February 25, 2024 • 60 mins
Discover the intriguing insights of Peter Krauth, author of "The Great Silver Bull," as he joins us to reveal the untold narrative of precious metals in our modern world. With a passion for history and economics, Peter takes us on a journey through gold and silver's profound impact on civilizations and their potential resurgence in today's shifting monetary landscape. Our conversation navigates the uncharted waters of de-dollarization, the emergence of BRICS nations, and the intriguing impact of these developments on the precious metals market.
Venture beyond the facade of the silver market and uncover the forces shaping its future. Peter Krauth brings his financial acumen to the table, dissecting the delicate balance of supply and demand that keeps the silver market teetering on the brink of transformation. Together, we explore the burgeoning industrial demand, the intrigue of market manipulation, and the unique mining practices that paint a complex picture of silver's role in our economy. This episode is a must-listen for those eager to understand the often-overlooked intricacies of this lustrous metal.
As we speculate on the evolution of money, pondering silver's place in the digital age, Peter provides a panoramic view of the opportunities that await the savvy investor. From the promise of a precious metal-backed cryptocurrency to the allure of junior mining stocks, this episode is an invitation to reassess your investment strategies. Tune in for a thought-provoking discussion that could very well redefine your perspective on silver's glittering future in the global economy.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
All right folks, welcome to a very special
edition of the Wise Wolf Goldand Crypto show.
The gentleman I'm about tointroduce I want to say I had a
copy of your book come across myKindle and anything that's
precious metals.
I try to do some research, seewho's putting out what kind of
(00:23):
work, and then I just gotengrossed into the book and I
loved it and I wanted to haveyou on for a while.
I want to give a shout out toMelissa for making this guest
possible, but Peter Kraut ishere.
He is the author of the greatSilver Bull.
Peter, so glad to have you.
Thanks for being here.
Speaker 2 (00:41):
Tony, it is my pleasure, and thanks for that
intro and thanks for your kindwords about the book.
I'm really happy to hear thatyou've enjoyed it.
Speaker 1 (00:50):
I did and I'm a history guy.
That's what really got mestarted in being in precious
metals was history itself andthen seeing so much tied to the
monetary history.
What creates a civilization.
I thought the great Silver Bullwas packed full of that.
It had great information, therewas great charts.
It was not phoned in folks, itwasn't written by AI, it's not a
(01:14):
pamphlet.
It was very well done.
Again, let's just start from thebeginning, because we're in
this massive shift historicallyof the monetary system.
Those of us who are Silver Bugsand Gold Bugs have been
thinking about this for years,but we are on the precipice.
It's clearly happening.
(01:35):
You've got de-dollarization,you've got the BRICS nations in
full force and then theperiphery BRICS, brics Plus, is
going on with Saudi Arabia, thePetrodollars dying.
So much happening.
You turn on your financialnetwork.
I don't think they totally getit yet.
It's got normalcy bias.
You're living in the past.
I think thinking about preciousmetals, and monetary metals
(01:58):
especially, is thinking aboutthe future.
I want to know, peter, yourinspiration.
What got you into this field?
Then, of course, what was theinspiration for the book?
What was the message there?
Speaker 2 (02:13):
I've got to say, tony , that I'm going to say
similarly to you.
I got interested in preciousmetals because of my interest in
history.
After I did a finance degree atuniversity, I started working
in the industry advising clients, helping them build portfolios.
(02:35):
Really, it's interesting how,again, I became interested in
precious metals, gold and silver, because of history.
At one point I'd gone to theback office of this company
where I was working to adviseclients and I said here's this
(02:56):
golden, silver physically backedmutual fund.
I'd like to offer this to myclients.
They said, oh, this is kind of.
We don't usually do this kindof fund.
Let us look into it, we'll getback to you.
It took a couple of weeks, Iguess at least, and then I had
no news.
Went back to them.
They said, oh no, no, this ismuch too risky.
(03:18):
We just do equities and bondsand money market.
We're going to stick to that.
I remember thinking to myselfthat is the most ridiculous
answer.
There's nothing safer thanphysical gold or silver.
If you're concerned, then allyou need to do is you allow your
(03:40):
clients to invest in high risktech stocks, all sorts of things
.
It's a matter of degree.
If someone's concerned, ifyou're concerned about clients.
Let's just limit the amount ofexposure.
Let's say that they could haveto this kind of fund that gives
them golden silver in theirportfolios, but they wanted
(04:01):
nothing to do with it and Icouldn't give up.
I lasted a few more years thereand just got more and more
interested in this and did moreand more research and ultimately
ended up had an opportunity towork with a group in the US
(04:23):
called the Agora group that hasmultiple branches but eventually
ended up writing a long storyshort they went through
restructuring.
I was writing, actuallyfreelance for mining companies.
(04:47):
I had been researching, writingand recommending all sorts of
resource and precious metalsinvestments for that length of
time and then eventually thelast couple of years had been
writing just silver and goldresearch and articles on a
weekly basis for them.
As I say, they went throughrestructuring.
(05:08):
I was on my own for about ayear and a half, did freelance
writing for mining companies.
Kind of got bored with that andsaid I've got to go back to
newsletters and did that.
Now, that was during thepandemic, so it would have been
around the beginning of 2020 andactually the friend I mentioned
(05:32):
earlier, just before we went onto record, had a good friend,
colleague who suggested that Iwrite this book.
I had built up all of thisresearch and information and
experience dealing with silverand gold, talking about it,
(05:54):
looking at it from thefundamental side, the mining
side, and this friend said,peter, you really should write a
book on silver.
And I thought about it and Isaid this guy's right, in the
sense that I do have a bunch ofwork where I've archived all
(06:18):
this research in terms of thedifferent aspects of silver.
And if you look at theeconomics, the macroeconomics,
the history, the supply demand,how to invest in it, in physical
silver, how to invest in themining companies, I thought
we're in the middle of thepandemic.
Why let a pandemic go to waste?
I've got all this time.
(06:39):
I'm not going anywhere.
I've built up this research andI thought, all right, the first
step is going to be an outlineand, I kid you not, probably
within about a couple of days Ihad my outline all set up.
I just sat down and I said whatwould make sense to have in
this book, what I want to cover,what should people need to know
(07:04):
and want to know about in termsof the history of silver, why
it's important and, ultimatelywhy they need it in their
portfolios and how to invest init.
So I put that outline togetherand then it was a question.
I was it moved a few thingsaround, but then it was a
question of, over time, ofcourse, start to fill that in,
(07:25):
use some of the research I'vedone and then do new research to
fill in all of these differentareas.
And I kid you not, this was waymore work than I had ever
expected.
Many times, ignorance is bliss,and it certainly was for me in
this case.
Had I known how much work thisbook was going to be, I'd have
(07:48):
probably not even attempted it.
So I'm glad I did not know andI'm glad I did it, because it
really has opened a lot of doorsand my approach to silver and
investing in silver is all abouteducation, and I think this I
think I hope at least the kindof feedback I've gotten from
people is that it has reallyopened their eyes to this market
(08:14):
, the possibilities, theimportance of it and how you can
go about it.
And I really was trying not tobe academic.
I wanted this to be somethingthat would be simple, easy to
understand, easy to read, andthat's the kind of feedback that
I've gotten, so I'm reallyhappy with the result.
Speaker 1 (08:30):
Well, it's certainly a worthwhile project and that's
how.
So you know.
If you could look back and say,if I knew what I, that's great,
and then what I know now, Iwouldn't have attempted it and
that's how you know.
It was worthwhile, but Ienjoyed it.
Just knowing the changes thatare happening in our monetary
system, with our currenciesworldwide, with inflation, the
(08:57):
destruction of the, Was it 80%of all dollars created or
created in the last 48 months orso it is crazy yeah exactly.
It's a big investment.
So you start looking around athow do I house value?
And some people are asking thatfor the first time.
Those of us who are gold andsilver bugs and precious metals
(09:17):
advocates are always looking atgold and silver or money.
But I think that what's sointeresting about the title of
the great silver bull is I don'teven think we're at the
beginning of the bull market,for what's going to happen to
silver.
And again, this isn't a showabout investment Like you're
going to make it all.
It's going to go to the moon.
I just think you Fundamentals,you look at silver.
(09:39):
How much is being pulled out ofthe ground?
How much is needed?
How much is in landfillsBecause of the?
It's not worth stripping out ofold computer systems and
software and all that stuff tomelt.
The photography, all the stufffrom the previous decades, all
that silver is just in landfills.
It's not coming back.
(09:59):
Gold usually gets recycled.
It doesn't get thrown awaybecause of the value.
We're just so off kilter withthe gold-silver ratio, with
pricing models or completely outthe.
Historically we're nowhere nearwhere we were.
Where do we start?
If someone is new to this andsays why silver?
(10:21):
And where do you start withthem on that.
Speaker 2 (10:25):
So I don't want to throw a whole bunch of numbers
out, but I do want to givepeople, as simple as I can, an
overview of the silver marketand the supply-demand pointers
to get some A rough idea intheir minds of what we're
looking at.
So the first big importantnumber is that the silver market
(10:46):
consists of about a billionounces a year in terms of
supply-demand.
So roughly a billion ounces areproduced a year or available.
About 85% of that comes frommining and about 15% of it comes
from recycling.
So when we talk about recyclingand silver, the easy recycling
(11:08):
is things like silver jewelry,silverware, because both of
those are mostly silver.
So when someone's going to meltit down, they can get all of the
silver out of that prettyeasily.
And, like you said, tony, a lotof the other applications for
silver industrial applicationsuse so little silver per per
(11:32):
unit or per thing that you'remanufacturing that it's.
So it's hard to justify thecost and effort to go and try
and get that back out of theitem, especially things like
electronics, if it ends up on amotherboard or if it ends up in
a little switch or something.
So most of the silver in thatcase ends up not being not being
(11:56):
recyclable or we can't get itback, so it's consumed in some
form.
So, as I say, it's about abillion ounces a year.
But in the last two to threeyears the silver market has been
way off balance in the sensethat overall supply between
(12:19):
recycling and mine supply, weare roughly at about a billion
ounces.
But since 2021, that has beenthere's been a supply deficit.
So in 2021, it was about 1.1billion ounces of demand versus
(12:39):
a billion ounces of supply.
2022 was almost 1.3 billionounces of demand versus 1
billion ounces of supply, andthen last year was about 1.1
again or so billion ounces ofdemand versus a billion ounces
of supply.
So your listeners are probablywondering so how can you have
(13:02):
these deficits go on year afteryear?
Now there's a lot going onaround that and, yes, some
people will talk about is theremanipulation?
My short answer from me on thatis that I do believe that, and
(13:23):
this wouldn't just be for silver, as with many other commodities
, there is manipulation.
My sense is that it takes placemore in the short term and you
get the price being pushedaround by large investment banks
and so on, but I believe overthe long term they're not able
to sustain that.
And I'll just point to the factthat in 2001, silver was $41.
(13:48):
By 2011, it had ralliedtremendously to $49.
So if silver was manipulatedthat entire time, well, it did
pretty well and managed to gomore than 10 times.
