1 00:00:00,240 --> 00:00:04,240 Speaker 1: The people who are involved in complex hedges in the 2 00:00:04,280 --> 00:00:07,400 silver market. I think you're going to get massacred. I mean, 3 00:00:07,440 --> 00:00:11,400 I think they're in for some truly religious experiences. To 4 00:00:11,480 --> 00:00:15,240 the extent that a short position on silver that has 5 00:00:15,359 --> 00:00:17,480 been put in place by algorithms that are looking at 6 00:00:17,480 --> 00:00:21,199 silver markets over the last forty years, those leverage guys 7 00:00:21,359 --> 00:00:24,239 are really truly in for a world of hurt. 8 00:00:24,519 --> 00:00:28,440 Speaker 2: You're listening to Carrie Lutz's Financial Survival Network, where you 9 00:00:28,480 --> 00:00:32,399 get valuable information you just can't find anywhere else to 10 00:00:32,600 --> 00:00:36,600 thrive in today's trying times. You need the Financial Survival 11 00:00:36,640 --> 00:00:41,359 Network now more than ever. Go to Financial Survivalnetwork dot 12 00:00:41,399 --> 00:00:45,719 com and get your free newsletter and gift. Financial Survival 13 00:00:45,759 --> 00:00:48,679 Network now more than ever. 14 00:00:51,880 --> 00:00:55,439 Speaker 3: And welcome. You are listening to and watching the Financial 15 00:00:55,479 --> 00:00:59,320 Survival Network. I'm your host, Carrie Leutz, and with us 16 00:00:59,560 --> 00:01:06,680 is one of the savvyest and most successful resource investors 17 00:01:06,879 --> 00:01:12,640 on the planet. Rick Rule officially in retirement, but I 18 00:01:12,760 --> 00:01:17,760 was with him last week at his investment symposium Resource 19 00:01:18,040 --> 00:01:22,200 Investment Symposium. And Rick, if you've retired, you're keeping it 20 00:01:22,239 --> 00:01:23,359 a big secret, aren't you. 21 00:01:24,519 --> 00:01:28,359 Speaker 1: I failed retirement pretty cool, pretty completely. And I'm delighted 22 00:01:28,359 --> 00:01:32,000 about that. I joke with my wife that my mind 23 00:01:32,519 --> 00:01:35,680 doesn't do well in neutral. It needs to be stimulated 24 00:01:35,799 --> 00:01:38,799 or sedated, and working for me is healthier than drinking. 25 00:01:39,319 --> 00:01:43,920 Speaker 3: But I enjoy both. I feel exactly the same way 26 00:01:43,959 --> 00:01:47,200 you got a few years on me. But the thought 27 00:01:47,239 --> 00:01:51,840 of retirement is not something I've come to terms with yet. 28 00:01:53,200 --> 00:01:55,680 And this is the probably the greatest time to be 29 00:01:55,799 --> 00:01:58,359 in this sector of our lifetimes here right. 30 00:01:59,840 --> 00:02:02,760 Speaker 1: I don't know if this will be more successful than 31 00:02:02,840 --> 00:02:05,840 the decade of the seventies was, But coming into the 32 00:02:05,840 --> 00:02:08,479 decade of the seventies, I didn't have much experience and 33 00:02:08,520 --> 00:02:11,800 I had no money. What's different is that I have 34 00:02:11,919 --> 00:02:15,319 both now, so I suspect that I will come out 35 00:02:15,319 --> 00:02:16,919 of the next ten years much better than I came 36 00:02:16,919 --> 00:02:18,280 out of the decade of the seventies. And I came 37 00:02:18,280 --> 00:02:20,919 out of the decade of the seventies pretty well well. 38 00:02:21,159 --> 00:02:24,599 Speaker 3: Rick. I was going to ask you this question last, 39 00:02:24,680 --> 00:02:27,800 but since you raised being broke and having no money, 40 00:02:28,800 --> 00:02:31,199 what would you buy right now if you were thirty 41 00:02:31,319 --> 00:02:34,879 years old, broke but had knowledge and nerve. 42 00:02:37,400 --> 00:02:40,120 Speaker 1: Frankly, I'd buy more knowledge. I know that's not the 43 00:02:40,199 --> 00:02:46,439 right answer, but your best asset at age thirty is 44 00:02:47,039 --> 00:02:52,759 compounding your knowledge and working on your reputation. I suspect 45 00:02:53,039 --> 00:02:59,800 that what an investor might do, assuming they have no 46 00:03:00,240 --> 00:03:04,759 assets looking at the next ten years, is to begin 47 00:03:04,840 --> 00:03:09,520 to save systematically and save probably half of what you 48 00:03:09,560 --> 00:03:13,919 say in gold. I say that not because gold will 49 00:03:13,960 --> 00:03:18,520 necessarily outperform other assets, but I think that over the 50 00:03:18,599 --> 00:03:20,840 next ten years, the purchasing power of the US dollar 51 00:03:21,240 --> 00:03:25,439 will decline by seventy five percent, and that gold will 52 00:03:25,479 --> 00:03:30,080 maintain at least its nominal purchasing power, which means that 53 00:03:30,159 --> 00:03:36,159 it is a high probability savings instrument. That's a boring answer. 54 00:03:36,919 --> 00:03:40,919 I'm tempted to say that a thirty year old who 55 00:03:41,080 --> 00:03:44,719 believes that he or she will be able to increase 56 00:03:44,759 --> 00:03:47,719 their disposable income over ten years, if they're looking at 57 00:03:47,719 --> 00:03:52,319 investments simply as investments, should consider buying exon mobile. 