October 8, 2025 • 31 mins
Kerry Lutz and John Rubino take a hard look at the shifting dynamics of gold and silver as inflation rises and fiat currencies continue to erode. John points to growing silver shortages—especially in Vietnam—that could spark panic buying and drive prices sharply higher. Both warn that manipulation in the silver market may finally be breaking down, setting the stage for major moves ahead. They discuss the danger of a paper silver default, Kerry’s real-world experience buying silver below spot prices, and the unique arbitrage opportunities that come with it. The conversation broadens to the global picture, from France’s unsustainable welfare system and ballooning debt to the U.S. government’s fiscal cliff and the looming threat of a shutdown. They close by examining how AI’s explosive growth and risky vendor financing could trigger the next shake-up in both tech and precious metals markets. Find John here: https://rubino.substack.com Find Kerry here :https://khlfsn.substack.com and here: https://inflation.cafe Kerry's New Book “The World According to Martin Armstrong – Conversations with the Master Forecaster” is now a #1 Best Seller on Amazon. . Get your copy here: https://amzn.to/4kuC5p5
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
This is the landscape of a currency reset. You know
when when the FIAD currency system ends and we go
to something new, like a gold standard or something else,
you know, some kind of sound money where the government
doesn't have the ability to borrow unlimited amounts and just
print the difference. Then we have to live within our needs,
which means government spending has to be cut by a
(00:21):
third to a half in most of these big countries.
Speaker 2 (00:24):
You are listening to Carrie Letz's Financial Survival Network, where
you get valuable information you just can't find anywhere else
to thrive in today's trying times. You need the Financial
Survival Network now more than ever. Go to Financial Survivalnetwork
dot com and get your free newsletter and gift. Financial
(00:44):
Survival Network now more than ever.
Speaker 3 (00:51):
Welcome you are listening to and watching the Financial Survival Network.
I'm your host, Carrie Letz. John Robino is back with us. John. Hey, first,
go to John Substack. It's Rabino dot substack dot com.
John was really ahead of the curve here getting onto substack.
(01:13):
I recently made the transition. I don't think about my
website anymore. I don't think about sponsors for it. I
don't think about when it breaks, what do I do
to make it go back up? I don't care about
any of that stuff, so I highly recommend it. And John,
you told me something pre call that shocked me that
(01:33):
in Vietnam they're selling metal on every street corner and
none of the booths have silver.
Speaker 1 (01:41):
Hey carry, Yeah, let's take a step back and look
at the precious metals market in general, because that's why
the Vietnam thing matters. Because gold just touched it's all
time inflation adjusted high, so it's never been higher no
matter how you measure it. So this is a rock
and bull market. And then silver is very close to
(02:04):
its nominal all time high fifty dollars an ounce, so
you know, it's really getting up there. And so a
lot of people are asking, Okay, is this the end
of this bull market? Are we going to bounce back
off the resistance there and go into a big correction
and are we going to get round tripped on our
stacks and stuff? And I think the answer in this
case is no. The longer term trend is in place
(02:28):
because those previous precious metals bull markets were kind of
about the business cycle of the time. You know, what
was going on in the nineteen seventies and how high
would inflation go and stuff like that, and the inflation
was transitorian back then, and so gold and silver went
back down. This time around, gold and silver are rising
(02:51):
because the fiat currency experiment is ending, which is a
much bigger deal. That is secular, that's epically secular. You
know that that is a whole new world being born
right now in finance, and we're nowhere near the peak
of that process because you know, the fiat currencies of
(03:12):
the world are still out there functioning, but they're they're
they're starting to deteriorate in an unstable, kind of hard
to predict way now where it's not smooth, and that's
what's spooking everybody. You know, the dollar is losing its value.
It's down by a ten percent in terms of real
(03:33):
things that you have to buy with gold, you know,
and that's just one year's deterioration, and it's continuing now.
What that means is that we probably have further to
go in the will market for precious metals right now.
You know, the long term trend is massively up, but
even the short term trend is looking pretty interesting. And
one of the ways you know that is like you said, Vietnam,
(03:56):
they're a society that owns a lot of gold, and
the government makes it easy by allowing stores just to
sell precious metals with minimal regulation. And so any story
you go into on the street in Vietnam might be
selling you gold and silver coins or bars, and right
now they're out of silver. You know, they've sold so
(04:16):
much silver that the supply can't keep up with demand.
