Why Buy Gold Silver Before the Next Market Shock Andrew Sleigh Sprott Money

Hi there, everyone, and welcome back to the Ask Andrew podcast. Once again, we are joined by Andrew Slay. Andrew, thank you for joining us. Great to be back, Kellen. Thank you very much. So why don't we just dive right in? There's been some actually pretty interesting updates in the international gold market. Chinese banks have decided to suspend retail paper gold trading linked to the Shanghai Gold Exchange after July 24th. What impact could this have on gold prices, market liquidity, and retail investors? Well, I actually didn't hear that one, but that was very close to what I was going to talk about so I can work this in. I'm not sure about suspending the paper trades, but it might be linked to Tuesday morning. There's an announcement that came out that the Hong Kong Metals Exchange is officially open and it's a stand for delivery, no paper shenanigans. So people can buy a paper contract and they can stand for delivery of whatever they bought. 100% backed. So this will be a complete change from the COMEX and the London LBMA formula where they want to sell multiples of what they have and have all kinds of price manipulation shenanigans going on. So this is huge, huge, huge information that they want to be the center of making the metals market in the future. Okay, so it's funny because a lot of the questions that I have here are somewhat based around like even one here. Does the suspension of retail paper gold trading by Chinese banks after July 24th indicate broader regulatory concerns or systematic risks in China's gold market? And it sounds like you're not leaning towards that way. Am I correct in that? I think so. This is all very, very new stuff. So I'm still absorbing and I'm trying to understand it all as well as the market. So if they're suspending paper trades, I'm going to just make a guess and say they're preparing for this all metal trading floor at the exchange in Hong Kong. And so maybe preparing whatever they planned, exactly how they operate this exchange, there's not going to be allowed selling of more paper than what they have for metal in stock to back it. It will be also a settlement exchange. So for example, COMEX, you can settle there with metal if you can get it. London was never designed as a settlement exchange. It was just trades. And I'm not in that area of expertise per se, so I can't go much beyond that. But the London, sorry, the Hong Kong exchange is going to be a settlement in physical metal. And so this is going to be inch by inch, month by month over the course of whatever the time frame is. You have the St. Petersburg exchange opening for business later this year, by the end of this year in Russia. You have the Warsaw exchange, I think that is still open and has been for a bit. You have Singapore. To me, the chips are lining up that there's going to be a lot more competition in the coming year or years that is going to have, I believe, a fantastic effect on real price discovery for metal. And can you expand on that when you say price discovery? So right now you have the metals being manipulated downward by COMEX in London and there's not enough competition. You see the metals might be down today when COMEX is open and then as soon as they close and Hong Kong opens, the metals go up. And that happens quite frequently. And so you have the two exchanges wrestling with trying to get the price of the metal one way or the other, up or down. And so if you have more exchanges open and more traders going to these other places, it's competition. And sooner or later, New York and London will lose. OK, so you're not at all concerned about the whole thing of paper trading because from what it sounds like, it's actually an introduction to more just full physical exchanges. Am I correct? Well, that's a good interpretation. That's how I think about it as well. You know, paper trading is what has got us into all these troubles. Like if they get rid of that, to me, I would be celebrating that. I don't think the the fund companies and the market traders and manipulators are going to be happy about it because that's what they do. But those that are buying real metal, I think it will be a very celebratory event as it starts to work its way into, you know, every day. And so you've been calling for what you could say, say a global reset. Would you say this kind of plays into it? I think the global reset is already ongoing. OK, so everything's being done behind the curtain and lots of analysts have talked about this. You know, the Iran war, call it whatever you want. That's just really a cover story. And and the price of oil being up or down, that's just more distraction. And meanwhile, you know, the the globalists that are sort of running the show around the world, they're negotiating, you know, what areas and what what land, what all this is going to look like, you know, when they get through this. This this conflict in Iran is not going to go away. It's going to last for multiple years. And there's no peace talks. That's just that's just the United States saying that. There's never been a peace talks. Well, actually, speaking of that, speaking of the Iran-Iran war, sorry