58 00:03:53,599 --> 00:03:57,439 Speaker 3: Yeah. Yeah, you mentioned that during the conference and the 59 00:03:58,159 --> 00:04:03,560 you know talk about boring. You can't get any more 60 00:04:03,599 --> 00:04:08,400 boring than the Big X, So, you know, interesting, This 61 00:04:09,159 --> 00:04:15,479 idea of investing in human capital, mainly your own human capital, 62 00:04:16,079 --> 00:04:19,439 I found in my life to be the one surefire 63 00:04:19,560 --> 00:04:25,639 investment that has never failed me. In over you know, 64 00:04:25,879 --> 00:04:30,360 nearly seven decades, every time I invested in myself it 65 00:04:30,480 --> 00:04:35,720 paid back many times over time than anything else I 66 00:04:35,800 --> 00:04:36,720 ever invested in. 67 00:04:37,079 --> 00:04:41,560 Speaker 1: I would agree with that completely. Knowledge is an asset. Well, 68 00:04:41,879 --> 00:04:44,480 you can lose it, but it can't be stolen. It 69 00:04:44,519 --> 00:04:48,240 can't be taxed. The fruits can be taxed, and your 70 00:04:48,240 --> 00:04:54,120 reputation the same. What thirty year olds need to focus 71 00:04:54,199 --> 00:04:56,920 on is the group of people they choose to be 72 00:04:56,920 --> 00:05:00,000 their community, because you become the sum of your friends, 73 00:05:01,759 --> 00:05:05,160 your reputation because if you lose it's very difficult to 74 00:05:05,199 --> 00:05:09,399 rebuild it. And your knowledge, all the risks that you face, Carrie, 75 00:05:10,759 --> 00:05:14,480 probably are manageable. If you manage the risk. This to 76 00:05:14,519 --> 00:05:15,879 the left of your right ear and to the right 77 00:05:15,959 --> 00:05:16,600 of your left ear. 78 00:05:18,519 --> 00:05:21,879 Speaker 3: I couldn't agree with you more. And like you said, 79 00:05:21,920 --> 00:05:25,519 the knowledge you attain, you know, no one can ever 80 00:05:25,560 --> 00:05:27,959 take it away from you. You can't lose it. Health, 81 00:05:28,399 --> 00:05:31,000 all those types of things. But assuming your health is good, 82 00:05:31,879 --> 00:05:35,240 invest in your health, invest in your human capital. So 83 00:05:36,000 --> 00:05:38,120 I wasn't going to go in this direction, but I 84 00:05:38,199 --> 00:05:40,680 have to go there with you now because you made 85 00:05:40,680 --> 00:05:44,839 me think of something at a connection. Ironies, the ironies 86 00:05:44,879 --> 00:05:49,560 of life. So we're in the midst of this green revolution, 87 00:05:50,279 --> 00:05:53,519 all right, And the very people who've been espousing the 88 00:05:53,600 --> 00:05:56,839 green revolution have been the people who've been holding it 89 00:05:56,879 --> 00:06:00,879 back because you can't get a mining permit. They've made 90 00:06:00,920 --> 00:06:06,680 the process so impossible to obtain a permit that we've 91 00:06:06,720 --> 00:06:11,000 seen companies just throw up their hands and say adios, 92 00:06:11,319 --> 00:06:16,000 I'm done. And then our current president, who is the 93 00:06:16,000 --> 00:06:22,079 most anti anti electrification. I wouldn't say he's anti technology, 94 00:06:23,000 --> 00:06:28,639 he's just maybe common sense about it. His policies speeding 95 00:06:28,720 --> 00:06:32,600 up mind permits, things like putting the road through at 96 00:06:32,600 --> 00:06:38,040 the Ambler District in Alaska for Trilogy who I worked 97 00:06:38,040 --> 00:06:42,800 with in the past, full disclosure. But his policies are 98 00:06:43,120 --> 00:06:47,720 making the Green New Deal more accessible than any of 99 00:06:47,759 --> 00:06:51,560 his adversaries. Do you find that as ironic as I do? 100 00:06:51,680 --> 00:06:54,600 Speaker 1: Rick, Well, it's important to understand that the Green New 101 00:06:54,639 --> 00:06:57,160 Deal wasn't really about environment. 102 00:06:57,240 --> 00:06:58,240 Speaker 3: Let's get that out of the way. 103 00:06:58,879 --> 00:07:01,160 Speaker 1: And I also need to say I'm no particular fan 104 00:07:01,199 --> 00:07:05,959 of Trump, but I do note that he has been 105 00:07:06,079 --> 00:07:15,120 effective at rescinding executive decrees by prior administrations. And I 106 00:07:15,240 --> 00:07:19,319 have noticed myself a real change in the politics of 107 00:07:19,319 --> 00:07:25,639 the regulatory agencies, which means frequently in the regulatory agencies. 108 00:07:25,199 --> 00:07:25,759 Speaker 3: There was. 109 00:07:27,439 --> 00:07:31,279 Speaker 1: A belief at the staff level the resource projects should 110 00:07:31,279 --> 00:07:35,199 go ahead, but the politics of the agency were such 111 00:07:35,519 --> 00:07:39,639 were such that at the very least stasis was what 112 00:07:39,680 --> 00:07:43,839 you expected. Now at the BLM, which by the way, 113 00:07:44,120 --> 00:07:48,959 has really competent technical people working there, They've been hidden 114 00:07:48,959 --> 00:07:53,439 well for twenty years, but they're there now. There is 115 00:07:53,839 --> 00:07:59,160 an incentive within the organization to get stuff done. They 116 00:07:59,199 --> 00:08:02,560 can use the knowledge that they have in the agency 117 00:08:02,959 --> 00:08:10,240 to complete the regulatory process in a responsible matter. It's 118 00:08:11,240 --> 00:08:16,600 further to what you say, Carrie, mining, look at empirically, 119 00:08:18,160 --> 00:08:24,079 is an efficient use of land. You generate an awful 120 00:08:24,160 --> 00:08:28,240 lot of economic activity and an awful lot of consumer 121 00:08:28,360 --> 00:08:33,080 utility by despoiling a very small piece of earth. The 122 00:08:33,399 --> 00:08:38,360 Resolution copper mine in Arizona, when it's built after twenty 123 00:08:38,360 --> 00:08:43,440 seven years of permitting, will have substantially less environmental disturbance 124 00:08:43,519 --> 00:08:47,440 than one golf course. Golf courses are green and people 125 00:08:47,559 --> 00:08:50,679 like to play on them, so they're regarded as not 126 00:08:50,759 --> 00:08:53,960 being environmentally deleterious. But if you have a monoculture, which 127 00:08:54,000 --> 00:08:57,879 is to say, grass in a Riparian area, the truth 128 00:08:57,960 --> 00:09:05,039 is that they're environmentally extremely injuries. So it's important to 129 00:09:05,159 --> 00:09:11,200 look at the concept of environmental degradation from an empirical 130 00:09:11,799 --> 00:09:15,080 technical lens as opposed to an emotional narrative lens. And 131 00:09:15,159 --> 00:09:17,960 I think what mister Trump has been able to do 132 00:09:18,039 --> 00:09:23,080 with the regulatory agencies is allow them to return to 133 00:09:23,360 --> 00:09:26,919 empirical rather than political or narrative analysis. 