Brien Lundin: If They Don’t Want You To Own It, You Probably Should
We're living through the most extraordinary period of monetary printing in all of human history. It’s as widespread as it is delusional.
One of the most perplexing mysteries to us is that right as the Federal Reserve embarked on QE3 — which was a huge, enormous, $85 billion a month experiment — commodities began a multiyear decline within two weeks of that announcement. Concurrently, the world’s central banks plunged the world into steeply negative real interest rates, a condition that has almost always resulted in booming commodity prices — but not this time. Today, the ratio between commodity prices and equities is at one of, if not the most, extreme points in history.
Gold Newsletter was started in 1971 by my mentor in the business, Jim Blanchard. That's the same year that the United States had closed the gold window, closed the convertibility of dollars into gold by other nations. Jim realized that now the US could print money with full abandon, it could print as much money and create as much debt as it wanted. And at that time still, and until we managed to get gold legalized in 1974, you couldn’t own gold legally, except in the form of jewelry or rare coins. It was up there with plutonium and heroin as substances you weren't allowed to own.
So it should be little surprise that, today, we're seeing a synchronous rise in equity markets across the globe. It corresponds almost exactly with the unprecedented rise in debt, in liquidity, in all of these developed nations. If you look for example at the rise in the Fed's balance sheet since 2008 and the corresponding rise in the S&P 500, the correlation is 97%. I don’t think that’s a coincidence. That’s where all of this reflation, this monetary reflation went, into those markets — which is why you really need to up your allocation to the uncorrelated assets [such as the precious metals] that are at historic lows in relation to financial assets.
Every time in history, before we’ve had a great upset in the financial markets, people have said: This time is different. And every time, it’s proven not to be. You have to have a correction. You have to have things return to the mean and, usually, overshoot a bit.
Alan Greenspan just a couple of days ago made the point that we’re in a bond market bubble and that's what’s eventually going to burst. The risk inherent in bonds is not being priced into the markets now. When that bond bubble bursts, it’s going to take equities down with it. And there’s still tremendous liquidity out there; massive amounts of money will start suddenly looking for a safe haven.
The gold market is miniscule. It’s so small relative to the funds that are in bonds, interest bearing securities, equities, that it won’t take much of an allocation at all to send gold to record levels. That’s going to happen at some point. We can get fuzzy on the actual timescale and the timing of when it’s going to happen. But the fact that it will happen is inevitable, these trends are absolutely irreversible at this point.
So…What’s so special about gold? If it's what they tell us: that it’s a barbaric relic and it has no use in society, then why be so secretive about it? Why be so reluctant to have your citizens own it? That alone tells you all you really need to know.
If they don’t want you to know about it, if they don’t want you to own it, you probably should.
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Brien Lundin: If They Don’t Want You To Own It, You Probably Should
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Chris Martenson: Welcome to this Peak Prosperity Podcast. I am your host Chris Martenson and it is August 3rd, 2017. You’ve heard me say this before. We are living through the most extraordinary period of monetary printing in all of human history. It’s as widespread as it is delusional.
One of the enduring mysteries of this period of money printing is that right as the Federal Reserve embarked on QE3, which was a huge, enormous, $85 billion a month experiment, commodities began a multiyear decline within two weeks of that announcement. Concurrently, the world’s central banks plunged the world into steeply negative real interest rates.
A condition that has almost always resulted in booming commodity prices, but not this time. Currently, the ratio between commodity prices and equities is at its most extreme ever on a chart I have that goes back to 1971. Now however we choose to explain that gap between central bank actions and commodities, it has become so profound that it really deserves our careful attention.
Which is why we’ve brought a very special guest today to this program with a career spanning four decades in the investment markets. Brien Lundin serves as President and CEO of Jefferson Financial, a highly regarded publisher of market analyses. And producer of investment oriented events, which we’ll get to in a minute.
Under the Jefferson Financial umbrella, Lundin publishes and edits Gold Newsletter, a cornerstone of precious metals advisories since 1971. Hey, there’s that date again. And one of the most respected newsletters in the business.
Brien also hosts the New Orleans Investment Conference, one of the most well attended and dynamic investing conferences that have been running for over 40 years. So perfect guest for today. Brien, welcome to the show.
Brien Lundin: Great to be here Chris. Thank you.
Chris Martenson: Well, you and I, we first met face to face at the Summit at Sea this last year, which turned out to be an excellent source of high quality connections for Adam and myself. That was fun, wasn’t it?