It was up 11 times roughly, oralmost 12 times.
So to answer the question aboutsupplying to the deficits every
(14:12):
year, the numbers and againit's not worth going I don't
think for your audience it'sworth going into too much nitty
gritty detail, but the way thenumbers are calculated, you've
got supply about a billionounces.
You've got demand at roughly1.1 or 1.2 billion ounces.
You've had deficits the lastthree years.
(14:35):
But there are secondarysupplies, what we call secondary
supplies and those are mostlythese 1000 ounce silver bars
that are sitting on exchanges orin what we call ETFs
exchange-treated funds.
So these 1000 ounce silver barsare what can be taken for
(15:00):
delivery, and that supply isdrawn down to meet the excess
demand that isn't met by miningor recycling.
So nobody knows exactly howmuch there is.
We do have some rough numbers,but what we also know is that in
these last three years ofdeficits, the three main
(15:22):
exchanges futures exchanges thathave these 1000 ounce silver
bars, are the London fault inLondon.
You have the COMEX in New Yorkand then you have the Shanghai
exchange in China, and they'reroughly down about 70% in the
last three years.
So the big consumers of silverthat have had to have access to
(15:46):
this silver to produce theirproducts and I'm gonna get into
where I think most of it's goingin a moment have, I believe,
bought these futures contractsand or have bought sufficient
amounts of silver that is backedby physical silver in these
(16:08):
silver ETS.
These are like a stock you canbuy on the stock market.
The price follows the silverprice and in most cases they
have physical silver backingthem.
But if you own enough of thatstock or those units and we're
talking big money, oftenhundreds of thousands or
millions of dollars, which bigconsumers have the ability to do
(16:32):
you can say I want to redeem myunits for physical silver and
they will have to deliver youthat silver.
It might there might be a bitof a delay and they might
scramble to find it, but so farthings have been orderly and
they've found the silver andthey've delivered it.
So that's where that deficithas been met for the last three
years.
Again, as I say, we've seenabout 70% drop in those three
(16:57):
major exchanges.
That's where most of that silveris that we know of in the last
three years and I believe thatreally can only go on a little
bit longer.
I'm thinking and that's just memaybe another year or a couple
of years and at some point somebig consumer of silver is
there's gonna be a squeeze andthey will not be able to get
(17:20):
their silver, whether it'ssomeone that buys one of these
long contracts, as we call them,on a futures exchange and
they're entitled to get thesilver delivered to them and the
exchange says oops, I'm sorry,we're out of inventory, we're
just gonna give you the cashbackand that's not gonna be what
(17:41):
they need.
They actually need the physicalsilver and that's when the
proverbial you know what it'sthe fan and it's the game's over
.
So this is kind of what I seein the supply demand, what's
been happening, and hopefullythat gives your listeners an
(18:01):
overview of the silver market.
Now I can drill down a littlebit and tell you about where the
demand comes from, thedifferent types of demand.
Speaker 1 (18:12):
Yeah, I'd like to know that.
First of all, the premise isinteresting because I think the
general public would bewondering why, when they think
of manipulating a market, it'sfor like a pump and dump or for
a gain, and this is the inverseof that.
Like you're looking for along-term strategy of I'm
(18:34):
assuming accumulation, you lookat the largest silver holder, a
physical silver holder in theworld, is JP Morgan.
Right, exactly, and it'sinteresting.
I've asked several people thisand we can get into this later
in the show if you want.
But I have questions about whathappened in the 70s with the
Hunts, because they were thelast people to ever truly I
(18:55):
guess you wanna coin it, cornerthe market, or they just
basically made these contractsthat they were using.
They just exposed that, as theykept buying all the physical,
they were shut down.
No one has ever come back andyou could you could be a whale
and come and do that.
Now no one does it, no onepicks it up, and I think that's
(19:16):
the tell.
As far as speaking on that,what are the different aspects
of what's it's driving it whereit goes?
Speaker 2 (19:29):
Right.
So in my view it's roughly Imean, I kind of to keep things a
bit simple I like to look at itin kind of two baskets.
I say that there is mostlyinvestment demand and then you
have industrial demand.
Until maybe a year or two agoit was roughly 50-50.
(19:51):
So about half went to industryand about half went to
investment.
Now that has been shifting.
Silver has become more and more,the demand has become more and
more industrial and what hasbeen overwhelmingly driving that
is solar.
So the International EnergyAgency put out a chart last year
(20:15):
and they're forecast andthey're saying that by 2027, so
we're really just almost threeyears away solar will be the
single largest source of energyworldwide.
It will surpass coal, it willsurpass natural gas.
So to produce solar energy, tomake these solar panels, you
(20:39):
absolutely have to have silver.
Silver is a crucial,indispensable component to
manufacturing solar panels andof course, over time, like any
industry, producers are going tolook for ways to cut costs, to
increase efficiencies, andthey've managed to do that over
the last 10 years.
There are these charts of whatwe call silver loadings.
(21:02):
Loading's are the amount ofsilver per panel to produce the
same amount of power.
So that line has actually gonedown very gradually and the last
couple of years it's actuallyflat, and so they've been, I'm
gonna say, unable to squeezemore silver out of a panel to
produce the same energy output.
Now I also believe and becauseI spend my days looking at this
(21:27):
stuff and the numbers and allthe research that line that's
steadily gone down and hasflattened is about to spike.
I think we're at an inflectionpoint where the amount of silver
required per solar panel isgoing to trend up very quickly.
Now the reason I say that issolar is evolving, technology is
(21:48):
improving, and the most commontype of solar panel and I'm
gonna use these words that arereally acronym, so the most
common technology for solarpanels is something we call PERC
.
The next more efficienttechnology is something called
TopCon and then after that theeven more efficient technology
(22:11):
is something called HJT.
So PERC's the most common.
Topcon is gaining dramatically,and HJT is also gaining a lot
in terms of the number of panelsthat are being made every year
that are using these newertechnologies.
So what is important to know isthat TopCon, which is actually
(22:34):
being forecast to represent 50%of all the new manufacturing
capacity this year, alreadytakes 50% more silver per panel.
Hjt is a technology that takes150% more silver per panel.
So again your listeners aregonna be wondering well, why
(22:56):
would you produce a panel thattakes more silver?
And it's all economics.
It's very simple and it makesperfect sense.
It's because they're moreefficient.
Despite requiring more silverand spending the money on extra
silver to put in that panel, youare getting more energy out of
that newer technology panel andso it makes sense to use more
(23:17):
silver make panels with thesenewer technologies because your
energy output is higher.
You're just being more efficientperiod.
So Last year the SilverInstitute which is the most
known, I guess, and most usedresearch group for the Silver
(23:40):
Supply and Demand and trends inthe market initially expected
that last year solar wouldrequire 140 million ounces.
So out of a billion ounces ofsupply a year, that's already
14%.
It revised that number to 160million ounces in November.
When they said 140 back inApril, I thought that was way
(24:05):
off.
I said you know I could seewhat was happening in the trends
in the solar industry and withthe technology and the new
technologies coming on andrequiring more silver per panel,
I said we are going to be muchcloser to 180 to 190 million
ounces of silver going to thesolar industry alone.
And I was right.
(24:25):
It turned out.
I was right.
When they revised their numbersin November they said it turns
out that the industrial demandthey didn't give the number
specifically but it was easy todo the math they said the total
industrial demand would be 632million ounces, so that's over
(24:45):
60% of silver now going toindustry.
That solar would go from 25% in2022 to 30% of industrial
demand in 2023.
So 30% of 632 million ounces isjust shy of 919 million ounces.
(25:06):
So it was right at the top endof my range of 180 to 190.
I think that we're going to seesomething again very close to
that it's.
When you look at how much thecapacity to produce solar panels
has grown in the last couple ofyears, it's been off the charts
.
2021 to 2022 saw a 55% growthin solar manufacturing capacity.
(25:30):
By the way, china dominatesthat too.
It's there at about 80% ofworldwide solar manufacturing
capacity.
2022 to 2023 saw another 55%growth in manufacturing capacity
.
We don't have the final numbersyet for 2023 growth, but it was
(25:54):
forecast at roughly 23, 24.
I think it's going to be wellnorth of 30% growth.
And we haven't even factored inthis extra demand, like I was
saying about silver, more silverbeing required because of these
newer technologies requiringmore silver per panel.
So it's just absolutelyexploding.
If you're not paying attentionto what's happening with the
(26:18):
solar industry and itsrequirements for silver in the
silver market, then you'rereally missing 80% of what's
going on in terms of demand.
That is just really.
That is the 800 pound gorillain the silver market and it's
really driving what's going onin silver.
Now, one last thing about thatin terms of.
(26:39):
I'll touch on a couple of otherpoints in terms of demand.
But I like to say, for an easyway to remember and understand
it, that I believe that becauseindustrial demand is a
relatively predictable thing interms of demand in the silver
market, so I like to say thatthe industrial demand is
providing a rising floor underthe silver price and that it's
(27:03):
going to be investment demandwhen that kicks in and it does
kick in, every so often it's,it's harder to predict, but it
creates these, just thesedramatic booms in the silver
price and that's the sort of awild card that helps bring these
spikes in the silver pricewhich we've experienced multiple
(27:23):
times since 2000.
And I am convinced are comingagain.
So that's just a, as I say,kind of an overall way to think
about what happens in silver andthe silver price.
And if we talk about some ofthe other sources of demand, as
I said, in industrial demand isabout half it's actually more
(27:47):
like 50% now and the balance ismostly some form of investment.
That includes, in my view,jewelry, silverware and physical
investment.
So people buying coins and barsand just storing them, sitting
on them.
That that is sort of how we,how we see the overall, the
(28:09):
overall breakdown of silver, ofsilver demand.
Speaker 1 (28:15):
I think it's interesting too with the
emergence of the BRICS nationsand you know there's talk of the
go back BRICS currency and butyou also see, I think, a
rumbling in getting away fromthe Western style exchanges and
going to a different exchangesystem because of the, because
(28:36):
it's so rigged.
I had Stuart Englert on lastweek.
He wrote the book rigged on themarket and we had.
We talked about silver too, butyou know, I remember, like some
of the figures that were thrownaround back in February of 2021
, when there was a big push tobuy physical silver from the
(28:58):
same people who brought you theGameStop short, you know, and
that my office was lit up.
I knew every dealer I knew ispeople bought physical silver.
The next day the spot pricewent down and then, if you
looked on the paper trades, theysold off 1.5 times the annual
supply in one day.
Speaker 2 (29:16):
Exactly.
Speaker 1 (29:17):
And there's a reason, see, and that's because it's
counterintuitive, because it'sagainst the grain of trying to
make a price go up.
Nobody really notices it, butyou know, you have.
You know, JPMorgan traders areconvicted of this.
I mean, we got three.
So there is something to it andI mean, if you're looking at, I
think, spot today and we'rerecording this on the 31st of
(29:39):
January 24 spot today is like$23 and three cents.
I just bought some kilo barsearly before I went back in the
studio.