134 00:09:27,600 --> 00:09:30,000 Speaker 3: Yeah, I think we'd agree. There are probably some places 135 00:09:30,440 --> 00:09:36,679 minds should not be built, you know, due to geographical population, 136 00:09:37,759 --> 00:09:44,360 many factors. But you know, invoking his emergency authority to 137 00:09:44,440 --> 00:09:49,440 push these projects through something that we really only saw 138 00:09:49,559 --> 00:09:54,279 happen during wartime or run ups to wartime. Is this 139 00:09:54,320 --> 00:09:57,240 a good thing? I mean from our standpoint, yes, it's 140 00:09:57,279 --> 00:10:01,879 a good thing. We agree a healthy mining sector, not 141 00:10:02,000 --> 00:10:04,480 just for the United States but for the world in general, 142 00:10:04,840 --> 00:10:10,320 is essential to our continued prosperity and well being. But 143 00:10:10,840 --> 00:10:16,159 invoking emergency authority to push a copper mind through, what 144 00:10:16,200 --> 00:10:16,799 are your thoughts? 145 00:10:17,279 --> 00:10:18,879 Speaker 1: What I would like to see mister Trump do, and 146 00:10:18,879 --> 00:10:20,399 he won't do it, by the way, but what I'd 147 00:10:20,440 --> 00:10:24,960 like to see him do is require upfront bonding environmental 148 00:10:25,039 --> 00:10:31,279 bonding for resource development the United States, including exploration, which 149 00:10:31,320 --> 00:10:35,000 means that the company would need to propose a reclamation 150 00:10:35,120 --> 00:10:39,240 budget which the regulator would accept, and that would need 151 00:10:39,240 --> 00:10:42,120 to be funded upfront by way of an insurance policy. 152 00:10:44,039 --> 00:10:46,240 What happens right now is that the risk was socialized. 153 00:10:47,320 --> 00:10:50,279 People promise to reclaim, but you know what a promise 154 00:10:50,360 --> 00:10:54,039 is worth, particularly for a bankrupt company, It's worth nothing. 155 00:10:54,919 --> 00:10:58,960 The best way to ensure environmental compliance would be for 156 00:10:59,480 --> 00:11:02,840 the company planning to do the mind to convince the 157 00:11:02,840 --> 00:11:06,320 insurance company to take the risk and pay them the 158 00:11:06,360 --> 00:11:09,440 price for the risk that they assumed. That lets the 159 00:11:09,480 --> 00:11:14,000 taxpayer off the hook. Then the regulatory process comes to 160 00:11:14,039 --> 00:11:19,080 be involved in prohibiting the discharge of deleterious materials from 161 00:11:19,080 --> 00:11:23,639 the mind sight to the environment. Stop. That's what I'd 162 00:11:23,679 --> 00:11:26,039 like to see mister Trump do. That's not what he 163 00:11:26,080 --> 00:11:29,960 will do. What he will do will be to solicit 164 00:11:30,000 --> 00:11:35,960 campaign contributions and political favors from elements in society, like 165 00:11:35,960 --> 00:11:40,519 the oil and gas industry that he thinks are more 166 00:11:40,559 --> 00:11:44,720 aligned with him than the other side, Which is to say, 167 00:11:44,759 --> 00:11:47,840 carry the old saw that mankenhead about events elections being 168 00:11:47,879 --> 00:11:51,600 advanced option of stolen property. First to book, Democrats and 169 00:11:51,639 --> 00:11:53,600 Republicans in equal measure. 170 00:11:54,480 --> 00:11:58,320 Speaker 3: For property yet to be stolen, and couldn't agree with 171 00:11:58,320 --> 00:12:02,639 you more on that. On the other hand, maybe this 172 00:12:02,759 --> 00:12:08,360 policy aligns more with societal good than just stopping everything 173 00:12:08,440 --> 00:12:14,279 this kind of luddite response to anything that happens. I mean, 174 00:12:14,320 --> 00:12:18,679 I'm not justifying it, but I'm saying it's kind of 175 00:12:18,720 --> 00:12:23,000 like I live in Florida. So there's no state more 176 00:12:23,039 --> 00:12:27,159 corrupt than Florida than except for every other state. But 177 00:12:27,200 --> 00:12:31,720 the difference between Florida and New York is well, like 178 00:12:32,200 --> 00:12:35,440 in the Illinois there was a saying an honest judge 179 00:12:35,480 --> 00:12:41,440 is one who's fixed and stays fixed. In Floriday, you 180 00:12:41,519 --> 00:12:44,919 pay the price of admission, whatever it is, zoning variants, 181 00:12:46,039 --> 00:12:48,320 law change, whatever, but you pay for it and you 182 00:12:48,360 --> 00:12:50,759 get what you paid for. In New York, you pay 183 00:12:50,840 --> 00:12:52,799 for it and you keep paying for it and paying 184 00:12:52,840 --> 00:12:55,600 for it, and maybe one day you'll get it. And 185 00:12:55,639 --> 00:13:00,720 that's why Florida is more prosperous than New York. Maybe 186 00:13:00,759 --> 00:13:03,879 this corruption is just built in, and maybe we need 187 00:13:03,919 --> 00:13:06,159 the most effective corruption we can find. 188 00:13:06,639 --> 00:13:10,120 Speaker 1: They used to say a Mouisiana, the good thing about 189 00:13:10,200 --> 00:13:12,320 Leander Perez was he stayed bribed. 