WEBVTT - Metal Mania 0:00:05.960 --> 0:00:06.760 Well, a chillions. 0:00:06.760 --> 0:00:08.680 I'm Joel Webber and I'm Eric Balcunas. 0:00:11.640 --> 0:00:14.240 Eric, there's a lot of stuff happening in the world 0:00:14.320 --> 0:00:18.120 right now, but one theme that has been just kind 0:00:18.120 --> 0:00:20.680 of like on a tear for more than a year 0:00:20.840 --> 0:00:23.840 or two years even is metals. We're gonna have a 0:00:24.079 --> 0:00:28.200 gentlemen join us, John Champalia, who's the CEO of sprot 0:00:28.280 --> 0:00:33.240 Asset Management. Eric, what's interesting about metals and spots approach 0:00:33.440 --> 0:00:34.600 in ETF investing. 0:00:35.360 --> 0:00:38.200 Let me give you a statue. About two weeks ago, 0:00:38.640 --> 0:00:42.519 the silver ETF SLV traded more in a week than 0:00:42.560 --> 0:00:46.959 any stock on planet Earth, more than Navidia, more than Tesla. 0:00:47.000 --> 0:00:49.279 A year ago, this ETF was ranked one hundred and 0:00:49.320 --> 0:00:53.200 sixty eighth. This is crazy what happened with silver and gold? 0:00:53.360 --> 0:00:57.600 Silver in particular felt like GameStop. It felt like, what 0:00:57.680 --> 0:01:00.120 in the hell's going on? How does something that's mid 0:01:00.160 --> 0:01:03.960 size takeover in terms of volume. So silver had this 0:01:04.160 --> 0:01:07.160 just parabolic move up. Gold has been going up for 0:01:07.200 --> 0:01:09.240 a year and a half. But between the two of them, 0:01:09.280 --> 0:01:11.039 I think they combined for I want to say something 0:01:11.120 --> 0:01:13.960 like sixty seventy billion in volume. That I mean, these 0:01:13.959 --> 0:01:17.360 are ridiculous numbers, it's going to die down. It has 0:01:17.400 --> 0:01:19.199 died down a little bit, there's been a sell off, 0:01:19.200 --> 0:01:22.160 but for the most part, these two medals really just 0:01:22.200 --> 0:01:27.479 went wild, particularly over the past couple months, and some 0:01:27.560 --> 0:01:30.160 people are calling it part of the debasement trade. It 0:01:30.240 --> 0:01:34.319 feels a little like fomo to me. People general investors 0:01:34.360 --> 0:01:36.959 have for a while now been buying equities like normal, 0:01:36.959 --> 0:01:39.080 but they've been buying gold. So gold has been a 0:01:39.120 --> 0:01:41.520 story for about a year and a half. But silver 0:01:41.640 --> 0:01:45.080 came out of nowhere and just went absolutely wild, and 0:01:45.120 --> 0:01:48.400 that's just caught everybody's by surprise a little bit. But 0:01:48.480 --> 0:01:52.280 the ETFs again, those volume numbers were absolutely ridiculous, and 0:01:52.320 --> 0:01:54.080 then there's some of the things to unpack there. But 0:01:54.360 --> 0:01:56.240 I think it's just one of those things where you 0:01:56.320 --> 0:01:58.400 never know, Joel. Just when you know things are like 0:01:58.480 --> 0:02:00.720 kind of going one direction, out thing comes from the 0:02:00.760 --> 0:02:03.960 side door and just goes wild. And silver was that thing, 0:02:04.440 --> 0:02:06.120 And where do we go from here? Both of these 0:02:06.160 --> 0:02:09.440 metals are like really at extreme positions. So what happens 0:02:09.480 --> 0:02:11.079 now also worth mentioning. 0:02:11.120 --> 0:02:12.639 John's been on the podcast once. 0:02:12.440 --> 0:02:14.440 Before a couple of years ago when we did a 0:02:14.560 --> 0:02:16.320 uranium episode. So if you want to hear more, you 0:02:16.320 --> 0:02:21.800 can listen back to that one this time I'm Tryin's 0:02:22.360 --> 0:02:22.960 Metal Mania. 0:02:25.040 --> 0:02:25.280 John. 0:02:25.360 --> 0:02:27.799 Welcome back to trillions, Thanks for having me back. 0:02:27.840 --> 0:02:31.280 Okay, So we mentioned this, this precious metals just having 0:02:31.280 --> 0:02:34.760 this incredible run. There's also like no shortage of ETFs 0:02:34.760 --> 0:02:37.600 that are offering exposure. So so curious what does SPRAT 0:02:37.600 --> 0:02:39.399 do differently and why does that matter? 0:02:39.440 --> 0:02:42.320 Right? Well, Sprout has a long history in metals of mining. 