WEBVTT 1 00:00:00.240 --> 00:00:04.240 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 --> 00:00:28.320 You are listening to Carrie Lutz's Financial Survival Network, where 9 00:00:28.359 --> 00:00:31.760 you get valuable information you just can't find anywhere else 10 00:00:32.320 --> 00:00:35.920 to thrive in today's trying times. You need the Financial 11 00:00:36.000 --> 00:00:41.079 Survival Network now more than ever. Go to Financial Survivalnetwork 12 00:00:41.119 --> 00:00:44.880 dot com and get your free newsletter and gift. Financial 13 00:00:45.000 --> 00:00:48.359 Survival Network now more than. 14 00:00:48.200 --> 00:00:54.679 Ever, And welcome. You are listening to and watching the 15 00:00:54.880 --> 00:00:58.880 Financial Survival Network. I'm your host, Carrie Leutz, and with 16 00:00:59.079 --> 00:01:05.599 us is one of the savvyest and most successful resource 17 00:01:05.799 --> 00:01:12.239 investors on the planet. Rick Rule officially in retirement, but 18 00:01:12.519 --> 00:01:17.159 I was with him last week at his investment symposium 19 00:01:17.280 --> 00:01:22.120 Resource Investment Symposium. And Rick, if you've retired, you're keeping 20 00:01:22.120 --> 00:01:23.359 it a big secret, aren't you. 21 00:01:24.519 --> 00:01:28.359 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 --> 00:01:40.239 But I enjoy both. 26 00:01:42.359 --> 00:01:45.120 I feel exactly the same way you got a few 27 00:01:45.200 --> 00:01:49.680 years on me. But the thought of retirement is not 28 00:01:49.799 --> 00:01:53.719 something I've come to terms with yet. And this is 29 00:01:53.840 --> 00:01:56.680 the probably the greatest time to be in this sector 30 00:01:56.879 --> 00:01:58.359 of our lifetimes here right. 31 00:01:59.840 --> 00:02:02.760 I don't know if this will be more successful than 32 00:02:02.840 --> 00:02:05.840 the decade of the seventies was, But coming into the 33 00:02:05.840 --> 00:02:08.479 decade of the seventies, I didn't have much experience and 34 00:02:08.520 --> 00:02:11.800 I had no money. What's different is that I have 35 00:02:11.919 --> 00:02:15.319 both now, so I suspect that I will come out 36 00:02:15.319 --> 00:02:16.919 of the next ten years much better than I came 37 00:02:16.919 --> 00:02:18.280 out of the decade of the seventies. And I came 38 00:02:18.280 --> 00:02:20.919 out of the decade of the seventies pretty well well. 39 00:02:21.159 --> 00:02:21.360 Rick. 40 00:02:21.599 --> 00:02:24.759 I was going to ask you this question last, but 41 00:02:25.280 --> 00:02:29.000 since you raised being broke and having no money, what 42 00:02:29.000 --> 00:02:31.840 would you buy right now if you were thirty years old, 43 00:02:32.280 --> 00:02:34.879 broke but had knowledge and nerve. 44 00:02:37.400 --> 00:02:40.120 Frankly, I'd buy more knowledge. I know that's not the 45 00:02:40.199 --> 00:02:41.039 right answer. 46 00:02:41.159 --> 00:02:41.319 But. 47 00:02:43.879 --> 00:02:48.199 Your best asset at age thirty is compounding your knowledge 48 00:02:48.199 --> 00:02:57.759 and working on your reputation. I suspect that what an 49 00:02:57.759 --> 00:03:02.240 investor might do, assuming they have no assets looking at 50 00:03:02.280 --> 00:03:06.199 the next ten years, is to begin to save systematically 51 00:03:06.479 --> 00:03:10.680 and save probably half of what you say in gold. 52 00:03:12.360 --> 00:03:15.759 I say that not because gold will necessarily outperform other assets, 53 00:03:16.719 --> 00:03:19.360 but I think that over the next ten years, the 54 00:03:19.360 --> 00:03:22.599 purchasing power of the US dollar will decline by seventy 55 00:03:22.599 --> 00:03:26.719 five percent, and that gold will maintain at least its 56 00:03:26.840 --> 00:03:31.199 nominal purchasing power, which means that it is a high 57 00:03:31.319 --> 00:03:38.639 probability savings instrument. That's a boring answer. I'm tempted to 58 00:03:38.680 --> 00:03:41.800 say that a thirty year old who believes that he 59 00:03:41.960 --> 00:03:45.960 or she will be able to increase their disposable income 60 00:03:46.000 --> 00:03:49.800 over ten years, if they're looking at investments simply as investments, 61 00:03:50.520 --> 00:03:52.319 should consider buying exon mobile. 