about that. Gold just dipped to a two week low even as US-Iran strikes escalated. Why is a safe haven asset selling off during actual war headlines? And as you're saying, it's not going to be a short conflict. We're in it for the long haul. Yeah, I don't know exactly. I'll just speculate a little bit. One, the market is having troubles across the board, so there's probably margin calls being taken across various investment accounts. And so they're selling gold to cover off margins. Turkey has also sold a large portion of their gold holdings, which could be having that effect as well. Demand, also physical demand on the retail side, has been very soft for a number of months, as you know. And so that doesn't help. Institutional demand and country demand has been through the roof. And why that hasn't had a more positive effect on having metals go up is beyond me. The charts also, if you look at anyone that's doing the chart analysis on gold and silver, regardless of these movements downward, for whatever reason, the charts are predicting it's probably going to go a bit lower. And it'll work its way there at some point. And even though sediment could be, well, China's buying loads, banks are buying loads of it, yet the price is still on a downward trajectory. And I can't explain the charts. There's a cycle on all this stuff. And I'm not a trader to that degree to understand it all. But all I would say is I'm still a little bit bearish on price. We're getting near the bottom on silver. And we have maybe another 10% to go on gold, somewhere thereabouts. That may or may not happen. Nothing is guaranteed. We could have world events happen tomorrow or next week, next month that throw all the charts off. And metals will go upward because of global events of some magnitude. But if everything stays relatively calm, status quo as it is now, you could be looking at a in the 50 to 54 range, which will be a great buying opportunity. So I'm bearish on the price going up in the very, very short term. But I'm fully bullish on a great opportunity to accumulate. And once it reaches that low, most analysts have said, when they're in that range, they're going to start buying in a significant way. And gold potentially could get down to $3,600, $3,700, according to some analysts. But there's equally as many analysts that are talking about all this stuff is getting ready to go up. So it's very interesting to see. But I would just bite off bits at a time. If you're spending a major amount of money, let's whatever, let's call it a million bucks, half a million bucks, or whatever. It's very hard to get to the very bottom. But it's easy to sort of nibble away with a couple hundred grand every week on the way down because it doesn't have that much further to go. And with that being said, so for a new investor, there's a lot of information going both ways for both gold and silver. What would you say is a good gold to silver ratio to be investing in? Not even just for the whole portfolio, but if you were to invest in precious metals for the first time, what do you think would be a good ratio? I'd start off with silver only and accumulate a position there first. And it depends on ultimately what they plan to put in for a dollar amount. That could change to gold at some point. But if it's just a small amount, and obviously there's going to be a few nuances in there where people have a certain preference or a certain requirement or something that might be unique, they may do a little bit of gold early on as well. But I think everyone should be starting with silver coins. If you're in Canada, it'd be maples. If you're in the US, eagles. Anywhere else, if it's in Europe, a coin of the realm, the British Britannia or whatever, have an established amount of the coin of the realm of the country you live in because that will be the most effective unit of barter when things get rough. And once you have that situation's status quo, then you can start looking at other product. And what do you say to some of our viewers that have seen silver's performance in 2026, let's say, and it has had a not so great year? It started off very well, but it's not in a very good spot now. What would you say to people who don't believe in silver anymore since the market slush? Well, I would say you're too easily shaken off the horse. Okay. You know, I mean, if you bought into metal in the first place, if you're speculating and you're caught up as a FOMO late January and you're the FOMO crowd, well, you perhaps bought on that FOMO scenario. And then, of course, there's a pullback and now you're underwater. Well, the same thing happened in 2011 and 1985, roughly. And people that continue to buy and accumulate from that time onward are way, way ahead. I do know of a couple of people that bought right before the 2011 collapse of silver pricing. And they got stung and they're like, you know, I don't want to buy this anymore. Meanwhile, they should have been accumulating and their cost average would be like so low that they'd be way ahead right now. And so those that may have sort of got in for the first time when the FOMO was going on in late January, don't be disheartened by any of that. I mean, I bought in January and I'm accumulating