Brien Lundin: That was incredible. What a wonderful event and I have to tell you, I’ve been in this business, as you just said, decades, and have hosted hundreds of the leading experts in the world in every area of economics, finance, investing, etc. But when you and Adam got up and started talking, after you were talking about 15-20 minutes, I did something I don’t think I’ve ever done.
I got up and walked out of the room and then I went to the bookstore, bought your book, and went right back in the room. Because I said as soon as these guys finish, there’s not going to be any books left. And in discussions with you and Adam on the cruise and after your presentation, we really got to know each other and realize how much our views overlapped.
And you guys kind of take it in a different way or expand it in a different way in all of the preparedness aspects that you bring to the table. Whereas, I’ve always focused on the aspects of using gold as insurance and as that kind of life preserver in case of monetary crisis. But we agree on so many things, so I’m very excited to be here and be on your show today.
Chris Martenson: Well thank you and it’s such a fantastic endorsement from somebody like yourself who really has seen a lot of presentations, I trust, over the years. And has really had a chance to pick at some of the most astute financial minds out there. And what Adam and I have done is, of course, we’ve broadened out. You can’t just look at the economy E anymore.
We’re at this weird place in human history where you have to understand really that resources aren’t assumable things that show up because your economy needs them. Now we have to start thinking a little differently. So, I’m glad that part resonated with you because of course, that’s our mission, to try and connect those dots for people.
It seems obvious but boy, it’s hard to get people to wrap their minds around it. I was just interviewing an old school economist. He knew Milton Friedman, is a very famous kind of guy. 77 years old and I tried to connect those dots for him and he said oh Chris. My whole life people have been telling me that resources are going to run out and they haven’t.
And of course, my flip response that I didn’t use with him at that point in time would’ve been something along the lines of: “Yeah. People have been telling me my whole life someday I’m going to die and I haven’t.” So therefore, I won’t? I mean, it was such a logical fallacy.
It was like no, no. When you were born, there were two billion people in the world. Now there’s seven point four. That’s got to create some new both challenges and opportunities, right?
Brien Lundin: It does and I’m surprised he didn’t bring up the fact that resources haven’t run out but boy, the prices sure have changed. And that has a direct impact on their availability and what we’re talking about, what you just mentioned, is the huge increase. Really unprecedented in terms of degree relative to GDP.
That we’ve seen debt creation. That we’ve seen credit creation and money creation since the 2008 credit crisis. And this huge influx of money has created a tremendous inflation not in prices as it used to, but in the financial markets; in other forms of paper securities.
Now eventually, this will have an impact in that these debts that have been created; debt is money. And they’re either going to have to be paid off or depreciated. And 4,000 years of human history shows that in every instance, these debts are depreciated by the subsequent depreciation of the underlying currency.
That’s what’s going to happen, and that’s why real things will rise in price. Because the underlying currency will decrease in real value.
Chris Martenson: Now that’s really the subtext of why I brought that other economist on. Because he wrote a book which included 5,000 years of history on interest rates, which is the price of money. And so, of course, to keep this whole thing going, the central banks have had to take interest rates from about 15% on the long end down to zero or negative in most cases.
That keeps the game going. But I want to ask you about this really historic gap between commodities and equities we’re seeing right now. To set that up, you started on this topic for a bit. You’ve been in business a long time. But how would you describe this moment in monetary history?
Brien Lundin: Unprecedented. We are literally in uncharted territory. The extremes in valuations and relative valuations have reached levels never seen before. And everything in the markets eventually returns to the mean. But before it returns to the mean, it goes to the other extreme. It overshoots equilibrium.
So, if you’re looking at the fact that the stock market, that that ratio between say equities, between stocks and commodities and let’s say gold in particular. That ratio has to return to normalized levels. Before it does that, it’s going to overshoot to the other end of the spectrum.
And that means much lower equity prices and much higher prices for gold and other commodities, especially the monetary commodities like gold and silver.
Chris Martenson: Well, this chart I’ve got is just very extreme. There are two other bottoms that were just remarkable turning points. So, the conclusion from a chart like this is either you have to believe that stocks just continue to go up and commodities continue to go down.
Or, you say this might be a really good time to begin thinking about sector rotating away from paper to things. If we could look at it that way or equities in this case, to commodities.
