Speaker 1: The dollar is under attack from the United States. What
Speaker 1: the heck does that mean? Well, it means what it
Speaker 1: says is the United States dollar under attack from within. Well,
Speaker 1: my guest today a living legend is Rick Rule, and
Speaker 1: he says that it's not China and not Russia attacking
Speaker 1: the dollar, It's happening from within. So we're gonna dig
Speaker 1: into the banking crisis. We're gonna explain what happened. Now,
Speaker 1: he started a bank, sold a bank, he started another bank.
Speaker 1: He knows what happens in banks. We're gonna talk about
Speaker 1: the banking crisis. We're gonna talk about what's happened in
Speaker 1: the investing market that's driven people and banks and consumers
Speaker 1: to this point. We're going to talk about the what
Speaker 1: the bank and what the governments are doing to restrict
Speaker 1: the flow of capital and keep it trapped in the system.
Speaker 1: We're going to talk about the move from fiat currencies,
Speaker 1: how the dollar is dying and the move to commodity
Speaker 1: money is changing. We're going to talk about energy markets.
Speaker 1: We're gonna talk about central bank digital currencies, and even
Speaker 1: his view on bitcoin. We covered a lot of grounds.
Speaker 1: This is amazing conversation with Rick Rule. Now, one thing
Speaker 1: I do want to say is I want to point
Speaker 1: your direction attention down to the description down below, because
Speaker 1: he has made an offer. He has a living legend,
Speaker 1: a resource investing legend, and if you go to his
Speaker 1: website and you post him what your energy or i'm
Speaker 1: sorry your resource investments are, he will personally grade them
Speaker 1: for you. Wow, I can't believe you made that opportunity
Speaker 1: for everybody listening. So check it out in description. Message him.
Speaker 1: Don't take don't pass up that opportunity to have him
Speaker 1: look at your own investments in the resource space. He's
Speaker 1: something like a legend. Anyway, let's go ahead, just jump
Speaker 1: right into this interview with Rick Rule. So you know,
Speaker 1: I know you had started a bank, you built a bank,
Speaker 1: you sold a bank. I know you work on another
Speaker 1: bank right now. But let's talk about the banks. That
Speaker 1: seems to be like the biggest topic of the hour
Speaker 1: at this point. The banks are melting down. It's a
Speaker 1: banking crisis. Coming from somebody who is working in the
Speaker 1: banking industry building a bank and now building a new bank.
Speaker 1: What's your take on this banking crisis?
Speaker 2: You know, mark banking is a pretty simple business if
Speaker 2: you do it right. It's really about blocking and tackling.
Speaker 2: I joke for forty five years and I've basically been
Speaker 2: a used money salesman. It's important, however, to get things right.
Speaker 2: Banking is a h fairly highly leveraged business, and that
Speaker 2: means that you have to be prudent and you have
Speaker 2: to implement the idea. As an example, that you would
Speaker 2: fund a long bond portfolio with very short dated instruments
Speaker 2: is the same thing that brought down the savings and
Speaker 2: loan industry. It isn't something that the banking business hasn't
Speaker 2: seen before. Credit spreads at present are very very attractive
Speaker 2: for bankers, credit spreads being the difference between their cost
Speaker 2: of funds and their return on capital employed, provided that
Speaker 2: the banks get paid back their return on capital employed.
Speaker 2: It's interesting that Silicon Valley Bank, as an example, had
Speaker 2: enough expertise in lending that their primary lending portfolio worked
Speaker 2: fairly well despite the risky nature of many of the
Speaker 2: venture loans that they've made. Their problem came because they
Speaker 2: were chasing yield in a place and in a way
Speaker 2: that I think was inappropriate. It's strange an inverted yield
Speaker 2: curve world that they moved out maturities to four or
Speaker 2: five years, rather than keeping them tight to change differentials
Speaker 2: in yield that were fairly low. Albeit perhaps when they
Speaker 2: put the positions on two or three years ago, those
Speaker 2: longer dated yields were higher. The fact is that if
Speaker 2: you have four or five year maturities that you are
Speaker 2: funding with now deposits and demand deposits, you always put
Speaker 2: yourself in a precarious position. When the interest rates went up,
Speaker 2: of course, the stated value of those long duration bonds fell,
Speaker 2: wiping out, in effect, the tangible book of the bank.
Speaker 2: I guess the second problem that they faced Mark, which
Speaker 2: a lot of people are talking about, is the unstable
Speaker 2: nature of their deposits, which is saying that they didn't
Speaker 2: sell deposits to Rick Ruler Mark Moss. They sold deposits
Speaker 2: that were uninsured in very large amounts to two classes
Speaker 2: of deposit or, one being venture capital firms that would
Speaker 2: deposit subscription receipts that hadn't been invested in venture capital
Speaker 2: partnerships yet, and secondly, the capital raised by technology companies
Speaker 2: that hadn't yet been deployed. As uh cost of capital
Speaker 2: went up and capital became less very available to technology companies,
Speaker 2: beginning about a year and a half ago. Those two
Speaker 2: sources of new fund dried up at the same time
Speaker 2: that both the funds and the companies ran down their
Speaker 2: existing deposits, So Silicon Valley Bank had a critical, I think,
Speaker 2: liquidity squeeze. The bottom line of this for your listeners, Mark,
Speaker 2: is that the only regulator who really makes a difference
Speaker 2: for you as a banking investor, a borrow or a
Speaker 2: lender is you yourself. Silicon Valley was described by the
Speaker 2: regulators as being very in very good condition forty eight
Speaker 2: hours before its demise, but the FED.
Speaker 1: But then the FED said, we saw last November that
Speaker 1: they were there was danger in morning signs.
Speaker 2: It would have been useful had they communicated that to
Speaker 2: the market, Yeah, right, rather than trying to avert panic.
Speaker 2: My suggestion to you is simply that investors need to
Speaker 2: pay attention for themselves. They need to pay attention to
Speaker 2: a few things that you can learn from a bank
Speaker 2: statement of financial condition, which they're required to provide for
Speaker 2: you if you ask for it. The first is equity
Speaker 2: is a percentage of total assets. The FED says that
Speaker 2: a well capitalized bank has equity of seven percent of
Speaker 2: total assets. An old guy like me prefers ten to seven.
Speaker 2: Suffice it to say, a bank that has a seven
Speaker 2: percent equity slices over ninety percent leveraged, there isn't much
Speaker 2: room for error. The second thing that one must look at,
Speaker 2: and the banks must show you this if you ask,
Speaker 2: is duration risk, which is to say, the median duration
Speaker 2: of their deposit base versus the median duration and liquidity
Speaker 2: of their assets. You can spot what Silicon Valley Bank
Speaker 2: has done. In fact, there are numerous web websites now
Speaker 2: that show you the mark to market liability of the
Speaker 2: chartered banks in thenited states. The third ratio that that
Speaker 2: your client should look at, both as borrowers and also
Speaker 2: as depositors is the ratio of cash or near cash
Speaker 2: on bank balance sheets relative to their deposit liabilities. An
Speaker 2: intelligently capitalized bank has cash or near cash, that is
Speaker 2: to say, ninety day obligations or repos or overnight deposits
Speaker 2: equal to twenty or twenty five percent of their now
Speaker 2: or near term deposit liabilities. Relying on the regulators, relying
Speaker 2: on the investment banks, relying on people like that to
Speaker 2: do basic due diligence obviously doesn't work. We should have
Speaker 2: learned that with Madeoff. We should have learned that with Enron,
Speaker 2: but we didn't.
