought a lot of the Trump. appointments were interesting in and. of themselves. But as you know, there's appointments and there's. confirmations. And so I was. withholding judgment to see.

And I think there is some. to me, again, as a, as a Washington. layman encouraging. Yeah. That he picked Vance number. one after what Vance at most was. Chuck most important thing I agree. So okay, Vance gets it on that. policy. But then when you see when. you see Tulsi. very unpopular in the Beltway okay, not only she get picked, she gets. confirmed RFK. Jr. I know not only gets picked. but gets confirmed like.

cash yesterday. Okay. Another so point. being that you are seeing, you know Hegseth unpopular. or confirmed. So there's this slate. of people that are non. sort of. deep state if we will. get picked and get. confirmed. And so to me you know I. would, I would defer to your joining. the press as a layman to Washington. The fact they got picked and then. that they got confirmed. is at least encouraging that.

that fight that I think is. presents executional risk. to this optimistic view. of where we could be in two, three, five, ten years. In my opinion, it's. those appointments and what have you. have on some level mitigated. or at least their victories, their. victories, huge victories. And you know, we're now 31. days in. I don't know when this is going to. air, but we're a month and a day. into the administration and. they won almost everything, said. Matt Gates. And.

You know, I think it's incredible. I've never seen anything like this. Nothing like this has happened in my. lifetime in Washington. On the other hand, it was really a. victory over the Republican Senate, which is a collection of some of the. worst people I've ever met, but. also some of the dumbest and. weakest. And so it's a it's. a great victory. And I love to see. them humiliated. And, you know, every day that. some of these people weep is a happy. day for me. On the other hand, like, they're not, you know, some of the. stakeholders in the current.

financial system are. smart and serious. And they, you know, they're not. people to play with at all. I think they're completely ruthless. I think they are, you know, willing. to resort to things. You it's hard. to even imagine. And I don't know, I just think. there's a fight ahead. I think it's I, I would defer to. your judgment on it, but I. intuitively makes perfect sense to. me. Yeah. One last question. Where does this leave the. the average person, the retail. investor or whatever we're calling. that person. Now on the question of. gold. Like, you know,

I mean, if governments love. gold. If gold plays a really. a central part of the global. financial system, which you've. described, I think in great detail. Is it wise for the average person to. take delivery on gold and great. in his yard? Yes, I think I think the average. investor should have probably 5 to. 10% of their net worth in gold. bullion coins. It's fascinating. Throughout, I've. been in the investment research. business for 30 years, and. one of the it's. offensive on some level, but it's. an old sore because it's true is.

once you start to see retail. investing, retail investors plowing. into something and mass. Right, runaway. And a lot of times the banks too by. the way the commercial banks. Yeah. Runaway. And you know we saw that with you. know com stuff in the late 90s. pet stocks. And then you remember. Well I remember them well. Right. And then it was you know sand. state real estate and subprime. mortgages and those kind of things. And in the last. 3 to 4 years,

the biggest marginal. buyer of long term U.S. Treasury bonds has been. that that U.S. retail, they've been investment. funds. Right. So the biggest buyers. of of of two, three, five, seven, ten, 20 and 30. year U.S. Treasury bonds, they've. been buying anywhere from 60 to. 70% of new issuance. for the last three to 4 or 5 years. And that's I'm not saying there's. any risk to Treasury bonds on an. annual basis. There isn't however. No, it's it's totally safe.

You're going to get every dime. you're promised. We can't guarantee you what that. those those, those dollars will buy. you in the real world. Those times will be worth it. That's why, you know, when you've. got this dichotomy where for 40. years, you know, from 1974. to 2014, global central banks were buying. Treasury bonds and they were selling. gold. Why would you ever buy a bond. from. From the same person who can. print the currency? I just don't understand that. I mean, if you believe the inflation.

numbers and you like. Look, there are. But I mean, it's it's kind of like a. rigged system, right? Like, the government is issuing the. debt, which is. held in a specific currency, but. that same government prints that. currency. Yeah. And that's why they're they're. so hyper focused on the fed managing. like. Oh I know it's, it's doesn't. make any sense. It's it's a rigged game. It is. My ignorance protects me from bad. investments because like if it. doesn't make sense I'm not at that I. invest, but like, you know what I. mean. No. And intuition is, is to. be trusted. That just like that just doesn't. Mean it doesn't make sense.

That that was ultimately why I first. got into an interesting because. What both of the key question is not. do you get paid back what they owe. you? The key question is what you. just said, which is what is the. value of what they pay you back? It's they get every dime back. But maybe those dimes are worth. anything. Well, unless they determine. What the dimes are worth. So it's a rigged deal. And it's. That's why I first got. involved and got. I never owned gold. before 2000, late 2000, early 2009 when they when. the U.S., you know, depths of the. great financial crisis came out and. they said, okay, now we're going to.

print $1 trillion and we're going to. buy Treasury bonds QE. And I remember thinking to myself, going, how. can an oil producer like Russia or. our factory base like China look at. that and say, so I'm going to. expend all this energy to pump this. oil and produce it and refine it and. ship it and send and, and pay for dollars, and then put. that those dollars into Treasury. bonds. And you're just going to click a. couple keys on a computer and buy. $1 trillion of treasure. Why would I sell my oil and.

store my surpluses in treasuries? That was what first. And sure enough, guess what happened. later in 2008, right? And into 2009 2010, Russia started buying gold. in their reserves. Of course. The Chinese same thing. How could you sell all this stuff to. the United States in Treasury? Yeah. And store it in. Treasury bonds. And then have the. Americans print it. And sure enough, Chinese gold. purchase started around. So for me, when you when you go. back to what does it mean for U.S. retail, it's the same. type of dynamic the United States.

government owes its baby boomers. right now. Its United States takes. $5 trillion a year in tax receipts. And right now we're paying baby. boomers in entitlements, $3.3. trillion of that. So about 70, almost 70% of receipts are going to. boomers. Has there ever been a generation. that deserves it less? So I'm I'm serious. Does there ever been a generation, as there ever been a more destructive. generation, a more self-involved. generation, a more annoying. generation? If I can, I just. I take a, you know, as a generation, I take it again. It's it's.

