WEBVTT - AppHarvest CEO on Sustainable Infrastructure 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:21.760 at Bloomberg dot com slash podcast. I'm very excited about 0:00:21.800 --> 0:00:26.160 this next guest for a number of reasons. Um Number one, 0:00:26.200 --> 0:00:28.840 I've always wanted to be a farmer, and it seems 0:00:28.920 --> 0:00:32.479 like I'm getting a little closer with new technology. Number two, 0:00:32.520 --> 0:00:34.760 I'm from Ohio. He's from Kentucky, and I feel like, 0:00:35.159 --> 0:00:36.639 you know, a lot of states that are next door 0:00:36.640 --> 0:00:39.839 to each other have rivalries. I think Ohio and Kentucky 0:00:39.880 --> 0:00:44.400 really compliment each other well. Dwight Yoakum was from Kentucky. 0:00:44.520 --> 0:00:48.400 He moved to Ohio. You know, Sturgill Simpson was from Kentucky. 0:00:48.640 --> 0:00:51.080 He moved to Ohio. Uh and a lot of people 0:00:51.080 --> 0:00:53.120 have moved the other way around as well. Jonathan Webb 0:00:53.200 --> 0:00:55.600 joins us right now, founder and chief executive of app 0:00:55.680 --> 0:01:00.000 harvest Um, which so Jonathan set us set us up 0:01:00.440 --> 0:01:02.480 as to what your company does as far as I 0:01:02.560 --> 0:01:08.119 understand it, you basically are bringing tech into farming and 0:01:08.800 --> 0:01:11.520 really solving some E s G problems as far as 0:01:11.560 --> 0:01:15.640 food waste is concerned as well. Yeah, Paul Matt, thanks 0:01:15.640 --> 0:01:17.760 for having me. And yeah, I'm a huge Sturtle Simpson fan. 0:01:17.880 --> 0:01:22.680 And uh yeah, heth Kentucky and Ohio. What well, that's right, 0:01:22.720 --> 0:01:25.720 and we're talking to all those East Kentucky artists now 0:01:25.760 --> 0:01:28.600 about this. But um, yeah, I've been in d C 0:01:28.840 --> 0:01:31.440 the past couple of days talking with senators on both 0:01:31.480 --> 0:01:34.319 sides of the aisle, and and what we've messaged is, 0:01:34.840 --> 0:01:39.119 you know, controlled environment agriculture is it's inevitable. It's really 0:01:39.160 --> 0:01:43.040 the third wave of sustainable infrastructure. You look, twenty years 0:01:43.040 --> 0:01:47.080 ago was renewable energy the world finally caught on. Ten 0:01:47.160 --> 0:01:50.360 years ago it was electric vehicles the world finally caught on. 0:01:50.880 --> 0:01:52.840 Uh And right now you can look at the you know, 0:01:53.320 --> 0:01:56.400 at the US, and we are incredibly vulnerable as it 0:01:56.440 --> 0:01:59.919 relates to food security in this country. You know, calif 0:02:00.080 --> 0:02:03.960 Ornia drought stricken, wildfires, the southwest of the US is 0:02:04.040 --> 0:02:08.200 drying up. CBS just did a big piece on the 0:02:08.240 --> 0:02:11.520 Colorado River drying up. You know, I'm standing in coal 0:02:11.600 --> 0:02:15.760 country eastern Kentucky. And we've talked about mining fossil fuels 0:02:15.760 --> 0:02:18.720 for decades. What we've not talked about is we're mining 0:02:18.760 --> 0:02:22.320 our water. We're we're extracting our water, uh to a 0:02:22.400 --> 0:02:25.960 point to where you know, our our awkwifers are not refilling, 0:02:26.080 --> 0:02:29.160 so app harvest. We're building some of the world's largest 0:02:29.200 --> 0:02:33.680 controlled environment agriculture facilities. We grow a fruit and fruit 0:02:33.720 --> 0:02:37.400 and vegetable with nine less water and get thirty times 0:02:37.520 --> 0:02:42.400 more more yield breaker uh, using technology. So Jonathan described 0:02:42.440 --> 0:02:44.440 for us, or explain to us, what is a controlled 0:02:44.560 --> 0:02:50.399 environment agriculture? Yeah, so I think of you know, anything 0:02:50.600 --> 0:02:54.560 you grow indoors and control the environment. So I'm thinking 0:02:54.560 --> 0:02:57.840 about weed by the way, I'm thinking just about marijuana basically. 