Speaker 1: Yeah, yeah, I love what you're saying. There something I've
Speaker 1: been saying, like the age of personal responsibility is coming
Speaker 1: back really hard. We've given our health care to the government,
Speaker 1: our education to the government, our pensance to the government,
Speaker 1: our health to our doctor. We've just shrugged off every
Speaker 1: single piece of personal responsibility. But we're all finding out
Speaker 1: why that's a problem. Which you take personal responsibility. I
Speaker 1: wanted to talk about who's supposed to be protecting us?
Speaker 1: But before we do, what about if we're looking at
Speaker 1: the bank, what about like the clos that they're hiding.
Speaker 2: Well, if you're asking me about unexploded bombs, I guess
Speaker 2: is what you're asking me about.
Speaker 1: Because those seem to be very hard to see. What's
Speaker 1: lurking un a balance sheet on and Wells Fargo is
Speaker 1: like on page one hundred and forty and it wasn't
Speaker 1: even fully disclosed. It didn't seem like.
Speaker 2: I can tell you what bothers me, and you know
Speaker 2: more about real estate than me. I've been a real
Speaker 2: estate lender and a real estate beneficiary, but not a
Speaker 2: real estate operator. I think the high ratio loans in
Speaker 2: commercial real estate pose a potential problem for banks. I
Speaker 2: realized for some borrowers they're a very pleasant thing, but
Speaker 2: for a lender they can be unpleasant. When I was
Speaker 2: more active in banking, I considered a reasonable ratio for
Speaker 2: a commercial loan to be sixty five to seventy percent LTV.
Speaker 2: I thought seventy was a bit aggressive. Lots of banks
Speaker 2: have been rating eighty five and ninety percent commercial firsts.
Speaker 2: I think that's problematic. The second thing that's problematic is
Speaker 2: that the senior secured doesn't always put in place a
Speaker 2: negative pledge, which is to say, even though they're in first,
Speaker 2: they don't restrict a borrower's ability to take on a
Speaker 2: second or a third to the extent that some barrow
Speaker 2: hors have taken out more than one hundred percent of
Speaker 2: the value of the project, and in liquidation and bankruptcy,
Speaker 2: that becomes a problem settling up the estate between various claimants.
Speaker 2: As I say, I'm not particularly an expert on many
Speaker 2: aspects of commercial real estate, but I notice that virtually
Speaker 2: every aspect, as an example of the office market, is
Speaker 2: experiencing some distress, and I suspect that banks that made
Speaker 2: office loans without understanding an awful lot about the collater
Speaker 2: and an awful lot about the borrower have some things
Speaker 2: to face. I think too, the banks that invested in
Speaker 2: mortgage bonds without understanding the constituent bond, the constituents of
Speaker 2: the bond, pardon me, probably face some difficulties. I think
Speaker 2: the third area where there are unexploded bombs mark and
Speaker 2: I think it's true in the ETF world as well
Speaker 2: as the banking world is in the general high yield
Speaker 2: or junk credit arena. Investors have been chasing yield without
Speaker 2: regard to credit quality for at least ten years. As
Speaker 2: long as interest rates were falling and borrowers had access
Speaker 2: to ever cheaper credit and lots of credit, life was good.
Speaker 2: With various lenders now trying to repair their own balance sheets, borrowers'
Speaker 2: ability to refinance, both in terms of real estate and
Speaker 2: junk credit is going to be constrained. That's going to
Speaker 2: be a problem. And the related problem I seated banking
Speaker 2: is in the ETFs, where you have these junk credit ETFs,
Speaker 2: where retail investors have chased yield, and where the ETF
Speaker 2: itself is highly highly liquid. But the parts that make
Speaker 2: up the ETF. The junk bonds are very very illiquid.
Speaker 2: If you have a circumstance where Joe citizen becomes concerned
Speaker 2: about credit quality and begins to redeem their ETFs in size,
Speaker 2: and the ETF manager tries to sell the underlying securities,
Speaker 2: which are illiquid, you could have a run on a
Speaker 2: different sort of bank. I'm reminded of my career as
Speaker 2: a young stockbroker where we described I liquid bonds as
Speaker 2: owl bonds. We call them owl bonds because the customer
Speaker 2: would call the broker to sell, and the broker would
Speaker 2: say to who, to who? And I'm afraid that both
Speaker 2: bankers and ETF managers are going to discover the perils
Speaker 2: of weak credits and I liquid secondary markets, much to
Speaker 2: their chagrin.
Speaker 1: You know, as you were explaining all of this unstable
Speaker 1: deposits and a mismatch on durations and not enough equity,
Speaker 1: but really you summed it up by saying, you know
Speaker 1: the nature of their depositors Silicon Valley, massive deposits. Now
Speaker 1: they're getting with draws, but they're not having enough deposits.
Speaker 1: And the whole time I'm just thinking, sounds like a
Speaker 1: Ponzi scheme, like a Ponzi scheme, Like as long as
Speaker 1: there's more going in than coming out, everything's fine. But
Speaker 1: as soon as that reverses the whole thing on winds,
Speaker 1: it seems like and it seems like it's being unwound. Well,
Speaker 1: it doesn't seem like it. Well, the FED seems to
Speaker 1: be the arsonist and the firefighter here, right. So in
Speaker 1: a sense, they took yield to zero and pushed everybody out,
Speaker 1: as you said, chasing yields. So everyone's chasing yield going
Speaker 1: into these junk bonds things like that. Because rates are
Speaker 1: at zero. Then the FED raises rates to five percent.
Speaker 1: Everyone's like, oh, what the heck am I in this
Speaker 1: junk for I'll just go to the treasury for five percent?
Speaker 1: And that drained all that that's draining all the liquidity
Speaker 1: out of these things, which is then starting to cause
Speaker 1: this liquidity crisis. Is that potentially the way you'd see it.
Speaker 2: I see the artificial manipulation of interest rates by the
Speaker 2: political class, not just the FED, as being an extraordinary problem.
Speaker 2: I would rather see free markets and interest rates. Of course,
Speaker 2: that would be chaotic, but I think it would be honest.
Speaker 2: And the artificial manipulation of interest rates down and then
Speaker 2: the recovery up.
Speaker 1: Would it be chaotok to get there? Or you think
Speaker 1: in a free market where money was priced by the market,
Speaker 1: that would be kadok.
Speaker 2: Yes and yes, okay. You know, the truth is that
Speaker 2: while markets work, they're invariably very messy, and price discovery
Speaker 2: is an ongoing circumstance, and it is in fact messy,
Speaker 2: and people don't like messy. That doesn't much matter. I
Speaker 2: think it's disingenuous to blame the FED for all of it, though.