190 00:13:15,320 --> 00:13:18,960 Speaker 3: Yeah, I'm just saying So let's talk about metals markets 191 00:13:19,240 --> 00:13:24,799 silver gold divergence. Is there a lagging silver squeeze that's 192 00:13:24,879 --> 00:13:29,480 about to really hit and does forty dollars silver matter? Uh? 193 00:13:30,600 --> 00:13:33,639 Speaker 1: Let me answer that in parts. My experience has been 194 00:13:34,639 --> 00:13:38,360 that in precious metals bull markets, gold leads, and when 195 00:13:38,679 --> 00:13:43,120 gold momentum attracts the generalist investor into the space, leadership 196 00:13:43,120 --> 00:13:44,000 transfers to silver. 197 00:13:44,840 --> 00:13:46,440 Speaker 3: Whether were there or not, I don't know. 198 00:13:47,120 --> 00:13:48,600 Speaker 1: What I do know is you won't need to tell 199 00:13:48,639 --> 00:13:53,159 me when it occurred. They're usually pretty dramatic events. I've 200 00:13:53,159 --> 00:13:56,399 seen him happen three times before in my life, and 201 00:13:56,600 --> 00:13:58,159 you don't need a weatherman to tell you which way 202 00:13:58,159 --> 00:14:01,840 the wind blowing when that happens. As to a silver squeeze, 203 00:14:01,919 --> 00:14:04,159 I am not one of those who believes that there's 204 00:14:04,279 --> 00:14:08,200 been an ongoing conspiracy to depress the price of silver 205 00:14:08,399 --> 00:14:14,240 over time. I worked for great, big financial institutions, and 206 00:14:14,279 --> 00:14:16,879 the idea that they would take a negative carry a 207 00:14:16,919 --> 00:14:21,799 short position over ten years or twelve years, which affected 208 00:14:21,879 --> 00:14:25,679 quarterly cash bonuses. The probability of that occurring is nil. 209 00:14:26,120 --> 00:14:30,759 Wouldn't happen markets. All markets are manipulated in the short term, 210 00:14:31,399 --> 00:14:35,159 and they're manipulated in whatever direction is easy and is 211 00:14:35,240 --> 00:14:40,080 easier to manipulate. For forty years, you have manipulated silver 212 00:14:40,120 --> 00:14:45,840 markets down because that was their natural direction. I remember 213 00:14:45,879 --> 00:14:49,039 the nineteen seventies when trading desk would manipulate the price 214 00:14:49,080 --> 00:14:53,600 of silver up because that was the easiest direction. The 215 00:14:53,639 --> 00:14:59,120 manipulation takes place because the futures markets, the paper markets 216 00:14:59,159 --> 00:15:04,639 often trade two hundred times the available silver to cover 217 00:15:05,440 --> 00:15:09,679 on a daily basis. They are much more liquid. So 218 00:15:09,840 --> 00:15:15,120 the game works like this. A short syndicate gets involved 219 00:15:15,120 --> 00:15:17,960 over the last forty years short in the futures market 220 00:15:18,440 --> 00:15:21,799 six year duration, twelve month duration, twenty four months duration, 221 00:15:21,919 --> 00:15:26,279 that kind of thing, and they get what would be 222 00:15:26,320 --> 00:15:30,480 for you and I massively short two billion dollars short, 223 00:15:30,519 --> 00:15:33,879 three billion dollars short in a market where the nominal 224 00:15:33,960 --> 00:15:37,600 value of the positions is four hundred billion, and then 225 00:15:37,600 --> 00:15:41,879 they borrow fifty or sixty million dollars worth a billion, 226 00:15:43,240 --> 00:15:47,200 and they pound it into the market physically at whatever 227 00:15:47,240 --> 00:15:51,759 point in time the market has the least volume, and 228 00:15:52,279 --> 00:15:56,240 they use the impact of the physical market on the 229 00:15:56,279 --> 00:16:00,320 futures market to cover their shorts and pay off their 230 00:16:00,320 --> 00:16:03,039 physical loss. I mean, you see it happen time and 231 00:16:03,080 --> 00:16:09,919 time and time again. That supports long term price manipulation. 232 00:16:11,120 --> 00:16:14,360 I think that there's an aggregate of short term price manipulations. 233 00:16:14,399 --> 00:16:19,799 The eurobond market has been manipulated, the Euro market's been manipulated, 234 00:16:19,840 --> 00:16:22,799 the US treasury market's been manipulated. If you can manipulate 235 00:16:22,840 --> 00:16:25,879 markets that are that big, the silver market's a piece 236 00:16:25,879 --> 00:16:29,679 of cake. What will change, Carrie, is that the easiest 237 00:16:29,679 --> 00:16:32,440 way to manipulate the market is going to go from 238 00:16:32,480 --> 00:16:33,120 down to up. 239 00:16:34,559 --> 00:16:38,320 Speaker 3: I got it. Yeah, that makes total total sense, and 240 00:16:39,200 --> 00:16:42,320 so a short squeeze because some of the players aren't 241 00:16:42,320 --> 00:16:45,200 going to figure this out until it happens. Right. 242 00:16:46,120 --> 00:16:50,159 Speaker 1: The people who are involved in complex hedges in the 243 00:16:50,200 --> 00:16:53,320 silver market, I think are going to get massacred. I mean, 244 00:16:53,360 --> 00:16:57,320 I think they're in for some truly religious experiences. To 245 00:16:57,399 --> 00:17:01,159 the extent that a short position on silver that has 246 00:17:01,279 --> 00:17:03,360 been put in place by algorithms that are looking at 247 00:17:03,399 --> 00:17:07,039 silver markets over the last forty years, those leverage guys 248 00:17:07,279 --> 00:17:11,119 are really truly in for a world of hurt. Those 249 00:17:11,400 --> 00:17:14,119 I mean, you know, long term capital management worked until 250 00:17:14,119 --> 00:17:17,440 it didn't. It was a convergence trade, but the convergence 251 00:17:17,480 --> 00:17:21,440 trade wasn't set up for a third standard deviation anomaly. 252 00:17:21,640 --> 00:17:23,440 And I think the silver market's going to see a 253 00:17:23,440 --> 00:17:28,519 third standard deviation anomaly, which means that the people who 254 00:17:28,559 --> 00:17:34,680 are using silver as an unhedged corollary to some economic bet, 255 00:17:35,319 --> 00:17:38,440 and they're doing it from algorithms that are based on 256 00:17:38,480 --> 00:17:41,720 forty years of trading history, they aren't prepared for a hiccup, 257 00:17:41,839 --> 00:17:43,200 and they're gonna get a hiccup. 