0:02:58.080 --> 0:03:02.280 But well, well that that that has helped push the 0:03:02.320 --> 0:03:08.680 industry technology wise forward. You look at LED lights, yeah, hydroponics, 0:03:08.720 --> 0:03:12.400 you know, climate control, humidity controls. So you know, there's 0:03:12.440 --> 0:03:15.280 several companies out there were one of them, and you know, 0:03:15.680 --> 0:03:19.400 I personally don't see anybody as competition. This problem is 0:03:19.480 --> 0:03:23.519 so big, uh. We as as you know, the US 0:03:23.560 --> 0:03:26.880 are not nearly moving fast enough. Uh. The U n 0:03:26.960 --> 0:03:30.800 is predicted we need fifty to seventy more food by 0:03:30.840 --> 0:03:34.160 twenty fifty, and we would need to planet Earth's the 0:03:34.200 --> 0:03:36.800 way we currently grow that food. We've got to use 0:03:36.840 --> 0:03:39.720 technology to grow more food with less resource. The point 0:03:39.720 --> 0:03:42.280 being you can grow a lot of other stuff besides weed. 0:03:42.320 --> 0:03:45.000 I mean, this is not a little pineapple express barn. 0:03:45.040 --> 0:03:51.680 You're talking about big indoor farming operations that can feed masses. Right, Yeah, 0:03:51.680 --> 0:03:54.280 that's that's right. And and no, we're we're growing fruits 0:03:54.280 --> 0:03:57.720 and vegetables. We're definitely not growing the other stuff. Uh, 0:03:57.880 --> 0:04:01.280 We're we're growing fruits and vegetables. But yeah, it's we're 0:04:01.320 --> 0:04:03.960 at scale. It's massive. So to put this in perspective, 0:04:04.320 --> 0:04:07.840 our first facility in Morehead, Kentucky is two point eight 0:04:07.920 --> 0:04:12.160 million square feet UH sixty acres under glass. One of 0:04:12.200 --> 0:04:15.240 the largest facilities under construction in the world in the 0:04:15.240 --> 0:04:17.960 middle of COVID is what we built here in Kentucky. 0:04:18.680 --> 0:04:22.520 We have four more facilities under construction. Uh. We just 0:04:22.560 --> 0:04:24.920 went public on the NASDAC under a p p H 0:04:25.040 --> 0:04:28.479 and raised five million dollars to build out our series 0:04:28.520 --> 0:04:33.040 of of indoor UH facilities here here in eastern Kentucky. 0:04:33.080 --> 0:04:36.240 So Jonathan explained to me your business per se, do 0:04:36.279 --> 0:04:40.880 you go to existing farmers and say, let us kinda 0:04:41.320 --> 0:04:44.560 help you get to the future. What what what is 0:04:44.600 --> 0:04:48.400 exactly your day to day business? Well, unfortunately, the American 0:04:48.400 --> 0:04:51.320 farmers already lost to Mexico. And when I've met with 0:04:51.360 --> 0:04:53.720 everybody on Capitol Hill last week, that's what we were 0:04:53.720 --> 0:04:57.039 talking about. We implore most of our fruit and vegetables 0:04:57.080 --> 0:04:59.920 from Mexico because the US is slowly shutting down for 0:05:00.040 --> 0:05:03.520 and vegetable production. So you know, our competition really an 0:05:03.520 --> 0:05:07.719 app harvest, it's it's the imports from Mexico. Four billion 0:05:07.800 --> 0:05:11.360 pounds of tomatoes were imported from Mexico last year. That 0:05:11.480 --> 0:05:15.360 was nearly one point two billion pounds about fifteen years ago. 0:05:15.520 --> 0:05:20.120 So we're app Harvest is building the facilities, we're operating 0:05:20.120 --> 0:05:24.760 the facilities. We're selling the Windy's, Walmart, Kroger, uh, some 0:05:24.880 --> 0:05:27.440 of the so we're selling directly to some of the 0:05:27.520 --> 0:05:31.920 largest grocers and retailers who see the vulnerability and their 0:05:31.960 --> 0:05:34.159 supply chain. How hard is it to get the human 0:05:34.200 --> 0:05:36.520 I mean, you've got the tech side covered and robotics 0:05:36.560 --> 0:05:39.160 I know are all are all up and working there 0:05:39.200 --> 0:05:42.360 as well, but you still need humans to pick the crop, right, 0:05:42.360 --> 0:05:45.039 I mean, how do you get strawberries off the vine? 0:05:45.080 --> 0:05:49.040 You've got to have people working. Well, we have robotic harvesters, 0:05:49.080 --> 0:05:50.960 but we have a lot of people. And look, I'm 0:05:51.000 --> 0:05:53.280 in I'm in eastern Kentucky. I don't think cause I'm 0:05:53.320 --> 0:05:56.599 from the state here and I love this state. But 0:05:57.240 --> 0:05:59.279 we had some of the hardest working men and women 0:05:59.560 --> 0:06:03.200 in the US powering or coal mines for the Industrial 0:06:03.279 --> 0:06:06.839 Revolution and on we hired five for I watched the 0:06:06.839 --> 0:06:08.880 news every day. People say people didn't want to work, 0:06:08.880 --> 0:06:11.479 and I laugh. We had eight thousand people apply to 0:06:11.520 --> 0:06:14.680 work at this company, five hundred and fifty people working now. 0:06:14.760 --> 0:06:17.080 So we have a workforce here that's going to drive 0:06:17.160 --> 0:06:20.799 high tech forward for the years to come in Eastern Kentucky. 0:06:20.839 --> 0:06:23.839 That's a great story. Johnson Webb, founder and chief executive 0:06:23.839 --> 0:06:28.440 officer from app Harvest. All right, Matt. When I went 0:06:28.640 --> 0:06:31.080 on my West Coast marketing trip when I was the 0:06:31.160 --> 0:06:33.919 South Side analysts, and you go to l A, you 0:06:34.080 --> 0:06:37.320 have to have to lockdown meetings and then you can 0:06:37.360 --> 0:06:39.159 book the rest of the day. In l A, one 0:06:39.240 --> 0:06:42.359 was Capital Group and the other was Trust Company of 0:06:42.400 --> 0:06:45.600 the West t c W. Just monsters Today, we're joined 0:06:45.600 --> 0:06:49.720 by Brian Whalen, Group Managing Director for TCWS Fixed Income Group. 0:06:49.800 --> 0:06:51.520 And why did I have to get that meeting? Two 0:06:51.880 --> 0:06:55.280 and fifty three billion dollars in assets under management? Brian, 0:06:55.279 --> 0:06:58.719 thanks so much for plus the nicest guys. Yeah, my 0:06:58.720 --> 0:07:00.760 my media guy on the equity I was a great 0:07:00.800 --> 0:07:03.440 guy and I still keep in touch with them. So um, 0:07:03.640 --> 0:07:05.280 always a fun meeting to go to to see the 0:07:05.279 --> 0:07:07.400 folks at tc W Bryant. I'm looking at the ten 0:07:07.520 --> 0:07:11.280 year here, I got one point four four percent. If 0:07:11.320 --> 0:07:13.800 I'm a fixed income geek, and I say that nicely? 0:07:14.240 --> 0:07:19.360 Uh like you where do I go to get some yield? Boy? Well, 0:07:19.400 --> 0:07:21.240 first of all, thank you for the nicest introduction I 0:07:21.280 --> 0:07:25.400 think I've ever heard. Um. Yeah, you know it's pretty hard. 0:07:25.440 --> 0:07:26.920 I mean you talked about the tenure at one point 0:07:26.960 --> 0:07:29.760 four or five percent. That doesn't seem to line up 0:07:29.800 --> 0:07:32.040 with you know, equities at the all time highs and 0:07:32.080 --> 0:07:33.920 you know, and there's a story behind that, but you know, 0:07:33.960 --> 0:07:37.640 looking for yield, I mean, look, you know, within fixed income, 0:07:37.920 --> 0:07:41.280 to define the high yield bond market, generally speaking, the 0:07:41.480 --> 0:07:43.920 highest type of yield you can get three point seven 0:07:44.000 --> 0:07:46.440 five I mean that that's what you get for generic 0:07:46.520 --> 0:07:49.760 hi yield portfolio. So, um, the FED has uh you know, 0:07:49.840 --> 0:07:52.840 and the fiscal side of things has done their job 0:07:52.880 --> 0:07:55.800 to flood the economy with money, uh, you know, suppressed 0:07:55.840 --> 0:07:58.960 interest rates and have you know, investors scrambling to to 0:07:59.040 --> 0:08:02.320 put any type of yielding their portfolio sometimes, I think, 0:08:02.320 --> 0:08:04.600 regardless of of the risk they're they're they're taking on 0:08:04.640 --> 0:08:10.520 the underlying credits. So what's going on? Um, why are 0:08:10.560 --> 0:08:16.400 we seeing yields dumped down to now? And how does 0:08:16.440 --> 0:08:20.920 this turn around? If not the FEDS hawkish you know, uh, 0:08:21.280 --> 0:08:25.640 change in tone, you know, I think first I'd say, remember, 0:08:25.680 --> 0:08:28.240 you know, we don't have a US capital markets, we 0:08:28.280 --> 0:08:30.720 have a global capital markets. And you think about the 0:08:30.760 --> 0:08:32.600 things going on around the world right now. So first 0:08:32.640 --> 0:08:35.079 of all, you know, obviously the what's been leading