0:02:42.400 --> 0:02:44.680 It's kind of our DNA, it's our culture and it's 0:02:44.720 --> 0:02:47.560 all we do, so we know it really well. And 0:02:47.639 --> 0:02:51.440 we do everything from investing in physical commodities and that 0:02:51.520 --> 0:02:56.360 covers gold, silver, palladium, platinum, copper, and uranium all in 0:02:56.400 --> 0:02:59.960 physical form, and we do most of the related equity 0:03:00.160 --> 0:03:03.800 oriented categories and we also do active management as well 0:03:03.840 --> 0:03:06.480 as some private investments. So we do everything in the 0:03:06.520 --> 0:03:11.920 capital structure, both physical commodities, passive equities, and active equities 0:03:12.440 --> 0:03:14.959 in metals of mining. So, you know, we saw a 0:03:15.000 --> 0:03:17.320 lot of these trends starting to form three four, five 0:03:17.400 --> 0:03:20.200 years ago, and we built a large suite of ETFs, 0:03:20.720 --> 0:03:22.480 not just in the United States, but we also have 0:03:22.520 --> 0:03:25.600 funds in Europe and Canada and they're really designed to 0:03:25.600 --> 0:03:29.120 give investors opportunities to play a lot of these thematics, 0:03:29.120 --> 0:03:31.240 which we think are still in the early stages of 0:03:31.360 --> 0:03:32.040 their development. 0:03:32.320 --> 0:03:35.480 So Eric mentioned the debasement trade, and I'm curious that 0:03:35.760 --> 0:03:38.280 really became a theme, especially last year. It seems like 0:03:38.280 --> 0:03:42.160 it's really gone mainstream. When did that thesis first resonate 0:03:42.640 --> 0:03:44.760 with you? And what's changed even since then? 0:03:45.040 --> 0:03:47.520 Well, at Sprott, I can tell you the deplacement trade 0:03:47.520 --> 0:03:51.800 that that term we've been using since the Great Financial Crisis, 0:03:52.480 --> 0:03:54.520 and it's only been in the last year, so it's 0:03:54.600 --> 0:03:58.040 kind of entered the mainstream lexicon. And for your audience, 0:03:58.120 --> 0:03:59.760 I think we should define what it means because it's 0:03:59.800 --> 0:04:02.320 not a typical term we use in everyday language. But 0:04:02.680 --> 0:04:06.520 the basement is a term to describe a situation where 0:04:06.840 --> 0:04:10.560 very excessive levels of debt, very high levels of inflation 0:04:11.880 --> 0:04:16.720 are basically eroding your real real after inflation returns, whether 0:04:16.760 --> 0:04:20.480 you're investing in treasuries or currencies. And it's also a 0:04:20.560 --> 0:04:25.039 part of currency devaluation. Currency evaluation is very common when 0:04:25.440 --> 0:04:27.799 countries are in trade wars, which we're in right now, 0:04:28.200 --> 0:04:31.159 and all of these things kind of point investors to say, 0:04:31.680 --> 0:04:35.720 maybe I need to hedge myself against those risks. How 0:04:35.720 --> 0:04:39.000 do I do that? Well. Precious metals, for not one 0:04:39.080 --> 0:04:41.000 or two years, but for the last five thousand years, 0:04:41.000 --> 0:04:45.839 have been an alternative form of storing your wealth. And 0:04:46.120 --> 0:04:48.920 this is one of the reasons why gold and silver 0:04:49.880 --> 0:04:52.640 and platinum have all been really well bid over the 0:04:52.680 --> 0:04:56.720 last couple of years, because investors are rotating from let's 0:04:56.760 --> 0:04:59.560 call it paper assets, whether those are treasuries or stocks 0:05:00.000 --> 0:05:04.560 in some cases, two more real things that historically have 0:05:04.680 --> 0:05:08.400 performed well in these par periods of debasement. 0:05:09.000 --> 0:05:12.320 Let's talk about this so right now. I mean, inflation 0:05:12.480 --> 0:05:15.640 isn't that bad, Debasement isn't that bad. I mean, it's 0:05:15.680 --> 0:05:17.800 not like we just had a bunch of qi. It 0:05:17.800 --> 0:05:20.040 feels a little more like fomo as well. It just 0:05:20.080 --> 0:05:23.200 seems like gold started going up because people were buying 0:05:23.279 --> 0:05:25.000 it for that reason. But then I think as it 0:05:25.040 --> 0:05:27.640 goes up, it gets more fomo money. It just seems 0:05:27.680 --> 0:05:30.560 like more of a craze than it does seem like 0:05:30.680 --> 0:05:34.520 a general allocation to it for this long term inflation hedge. 