Speaker 2: I think that investors have been through forty years of
Speaker 2: benign economic climate and we've been lulled into a sense
Speaker 2: of security. We've been lolled into believing that we can
Speaker 2: consign our future as you suggest, be it medical or
Speaker 2: financial or anything else, to the big thinkers, and I
Speaker 2: think that's an enormous mistake. I think that the FED
Speaker 2: has accommodated our own individual stupidity, and given that the
Speaker 2: FED is a political creature, I think it's important that
Speaker 2: we recapture a sense of responsibility for own future. Listen,
Speaker 2: I'm in front of the FED right now starting a
Speaker 2: new bank, and I got to tell you, the young
Speaker 2: employees of the FED that I have to deal with
Speaker 2: superb human beings, much to my dismay, smart, nice, curious,
Speaker 2: hard working, But they work for an organization that is political.
Speaker 2: They work for an organization where their success or failure
Speaker 2: is human beings, is determined by Congress. That's not so good.
Speaker 2: I don't think it's going to change. So the idea
Speaker 2: that individuals, be they depositors, borrowers, or bank shareholders, need
Speaker 2: to rely on their own resources rather than on the FED,
Speaker 2: on the OCC and on the FDIC.
Speaker 1: Do you think that you know, there's the saying of
Speaker 1: a general is always fighting the last war. And so
Speaker 1: obviously everyone still has the PTSD from two thousand and eight,
Speaker 1: and we had the banking collapse, the banking crisis. So
Speaker 1: everyone's looking now, oh, the banking crisis, the banking crisis.
Speaker 1: It seems that yes, there's problems in the banking sector,
Speaker 1: but it seems like this is something much bigger, potentially
Speaker 1: the unwinding of a one hundred year sovereign debt crisis.
Speaker 1: And it's the sovereign debt crisis that's then causing the
Speaker 1: strain into the banks in the commercial real estate, et cetera.
Speaker 1: What's your take on that on it. From a bigger picture, I.
Speaker 2: Guess I sort of hope that there is a sovereign
Speaker 2: debt crisis. Understand that the sovereigns regard me as collateral.
Speaker 2: Their ability to solve this crisis involves ringing more blood
Speaker 2: out of my stone.
Speaker 1: Stones don't have a lot of blow. Stones don't have
Speaker 1: a lot of blood. That's the problem.
Speaker 2: I recognize that, but they seem to believe that I do.
Speaker 2: The part of the I mean, the part of the
Speaker 2: sovereign debt crisis that causes people to lose faith in
Speaker 2: government securities and at the same time actually causes people
Speaker 2: to believe that the size of government should be constrained
Speaker 2: is something that I applaud. The idea being, however, that
Speaker 2: the answer to the sovereign debt crisis is to find
Speaker 2: more resources from the citizenry to fund more official sector
Speaker 2: stupidity is not particularly attractive to me, Mark, and I
Speaker 2: suspect it's not particularly attractive to you. The idea that
Speaker 2: you may be referring to is the idea that we
Speaker 2: rely on the commonwealth as a solution to every want
Speaker 2: and need in society, rather than relying on ourselves. And
Speaker 2: I completely agree with you there, and I completely agree
Speaker 2: that the idea than in addition to having the government
Speaker 2: satisfy all of our wants and needs, that they should
Speaker 2: satisfy them with quantitative easing, which, by the way, if
Speaker 2: Mark Moss did it would be called counterfeiting or through borrowing.
Speaker 2: The idea that we're spending our children and our grandchildren's
Speaker 2: money to satisfy our wants and needs is I think
Speaker 2: the author of the sovereign crisis.
Speaker 1: I think if if it was really trying to squeeze
Speaker 1: more blood out of us, I think that would be
Speaker 1: met with a lot of resistance. But of course they
Speaker 1: silently and secretly inflate it without asking us, right, and
Speaker 1: so secretly they print themselves more money, so it's not
Speaker 1: really coming directly from the Commonwealth, and that lies in
Speaker 1: the problem.
Speaker 2: Right.
Speaker 1: If they had to go house to house begging for gold,
Speaker 1: like in King Richard's day, it would be a whole
Speaker 1: lot different story. But instead they inflated away, and so
Speaker 1: you know, now they're in this situation where we're seeing
Speaker 1: nations around the world high inflation. War tends to be
Speaker 1: very inflationary. Nations around the world are being forced to
Speaker 1: liquidate government bonds to pay for high energy costs, for example,
Speaker 1: and just a little bit of bond selling starts to
Speaker 1: unravel and cause massive volatility in the treasury markets. And
Speaker 1: then we have this massive volatility which is then being
Speaker 1: responded with more printing, and it says more of the
Speaker 1: same problem that just causes a bigger problem.
Speaker 2: It seems like, you know, Mark, I shouldn't laugh so
Speaker 2: hard that I have seen this before. In some support
Speaker 2: of what you just said, I note that the government
Speaker 2: just extended the banks as sort of a financial lifeline
Speaker 2: of two hundred billion dollars and they did that without
Speaker 2: borrowing it and without raising tax. Now, how did they
Speaker 2: do that? They must have printed it. They must have
Speaker 2: conjured it up. You know. In addition to all the
Speaker 2: other problems that you and I have discussed, we have
Speaker 2: to discuss quantitative easy because it really truly is counterfeiting.
Speaker 2: The printing of new specious currency units does not make
Speaker 2: existing units more valuable, the opposite, And we need to
Speaker 2: understand end that that constitutes a tax in an end
Speaker 2: of itself. We just don't feel it. We don't feel
Speaker 2: it coming out of our paychecks. Although if your income
Speaker 2: tax and capital gains tax aren't indexed to inflation. Perhaps
Speaker 2: you do see it coming directly out of your paycheck
Speaker 2: or out of what your paycheck will buy you. Yes,
Speaker 2: after they take their bite.
Speaker 1: Yeah. I just read this book and I interviewed the author.
Speaker 1: It's called The Revolt of the Public, and it talks
Speaker 1: about how the rise of the Internet and all this
Speaker 1: information that goes around and through the internet spread information
Speaker 1: has led to all these revolts and overthrows of the government.
Speaker 1: And he spent a lot of time in twenty eleven
Speaker 1: talking about Arab Spring and what happened in Egypt and
Speaker 1: Syria and Tunisia and all of those things, and even
Speaker 1: Occupy Wall Street, which happened in twenty eleven. And it
Speaker 1: seemed like as I was reading the accounts of all
Speaker 1: these happening, it all was traced back to people were
Speaker 1: ready to revolt, like we're seeing in France today when
Speaker 1: their cost of when their quality of life goes down,
Speaker 1: when inflation affects, then when they can't buy as much food,
Speaker 1: that seems to be the trigger point for all of this.
Speaker 1: Even today in France are saying, oh, it's you know,
Speaker 1: we have to raise the retirement age by two years.
Speaker 1: But it's all about that quality of life, that's that
Speaker 1: silent tax.