the 0:08:35.600 --> 0:08:37.679 news and the economy and the markets for a year 0:08:37.679 --> 0:08:39.760 and a half now is COVID and we've got the 0:08:39.800 --> 0:08:42.520 delta variant going around and while we may have not 0:08:42.559 --> 0:08:44.520 really see it here so much, it is affecting other 0:08:44.559 --> 0:08:47.080 parts of the world. Um. Also, remember that you know, 0:08:47.280 --> 0:08:49.480 one point four or five percent sounds really low to 0:08:49.520 --> 0:08:51.880 you and I you look at the developed world out there, 0:08:51.960 --> 0:08:55.160 one point four looks really cheap. You know, maybe Australia, 0:08:55.240 --> 0:08:58.880 New Zealand, places like Singapore slightly higher. But you know, 0:08:58.880 --> 0:09:00.640 you go to Germany, you go to Switzerland, you go 0:09:00.679 --> 0:09:02.439 to Japan, you're talking about a ten year yield of 0:09:02.559 --> 0:09:05.680 zero or less, you know, minus twenty five basis points. 0:09:06.200 --> 0:09:07.680 And then you know, back back here to the US, 0:09:07.760 --> 0:09:10.520 I think, and you focus on the fundamentals. One. I think, 0:09:10.800 --> 0:09:14.400 you know, investors are starting to you know, realize that 0:09:14.440 --> 0:09:17.120 the economy, you know, it may not accelerate in the 0:09:17.160 --> 0:09:19.000 second half of the year as quickly, you know, as 0:09:19.000 --> 0:09:22.079 they were anticipating. Instead of adding a million jobs a month, 0:09:22.120 --> 0:09:24.480 we're going to add maybe six D seven hundred thousand 0:09:24.480 --> 0:09:27.040 a month, so that might be slower. Uh. And then 0:09:27.120 --> 0:09:29.640 you know, finally, most recently, you know, the Fed, the 0:09:29.640 --> 0:09:31.200 Fed just told us, you know, I said, look, you know, 0:09:31.440 --> 0:09:34.199 we may let inflation run hot for a little while, 0:09:34.720 --> 0:09:37.760 but we're not ready to turn in our inflation fighting batch. Uh. 0:09:37.760 --> 0:09:39.680 And so that's why you saw, you know, you saw 0:09:39.720 --> 0:09:42.240 this flattener, you saw its long end rates come down, 0:09:42.400 --> 0:09:44.720 you know, as the Fed kind of let everyone know that, 0:09:44.760 --> 0:09:46.280 you know, they're not going to let inflation get out 0:09:46.280 --> 0:09:48.280 of hand or they're gonna try not to. And you 0:09:48.280 --> 0:09:50.520 saw short end rates go up, meaning that you know, 0:09:50.559 --> 0:09:54.359 the market just started the price a slightly higher probability 0:09:54.440 --> 0:09:56.240 that the Fed may move a little bit sooner with 0:09:56.280 --> 0:09:59.480 regards to interest rates than the market was expecting just prior. 0:09:59.520 --> 0:10:01.520 So do you put all this together and then a 0:10:01.520 --> 0:10:04.320 few other factors, and I think it does explain why 0:10:04.400 --> 0:10:07.640 we're under one. Dude, you had me at negative twenty 0:10:07.800 --> 0:10:11.800 points on the BUND. I got you cheap now right, yeah, 0:10:11.840 --> 0:10:16.600 exactly so. But my question then, and I just want 0:10:16.600 --> 0:10:18.600 to get your take on this. The dollar is important 0:10:18.600 --> 0:10:21.520 then if I'm a euro investor, you know, UM and 0:10:22.520 --> 0:10:25.079 the US. You know, from the perspective of a German, 0:10:25.360 --> 0:10:30.680 the US budget is like out of control, you know GDP, 0:10:30.960 --> 0:10:34.400 that's very on Deutsch. Is that does that bother you 0:10:34.440 --> 0:10:38.160 at all? I think I think that's a problem for 0:10:38.200 --> 0:10:40.480 another day, to quite honest with you. You know, we 0:10:40.520 --> 0:10:42.160 could go on and on about the levels of debt 0:10:42.160 --> 0:10:44.280 in the economy on the corporate side and as you said, 0:10:44.280 --> 0:10:47.560 on the fiscal side, and the long term ramifications for 0:10:47.600 --> 0:10:50.160 the dollar and whether that will retain a reserve currency 0:10:50.240 --> 0:10:52.520 or whether others will kind of share that that that title. 