Brien Lundin: And I think it’s also important Chris – I don’t tell people that they need to go all in either way or the other. But they need to get prepared. They need to diversify and they need to shift allocations. I don’t tell people that they need to sell every stock that they own. We still have to maintain retirement plans. We still have to do the kinds of smart planning that everyone needs to do.
But you need to be positioned. In the commodity sector, you need to build your positioning in gold and precious metals. And in some cases, for the more speculative among us, mining stocks that leverage those moves into precious metals.
Chris Martenson: Now as an investor then, so we’re getting into this idea of being an investor and not going all in and being truly diversified. This is kind of an unusual period to be an investor if you’re looking at once upon a time. Not that long ago, when I was first learning about portfolios and investing my own money from my career.
Diversification, I learned about it. It made sense. You wouldn’t want to be all in US stocks. You might want to be diversified. You were considered diversified. You could build this efficient frontier portfolio if you were diversified across foreign equities and maybe you were in currencies a little bit.
Or maybe you had bonds. I’m looking at the correlations between these things now. Here’s how I summarize it. It looks like there’s nowhere to hide. All the paper assets have been run up and they’re all trading almost like a single beast. And Brien, I follow the stock market really, really closely. Closer than most people should or do.
If you strip the headers off and you showed me here’s one of the DAQs. Here’s one of the CAQH. Here’s one of the FTSE. Here’s one of the S&P. I’d be hard pressed to pick them apart without a header on it. So, talk to us about what it means to be an investor in these unprecedented times.
Brien Lundin: Well, first off, what you just referred to is the synchronous rise in equity markets across the globe. And it corresponds almost exactly with the, as we said, unprecedented rise in debt, in liquidity, in all of these developed nations. If you look, for example, at the rise in the Fed's balance sheet since 2008 and the corresponding rise in the S&P 500, the correlation is 97%.
I don’t think that’s a coincidence. That’s where all of this reflation, this monetary reflation went, into those assets. And you mentioned the efficient frontier, which is trying to create the perfect risk adjusted return portfolio. It’s the basis of modern portfolio theory.
It’s the basis of really even this robo advice they’re promoting now, always trying to get the right mix of assets to get the highest risk adjusted return. Every one of those algorithms is backward looking. And as we just said, we’re in unprecedented times. Literally uncharted times. We’ve never reached these extremes.
So any backward-looking portfolio management algorithm or theory, by its very nature, cannot capture the environment we’re in now. And that argues for the fact that yes, you can still be in the stock market. You can still be in all of these financial assets. But you really need to up your allocation to these uncorrelated assets that are at historic lows in relation to financial assets.
Chris Martenson: Now if we, just to put a little bit of a spin on this, a point on it if it were. In Europe right now, junk bonds are trading at record lows in terms of yield. So this is record high prices, junk bonds. That now, once you factor in just even a slight amount of risk adjusted returns, they’re trading with negative yields, junk bonds.
They’re actually at a nominal yield of about two point four percent. Just astonishing that you could choose to either hold a junk bond in Europe or close enough, a US ten-year treasury, at almost the same yield. But people are so desperate that they’re willing to chase that extra 70 basis points for a junk bond, which means that by extension, however these algorithms got built.
And however people are constructing their portfolios, somehow, someway, this idea has gotten coded in. Which is that this time is different. Risk has been all but eliminated. Has it?
Brien Lundin: Yeah, that’s the only part of today’s environment that isn’t unprecedented. Every time in history, before we’ve had a great upset in the financial markets, people have said this time it’s different. And every time, it’s proven not to be. You have to have a correction. You have to have things return to the mean and as I said, overshoot a bit.
But you make a great point about the bond market. Alan Greenspan just a couple of days ago made the point that we’re not in a stock market bubble. But we’re in the bond market bubble and that is what’s eventually going to burst. That’s what’s…the risk inherent in bonds is not being priced into the markets now.
But when that bond bubble bursts, it’s going to take equities down with it. And there’s still tremendous liquidity out there. There’s still massive amounts of money looking for a safe haven. And we’ve seen that this money gets allocated to the gold market, for example, when there are crises out there. When there’s uncertainty in equities and/or bonds.
And it doesn’t take that much money. The gold market is miniscule. It’s so small relative to the funds that are in bonds, interest bearing securities, equities, that it won’t take much of an allocation at all to send gold to record levels. That’s going to happen at some point.
We can get fuzzy on the actual timescale and the timing of when it’s going to happen. But the fact that it will happen is inevitable and these trends are absolutely irreversible at this point.