Speaker 2: I think what you say is very, very correct. I
Speaker 2: think on the one hand, what the French you're doing
Speaker 2: is revolting against arithmetic. They're suggesting that raising the retirement
Speaker 2: age from sixty two to sixty four is somehow some
Speaker 2: enormous travesty, when in fact it's a reflection of the
Speaker 2: financial ability of the French state to support their citizenry.
Speaker 2: On the other hand, I think the Citistry have come
Speaker 2: to understand that they have each voted themselves too much
Speaker 2: mono from heaven. Everybody seems to believe that mana from
Speaker 2: heaven that they receive is justified, but any mona from
Speaker 2: heaven that someone else receives as a consequence of their
Speaker 2: effort is some crime against humanity. And I agree with
Speaker 2: you one hundred percent. In a politicized world, we believe
Speaker 2: that we have calls on the wealth and efforts of others,
Speaker 2: but we try to defend ourselves against other people's claims
Speaker 2: against us. When the allocation of benefit is occurs politically,
Speaker 2: rather than from servicing your customer, you come to believe
Speaker 2: yourself to be politically entitled and to the extent that
Speaker 2: there's a failure, you don't accept blame for the failure,
Speaker 2: You assign blame on society as a consequence of that,
Speaker 2: you revolt against it. And we're seeing that around the world.
Speaker 1: Yeah, I'm curious, you know, on your take on when
Speaker 1: you look back through when you see the end of
Speaker 1: the empire coming. It seems like one of the last
Speaker 1: final stages of these empires is to restrict capital flows
Speaker 1: and so capital controls, because they know if they don't
Speaker 1: keep that capital in, the whole thing collapses. And it's
Speaker 1: not just a historical lens. That's why China doesn't want
Speaker 1: to have open capital markets, and so it seems that,
Speaker 1: you know, maybe that's sort of this stage that we're
Speaker 1: in the United States right now, is capital control laws.
Speaker 1: And so, you know, I don't know how much you've
Speaker 1: been paying attention to some of the headlines. There's a
Speaker 1: talk of this choke point two point zero coming back
Speaker 1: out where the banks are starting to restrict flows. Potentially
Speaker 1: these three banks that went down Silvergates, SBB and then
Speaker 1: Signature we're all crypto friendly banks, and so are they
Speaker 1: taking down these banks to take out these crypto exits?
Speaker 1: Are they doing everything can to block the exits to
Speaker 1: keep this capital control in. And then there's two more examples. Recently,
Speaker 1: Caitlin Long she tried to get a new bank charter
Speaker 1: open called Custodia Bank, which was going to be a
Speaker 1: full reserve bank. They're going to keep one hundred and
Speaker 1: percent of reserves, and the FED shot them down. They
Speaker 1: shot down another bank called Narrow Bank for the same thing.
Speaker 1: They don't want a full reserve bank because then everybody
Speaker 1: would go to that full reserve bank and it would
Speaker 1: drain all liquidity. So it seems what's your take on
Speaker 1: trying to restrict their Capitalpholles, Do you think that's what
Speaker 1: they're doing. I know you're trying to open a bank.
Speaker 2: I haven't seen, as an investor who invests internationally, anything
Speaker 2: that I could describe as a concerted federal effort to
Speaker 2: cause me not to be able to invest or deposit
Speaker 2: money overseas. Certainly, know your client regulation and the extra
Speaker 2: territorial imposition of American law on foreign institutions makes my
Speaker 2: international investing more cumbersome. I think that's probably more a
Speaker 2: function of stupidity than perniciousness on their part. I'm amazed
Speaker 2: that Caitlin Long's application wasn't accepted. I don't know the
Speaker 2: reason for that. I would assume that it's in the
Speaker 2: interest of the American consumer to have many different approaches
Speaker 2: to safeguarding savings, and I suspect that most of the
Speaker 2: employees of the banking regulators feel the same. When the
Speaker 2: employees of the banking regulators looked at our application for
Speaker 2: Battle Bank and they understood that our mission was to
Speaker 2: be a community bank where community was defined by needs
Speaker 2: and values rather than by locality, I would describe them
Speaker 2: as very, very, very supportive. I can only say that
Speaker 2: thus far, the reception that we've had from the regulatory agencies,
Speaker 2: perhaps because we've been involved as a group and so
Speaker 2: many banks before, perhaps because we're known entities and not
Speaker 2: threats to career, the response that we've enjoyed has been
Speaker 2: much better than the responses that have been enjoyed by others.
Speaker 2: Now will say that all three agencies asked us point
Speaker 2: blank what our view with regards to crypto was, and
Speaker 2: our response was, we didn't understand very much about crypto,
Speaker 2: and we had no interest in lending against or accepting
Speaker 2: these deposits asset classes that we had no experience in
Speaker 2: we didn't describe ourselves as anti crypto. We described ourselves
Speaker 2: as focused on asset classes that we understood. But I
Speaker 2: need to say that all three agencies were very relieved
Speaker 2: to hear that response.
Speaker 1: Yeah, yeah, I mean, it's certainly something that I've been
Speaker 1: thinking about. Is it is it really trying to choke
Speaker 1: off money exiting the system, or is it specifically trying
Speaker 1: to choke off fraud inside the crypto industry? And so
Speaker 1: you can certainly look at it from either lens. That's
Speaker 1: why I was just kind of curious to get your
Speaker 1: take when I see what happened with Caitlin Longs Bank,
Speaker 1: though you know, apparently she had already kind of passed
Speaker 1: all these regulators and at the end was denied, and
Speaker 1: it just seemed like they didn't want that competition of
Speaker 1: a full reserve bank and what that could do. Because
Speaker 1: at the end of the day, it's something that I
Speaker 1: want to talk about, which is it seems back to
Speaker 1: that kind of book that revolted the public, and what
Speaker 1: it talks about is that now information moves so freely
Speaker 1: that we don't put value, We don't trust these authority
Speaker 1: figures anymore, no longer does CNN carry the weight or
Speaker 1: legitimacy that they used to. Now it's Matt Tayibe on
Speaker 1: substack or something like that. And information moves so fast,
Speaker 1: and so we're losing this confidence. And the banking system
Speaker 1: is really a game of confidence. Right. If the American people,
Speaker 1: as Henry Ford said, if they knew how the banking
Speaker 1: system worked, there'd be a revolution before morning. But if
Speaker 1: the people started to withdraw their funds, then the system collapses,
Speaker 1: similar like SVB. So they have to keep the confidence
Speaker 1: in the game, so we keep our money in there.
Speaker 2: Right, what you say is in some measure true, But
Speaker 2: you said a lot.
Speaker 1: There, Okay, and break it down from.
Speaker 2: I think first of all, that there are lots of
Speaker 2: in the United States that are well run, good stewards
Speaker 2: of capital. I think, as an example of farmers and merchants,
Speaker 2: Bank of Long Beach with equity as twenty percent of
Speaker 2: total assets, banks that expand their market share during banking
Speaker 2: crises because they were well run. But I think that
Speaker 2: what you suggest with regards to the banking industry as
Speaker 2: a whole rings very true. There is a confidence in
Speaker 2: the banking industry that I suggest as partly born of ignorance,
Speaker 2: which is why neither borrowers, nor depositors nor bank shareholders
Speaker 2: know anywhere near as much about banking as they ought to.