0:10:52.880 --> 0:10:55.560 I think in the you know, short term, intermediate time horizon, 0:10:56.320 --> 0:10:58.760 given what the Fed just said, you know, the dollar 0:10:58.880 --> 0:11:01.960 looks fairly stay able lift not will continue to strengthen 0:11:02.000 --> 0:11:05.040 a bit versus these other currencies. And we've seen that 0:11:05.080 --> 0:11:07.800 reflecting the bond market, you know, almost it feels like 0:11:07.880 --> 0:11:10.240 for for months now, you know, you come into you know, 0:11:10.280 --> 0:11:12.480 you wake up in the United States and you hear 0:11:12.520 --> 0:11:15.520 about all this buying of US bonds, whether they be 0:11:15.559 --> 0:11:19.000 treasuries or corporate bonds from overseas because of just like 0:11:19.000 --> 0:11:21.920 we talked about before the tenure, just how cheap they look. 0:11:22.040 --> 0:11:24.000 You know, Remember, we're not just starve for yield. The 0:11:24.000 --> 0:11:27.000 globe is starf for yield. And every night these investors 0:11:27.000 --> 0:11:28.640 from un from outside the U S. They come in 0:11:28.679 --> 0:11:31.360 their poor dollars in here because even when you adjust 0:11:31.400 --> 0:11:34.280 for the currency, it's still the best place to find 0:11:34.280 --> 0:11:37.480 some yield. I feel you, Brian, thank you so much 0:11:37.520 --> 0:11:40.920 for joining us. Brian Whale and there group managing director 0:11:40.960 --> 0:11:44.840 Fixed Income and portfolio manager at TCW talking to us 0:11:44.840 --> 0:11:47.040 about what's going on in markets. By the way, as 0:11:47.120 --> 0:11:49.480 he was talking, I saw the yen. UM, Well, the 0:11:49.559 --> 0:11:52.559 dollars jump against the end. You can now buy a 0:11:52.640 --> 0:11:57.960 hundred ten yen for your dollar. Let's get over to 0:11:57.960 --> 0:12:02.080 Everett Millman. He's apprecially med medals specialist with Gainesville Coins. 0:12:02.480 --> 0:12:06.840 He's gonna talk to us about commodities even more broadly. 0:12:06.880 --> 0:12:09.520 We'll get into copper and bitcoin as well, but I 0:12:09.559 --> 0:12:12.439 want to focus it on gold first. Everett, good morning, 0:12:12.480 --> 0:12:16.560 Thank you for joining us. UM. Why is gold not 0:12:16.760 --> 0:12:21.680 performing the way? UM? Well, look, we've got rates that 0:12:21.720 --> 0:12:24.720 are coming down, which I would think means gold goes up. 0:12:24.760 --> 0:12:27.080 The ten year over the last three months goes from 0:12:27.080 --> 0:12:30.080 one seventy five to one forty five, and we're seeing 0:12:30.160 --> 0:12:33.839 gold UM that has done a whole lot of nothing 0:12:33.840 --> 0:12:38.520 at seventeen sixty three. What's what gives? Right? I think 0:12:38.920 --> 0:12:41.480 part of that is that risk appetite seems to be 0:12:41.559 --> 0:12:44.760 elevated right now. That's siphoning off some of the normal 0:12:44.840 --> 0:12:49.760 saife haven demand for gold. But also we're seeing seasonality 0:12:49.960 --> 0:12:52.960 kind of return to normal for the gold market. The 0:12:53.000 --> 0:12:56.440 summer months are almost always unkind to gold, and the 0:12:56.480 --> 0:12:59.280 only reason that hasn't been reflected in the price the 0:12:59.320 --> 0:13:03.839 past two years years is some unprecedented circumstances with the 0:13:03.920 --> 0:13:08.520 early stages of the pandemic in tw and some fluctuations 0:13:08.520 --> 0:13:11.400 in the rebo market in twenty nineteen, So I think 0:13:11.760 --> 0:13:13.800 that's one of the main factors. And also, as you 0:13:13.880 --> 0:13:16.599 pointed out, with rates um, I think this is a 0:13:16.679 --> 0:13:21.000 knee jerk reaction and overreaction even to the hawkishness by 0:13:21.040 --> 0:13:24.320 the Fed, because if you look at the tenure yield, 0:13:24.360 --> 0:13:28.679 it actually fell in response to that, And with inflation rising, 0:13:28.800 --> 0:13:32.600 that means that real rates, the federal funds rate minus 0:13:32.640 --> 0:13:35.800 the rate of inflation, is still rather negative. So you 0:13:35.800 --> 0:13:39.080 would expect that to be a favorable environment for gold. 0:13:39.160 --> 0:13:42.520 But I think that risk sentiment and kind of the 0:13:42.520 --> 0:13:46.480 summer doldrums of seasonality are the main factors holding back 0:13:46.520 --> 0:13:50.040 gold right now. Everard, I wonder if you know bitcoin 0:13:50.240 --> 0:13:55.079 has is having an impact on how gold is trading. 