all the time. I'm not worried about the prices. I'm just getting rid of cash because there's no future in cash. So if you bought $5,000 in FOMO January at $171 peak announced for maple, well, now you can buy them for roughly $92 or whatever they are and start accumulating like crazy because it's going to go back to $171 and beyond. And why would you give up all that growth by being stubborn to wait for it to go back to where it was before you start buying again? That's insane. Fair enough. When you put it like that, it's a great argument, right? Well, every season, sorry, every season investor, whether it be metals, stocks, whatever. I mean, that's just basic strategy. You can't tell if there's going to be a market dropout and eventually if it's something that's worth holding, then it will come back to value. And so then you accumulate like hell all that you can while it's low in price. And then when it does get back to its original value, you're not just breaking even, you're way ahead. And that's just absolute basic strategy that everybody should be employing on anything they're buying. It could be real estate. You buy one house at the market high and it crashes, buy four more houses at the market bottom. Your overall cost of all the real estate is a lot less. When you put it like that, the cost dollar average is a great argument. So switching gears here, actually more so to you, Andrew, you spent many years as financial planner in traditional finance before converting to precious metals. Was there any specific event that flipped you? Anything that you started to see? I mean, it's again, for someone that doesn't quite believe in the precious metal side of thing, gold and silver. They're all in on the markets. Maybe you could give a little bit more history about yourself, which you've seen that kind of led you to this path of thinking. Sure. I haven't told that story for a little while, so I got to kind of remember that. It's getting older and older as we go by here. But so roughly 11 or 12 years ago, I had a client that asked me one day about, you know, should I own any gold or silver? And at that time I was, you know, I had my own business as a mutual fund broker. And I said, you know, what for? I gave all the standard answers that seem to be identical with all the financial advisors of today and yesterday is, you know, what can you do with it? You can't put it in an RRSP, you can't put it in a TFSA. It's done nothing for a number of years, which back then, that's when silver was like flatline for six, seven years after 2011, which again, out of my ignorance, you should have been accumulating at that price. But anyway, that's how little the advisor sector knows about this stuff. And I said, give me a good argument and I'll give you my opinion if I think it's worthwhile. Otherwise, I can't see the purpose of having it. And that's more or less the standard, you know, answer of the industry. And so the client didn't really know enough about it to really give me any discussion at all. It just kind of died right there. And so six months later, I just started looking at the markets and we were quite far away from the 08 crash and there had been no real corrections. There were bad economic news going on, but the markets kept going up. And so I just started to question the whole system. And I started diving into the YouTube channels, looking for independent people that were brilliant, that didn't have any strings attached to their advice, like they weren't a mutual fund advisor or a real estate agent. They were self-made, successful people that were ex-market people, but now they're doing all their own trades. And I followed a number of people that I would credit to help me, what I call drag me out of the fog of fiat currency. And it has a lot of grip on people. And so it took me six months. It was January 2016 to July 2016. We're after listening literally to a thousand hours of arguments from other individuals on YouTube that knew what they're talking about. They could give examples every which way. And all I had on my end of the argument was denial or can't be true, which is proof of nothing. And if I can't say anything more than that, and these other people I'm listening to are giving example after example, cross-referencing, they can talk about it for hours, that's got to be the truth because you can't sit there and make up lies for hours. You just can't. So I decided that, well, this has got to be the truth that I'm hearing from multiple, multiple people. And all I have on my end is denial, then I'm in the wrong spot. And this whole thing is going to go to zero. And I learned along the way after that, that every currency fails, goes to zero. And it's just a matter of time. They're printing money like crazy. The debt is getting larger, which is printing money. And inevitably, the currencies fail and go to zero. And as a result, the number one thing to have on a financial side is gold and silver. They're the most immune to preserving your purchasing power. And after that, it's other real assets in your hand. A phone in your hand is usable. The picture of a phone on the wall is useless. It doesn't help you. So having real things that give you options that can see