0:05:35.000 --> 0:05:35.840 What's your take on that. 0:05:35.920 --> 0:05:38.679 We would describe it as a pivot, and the pivot 0:05:38.720 --> 0:05:42.320 is really twofold. It's one. I'm going to bring this 0:05:42.440 --> 0:05:45.479 more on a local basis. It's about running an economy 0:05:45.560 --> 0:05:47.960 very hot in the United States. That means allowing inflation 0:05:48.120 --> 0:05:51.800 to be higher than historic targets of two percent. That 0:05:51.839 --> 0:05:55.920 means running very high physical death sits, which is what's happening. 0:05:56.400 --> 0:06:01.400 It is also around very commoday to monetary policy, which 0:06:01.440 --> 0:06:06.400 obviously the Trump administration is trying to engineer with new 0:06:06.760 --> 0:06:09.680 FED chairman. So if you're running the economy hotter from 0:06:09.680 --> 0:06:13.560 a fiscal and monetary perspective, I think that introduces a 0:06:13.600 --> 0:06:15.800 different dynamic. But take a step back and look at 0:06:15.839 --> 0:06:19.600 the big picture globally, this really started four years ago 0:06:19.839 --> 0:06:23.480 when Russian invaded the Ukraine, and so what does this 0:06:23.520 --> 0:06:26.280 have to do with gold? While six hundred billion dollars 0:06:26.320 --> 0:06:29.760 of Russian assets were frozen with a few keystrokes on 0:06:29.760 --> 0:06:32.680 the computer. And this was a real eye opener for 0:06:32.720 --> 0:06:35.919 a lot of emergent markets and countries that aren't so 0:06:36.000 --> 0:06:39.360 friendly with the United States and other Western countries that 0:06:39.680 --> 0:06:42.720 their assets could be seized or frozen very easily. And 0:06:42.800 --> 0:06:46.080 this is what really kick started and accelerated a shift 0:06:46.320 --> 0:06:50.640 we call it dedollarization, basically where central banks around the 0:06:50.640 --> 0:06:54.200 world and governments were basically selling treasuries or reducing their 0:06:54.640 --> 0:06:57.440 dollar holdings, and what were they doing with the money. 0:06:57.480 --> 0:07:01.360 They were basically recycling it into gold. The Chinese Central 0:07:01.360 --> 0:07:06.080 Bank was really the primary proponent of this strategy. We 0:07:06.120 --> 0:07:09.120 know they have hundreds of billions of dollars of treasures 0:07:09.160 --> 0:07:12.080 that they are selling into the market and recycling in 0:07:12.200 --> 0:07:17.520 hard assets. It's not just gold, it's infrastructure, it's energy, etc. 0:07:18.200 --> 0:07:20.840 But there are a lot of central banks doing this India, 0:07:20.960 --> 0:07:25.400 Poland Singapore. They are moving away from dollars and treasuries 0:07:25.480 --> 0:07:29.040 as part of their foreign exchange reserves, and they're recycling 0:07:29.040 --> 0:07:32.480 the money into physical gold. And you're starting to see 0:07:32.480 --> 0:07:37.239 institutional investors mimic this behavior, which is why last year 0:07:37.400 --> 0:07:42.440 we saw very good flows into gold based exchange listed offerings, 0:07:42.480 --> 0:07:46.000 including the sprot Physical Gold Trust. And this trend, I 0:07:46.040 --> 0:07:48.960 think is starting to trickle down into more of the 0:07:48.960 --> 0:07:52.440 advisor channel and down to individual investors. They're kind of 0:07:52.480 --> 0:07:55.480 minicking the behavior of these central banks. And so you 0:07:55.520 --> 0:07:58.720 might say, well, is this a short term trend or 0:07:58.760 --> 0:08:01.440 is this part of a longer term kind of fracture 0:08:01.480 --> 0:08:04.200 of the global world order? And right now it feels 0:08:04.240 --> 0:08:06.560 like the ladder to us, which is why you have 0:08:06.640 --> 0:08:09.000 such a constant bid under the price of gold, why 0:08:09.000 --> 0:08:12.000 it's been so resilient, and obviously in the last few 0:08:12.040 --> 