62 00:03:53.599 --> 00:03:53.919 Yeah. 63 00:03:54.280 --> 00:03:58.280 Yeah, you mentioned that during the conference and the you 64 00:03:58.280 --> 00:04:03.960 know talk about boring. You can't get any more boring 65 00:04:04.039 --> 00:04:09.599 than the Big X, So, you know, interesting, This idea 66 00:04:09.800 --> 00:04:15.479 of investing in human capital, mainly your own human capital, 67 00:04:16.079 --> 00:04:19.439 I found in my life to be the one surefire 68 00:04:19.560 --> 00:04:25.639 investment that has never failed me. In over you know, 69 00:04:25.879 --> 00:04:30.360 nearly seven decades, every time I invested in myself it 70 00:04:30.480 --> 00:04:35.720 paid back many times over time than anything else I 71 00:04:35.759 --> 00:04:36.720 ever invested in. 72 00:04:37.079 --> 00:04:41.560 I would agree with that completely. Knowledge is an asset. Well, 73 00:04:41.879 --> 00:04:44.480 you can lose it, but it can't be stolen. It 74 00:04:44.519 --> 00:04:48.240 can't be taxed. The fruits can be taxed, and your 75 00:04:48.240 --> 00:04:54.120 reputation the same. What thirty year olds need to focus 76 00:04:54.199 --> 00:04:56.920 on is the group of people they choose to be 77 00:04:56.920 --> 00:05:00.000 their community, because you become the sum of your friends, 78 00:05:01.759 --> 00:05:05.160 your reputation because if you lose it's very difficult to 79 00:05:05.199 --> 00:05:09.399 rebuild it. And your knowledge, all the risks that you face, Carrie, 80 00:05:10.759 --> 00:05:14.480 probably are manageable. If you manage the risk. This to 81 00:05:14.519 --> 00:05:15.920 the left of your right ear and to the right 82 00:05:15.959 --> 00:05:16.600 of your left ear. 83 00:05:18.519 --> 00:05:19.839 I couldn't agree with you more. 84 00:05:20.120 --> 00:05:24.480 And like you said, the knowledge you attain, you know, 85 00:05:24.759 --> 00:05:26.560 no one can ever take it away from you. You 86 00:05:26.600 --> 00:05:29.639 can't lose it. Health, all those types of things. But 87 00:05:29.680 --> 00:05:33.560 assuming your health is good, invest in your health, invest 88 00:05:33.600 --> 00:05:36.800 in your human capital. So I wasn't going to go 89 00:05:36.879 --> 00:05:39.120 in this direction, but I have to go there with 90 00:05:39.199 --> 00:05:41.920 you now because you made me think of something at 91 00:05:41.920 --> 00:05:47.120 a connection. Ironies, the ironies of life. So we're in 92 00:05:47.160 --> 00:05:51.160 the midst of this green revolution, all right, And the 93 00:05:51.319 --> 00:05:55.399 very people who've been espousing the green revolution have been 94 00:05:55.439 --> 00:05:58.600 the people who've been holding it back because you can't 95 00:05:58.639 --> 00:06:03.519 get a mining permit. They've made the process so impossible 96 00:06:04.079 --> 00:06:08.439 to obtain a permit that we've seen companies just throw 97 00:06:08.519 --> 00:06:12.480 up their hands and say adios, I'm done. 98 00:06:12.560 --> 00:06:14.519 And then our current. 99 00:06:14.319 --> 00:06:20.720 President, who is the most anti anti electrification. I wouldn't 100 00:06:20.720 --> 00:06:26.480 say he's anti technology, he's just maybe common sense about it. 101 00:06:26.600 --> 00:06:31.879 His policies speeding up mind permits, things like putting the 102 00:06:31.959 --> 00:06:37.360 road through at the Ambler District in Alaska for Trilogy 103 00:06:37.439 --> 00:06:40.360 who I worked with in the past, full disclosure. But 104 00:06:41.279 --> 00:06:46.279 his policies are making the Green New Deal more accessible 105 00:06:46.839 --> 00:06:50.560 than any of his adversaries. Do you find that as 106 00:06:50.560 --> 00:06:51.560 ironic as I do? 107 00:06:51.680 --> 00:06:54.600 Rick, Well, it's important to understand that the Green New 108 00:06:54.639 --> 00:06:57.160 Deal wasn't really about environment. 