I just I think of how cheapthat is.
You know I was born in the daythe Soviets invaded Afghanistan
in 1979, on December 26.
And you know I was what?
(30:02):
Six months old and silver was$52 and 50 cents.
I'm 44 years old now.
$52 and 50 cents in 1980, whichis today probably 250, maybe
$300 in purchasing power.
There's something just raw and Ithink anybody that really looks
at this, if they go get thegreat silver bull and read your
book, I mean it's very late,well laid out.
(30:23):
For what's the future of thiscommodity?
Not just as a monetary medalbut, as you mentioned, all these
industrial uses.
The entire green economy isbuilt on that.
If we're going to be in thatsystem that those things are
going to get built, we're alsoin a war economy, unfortunately.
I mean, you know, you look atwhat is there?
40 pounds of silver in eachtomahawk missile.
(30:44):
These, these demands aren'tgoing away yet.
I go to look for and I know youwrote for silver Mining stocks
or you you wrote about them itthere's not a lot of that going
on, there's a lot of.
There isn't as much activitylike you would think because of
this, because of the price, it'sjust not profitable to pull it
(31:08):
out of the ground.
So that hasn't even started yet.
So it seems like there's gonnabe.
Do you foresee like some sortlike you're mentioning earlier,
where they don't have the orders?
They, they try to fill theorders with fiat, like you were
if you're in a cash-in SLV.
But is there a, is there a dayof reckoning coming where the
orders can't get filled?
(31:28):
The price reevaluates and offoff we go.
I mean, does it?
Is it this like?
Is it become organic and viralafter that, where it just can't?
You know, nobody can really puta stopping point on it because
it has to reevaluate.
But what's gonna happen tosilver?
Speaker 2 (31:44):
Yeah, I think that you, you were right, absolutely.
That's the kind of thing thatwill happen.
Silver is the only metal ofsort of the Major and even minor
metals if you think aboutprecious metals, platinum group
metals, base metals that isbelow its 1980 high about 50,
for it's more than 50 percentbelow its 1980 high, and that's
(32:05):
not even accounting forinflation.
So it has a lot of catching upto do and You're right, it is,
it is not that profitable forminers.
Something also I think, and Ilike to point out that's
particular to silver compared toother metals, is that only
(32:28):
about 20, only about 25% ofmined silver Actually comes from
primary silver mines.
So if you look at, you know,you take a hundred, a hundred
Mining companies that have somesort of silver output, 25 of
those overall Can say thatsilver is their main product.
(32:50):
75% that produce silver arereally actually mostly producing
other metals copper, lead, zincor gold Mostly and so silver is
a byproduct in those cases.
So here's, here's how thingsget exacerbated.
The shortage can getexacerbated.
(33:13):
These companies Don't reallyhear that much for the silver
price.
It's, it's a, it's almost anafterthought for them because
really, as I say, their, theirfocus is producing these other
metals and oftentimes will justsell off that production to
someone and something called astream, and so they may sell it
even in advance of of Buildingthe mine, in order to get
(33:37):
financing.
So if you think about a year,you've got this deposit.
You need to build a mine andyou need money to build a mine.
You know you're gonna have acertain amount of silver output
over, say, 20 years, 30 yearsyou might.
Someone comes up to you andsays here's, you know few
hundred million dollars, I'mwilling to buy that silver for
you.
As long as the mines operating,I'll pay you fixed price of,
(34:02):
say, four or five dollars perounce of silver for that entire
time.
And and here's the you know one, two hundred million dollars.
Again, that miner is oftentimeshappy to take it.
They get that cash up front.
It's not dilutive to theirshareholders, so they take that
money up front and then thatsilver is spoken for for the
(34:24):
rest of of of the life of thatmine.
And Again, they don't.
They don't care what the priceof that silver is.
They know They've sold it inadvance.
And the ones who have not soldit in advance, it's such a small
Part of the profit To.
In their bottom line they justhappily accept whatever the
(34:45):
price is for silver and if theyhappen, you know, to make it
it's what we call a byproductand it actually helps to lower
their overall cost to produceother metals.
So we'll just take whatever themarket prices and and that's
that now it can get.
If that, that can be exacerbatedeven more in a couple of ways.
One is if we have an economicslowdown now.
(35:06):
So first of all, it's mucheasier to to scale back mining.
Then it is to try and ramp upmining, and I'm not going to go
into all the reasons, but thereare many reasons Permitting
financing all these things.
So it's just Challenging from ageopolitical perspective and
financing and and all the restof it.
(35:26):
So, as I say, it's easier toscale back.
So imagine you have an economicslowdown.
You would have likely aslowdown in demand for what we
call base metals, so things thatare used industrially copper,
led zinc which are Importantmetals that have silver as a
byproduct, as I was sayingearlier.
So if you have a slowdown, ifyou do have scaling back in
(35:49):
production of those metals, well, guess what?
You automatically have ascaling back of production of
silver.
Unintentionally it it's again,it's a byproduct of producing
those metals.
And if the miner says, well,I'm going to produce less copper
for the next six or twelvemonths, they're going to produce
automatically less silver.
(36:09):
So, although there may beplenty of demand for silver,
because 75% of it comes comes asa byproduct of mining other
metals, again, those minersdon't care what the silver price
is or what the demand is forsilver.
They may just automaticallystart producing less silver and
it makes the the deficit insilver even even more more
(36:33):
pronounced.
You could need it just as muchas you could need it, but if no
one's willing to produce it foryou, you're gonna have to
scramble and find some other wayto get it.
So that's one way you couldactually see, although despite
silver prices being high andmaintained high, you could
actually still see supply comedown.
(36:55):
And a more intricate way is thatyou, if the price is high or
even goes higher, you could havesilver miners say, well, this
is fantastic, I'm making goodprofit.
And I'm talking about, let'ssay, mostly primary silver
miners whose product is mostlysilver.
(37:17):
They can say this is fantastic.
Silver prices are now, let'ssay, $30, $35 an ounce.
My bottom line might my.
You know, my main focus is toproduce good profits for for my
shareholders.
So rather than because, becausesilver prices are high, rather
(37:39):
than produce silver from thesame place in my deposit that I
have been getting the ore out ofthe ground for the last couple
of years, I know that there isan area of my deposit that has
lower grade silver, and if Imine lower grade silver and I
(37:59):
produce less silver per ton ofore, for example, because the
concentration is lower, I'mstill gonna make a decent profit
because the price of silver ishigh now.
So you could, in that scenario,again get less silver output
despite high or reasonably high,sustained high silver prices.
(38:24):
So this is contradictory in away if you think about it.
But so and I talked about it inthe book silver what I say in
the book is that silver is thesilver supply is inelastic to
the silver price.
It does not necessarily alwaysand or immediately.
(38:48):
Over time, yes, but overperhaps some considerable
amounts of time, you could havesilver just simply not react or
go in the silver supply go inthe opposite direction to the
price, making the price spikeeven higher.
So that is, these are some ofthe ways you get these spikes
and that these spikes become sobig and they just kind of take
(39:11):
on a life of their own.
And we haven't even talkedabout all of the social media
kinds of things around that andthe excitement and the fear of
missing out, the FOMO thatdrives all of this.
This thing really can go wild.
And so in the book I talk aboutall of these things.
I talk about the things thatdrive silver, why it's a very
(39:33):
particular kind of market,different from most, and why it
can go crazy and why I have sucha well, I mean, I again I've
said many times my ultimateprice target for silver is not
to be sensational.
It's what I think is trulyrealistic.
(39:54):
Again, I've done the research,I've done the homework, I've
looked back at prior bullmarkets.
You look at inflation, you lookat what's driven the silver
price, you look at it relativeto other assets and I just think
it's realistic.
And I've heard people who arevery, very accomplished and have
(40:18):
managed billions of dollars andhave even higher price targets
than I have.
So I don't feel so crazy when Italk about that.
Speaker 1 (40:28):
Well, you know it's interesting too.
You look at the as a dealer,the timelines when the first
quarter of 2020, after theexecutive order was signed you
had this massive spike in thestock market.
It was like the highest it hadbeen since 1929.
And then it's the lowest since29.
They went and, just, you know,peak in Valley and then, and so
(40:51):
I remember, golden silvertemporarily went with it Exactly
and so in theory, right inpaper, because it was down like
12, 13 bucks an ounce or 11bucks an ounce.
People were calling me trying tolock in trades.
I don't have it Exactly.
It's funny, that's the tell.
It's because I didn't.
There's nowhere to get it.
I mean you're saying, well,this is the price for spot
(41:12):
silver.
I couldn't really get any kindof significant product at the
time.
You had prices had to rebound,there had to be a recovery, and
then it stabilized enough forwhere there was supply hitting
the market and that's where weare in the papers.
I just that just one area aloneshows that we're not, this
(41:32):
isn't evaluating correctly, andthen I call the stuff that
you've laid out here in theinterview.
You know, with the lack ofsupply, and again, I just think
it's one of the.
It's going to be one of thegreatest financial stories of
our time.
It's because it's going to comeout of nowhere for a lot of
people to see.
Well, silver just never doesanything.
Silver just never does anything.
And one of these days it's justgoing to have that perfect
(41:54):
storm.
Things are going to line up andI agree with you, it has to do
with the, not only the monetaryuse, but the industrial use of
silver, the demands just goingto hit.
That was one of my theories.
And again, we don't.
We're speculating.
We don't know why.
Why do these?
Why do the big players want tosuppress?
And the only thing I can thinkof is accumulation, for they
know this is.
(42:14):
They're doing the simulations,looking into the future.
What's the next move?
Can we, what can we?
What can we do cheaply?
One of the things you could dois silver is just again the time
frames add up and especiallywhere we're going and how to.
How to keep it under 30 bucksan ounce, which I don't think
will last very much longer.
But we don't know.
We're not.
Neither Peter or I are giveninvestment advice.
(42:36):
This is more of an explorationof the manipulated markets.
But, peter, looking into thefuture, do you see and it's kind
of a veer off topic a littlebit do you feel like silver will
have any sort of officialmonetary use again with
governments, or are we, is it'sgoing to strictly be something
(42:59):
that is, or the private citizen?
Speaker 2 (43:02):
So I guess my answer to that is if we think, in an
ideal world it absolutely wouldhave a role, and I mentioned in
the book.
That doesn't mean that we haveto go back to that.
But silver has been money forlonger than gold has.
It has over time representedmore value of transactions just
(43:26):
because it's more of a dailytype of money.
Where you've got these you'vegot smaller value.
I guess in the same weight Anounce of silver is obviously a
lot cheaper than an ounce ofgold.
So for daily transactions it'smade a lot of sense, and your
(43:47):
listeners, many of them,probably do know that for much
of history, going back 5000years when silver started to be
used as money.
For nearly all of that timesilver has had been continuously
used as money until about thelate 60s when in the US and
elsewhere most of the developedworld they started to remove
(44:09):
silver from coinage.
