Don't Be Fooled By Gold and Silver's Price Drop Physical Metals Are Your Financial Insurance

Monaco 64, home of alternative economics and contrarian views. Well I'm in Frankfurt, Germany. I'm recording this on Friday and the markets are going pretty crazy. It's not just gold and silver that are getting hammered. Bonds are getting hammered. Stocks are getting hammered. And I think it's appropriate though because I spoke this morning. It was the first keynote speech at the conference at the Deutsche Gold Messe or the German Gold Show organized by Kai Hoffman and Soar Financially. And yes, I was a little nervous. This is the first time I've spoken at a conference. But then I thought I speak to you guys every day, thousands of you. Why not 100 or 150 people? I'm not sure how many people there was in the hall. But it's interesting because what I spoke today is very much appropriate to what's happening right now, which is coincidental. I didn't expect such a big move in gold and silver, nor in the bond market. That's where all the problem lies, the bond market. And I've told you many times that I think we're in a bare bond market. And that's government bond markets, sovereign markets. And it's not just the UK, it's the US, it's Japan, even Germany. So this was the title here of my presentation today. The fifth pillar for the gold bull market has been erected and my journey from bonds to gold. And I borrowed this, of course, from the late Jim Sinclair, Mr. Gold from the 1970s. And he always said that there were five golden pillars that would confirm a major bull market in gold. And this cartoon is from, well, many years ago, maybe 15, 20 years ago before gold was even at 1000. And 1650 gold was considered kind of crazy. And the pictures on either side of the cartoon are one is a German government, not a German government bond, but a German government international loan that was issued in 1930. And the reason I use that for my speech is to show that it's just a piece of paper, even though it was a gold bond. And I worked out that the thousand dollars back in 1930, if you had kept it in gold, would be worth over $220,000 today. But this you can get on eBay for about 40 bucks, maybe a little less. And then on the right hand side, I've got a German gold piece, a 20 mark gold piece from 1904. And that's still worth something, 950 euros. It just goes to show you that gold is money and everything else is credit, like Mr. J.P. Morgan said in 1913. So what I try to portray to the people at the conference this morning was that we were in a bond bear market. And what Jim Sinclair circled here in the yellow pillar was that we didn't have a recognized top in the U.S. Treasury long bond or in long bond Treasuries. And we have to go back to 2022 because I've been warning those of you who have been listening to me for years, I've been warning since around 2019, 2020, that we were like in the bond bubble at the time and that we're going to see like this bubble burst. And one of the reasons why was that, for example, back in 2019, just in the beginning of the repo crisis that actually triggered loads of QE later in 2020, there were $17 trillion in negative yielding government bonds. And that was a huge red flag. And some people will ask why would an investor buy bonds that have a negative yield? And it's crazy, isn't it? It is crazy because you're lending to the government and you're paying the government to lend to the government. You all know that the last institution I would lend to at the moment would be a government, especially if I had to actually pay them to lend to them. So why were these bond fund managers, investors buying these negative yielding bonds? Well, I explained at the conference that it's to do with the mechanism of the bond market. So if you buy a bond with longer duration, and all that means is that instead of buying a five-year treasury note, you buy a 30-year. The 30-year has a longer duration or even a 50-year, let's say, Austrian government bonds. They even issued 100-year bonds, the Austrian government. When yields drop, the price of those longer dated bonds or longer duration bonds, they go up very fast. They go parabolic. So it became like a speculative mania, not a place for bond fund managers really to manage a fixed income portfolio. But experts dismissed this talk of a bond bubble back in 2019. And the excuse was demographics and excess savings. And I give an example here at the conference of all these experts here. One is from J.P. Morgan. The other one was from BlackRock. The other one's from Vanguard. And the other one from PIMCO. All in 2019, when we had $17 trillion of negative yielding government bonds, they said, no, we're not in a bubble. But unfortunately for the central bankers and for bond investors, that all changed in 2022. And what happened in 2022? Well, from mid to late 2022, bond yields started taking off, as you can see here by the U.S. treasury 10-year yield. And we actually broke out of this multi-decade bear market in yields, which is bullish for bonds, of course. When bond yields drop, it means prices are being bid up. And this is when I warn this is finished, the bull market. There are still a lot of people out there who think we're going go back to near zero. But I think today is like a really important day in the context of the continuation of the spike that we saw from, let's say, the second half of 2022. We saw the 10-year yield go through 1.5 percent and we went as high as almost 5 percent in 2022. We've been consolidating ever since. But we're going to look at what's going on right now. And this is the important part for those of you who might be concerned about what's going on with gold today, is that since that low in the 10-year yield, well, not