And so a lot of these places are just out
of stock on the most popular silver coins and bars.
And that's the kind of thing that usually presages a
kind of parabolic spite driven by panic buying, because if
you want silver, you got to pay way up for
(04:38):
it now to get it right if you can't just
walk into a store and buy it. And so that's
the kind of sign that we're in the intermediate stages
of the boom market and we haven't really had our
parabolic spike yet. So I think if you're stacking, continue
to stack. Don't go crazy out there, but continue to
add to your pile of gold and silk and dollar
(05:01):
crust average or whatever did you do. Just keep on
doing it because the wind is still at your back
and we've got a ways to go before the resistance
starts pointing towards you know, a big correction or anything.
I don't see anything like that right this minute.
Speaker 3 (05:17):
I couldn't agree with him more. Look, it was just
a month ago, two months ago, I was buying a
silverette underspot. You know, nobody likes these Kennedy forty percent
half dollars. But in the meantime, I bought a bag
of them, one thousand dollars face value bag way back
in was it like two thousand and ten or nine,
(05:41):
after silver had crashed, when we had the great financial collapse,
you know, but we don't know from great financial collapses
in this swirld. But but now, like people, I bought
it for underspot under Milt, under melt value, you know,
a fifty cent piece that's forty percent silver. And now
(06:05):
those things are worth like six times what I paid
for them, even though there may be going for a
little underspot under milt or at milt, whereas ninety percent
might be going for a few percent above. But my
feeling is that when silver really gets tight, people aren't
going to care if the coin is forty percent or
(06:28):
ninety percent. They're just going to want it, and I
think Vietnam could very well be the precursor to that. John. Yeah.
Speaker 1 (06:36):
Yeah. When the supply of something dries up but its
prices is still rising so people fear missing out on it,
you get the potential for some really wild moves. And
I think silver is such a First of all, it's
a small market relative to a lot of other financial assets,
so there just isn't that much silver out there. It's
(06:59):
kind of thinly traded because a lot of people, you know,
especially stackers these days, you know, we don't trade or
we just buy it and put it away. So it's
taken off the market, and it's in deficit right now
as far as industrial demand goes. In other words, the
world's silver mines aren't producing enough silver to satisfy the
demand from solar panel makers and ev makers and the
(07:22):
military industrial complex around the world making missiles that have
silber in them, and that is vaporized when the missiles
blow up, you know, So we're not producing enough news
silver to satisfy the demand, and the existing stock piles
of silver out there are being depleted rapidly. So one
(07:42):
way this plays out, or one way this is revealed,
might be a default on a metals exchange like COMEX,
where you've got you've got a futures contract that allows
you to demand delivery of x amount of silver. You
take it in and say, okay, I'll take my and
they'll say sorry, we're going to have to give you cash.
(08:03):
And that's so you still get paid back, but it's
a default because they admitted they don't have enough silver
to cover the contracts, and that'll cause people just to panic.
If that happens, God that that will be amazing, because
you know, the industrial guys who need silver to produce
the expensive stuff they produce, they don't really have an
(08:25):
option of just sitting back and thinking, all right, I'll
wait till it goes down twenty dollars an ounce, because
maybe then you know, they can't make their cars or
whatever or right on be able to supply the missiles
to defense that they promised that. So you can't let
that happen. So you've got to buy the silver at
any price, and we're the situation is such that we
(08:46):
could see something like that sometime in the balance of
this year or next year.
Speaker 3 (08:50):
I think it's a definite. That's what Keith Neumeyer has
been talking about commercial signal fail. That's based what we're
talking about, where the paper market kind of just disappears,
It vaporizes before your very eyes, and then you're just
(09:10):
left with the physical market.
Speaker 1 (09:12):
Right yeah, I mean if the if the paper guys
cannot produce physical then what are they. You know, there's
just you know, a bunch of financial dufices playing games
with computer code. You know, it's just it's just signals
going back and forth. There's no physical reality to any
(09:32):
of it.
Speaker 3 (09:33):
And done that way for a while.