Chris Martenson: Now for every bond issued, there’s a bond holder. So we know there are over $215 trillion of bonds outstanding in the world market at this point. We know that the relative valuation of equities is around $75 trillion. So rounding to the nearest 100 trillion, there’s about $300 trillion of outstanding claims. How much of that $300 trillion would you think is allocated to gold right now in these portfolios you just mentioned?
Brien Lundin: Oh, I think it’s less than one percent, around that level. I believe the gold market, and especially the gold equities market, is less than one trillion dollars in total value. So accessible gold. Much of the world’s gold is locked up forever and I’m not talking about central bank vaults.
Because we’ve learned over the years that some of that central bank gold is actually mobilized and loaned out to the market. So, a lot of citizens in a number of countries think that their central banks have these gold reserves when in fact, they have paper IOUs. But a lot of the gold out there will never be recovered.
It’s in chains and jewelry adorning Indian women, for example. That’ll never be returned to the market. So it’s an interesting market in that the commodity never really gets consumed. But yet, there is demand that quite often exceeds supply.
Chris Martenson: Now this is a fascinating topic and I hate to say this. I’ve spent a lot of time trying to make sense of it and I’ve come up kind of empty handed. I look at the excellent work by say Koos Jansen and people of BullionStar. And they’re busy sectioning through the Shanghai gold exchange reports and digging through the statements of individual central banks.
And trying to add all the numbers up. Honestly, I’ve joked about this before. So to any NSA people listening, and this is a joke, but it’s easier to find plans for a nuclear bomb online than it is to find out the actual state of the gold market.
How have you fared in trying to make sense of what is least, who's got what, where it might be? You’ve been in this a long time. So what’s your perception there?
Brien Lundin: Well, we published research by a guy named Frank Veneroso. Brilliant market economist, in the mid-1990’s, that kind of started a lot of this analysis going. We published a book called The Gold Book, which was just a comprehensive analysis of all the central bank holdings and was the first to really expose the fact that there were paper IOUs replacing central bank gold reserves around the world.
And that launched a lot of things. A lot of the groups that were looking into potential central bank manipulation of the gold market and manipulation by other big bullion banks out there. And it is; it’s shadowy, it’s mysterious, it’s hidden. It’s information that they don’t want you to know. And therefore, if they don’t want you to know it, it’s just that much more important that you know it.
For that very reason and these guys that you mentioned, the guys at BullionStar, Koos Jansen, Ronan Manly, I just wrote about them in the issue of Gold Newsletter that’s going out today. Their research gives me a headache trying to ferret through the numbers that they put out there.
They do the hard work and sweat the details that very few other analysts do or can. And it really makes your head spin trying to go through their analyses and figure out where the gold flows are going. But they come out to bottom line answers that are absolutely amazing.
Koos, for example, has made a point that I’ve agreed with for years in that China’s gold reserves… you have to include not only their official reserves, which we can only really guess at. But all of the gold held by their citizens. They’ve been encouraging their citizens to own gold for many years now. And why is that? Because there’s no such thing as private property in China.
Gold in the hands of its citizens are de facto official gold reserves of the nation. And Koos puts their official gold reserves at over 30,000 tons right now. If you include the gold held by its citizens and that’s huge. That’s more than any other developed nation out there.
So there are a lot of trends out here, undercurrents, that are not being reported that the mainstream financial media and the vast majority, therefore, of investors aren’t aware of. These huge gold flows that are going from West to East. There are 400-ounce good delivery bars that since 2013 have been flowing into China.
They’ve been shipped to Swiss refineries where they’re melted down into one-kilogram bars that are destined for the Asian markets. So this gold, these 400-ounce good delivery bars, are typically the gold bars that are in central bank vaults as gold reserves. So we’ve seen this wealth flow from West to East and that’s, I think, a corollary for the flows of economic power in the world today.
Chris Martenson: Brien, about those 400-ounce good for delivery bars. Have you heard any scuttlebutt about the nature of those? They all have a stamp on them. They all have a serial number. Has anybody, to your knowledge, been chasing those down and saying where are these coming from?
Brien Lundin: Yeah. The scuttlebutt has been that the news coming out or rumors coming out of these Swiss refineries is that they have central bank stamps on those good delivery bars. And not only that, that some of the dates on those stamps are getting older and older. So that they may be reaching the bottoms of those vaults.