you through what's coming from a financial storm when things occur. Cash at home, so to speak, you have physical direct access and control over, you know, 10 grand at home in your drawer, 10 grand at the bank, you have no control. And when the banks close or do their bailing events, which is coming, that will disappear and you'll have no recourse. And so which one is better, 10 grand at home or 10 grand in the bank? And that's the same with tubes of silver where, you know, that's money at the end of the day in your hand and the stock portfolio, mutual funds, the bonds, when things start to get problematic, you're going to find out how hard it is to get your money out of the system. And I'm going to get a little follow-up to this too, is we see the private equity funds that have been screaming the last couple of years, particularly this past year, where they're suspending liquidations. You've seen some headlines about that, Calum, I'm sure. Yes. Okay. So BlackRock and JP Morgan, and you know, the list is pretty long that, you know, they've been having, they allow a certain amount of redemptions per year, call it 5%, and they're having 15 or 10% withdrawal and they're suspending these liquidations. One of them the other day suspended liquidations for four years. I didn't hear that. Which was, which is the four years? I can't even remember. It's just, there's so many of these things going by now. Fair enough. But if I come across it again, I'll make note. But, you know, suspending something for four years, if you're a client that has a million dollars there that was living high with your private equity, maybe you had 10% more or less guaranteed return making a hundred grand, you thought that was the best thing since sliced bread. And now you don't know if you're going to get your money back. Like that's how fast it's going to turn. That's just like that. Today, you making a hundred grand a year on your, on your investment. Now you're wondering if you're ever going to see it back. And I want to expand on that a little further because I just realized this by thinking about it the other day. This is just the private equity category that's freezing or dramatically dragging their heels on letting people take their money out. You know, reducing is what I wanted to use, reducing what you can take or, or suspending it for a period of time. Wait until that withdrawal amount starts to hit higher with the regular mutual fund industry. Yeah. You know, at that point, everything's going to hit the fan for lack of a better term. The mutual fund industry is no different than those private equity funds. They're the same product except just in different investments. So you have a, you know, a, whoever managing a fund that's billions of dollars, and now you have huge liquidation amounts. Sooner or later, the company is going to be like, if we let much more go, we have to start laying off people and closing offices. So they either have to do that or they have to start suspending withdrawals. Okay. Yeah. So like this has a really ugly potential in my opinion, and I'm not trying to, I'm not trying to throw around a bunch of fear. These are the realities that if people don't start connecting the dots, that if this is happening to private equity, why can't it happen to the mutual fund industry and anybody else? Well, and I think that's why people wanted to understand your way of thinking, right? Because everyone is so on the tune of S&P 500, the mutual funds, private equity, and then we kind of seem like we're a little bit, for lack of a better term, crazy, right? We're kind of the metal guys. We're on the edge. We're a little bit out there. But when you actually look at it from that perspective, you make not only a very compelling argument, it's hard to argue against. Well, again, our conversations have always been around not dealing with, not discussing this from a day trading point of view, because that's a different scenario. I'm really only addressing my concerns with regards to the people that kind of invest and they just don't look at it again for weeks, months, whatever, and long-term holders, as opposed to the day trader who will, many of them will get over the system and many of them already have a position in metals and they have their core wealth, et cetera. So when this stuff starts to fall, well, here's an example. I asked a client one day who I couldn't place his accent. It sounded South African, but it was actually Zimbabwe. And I said, do you mind if I ask you a question? And he said, go right ahead. I said, in 2011, when I realized that the dollar system, wherever you are in whatever country, goes to zero and all these things ultimately will fail in one way or another, and the only safe haven lifeboat is really metals and other real things, other things that help you survive and thrive in your home and your country and whatnot. I said, I saw the whole system going to zero, mutual fund companies, life insurance companies, the financial sector as a whole, having a real challenge to stay alive and be in existence. I said, is that true? I really would like to know. And he said, he lived in Zimbabwe as a young man, married a couple of kids. At that time, it was quite a flourishing