109 00:06:57.240 --> 00:06:58.240 Let's get that out of the way. 110 00:06:58.879 --> 00:07:01.160 And I also need to say I'm no particular fan 111 00:07:01.199 --> 00:07:05.959 of Trump, but I do note that he has been 112 00:07:06.079 --> 00:07:15.120 effective at rescinding executive decrees by prior administrations. And I 113 00:07:15.240 --> 00:07:19.319 have noticed myself a real change in the politics of 114 00:07:19.319 --> 00:07:25.639 the regulatory agencies, which means frequently in the regulatory agencies. 115 00:07:25.199 --> 00:07:25.759 There was. 116 00:07:27.439 --> 00:07:31.279 A belief at the staff level the resource projects should 117 00:07:31.279 --> 00:07:35.199 go ahead, but the politics of the agency were such 118 00:07:35.519 --> 00:07:39.639 were such that at the very least stasis was what 119 00:07:39.680 --> 00:07:43.839 you expected. Now at the BLM, which by the way, 120 00:07:44.120 --> 00:07:48.959 has really competent technical people working there, They've been hidden 121 00:07:48.959 --> 00:07:53.439 well for twenty years, but they're there now. There is 122 00:07:53.839 --> 00:07:59.160 an incentive within the organization to get stuff done. They 123 00:07:59.199 --> 00:08:02.560 can use the knowledge that they have in the agency 124 00:08:02.959 --> 00:08:10.240 to complete the regulatory process in a responsible matter. It's 125 00:08:11.240 --> 00:08:16.600 further to what you say, Carrie, mining, look at empirically, 126 00:08:18.160 --> 00:08:24.079 is an efficient use of land. You generate an awful 127 00:08:24.160 --> 00:08:28.240 lot of economic activity and an awful lot of consumer 128 00:08:28.360 --> 00:08:33.080 utility by despoiling a very small piece of earth. The 129 00:08:33.399 --> 00:08:38.360 Resolution copper mine in Arizona, when it's built after twenty 130 00:08:38.360 --> 00:08:43.440 seven years of permitting, will have substantially less environmental disturbance 131 00:08:43.519 --> 00:08:47.440 than one golf course. Golf courses are green and people 132 00:08:47.559 --> 00:08:50.679 like to play on them, so they're regarded as not 133 00:08:50.759 --> 00:08:53.960 being environmentally deleterious. But if you have a monoculture, which 134 00:08:54.000 --> 00:08:57.879 is to say, grass in a Riparian area, the truth 135 00:08:57.960 --> 00:09:05.039 is that they're environmentally extremely injuries. So it's important to 136 00:09:05.159 --> 00:09:11.200 look at the concept of environmental degradation from an empirical 137 00:09:11.799 --> 00:09:15.080 technical lens as opposed to an emotional narrative lens. And 138 00:09:15.159 --> 00:09:17.960 I think what mister Trump has been able to do 139 00:09:18.039 --> 00:09:23.080 with the regulatory agencies is allow them to return to 140 00:09:23.360 --> 00:09:26.919 empirical rather than political or narrative analysis. 141 00:09:27.600 --> 00:09:28.600 Yeah, I think we'd agree. 142 00:09:28.639 --> 00:09:33.559 There are probably some places minds should not be built, 143 00:09:33.840 --> 00:09:40.399 you know, due to geographical population, many factors. But you know, 144 00:09:40.960 --> 00:09:47.720 invoking his emergency authority to push these projects through something 145 00:09:47.720 --> 00:09:51.519 that we really only saw happen during wartime or run 146 00:09:51.600 --> 00:09:55.840 ups to wartime. Is this a good thing? I mean 147 00:09:55.879 --> 00:09:59.000 from our standpoint, yes, it's a good thing. We agree 148 00:09:59.480 --> 00:10:03.080 a healthy mining sector, not just for the United States 149 00:10:03.120 --> 00:10:06.440 but for the world in general, is essential to our 150 00:10:06.519 --> 00:10:12.879 continued prosperity and well being. But invoking emergency authority to 151 00:10:12.960 --> 00:10:16.799 push a copper mind through, what are your thoughts? 152 00:10:17.279 --> 00:10:18.879 What I would like to see mister Trump do, and 153 00:10:18.879 --> 00:10:20.399 he won't do it, by the way, but what I'd 154 00:10:20.440 --> 00:10:24.960 like to see him do is require upfront bonding environmental 155 00:10:25.039 --> 00:10:31.279 bonding for resource development the United States, including exploration, which 156 00:10:31.320 --> 00:10:35.000 means that the company would need to propose a reclamation 157 00:10:35.120 --> 00:10:39.240 budget which the regulator would accept, and that would need 158 00:10:39.240 --> 00:10:42.120 to be funded upfront by way of an insurance policy. 