0:13:55.160 --> 0:13:58.880 You know, the smart folks around crypto are trying to 0:13:58.920 --> 0:14:01.880 convince me that a bitcoin is a store of value, 0:14:01.920 --> 0:14:04.800 and that's kind of typically how folks have you gold? 0:14:05.080 --> 0:14:07.440 How do you think bitcoin is impacting, if at all, 0:14:08.120 --> 0:14:11.960 kind of how how gold is trading. I do tend 0:14:12.000 --> 0:14:15.480 to agree that it is drawing away some of that 0:14:15.720 --> 0:14:19.800 store of value appeal of gold into the crypto market, 0:14:20.360 --> 0:14:25.200 as it's essentially the most appealing alternative to the dollar 0:14:25.320 --> 0:14:28.600 right now. And although we have seen the dollar been rising, 0:14:28.680 --> 0:14:31.800 that's been reflected in the bitcoin price that we've had 0:14:31.840 --> 0:14:35.440 this significant pullback. But as you pointed out at the beginning, 0:14:35.480 --> 0:14:38.520 that gold have been kind of moving sideways, hasn't done 0:14:38.520 --> 0:14:41.480 a whole lot. We don't often see that from bitcoin. 0:14:41.840 --> 0:14:44.920 The volatility is certainly a feature of bitcoin, and I 0:14:44.960 --> 0:14:48.080 think that appeals a lot to most investors that if 0:14:48.120 --> 0:14:50.760 they want to get some exposure to something that is 0:14:51.200 --> 0:14:54.960 anti dollar or outside of the dollar, then they'd rather 0:14:55.040 --> 0:14:58.600 have that greater upside with something like bitcoin rather than gold, 0:14:58.640 --> 0:15:03.960 which is fundamental, more boring and sort of a conservative investment. Also, 0:15:04.200 --> 0:15:06.720 bitcoin maybe a little bit easier to use in the catastrophe, 0:15:06.760 --> 0:15:10.240 you know. I like, uh the idea of both because 0:15:12.200 --> 0:15:16.360 I'm looking forward to some post apocalyptic world when all 0:15:16.400 --> 0:15:18.640 we have is gold, guns, and water. Right, But you're 0:15:18.680 --> 0:15:20.320 not going to get a hundred cents on the dollar 0:15:20.440 --> 0:15:22.760 for your gold and bitcoin. You can just zap over 0:15:22.760 --> 0:15:26.200 to somebody else, isn't it you know? In the end 0:15:26.280 --> 0:15:30.640 days going to be easier to use digital currency. That's 0:15:30.640 --> 0:15:33.520 a fascinating point, and I do agree that I think 0:15:33.560 --> 0:15:36.560 a little bit of both is ideal because although it's 0:15:36.640 --> 0:15:40.120 true that the digital nature of bitcoin makes it much 0:15:40.200 --> 0:15:43.520 more easy to use in those situations. Um, if we're 0:15:43.520 --> 0:15:46.960 talking about kind of a a end of time scenario, 0:15:47.520 --> 0:15:51.360 you would think that some of our digital Internet capabilities 0:15:51.360 --> 0:15:55.960 would perhaps be offline. So I think that the physical 0:15:56.040 --> 0:15:58.480 nature of gold sort of is the backup plan for that. 0:15:58.560 --> 0:16:01.040 Could be a red dawn, could be a red dawn 0:16:01.120 --> 0:16:03.480 kind of moment, you know, when the Soviets invade and 0:16:04.160 --> 0:16:07.720 occupy the US and we all have to huddle up 0:16:07.720 --> 0:16:11.720 with our teenage friends in the Colorado Mountains. Who knows? 0:16:11.840 --> 0:16:16.720 Who knows? What could it happened? Yeah? Every aside from gold, 0:16:16.880 --> 0:16:19.120 give it. Where where do you see the best I 0:16:19.160 --> 0:16:25.360 guess value or opportunities here in the precious metal space? Well, 0:16:25.400 --> 0:16:28.920 the precious metals I think are sort of mixed right now. 0:16:29.160 --> 0:16:32.640 Silver seems to be tracking gold, but it is much 0:16:32.720 --> 0:16:36.080 more sensitive to the industrial metals, to what's going on 0:16:36.200 --> 0:16:39.880 in the broader economy. And although we have seen um 0:16:39.920 --> 0:16:44.840 some encouraging manufacturing numbers, particularly in Japan and Germany. UM. 0:16:44.920 --> 0:16:48.960 These potential setbacks with the delta variant of the coronavirus 0:16:49.160 --> 0:16:53.480 may kind of crimp that potential UM, although it's considered 0:16:53.480 --> 0:16:56.800 a semi precious metal. I'm also looking at copper because 0:16:56.840 --> 0:17:00.080 some of the UH impediments, some of the roadblocks to 0:17:00.440 --> 0:17:03.680 hire copper demand that we've seen are are pretty well understood. 