So it's, and then it'sofficially since 1971, since
Nixon, you know, closed the goldwindow and said you know we're
not no longer going to back ourdollar with gold, that there
have been no more preciousmetals and nothing of true value
that has been backingcurrencies, and so we've been
(44:30):
living in an experiment eversince then.
So the last 70 years have beenan experiment.
Sorry, the last 50 years havebeen an experiment in terms of,
you know, operating a worldwidefinancial system with fiat money
.
Central banks know what's goingon.
It's not an accident that lastyear sorry, two years ago, in
(44:59):
2022, and I don't have mynumbers exactly, but I know that
I'm close I just read somerecent stat this morning.
In 2022, central banks hadbought 1000, I believe it was
1087 tons of gold.
In 2023, that number is about1040 or so tons of gold.
(45:27):
So if you look at a chart, abar chart, that shows the amount
of central bank gold buying,first of all it was selling
until 2009,.
It reversed to buying in 2009.
So think about what happenedthen.
Great financial crisis.
Everything has flipped on itshead.
We've had consistent buying bycentral banks of gold and in the
(45:51):
last two years it has been offthe charts.
It's been way more than in theprior years.
What happened in 2022.
Russia walked into Ukraine, theUS froze Russia's treasuries and
then Russia saw that they nolonger had control over.
(46:11):
I think it's hundreds ofbillions of dollars worth of
assets, and so you have toimagine that central banks
around the world governments andcentral banks looked inwards
and said what if that were tohappen to us?
We're sitting on piles oftreasuries.
(46:31):
What if that were to happen tous?
So I believe that and that'sbeing led by China.
But we've heard, you know, itdoesn't take much to know, and I
follow this, but it doesn'ttake much to know that there
have been plenty of centralbanks around the world, mostly
in the European Europe, eastern,in Asia, in the Middle East and
(46:53):
so on, that have beendramatically accumulating gold
and I believe it's to build atrue reserve of liquid, of a
liquid asset money, true money,real money.
That push comes to shove, theycan use, anybody will take it
(47:16):
from them.
It's easy to transact.
We know that that's been beengoing on and has has that has
really kicked into high here inthe last couple of years.
So I mean that's a little bitof a roundabout thing.
I started talking about gold but, as I say, silver has been
money for 5000 years.
(47:36):
The last 50 years we've beenliving in an experiment fiat
money and if I think a littlebit philosophically about what
money is and what it should be,really it's it's a store of
value and it's a means oftransaction.
(47:57):
Those are the two basicfunctions of money.
Well, fiat paper is not a storeof money.
That is pretty clear.
It's down about 98% in the last50 years in terms of its buying
power.
He's a transaction you do havewith paper money.
It's readily accepted for nowand and it's, you know, it's
(48:20):
government decree, so you've gotto use it to transact etc.
But you know, I thought aboutthis when I wrote the book and I
thought about about what hashappened since.
You know we've had this.
You know we've had thisdevelopment of Bitcoin and all
these cryptocurrencies and thereis, there is a bit of a, a, I
(48:46):
guess, a hang up, if you want,but ultimately, ideally, what
you would have is some kind ofdigital money that was fully
securely backed by gold and orsilver or because you've got
you've got that, you know, multithousand year, I guess
(49:11):
confidence of something holdingits value, difficult to produce,
and therefore every new ouncethat comes out of the ground has
value.
Because it's difficult toproduce, effort has to go into
it, and then you have the easeof transaction, of transferring
value through some kind of acryptocurrency to anybody
(49:34):
anywhere, instant, almostinstantly, and what we call
frictionless.
So I almost no cost, and if youcan do it on something like a
blockchain, where you've got adecentralized ledger and
everyone has confidence that,yes, you know, this person or
this entity that I'm transactingwith is sending me this, this
(49:58):
value in this currency, then, asI say, that would be the
ultimate form of money.
So do I think we're going to getthere?
I don't know.
What I do know is that it isfor central planners to have
(50:18):
fiat is something that theywould not want to give up and
would not give up easily.
It would take a dramatic.
I think it really would take adramatic.
I'm not saying I'm not hopingfor it and I'm not saying we'll
get there, but I think that forthem to give up the power that
comes with fiat currency wouldtake a lot dramatic reset.
(50:42):
And I think if we got there andgold and or silver became
somehow backed a new form ofcurrency, then I think that
would be the ideal to have it insome form of precious metals
backed crypto.
It would be absolutely ideal.
(51:04):
But the real hiccup that youhave there is trust, right?
I can imagine you're smiling atit because you know where I'm
going with that and that is the.
That's the flame the ointment.
If you have that form of money,can you?
Will you have trust that you'resending these, this currency
(51:25):
around the world?
Are you comfortable acceptingit?
Is the is that physical silveror gold in that vault and you're
told is there?
Is it actually there?
And if you need to get it, canyou cash that currency in those
coins, those, those virtualcoins, and get that if you want
it?
And I think that will always besort of the issue if, if you
(51:50):
can do it, if if there wereprivate maybe private, ideally
private crypto currencies.
There still will always be kindof you know this doubt perhaps
in people's minds, but if youhave regular audits, if you have
confidence in the audits I mean, we're really going off on a
(52:13):
tangent here, but these arekinds of the kinds of things
that that the debates that wewould have to have around, that
kind of of a ranger.
Speaker 1 (52:24):
Counter party risk.
Exactly, and I start with thepremise that if the government's
involved in my currency, Iautomatically don't want it.
There's no in history.
You know, when you havedecentralized at least there's,
the levels of trust go up.
You know, the moredecentralized, the more
transparent, the more open.
(52:45):
Then yes, and I agree with youbecause I like the technology of
blockchain when it can be useddecentralized.
You know I do buy Bitcoin.
You know we talked last week onthe Bitcoin ETF, myself and
Stuart Englert, and justmanipulation is everywhere, and
we're, you know, those of us whofollow the precious metals
markets are seeing the BitcoinETF stuff the same skeptically,
(53:08):
the same way.
Well, so we could go on forever.
I want people to go read yourbook that's I did and I'm better
off for it.
And I want to say the title ofthe book again is the Great
Silver Bull crush inflation andprofit as the dollar dies.
That's a great title.
By the way, peter, peter Kraut,ladies and gentlemen, now you
tell people where they can findyou, and do you still have a
(53:30):
newsletter?
Do you have any kind of paidsubscription or anything like
that?
You have a website.
Speaker 2 (53:35):
I do.
So I've got a copy with me.
I'll just show it.
It's always good, I think, tohave a bit of a visual so you
can see what the what the booklooks like.
I didn't bring it with me, soit's the Great Silver Bull
actually, just as a little sidenote, last year I was approached
by a group in Germany and thebulls actually the books
(53:57):
actually available in German,nice, yeah, so that was kind of
fun.
You can find this on Amazon,it's available in print in
Kindle, it's available as anaudio book version on audible
etc.
So it's easy to get, it's easyto read and the idea was really
(54:20):
to bring the opportunity at whatI feel is a generational
opportunity to invest in silverand and everything that
surrounds it, the different waysto invest in it.
And I think at least thefeedback, as I say, that I've
gotten is that it's it's it's asimple, easy read that does give
you that overall view of theopportunity.
(54:41):
So now I also write aninvestment newsletter that that
is, from what I know, the onlysilver focused investment
newsletter out there.
It's called.
It's called SilverstockInvestor, so you can find that
at Silverstockinvestorcom.
I've partnered with GwenPreston, who writes her own
(55:03):
newsletter that focuses onjunior mining, and the website
is resource maven.
But if you want to find mynewsletter, it's
Silverstockinvestorcom.
You'll.
You'll see these othernewsletters posted there as well
, and other than that I'm on.
You can follow me on LinkedIn,on Twitter.
I do want to say about thenewsletter that that is
(55:26):
subscription based.
I'm out of Canada, so it's $49a month or 499 a year, which in
US dollars is probably somewherearound 350 or so a year.
$35 or no, yeah, about $35 USper month.
And I cover the wholeinvestment, silver investment
(55:48):
space everything from ETFs,silver backed ETFs, silver
mining ETFs, large silverroyalty and producing companies,
developing companies and thenall the way down to junior
explorers that are looking forsilver, and it's a relatively
small field there.
You know, when you look intothis in detail, you start to
(56:14):
realize there really are notthat many companies that focus
on finding silver.
It doesn't occur that easily inin, in what I'm going to say,
high enough concentrations thatmake it attractive to to mine
Most of the silver that we find.
Most of the deposits that thesecompanies have are going to be
in Latin America, in Mexico, inMexico.
In Mexico, mostly concentratedalong the western coast or the
(56:42):
western parts of the US, ofCanada.
You have some in places likePoland and Russia, a little bit
in Europe Western Europe, somein Australia, and that really
covers where silver is found, asI say, in interesting
concentrations.
You know, you don't have to takebig risks If you want to invest
(57:04):
in the companies that areinvolved in silver, and I give a
couple of examples.
So two of the bigger names inthis space are Pan American
Silver and then you have acompany that is a royalty
company called Silver Wheaton or, sorry, today it's called
Wheaton Precious Metals.
It used to be called SilverWheaton, and here are a couple
of interesting examples.
(57:25):
I have these in the book aswell, but from I believe it was,
I think from I believe it was2008 to 2011, wheaton Precious
Metals, which is a multi-billion, probably the largest public
company in the silver spaceperiod that you could invest in,
(57:46):
was up 17 times.
Its stock was up 17 times inthree years from 2008, and from
not even three years.
November of 2008 to April of2011,.
That stock was up 17 times.
So you don't have to take bigrisks to get really big payoffs
(58:07):
in the silver space.
But you know where you reallyhave sort of the driving
explosive potential gains is inthe juniors, of course, and
discoveries are rewarded.
And I'll give one sort of smallexample.
Just last year my subscribersgot into a company called
(58:27):
Hercules Silver which isexploring in Idaho actually, and
they hit a discovery andinitially we got in around 18
cents.
Ultimately the price went up toI think it was about $1.50 or
so Canadian.
So they were up about 800%eight times.
That has come back a little bitbut still remains very
(58:52):
attractive and they have areally, really good discovery.
So that gives you some idea ofyou know how these stocks can
actually explode.
But you do want to be careful ifyou go into the explorer side
of things because that is muchhigher risk.
You want to spread your moneyacross several names and, again,
you don't need to go into thatarea, but I do talk about them
(59:15):
if you're a bit in thenewsletter and everyone has to
know themselves and I say silvercan be is quite volatile, but
you need to make that volatilitywork for yourself.
If you're someone who is lowerrisk, that does not mean you
should not be exposed to silver.
I believe it's a question ofperhaps what form of silver and
(59:37):
if you go into the stock side orthe equity side, which risk
profile in terms of companiesthat you're comfortable with and
build your portfolio that way.
Speaker 1 (59:48):
Well, I'm definitely going to subscribe.
I'm going to do that and saythat website one more time.
Speaker 2 (59:53):
So that's Silverstockinvestorcom.
Speaker (59:56):
Silverstockinvestorcom .
Great Well, peter.
Again, thank you so much forbeing here.
Love the book.
Thanks for the content.
It was a fun conversation.