Speaker 1 (09:36):
Well, I mean, they've been able to manage to to
give metal to people who ask for it. There hasn't
been a physical default yet. But when that happens, that
completely changes the nature of an exchange like comes right.
I mean, if they if they don't have to come
up with much metal, that's one thing, But if they
can't come up with any that's a whole different thing.
(09:58):
And it's totally but something like that happens in the
not too distant future, and it'll look kind of like
the stores in Vietnam where all of a sudden everything's
out of stock, you know, and if you want it,
you got to pay way up because you can't go
through normal channels.
Speaker 3 (10:15):
Yeah, we've been waiting for this for like years here,
you know, and here, sure it's finally finally upon us,
and so many of you out there don't even believe
it because we thought we'd never see the day because look,
they've been controlling the price of silver for sixty plus years.
(10:36):
Arguably you could go back to the late eighteen hundreds
and the demonetization and William Jennings Bryant and all that,
but let's just say from nineteen sixty five when they
demonetize silver from the coinage, it's been manipulated from that
point forward. That's not a stretch. And now all of
(10:59):
us sudden the game is up, John.
Speaker 1 (11:03):
Yeah, yeah, well we're close to that. We're close to
the point where the old systems don't work anymore. And see,
you you know, you ideally would like to be fully
invested by then, but if you're not, you still don't
want to jump in with both feet because precious metals,
like a lot of markets these days, are very ball
(11:24):
little and you can get burned. So you know, the
time to have finished our buying would have been like
twenty twenty three. But still, well, whatever you've got you
should hold.
Speaker 3 (11:37):
I was just buying it for fun on eBay, just
to show people you could buy for less than spot,
because I'd wait till a Friday where silver went up
a dollar and then nobody, most of the sellers on
there were not adjusting their prices, so I would get
(11:58):
it at the pre you know, they'd be up there
for three or four days, silver went up to three
dollars an ounce, and they didn't adjust their prices, just
you know, just to prove, just to prove that it
could be done.
Speaker 1 (12:13):
And yeah, a career actually, you know, just going on
eBay and it's exploiting the who aren't in attention.
Speaker 3 (12:22):
Yeah, totally arbitraging it. And it was simple, you know,
like you just knew, like you looked on you could
pretty much figure out the melt value per dollar of
(12:43):
you know, of silver, and ninety percent was like at
twenty six, and forty percent was like at at twelve. Say,
I don't remember the exact numbers, but it was. It
was crazy and you know, like it just totally worked.
Now it could have easily not worked as well. You know,
(13:07):
I'm not the perfect at this game. And the cycles
they can really whipsaw you and you can really wind
up getting burned. But I felt like at this point, John,
you know, I wasn't betting the ranch on it. It
was more just like a fun activity, you know, and
(13:27):
it worked, so you can't beat that, right.
Speaker 1 (13:32):
What else I noticed was a couple of years ago,
a lot of friends wanted to sell their silver, yeah,
and they were willing to sell it at spot. I
bought a monster box off of a friend of siber
Eels at Spot, which is pretty hard to do in
a normal market, and three or four other people sold
me some silver then too, So I think there was
(13:53):
exhaustion at the same time things were just getting started,
there was exhaustion out there on the part of people
who had bought soon over in you know, two thousand
and two or something like that, and just been holding
it all this time. And then you know, it went
up for a while and then it went back down
and it's so boring, I need to get my cash out.
And that's kind of a sign of the mark up
(14:15):
a bottomn when people are just willing to go all right,
just take it away. I thought it was going to be,
you know, better than this, and it wasn't so And yeah,
so that was you know, it was kind of a
lucky break, yeah that around people like that, but it
was also a sign that something like today was going
to happen, you know, where where you get this long,
(14:36):
long upswing that then everybody wants to join and then
it really takes off. So you know, we're up big
today and both gold and silver. Yeah, well we were exactly.
Speaker 3 (14:46):
But yeah, every raid they've tried to bring it, you know,
whether we're tinfoil conspiracy, but just just assume that they
do raids and you'll see in the access market in
the early hour they slam it which is thinly traded
in Asia, and they slam it down a dollar and
(15:06):
then by the afternoon it's it's erased all its losses
and is up or is only down like five or
ten cents. And then they'll time that hitting the silver stocks,
they'll hit the sil the ETFs and the sil j
(15:28):
but it has no lasting effect. So that's uh, that's
pretty indicative I think of what's really going on here,
you know, and yeah, this is.