0:08:13.920 weeks it's hit an all time high. 0:08:14.120 --> 0:08:16.760 So god, there was a lot there. I want to 0:08:16.800 --> 0:08:19.400 ask about. You went from the institutional kind of to 0:08:19.480 --> 0:08:22.560 the retail. So let's pivot, if we may, from the 0:08:22.600 --> 0:08:26.960 institutional into the retail. And I'm curious, like, what role 0:08:27.040 --> 0:08:31.800 should metals play in a retail investor's portfolio? Now, I 0:08:31.800 --> 0:08:34.440 mean there was this sort of like old way and 0:08:34.520 --> 0:08:36.680 if you're describing sort of a new world, like what 0:08:36.840 --> 0:08:39.920 is the way that asset managers are financial advisors are 0:08:39.920 --> 0:08:41.880 starting to talk to one another about this. 0:08:42.120 --> 0:08:44.480 Yeah, I mean historically goal has always played a safe 0:08:44.520 --> 0:08:47.199 haven role in a portfolio. It's always done very well, 0:08:47.240 --> 0:08:51.640 particularly in financial dislocations or calamities. And the other assets 0:08:51.640 --> 0:08:54.200 that always historically did well are things like US treasuries 0:08:54.200 --> 0:08:56.800 and the US dollar. But last year the US dollar 0:08:56.880 --> 0:08:59.520 went down ten percent against a basket of currency, so 0:09:00.240 --> 0:09:03.880 didn't really provide the shock absorber against things going on 0:09:04.000 --> 0:09:07.760 with trade wars and tariffs and the lake. So what 0:09:07.800 --> 0:09:11.720 we see is some rotation of assets away from traditional 0:09:12.320 --> 0:09:17.200 treasuries to gold, and we think it's displaying a more 0:09:17.240 --> 0:09:21.160 effective hedge against some of the risks, whether it's currency, credit, 0:09:21.880 --> 0:09:25.520 equity risk. And we've always told our investors, and this 0:09:25.559 --> 0:09:28.640 is going back decades, that gold should always be kind 0:09:28.640 --> 0:09:30.880 of the ballast in your portfolio. You should always have 0:09:30.920 --> 0:09:33.720 some weight to it depending on what you know, what 0:09:33.760 --> 0:09:36.880 you're trying to hedge against. But it obviously goes up 0:09:36.880 --> 0:09:39.680 around eight to ten percent over long periods of time, 0:09:40.400 --> 0:09:42.959 and then it obviously can can perform well against other 0:09:43.000 --> 0:09:45.679 asset classes and a dislocation. But we've always said to 0:09:45.720 --> 0:09:48.040 people you should have somewhere between five to ten percent 0:09:48.040 --> 0:09:51.480 of your portfolio in physical gold help you stay invested 0:09:51.559 --> 0:09:55.240 in other asset classes that historically have been more volatile. 0:09:55.120 --> 0:09:59.040 Gold, but maybe maybe not silver. Right, So what's driving 0:09:59.080 --> 0:10:02.120 the interest in in silver? Is it just price momentum 0:10:02.200 --> 0:10:03.400 or is there something else going on? 0:10:04.120 --> 0:10:07.559 Yeah, I mean silver obviously and gold are very tied together, 0:10:08.080 --> 0:10:11.520 but there are some key differences between the two. Silver 0:10:11.800 --> 0:10:14.080 is what we call a hybrid metal. That means it 0:10:14.120 --> 0:10:18.440 has monetary elements to it and it has industrial elements 0:10:18.480 --> 0:10:21.240 to it. And I think it's important to take a 0:10:21.240 --> 0:10:24.520 step back and look at the price history of silver. 0:10:24.600 --> 0:10:28.120 I mean, silver was fifty dollars an ounce in twenty eleven. 0:10:28.840 --> 0:10:32.360 It meandered around for over ten years, and in the 0:10:32.440 --> 0:10:34.680 last I guess three or four months, it was like 0:10:34.720 --> 0:10:38.720 a coiled sprint. It had a huge catchup trade because 0:10:38.720 --> 0:10:42.240 gold was rallying first. But there's also kind of a 0:10:42.640 --> 0:10:47.360 geopolitical angle to silver as well, because silver is a 0:10:47.480 --> 0:10:51.640 very important metal for anything that conducts electricity. So think 0:10:51.679 --> 0:10:55.679 about defence industries, evs, things where you need very high 0:10:55.760 --> 0:11:00.480 levels of