These things happen because gold and silver go up with inflation when we print too
much of our fiat currency. You know, the metals that are real money,
that are limited and supplied, they go up in value, and they
don't go perfectly sideways up year after year with inflation. Sometimes they go,
you know, down, go sideways, and then they have this big jump
in this big catchup move, and we're kind of at that perfect storm.
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Carrie Let's. Well, late gold prices have gone all over the place.
They've gone the power ball one might stay and hey, how can that be?
I thought that gold was a barbarous relic and silver was like, who
needs silver when you have copper? Right? But Michael Arey's of the Nicol
Vaney is here to explain to us exactly what's going on and why it took
so long. Michael, It's great to have you back on the show.
How are you well, I'm good, Carrie, thanks for having me on
again. It's great to be here and interesting how things have changed. You
know. I look back and when we talked before in February, we you
know, you said on the show or titled the show precious Metals are worth
the weight, and we kind of mentioned that in there, and honestly,
I was thinking, all right, what's wrong? That's so fun? Yeah,
but I was thinking, you know, yeah, we're we're we're soon
to have a breakout. Something good's gonna happen here. It's been a long
time, but you know, they're they're probably going to take off. I'm
thinking, well, i'll see what happens later this year with the election whatever,
and then you know, a month later in March, Gold starts to
take off and never looks back. Now recently, I mean, you just
had, you know, Craig Hemkeyon saying, oh, Silver's got to go
about thirty. A couple days later, it goes above thirty. Not even
trying to go back to thirty. It's just taken off. So it's interesting
to see these acceleration phases in the metals when for so long you get a
sideways move and just this up and down kind of going sideways, and you
kind of think, oh, yeah, metals are never going to do anything,
and then they take off. They're like, what's happening, what's going
on? This is weird? Who I experts surprised? Expert surprised. But
that's the thing, Carrie, this is normal. These things happen because gold
and silver go up with inflation when we print too much of our fiat currency.
You know, the metals that are real money, that are limited and
supplied, they go up in value, and they don't go perfectly sideways up
year after year with inflation. Sometimes they go you know down, go sideways,
and then they have this big jump in this big ketchup move and we're
kind of at that perfect storm now where you know, there's political dysfunction,
there's distrust, there's potential war overseas, and really the FED is just kind
of losing their mojo. You know, there's a lack of trust, a
lack of faith that they can save this, that we can have a soft
landing, and so you know, gold ahead of time is like, all
right, well we need to go up now. You know, we're the
safe haven asset. The market is buying that. But now it's ketchup mode.
Now it's like, okay, gold should be much higher compared to the
trillions and trillions of dollars we printed out of thin air. So now it
has it's ketchup move and it looks like it goes straight up, and it's
kind of fun to see that. But also it's not going to wait for
us. People are late to the party at this point. Hey, if
I look at the most good about housing but like just the most basic condo
that could have purchased in nineteen seventy seven, in fact, my mother did
for twenty one thousand. All right, Yeah, that that house is now
selling well north of one hundred. So you're just using a multiplier of five
back from when gold hit its peak in the eighties, and you know that's
four thousand bucks, right, forty two fifty pardon my mat. Yeah,
yeah, gold should go to four thousand to keep up with that condo,
and it'll naturally do that to catch up to where it should be. Yeah,
like you have to, you have to, you know your indicators.
There's always these classical indicators of gold, right, Like they used to say
one ounce by a fine man suit. Right, But like with all of
the automation and stuff that happened, and the other countries, lower cost countries
starting to produce higher quality garments, that measure lost its relevance to somewhat.
Yes, for twenty three hundred bucks, you can buy a good suit,
not like a like a hand seiler custom suit. Yeah, yeah, but
really it's changed a lot. So you got to look at other indicators.
One two of them that never fail are how many ounces of gold to buy
your average home? Right now we're at like one hundred and fifty thereabouts,
and the doubt of gold ratio right right, right, yep, those are
indicators we look at. I think I've seen, you know, at different
times it's around two hundred ounces of gold to buy an average single family home,
you know, and maybe maybe it'll yeah yeah, and now it'll be
a little bit less with gold prices going up, But that's the same I
mean one hundred years ago, same amount of gold buys a house. Now,
same amount of gold buys a house, you know, one hundred years
ago, if you had two thousand or five thousand dollars to buy a house.