Really hard, if not impossible, to verify. But scary nonetheless and there have been all sorts of resistance over the years to an actual auditing of say Fort Knox and the US gold reserves. Why? Why would you want to give rise and fertilize these conspiratorial rumors by refusing to audit the US gold reserves? Why don’t you just audit them? What’s there to hide? When we saw Germany try to get its gold reserves returned from US holdings, they said it would take seven years. Why?
The easy answer is that gold didn’t exist at the time. Now they didn’t take seven years. They managed to mobilize it and get gold over there, but it wasn’t the same gold bars that had gone in. And immediately upon arrival, they were melted and recast into new bars. Why? Why would you do that?
Chris Martenson: Why would you do that?
Brien Lundin: Because you want to hide the trail of where they came from. And you don’t want to confirm the fact that this isn’t the gold, these aren’t the reserves that were there. That supposedly, they’re on record by bar number.
Chris Martenson: That’s interesting because one of the things they’ve always said is oh. It just costs so much money to audit. So we couldn’t. I mean, I don’t know if that’s a lot of trouble. We’d have to actually look at the bars and write the numbers. I don’t know, a lot of money. But then when they get bars back it’s like oh, yeah. We paid to have them melted and recast. That didn’t cost anything.
Brien Lundin: Listen, if we told the IRS that that’s just too much trouble to figure out how much money we made, we’d be in jail. It’s another example of what the government gets away with.
Chris Martenson: Yeah. Koos had a recent piece again, sort of headache producing. But he did this really exhaustive work, I believe, with the Dutch central bank. Because they had just repatriated some bars and he’s like can I see the bar list? And they’re like oh, yeah, no. That would cost hundreds of thousands of dollars and he went through this whole thing to sort of prove that we’re pretty sure you have a bar list.
It’s in a spreadsheet somewhere. It has to be. And that doesn’t cost hundreds of thousands to send out. What’s the deal? But again, just that opaqueness, they drag their feet, they don’t want to talk about it. They don’t even want to release the bar list numbers. This is really a case of there’s a lot of smoke here. You’re saying there’s probably some fire down there.
Brien Lundin: Yeah, there really is. They spend so much time trying to hide how much gold they have. In every other aspect, they have holdings down to three decimal places. But they always try to hide gold and don’t want you to know how much they have or where it’s going or who they’re transferring it to, who they’re swapping it with.
And you mentioned earlier, 1971 was when Gold Newsletter started. It was started by my mentor in the business, Jim Blanchard. And that date again is the date that the United States had mixed and closed a gold window, closed the convertibility of dollars into gold by other nations.
And it was at that point that Jim had realized that now we can print money without restraint, with full abandon. We can print as much money and create as much debt as we want. And at that time still, and until we managed to get gold legalized in 1974, you couldn’t own gold legally except in jewelry or rare coins.
It was up there with plutonium and heroin as substances you were not allowed to own. So again, what’s so special about gold? If what they tell us, that it’s a barbaric relic and it has no use in society, is true, then why be so secretive about it? Why be so reluctant to have your citizens own it? That alone tells you all you really need to know.
If they don’t want you to know about it, if they don’t want you to own it, you probably should.
Chris Martenson: That’s a concise way of putting it and I’m with you on this Brien. I totally agree that if they really didn’t care about it, they would throw the vaults wide open. And they’d make a big show of every bar being sold and loaded on a truck and leaving for some other point. Because we don’t care. Let’s just be done with it.
But again, it’s one of the most frustratingly secretive substances out there. I’m pretty sure I know the state of finances on almost every other crevice in the government. Maybe there’s some black box stuff I don’t know about. But at least you can look at the total outlays and inflows. But with gold, no clue, not a clue.
Who owns what or how it’s encumbered or whether there are multiple owners because it’s been hypothecated and rehypothecated or what. Just a big giant sort of opaque mess. But meanwhile, silently as it were, or not so silently, hidden in plain sight you have the East countries just buying like crazy. Now we have to include Turkey in this Russia, India of course, China of course.
But generally, those countries really starting to pick up their ownership and this is the thing about gold. Can’t print it up. Has to be coming from somewhere. So we know there’s a minimum 1,000 ton per year deficit over mine supply that has to come from somewhere. It must be coming from Western vaults, I guess, unless there was a whole lot of gold liberated from Saddam Hussein that sort of got fed into the maw of this scam.
But there must be a time, I’ve always argued, that the Western vaults get depleted enough that we say stop. We can’t do that anymore. Do you agree with that and what’s the mechanism that we say stop? Is that by passing a law that says it’s illegal again or do we let price sort that out?