Speaker 2: Part of the panic comes about from ignorance, and much
Speaker 2: of the confidence comes about as a consequence of ignorance.
Speaker 2: Banking is not a complex business done right. It is
Speaker 2: really about using your lending expertise and using your equity
Speaker 2: to shield the depositors deposits from excessive risk while paying
Speaker 2: them rent on the deposit, a fairly simple process if
Speaker 2: done right.
Speaker 1: Do you think that that what you just said, they're
Speaker 1: paying them rent. Well, first of all, so I do
Speaker 1: want to agree with what you're saying. I kind of
Speaker 1: wanted to bring the listener's point back to that SVB
Speaker 1: was a horribly run bank. I believe they had seventy
Speaker 1: eight percent of their investments into MBS mortgage backed securities
Speaker 1: when the industry averages like thirty percent for example. I mean,
Speaker 1: just just very basic things. They're way out on the
Speaker 1: risk curve, and these are things they should have known
Speaker 1: better they had. I think one of the guys from
Speaker 1: Lehman Brothers was on board, someone from the San Francisco
Speaker 1: fred was on board. Like they should have known better.
Speaker 1: They went way out on the risk curve, didn't practice
Speaker 1: propers management. So I would agree with you on that,
Speaker 1: But what about just the changes back to kind of
Speaker 1: this technolology and driving change and just changing things. So
Speaker 1: you said that they should pay them rent. So all
Speaker 1: of a sudden, my bank is paying me zero point
Speaker 1: five percent or zero point eight percent, and the Fed's
Speaker 1: going to pay me five percent. What should I do?
Speaker 2: It's outrageous. Well, that's that's really obvious. You know. I
Speaker 2: went into a big bank. I'm not going to say
Speaker 2: which one. I've been a customer there is for over
Speaker 2: fifty years. I went into the local branch, and I
Speaker 2: have to say the branch manager was a very nice woman,
Speaker 2: but she didn't know very much about banking. It turns
Speaker 2: out they had fourteen savings products, savings and deposit products,
Speaker 2: and when I began to ask her questions about these,
Speaker 2: she pointed me to a white service phone, I guess,
Speaker 2: to connect me to India to learn about their products.
Speaker 2: I learned that five of the fourteen products proposed to
Speaker 2: pay me little or no interest. Now why would they
Speaker 2: need fourteen products? First of all, my last bank and
Speaker 2: my new bank has one deposit product, you know you
Speaker 2: could write checks against it. You can do what you want.
Speaker 2: It's a high yield deposit that you can write checks against.
Speaker 2: You don't need fourteen. But in particular as a customer,
Speaker 2: I don't need fourteen that where five of them don't
Speaker 2: pay me interest. I can only believe mark that the
Speaker 2: last forty years have been so benign that savers have
Speaker 2: become lazy with their checking accounts because they've made so
Speaker 2: much money in real estate, They've made so much money
Speaker 2: in the stock market that they figure convenience is more
Speaker 2: important than yield. I'm old and fat and rich. I
Speaker 2: happen to believe that yield is important. If somebody's going
Speaker 2: to use my money and expose me to some risk,
Speaker 2: they got to pay me some rent. As you say,
Speaker 2: the idea that you would have money in a checking account,
Speaker 2: in a now account and get paid fifteen basis points
Speaker 2: when you can go treasury direct and get four hundred
Speaker 2: and forty basis point in short term fed funds. The
Speaker 2: idea that there's still money, trillions of dollars in these
Speaker 2: bank products that pay no interest rate is astonishing to me.
Speaker 1: Ignorance and laziness. I suppose, right, are the two things,
Speaker 1: But so what do the banks do? So the world
Speaker 1: changes and it seems like the banks need to change now,
Speaker 1: typically competition would make the banks need to change. The
Speaker 1: banks haven't had any competition, and maybe to Caitlyn Long's bank,
Speaker 1: the FED has purposely kept competition out of it. But
Speaker 1: they don't have any competition. I mean now they sort
Speaker 1: of do it, the FED. But it seems like they're
Speaker 1: going to have to offer me a better deal than
Speaker 1: what the FED is doing since the bank typically the model,
Speaker 1: I think most people believe that the model would be
Speaker 1: I give my money to the bank and deposits. They
Speaker 1: loan that money back out and make somewhere between. Probably
Speaker 1: I've heard it's an average of about seventeen percent when
Speaker 1: you take your high interest credit cards down to mortgages
Speaker 1: or whatever, and then they pay a percentage of that
Speaker 1: back to me. So should they be paying like, you know,
Speaker 1: short term treasure yields plus a premium on top of that.
Speaker 2: I don't want to say what they should pay because
Speaker 2: I think that depends on what they do with the money.
Speaker 2: Banks that take more credit risk, which is to say,
Speaker 2: banks that are making as an example, credit card loans
Speaker 2: where there's an expectant six percent default should pay me more.
Speaker 2: Banks like farmers and merchants. Bank of Long Beach is
Speaker 2: an example, that have a lot of their own money
Speaker 2: in very short term treasury securities that run very high
Speaker 2: cash reserves relative to deposit liabilities should probably have to
Speaker 2: pay me less, but they should have to pay me something,
Speaker 2: particularly because there's so many banks out there, there's solvent
Speaker 2: that will pay you something.
Speaker 1: I should have to pay you at least what they
Speaker 1: what you could earn in short term treasuries, right.
Speaker 2: I would think so. Now, perhaps people want deposits with
Speaker 2: shorter term, that is, they don't want to invest money
Speaker 2: for nine months. Necessarily they want overnight money. But even
Speaker 2: overnight money should pay an interest rate that is reasonable
Speaker 2: compared to what the banks receive for that same overnight
Speaker 2: money that they on lend. It shouldn't be any particular
Speaker 2: difficulty to get three point one five, three point three five,
Speaker 2: and now accounts and checking accounts, given the opportunities available
Speaker 2: for the banks to reinvest in short term money market
Speaker 2: style investments.