159 00:10:44.039 --> 00:10:46.240 What happens right now is that the risk was socialized. 160 00:10:47.320 --> 00:10:50.279 People promise to reclaim, but you know what a promise 161 00:10:50.360 --> 00:10:54.039 is worth, particularly for a bankrupt company, It's worth nothing. 162 00:10:54.919 --> 00:10:58.960 The best way to ensure environmental compliance would be for 163 00:10:59.480 --> 00:11:02.840 the company planning to do the mind to convince the 164 00:11:02.840 --> 00:11:06.320 insurance company to take the risk and pay them the 165 00:11:06.360 --> 00:11:09.440 price for the risk that they assumed. That lets the 166 00:11:09.480 --> 00:11:14.000 taxpayer off the hook. Then the regulatory process comes to 167 00:11:14.039 --> 00:11:19.080 be involved in prohibiting the discharge of deleterious materials from 168 00:11:19.080 --> 00:11:23.639 the mind sight to the environment. Stop. That's what I'd 169 00:11:23.679 --> 00:11:26.039 like to see mister Trump do. That's not what he 170 00:11:26.080 --> 00:11:29.960 will do. What he will do will be to solicit 171 00:11:30.000 --> 00:11:35.960 campaign contributions and political favors from elements in society, like 172 00:11:35.960 --> 00:11:40.519 the oil and gas industry that he thinks are more 173 00:11:40.559 --> 00:11:44.720 aligned with him than the other side, Which is to say, 174 00:11:44.759 --> 00:11:47.840 carry the old saw that mankenhead about events elections being 175 00:11:47.879 --> 00:11:51.600 advanced option of stolen property. First to book, Democrats and 176 00:11:51.639 --> 00:11:53.600 Republicans in equal measure. 177 00:11:54.480 --> 00:11:58.320 For property yet to be stolen, and couldn't agree with 178 00:11:58.320 --> 00:12:02.639 you more on that. On the other hand, maybe this 179 00:12:02.759 --> 00:12:08.360 policy aligns more with societal good than just stopping everything 180 00:12:08.440 --> 00:12:14.279 this kind of luddite response to anything that happens. I mean, 181 00:12:14.320 --> 00:12:18.679 I'm not justifying it, but I'm saying it's kind of 182 00:12:18.720 --> 00:12:23.000 like I live in Florida. So there's no state more 183 00:12:23.039 --> 00:12:27.159 corrupt than Florida than except for every other state. But 184 00:12:27.200 --> 00:12:31.720 the difference between Florida and New York is well, like 185 00:12:32.200 --> 00:12:35.440 in the Illinois there was a saying an honest judge 186 00:12:35.480 --> 00:12:41.440 is one who's fixed and stays fixed. In Floriday, you 187 00:12:41.519 --> 00:12:44.919 pay the price of admission, whatever it is, zoning variants, 188 00:12:46.039 --> 00:12:48.279 law change, whatever, but you pay for it and you 189 00:12:48.360 --> 00:12:50.759 get what you paid for. In New York, you pay 190 00:12:50.840 --> 00:12:52.799 for it and you keep paying for it and paying 191 00:12:52.840 --> 00:12:55.600 for it, and maybe one day you'll get it. And 192 00:12:55.639 --> 00:13:00.720 that's why Florida is more prosperous than New York. Maybe 193 00:13:00.759 --> 00:13:03.879 this corruption is just built in, and maybe we need 194 00:13:03.919 --> 00:13:06.159 the most effective corruption we can find. 195 00:13:06.639 --> 00:13:10.120 They used to say a Mouisiana, the good thing about 196 00:13:10.200 --> 00:13:12.320 Leander Perez was he stayed bribed. 197 00:13:15.320 --> 00:13:18.960 Yeah, I'm just saying So let's talk about metals markets 198 00:13:19.240 --> 00:13:24.840 silver gold divergence. Is there a lagging silver squeeze that's 199 00:13:24.879 --> 00:13:28.679 about to really hit and does forty dollars silver matter? 200 00:13:29.320 --> 00:13:33.440 Uh? Let me answer that in parts. My experience has 201 00:13:33.480 --> 00:13:37.639 been that in precious metals bull markets, gold leads, and 202 00:13:38.120 --> 00:13:41.799 when gold momentum attracts the generalist investor into the space, 203 00:13:42.679 --> 00:13:44.000 leadership transfers to silver. 