Speaker 1 (15:40):
This is completely different trading patterns than it used to
because it used to be there at like four o'clock
in the morning, somebody would just smash gold to silver
in the futures markets, but then it would they would
stay down for most of the day. That smash would
have spooked people and they didn't jump right back in.
But now you see the smash and then you see
(16:00):
a gradual increase in the price from there, and it
goes up, and it goes up, and it ends the
day up, even though somebody came in with a lot
of money in the futures market trying to knock gold
and silver down. So yeah, that's a bull market behavior.
Speaker 3 (16:14):
Who would do such a thing, selling inn selling losses,
making notes in trades by design?
Speaker 1 (16:22):
Why was it any JP Morgan Chase. Yeah, maybe JP
Morgan is just finally loaded up on enough silver that
they're ready to let it rip.
Speaker 3 (16:31):
So that kind of What about the reports that the
gold is pouring into the United States from Europe? I
don't know if you've heard that. We hadn't talked in
a while, but supposedly vest amounts of bars are coming here,
like tons and tons.
Speaker 1 (16:48):
Well, a lot of that stuff is terrorf related. They
just don't know, you know, how how it's going to
be to move metal around, and they want to get
ahead of it because maybe Trump's going to slap a
fifty percent terror on it from you know, starting next
month or something like that, and so that's part of it.
The other part is that Europe is a mess. Europe
is almost over as the continent that we once knew,
(17:11):
you know, And if you look at France, that was
on our list of things to talk about. So now
we could we could segue over there, because here's France's story. They,
you know, were a fairly rich country by basically any
measure twenty years ago or so, and they set themselves
up with really generous a social safety net and retirement
plans and things like that, where you retire at a
(17:33):
young age and you make basically a nice living off
of the government. And the lines just crossed. It used
to be that the average person would make more during
their working lifetime than when in retirement. But the line
just crossed where the average retiree now is set up
to make more during his thirty years of retirement than
(17:54):
the average person makes during their working lifetime. So they
basically set up a completely unsuc sustainable welfare system. So
they did that, and that requires massive increases in government spending.
So they let their deficits go up way beyond the
rules and the master treaty that define the European Union
(18:14):
and the euro It was supposed to be that you
were limited to a three percent of GDP deficit. Well,
France just moved through that. So they're racking up massive
debts and their interest rates are going up because the
blonde market doesn't trust them anymore. So the cost of
the debt is going up basically twice because the amount
of debt is going up and the interest on that
(18:36):
debt is going up, and France is basically and broke,
and so they can't keep a government in place because
the only thing a government can do now, if it's rational,
is try to scale back spending to prevent the fiscal
and monetary train from going off a cliff. And as
(18:57):
soon as they do that, all the French people hit
the streets and they get the government thrown out of office.
And that just happened where the most recent prime minister
was in power for like sixteen days and then he
had to quit. So France cannot fix its problems. It's
going broke in an accelerating rate. And it's one of
(19:19):
the so called success stories in the Eurozone because Normany
is a catastrophe for other reasons. You know, they just
destroyed their energy economy and that industrialize them. Now, while
that's happening, while these countries are engineering financial crises, their
open borders are letting so many people from so many
(19:42):
other cultures in that a lot of different parts of
Europe are becoming caliphates almost, you know, that are ruled
under very different rules than used to prevail in it,
like a liberal democratic, quasi capitalist society, which is what
we used to think of as Europe. So they've i
got a civil war on one hand, or maybe two
(20:02):
different civil wars, one the different cultures fighting each other,
the other the government fighting people who are demanding ever
increasing amounts of social spending. And you know, there's no
way the euro as a coherent reserve currency survives something
like that. So that's the next decade for Europe. They
are a catastrophe waiting to happen. And you know, it
(20:24):
could be that a lot of Europeans are shipping their
gold to the US because of that. They're looking for
a safe haven for storage of wealth and they're choosing
the US, although we're not exactly the most stable system
that you're ever going to see either. So but I
guess relative to Europe were okay. But you know, I
don't know where you hide, really, if you're extremely rich
(20:46):
and you're trying to protect half a billion dollars worth
of gold, you know, I wouldn't know where to tell
you to put it.