Speaker 1: Yeah, yeah, and you know the thing, times have changed,
Speaker 1: and so today we have smartphones and I don't have
Speaker 1: to go drive whatever, however hard to get to town
Speaker 1: and stand inland of the bank. I just opened my
Speaker 1: app and push a button and I can move all
Speaker 1: my money out of the account. And so the banks
Speaker 1: are going to have to get with this. We saw
Speaker 1: with SVP as forty billions and moved in a single day,
Speaker 1: I mean amazing, and that wasn't from people standing in
Speaker 1: line withdrawing a few thousand bucks. I want to jump
Speaker 1: to a bigger topic and back to kind of this
Speaker 1: sovereign debt crisis. And Zoltan Posar put out this work
Speaker 1: which I kind of think is a pretty good mental model,
Speaker 1: and he talks about this Breton Woods three. I'm sure
Speaker 1: you're probably familiar with that, and kind of Brettonwood's one
Speaker 1: was the gold back currency informally, Brettonwoods two went to
Speaker 1: just a paper fiat system what he calls inside money,
Speaker 1: and now Bretonwoods three is moving back to a commodity
Speaker 1: type money. So the US, you know, through sanctions, have
Speaker 1: sanctioned all these countries, including now Russia, and now we're
Speaker 1: seeing it seems like potentially moving back. We're seeing central
Speaker 1: banks adding more gold than any time in history. But
Speaker 1: it's not just gold. We saw GM put six hundred
Speaker 1: and fifty million into a lithium mind, they'd rather have
Speaker 1: the lithium in the ground. And we're seeing, you know,
Speaker 1: Russia wants to pump out less oil, and so we're
Speaker 1: seeing it's almost like nations would rather keep the commodity
Speaker 1: in the ground than hold treasuries that could be sanctioned
Speaker 1: or lose value or not buy as many of those
Speaker 1: commodities in the future. What's your take on that thesis
Speaker 1: if you heard it, or just that overall idea.
Speaker 2: Again, you said many things there, so.
Speaker 1: I'll make I'll make my questions a little shorter. I
Speaker 1: feel free to back it.
Speaker 2: Well, I heard three and so I'll try to deal
Speaker 2: with those. I agree with the thesis that we are
Speaker 2: coming into a period of increased commodity prices and also
Speaker 2: increased geopolitical strains on commodity pipelines. So I think that
Speaker 2: you will see in the investment business and in geopolitics
Speaker 2: more attention paid to commodities. I mean, that makes absolute sense.
Speaker 2: The Chinese in terms of trying to secure their economic
Speaker 2: future with security with the resources. They're doing the same
Speaker 2: thing that the United States did in the fifties. And sixties.
Speaker 2: We even taught them how so that makes absolute perfect sense.
Speaker 2: The idea, however, that breton Wood's three to the extent
Speaker 2: that it's a government dictate will do anything to back
Speaker 2: a currency with gold or commodities or anything else, strikes
Speaker 2: me as being unlikely. The politician's currency is power, and
Speaker 2: having a currency tied to any form of reality limits
Speaker 2: the power of the constant of the politicians. The idea,
Speaker 2: as an example, that the guy who runs China GI
Speaker 2: would have a gold backed Chinese yuan, which would limit
Speaker 2: his ability to impact the economy, seems to me like
Speaker 2: a one hundred percent non starter. Now, the reason that
Speaker 2: you're seeing more gold in central banks is, I think
Speaker 2: central banks have come to understand the challenges that they
Speaker 2: face as individuals, and they believe that the challenges that
Speaker 2: other central banks fail face are just as high. And they,
Speaker 2: I think would like an asset that isn't simultaneously somebody
Speaker 2: else's liability. If you own US treasuries, you implicitly believe
Speaker 2: that the US will pay you back and not steal it.
Speaker 2: And goal doesn't have to pay you back, it's already
Speaker 2: paid you. So it makes perfect sense, particularly in an
Speaker 2: era in an era of artificially low interest rates. Why
Speaker 2: you would do that? Why would you own, if you
Speaker 2: were China, large amounts of US tenure treasuries that pay
Speaker 2: you three and three quarters basis points in a currency
Speaker 2: where its value is depreciating by seven and a half
Speaker 2: percent a year. The US government solemnly swears to you
Speaker 2: that they will reduce your purchasing power by three and
Speaker 2: a half percent a year for the next ten years.
Speaker 2: Jim Grant calls that return free risk. The Chinese are
Speaker 2: simply being smart that way.
Speaker 1: So, you know, lots of talk just these last couple
Speaker 1: of days. CNN put out a piece, it was on
Speaker 1: Fox News, It was on you know, it's a lot
Speaker 1: of talk these days about the US dollar losing its
Speaker 1: reserve status. And you think about maybe a reserve currency
Speaker 1: like what you're actually using to store your savings, your
Speaker 1: reserves in versus maybe a medium of exchange currency. So
Speaker 1: in regards to this reserve, this store of value kind
Speaker 1: of this reserve currency, do you think that I guess
Speaker 1: what you're saying is then a lot of these countries
Speaker 1: are saying, well, I'd rather just hold gold, I'd rather
Speaker 1: reserve my assets, my value in gold than some other
Speaker 1: form of currency.
Speaker 2: I think that's true. Mark, going back to the first
Speaker 2: thing you said. When I was still actively employed, I
Speaker 2: spent a lot of time selling to very large quasi
Speaker 2: governmental investors, sovereign wealth fund stuff like that, And I
Speaker 2: asked them about their holdings of US Treasury. And I said,
Speaker 2: point blank to some of these sovereign wealth fund managers,
Speaker 2: do you trust us? They laughed and said, of course not,
Speaker 2: but we trust you more than we trust each other.
Speaker 1: Right.
Speaker 2: I once heard the US dollar described as quote, of
Speaker 2: course a lie, but a deeper and more liquid lie
Speaker 2: than we are told by other flyers, meaning that I
Speaker 2: think that the US dollar probably is the world's reserve
Speaker 2: currency for a while. The biggest enemy of the US
Speaker 2: dollar isn't the Chinese, It isn't the saudiast It's Congress.
Speaker 2: We're doing our very best to debase our currency. We're
Speaker 2: doing our very best to limit its ability to be
Speaker 2: a reserve currency by weaponizing the dollar and by the
Speaker 2: export of US values and politics across our borders. There
Speaker 2: is nothing that our quote competitors are doing to devalue
Speaker 2: the dollar that comes close to matching what we're doing
Speaker 2: to ourselves and I think it's important that the US
Speaker 2: citizens that generate real value from the US dollar as
Speaker 2: a reserve currency and the ability to export inflation as
Speaker 2: an example, understand the damage that's being done to the
Speaker 2: US franchise by the US Congress.
Speaker 1: Yeah, that's a good point. I've often thought about that.
Speaker 1: I mean, it's it's the United States race or positioned
Speaker 1: to lose, and so to your point, they're doing the
Speaker 1: most to damage it. You know, I know, I don't
Speaker 1: want to say, I know. I suspect that you have
Speaker 1: a long term perspective. I know you you know you're
Speaker 1: deep into golden resources, and so you must take the
Speaker 1: long view on this directionality wise. I mean, it just
Speaker 1: seems like that's the direction we're going in and they're
Speaker 1: only going to continue. It seems like back to kind
Speaker 1: of maybe earlier I said, at the end of this empire,
Speaker 1: they start to squeeze and try to kind of restrict
Speaker 1: and so potentially maybe you know what they're doing having
Speaker 1: to print, for example. I mean, that's only going to continue.
Speaker 1: This is just the direction we're in.
Speaker 2: Maybe true, maybe not true, But why take a chance
Speaker 2: mark with some part of your portfolio. I think you
Speaker 2: need to own insurance you need to pay DP. Gold
Speaker 2: has traditionally done well when investors were nervous about other
Speaker 2: forms of savings. So let's look at the arithmetic of
Speaker 2: those other forms of savings. The US ten your treasury,
Speaker 2: they pay you three and three quarters in a currency
Speaker 2: that they acknowledge is depreciating in value by seven and
Speaker 2: a half.