low, but that breakout in the beginning of a bear market in bonds, gold is more than double because gold actually touched that level around 1650, which was Jim Sinclair's objective at one point on the upside. It actually acted as a major support. And yes, the gold price did come down that year, mainly because bond yields started going higher. And I think most people thought, well, a lot of investors thought, well, that's negative gold and they sold it. But that was a bear trap there. And ever since then, of course, gold has more than doubled from 1650 and Treasury prices have been dropping. So what I'm trying to say here, yes, today is a bloody day for gold and silver right now as I speak here. And of course, I'm recording this on Friday. Yes, I see gold is down 130 dollars at 4520. We've come from a high of 4668. We see silver trading around 76. That's down almost 9 percent. And I'm not concerned. And I'll tell you why in a minute. We've got the Dow. That's down about 500 points. S&P is down about 100. And the Nasdaq 100 future is down about 540 points. Why am I not concerned? Well, because the bond bear market is getting even worse. And it's not just in the U.K., it's in the U.S. as well. As I speak here, the 10 year Treasury yield is up 12 basis points, which is huge. Believe me, it's a big move. I worked in the bond markets for 20 years and I can tell you that 12 basis points is not normal. There's a problem. And it's at 460 or 458. The 30 year is gone above 510. It's up 10 basis points. And in the U.K., it's even worse. We've got the 10 year yield up almost 20 basis points at 517. The 30 year is at 585, up 20 basis points. And even the German government bond yield curve is rising. And the Germans have always been more careful with their finances, even though in the last few years, that's gone out the window. But for example, the 10 year bond yield is up 10 basis points today. And it's broken up, broken through 3%. It's at 315. So this is a worldwide sovereign debt problem. And I think it's going to get worse. And the central bankers are going to have to step in. It's only a matter of time before things go really bad. And there was a very interesting speaker later on this afternoon. His name was Michael Howell. And he's like an expert in liquidity. I'm going to try to find his website and his link. I'm going to put it below in the description. English guy. And he spoke about this, that nowadays, most of the liquidity is created through the repo market, the collateral market. And what's used for collateral? Well, government bonds. And the problem is, if government bond prices go down, collateral goes down. And if yields and interest rates rise, the cost of borrowing with collateral goes up too. So it's a vicious circle. And I think it's going to get worse. So what's going on with gold and silver? Well, I think just like in 2022, when people saw bond yields rising, interest rates rising, they got spooked because the mainstream economist, mainstream idea is that bonds going down in value and yields going up hurts gold because gold doesn't pay interest. But the problem is we're in a bond bear market. We're not in that bull market from 1980 to 2020. Yes, where I do agree when yields went up during that bull market countertrend, let's say corrections, it did hurt gold. But now the central bankers are they're way behind the curve and they're not going to be able to raise rates to defend their currencies against higher prices. We see that money supply and liquidity is still going through the roof. So I always think of what the alternative is when we have days like this. And we've been having days like this in gold and silver since I first started buying gold and silver in 2002. And it's always, well, in the beginning it was scary, but now I'm used to it. But the question I always ask when this happens is, what is the alternative? Do I really want to get rid of my precious sound money, gold and silver, turn it into a debt-based instrument that is losing value hand over fist and put it in an institution that is in deep trouble with liquidity? Because you can bet the Wall Street banks are in trouble in terms of the bond market because there are these new SLR regulations have been whittled down by President Trump. And yeah, the liquidity is a problem, though, in the treasury market. So that's what I would think. Yeah. Do you really want to get rid of your physical gold and silver and put it with the banks? I wouldn't. If anything, I would be buying more gold and silver right now. Yes, it might drop a bit more. We might have to wait a little bit. I did buy a little bit of gold the other day. And yes, if I do get spare currency, I always try to do that gold and silver. So yes, as I said, I'm speaking on Friday. It's around three p.m. London time. I'm in Frankfurt and it's four p.m. There's going to be another speaker, I think around five thirty, Mark Friedrich. He's a German interesting guy. I'm going to listen to that. And I've been invited for a dinner later on tonight. I've been invited for a dinner tomorrow. That's why I'm staying here till Sunday. But you'll be listening to this video on Saturday. And yeah, I just like to thank all of you as well for the support that you've given my channel. If it wasn't for you, I wouldn't be here. And what was really nice today as well is that a lot of people came up to me to say that they watched the channel. So a lot of I met a lot of supporters, not just from Germany, but I was talking to a gentleman from Norway who watches me and so on and so forth. And hopefully I'll meet some more people that watch the channel. And it's just really nice to network and connect with people. And yeah, with that, I'm going to wish you all a very good weekend. Take care. Bye.