Speaker 3 (20:55):
Right now, I guess it comes to the US just
like it did before World War Two, right.
Speaker 1 (21:03):
Well, yeah, and that was a time when the US
was in relatively good shape and the rest of the
world was a mess. So there's you know, that's kind
of an analog. But the US is a mess too.
I mean, we we've got the same We've got the
kind of French problem going where we're borrowing insane amounts
of money and the interest on that debt is going
through the roof, and there's nothing we can do to
stop it because if we try to cut spending, then
(21:25):
whoever does that gets kicked out of office almost instantly.
And you know, the military budget is a trillion dollars.
So we have problems that are similar to France's. Their
big problem is the social spending. Our big problem is
the combination of the military industrial complex and social spending.
But either way, the currencies of countries like that can't
(21:50):
survive for long because the value of the currency starts
to fall, and then you have a choice of do
you raise interest rates to protect the currency, which blows
up your financial system, or do you just let it fall,
which blows up your financial system. And multiple countries in
the world are there right now. They are at that
decision point, and the US is not far from far behind.
(22:13):
So that's when I say the fiat currency experiment is ending.
That's basically what I mean. It's that this idea that
everybody has an unlimited printing press and they manage their
economies via creation of money out of thin air. That
whole thing is ending. And it's a phenomenally good thing
for gold and silver to take us back to where
we started, you know, and that kind of an environment.
(22:35):
Everybody wants real money, and they will throw unlimited amounts
of fake money, that is, fiat currencies at the real
money to get as much as they think they need.
And those are the things that are coming right now.
Speaker 3 (22:48):
The Minski moment is here. Yes, Hey, so what about
the government shutdown? Like nobody's even noticing it, right? You
noticed it was shut down? Well, you know, The government
shuts down all the time in the US. We have
that debt limit law, and that's always the lever that
they use when they're negotiating. We're going to shut down
(23:09):
the government unless you give us whatever we want. And
so the government shuts down for a little while and
then there's outrage, and then they cut the deal and
the government goes back online. What might be different about
at this time, though, is that a lot of people
around Trump love the idea of a government shutdown because
that lets them fire government workers with immunity. You know,
(23:33):
you can't take them to court when they're laying off
workers during a shutdown, but because you can legitimately say, hey,
well I don't have money to pay these guys, what
am I supposed to do? And so these guys get
to go in and clean house in a bunch of
government agencies now, and they actually are are kind of
enjoying that. So it could be that there isn't the
(23:54):
there isn't the urgency to cut a deal this time
around that there once was. You know, we could end
up with the Democrats begging trunk from the government by
by accepting their latest proposal of surrender, you know, because
they don't want a million government employees to be laid off.
That's a horrifying idea for the Democrat or their voter base. Yeah,
(24:19):
But for the Republicans, it's like, well, so what, you know,
they aren't going to vote for us anyhow, So who
cares whether they can feed their children or not?
Speaker 1 (24:28):
So we'll see here.
Speaker 3 (24:29):
Yeah, Well, the whole government government work is a form
of welfare, is kind of coming to an end now.
I think that's what we're seeing, and they're willing to
let it happen. And you know, the government union lobby
is not what it used to be. I think they've
(24:50):
laid off three hundred thousand, fired three hundred thousand government
employees so far federal government, and another one hundred thousand
are putting in their retirement papers now as we speak.
So we got all these buildings in downtown Washington, d C.
(25:11):
Maybe they can turn them into deportation centers or something. Well,
this is the landscape of a currency reset, you know,
when when the field currency system ends and we go
to something new, like a gold standard or something else.
You know, some kind of sound money where the government
doesn't have the ability to borrow unlimited amounts and just
(25:33):
print the difference. Then we have to live within our needs,
which means government spending has to be cut by a
third to a half in most of these big countries,
which is we can't have all those government employees, so.
Speaker 1 (25:45):
They're going to get fired. Regardless. Even if the government
starts back up tomorrow and everybody's rehired and everything, we
still have the currency reset, which is going to involve
a massive decrease in government spending and employment. So this
is coming regardless, and we don't know what the form
(26:06):
what we'll take, but it could be a government shut
down over the budget or it could be a currency reset.