Speaker 1: Percent, And that's understanding.
Speaker 2: Why is to be nervous about that, wouldn't they? The
Speaker 2: second thing to understand about gold ownership today is the
Speaker 2: value proposition associated with longer bonds. From two perspectives, A
Speaker 2: large institutional investor who has forty percent of his or
Speaker 2: her portfolio and long bonds has two problems. The first
Speaker 2: is that his interest rates rise the capitalize value of
Speaker 2: their distributions, which is the bond prices fall. The second
Speaker 2: is that the yield is insufficient to make up the
Speaker 2: actuarial assumptions that will provide for the benefits of those
Speaker 2: pension funds twenty years from now. What that means is
Speaker 2: that I think we're going to see disintermediation from long
Speaker 2: bond portfolios into other asset classes. One of those I
Speaker 2: think will be gold. The most important part I think
Speaker 2: of the case for Americans owning gold is that it's
Speaker 2: under owned, precisely when the wind ought to be in
Speaker 2: its sales. The market share of gold is one half
Speaker 2: of one percent of total savings and investment assets in
Speaker 2: the United States. The four decade median is between two
Speaker 2: and a half and three percent. Gold doesn't need to
Speaker 2: win the war against the US dollar, doesn't need to
Speaker 2: win the war against the US Treasury. It needs to
Speaker 2: lose it less badly. If the market share of gold
Speaker 2: merely returned to mean, demand for gold would increase by
Speaker 2: four or five or six hundred percent in the largest
Speaker 2: savings and investment market in the world. That I think
Speaker 2: is the case for the gold price one hundred percent
Speaker 2: of your net worth, of course, not but more than
Speaker 2: half of a percent.
Speaker 1: Yeah, what is that? How does that stack up to
Speaker 1: India and China, which I know that people buy a
Speaker 1: lot of gold in those countries.
Speaker 2: I don't think that the statistics exist.
Speaker 1: Okay.
Speaker 2: One of the reasons why the US dollar is the
Speaker 2: world's reserve currency is relative to other countries, we're you know,
Speaker 2: pretty transparent. The data exists. It might not be good data,
Speaker 2: but at least it's data, right.
Speaker 1: Yeah, And of course you have to keep in mind
Speaker 1: that gold is a global asset. So you know, Russia's
Speaker 1: central Bank doubled their reserve requirements for gold from twenty
Speaker 1: to forty percent, and so those are those are big
Speaker 1: demands for gold as well. We see I think it
Speaker 1: was Turkey right, It was one of the biggest buyers
Speaker 1: of gold. So there's massive amounts of demand all over
Speaker 1: the world. What would you say to the fact that
Speaker 1: since twenty eleven, the money supply has gone up by
Speaker 1: about fifty percent, yet gold's price is the same.
Speaker 2: Well, a couple of things. I think that we've lived
Speaker 2: in a very benign time. I think the fact that
Speaker 2: we've lived through forty of benign economic climate means that
Speaker 2: the FED has been able to counterfeit without people taking
Speaker 2: refuge in gold. I also think that while markets are messy,
Speaker 2: they ultimately work. And I do believe that as long
Speaker 2: as we have negative real interest rates, which is to say,
Speaker 2: as long as the rate of inflation is substantially higher
Speaker 2: than the rate of the long US government bond yield,
Speaker 2: that we continue to compress the spring for gold. I'm
Speaker 2: in the odd position mark of owning a lot of
Speaker 2: gold when a financial planner would tell me. As a
Speaker 2: consequence of my other investments, I probably didn't need to
Speaker 2: own too much gold, but it allows me to sleep
Speaker 2: nights and stay calm, which is a seventy year old
Speaker 2: is a very good thing. I suspect that the statistics
Speaker 2: will tell you, given that the market share of gold
Speaker 2: across the length and breadth of the country is one
Speaker 2: half of one percent, that other investors aren't as well
Speaker 2: invested in gold as they should be.
Speaker 1: Yeah, what about what about all the talk of central
Speaker 1: bank digital currencies? Now? Lots of talk about them. I
Speaker 1: think just today I saw the ECB banging their drum again,
Speaker 1: Christine Legardo. They're talking about how fast they're rushing out
Speaker 1: their CBDC. Of course, China, the communist country, of course
Speaker 1: put theirs out first. Lots of talk about that. Some
Speaker 1: people think it could be I think you would probably agree.
Speaker 1: I know you don't pose to be an expert in crypto,
Speaker 1: but I'm sure you've seen enough to know the CBDCs
Speaker 1: would be a extremely orwellian in nature. But some people
Speaker 1: think that the government might use a CBD suo to
Speaker 1: get themselves out of this crisis that they're in.
Speaker 2: Well, one thing that I mean, there's many things chilling
Speaker 2: about the central bank digital currency. The most chilling is
Speaker 2: that they could cancel it.
Speaker 1: Shut you off.
Speaker 2: What happens right now if they come after my money
Speaker 2: is they have to find me and they have to
Speaker 2: take it from me by due process. The idea that
Speaker 2: they could issue me currency and then if they didn't
Speaker 2: like it, they could cancel that currency does not seem
Speaker 2: like a good idea to me, although it might seem
Speaker 2: like a very good idea to them. Sure, I think
Speaker 2: that money is supposed to be a medium of exchange,
Speaker 2: and if they cancel it, you can't exchange it, can you?
Speaker 1: No, you can't. You can't do anything if they cancel
Speaker 1: your money.
Speaker 2: I guess if you really trust Congress more than you
Speaker 2: trust yourself or your customer or your supplier, you think
Speaker 2: central bank digital currencies are a very good thing. I've
Speaker 2: watched Congress for a fairly long time, and I would
Speaker 2: rather take my chances with my suppliers and my customers.
Speaker 1: Yeah, what do you think? I mean? You could see
Speaker 1: the battle already heating up in the US. We have
Speaker 1: some lawmakers or trying to put like Ted Cruz or Emmer,
Speaker 1: putting bills forth trying to really block even on DeSantis,
Speaker 1: blocking CBDs from getting into the state, or into the
Speaker 1: Fed or into Congress. While some obviously wanted, there's certainly
Speaker 1: a battle there. Do you think that pesky document called
Speaker 1: the Constitution or some of these new laws could prevent
Speaker 1: this or is this something that's going to probably steamroll
Speaker 1: through no matter what.
Speaker 2: I don't think many Americans have a strong belief in
Speaker 2: the Bill of Rights.
Speaker 1: They don't even know what it says.
Speaker 2: I don't think, as the country is currently constituted, that
Speaker 2: people care too much about the Constitution. I'm reminded. I
Speaker 2: think it's the make end quote which suggests that the
Speaker 2: elections really are advanced auctions of stolen property. And further
Speaker 2: that you can understand politics by looking at the root
Speaker 2: of the word polly, of course, from the Greek for many,
Speaker 2: tick from the colloquial English for small bloodsucking insect. And
Speaker 2: I think that that process maybe manifest itself with voters.