We could go on for hours.
We sure could.
We're not asking questions, butwe'll try to keep these things
within an hour.
Folks, go subscribe, go checkhim out by the book and I think
we're all going to have to beprepared for the next chapter in
(01:00:20):
the story, the saga that issilver, and I think it's going
to be an interesting ride.
All right, thank you, weappreciate you.
Folks.
Thanks for subscribing to thepodcast.
Be sure and check us out overon freeworldfm, the new stations
carrying us on Mondays.
All new show coming this Monday.
So 11 am Central Time Wise WolfGolden Crypto Show In a world
(01:00:45):
of bulls and bears, be the wolf.
See you next time.
All right folks, welcome to a very special
edition of the Wise Wolf Goldand Crypto show.
The gentleman I'm about tointroduce I want to say I had a
copy of your book come across myKindle and anything that's
precious metals.
I try to do some research, seewho's putting out what kind of
(00:23):
work, and then I just gotengrossed into the book and I
loved it and I wanted to haveyou on for a while.
I want to give a shout out toMelissa for making this guest
possible, but Peter Kraut ishere.
He is the author of the greatSilver Bull.
Peter, so glad to have you.
Thanks for being here.
Speaker 2 (00:41):
Tony, it is my pleasure, and thanks for that
intro and thanks for your kindwords about the book.
I'm really happy to hear thatyou've enjoyed it.
Speaker 1 (00:50):
I did and I'm a history guy.
That's what really got mestarted in being in precious
metals was history itself andthen seeing so much tied to the
monetary history.
What creates a civilization.
I thought the great Silver Bullwas packed full of that.
It had great information, therewas great charts.
It was not phoned in folks, itwasn't written by AI, it's not a
(01:14):
pamphlet.
It was very well done.
Again, let's just start from thebeginning, because we're in
this massive shift historicallyof the monetary system.
Those of us who are Silver Bugsand Gold Bugs have been
thinking about this for years,but we are on the precipice.
It's clearly happening.
(01:35):
You've got de-dollarization,you've got the BRICS nations in
full force and then theperiphery BRICS, brics Plus, is
going on with Saudi Arabia, thePetrodollars dying.
So much happening.
You turn on your financialnetwork.
I don't think they totally getit yet.
It's got normalcy bias.
You're living in the past.
I think thinking about preciousmetals, and monetary metals
(01:58):
especially, is thinking aboutthe future.
I want to know, peter, yourinspiration.
What got you into this field?
Then, of course, what was theinspiration for the book?
What was the message there?
Speaker 2 (02:13):
I've got to say, tony , that I'm going to say
similarly to you.
I got interested in preciousmetals because of my interest in
history.
After I did a finance degree atuniversity, I started working
in the industry advising clients, helping them build portfolios.
(02:35):
Really, it's interesting how,again, I became interested in
precious metals, gold and silver, because of history.
At one point I'd gone to theback office of this company
where I was working to adviseclients and I said here's this
(02:56):
golden, silver physically backedmutual fund.
I'd like to offer this to myclients.
They said, oh, this is kind of.
We don't usually do this kindof fund.
Let us look into it, we'll getback to you.
It took a couple of weeks, Iguess at least, and then I had
no news.
Went back to them.
They said, oh no, no, this ismuch too risky.
(03:18):
We just do equities and bondsand money market.
We're going to stick to that.
I remember thinking to myselfthat is the most ridiculous
answer.
There's nothing safer thanphysical gold or silver.
If you're concerned, then allyou need to do is you allow your
(03:40):
clients to invest in high risktech stocks, all sorts of things
.
It's a matter of degree.
If someone's concerned, ifyou're concerned about clients.
Let's just limit the amount ofexposure.
Let's say that they could haveto this kind of fund that gives
them golden silver in theirportfolios, but they wanted
(04:01):
nothing to do with it and Icouldn't give up.
I lasted a few more years thereand just got more and more
interested in this and did moreand more research and ultimately
ended up had an opportunity towork with a group in the US
(04:23):
called the Agora group that hasmultiple branches but eventually
ended up writing a long storyshort they went through
restructuring.
I was writing, actuallyfreelance for mining companies.
(04:47):
I had been researching, writingand recommending all sorts of
resource and precious metalsinvestments for that length of
time and then eventually thelast couple of years had been
writing just silver and goldresearch and articles on a
weekly basis for them.
As I say, they went throughrestructuring.
(05:08):
I was on my own for about ayear and a half, did freelance
writing for mining companies.
Kind of got bored with that andsaid I've got to go back to
newsletters and did that.
Now, that was during thepandemic, so it would have been
around the beginning of 2020 andactually the friend I mentioned
(05:32):
earlier, just before we went onto record, had a good friend,
colleague who suggested that Iwrite this book.
I had built up all of thisresearch and information and
experience dealing with silverand gold, talking about it,
(05:54):
looking at it from thefundamental side, the mining
side, and this friend said,peter, you really should write a
book on silver.
And I thought about it and Isaid this guy's right, in the
sense that I do have a bunch ofwork where I've archived all
(06:18):
this research in terms of thedifferent aspects of silver.
And if you look at theeconomics, the macroeconomics,
the history, the supply demand,how to invest in it, in physical
silver, how to invest in themining companies, I thought
we're in the middle of thepandemic.
Why let a pandemic go to waste?
I've got all this time.
(06:39):
I'm not going anywhere.
I've built up this research andI thought, all right, the first
step is going to be an outlineand, I kid you not, probably
within about a couple of days Ihad my outline all set up.
I just sat down and I said whatwould make sense to have in
this book, what I want to cover,what should people need to know
(07:04):
and want to know about in termsof the history of silver, why
it's important and, ultimatelywhy they need it in their
portfolios and how to invest init.
So I put that outline togetherand then it was a question.
I was it moved a few thingsaround, but then it was a
question of, over time, ofcourse, start to fill that in,
(07:25):
use some of the research I'vedone and then do new research to
fill in all of these differentareas.
And I kid you not, this was waymore work than I had ever
expected.
Many times, ignorance is bliss,and it certainly was for me in
this case.
Had I known how much work thisbook was going to be, I'd have
(07:48):
probably not even attempted it.
So I'm glad I did not know andI'm glad I did it, because it
really has opened a lot of doorsand my approach to silver and
investing in silver is all abouteducation, and I think this I
think I hope at least the kindof feedback I've gotten from
people is that it has reallyopened their eyes to this market
(08:14):
, the possibilities, theimportance of it and how you can
go about it.
And I really was trying not tobe academic.
I wanted this to be somethingthat would be simple, easy to
understand, easy to read, andthat's the kind of feedback that
I've gotten, so I'm reallyhappy with the result.
Speaker 1 (08:30):
Well, it's certainly a worthwhile project and that's
how.
So you know.
If you could look back and say,if I knew what I, that's great,
and then what I know now, Iwouldn't have attempted it and
that's how you know.
It was worthwhile, but Ienjoyed it.
Just knowing the changes thatare happening in our monetary
system, with our currenciesworldwide, with inflation, the
(08:57):
destruction of the, Was it 80%of all dollars created or
created in the last 48 months orso it is crazy yeah exactly.
It's a big investment.
So you start looking around athow do I house value?
And some people are asking thatfor the first time.
Those of us who are gold andsilver bugs and precious metals
(09:17):
advocates are always looking atgold and silver or money.
But I think that what's sointeresting about the title of
the great silver bull is I don'teven think we're at the
beginning of the bull market,for what's going to happen to
silver.
And again, this isn't a showabout investment Like you're
going to make it all.
It's going to go to the moon.
I just think you Fundamentals,you look at silver.
(09:39):
How much is being pulled out ofthe ground?
How much is needed?
How much is in landfillsBecause of the?
It's not worth stripping out ofold computer systems and
software and all that stuff tomelt.
The photography, all the stufffrom the previous decades, all
that silver is just in landfills.
It's not coming back.
(09:59):
Gold usually gets recycled.
It doesn't get thrown awaybecause of the value.
We're just so off kilter withthe gold-silver ratio, with
pricing models or completely outthe.
Historically we're nowhere nearwhere we were.
Where do we start?
If someone is new to this andsays why silver?
(10:21):
And where do you start withthem on that.
Speaker 2 (10:25):
So I don't want to throw a whole bunch of numbers
out, but I do want to givepeople, as simple as I can, an
overview of the silver marketand the supply-demand pointers
to get some A rough idea intheir minds of what we're
looking at.
So the first big importantnumber is that the silver market
(10:46):
consists of about a billionounces a year in terms of
supply-demand.
So roughly a billion ounces areproduced a year or available.
About 85% of that comes frommining and about 15% of it comes
from recycling.
So when we talk about recyclingand silver, the easy recycling
(11:08):
is things like silver jewelry,silverware, because both of
those are mostly silver.
So when someone's going to meltit down, they can get all of the
silver out of that prettyeasily.
And, like you said, tony, a lotof the other applications for
silver industrial applicationsuse so little silver per per
(11:32):
unit or per thing that you'remanufacturing that it's.
So it's hard to justify thecost and effort to go and try
and get that back out of theitem, especially things like
electronics, if it ends up on amotherboard or if it ends up in
a little switch or something.
So most of the silver in thatcase ends up not being not being
(11:56):
recyclable or we can't get itback, so it's consumed in some
form.
So, as I say, it's about abillion ounces a year.
But in the last two to threeyears the silver market has been
way off balance in the sensethat overall supply between
(12:19):
recycling and mine supply, weare roughly at about a billion
ounces.
But since 2021, that has beenthere's been a supply deficit.
So in 2021, it was about 1.1billion ounces of demand versus
(12:39):
a billion ounces of supply.
2022 was almost 1.3 billionounces of demand versus 1
billion ounces of supply, andthen last year was about 1.1
again or so billion ounces ofdemand versus a billion ounces
of supply.
So your listeners are probablywondering so how can you have
(13:02):
these deficits go on year afteryear?
Now there's a lot going onaround that and, yes, some
people will talk about is theremanipulation?
My short answer from me on thatis that I do believe that, and
(13:23):
this wouldn't just be for silver, as with many other commodities
, there is manipulation.
My sense is that it takes placemore in the short term and you
get the price being pushedaround by large investment banks
and so on, but I believe overthe long term they're not able
to sustain that.
And I'll just point to the factthat in 2001, silver was $41.
(13:48):
By 2011, it had ralliedtremendously to $49.
So if silver was manipulatedthat entire time, well, it did
pretty well and managed to gomore than 10 times.
It was up 11 times roughly, oralmost 12 times.
So to answer the question aboutsupplying to the deficits every
(14:12):
year, the numbers and againit's not worth going I don't
think for your audience it'sworth going into too much nitty
gritty detail, but the way thenumbers are calculated, you've
got supply about a billionounces.
You've got demand at roughly1.1 or 1.2 billion ounces.
You've had deficits the lastthree years.
(14:35):
But there are secondarysupplies, what we call secondary
supplies and those are mostlythese 1000 ounce silver bars
that are sitting on exchanges orin what we call ETFs
exchange-treated funds.