Either way, one third of federal government employees are looking
for private sector work within the next few years.
Speaker 3 (26:20):
That's virtually baked in the cake, you know, has to be.
So what about AI here, like AI the Big Savior?
You see bumps in the road for it. Huh.
Speaker 1 (26:32):
Well, I wouldn't presume to have any idea what AI
is going to do in the next five years, because
it's doing amazing stuff right now. But you also have
people talking about the limitations of it and that you
literally can't make it much smarter than it is right now.
Because you hit kind of an event horizon where to
(26:53):
make it anything like mistake free, it takes more money
than there is on right now. You know, you just
you can't get it beyond a certain point. But the
point it's at right now is pretty astounding. It's doing
a lot, you know, it's taking a lot of college
or computer programming jobs, so that that avenue to job
(27:14):
security isn't there anymore. You can't just go learn the
code and then know you're going to work forever. And
it's doing a lot of other stuff, very interesting stuff.
But there's a business practice out there that is really
scary in the short run, and that is kind of
vendor financing right now, where say Nvidia, which is the
big chip maker in AI, invests a bunch of money
(27:37):
in open Ai, which is building a lot of AI
server farms data centers, and so then in order to
build more data centers, then open ai comes around and
buys computer chips off of Nvidia. So Nvidia is in
effect financing its own it's buying its own products, right
(28:00):
And businesses do that every once in a while. That's
kind of a common thing. You give a loan to
your customer so they can buy your stuff. You then
record that as sales and profits, and the debt gets
shuffled over to the balance sheet where nobody's looking. And
that works as long as your customer can pay back
(28:21):
the money that you've lent them. And where you're getting
into trouble it's where the customer goes bankrupt and then
all this debt that you thought was going to be
just paid back via profits and cash flow has to
be paid back some other way, and so you risk
going bankrupt too. So that's happening now in AI. And
(28:43):
you know, they've got so much money coming in from outside,
it seems reasonable. You know, if your equity market cap
is four and a half trillion dollars, you can throw
one hundred million dollars at vendor financing. It's a drock
in the bucket. But that's that's what that's what it's
like in really good times. But as soon as time
gets times get hard, those loans become really onerous liabilities
(29:08):
of the lender, and so we'll see, you know, it's
a dangerous thing that's happening. And equities, especially tech stocks,
are as richly valued as they've ever been in human history.
So based on historical measures evaluation. We're due for at
least a correction and probably a really nasty bear market.
(29:33):
And if we do get an equities downturn, then all
this vendor financing is going to become front page news.
You know, people are going to be wondering how that
was allowed to happen, and that won't be good for
stock prices when it happens.
Speaker 3 (29:46):
Yeah, that's for sure. You know. The one thing about
the AI is like the big companies using it, Like
you get open Ai, which is strictly just an AI company,
but obviously x which is using it at a grock,
and then you have Google with Gemini, Microsoft with Copilot,
(30:09):
and Meta with Facebook whatever the heck they call theirs,
and even Amazon is getting into the act. For them,
they're not AI first companies, so they're probably sustainable. But
for companies that are just like Claude, there's there's a
zillion just pure AI companies. How do they survive? Why
(30:32):
is there is any better than chat GPT? Well, interesting
times ahead. I guess we will get together again shortly,
and probably I expect the next time we talk John
that there will be either a massive fight to keep
silver under fifty dollars because that is the line in
(30:54):
the sand, and maybe gold will be over four thousand.
That I think is a layout up, but at some
point we didn't talk about it. The gold silver ratios
gota compress. Especially if gold is you can buy all
the gold you want as long as you're willing to
pay for it, but you can't buy silver because it's
(31:15):
just not there, regardless how much you're willing to buy. Anyways,
make sure you go over to johnsite Rabino dot substack
dot com and our site which just go to Financial
Survival Network dot com. It'll take you to our substack. John.
We will talk to you again soon. Be well.
Speaker 1 (31:33):
Thanks Carry you too, talk to you soon.