electrical connectivity. Silver's your go to metal. China 0:11:00.520 --> 0:11:04.480 has recently put export restrictions on silver, so there's some 0:11:04.640 --> 0:11:07.480 challenges there. The other element that's got silver kind of 0:11:07.520 --> 0:11:12.120 really going is substitution effects. So what does that mean. Well, 0:11:12.200 --> 0:11:14.760 what it means is if you're an investor in a 0:11:14.800 --> 0:11:18.040 place like India or another emerging market where you don't 0:11:18.080 --> 0:11:23.280 trust your currency because of hyper inflation or whatever, gold 0:11:23.320 --> 0:11:27.240 has become very expensive for those for those people. And 0:11:27.320 --> 0:11:29.040 so what we see is that as the price of 0:11:29.080 --> 0:11:33.000 gold becomes unaffordable for some groups in the world, they 0:11:33.000 --> 0:11:36.320 switched to silver. So a really good example would be India, 0:11:36.440 --> 0:11:39.960 you know, huge owners of physical gold. When the price 0:11:40.000 --> 0:11:43.319 of gold kind of broke five thousand, we saw eighty 0:11:43.360 --> 0:11:45.720 five million ounces of silver in the just a two 0:11:45.760 --> 0:11:49.640 month period get imported into India, So they're basically hoarding 0:11:49.880 --> 0:11:52.840 silver now as y're touched at the beginning. Was there 0:11:52.840 --> 0:11:55.440 a bit of a fomo you know, memification going on 0:11:55.520 --> 0:11:58.599 with silver in the last couple of weeks. Yeah, absolutely, 0:11:58.600 --> 0:12:02.720 there was a absolute wild trading looking at some of 0:12:02.720 --> 0:12:05.320 the ETFs you look at, we were watching the options 0:12:05.360 --> 0:12:08.760 trading on some of the ETFs. It got very excessive, 0:12:08.800 --> 0:12:10.520 and we've had kind of a correction here, which I 0:12:10.520 --> 0:12:13.280 think is quite healthy. But we're holding at eighty dollars, 0:12:13.280 --> 0:12:16.280 so you know, we were fifty dollars an ounce in 0:12:16.320 --> 0:12:19.880 November and we obviously broke through one hundred and corrected 0:12:20.000 --> 0:12:23.080 back down to eighty. But there's also a shortage of silver. 0:12:23.120 --> 0:12:26.560 We've had a supply deficit for five years and that 0:12:26.760 --> 0:12:29.320 is obviously starting to catch up to the marketplace. 0:12:29.360 --> 0:12:32.920 So SLV alone traded one hundred and forty six billion 0:12:34.160 --> 0:12:38.080 in the last week of January, and that's an enormous number. 0:12:38.320 --> 0:12:41.120 And even leading up to that, we're talking like eight 0:12:41.200 --> 0:12:45.480 ten times its average. Now, all that volume, all that return, 0:12:46.120 --> 0:12:48.679 and yet no flows. This was interesting to me. I 0:12:48.760 --> 0:12:50.959 want to get your take on this, so Joel. Normally, 0:12:51.120 --> 0:12:53.080 like when gold started to go up, the flows came in, 0:12:53.160 --> 0:12:56.000 like people were like, oh cool silver. No flows in 0:12:56.000 --> 0:12:59.920 fact outflows, and I heard a theory and it feels 0:13:00.200 --> 0:13:02.120 but I want to get your take on it. That 0:13:02.320 --> 0:13:04.800 silver for a minute there and I'm not sure if 0:13:04.800 --> 0:13:07.600 it still exists was so hot and demand physically, especially 0:13:07.600 --> 0:13:10.480 in Asia and China. One guy tried to smuggle silver 0:13:10.520 --> 0:13:12.840 in through Hong Kong, got busted and they put up 0:13:13.160 --> 0:13:15.520 the picture all the silver he was trying to snuggle 0:13:15.559 --> 0:13:18.520 it in these Danish cookie boxes. Anyway, I wouldn't mess 0:13:18.559 --> 0:13:21.439 with the Chinese government, but that's just me. Anyway, he's 0:13:21.480 --> 0:13:24.840 trying to get this in. And the thesis I heard 0:13:24.960 --> 0:13:27.720 was that the traders out there were using SLV for 0:13:27.760 --> 0:13:31.240 its silver stash. They were actually handing in chairs of 0:13:31.360 --> 0:13:34.920 SLV to get physical silver back and then sell it 0:13:34.960 --> 0:13:37.480 in arbitrage it in the open market, especially in Asia. 0:13:38.080 --> 0:13:40.440 So it was almost like the ETF was getting raided 0:13:40.480 --> 0:13:43.200 for its valuable thing that it held. And that's why 0:13:43.200 --> 0:13:46.599 there could be outflows that overwhelmed the inflows from the 0:13:46.640 --> 0:13:47.720 FOMO people. Thoughts. 