204 00:13:44.840 --> 00:13:46.440 Whether were there or not, I don't know. 205 00:13:47.120 --> 00:13:48.600 What I do know is you won't need to tell 206 00:13:48.639 --> 00:13:53.159 me when it occurred. They're usually pretty dramatic events. I've 207 00:13:53.159 --> 00:13:56.399 seen him happen three times before in my life, and 208 00:13:56.600 --> 00:13:58.159 you don't need a weatherman to tell you which way 209 00:13:58.159 --> 00:14:01.840 the wind blowing when that happens. As to a silver squeeze, 210 00:14:01.919 --> 00:14:04.159 I am not one of those who believes that there's 211 00:14:04.279 --> 00:14:08.200 been an ongoing conspiracy to depress the price of silver 212 00:14:08.399 --> 00:14:14.200 over time. I worked for great, big financial institutions, and 213 00:14:14.279 --> 00:14:16.879 the idea that they would take a negative carry a 214 00:14:16.919 --> 00:14:21.799 short position over ten years or twelve years, which affected 215 00:14:21.879 --> 00:14:25.679 quarterly cash bonuses. The probability of that occurring is nil. 216 00:14:26.120 --> 00:14:30.759 Wouldn't happen markets. All markets are manipulated in the short term, 217 00:14:31.399 --> 00:14:35.159 and they're manipulated in whatever direction is easy and is 218 00:14:35.240 --> 00:14:40.080 easier to manipulate. For forty years, you have manipulated silver 219 00:14:40.120 --> 00:14:45.840 markets down because that was their natural direction. I remember 220 00:14:45.879 --> 00:14:49.039 the nineteen seventies when trading desk would manipulate the price 221 00:14:49.080 --> 00:14:53.600 of silver up because that was the easiest direction. The 222 00:14:53.639 --> 00:14:59.120 manipulation takes place because the futures markets, the paper markets 223 00:14:59.159 --> 00:15:04.639 often trade two hundred times the available silver to cover 224 00:15:05.440 --> 00:15:09.919 on a daily basis. They're much more liquid. So the 225 00:15:09.960 --> 00:15:15.320 game works like this. A short syndicate gets involved over 226 00:15:15.320 --> 00:15:18.639 the last forty years short in the futures market six 227 00:15:18.720 --> 00:15:22.000 year duration, twelve month duration, twenty four months duration, that 228 00:15:22.120 --> 00:15:26.399 kind of thing, and they get what would be for 229 00:15:26.480 --> 00:15:30.679 you and I massively short two billion dollars short, three 230 00:15:30.679 --> 00:15:34.200 billion dollars short in a market where the nominal value 231 00:15:34.200 --> 00:15:37.799 of the positions is four hundred billion, and then they 232 00:15:37.840 --> 00:15:43.399 borrow fifty or sixty million dollars worth a billion, and 233 00:15:43.440 --> 00:15:47.480 they pound it into the market physically at whatever point 234 00:15:47.480 --> 00:15:52.559 in time the market has the least volume, and they 235 00:15:52.960 --> 00:15:56.679 use the impact of the physical market on the futures 236 00:15:56.720 --> 00:16:01.120 market to cover their shorts and pay off their physical loss. 237 00:16:01.679 --> 00:16:03.399 I mean, you see it happen time and time and 238 00:16:03.440 --> 00:16:11.399 time again. That supports long term price manipulation. I think 239 00:16:11.399 --> 00:16:14.480 that there's an aggregate of short term price manipulations. The 240 00:16:14.519 --> 00:16:19.799 eurobond market has been manipulated, the Euro market's been manipulated, 241 00:16:19.840 --> 00:16:22.799 the US treasury market's been manipulated. If you can manipulate 242 00:16:22.840 --> 00:16:25.879 markets that are that big, the silver market's a piece 243 00:16:25.879 --> 00:16:29.679 of cake. What will change, Carrie, is that the easiest 244 00:16:29.679 --> 00:16:32.440 way to manipulate the market is going to go from 245 00:16:32.480 --> 00:16:33.120 down to up. 246 00:16:34.559 --> 00:16:35.080 I got it. 247 00:16:35.320 --> 00:16:39.879 Yeah, that makes total total sense, and so a short 248 00:16:39.919 --> 00:16:42.879 squeeze because some of the players aren't going to figure 249 00:16:42.919 --> 00:16:44.879 this out until it happens. 250 00:16:45.000 --> 00:16:45.200 Right. 