So these 1000 ounce silver barsare what can be taken for
(15:00):
delivery, and that supply isdrawn down to meet the excess
demand that isn't met by miningor recycling.
So nobody knows exactly howmuch there is.
We do have some rough numbers,but what we also know is that in
these last three years ofdeficits, the three main
(15:22):
exchanges futures exchanges thathave these 1000 ounce silver
bars, are the London fault inLondon.
You have the COMEX in New Yorkand then you have the Shanghai
exchange in China, and they'reroughly down about 70% in the
last three years.
So the big consumers of silverthat have had to have access to
(15:46):
this silver to produce theirproducts and I'm gonna get into
where I think most of it's goingin a moment have, I believe,
bought these futures contractsand or have bought sufficient
amounts of silver that is backedby physical silver in these
(16:08):
silver ETS.
These are like a stock you canbuy on the stock market.
The price follows the silverprice and in most cases they
have physical silver backingthem.
But if you own enough of thatstock or those units and we're
talking big money, oftenhundreds of thousands or
millions of dollars, which bigconsumers have the ability to do
(16:32):
you can say I want to redeem myunits for physical silver and
they will have to deliver youthat silver.
It might there might be a bitof a delay and they might
scramble to find it, but so farthings have been orderly and
they've found the silver andthey've delivered it.
So that's where that deficithas been met for the last three
years.
Again, as I say, we've seenabout 70% drop in those three
(16:57):
major exchanges.
That's where most of that silveris that we know of in the last
three years and I believe thatreally can only go on a little
bit longer.
I'm thinking and that's just memaybe another year or a couple
of years and at some point somebig consumer of silver is
there's gonna be a squeeze andthey will not be able to get
(17:20):
their silver, whether it'ssomeone that buys one of these
long contracts, as we call them,on a futures exchange and
they're entitled to get thesilver delivered to them and the
exchange says oops, I'm sorry,we're out of inventory, we're
just gonna give you the cashbackand that's not gonna be what
(17:41):
they need.
They actually need the physicalsilver and that's when the
proverbial you know what it'sthe fan and it's the game's over
.
So this is kind of what I seein the supply demand, what's
been happening, and hopefullythat gives your listeners an
(18:01):
overview of the silver market.
Now I can drill down a littlebit and tell you about where the
demand comes from, thedifferent types of demand.
Speaker 1 (18:12):
Yeah, I'd like to know that.
First of all, the premise isinteresting because I think the
general public would bewondering why, when they think
of manipulating a market, it'sfor like a pump and dump or for
a gain, and this is the inverseof that.
Like you're looking for along-term strategy of I'm
(18:34):
assuming accumulation, you lookat the largest silver holder, a
physical silver holder in theworld, is JP Morgan.
Right, exactly, and it'sinteresting.
I've asked several people thisand we can get into this later
in the show if you want.
But I have questions about whathappened in the 70s with the
Hunts, because they were thelast people to ever truly I
(18:55):
guess you wanna coin it, cornerthe market, or they just
basically made these contractsthat they were using.
They just exposed that, as theykept buying all the physical,
they were shut down.
No one has ever come back andyou could you could be a whale
and come and do that.
Now no one does it, no onepicks it up, and I think that's
(19:16):
the tell.
As far as speaking on that,what are the different aspects
of what's it's driving it whereit goes?
Speaker 2 (19:29):
Right.
So in my view it's roughly Imean, I kind of to keep things a
bit simple I like to look at itin kind of two baskets.
I say that there is mostlyinvestment demand and then you
have industrial demand.
Until maybe a year or two agoit was roughly 50-50.
(19:51):
So about half went to industryand about half went to
investment.
Now that has been shifting.
Silver has become more and more,the demand has become more and
more industrial and what hasbeen overwhelmingly driving that
is solar.
So the International EnergyAgency put out a chart last year
(20:15):
and they're forecast andthey're saying that by 2027, so
we're really just almost threeyears away solar will be the
single largest source of energyworldwide.
It will surpass coal, it willsurpass natural gas.
So to produce solar energy, tomake these solar panels, you
(20:39):
absolutely have to have silver.
Silver is a crucial,indispensable component to
manufacturing solar panels andof course, over time, like any
industry, producers are going tolook for ways to cut costs, to
increase efficiencies, andthey've managed to do that over
the last 10 years.
There are these charts of whatwe call silver loadings.
(21:02):
Loading's are the amount ofsilver per panel to produce the
same amount of power.
So that line has actually gonedown very gradually and the last
couple of years it's actuallyflat, and so they've been, I'm
gonna say, unable to squeezemore silver out of a panel to
produce the same energy output.
Now I also believe and becauseI spend my days looking at this
(21:27):
stuff and the numbers and allthe research that line that's
steadily gone down and hasflattened is about to spike.
I think we're at an inflectionpoint where the amount of silver
required per solar panel isgoing to trend up very quickly.
Now the reason I say that issolar is evolving, technology is
(21:48):
improving, and the most commontype of solar panel and I'm
gonna use these words that arereally acronym, so the most
common technology for solarpanels is something we call PERC
.
The next more efficienttechnology is something called
TopCon and then after that theeven more efficient technology
(22:11):
is something called HJT.
So PERC's the most common.
Topcon is gaining dramatically,and HJT is also gaining a lot
in terms of the number of panelsthat are being made every year
that are using these newertechnologies.
So what is important to know isthat TopCon, which is actually
(22:34):
being forecast to represent 50%of all the new manufacturing
capacity this year, alreadytakes 50% more silver per panel.
Hjt is a technology that takes150% more silver per panel.
So again your listeners aregonna be wondering well, why
(22:56):
would you produce a panel thattakes more silver?
And it's all economics.
It's very simple and it makesperfect sense.
It's because they're moreefficient.
Despite requiring more silverand spending the money on extra
silver to put in that panel, youare getting more energy out of
that newer technology panel andso it makes sense to use more
(23:17):
silver make panels with thesenewer technologies because your
energy output is higher.
You're just being more efficientperiod.
So Last year the SilverInstitute which is the most
known, I guess, and most usedresearch group for the Silver
(23:40):
Supply and Demand and trends inthe market initially expected
that last year solar wouldrequire 140 million ounces.
So out of a billion ounces ofsupply a year, that's already
14%.
It revised that number to 160million ounces in November.
When they said 140 back inApril, I thought that was way
(24:05):
off.
I said you know I could seewhat was happening in the trends
in the solar industry and withthe technology and the new
technologies coming on andrequiring more silver per panel,
I said we are going to be muchcloser to 180 to 190 million
ounces of silver going to thesolar industry alone.
And I was right.
(24:25):
It turned out.
I was right.
When they revised their numbersin November they said it turns
out that the industrial demandthey didn't give the number
specifically but it was easy todo the math they said the total
industrial demand would be 632million ounces, so that's over
(24:45):
60% of silver now going toindustry.
That solar would go from 25% in2022 to 30% of industrial
demand in 2023.
So 30% of 632 million ounces isjust shy of 919 million ounces.
(25:06):
So it was right at the top endof my range of 180 to 190.
I think that we're going to seesomething again very close to
that it's.
When you look at how much thecapacity to produce solar panels
has grown in the last couple ofyears, it's been off the charts
.
2021 to 2022 saw a 55% growthin solar manufacturing capacity.
(25:30):
By the way, china dominatesthat too.
It's there at about 80% ofworldwide solar manufacturing
capacity.
2022 to 2023 saw another 55%growth in manufacturing capacity
.
We don't have the final numbersyet for 2023 growth, but it was
(25:54):
forecast at roughly 23, 24.
I think it's going to be wellnorth of 30% growth.
And we haven't even factored inthis extra demand, like I was
saying about silver, more silverbeing required because of these
newer technologies requiringmore silver per panel.
So it's just absolutelyexploding.
If you're not paying attentionto what's happening with the
(26:18):
solar industry and itsrequirements for silver in the
silver market, then you'rereally missing 80% of what's
going on in terms of demand.
That is just really.
That is the 800 pound gorillain the silver market and it's
really driving what's going onin silver.
Now, one last thing about thatin terms of.
(26:39):
I'll touch on a couple of otherpoints in terms of demand.
But I like to say, for an easyway to remember and understand
it, that I believe that becauseindustrial demand is a
relatively predictable thing interms of demand in the silver
market, so I like to say thatthe industrial demand is
providing a rising floor underthe silver price and that it's
(27:03):
going to be investment demandwhen that kicks in and it does
kick in, every so often it's,it's harder to predict, but it
creates these, just thesedramatic booms in the silver
price and that's the sort of awild card that helps bring these
spikes in the silver pricewhich we've experienced multiple
(27:23):
times since 2000.
And I am convinced are comingagain.
So that's just a, as I say,kind of an overall way to think
about what happens in silver andthe silver price.
And if we talk about some ofthe other sources of demand, as
I said, in industrial demand isabout half it's actually more
(27:47):
like 50% now and the balance ismostly some form of investment.
That includes, in my view,jewelry, silverware and physical
investment.
So people buying coins and barsand just storing them, sitting
on them.
That that is sort of how we,how we see the overall, the
(28:09):
overall breakdown of silver, ofsilver demand.
Speaker 1 (28:15):
I think it's interesting too with the
emergence of the BRICS nationsand you know there's talk of the
go back BRICS currency and butyou also see, I think, a
rumbling in getting away fromthe Western style exchanges and
going to a different exchangesystem because of the, because
(28:36):
it's so rigged.
I had Stuart Englert on lastweek.
He wrote the book rigged on themarket and we had.
We talked about silver too, butyou know, I remember, like some
of the figures that were thrownaround back in February of 2021
, when there was a big push tobuy physical silver from the
(28:58):
same people who brought you theGameStop short, you know, and
that my office was lit up.
I knew every dealer I knew ispeople bought physical silver.
The next day the spot pricewent down and then, if you
looked on the paper trades, theysold off 1.5 times the annual
supply in one day.
Speaker 2 (29:16):
Exactly.
Speaker 1 (29:17):
And there's a reason, see, and that's because it's
counterintuitive, because it'sagainst the grain of trying to
make a price go up.
Nobody really notices it, butyou know, you have.
You know, JPMorgan traders areconvicted of this.
I mean, we got three.
So there is something to it andI mean, if you're looking at, I
think, spot today and we'rerecording this on the 31st of
(29:39):
January 24 spot today is like$23 and three cents.
I just bought some kilo barsearly before I went back in the
studio.
I just I think of how cheapthat is.
You know I was born in the daythe Soviets invaded Afghanistan
in 1979, on December 26.
And you know I was what?
(30:02):
Six months old and silver was$52 and 50 cents.
I'm 44 years old now.
$52 and 50 cents in 1980, whichis today probably 250, maybe
$300 in purchasing power.
There's something just raw and Ithink anybody that really looks
at this, if they go get thegreat silver bull and read your
book, I mean it's very late,well laid out.
(30:23):
For what's the future of thiscommodity?
Not just as a monetary medalbut, as you mentioned, all these
industrial uses.
The entire green economy isbuilt on that.