0:13:48.360 --> 0:13:49.679 Yeah, I mean, I think you have to look at 0:13:49.720 --> 0:13:52.600 it fun by fund. So Sprott has a physical silver 0:13:52.679 --> 0:13:56.040 trust that's actually been in net inflow, so we've been 0:13:56.120 --> 0:13:59.720 accumulating new new dollars into the fund, and buying silver 0:13:59.760 --> 0:14:02.960 with SLV is more of a trading instrument versus a 0:14:03.000 --> 0:14:06.760 buy and hold, And obviously I think the options market 0:14:06.800 --> 0:14:09.600 for that is more the tail wagging the dog on 0:14:09.640 --> 0:14:12.800 that thing, just the way it trades. But yes, you're right, 0:14:12.840 --> 0:14:17.320 there are some arbitrage opportunities by location. So for example, 0:14:17.920 --> 0:14:21.040 there's too much metal sitting in North America right now 0:14:21.600 --> 0:14:25.800 versus places like London, India or China, the other big 0:14:25.880 --> 0:14:28.600 kind of metal markets. And we know that because there's 0:14:28.600 --> 0:14:32.400 a price differential as to what the price of silver 0:14:32.480 --> 0:14:35.440 trades for in Shanghai versus New York, and there is 0:14:35.480 --> 0:14:39.040 a big spread, and traders are very opportunistic. If that 0:14:39.200 --> 0:14:44.240 spread provides an arbitrage opportunity, they will physically move the silver, 0:14:44.440 --> 0:14:46.920 put it on a ship, sail it around the world, 0:14:46.960 --> 0:14:50.680 and deliver it and the vaults into whatever market. We 0:14:50.760 --> 0:14:54.360 haven't quite seen that yet because there's not enough arbitrage there. 0:14:54.400 --> 0:14:57.960 There is some vat taxes in China that makes that 0:14:58.640 --> 0:15:02.600 arbitrage why than you would think, But we see that 0:15:02.640 --> 0:15:05.560 all the time when markets dislocate. I think the great 0:15:05.560 --> 0:15:08.960 example right now is copper. We obviously saw the price 0:15:09.000 --> 0:15:11.960 of copper at one point trading over ten percent over 0:15:12.000 --> 0:15:15.440 the price of copper in London and traders were basically 0:15:15.440 --> 0:15:17.720 loading up ships and rushing it to the United States. 0:15:18.400 --> 0:15:22.040 So these physical movements of metal actually happen. 0:15:22.160 --> 0:15:22.880 We do it. 0:15:22.880 --> 0:15:24.640 That's brought all the time. We have to buy metal 0:15:24.640 --> 0:15:27.880 and move it around the world. But yeah, there's definitely 0:15:27.960 --> 0:15:31.560 I think the volatility has been exacerbated by some of 0:15:31.600 --> 0:15:33.600 the inventory mismatches right now going on. 0:15:33.640 --> 0:15:35.960 Who's calls when you have to move metal like that? 0:15:37.880 --> 0:15:40.520 Yeah, so we we obviously work with different banks and 0:15:40.960 --> 0:15:44.800 shippers and believe it or not, silver, It just gives 0:15:44.800 --> 0:15:47.240 you a quick background silver. So how do you move 0:15:47.280 --> 0:15:51.680 around these one thousand ounce bars. Well, we put six 0:15:51.760 --> 0:15:55.120 hundred of them on a semi flatbed tractor trailer, which 0:15:55.160 --> 0:15:58.840 is a reinforced trailer, and we moved six hundred bars 0:15:58.880 --> 0:16:02.160 at a time, and sometimes it'll take us six months 0:16:02.440 --> 0:16:05.360 to move large quantities around to our vaults, but we 0:16:05.400 --> 0:16:06.840 do it. It's a lot of work, but we have 0:16:06.880 --> 0:16:10.600 a whole team of logistics people that organize this. And 0:16:10.960 --> 0:16:14.040 gold is a little different. It's obviously it's obviously in 0:16:14.280 --> 0:16:17.800 armored cars because of the volume to value, but silver 0:16:17.960 --> 0:16:26.000 is so bulky you need to put it on flatbed trailers. 0:16:26.000 --> 0:16:30.440 Interesting about all this, like moving this merchandise around and ships. 