258 00:17:43,440 --> 00:17:47,799 Speaker 3: What you're describing is blood in the streets. Fortunately, nobody 259 00:17:47,839 --> 00:17:50,680 works in Wall Street anymore, so you don't have to 260 00:17:50,680 --> 00:17:53,279 worry about walking down the street and having a body 261 00:17:54,119 --> 00:17:57,720 you know, crashed to the ground before you because everybody's 262 00:17:57,759 --> 00:18:02,359 in their in their home office doing these trades here. Rick. 263 00:18:02,720 --> 00:18:08,240 But but seriously, this is like an existential event, what 264 00:18:09,400 --> 00:18:12,920 you're saying, and it could spread to other markets as well, 265 00:18:12,960 --> 00:18:16,720 because like you said, silver is tiny. You got thirty 266 00:18:16,920 --> 00:18:22,480 five billion dollars worth of shorts in silver, man, like 267 00:18:23,200 --> 00:18:27,519 this could just spread in one counterparty hits the hits 268 00:18:27,519 --> 00:18:31,519 the bricks, and we're talking to from the fledge meltsound 269 00:18:31,559 --> 00:18:31,920 about that. 270 00:18:32,240 --> 00:18:35,519 Speaker 1: To be honest with you, thirty five billion dollars is 271 00:18:35,559 --> 00:18:38,599 a lot to you and me, But the notional value 272 00:18:38,599 --> 00:18:43,799 of derivatives is more like five trillion dollars. I'm not 273 00:18:43,799 --> 00:18:47,000 so concerned about that. I'm much more concerned about things 274 00:18:47,319 --> 00:19:00,960 like unfunded entitlement liabilities and the imbalance between the nominal 275 00:19:01,000 --> 00:19:03,599 and the real interest rates. I mean, if you want 276 00:19:03,599 --> 00:19:06,079 me to scare your audience, carry I can really truly 277 00:19:06,119 --> 00:19:10,079 do that. I'm less. I'm less concerned about the impact 278 00:19:10,079 --> 00:19:13,559 on Wall Street and the deriven's markets by a silver short. 279 00:19:13,599 --> 00:19:15,480 I think it'll be you know, I think there's probably 280 00:19:15,480 --> 00:19:20,440 a couple of quantitative hedge funds that'll go broke. 281 00:19:22,200 --> 00:19:25,000 Speaker 3: Good riddance. No one cares about them anyway. 282 00:19:25,160 --> 00:19:29,319 Speaker 1: Yeah, you know, the derivatives market is, it's truly vast. 283 00:19:30,000 --> 00:19:33,680 There are other counterparty scenarios that scare me a lot more. 284 00:19:34,000 --> 00:19:39,880 If if maws and paws in the United States that 285 00:19:40,079 --> 00:19:45,920 own high yield ETFs junk bond ETFs get a whiff 286 00:19:46,000 --> 00:19:48,240 of the beginnings of a credit crisis like they did 287 00:19:48,319 --> 00:19:51,640 in two thousand and eight around real estate, and they 288 00:19:51,680 --> 00:19:55,880 go to sell those high yield ETFs. The ETFs are 289 00:19:55,920 --> 00:19:59,279 extremely liquid, they trade billions of dollars a day, but 290 00:19:59,319 --> 00:20:03,480 they're comprised assets that are totally illiquid. Yes, if they 291 00:20:03,519 --> 00:20:05,759 redeem the ETF and the manager has to sell the 292 00:20:05,799 --> 00:20:12,000 bonds and can't. Now that's a scenario that's truly scary. 293 00:20:12,119 --> 00:20:15,359 Speaker 3: And I remember reading Benjamin Graham. You know, he only 294 00:20:15,400 --> 00:20:18,799 wrote this almost one hundred years ago. They had junk 295 00:20:18,839 --> 00:20:22,519 bonds then. Junk bonds aren't a new thing. The liquidity 296 00:20:22,559 --> 00:20:26,759 of junk bonds are. But he said that, you know, 297 00:20:27,480 --> 00:20:31,680 no individual investor should ever buy a junk bond because 298 00:20:31,920 --> 00:20:35,200 you cannot understand it. And we've seen even the guys 299 00:20:35,200 --> 00:20:39,079 who understand the market get slaughtered by it. And yet 300 00:20:39,559 --> 00:20:41,240 there's a lot of junk out there. 301 00:20:42,160 --> 00:20:45,400 Speaker 1: Harry, in shows like yours where there's live Q and A. 302 00:20:45,519 --> 00:20:48,599 I've talked to investors that held I high yield ets 303 00:20:48,880 --> 00:20:52,160 that didn't understand that the assets were comprised of junk bonds. 304 00:20:52,720 --> 00:20:54,960 They just looked at the cover yield, not how the 305 00:20:55,039 --> 00:20:58,920 yield was generated. When I was a younger man, wasn't 306 00:20:58,920 --> 00:21:02,559 the young man, but in the eighties I was pretty 307 00:21:02,599 --> 00:21:05,799 active in the high yield credit market because I understand 308 00:21:05,839 --> 00:21:10,680 how to read bond covenants. And I remember that when 309 00:21:10,799 --> 00:21:13,319 Drexel Burnham started to blow apart and blew apart the 310 00:21:13,400 --> 00:21:16,839 junk bond market. We had a we had a description 311 00:21:17,319 --> 00:21:20,240 for these ill liquid bonds. We called them owl blonds. 312 00:21:20,720 --> 00:21:23,039 And we called them owl blonds because when you called 313 00:21:23,079 --> 00:21:27,079 your broker to sell, your broker would say to who too. 314 00:21:30,119 --> 00:21:33,519 Speaker 3: I had some friends that worked at Drexel, and you know, 315 00:21:33,640 --> 00:21:38,160 but then Leon Black picked over the carcasses of all 316 00:21:38,200 --> 00:21:42,960 those owls and made billions of dollars because, like you said, 317 00:21:43,119 --> 00:21:44,160 he could read a convenant. 