If we're going to be in thatsystem that those things are
going to get built, we're alsoin a war economy, unfortunately.
I mean, you know, you look atwhat is there?
40 pounds of silver in eachtomahawk missile.
(30:44):
These, these demands aren'tgoing away yet.
I go to look for and I know youwrote for silver Mining stocks
or you you wrote about them itthere's not a lot of that going
on, there's a lot of.
There isn't as much activitylike you would think because of
this, because of the price, it'sjust not profitable to pull it
(31:08):
out of the ground.
So that hasn't even started yet.
So it seems like there's gonnabe.
Do you foresee like some sortlike you're mentioning earlier,
where they don't have the orders?
They, they try to fill theorders with fiat, like you were
if you're in a cash-in SLV.
But is there a, is there a dayof reckoning coming where the
orders can't get filled?
(31:28):
The price reevaluates and offoff we go.
I mean, does it?
Is it this like?
Is it become organic and viralafter that, where it just can't?
You know, nobody can really puta stopping point on it because
it has to reevaluate.
But what's gonna happen tosilver?
Speaker 2 (31:44):
Yeah, I think that you, you were right, absolutely.
That's the kind of thing thatwill happen.
Silver is the only metal ofsort of the Major and even minor
metals if you think aboutprecious metals, platinum group
metals, base metals that isbelow its 1980 high about 50,
for it's more than 50 percentbelow its 1980 high, and that's
(32:05):
not even accounting forinflation.
So it has a lot of catching upto do and You're right, it is,
it is not that profitable forminers.
Something also I think, and Ilike to point out that's
particular to silver compared toother metals, is that only
(32:28):
about 20, only about 25% ofmined silver Actually comes from
primary silver mines.
So if you look at, you know,you take a hundred, a hundred
Mining companies that have somesort of silver output, 25 of
those overall Can say thatsilver is their main product.
(32:50):
75% that produce silver arereally actually mostly producing
other metals copper, lead, zincor gold Mostly and so silver is
a byproduct in those cases.
So here's, here's how thingsget exacerbated.
The shortage can getexacerbated.
(33:13):
These companies Don't reallyhear that much for the silver
price.
It's, it's a, it's almost anafterthought for them because
really, as I say, their, theirfocus is producing these other
metals and oftentimes will justsell off that production to
someone and something called astream, and so they may sell it
even in advance of of Buildingthe mine, in order to get
(33:37):
financing.
So if you think about a year,you've got this deposit.
You need to build a mine andyou need money to build a mine.
You know you're gonna have acertain amount of silver output
over, say, 20 years, 30 yearsyou might.
Someone comes up to you andsays here's, you know few
hundred million dollars, I'mwilling to buy that silver for
you.
As long as the mines operating,I'll pay you fixed price of,
(34:02):
say, four or five dollars perounce of silver for that entire
time.
And and here's the you know one, two hundred million dollars.
Again, that miner is oftentimeshappy to take it.
They get that cash up front.
It's not dilutive to theirshareholders, so they take that
money up front and then thatsilver is spoken for for the
(34:24):
rest of of of the life of thatmine.
And Again, they don't.
They don't care what the priceof that silver is.
They know They've sold it inadvance.
And the ones who have not soldit in advance, it's such a small
Part of the profit To.
In their bottom line they justhappily accept whatever the
(34:45):
price is for silver and if theyhappen, you know, to make it
it's what we call a byproductand it actually helps to lower
their overall cost to produceother metals.
So we'll just take whatever themarket prices and and that's
that now it can get.
If that, that can be exacerbatedeven more in a couple of ways.
One is if we have an economicslowdown now.
(35:06):
So first of all, it's mucheasier to to scale back mining.
Then it is to try and ramp upmining, and I'm not going to go
into all the reasons, but thereare many reasons Permitting
financing all these things.
So it's just Challenging from ageopolitical perspective and
financing and and all the restof it.
(35:26):
So, as I say, it's easier toscale back.
So imagine you have an economicslowdown.
You would have likely aslowdown in demand for what we
call base metals, so things thatare used industrially copper,
led zinc which are Importantmetals that have silver as a
byproduct, as I was sayingearlier.
So if you have a slowdown, ifyou do have scaling back in
(35:49):
production of those metals, well, guess what?
You automatically have ascaling back of production of
silver.
Unintentionally it it's again,it's a byproduct of producing
those metals.
And if the miner says, well,I'm going to produce less copper
for the next six or twelvemonths, they're going to produce
automatically less silver.
(36:09):
So, although there may beplenty of demand for silver,
because 75% of it comes comes asa byproduct of mining other
metals, again, those minersdon't care what the silver price
is or what the demand is forsilver.
They may just automaticallystart producing less silver and
it makes the the deficit insilver even even more more
(36:33):
pronounced.
You could need it just as muchas you could need it, but if no
one's willing to produce it foryou, you're gonna have to
scramble and find some other wayto get it.
So that's one way you couldactually see, although despite
silver prices being high andmaintained high, you could
actually still see supply comedown.
(36:55):
And a more intricate way is thatyou, if the price is high or
even goes higher, you could havesilver miners say, well, this
is fantastic, I'm making goodprofit.
And I'm talking about, let'ssay, mostly primary silver
miners whose product is mostlysilver.
(37:17):
They can say this is fantastic.
Silver prices are now, let'ssay, $30, $35 an ounce.
My bottom line might my.
You know, my main focus is toproduce good profits for for my
shareholders.
So rather than because, becausesilver prices are high, rather
(37:39):
than produce silver from thesame place in my deposit that I
have been getting the ore out ofthe ground for the last couple
of years, I know that there isan area of my deposit that has
lower grade silver, and if Imine lower grade silver and I
(37:59):
produce less silver per ton ofore, for example, because the
concentration is lower, I'mstill gonna make a decent profit
because the price of silver ishigh now.
So you could, in that scenario,again get less silver output
despite high or reasonably high,sustained high silver prices.
(38:24):
So this is contradictory in away if you think about it.
But so and I talked about it inthe book silver what I say in
the book is that silver is thesilver supply is inelastic to
the silver price.
It does not necessarily alwaysand or immediately.
(38:48):
Over time, yes, but overperhaps some considerable
amounts of time, you could havesilver just simply not react or
go in the silver supply go inthe opposite direction to the
price, making the price spikeeven higher.
So that is, these are some ofthe ways you get these spikes
and that these spikes become sobig and they just kind of take
(39:11):
on a life of their own.
And we haven't even talkedabout all of the social media
kinds of things around that andthe excitement and the fear of
missing out, the FOMO thatdrives all of this.
This thing really can go wild.
And so in the book I talk aboutall of these things.
I talk about the things thatdrive silver, why it's a very
(39:33):
particular kind of market,different from most, and why it
can go crazy and why I have sucha well, I mean, I again I've
said many times my ultimateprice target for silver is not
to be sensational.
It's what I think is trulyrealistic.
(39:54):
Again, I've done the research,I've done the homework, I've
looked back at prior bullmarkets.
You look at inflation, you lookat what's driven the silver
price, you look at it relativeto other assets and I just think
it's realistic.
And I've heard people who arevery, very accomplished and have
(40:18):
managed billions of dollars andhave even higher price targets
than I have.
So I don't feel so crazy when Italk about that.
Speaker 1 (40:28):
Well, you know it's interesting too.
You look at the as a dealer,the timelines when the first
quarter of 2020, after theexecutive order was signed you
had this massive spike in thestock market.
It was like the highest it hadbeen since 1929.
And then it's the lowest since29.
They went and, just, you know,peak in Valley and then, and so
(40:51):
I remember, golden silvertemporarily went with it Exactly
and so in theory, right inpaper, because it was down like
12, 13 bucks an ounce or 11bucks an ounce.
People were calling me trying tolock in trades.
I don't have it Exactly.
It's funny, that's the tell.
It's because I didn't.
There's nowhere to get it.
I mean you're saying, well,this is the price for spot
(41:12):
silver.
I couldn't really get any kindof significant product at the
time.
You had prices had to rebound,there had to be a recovery, and
then it stabilized enough forwhere there was supply hitting
the market and that's where weare in the papers.
I just that just one area aloneshows that we're not, this
(41:32):
isn't evaluating correctly, andthen I call the stuff that
you've laid out here in theinterview.
You know, with the lack ofsupply, and again, I just think
it's one of the.
It's going to be one of thegreatest financial stories of
our time.
It's because it's going to comeout of nowhere for a lot of
people to see.
Well, silver just never doesanything.
Silver just never does anything.
And one of these days it's justgoing to have that perfect
(41:54):
storm.
Things are going to line up andI agree with you, it has to do
with the, not only the monetaryuse, but the industrial use of
silver, the demands just goingto hit.
That was one of my theories.
And again, we don't.
We're speculating.
We don't know why.
Why do these?
Why do the big players want tosuppress?
And the only thing I can thinkof is accumulation, for they
know this is.
(42:14):
They're doing the simulations,looking into the future.
What's the next move?
Can we, what can we?
What can we do cheaply?
One of the things you could dois silver is just again the time
frames add up and especiallywhere we're going and how to.
How to keep it under 30 bucksan ounce, which I don't think
will last very much longer.
But we don't know.
We're not.
Neither Peter or I are giveninvestment advice.
(42:36):
This is more of an explorationof the manipulated markets.
But, peter, looking into thefuture, do you see and it's kind
of a veer off topic a littlebit do you feel like silver will
have any sort of officialmonetary use again with
governments, or are we, is it'sgoing to strictly be something
(42:59):
that is, or the private citizen?
Speaker 2 (43:02):
So I guess my answer to that is if we think, in an
ideal world it absolutely wouldhave a role, and I mentioned in
the book.
That doesn't mean that we haveto go back to that.
But silver has been money forlonger than gold has.
It has over time representedmore value of transactions just
(43:26):
because it's more of a dailytype of money.
Where you've got these you'vegot smaller value.
I guess in the same weight Anounce of silver is obviously a
lot cheaper than an ounce ofgold.
So for daily transactions it'smade a lot of sense, and your
(43:47):
listeners, many of them,probably do know that for much
of history, going back 5000years when silver started to be
used as money.
For nearly all of that timesilver has had been continuously
used as money until about thelate 60s when in the US and
elsewhere most of the developedworld they started to remove
(44:09):
silver from coinage.
So it's, and then it'sofficially since 1971, since
Nixon, you know, closed the goldwindow and said you know we're
not no longer going to back ourdollar with gold, that there
have been no more preciousmetals and nothing of true value
that has been backingcurrencies, and so we've been
(44:30):
living in an experiment eversince then.
So the last 70 years have beenan experiment.
Sorry, the last 50 years havebeen an experiment in terms of,
you know, operating a worldwidefinancial system with fiat money
.
Central banks know what's goingon.
It's not an accident that lastyear sorry, two years ago, in
(44:59):
2022, and I don't have mynumbers exactly, but I know that
I'm close I just read somerecent stat this morning.
In 2022, central banks hadbought 1000, I believe it was
1087 tons of gold.
In 2023, that number is about1040 or so tons of gold.