251 00:16:46.120 --> 00:16:50.159 The people who are involved in complex hedges in the 252 00:16:50.200 --> 00:16:53.320 silver market, I think are going to get massacred. I mean, 253 00:16:53.360 --> 00:16:57.320 I think they're in for some truly religious experiences. To 254 00:16:57.399 --> 00:17:01.159 the extent that a short position on silver that has 255 00:17:01.279 --> 00:17:03.360 been put in place by algorithms that are looking at 256 00:17:03.399 --> 00:17:07.039 silver markets over the last forty years, those leverage guys 257 00:17:07.279 --> 00:17:11.119 are really truly in for a world of hurt. Those 258 00:17:11.400 --> 00:17:14.119 I mean, you know, long term capital management worked until 259 00:17:14.119 --> 00:17:17.440 it didn't. It was a convergence trade, but the convergence 260 00:17:17.480 --> 00:17:21.440 trade wasn't set up for a third standard deviation anomaly. 261 00:17:21.640 --> 00:17:23.440 And I think the silver market's going to see a 262 00:17:23.440 --> 00:17:28.519 third standard deviation anomaly, which means that the people who 263 00:17:28.559 --> 00:17:34.680 are using silver as an unhedged corollary to some economic bet, 264 00:17:35.319 --> 00:17:38.440 and they're doing it from algorithms that are based on 265 00:17:38.480 --> 00:17:41.720 forty years of trading history, they aren't prepared for a hiccup, 266 00:17:41.839 --> 00:17:43.200 and they're gonna get a hiccup. 267 00:17:43.440 --> 00:17:47.799 What you're describing is blood in the streets. Fortunately, nobody 268 00:17:47.839 --> 00:17:50.680 works in Wall Street anymore, so you don't have to 269 00:17:50.680 --> 00:17:53.279 worry about walking down the street and having a body 270 00:17:54.119 --> 00:17:57.720 you know, crashed to the ground before you because everybody's 271 00:17:57.759 --> 00:18:02.079 in their in their home office doing these trades here. 272 00:18:02.200 --> 00:18:02.359 Rick. 273 00:18:02.720 --> 00:18:08.240 But but seriously, this is like an existential event, what 274 00:18:09.400 --> 00:18:12.920 you're saying, and it could spread to other markets as well, 275 00:18:12.960 --> 00:18:16.720 because like you said, silver is tiny. You got thirty 276 00:18:16.920 --> 00:18:22.480 five billion dollars worth of shorts in silver, man, like 277 00:18:23.200 --> 00:18:27.480 this could just spread in one counterparty hits the hits 278 00:18:27.519 --> 00:18:31.200 the bricks, and we're talking to from the fledge. 279 00:18:31.039 --> 00:18:31.920 Meltsound about that. 280 00:18:32.240 --> 00:18:35.519 To be honest with you, thirty five billion dollars is 281 00:18:35.559 --> 00:18:38.599 a lot to you and me, But the notional value 282 00:18:38.599 --> 00:18:43.759 of derivatives is more like five trillion dollars. I'm not 283 00:18:43.799 --> 00:18:47.000 so concerned about that. I'm much more concerned about things 284 00:18:47.319 --> 00:19:00.960 like unfunded entitlement liabilities and the imbalance between the nominal 285 00:19:01.000 --> 00:19:03.599 and the real interest rates. I mean, if you want 286 00:19:03.599 --> 00:19:06.079 me to scare your audience, carry I can really truly 287 00:19:06.119 --> 00:19:10.079 do that. I'm less. I'm less concerned about the impact 288 00:19:10.079 --> 00:19:13.559 on Wall Street and the deriven's markets by a silver short. 289 00:19:13.599 --> 00:19:15.480 I think it'll be you know, I think there's probably 290 00:19:15.480 --> 00:19:18.559 a couple of quantitative hedge funds. 291 00:19:19.720 --> 00:19:20.440 It'll go broke. 292 00:19:22.200 --> 00:19:22.839 Good riddance. 293 00:19:23.480 --> 00:19:25.000 No one cares about them anyway. 294 00:19:25.160 --> 00:19:29.319 Yeah, you know, the derivatives market is, it's truly vast. 295 00:19:30.000 --> 00:19:33.680 There are other counterparty scenarios that scare me a lot more. 296 00:19:34.000 --> 00:19:39.880 If if maws and paws in the United States that 297 00:19:40.079 --> 00:19:45.920 own high yield ETFs junk bond ETFs get a whiff 298 00:19:46.000 --> 00:19:48.240 of the beginnings of a credit crisis like they did 299 00:19:48.319 --> 00:19:51.640 in two thousand and eight around real estate, and they 300 00:19:51.680 --> 00:19:55.880 go to sell those high yield ETFs. The ETFs are 301 00:19:55.920 --> 00:19:59.279 extremely liquid, they trade billions of dollars a day, but 302 00:19:59.319 --> 00:20:03.480 they're comprised assets that are totally illiquid. Yes, if they 303 00:20:03.519 --> 00:20:05.759 redeem the ETF and the manager has to sell the 304 00:20:05.799 --> 00:20:12.000 bonds and can't. Now that's a scenario that's truly scary. 