318 00:21:44,759 --> 00:21:48,119 Speaker 1: It's a great, great, great market if you understand it. 319 00:21:49,920 --> 00:21:53,759 The oil and gas industry junk bonds in the eighties 320 00:21:53,759 --> 00:21:57,160 and the nineties made me, relative to my net worth, 321 00:21:57,559 --> 00:22:01,279 a large amount of money forever, great full. But I 322 00:22:01,359 --> 00:22:04,480 understood about oil and gas and understood about covenants. You know, 323 00:22:04,519 --> 00:22:08,440 I remember buying bonds with a cover yield of twelve 324 00:22:08,440 --> 00:22:14,039 percent that we're selling at sixty. So you know, I 325 00:22:14,119 --> 00:22:18,400 got a running yield of twenty percent and a yield 326 00:22:18,559 --> 00:22:22,240 maturity of thirty five percent in a dead instrument. Life 327 00:22:22,279 --> 00:22:24,920 doesn't get better than that. But that's not what's on 328 00:22:24,960 --> 00:22:25,559 offer today. 329 00:22:26,240 --> 00:22:32,240 Speaker 3: I remember making twenty percent on Ford bonds myself. But yeah, 330 00:22:32,880 --> 00:22:37,640 so talking about the junior resource sector, which is revivified, 331 00:22:38,119 --> 00:22:42,240 that's the right word as witnessed by your recent conference. 332 00:22:42,920 --> 00:22:47,359 You know you always said the junior resource sector is 333 00:22:47,960 --> 00:22:52,880 a broken model if you will, composed of lifestyle companies 334 00:22:53,319 --> 00:22:59,200 that aren't real businesses, and you know, look, we got 335 00:22:59,480 --> 00:23:01,559 a lot of AI going on. Do you think the 336 00:23:01,599 --> 00:23:05,480 AI can pick out the lifestyle companies from the real 337 00:23:05,519 --> 00:23:08,119 companies five years from now? 338 00:23:09,039 --> 00:23:12,319 Speaker 1: But you have to know how to ask AI the questions. 339 00:23:12,880 --> 00:23:18,400 What AI does is aggregate misinformation often, So if you 340 00:23:18,640 --> 00:23:24,400 ask AI to search the Edgard database or the Cedar 341 00:23:24,519 --> 00:23:28,519 database for companies where general and an administrative expenses less 342 00:23:28,559 --> 00:23:31,119 than twenty five percent of total expenditures, that's a great 343 00:23:31,240 --> 00:23:34,920 use of AI. But if you ask AI to look 344 00:23:34,960 --> 00:23:38,119 for lifestyle companies without defining what a lifestyle company is, 345 00:23:38,920 --> 00:23:41,960 they'll go to CNBC or Kitko or places and they'll 346 00:23:42,000 --> 00:23:46,519 aggregate a whole bunch of narrative and misinformation. AI is 347 00:23:47,319 --> 00:23:51,720 really good for what the Bloomberg gobots have been good for. 348 00:23:52,920 --> 00:23:56,920 It can search databases if you give it very very 349 00:23:57,160 --> 00:24:03,160 very specific correlations, and you can do it instantaneously. AI 350 00:24:03,359 --> 00:24:06,400 can do in terms of comparative balance your analysis. If 351 00:24:06,400 --> 00:24:10,119 you know how to ask the question tasks in two 352 00:24:10,160 --> 00:24:14,680 minutes that would take me two months and I'm good 353 00:24:14,680 --> 00:24:18,480 at it. The important part, though, is that you have 354 00:24:18,559 --> 00:24:21,039 to understand how to ask it the right question. 355 00:24:22,640 --> 00:24:24,880 Speaker 3: That is so true. I've been using it for three 356 00:24:24,920 --> 00:24:28,640 and a half years now, and you know, like could 357 00:24:28,680 --> 00:24:35,440 they talk about prompt engineers and all that, Well, that's nice, 358 00:24:35,599 --> 00:24:38,279 but I'll tell you what, Like for law, I had 359 00:24:38,319 --> 00:24:41,519 a friend and the legal profession doesn't even see what's 360 00:24:41,559 --> 00:24:46,240 coming here. Adam Ray, friend of mine. She wanted to read. 361 00:24:46,640 --> 00:24:50,119 She wanted to amend her trust a mendor will and 362 00:24:50,319 --> 00:24:53,680 quit claim her condo over to her trust. And she 363 00:24:53,759 --> 00:24:57,799 goes to one lawyer forty five hundred dollars. She goes 364 00:24:57,839 --> 00:25:01,759 to another lawyer thirty five hundred. Now I'm a recovering attorney, 365 00:25:01,759 --> 00:25:05,160 in fact, in America's top recovering attorney. She comes to me. 366 00:25:06,119 --> 00:25:10,119 I said, fuck it, I'm not writing papers. Let's throw 367 00:25:10,160 --> 00:25:12,839 it into the AI and see how it works. I 368 00:25:12,920 --> 00:25:17,880 think it'll do, okay, Rick. Twenty minutes later, I had 369 00:25:17,920 --> 00:25:23,279 all her documents done, multiple copies stapled, and they were 370 00:25:23,319 --> 00:25:28,920 ready to be witnessed and notarized. And they worked. They 371 00:25:28,960 --> 00:25:32,079 were perfect. In fact, they were better than the documents 372 00:25:32,480 --> 00:25:35,720 I would have created myself. Because I'm a master of typos, 373 00:25:36,400 --> 00:25:40,240 and there wasn't one typo. And that's just one area. 374 00:25:40,279 --> 00:25:42,680 So I had the legal expertise, I could look at 375 00:25:42,680 --> 00:25:44,880 the docs and know that they were. 376 00:25:44,880 --> 00:25:48,160 Speaker 1: You edit it, you can shape the product, and then 377 00:25:48,200 --> 00:25:51,079 you can consume the product. That's important. I asked AI 378 00:25:52,000 --> 00:25:54,359 to try to do some work for me in anticipation 379 00:25:54,400 --> 00:25:58,960 of an interview about six weeks ago talking about debt 380 00:25:59,079 --> 00:26:02,720 deficit on baalllot sheet liability stuff like that. I didn't 381 00:26:02,720 --> 00:26:08,920 specify source, and so they went through Twitter and CNBC 382 00:26:10,039 --> 00:26:15,000 and ABC and CBS, and what I got was an 383 00:26:15,079 --> 00:26:20,559 aggregation of misinformation. They didn't, as an example, talk about 384 00:26:20,880 --> 00:26:23,920 They talked about one balance sheet liabilities, you know, thirty 385 00:26:23,960 --> 00:26:28,440 seven trillion. They talked about net on balance sheet liabilities 386 00:26:28,519 --> 00:26:31,319 thirty trillion net of the seven. But they don't talk 387 00:26:31,359 --> 00:26:38,240 about unfunded entitlements. They missed completely the one hundred trillion 388 00:26:38,279 --> 00:26:42,559 dollar elephant in the room. So it's important that somebody 389 00:26:42,599 --> 00:26:49,359 be like Harry Lutts, somebody use AI in a subject 390 00:26:49,359 --> 00:26:51,279 that they know well enough that they can frame the 391 00:26:51,359 --> 00:26:54,119 question and they can judge the product. 