Speaker 2: They are looking at once to victimize other classes of
Speaker 2: society to advance themselves while protecting themselves from victimization. That
Speaker 2: isn't what the Constitution is about. I think politics has
Speaker 2: become very pragmatic and probably much less morals based.
Speaker 1: Yeah, certainly. All right, Well we've covered a lot of ground.
Speaker 1: Now one question I have to ask you about, which
Speaker 1: you've already told me you're not an expert in, so
Speaker 1: I won't push too hard. But you know a lot
Speaker 1: of people have called bitcoin like a digital gold, a
Speaker 1: Swiss bank account in your pocket. It's certainly like an
Speaker 1: offshore bank account. It's a way to hold stuff you
Speaker 1: know self, custy yourself, and transfer over time and space
Speaker 1: without any authority's ability to sensor, sensor or take over
Speaker 1: that transaction. I'm curious. Have you just not really paid
Speaker 1: much attention to it because you're seventy years old and
Speaker 1: you don't care, or have you taken a look at
Speaker 1: it and had your doubts about it? What's your thoughts
Speaker 1: on that?
Speaker 2: I had the good fortune to buy bitcoin fairly early
Speaker 2: because it abused me and frankly, Mark, this doesn't happen often.
Speaker 2: But I made too much money too fast, and I thought, Okay,
Speaker 2: you've made X y Z without really understanding anything about
Speaker 2: this asset class. If you don't sell it and grab
Speaker 2: the cash, you're stupid. Yeah, well I was stupid. I
Speaker 2: made a lot of money and sold at eight hundred
Speaker 2: on the way to sixty thousand or whatever it went to.
Speaker 2: So I left, let's just say a little bit on
Speaker 2: the table. Yeah, but I don't feel bad about that.
Speaker 2: I will say that my belief in value is that
Speaker 2: most of the most of the value in bitcoin is
Speaker 2: the anonymity which some of its adherents are trying to
Speaker 2: get rid of. It's frictionless nature, but also the size
Speaker 2: of the network. What I like about gold that gold
Speaker 2: has a big network too. It's liquid, but it has
Speaker 2: intrinsic value that is useful to me. It's more useful
Speaker 2: to me frankly, that I understand it. I don't have
Speaker 2: anything against bitcoin. It just isn't an asset class that
Speaker 2: I feel as comfortable with from an insurance point of
Speaker 2: view as I do Bitcoin. If I lived in Venezuela,
Speaker 2: if there were currency controls and I wanted to change
Speaker 2: my bolevars for something I could spend, Bitcoin might be
Speaker 2: extremely useful for me. Right. Certainly, it has proved useful
Speaker 2: for Chinese nationals who didn't like the controls on how
Speaker 2: many yuan they would take out of China. I hope
Speaker 2: that situation isn't one that confronts Americans in the near future.
Speaker 1: Yeah, yeah, no, that's a great point to bring up.
Speaker 1: And I appreciate that perspective because you know, at the
Speaker 1: end of the day, we move or react when our
Speaker 1: pain is high enough. And so in the United States,
Speaker 1: as dirty as the dollar is, is still the cleanest shirt
Speaker 1: in the laundry versus Yeah, if you're in North Korea
Speaker 1: or China, or Lebanon or a Turkey or any number
Speaker 1: of countries around the world, the pains high enough and
Speaker 1: you have to you have to move into something. Eighty
Speaker 1: percent of all bitcoin transactions under one thousand dollars are
Speaker 1: happening in Africa, right, they need it there. But in
Speaker 1: the US that you know, I'm at a bar in
Speaker 1: Manhattan drinking a twenty dollars cocktail, like the dollar still
Speaker 1: works pretty dang good, right, and so we don't have
Speaker 1: that need. If you're in Syria running for your life,
Speaker 1: you can't really take that money in your bankccount, nor
Speaker 1: can you carry a bunch of gold bars either. And so, yeah,
Speaker 1: great perspective on that. I appreciate that. All right, Well,
Speaker 1: we man, we covered a lot of ground. So gold
Speaker 1: commodities protect yourself and that's it. Anything else you want
Speaker 1: to draw attention to.
Speaker 2: I'd love to invite your audience to continue the dialogue
Speaker 2: with me. If you care what I have to say
Speaker 2: about natural resources and investing, you can do it really
Speaker 2: easily by coming to Rule Investmentmedia dot Com. And I'll
Speaker 2: give you an incentive if you'll list your natural resource stocks,
Speaker 2: I'll personally rank them one to ten. Wow, and comment
Speaker 2: on any individual issue or I think my comment might
Speaker 2: have value. In addition, if you're concerned about your bank
Speaker 2: or unhappy with your bank, and you want to do
Speaker 2: business with a real old fashioned bank, one that has
Speaker 2: money in it, one that pays you interest on your deposits,
Speaker 2: and one that will happily lend you money against physical
Speaker 2: precious metals stored in segregated storage. In the question and
Speaker 2: comment section at Rule Investment Media Right bank, and I'll
Speaker 2: put you on a list for battle Bank information so
Speaker 2: that you can take a look at becoming a customer
Speaker 2: when we open once again, Rule Investmentmedia dot Com rankings bank.
Speaker 1: Yeah, so that's awesome. I'm we're going to record the
Speaker 1: intro separately. I'm going to make sure I shout that
Speaker 1: out in the intro. So everybody hears that as well.
Speaker 1: We'll link to it in the show notes down below
Speaker 1: as well. Man, that's an amazing offer. Get your resource
Speaker 1: investments rated by the legend, the living legend here, Rick Rule.
Speaker 1: Take him up on that offer. Battle Bank for sure,
Speaker 1: comment Bank. I'm gonna be using battle Bank when it
Speaker 1: comes online. I'm excited for that. I think it's very unique.
Speaker 1: I think it's great. So I'm wishing you luck with that.
Speaker 1: So we'll link to that stuff down below, and I
Speaker 1: guess with that we'll we'll let you go. Thanks so much, Rick.
Speaker 2: Mark, Thank you. I really enjoyed the conversation.
Speaker 1: All right, that's a wrap. Hopefully enjoyed that conversation with
Speaker 1: Rick Rule. Like I said, a living legend. This guy
Speaker 1: is on it and it was a great conversation. Do
Speaker 1: not pass up that opportunity he's given to you to
Speaker 1: put your resource investments up and have him personally grde it.
Speaker 1: I'm doing it. You should do it. We're gonna put
Speaker 1: a link down below. Like I said, don't pass it up.
Speaker 1: We put a QR code up on the screen as
Speaker 1: well as always let me know what you think. Give
Speaker 1: me thumbs up if you like it. Thumbs down. If
Speaker 1: you don't please, if you don't like it, tell me
Speaker 1: why leave a comment down below. Of course, as always,
Speaker 1: share this video, discuss it with your friends, families, coworks.
Speaker 1: We've got to continue to wake people up and that's
Speaker 1: what I got to your success.
Speaker 2: I'm out.