0:17:03.800 --> 0:17:07.240 The crackdown in China where Beijing and is limiting its 0:17:07.280 --> 0:17:12.240 exposure to UM, commodity inflation, and also in the housing market, 0:17:12.240 --> 0:17:15.159 the fact that new home sales are dropping. That's a 0:17:15.200 --> 0:17:19.240 major source for copper demand. But UM Chile is far 0:17:19.280 --> 0:17:22.360 and away the world's number one producer of copper, and 0:17:22.560 --> 0:17:26.560 right now their legislature is considering legislation that would impose 0:17:26.800 --> 0:17:31.159 pretty steep taxes on their copper miners. So if that 0:17:31.200 --> 0:17:33.720 were to come to pass, it is estimated that about 0:17:33.720 --> 0:17:37.000 a one million metric tons of copper output from Chile 0:17:37.520 --> 0:17:40.280 would be in doubt. So on the supply side, I 0:17:40.320 --> 0:17:44.159 think that UM copper does have some potential headwinds, and 0:17:44.240 --> 0:17:48.000 that these supply concerns would mean that prices won't fall 0:17:48.080 --> 0:17:50.719 quite as far as many are as expecting. All right, ever, 0:17:50.880 --> 0:17:53.840 thank you so much. We always appreciate chatting with you, 0:17:53.880 --> 0:17:57.080 getting in getting the latest on precious metals. Everett moment, 0:17:57.119 --> 0:18:02.960 he's a precious metal specialist at Gainesville. All coins, Let's 0:18:03.000 --> 0:18:07.639 talk tech, Let's talk cybersecurity, chip shortages, all that good stuff. 0:18:07.680 --> 0:18:13.080 Nicola Marini, chief technical officer for e Y, joins us. Uh, Nicola, 0:18:13.119 --> 0:18:14.840 thanks so much for joining us here. Love to get 0:18:14.880 --> 0:18:18.360 your thoughts on I'm thinking cybersecurity. We've seen a lot 0:18:18.400 --> 0:18:21.480 of ransomware hacks, and I was just going to ask 0:18:21.560 --> 0:18:25.960 myself it doesn't Corporate America or just the C suite 0:18:25.960 --> 0:18:28.359 in general get it that they need to spend money 0:18:28.520 --> 0:18:32.719 to protect their systems. What's the latest? Yeah, so, hi, 0:18:32.880 --> 0:18:34.920 Hi guys, good morning. It's great to be here. Thank 0:18:34.960 --> 0:18:37.720 you for having me. Uh yeah, exactly. I think it's 0:18:37.760 --> 0:18:40.560 a very bizarre situation. I said, on one side, you know, 0:18:40.600 --> 0:18:44.159 cybersecurities on the front page everywhere, right, and then on 0:18:44.200 --> 0:18:47.439 the other hand, we're not seeing, uh, the same type 0:18:47.480 --> 0:18:53.159 of reaction intense of the prioritization of of investment for cybersecurity. 0:18:53.240 --> 0:18:55.960 So I would summarize it as a sort of you know, 0:18:56.000 --> 0:18:58.560 on one side that is alarmed, you know, exact to 0:18:58.560 --> 0:19:01.360 be almost panic in some some elements and as well 0:19:01.440 --> 0:19:03.320 at the same time, you know, with subt of the 0:19:03.440 --> 0:19:06.919 important it's a sense of resignation and say, you know, 0:19:07.000 --> 0:19:08.600 this is something that sooner or later it's going to 0:19:08.680 --> 0:19:12.040 happen to us, and we're gonna sit and wait. So 0:19:12.240 --> 0:19:15.040 we had done, for example, a survey very recently, and 0:19:15.080 --> 0:19:18.879 we see that, you know, for s the CEOs that 0:19:18.960 --> 0:19:23.000 we have interviewed, you know, day sacience technology is I consider, 0:19:23.080 --> 0:19:25.840 you know, the base of the future growth. And at 0:19:25.840 --> 0:19:28.720 the same time, only one third of the same CEO 0:19:29.000 --> 0:19:32.359 ce cybersecurity as as a top priority. So it's kind 0:19:32.400 --> 0:19:37.879 of puzzling. Well, I guess the ransomware attacks are the 0:19:37.920 --> 0:19:41.160 alarm sounding and and and maybe they're gonna start ramping 0:19:41.240 --> 0:19:44.120 up spending. By the way, I love Ernst and Young. 