I try to put myself in their shoes. and it's, it's like if I was born. when they were born and their. parents came home from World War two. and basically had, you know, 16 kids. and like, let them go be free. range chickens. And they, they just sort. Of I love them. They were they were general. They were they were a product. of the environment and within their. time they lived about themselves. That's. I love huge families, I love. prosperity, I like peace and. freedom. I like all that stuff. What I don't like is. self-involvement and. those people never stop telling. their own story.

The stupid Vietnam War, every. cliche, but Woodstock and the dumb. civil rights movement, which. actually didn't really help anybody. and everything about it was just. like just it was just they. were drowning in Lake Me. And I was raised around people like. that, and they were my teachers and. I every single one of my teachers. went to Woodstock. Every single one. of my teachers at some sit in on. some lunch counter in Greensboro or. so. It's like they all were. participating in these same mass. market cliches, which they thought were like. a sign of, you know, unique.

individualism or something. But they were all like a herd. They were like dumb and. narcissistic and mediocre. Did you not notice that. I would agree with the narcissism. as a generation? Yeah, I would agree with that. Talking about Selma all the time. And I would be like, how is Selma? Like, have you been to Selma? Like it's an actual place with. actual people. Like, are they thriving? You know, all these people are like, you know, just lecturing you about. how great they were because they. were Selma and I was I was. one and then I wound up. And somebody's ever been to Selma.

I've never been to. So you should go to Selma. And. And then you can tell I'm like, shut. up, actually. Because, like, the sum total of your. efforts was, you know, like poverty, despair and chaos. Like you didn't actually achieve. anything. So be quiet. Sorry. You can not feel my. resentment. No, no, no. That's so. It's so weird. So think about that. Right? So if you're getting 3.3 trillion. in receipts for receipts, super nice. And I'm like such a lunatics. Excuse. Excuse me. The.

But how do you get them to pay more. for their own care. Well simple. You get them into treasury bonds and. then you tell them inflation's for. you give them a 4.4% on the Treasury. bond and you actually let inflation. run six. Right. Exactly. And that's why you need. to also as an investor, whether. you're a boomer, whether you're not. a boomer or younger, you need to own. some gold because over time. you'll lose on your bonds, but your gold will more than. compensate you for that inflation. You maintain your purchasing. power. And, you know, I think your stocks will.

and certainly, you know, it broadly. diversified. But that gold is. ultimately the release. valve that that is happening. that that it and and it needs to. happen. But basically we're not. gonna be able to have an election. where we're and say, hey, boomers, we need you to pay more for. your care. They know no politician will be in. office after trying to do that if. they raise taxes on boomers to do. that. So what do they do? Because they. can't do that. They take sort of the. politically on courageous way out, which is you inflate, you. have to inflate.

And that's what they're doing, what. they have been doing with they're. going to continue to keep doing, in. my opinion. And that's why I think you want. to own I think retail investors need. to own five, 510% of their of. their assets in gold bullion. So it's it. What? I didn't check the spot price this. morning, but 2950. ish ish. Where do you think it goes in the. next? I know you hate questions like. this, but like. I'm an I can't resist. Final question where, you know, where could gold gold go? So if.

something in our business I say, if. you give a price, never give a time. right now. I'm sorry, I'm sorry. It's okay, it's okay. No, I, I do it to. to be self-aware and parody myself. on some level, but not in all. seriousness. Over time. One of the metrics I have looked at. when we're talking about a. restructuring of a system, we talk. about the debt levels being a. problem. All these things. I have a metric that looks at the. market value of U.S. official gold, right? So let's let's pretend it's all. there. We had that discussion. already. Let's pretend it's all. there or it's being brought back. here, maybe as we speak, but it's.

all there. There's a metric that I follow that. is the U.S. official gold as. a percentage of. the foreign held. portion of the U.S. federal debt. Right. So it's what percentage it. market price. What percentage is the United States. official gold collateral izing. our foreign held debt? Because in the end, we can cram down. our own people. But we have to. We have to. Yeah, yeah, we maintain. foreign creditors. Yeah. So long term, the average. going back to I think 1960 or.

1950, that number was 40%. U.S. official gold at market price, collateralized our debt by on. average 40%. As recently as 1989. That number was 20%. in the in the dollar crisis. of 7980, that number was. 135%. That was a true gold bubble. In other words, if our foreign. creditors would have been so. inclined, we did it. They could have. demanded gold for treasuries, and we still would have had a third. of our gold leftover. Okay, where is. that number today? That number today, with gold having.

risen 40%. in the last year. Is it 9%? Yeah. It's bad. So gold in my opinion, minimum over time. probably has to rise at least two. and probably more like forex just to. get back to historical levels, assuming no further growth in. the debt and assuming no. ever again, and assuming no. no dollar crisis that leads it to go. over 40%. And so I it's still, paradoxically,

one of the cheapest assets on the. board when you look at it, relative. to the debt outstanding and the way. this probably needs to be resolved. from a debt perspective and an. economic restructuring perspective. China clearly thinks so. Yep. If people found what. you said compelling and. smart and really insightful, my view is where do they read. more? Share your insights. We have institutional. and mass market products. I appreciate it. Thank you. Thank you.