392 00:26:55,720 --> 00:26:59,079 Speaker 3: So true. We used to say garbage in, garbage out. 393 00:26:59,599 --> 00:27:04,799 Now it's garbage in landfill out. I mean, it's so 394 00:27:04,920 --> 00:27:10,160 true because you can ask it questions and they're theoretically correct, 395 00:27:10,880 --> 00:27:15,839 but they're absolutely on a factual level they're wrong. And 396 00:27:15,880 --> 00:27:18,279 I see it all the time. But if you can't 397 00:27:18,319 --> 00:27:22,799 recognize it, then you're going to spout out garbage that 398 00:27:22,960 --> 00:27:25,440 you don't really understand. That's the whole problem with AI. 399 00:27:25,559 --> 00:27:31,319 It's a black box and nobody really understands how it's 400 00:27:31,359 --> 00:27:34,160 producing its results at this point, right. 401 00:27:34,880 --> 00:27:38,640 Speaker 1: We're seeing now in the exploration business. In exploration, we 402 00:27:38,680 --> 00:27:42,279 have a thing called coincident anomalies where you might look 403 00:27:42,319 --> 00:27:46,599 at ten different factors and you might look you look 404 00:27:46,640 --> 00:27:52,400 for areas where favorable data overlays itself geographically right. And 405 00:27:52,519 --> 00:27:55,640 AI has the potential to do that spectacularly well. It 406 00:27:55,680 --> 00:27:59,519 has the potential to look, as an example, at two 407 00:27:59,519 --> 00:28:02,920 thousands square miles of Earth from a landsat photo, look 408 00:28:02,960 --> 00:28:06,880 at spectral differentiation so that you can understand how different 409 00:28:06,920 --> 00:28:13,720 landforms respond to light differently from space. Merge that with 410 00:28:14,319 --> 00:28:20,000 visible structures you know callederas or faults. Merge that with 411 00:28:20,200 --> 00:28:27,319 historical ground data, historical geophysical data. Each of those inputs 412 00:28:27,720 --> 00:28:32,079 might take a researcher two or three weeks to do. 413 00:28:32,799 --> 00:28:35,039 In the old days, we used to actually make vellums 414 00:28:36,000 --> 00:28:40,079 overload them. AI can do that. AI can take two 415 00:28:40,119 --> 00:28:46,480 thousand square miles of earth and define a thousand acre 416 00:28:46,559 --> 00:28:50,240 target so that geologists don't have to look at two 417 00:28:50,279 --> 00:28:52,319 thousand square miles, they can look at one square mile. 418 00:28:53,160 --> 00:28:57,119 That's a great use of AI. It's a great use 419 00:28:57,119 --> 00:28:58,759 of AI. And over the next five years we're going 420 00:28:58,799 --> 00:29:00,599 to learn how to do this, and we're to develop 421 00:29:00,720 --> 00:29:04,680 data sets that are AI usable. You know, it's going 422 00:29:04,720 --> 00:29:07,079 to actually change the way we develop in store data 423 00:29:07,880 --> 00:29:10,839 to make it assimilable on AI. That's that's going to 424 00:29:10,880 --> 00:29:11,519 be fantastic. 425 00:29:12,839 --> 00:29:16,440 Speaker 3: And then if the Elon Musk starts taking as tunneling 426 00:29:16,519 --> 00:29:20,720 machines and devotes them to mining, we might really have 427 00:29:20,799 --> 00:29:22,960 a revolution in the mining space. 428 00:29:23,799 --> 00:29:27,279 Speaker 1: That's coming the you know, the oil and gas business 429 00:29:27,319 --> 00:29:30,720 has undergone as spectacular transformation the last thirty years through technology. 430 00:29:31,759 --> 00:29:33,440 My mining friends will hate this, but the oil and 431 00:29:33,440 --> 00:29:37,480 gas guys are smarter. That's coming to mining. You know, 432 00:29:37,519 --> 00:29:40,880 it really truly is coming to mining. The technology that's 433 00:29:40,920 --> 00:29:44,680 worked in oil and gas around geophysics will come to mining. 434 00:29:44,720 --> 00:29:46,920 I don't know what it'll be, you know, maybe it'd 435 00:29:46,920 --> 00:29:51,000 be Robert Friedan's typhoon typhoon. Who knows what it'll be. 436 00:29:51,799 --> 00:29:55,559 But eventually we will have some form of tool the 437 00:29:55,640 --> 00:29:58,400 human I sees an ankstrum into the earth. We'll have 438 00:29:58,480 --> 00:30:02,079 some form of tool that will allow us to do 439 00:30:02,200 --> 00:30:04,240 for mineral deposits what we can do for oil and 440 00:30:04,279 --> 00:30:07,279 gas deposits today. That may or may not be an 441 00:30:07,319 --> 00:30:12,519 AI enabled tool, but technology will truly transform mining. It's 442 00:30:12,839 --> 00:30:18,640 interesting that a rocket scientist, Elon Musk is the guy 443 00:30:18,680 --> 00:30:24,480 who came to us with a more efficient, boring technology, 444 00:30:24,680 --> 00:30:27,200 given that our industry had been boring for three hundred years. 445 00:30:27,759 --> 00:30:31,559 It's interesting that the technological innovation came from outside of 446 00:30:31,599 --> 00:30:33,200 the experienced class. 