Brien Lundin: I think it always comes down to price. The point where the vaults are empty, I’m not sure we’re really going to be able to realize when that happens. Again, it’s very secretive and they’ll have paper representations, IOUs in the vaults, but no more gold. Probably one of the reasons why they don’t want people poking around and auditing it. But you also make a good point about the excess of demand over supply.
We’ve actually reached peak gold and gold production and this is the year that was long awaited and predicted over the last few years. But it’s finally happened, that gold, new gold mine production has peaked and is falling off. And right now, and corresponding to that, further to your point, Asian demand has soared, particularly in China.
And Koos has done a good job, really the only one who was able to figure out that the Shanghai gold exchange and the deliveries from that exchange is the only real and accurate proxy for domestic demand in China. And from his work, we’ve figured out that in some cases or in recent years, Chinese demand has nearly dwarfed global gold production.
And when you add India in there, it far exceeds global gold production. Just those two nations, hundreds and hundreds of tons of gold demand buying over and above new gold produced.
Chris Martenson: Which means it’s coming from somewhere.
Brien Lundin: It’s coming from somewhere and there is a veritable river of gold flowing from Western vaults through Switzerland into China and the rest of Asia.
Chris Martenson: Yeah. I’ve been tracking that for a while and I keep thinking it’s got to make a difference at some point. It hasn’t yet. Now how about silver? You just mentioned peak gold output for supply from mines and all that. What about silver? I was down in Lima, Peru two years ago and I was talking with the CEO of one of the larger silver miners down there.
And their all-in cost of production was hovering at about 17 US at that point in time. So I know that their operations plus a lot of others are either at or below the all-in cost of production for silver at its current price, which it can’t seem to escape from. What are your views on silver short-term, long-term?
Brien Lundin: Silver is a monetary metal, first off. And one of the things that new investors to the sector get confused about is when people start talking about well silver is better than gold because it has industrial uses. If silver was valued purely on its industrial uses, it would be somewhere around five to seven dollars an ounce instead of 16-17 dollars where it is today.
That premium above those levels is entirely due to its monetary nature. And if you like gold, if you believe that these mountains of debt and credit and money that have been created in recent years. And in fact, recent decades, if you believe that that demands that the dollar and other fiat currencies, other paper currencies have to be depreciated, then the inevitable result of that is that gold prices will rise.
If you believe gold is rising, then you need to invest in silver. Because silver will always rise more quickly than gold. It’s like an option on the gold price. It’s more volatile. It will also fall more quickly than gold and further than gold in a down market. So, it is more volatile, but if gold prices are rising, silver will rise more and there are a lot of ways to invest in it.
And these silver companies, for example, that you mentioned, because they are barely making it, they are sometimes losing money on their silver production. Just a modest increase in the silver price translates to their bottom line to a much greater degree. So these what we call marginal silver producers can offer huge leverage in a rising gold and silver price environment.
Chris Martenson: And obviously, we’ve all been waiting for a long time, since 2011. Have we finally bottomed? Are we at bottom? Where and when do you think gold and/or silver will begin to go the other direction in this story?
Brien Lundin: Well, they already have. We bottomed in December of 2015, late December of 2015. We had a really nice rise in 2016 and then with the elections in the summer of 2016, the price peaked. And gold and silver dropped precipitously after Trump was elected. But then, once again, in late December, early January, it started rising again as Trump got to the White House and his administration started working.
The metals bottomed and started rising again. But it’s been in a stair step kind of fashion. Halting, two steps forward, one step back fashion all year long. And I think a lot of that has to do with the geopolitical worries. Say what you will about Donald Trump. He has taken, he’s created a lot more anxiety around the world than normal.
Usually, these geopolitical events affect the gold market like waves on the beach. They come in and they crash and then things return to normal. But with the Trump administration, there seems to have been a rising tide of worry that’s been booing to some extent. Usually, I typically don’t like that as a driver for gold prices.
Because things tend to get resolved. The big driver, the most important driver for gold and silver prices, are monetary issues. That’s what really gets us in these long secular bull trends that can be extremely profitable. And I think those factors are still very much in play. But again, also creating the wiggles in the line as it were have been these geopolitical factors this year.
Chris Martenson: Not the least of which is a pretty hefty decline in the dollar throughout 2017 so far. Which has some geopolitical overtones and maybe some monetary overtones. But a little surprising to me to see the dollar drop and even as the Federal Reserve is assuring that ther
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