We can't even buy a shed for that nowadays. So holding on to
your dear cash for one hundred years can't buy a house, can't even buy
shed. Holding onto that amount of gold for one hundred years, it still
buys a house. So that's that's why it's real money. And yeah,
it'll it'll go to where it's going to go. And then yeah, with
the dow gold ratio, we're going to look at that for when to when
to sell it when it's too high. You know, when we get it
down into the low single digits, well then gold has probably done more than
it's catchup move and maybe getting too high and let's rebalance, let's take some
of those gains. But you know, if the dowt of gold ratio is
over ten to one or twenty to one like it has been, it's gold
is too cheap and you just have to buy it. It's just stupid cheap.
Speaking of ratios gold to silver, what could you say about that?
That one's interesting? Now, it's no, I was down to seventy five
yesterday. What is my chart say seventy six right now? So yeah,
so it's coming down it's been in the nineties, you know, in the
last year or two, it's been in the eighties, the last couple of
months. Now it's seventy five, so it is coming down significantly and looking
at some of the price chart patterns and the structures it makes when you just
chart out the gold silver ratio, it's starting to you know, to break
out and it looks like it's really going to head down. Or you can
flip it the other way and do a percentage of silver to the price of
gold and it looks like it's breaking out and going up. But that one's
been a significant change. I mean at mclavaney we watched that. We look
for major turning points where we can switch from one metal to the other and
increase our ounces, get free ounces when one metal has outperformed another, and
we help our clients do that. So we absolutely watch the ratio and this
is I think going to be another one of those times where it comes down
quickly. It'll usually go up and stay up for a long long time where
silver is undervalued and now Carrie, it's probably going to drop quickly. Silver's
going to shoot up and then we can buy a bunch of extra free gold
with our silver versus what we could get today for it. I like it.
Yeah. Well, you know the problem with silver if you're having physical
is it just is so heavy and it takes up so much space. Yeah,
to physically secure it, which you should never do in your home,
but everyone does. It's costly, it's probablematical and better. You know,
you got a few ounce as of gold and they can easier hide it.
Yeah. Yeah, it's interesting. I mean, you know, everyone's different.
You know, clients that I talked to, there are so many people
that they want to have that in their hands. They want to know that
it's within arm's reach and I get that. I feel the same way,
so, you know, but silver can get pretty heavy and bulky. We
do have good storage depositories that we use that We've even gone out and audited
our client's metals and seeing everything that's there and confirmed everything. So there are
good storage options that we have. Taking delivery, I've had people that have
taken tens of thousands of ounces of silver. I mean it's like half a
ton of silver, but they just want it nearby and they want silver for
the performance. But there are options, there are ways to logistically make it
work well, so hey, so yeah, so silver. You know,
Eric Sprout, one of the gurus of our space, says, three hundred
dollars silver, is it possible? I think it's possible. I think mathematically
five hundred is possible. And that's not you know, the fringe conspiracy theory
number. Really just looking at the inflation adjusted high from nineteen eighty and the
ratio it got to then and the amount of money out there. Now,
you know, we can potentially see gold go ten to fifteen thousand dollars an
ounce. That would just be it's high in nineteen eighty when it got to
eight fifty briefly, and then looking at the money supply today. I mean
back then you could have picked that number, and there was a guy,
Jim Sinclair picked that number pretty close just looking at and I'd have to look
back. I can't remember if he looked at M one or M two for
the money supply and the amount of official reserves, which I don't know we
can trust that nowadays, but you can kind of, you know he did.
He came to that number, and if you do the same thing nowadays,
it's ten or fifteen thousand dollars an ounce. Well, if gold goes
to ten thousand, then what's silver? So nineteen eighty, you know what
the ratio was at the high God, I want to say it was like
fifteen to one or something very close, very very close. One seventeen to
one. Oh, I knew it was like ridiculously low bear to current numbers.
Yeah, and again that's a peak point. You know we're going to
hit something close to that when we have time to do a transaction. But
yeah, you're right on. So imagine that today. Let's say gold goes
to ten thousand dollars an ounce to just kind of catch up to where it
should be with the money supply, Then what silver silver? The ratio gets
down to twenty to one. Again, that's five hundred dollars silver, So
that's very possible. That may be a brief event, but I mean anything
from two hundred or five, whether it is possible silver gets to five hundred,
is that going to be in today's dollars or is it going to be
wildly depreciated future dollars? Where what I'm asking effectively, is the real purchasing
power of silver and gold going to increase or is it just going to stay
this same and we're just to have more dollars, you know. That's that's
a good question. There are probably a lot smarter people than me that could
pontificate on that. My feeling is from my experience, from what I've seen,
is that gold and silver are going to overshoot where they should be.