country. They had all the same financial products there that we have. So life insurance, bonds, mutual funds, whatever, all the same stuff. And he said, when the crisis occurred, which was between 2007 and 2008, that's when the hyperinflation hit. And I showed you earlier, months ago, the $100 trillion bill from Zimbabwe. When it got to that kind of stage, he said, literally overnight, he lost everything at those companies. Wow. He didn't have any mutual fund. They all closed. They all disappeared. Mutual fund companies were gone overnight. The life insurance industry companies were all gone overnight. Now, overnight could be a week or days. I don't know. He didn't get that specific. But literally, he left the country in a vehicle with luggage, with clothes, and the family. And that's all he had. Wow. And he went to a neighboring country and worked. And he had a job that had skills. And he saved his money up until he could afford to immigrate to Canada. And he came, like, whatever, 20, 30 years ago, whatever it was. And so that's how this thing will play out eventually. Now, the difference being is we're going to a digital currency as opposed to the traditional hyperinflation from one paper currency to another paper currency. And so I'm not entirely sure how this is going to play out. The hyperinflation will eventually arrive because look at what the debt is doing in every country. It's going through the roof. And that's printing money. And it's going to come back to roost in Main Street with groceries, all taking a hike in the near future. And it will continue to accelerate till people are really going to notice in the coming year. And when that starts to go, people will be withdrawing their assets and savings from any orifice they can at any financial institution to survive to buy food. And when that starts to occur, it's no wonder all these companies suffer. And I think that's why at some point, I'm suspicious about this. I don't know. But I think they'll switch over to a digital currency before it gets to that stage as another form of trying to kick the can down the road. And they will manipulate the currency digitally to try and keep control of inflation. So if gas is going up too much, then they start suspending that you can't buy gas next month. They program the currency so that people can't buy whatever it is that's going up. And they're going to manipulate the heck out of inflation, which they'll get away with that for a little while. And ultimately, the digital currency, which by the way, in Canada, was passed March 26 for stablecoin. So all the legal framework is set in Canada now. And Deloitte and Stablecorp announced Canada's first fully regulated stablecoin. And there's no sign of the banks. Not one bank has announced it yet. So that was not a surprise to me because I've been saying that the banks aren't invited to that party. So when they do eventually bring out stablecoins and convert this thing over, I don't think there'll be a bank involved. I think they'll be gone. And the Bank Act has been updated, by the way, on March 26. They didn't update it on the Bank Act of Canada until the last Wednesday of May. And it now says there will be no banks in Canada, domestic or foreign, allowed to be operating beyond June 30, 2033. Oh, wow. They just updated it in May, the last Wednesday of May. And I was there on the Tuesday looking at the Act. And it said June 30, 2026. And that's why I was telling people in our last interview, get whatever you want done before June. Because nothing's been updated. You definitely weren't wrong. Oh, my goodness. And so now that they updated it at the last Wednesday of May, and I just happened to go on that day to check it. And that's the only reason I know these dates, is they finally updated it from the Act Bill C-15 that was passed March 26. And that's why it took them a couple of months to update the Act. And instead of renewing it every year, they decided there's just maybe too much attention or too much effort or whatever. So they changed it in the Act to be 2033 as a maximum deadline. It doesn't mean nothing's going to happen until then. It means beyond that date, there will be no banks, period. Well, we're definitely getting into an interesting time then. Andrew, we are out of time here on my end. I do apologize. But it definitely seems like I'll have a loaded list of questions for you for our next interview. Before we do go, do you have anything you want to say to our viewers? Great time to be averaging in on whatever metal you want to buy. Silver is an absolute bargain right now. So accumulate and average down your costs is a very good strategy to do that. And hang on tight. We have some really big things coming in the coming months. So I do expect to see some real market problems in September. And we'll have to have another conversation in August, I guess, to get another update on what's going on next. But thanks again for doing it. If people need to reach me, they can call the toll-free number 1-888-861-0775. My extension is 230. And you can email deathofthedollar at SprottMoney.com. All right. Well, Andrew, once again, thank you very much for joining us. Thank you very much, Calum. Have a good day. Likewise.