(45:27):
So if you look at a chart, abar chart, that shows the amount
of central bank gold buying,first of all it was selling
until 2009,.
It reversed to buying in 2009.
So think about what happenedthen.
Great financial crisis.
Everything has flipped on itshead.
We've had consistent buying bycentral banks of gold and in the
(45:51):
last two years it has been offthe charts.
It's been way more than in theprior years.
What happened in 2022.
Russia walked into Ukraine, theUS froze Russia's treasuries and
then Russia saw that they nolonger had control over.
(46:11):
I think it's hundreds ofbillions of dollars worth of
assets, and so you have toimagine that central banks
around the world governments andcentral banks looked inwards
and said what if that were tohappen to us?
We're sitting on piles oftreasuries.
(46:31):
What if that were to happen tous?
So I believe that and that'sbeing led by China.
But we've heard, you know, itdoesn't take much to know, and I
follow this, but it doesn'ttake much to know that there
have been plenty of centralbanks around the world, mostly
in the European Europe, eastern,in Asia, in the Middle East and
(46:53):
so on, that have beendramatically accumulating gold
and I believe it's to build atrue reserve of liquid, of a
liquid asset money, true money,real money.
That push comes to shove, theycan use, anybody will take it
(47:16):
from them.
It's easy to transact.
We know that that's been beengoing on and has has that has
really kicked into high here inthe last couple of years.
So I mean that's a little bitof a roundabout thing.
I started talking about gold but, as I say, silver has been
money for 5000 years.
(47:36):
The last 50 years we've beenliving in an experiment fiat
money and if I think a littlebit philosophically about what
money is and what it should be,really it's it's a store of
value and it's a means oftransaction.
(47:57):
Those are the two basicfunctions of money.
Well, fiat paper is not a storeof money.
That is pretty clear.
It's down about 98% in the last50 years in terms of its buying
power.
He's a transaction you do havewith paper money.
It's readily accepted for nowand and it's, you know, it's
(48:20):
government decree, so you've gotto use it to transact etc.
But you know, I thought aboutthis when I wrote the book and I
thought about about what hashappened since.
You know we've had this.
You know we've had thisdevelopment of Bitcoin and all
these cryptocurrencies and thereis, there is a bit of a, a, I
(48:46):
guess, a hang up, if you want,but ultimately, ideally, what
you would have is some kind ofdigital money that was fully
securely backed by gold and orsilver or because you've got
you've got that, you know, multithousand year, I guess
(49:11):
confidence of something holdingits value, difficult to produce,
and therefore every new ouncethat comes out of the ground has
value.
Because it's difficult toproduce, effort has to go into
it, and then you have the easeof transaction, of transferring
value through some kind of acryptocurrency to anybody
(49:34):
anywhere, instant, almostinstantly, and what we call
frictionless.
So I almost no cost, and if youcan do it on something like a
blockchain, where you've got adecentralized ledger and
everyone has confidence that,yes, you know, this person or
this entity that I'm transactingwith is sending me this, this
(49:58):
value in this currency, then, asI say, that would be the
ultimate form of money.
So do I think we're going to getthere?
I don't know.
What I do know is that it isfor central planners to have
(50:18):
fiat is something that theywould not want to give up and
would not give up easily.
It would take a dramatic.
I think it really would take adramatic.
I'm not saying I'm not hopingfor it and I'm not saying we'll
get there, but I think that forthem to give up the power that
comes with fiat currency wouldtake a lot dramatic reset.
(50:42):
And I think if we got there andgold and or silver became
somehow backed a new form ofcurrency, then I think that
would be the ideal to have it insome form of precious metals
backed crypto.
It would be absolutely ideal.
(51:04):
But the real hiccup that youhave there is trust, right?
I can imagine you're smiling atit because you know where I'm
going with that and that is the.
That's the flame the ointment.
If you have that form of money,can you?
Will you have trust that you'resending these, this currency
(51:25):
around the world?
Are you comfortable acceptingit?
Is the is that physical silveror gold in that vault and you're
told is there?
Is it actually there?
And if you need to get it, canyou cash that currency in those
coins, those, those virtualcoins, and get that if you want
it?
And I think that will always besort of the issue if, if you
(51:50):
can do it, if if there wereprivate maybe private, ideally
private crypto currencies.
There still will always be kindof you know this doubt perhaps
in people's minds, but if youhave regular audits, if you have
confidence in the audits I mean, we're really going off on a
(52:13):
tangent here, but these arekinds of the kinds of things
that that the debates that wewould have to have around, that
kind of of a ranger.
Speaker 1 (52:24):
Counter party risk.
Exactly, and I start with thepremise that if the government's
involved in my currency, Iautomatically don't want it.
There's no in history.
You know, when you havedecentralized at least there's,
the levels of trust go up.
You know, the moredecentralized, the more
transparent, the more open.
(52:45):
Then yes, and I agree with youbecause I like the technology of
blockchain when it can be useddecentralized.
You know I do buy Bitcoin.
You know we talked last week onthe Bitcoin ETF, myself and
Stuart Englert, and justmanipulation is everywhere, and
we're, you know, those of us whofollow the precious metals
markets are seeing the BitcoinETF stuff the same skeptically,
(53:08):
the same way.
Well, so we could go on forever.
I want people to go read yourbook that's I did and I'm better
off for it.
And I want to say the title ofthe book again is the Great
Silver Bull crush inflation andprofit as the dollar dies.
That's a great title.
By the way, peter, peter Kraut,ladies and gentlemen, now you
tell people where they can findyou, and do you still have a
(53:30):
newsletter?
Do you have any kind of paidsubscription or anything like
that?
You have a website.
Speaker 2 (53:35):
I do.
So I've got a copy with me.
I'll just show it.
It's always good, I think, tohave a bit of a visual so you
can see what the what the booklooks like.
I didn't bring it with me, soit's the Great Silver Bull
actually, just as a little sidenote, last year I was approached
by a group in Germany and thebulls actually the books
(53:57):
actually available in German,nice, yeah, so that was kind of
fun.
You can find this on Amazon,it's available in print in
Kindle, it's available as anaudio book version on audible
etc.
So it's easy to get, it's easyto read and the idea was really
(54:20):
to bring the opportunity at whatI feel is a generational
opportunity to invest in silverand and everything that
surrounds it, the different waysto invest in it.
And I think at least thefeedback, as I say, that I've
gotten is that it's it's it's asimple, easy read that does give
you that overall view of theopportunity.
(54:41):
So now I also write aninvestment newsletter that that
is, from what I know, the onlysilver focused investment
newsletter out there.
It's called.
It's called SilverstockInvestor, so you can find that
at Silverstockinvestorcom.
I've partnered with GwenPreston, who writes her own
(55:03):
newsletter that focuses onjunior mining, and the website
is resource maven.
But if you want to find mynewsletter, it's
Silverstockinvestorcom.
You'll.
You'll see these othernewsletters posted there as well
, and other than that I'm on.
You can follow me on LinkedIn,on Twitter.
I do want to say about thenewsletter that that is
(55:26):
subscription based.
I'm out of Canada, so it's $49a month or 499 a year, which in
US dollars is probably somewherearound 350 or so a year.
$35 or no, yeah, about $35 USper month.
And I cover the wholeinvestment, silver investment
(55:48):
space everything from ETFs,silver backed ETFs, silver
mining ETFs, large silverroyalty and producing companies,
developing companies and thenall the way down to junior
explorers that are looking forsilver, and it's a relatively
small field there.
You know, when you look intothis in detail, you start to
(56:14):
realize there really are notthat many companies that focus
on finding silver.
It doesn't occur that easily inin, in what I'm going to say,
high enough concentrations thatmake it attractive to to mine
Most of the silver that we find.
Most of the deposits that thesecompanies have are going to be
in Latin America, in Mexico, inMexico.
In Mexico, mostly concentratedalong the western coast or the
(56:42):
western parts of the US, ofCanada.
You have some in places likePoland and Russia, a little bit
in Europe Western Europe, somein Australia, and that really
covers where silver is found, asI say, in interesting
concentrations.
You know, you don't have to takebig risks If you want to invest
(57:04):
in the companies that areinvolved in silver, and I give a
couple of examples.
So two of the bigger names inthis space are Pan American
Silver and then you have acompany that is a royalty
company called Silver Wheaton or, sorry, today it's called
Wheaton Precious Metals.
It used to be called SilverWheaton, and here are a couple
of interesting examples.
(57:25):
I have these in the book aswell, but from I believe it was,
I think from I believe it was2008 to 2011, wheaton Precious
Metals, which is a multi-billion, probably the largest public
company in the silver spaceperiod that you could invest in,
(57:46):
was up 17 times.
Its stock was up 17 times inthree years from 2008, and from
not even three years.
November of 2008 to April of2011,.
That stock was up 17 times.
So you don't have to take bigrisks to get really big payoffs
(58:07):
in the silver space.
But you know where you reallyhave sort of the driving
explosive potential gains is inthe juniors, of course, and
discoveries are rewarded.
And I'll give one sort of smallexample.
Just last year my subscribersgot into a company called
(58:27):
Hercules Silver which isexploring in Idaho actually, and
they hit a discovery andinitially we got in around 18
cents.
Ultimately the price went up toI think it was about $1.50 or
so Canadian.
So they were up about 800%eight times.
That has come back a little bitbut still remains very
(58:52):
attractive and they have areally, really good discovery.
So that gives you some idea ofyou know how these stocks can
actually explode.
But you do want to be careful ifyou go into the explorer side
of things because that is muchhigher risk.
You want to spread your moneyacross several names and, again,
you don't need to go into thatarea, but I do talk about them
(59:15):
if you're a bit in thenewsletter and everyone has to
know themselves and I say silvercan be is quite volatile, but
you need to make that volatilitywork for yourself.
If you're someone who is lowerrisk, that does not mean you
should not be exposed to silver.
I believe it's a question ofperhaps what form of silver and
(59:37):
if you go into the stock side orthe equity side, which risk
profile in terms of companiesthat you're comfortable with and
build your portfolio that way.
Speaker 1 (59:48):
Well, I'm definitely going to subscribe.
I'm going to do that and saythat website one more time.
Speaker 2 (59:53):
So that's Silverstockinvestorcom.
Speaker (59:56):
Silverstockinvestorcom .
Great Well, peter.
Again, thank you so much forbeing here.
Love the book.
Thanks for the content.
It was a fun conversation.
We could go on for hours.
We sure could.
We're not asking questions, butwe'll try to keep these things
within an hour.
Folks, go subscribe, go checkhim out by the book and I think
we're all going to have to beprepared for the next chapter in
(01:00:20):
the story, the saga that issilver, and I think it's going
to be an interesting ride.
All right, thank you, weappreciate you.
Folks.
Thanks for subscribing to thepodcast.
Be sure and check us out overon freeworldfm, the new stations
carrying us on Mondays.
All new show coming this Monday.
So 11 am Central Time Wise WolfGolden Crypto Show In a world
(01:00:45):
of bulls and bears, be the wolf.
See you next time.
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