I think there will be a brief time where they go well passed and actually
give us a gain, an increase in purchasing power far above inflation, and
then come down to a new normal. So it may be the gold goes
to ten thousand, comes back down to four or five thousand, and that's
the new normal for the next generation. Like still higher than we're at now.
We'll just be you know, the next generation's normal, but for a
time, I imagine I bet that it will, and especially with silver,
if it goes to several hundred dollars an ounce, I think it will overshoot
and then come back down to reality and there will be a time where we
take advantage of this once in a generation event with the growth in metals.
And this really is carry like your listeners need to know this. This is
one of those once in a life time opportunities to grow your portfolio with the
big ketchup move in metals and have enough of an exposure to benefit from that.
I like that, the big ketchup move in metals. And hey,
so if you're able to take you know, what's seventy six ounces of silver
now for one ounce of gold, and then down the road, instead of
getting one ounce, you're getting five ounces almost, That's that's a big difference.
So even if the purchasing power isn't going up, the purchasing power in
time in terms of how much gold it will buy is going up correct well.
Well, and that's just that's one way we're going to capture our gains
a lot of way along the way. So for our clients at maclvane,
if for anyone working with me, we're going to be doing some of that
along the way, maybe not waiting to the very end. We might want
to be scaling out of our precious metals at that very end point, at
that very low ratio, but along the way we're going to hit points where
you know, people that have bought five years ago, well, on this
next move up in silver, they can get to a point where they can
double their ounces from where they started, and maybe we take some of our
silver and turn it into gold, and we're essentially capturing that gain in three
ounces of gold. We're locking it in. We have extra three ounces of
gold that we didn't have before, and we're locking in that gain. If
there's a correction, great, we can reset for a little bit. If
it keeps going, that's fine. We haven't tried to time the market perfectly.
We're just we're making our pile bigger along the way. Okay, So
the doubt to gold ratio, that's kind of when you know it's time to
get out of metals. If it gets down to two to one, three
to one, or one to one even then it's kind of flashing of major
buy for the stock market. Huh. Yeah, that would be the case
too. I think we'll get to a point of selling gold and buying stocks
potentially if interest rates are high enough, going back into the bonds again too,
if they're paying enough. But yeah, the Dow gold ratio will be
a big indicator. And I've got actually a list for my clients, and
I'm going to let them know. I've got a list of like ten indicators
of this is what we normally see at the end of a bowl market in
metals, how people are acting, what the news is saying, what's going
on in the world. There's a lot of things we'll know, but the
Dow gold ratio will be a good one. So what is it now?
Seventeen to one? Roughly? What can we say it is sixteen? Between
sixteen and seventeen to one. So yeah, the end of a bowl market,
the time when you want to reallocate some of your goal, the time
when you want to buy stocks. Maybe five to one or less. I
mean, I think it could go to two or three to one. So
huge multiplier, huge multiplier. And it's not like we'd even get rid of
all our gold either. I think everyone should always have amount of gold,
yeah, whether it's ten or twenty percent, whatever it is. But we
may be high in that percentage when gold is ten thousand dollars down. So
then let's say, all right, well let's go back to a foundational amount.
Oh, stocks are dirt cheap, Okay, let's buy a bunch of
those for pennies on the dollar compared to today. So there'll be a reallocation.
We'll take advantage of these moves, but we also need to be on
the trend right now, because this is this is where they're going. All
right, it's exciting times here. Just tell us, Michael, where we
find you connect with you. Give us your phone number, Yeah, the
phone number you again, call our text We can get in touch that way.
It's nine seven zero four five nine four six one one Again nine seven
zero four five nine four six one one. Call me directly, send me
a text. We'll connect. Any questions you have, I'm happy to help.
Right, and the link is in the shows to this interview on Financial
Survival Network dot com. If you've got a question for Michael byself, shoot
me an email kl at Carrie Lutz and hey, while you're at the site,
sign up for your free newsletter Michael. Always a pleasure, Thanks for
coming by. Thank you, Kerrie Privilege. I appreciate it. Thanks for
listening to Carrie Leutz's Financial Survival Network, your solution to today's trying times.
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