0:16:30.520 --> 0:16:34.240 And I just finished a book project on bitcoin and 0:16:34.280 --> 0:16:37.520 one of the chapters is called the Store of Value SmackDown, 0:16:37.920 --> 0:16:40.920 and it's basically gold versus bitcoin. One of the big 0:16:41.760 --> 0:16:45.040 arguments that the bitcoiners have is, hey, if you want 0:16:45.080 --> 0:16:47.480 to move bitcoin, you just like basically click a button. 0:16:47.720 --> 0:16:49.400 You can move it anywhere in the world. You don't 0:16:49.440 --> 0:16:51.680 have to get it through a border, there's nobody who's 0:16:51.680 --> 0:16:53.640 going to confiscate it. You don't have to call like 0:16:54.160 --> 0:16:56.600 a big ship up, you don't have to ensure it. 0:16:56.600 --> 0:16:59.400 It's just easy. So it's like better version of gold. 0:16:59.840 --> 0:17:02.520 And obviously it has made that case pretty well. Even 0:17:02.640 --> 0:17:05.000 seventy thousand dollars after this huge pullback, that's still a 0:17:05.000 --> 0:17:08.920 lot of money per bitcoin, and it's been around seventeen years. Obviously, 0:17:09.000 --> 0:17:13.600 gold has really crushed in the short term, and bitcoin 0:17:13.880 --> 0:17:16.359 crushed maybe we'll call it twenty twenty twenty three and 0:17:16.359 --> 0:17:18.720 twenty twenty four was up four hundred and fifty percent, 0:17:18.760 --> 0:17:21.199 gold up way less. So they go back and forth. 0:17:21.720 --> 0:17:23.960 But what's your take on bitcoin? Could it be used 0:17:24.000 --> 0:17:26.439 as the same store of value in it as they 0:17:26.480 --> 0:17:29.680 say a digital gold, and is it even better because 0:17:29.720 --> 0:17:31.800 you don't have to worry about calling up a ship. 0:17:32.000 --> 0:17:34.680 Yeah, it's a good question. I obviously get that all 0:17:34.760 --> 0:17:37.880 the time. I'm going to use your seventeen year term 0:17:38.119 --> 0:17:40.919 and say that gold's been a store of value for 0:17:40.960 --> 0:17:43.840 five thousand plus years. So we have a long history 0:17:43.880 --> 0:17:49.399 as humans in terms of our value and accumulation of gold. 0:17:49.640 --> 0:17:53.159 So it stood the test of time over millennia. You know, 0:17:53.880 --> 0:17:55.600 seventeen years. It sounds like a long time, but it's 0:17:55.600 --> 0:17:58.000 still in its infancy in terms of a new asset class. So, 0:17:58.800 --> 0:18:01.240 but yes, they have pros and they're very different there. 0:18:01.440 --> 0:18:03.240 It's not a digital gold. We don't like to think 0:18:03.240 --> 0:18:06.240 of it that way. It's a very different asset. Last obviously, 0:18:06.320 --> 0:18:08.679 if it was digital gold, there wouldn't be a forty 0:18:08.720 --> 0:18:11.560 percent difference in performance just over the last few months. 0:18:11.600 --> 0:18:16.280 So they have very different audiences. They have some similarities. Yes, 0:18:16.680 --> 0:18:19.640 you can zip it around digitally, but there's obviously trade 0:18:19.640 --> 0:18:23.200 offs with security, whereas trying to steal gold is pretty 0:18:23.280 --> 0:18:27.439 challenging given how heavy it is and how highly secure 0:18:27.480 --> 0:18:30.040 it is. So they can compliment each other, but we 0:18:30.080 --> 0:18:31.879 just we don't like to think of them as substitute. 0:18:31.920 --> 0:18:32.560 That's brought. 0:18:33.880 --> 0:18:36.439 Hold on, Joel. I have a trivia question for you. 0:18:37.000 --> 0:18:38.080 How old is gold? 0:18:39.280 --> 0:18:42.080 I mean, like from the beginning. 0:18:42.560 --> 0:18:45.639 Yes, here's how old it is. It was mentioned in 0:18:45.640 --> 0:18:49.200 the Old Testament three hundred fifty times. That's old, man. 0:18:49.240 --> 0:18:51.000 If you get if you're like getting shout outs in 0:18:51.040 --> 0:18:54.080 the Old Testament, I mean that is really old. And 0:18:54.119 --> 0:18:57.240 that's why gold I do think it's it should get 0:18:57.280 --> 0:19:00.280 respected more from the bitcoinners. It's like you're seventeen years old. 0:19:00.720 --> 0:19:03.400 This thing is like has been through it, and every 0:19:03.480 --> 0:19:05.560 human generation has come along has come on and say 0:19:05.560 --> 0:19:08.000 gold is valuable. So that is definitely worth something. I 0:19:08.000 --> 0:19:09.560 think they both can exist. 