305 00:20:12.119 --> 00:20:15.359 And I remember reading Benjamin Graham. You know, he only 306 00:20:15.400 --> 00:20:18.799 wrote this almost one hundred years ago. They had junk 307 00:20:18.839 --> 00:20:22.519 bonds then. Junk bonds aren't a new thing. The liquidity 308 00:20:22.559 --> 00:20:26.759 of junk bonds are. But he said that, you know, 309 00:20:27.480 --> 00:20:31.680 no individual investor should ever buy a junk bond because 310 00:20:31.920 --> 00:20:35.200 you cannot understand it. And we've seen even the guys 311 00:20:35.200 --> 00:20:39.079 who understand the market get slaughtered by it. And yet 312 00:20:39.559 --> 00:20:41.240 there's a lot of junk out there. 313 00:20:42.160 --> 00:20:45.400 Harry, in shows like yours where there's live Q and A. 314 00:20:45.519 --> 00:20:48.599 I've talked to investors that held I high yield ets 315 00:20:48.880 --> 00:20:52.160 that didn't understand that the assets were comprised of junk bonds. 316 00:20:52.720 --> 00:20:54.960 They just looked at the cover yield, not how the 317 00:20:55.039 --> 00:20:58.920 yield was generated. When I was a younger man, wasn't 318 00:20:58.920 --> 00:21:02.559 the young man, but in the eighties I was pretty 319 00:21:02.599 --> 00:21:05.799 active in the high yield credit market because I understand 320 00:21:05.839 --> 00:21:10.680 how to read bond covenants. And I remember that when 321 00:21:10.799 --> 00:21:13.319 Drexel Burnham started to blow apart and blew apart the 322 00:21:13.400 --> 00:21:16.839 junk bond market. We had a we had a description 323 00:21:17.319 --> 00:21:20.240 for these ill liquid bonds. We called them owl blonds. 324 00:21:20.720 --> 00:21:23.039 And we called them owl blonds because when you called 325 00:21:23.079 --> 00:21:27.079 your broker to sell, your broker would say to who too. 326 00:21:30.079 --> 00:21:33.519 I had some friends that worked at Drexel, and you know, 327 00:21:33.640 --> 00:21:38.160 but then Leon Black picked over the carcasses of all 328 00:21:38.200 --> 00:21:42.960 those owls and made billions of dollars because, like you said, 329 00:21:43.119 --> 00:21:44.160 he could read a convenant. 330 00:21:44.759 --> 00:21:48.119 It's a great, great, great market if you understand it. 331 00:21:49.920 --> 00:21:53.759 The oil and gas industry junk bonds in the eighties 332 00:21:53.759 --> 00:21:57.160 and the nineties made me, relative to my net worth, 333 00:21:57.559 --> 00:22:01.279 a large amount of money forever, great full. But I 334 00:22:01.359 --> 00:22:04.480 understood about oil and gas and understood about covenants. You know, 335 00:22:04.519 --> 00:22:08.440 I remember buying bonds with a cover yield of twelve 336 00:22:08.440 --> 00:22:14.039 percent that we're selling at sixty. So you know, I 337 00:22:14.119 --> 00:22:18.400 got a running yield of twenty percent and a yield 338 00:22:18.559 --> 00:22:22.240 maturity of thirty five percent in a dead instrument. Life 339 00:22:22.279 --> 00:22:24.920 doesn't get better than that. But that's not what's on 340 00:22:24.960 --> 00:22:25.559 offer today. 341 00:22:26.240 --> 00:22:32.240 I remember making twenty percent on Ford bonds myself. But yeah, 342 00:22:32.880 --> 00:22:37.640 so talking about the junior resource sector, which is revivified, 343 00:22:38.119 --> 00:22:42.240 that's the right word as witnessed by your recent conference. 344 00:22:42.920 --> 00:22:47.359 You know you always said the junior resource sector is 345 00:22:47.960 --> 00:22:52.880 a broken model if you will, composed of lifestyle companies 346 00:22:53.319 --> 00:22:58.440 that aren't real businesses, and you know, look, we. 347 00:22:58.519 --> 00:23:01.000 Got a lot of AI going on. 348 00:23:01.119 --> 00:23:04.319 Do you think the AI can pick out the lifestyle 349 00:23:04.400 --> 00:23:08.119 companies from the real companies five years from now? 350 00:23:09.039 --> 00:23:12.319 But you have to know how to ask AI the questions. 