447 00:30:34,279 --> 00:30:36,640 Speaker 3: And all from well, I don't know if the origin 448 00:30:36,759 --> 00:30:38,880 story is true or not that he got fed up 449 00:30:38,920 --> 00:30:41,640 with traffic in La one day and said I'm just 450 00:30:41,680 --> 00:30:45,839 going to dig a tunnel. That's a little too pat Well, 451 00:30:45,960 --> 00:30:50,160 if it's true, having been to Vegas and ridden on 452 00:30:50,240 --> 00:30:55,559 that thing, and the people they can't see the potential 453 00:30:55,599 --> 00:30:58,599 for this rick Like I live in Florida, we have 454 00:30:58,759 --> 00:31:01,720 nothing but traffic. The idea of being able to go 455 00:31:01,920 --> 00:31:06,640 under it all and not have traffic lights and Florida drivers. 456 00:31:07,200 --> 00:31:10,880 I mean, I don't see how that's just for tunneling 457 00:31:10,920 --> 00:31:14,279 for transportation, but for mining to be able to bore 458 00:31:14,359 --> 00:31:17,839 through an entire mountain you know exactly where you need 459 00:31:17,880 --> 00:31:20,319 to go and not have to worry about collapses and 460 00:31:20,400 --> 00:31:23,440 all that. I mean, who cannot see the potential of this. 461 00:31:23,960 --> 00:31:24,920 Speaker 1: At a quarter of the cost? 462 00:31:25,440 --> 00:31:25,640 Speaker 3: Yep? 463 00:31:25,960 --> 00:31:28,519 Speaker 1: Yeah, I mean you know, we we do more we 464 00:31:28,599 --> 00:31:32,720 do boring in mining. And by boring I mean tunnels. 465 00:31:32,720 --> 00:31:34,319 I don't mean the fact that our business is boring, 466 00:31:34,400 --> 00:31:38,880 which is also true. But the idea that you can 467 00:31:38,920 --> 00:31:43,119 increase the efficiency and cut the cost substantially changes things. 468 00:31:43,279 --> 00:31:46,720 Speaker 3: And the environmental aspects of it too, and the safety 469 00:31:47,759 --> 00:31:50,599 mining when you get down to it, you start going 470 00:31:50,640 --> 00:31:55,920 into those tunnels, it's dangerous down there and anything could happen. 471 00:31:56,400 --> 00:32:00,000 So well, I always appreciate your coming on the show. 472 00:32:00,000 --> 00:32:03,000 So Rick, where's the best place to find your work 473 00:32:03,039 --> 00:32:05,160 and your latest missive? 474 00:32:05,880 --> 00:32:08,319 Speaker 1: The best place to reach me and the one with 475 00:32:08,400 --> 00:32:11,559 the most current incentive is it Rule Investment Media. If 476 00:32:11,599 --> 00:32:14,480 you go there and list your natural resource stocks, I will, 477 00:32:14,519 --> 00:32:18,440 for no obligation review them. Please no textoks, please no 478 00:32:18,559 --> 00:32:22,880 pot stocks please, no crypto resource stocks only Rule Investment Media. 479 00:32:23,759 --> 00:32:24,519 Speaker 3: Give me a little while. 480 00:32:24,559 --> 00:32:27,000 Speaker 1: I'm about two hundred and fifty responses behind because of 481 00:32:27,000 --> 00:32:30,000 the conference last year. The other thing is if for 482 00:32:30,079 --> 00:32:31,960 some reason you missed that conference, maybe you have a 483 00:32:31,960 --> 00:32:35,720 life or something like that. The conference tapes are valuable. 484 00:32:36,920 --> 00:32:39,319 We sell the conference tapes after the fact with a 485 00:32:39,319 --> 00:32:42,480 full money back guarantee. If you play the tape and 486 00:32:42,519 --> 00:32:44,759 think I didn't give you your money, I'll give you your money back. 487 00:32:45,759 --> 00:32:51,319 Rule Symposiums look forward to seeing your listeners either place. 488 00:32:51,599 --> 00:32:53,640 I'm glad you enjoyed the conference. Carry I hope we 489 00:32:53,960 --> 00:32:56,279 see you there next year. We're going to bring it 490 00:32:56,319 --> 00:32:58,839 back to a neighborhood in Florida, close to you, all. 491 00:32:58,839 --> 00:33:02,960 Speaker 3: Right to thirty five miles down the road. Maybe you 492 00:33:03,000 --> 00:33:08,720 should think about using some AI to to update those 493 00:33:09,240 --> 00:33:13,480 emails that are stacking up there. Rick, Well, we have. 494 00:33:14,839 --> 00:33:19,079 Speaker 1: A person who is looking at bringing the entire Rule 495 00:33:19,160 --> 00:33:26,039 Investment Media business into the century kicking and starting as 496 00:33:26,079 --> 00:33:28,119 a person is less than half my age, and I 497 00:33:28,160 --> 00:33:32,400 suspect we'll be able to cause some minor miracles to occur. 498 00:33:33,240 --> 00:33:36,200 Speaker 3: No surprise there. I would expect somebody half our age 499 00:33:36,240 --> 00:33:38,519 to be in the thick of it. Hey, if you've 500 00:33:38,519 --> 00:33:41,200 got a question for Rick myself, shoot me an email 501 00:33:41,440 --> 00:33:44,039 kl at Kerrie lets dot com. We'll get you an 502 00:33:44,079 --> 00:33:49,319 answered quick and you'll find a link to rickcite in 503 00:33:49,359 --> 00:33:52,440 the show notes of this interview on Financial Survival Network 504 00:33:52,480 --> 00:33:55,079 dot com. And if you go there, just sign up 505 00:33:55,079 --> 00:33:58,039 for your free newsletter. Rick, always a pleasure. Talk to 506 00:33:58,079 --> 00:33:58,799 you again real. 507 00:33:58,680 --> 00:34:01,680 Speaker 1: Soon, my pleasure carry Thank you. I welcome the opportunity 508 00:34:01,680 --> 00:34:02,119 to come back. 509 00:34:02,319 --> 00:34:06,480 Speaker 2: Thanks for listening to Carrie Lenz's Financial Survival Network, your 510 00:34:06,559 --> 00:34:10,360 solution to today's trying times. For the latest, go to 511 00:34:10,559 --> 00:34:16,760 Financial Survivalnetwork dot com. Financial Survival Network now more than ever,