0:19:09.600 --> 0:19:12.240 But you know, John, actually I'm curious do you think 0:19:12.280 --> 0:19:16.199 that the kind of the rise and popularity of bitcoin 0:19:16.320 --> 0:19:20.000 has that actually sparked an interest and expanded the interest 0:19:20.080 --> 0:19:23.520 in more hard assets that are physically backed. 0:19:23.640 --> 0:19:26.000 Look, I think there's similarities in terms of what people 0:19:26.000 --> 0:19:28.399 are trying to do with each asset class. Right, people 0:19:28.400 --> 0:19:31.639 are trying to diverse away at the fundamental base of 0:19:31.880 --> 0:19:34.920 from FIA currencies, which are basically paper money which can 0:19:34.960 --> 0:19:38.960 be printed as free will and debased. There's that term 0:19:39.000 --> 0:19:43.960 again over time from excessive money printing, inflation, excessive debt levels, 0:19:43.960 --> 0:19:47.080 et cetera. So there are some commonalities in terms of 0:19:47.119 --> 0:19:51.240 what people are trying to avoid. So those are the 0:19:51.280 --> 0:19:55.720 common I think the commonalities between the two. Obviously one 0:19:55.800 --> 0:19:58.320 is a lot more volatile than the other. We don't 0:19:58.359 --> 0:20:01.520 see central banks accumulating bitcoin yet. Maybe there are one 0:20:01.600 --> 0:20:03.399 or two that I am not worre about of. But 0:20:03.760 --> 0:20:06.200 we obviously have lots of central banks that a store 0:20:06.400 --> 0:20:09.080 as in there as part of their foreign exchange reserves 0:20:09.560 --> 0:20:12.920 as a liquid, tangible acid they can easily exchange for 0:20:13.200 --> 0:20:15.679 whatever it wants to when it wants to. So we 0:20:15.720 --> 0:20:19.000 haven't quite got central banks buying bitcoin. Maybe I'll Salvador, 0:20:19.440 --> 0:20:22.000 but time will tell to see how they play out. 0:20:22.280 --> 0:20:25.000 One more question on this, because one of the other 0:20:25.000 --> 0:20:28.359 things that we bring up between bitcoiners as well, Okay, 0:20:28.400 --> 0:20:31.639 gold is definitely scarce because one of the big you know, 0:20:31.720 --> 0:20:33.480 reasons to buy bitcoin is there's only going to be 0:20:33.480 --> 0:20:35.960 twenty one million, and twenty million are already done, so 0:20:36.320 --> 0:20:39.640 you're almost at the capacity and it's locked in. That's 0:20:39.640 --> 0:20:44.959 hard coded. Now gold two three percent is dug up 0:20:44.960 --> 0:20:46.720 from the ground a year, right, so there's a little 0:20:46.720 --> 0:20:49.280 bit of inflation. And then now they're talking about digging 0:20:49.359 --> 0:20:53.960 up the ocean floor or even beyond that mining asteroids. Joel, 0:20:53.960 --> 0:20:57.479 there's an asteroid called sixteen psych and did you know 0:20:57.560 --> 0:21:00.560 it has seven hundred quintillion I think, not gold on it. 0:21:00.600 --> 0:21:03.119 That's enough for ninety billion dollars per person on Earth. 0:21:03.760 --> 0:21:06.840 I don't know that could really decrease the price of gold. 0:21:06.920 --> 0:21:10.879 No, I think that's a pretty far fetch, well a theory. 0:21:10.960 --> 0:21:14.560 But it also I will pivot that again, pivot into 0:21:14.840 --> 0:21:19.800 a question about miners. There's the physical and the physical backstaff. 0:21:20.040 --> 0:21:21.760 Hold on, but I want to get to miners. 0:21:21.760 --> 0:21:24.040 But well, he would have exposure via miners. 0:21:24.800 --> 0:21:28.440 Oh yeah, why don't they send the gold miners into 0:21:28.440 --> 0:21:30.679 the ocean or to space space? 0:21:30.720 --> 0:21:32.800 Well, how about when was the last time somebody landed 0:21:32.880 --> 0:21:35.119 on the moon, let alone an asteroid? So I'm not 0:21:35.160 --> 0:21:39.080 holding my wreath on that one. But you do raise 0:21:39.119 --> 0:21:41.960