351 00:23:12.880 --> 00:23:18.400 What AI does is aggregate misinformation often, So if you 352 00:23:18.640 --> 00:23:24.400 ask AI to search the Edgard database or the Cedar 353 00:23:24.519 --> 00:23:28.519 database for companies where general and an administrative expenses less 354 00:23:28.559 --> 00:23:31.119 than twenty five percent of total expenditures, that's a great 355 00:23:31.240 --> 00:23:34.920 use of AI. But if you ask AI to look 356 00:23:34.960 --> 00:23:38.119 for lifestyle companies without defining what a lifestyle company is, 357 00:23:38.920 --> 00:23:41.960 they'll go to CNBC or Kitko or places and they'll 358 00:23:42.000 --> 00:23:46.519 aggregate a whole bunch of narrative and misinformation. AI is 359 00:23:47.319 --> 00:23:51.720 really good for what the Bloomberg gobots have been good for. 360 00:23:52.920 --> 00:23:56.920 It can search databases if you give it very very 361 00:23:57.160 --> 00:24:03.200 very specific correlations, and you can do it instantaneously. AI 362 00:24:03.359 --> 00:24:06.400 can do in terms of comparative balance your analysis. If 363 00:24:06.400 --> 00:24:10.119 you know how to ask the question tasks in two 364 00:24:10.160 --> 00:24:14.680 minutes that would take me two months and I'm good 365 00:24:14.680 --> 00:24:18.480 at it. The important part, though, is that you have 366 00:24:18.559 --> 00:24:21.039 to understand how to ask it the right question. 367 00:24:22.640 --> 00:24:23.559 That is so true. 368 00:24:23.599 --> 00:24:25.960 I've been using it for three and a half years now, 369 00:24:26.640 --> 00:24:31.680 and you know, like could they talk about prompt engineers 370 00:24:31.720 --> 00:24:36.400 and all that, Well, that's nice, but I'll tell you what, 371 00:24:36.559 --> 00:24:40.000 Like for law, I had a friend and the legal 372 00:24:40.000 --> 00:24:44.000 profession doesn't even see what's coming here. Adam Ray, friend 373 00:24:44.039 --> 00:24:47.599 of mine. She wanted to read. She wanted to amend 374 00:24:47.640 --> 00:24:51.720 her trust a mendor will and quit claim her condo 375 00:24:51.920 --> 00:24:54.680 over to her trust. And she goes to one lawyer 376 00:24:55.480 --> 00:24:59.359 forty five hundred dollars. She goes to another lawyer thirty 377 00:24:59.359 --> 00:25:02.160 five hundred. Now I'm a recovering attorney, in fact, in 378 00:25:02.279 --> 00:25:04.200 America's top recovering attorney. 379 00:25:04.440 --> 00:25:07.519 She comes to me. I said, fuck it, Like. 380 00:25:07.640 --> 00:25:11.000 I'm not writing papers, Let's throw it into the AI 381 00:25:11.119 --> 00:25:15.160 and see how it works. I think it'll do, okay, Rick. 382 00:25:15.920 --> 00:25:20.519 Twenty minutes later, I had all her documents done, multiple 383 00:25:20.599 --> 00:25:26.160 copies stapled, and they were ready to be witnessed and notarized. 384 00:25:27.119 --> 00:25:28.680 And they worked. 385 00:25:28.839 --> 00:25:31.400 They were perfect. In fact, they were better than the 386 00:25:31.480 --> 00:25:34.839 documents I would have created. Myself because I'm a master 387 00:25:34.960 --> 00:25:39.680 of typos, and there wasn't one typo. And that's just 388 00:25:39.759 --> 00:25:42.319 one area. So I had the legal expertise. I could 389 00:25:42.319 --> 00:25:44.880 look at the docs and know that they were. 390 00:25:44.880 --> 00:25:48.160 You edit it, you can shape the product, and then 391 00:25:48.200 --> 00:25:51.079 you can consume the product. That's important. I asked AI 392 00:25:52.000 --> 00:25:54.359 to try to do some work for me in anticipation 393 00:25:54.400 --> 00:25:58.960 of an interview about six weeks ago talking about debt 394 00:25:59.079 --> 00:26:02.720 deficit on baalllot sheet liability stuff like that. I didn't 395 00:26:02.720 --> 00:26:08.920 specify source, and so they went through Twitter and CNBC 396 00:26:10.039 --> 00:26:15.000 and ABC and CBS, and what I got was an 397 00:26:15.079 --> 00:26:20.559 aggregation of misinformation. They didn't, as an example, talk about 398 00:26:20.880 --> 00:26:23.920 They talked about one balance sheet liabilities, you know, thirty 399 00:26:23.960 --> 00:26:28.440 seven trillion. They talked about net on balance sheet liabilities 400 00:26:28.519 --> 00:26:31.319 thirty trillion net of the seven. But they don't talk 401 00:26:31.359 --> 00:26:38.240