0:19:44.440 --> 0:19:47.720 The word for the business that you're in in German 0:19:47.840 --> 0:19:52.440 is vietshaft's proofunk's gazelle shaft Vshaft's proofunks gazelle shaft. That's 0:19:52.480 --> 0:19:54.359 one word, thirty two letters. I just thought it was 0:19:54.400 --> 0:20:01.879 probably I didn't know that it's a professional services is auditing, taxes, 0:20:02.000 --> 0:20:05.560 financials all rolled up into one. And obviously e Y 0:20:05.880 --> 0:20:09.399 is one of the biggest in the globe and you 0:20:09.440 --> 0:20:14.960 know you advise businesses from mining to real estate tech, 0:20:15.160 --> 0:20:20.119 you vice finance and government and automotive, the automotive industry. 0:20:20.240 --> 0:20:22.240 So I wanted to ask a little bit about the 0:20:22.280 --> 0:20:26.400 chip shortage. Um, this affects more than just cars obviously, 0:20:26.480 --> 0:20:29.359 but they're most important to me. How soon do you 0:20:29.400 --> 0:20:33.360 expect companies to be able to solve this issue? Yeah, 0:20:33.440 --> 0:20:35.679 I think the time a rising is still probably between 0:20:35.760 --> 0:20:40.040 one and two years. Still, uh, the because the systemic issues, right, 0:20:40.080 --> 0:20:43.520 that actually led to that problems almost like a perfect 0:20:43.560 --> 0:20:46.240 storm of I think a little bit of an obsolete 0:20:46.280 --> 0:20:51.040 way of planning, right, very localized for for some companies 0:20:51.040 --> 0:20:54.080 where they look at the supply chain in components versus 0:20:54.160 --> 0:20:57.320 looking at the supply chain a systemic as a system. 0:20:57.640 --> 0:21:00.359 And so that led to you know, compound with the 0:21:00.359 --> 0:21:05.359 pandemic maybe you know, very conservative estimates around potential growth 0:21:05.359 --> 0:21:08.800 excess that they all contributed to a massive, massive clock. 0:21:08.880 --> 0:21:11.639 This is one almost in a lifetime, you know, a 0:21:11.760 --> 0:21:17.120 case study for for food planning any way, So explain 0:21:17.200 --> 0:21:21.240 to us the nicol of the you know, digital twin 0:21:21.320 --> 0:21:24.040 concept and how that might be impactful here. So we 0:21:24.080 --> 0:21:28.280 think its p what are digital twins. Yes, So the 0:21:28.320 --> 0:21:32.200 digital twin is expectively like a the digital representation of 0:21:32.240 --> 0:21:35.080 a system, right, And so it started with dirt in 0:21:35.119 --> 0:21:37.959 the manufacturing space where you know, you could build For example, 0:21:38.040 --> 0:21:40.119 I think a General Electric was one of the first 0:21:40.160 --> 0:21:42.760 ones to actually launch the concept where they were able 0:21:42.800 --> 0:21:45.760 to build the turbine in a in a computer simulation 0:21:45.880 --> 0:21:48.280 and so using that you can understand, you know, what 0:21:48.359 --> 0:21:51.000 are the impacts of changes in some of the variables 0:21:51.080 --> 0:21:54.879 that this particular system was experiencing it. So if you 0:21:54.920 --> 0:21:57.840 take the concept, then you're actually evolved it from a 0:21:58.000 --> 0:22:02.760 very specific sub atomics right into the whole system. I 0:22:02.800 --> 0:22:05.280 think you'll be able to capture, you know, the signals 0:22:05.320 --> 0:22:07.720 that you're saying in the system itself and be able 0:22:07.760 --> 0:22:10.480 to react even if you don't know exactly how things 0:22:10.560 --> 0:22:13.600 will play out. But the ability through technology and the 0:22:13.680 --> 0:22:18.000 gathering on data to understand the correlation across the variable 0:22:18.040 --> 0:22:20.920 state of seeing and how they're evolving time, I think 0:22:20.960 --> 0:22:23.880 at least raises those red flags that in the case 0:22:23.920 --> 0:22:27.000 of the ship shortage and nobody has seen coming, what's 0:22:27.040 --> 0:22:31.640