Speaker 2 (31:35):
Thanks for listening to carry Letz's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network
Speaker 1 (31:48):
Now more than ever
This is the landscape of a currency reset. You know
when when the FIAD currency system ends and we go
to something new, like a gold standard or something else,
you know, some kind of sound money where the government
doesn't have the ability to borrow unlimited amounts and just
print the difference. Then we have to live within our needs,
which means government spending has to be cut by a
(00:21):
third to a half in most of these big countries.
Speaker 2 (00:24):
You are listening to Carrie Letz's Financial Survival Network, where
you get valuable information you just can't find anywhere else
to thrive in today's trying times. You need the Financial
Survival Network now more than ever. Go to Financial Survivalnetwork
dot com and get your free newsletter and gift. Financial
(00:44):
Survival Network now more than ever.
Speaker 3 (00:51):
Welcome you are listening to and watching the Financial Survival Network.
I'm your host, Carrie Letz. John Robino is back with us. John. Hey, first,
go to John Substack. It's Rabino dot substack dot com.
John was really ahead of the curve here getting onto substack.
(01:13):
I recently made the transition. I don't think about my
website anymore. I don't think about sponsors for it. I
don't think about when it breaks, what do I do
to make it go back up? I don't care about
any of that stuff, so I highly recommend it. And John,
you told me something pre call that shocked me that
(01:33):
in Vietnam they're selling metal on every street corner and
none of the booths have silver.
Speaker 1 (01:41):
Hey carry, Yeah, let's take a step back and look
at the precious metals market in general, because that's why
the Vietnam thing matters. Because gold just touched it's all
time inflation adjusted high, so it's never been higher no
matter how you measure it. So this is a rock
and bull market. And then silver is very close to
(02:04):
its nominal all time high fifty dollars an ounce, so
you know, it's really getting up there. And so a
lot of people are asking, Okay, is this the end
of this bull market? Are we going to bounce back
off the resistance there and go into a big correction
and are we going to get round tripped on our
stacks and stuff? And I think the answer in this
case is no. The longer term trend is in place
(02:28):
because those previous precious metals bull markets were kind of
about the business cycle of the time. You know, what
was going on in the nineteen seventies and how high
would inflation go and stuff like that, and the inflation
was transitorian back then, and so gold and silver went
back down. This time around, gold and silver are rising
(02:51):
because the fiat currency experiment is ending, which is a
much bigger deal. That is secular, that's epically secular. You
know that that is a whole new world being born
right now in finance, and we're nowhere near the peak
of that process because you know, the fiat currencies of
(03:12):
the world are still out there functioning, but they're they're
they're starting to deteriorate in an unstable, kind of hard
to predict way now where it's not smooth, and that's
what's spooking everybody. You know, the dollar is losing its value.
It's down by a ten percent in terms of real
(03:33):
things that you have to buy with gold, you know,
and that's just one year's deterioration, and it's continuing now.
What that means is that we probably have further to
go in the will market for precious metals right now.
You know, the long term trend is massively up, but
even the short term trend is looking pretty interesting. And
one of the ways you know that is like you said, Vietnam,
(03:56):
they're a society that owns a lot of gold, and
the government makes it easy by allowing stores just to
sell precious metals with minimal regulation. And so any story
you go into on the street in Vietnam might be
selling you gold and silver coins or bars, and right
now they're out of silver. You know, they've sold so
(04:16):
much silver that the supply can't keep up with demand.
And so a lot of these places are just out
of stock on the most popular silver coins and bars.
And that's the kind of thing that usually presages a
kind of parabolic spite driven by panic buying, because if
you want silver, you got to pay way up for
(04:38):
it now to get it right if you can't just
walk into a store and buy it. And so that's
the kind of sign that we're in the intermediate stages
of the boom market and we haven't really had our
parabolic spike yet. So I think if you're stacking, continue
to stack. Don't go crazy out there, but continue to
add to your pile of gold and silk and dollar
(05:01):
crust average or whatever did you do. Just keep on
doing it because the wind is still at your back
and we've got a ways to go before the resistance
starts pointing towards you know, a big correction or anything.
I don't see anything like that right this minute.
Speaker 3 (05:17):
I couldn't agree with him more. Look, it was just
a month ago, two months ago, I was buying a
silverette underspot. You know, nobody likes these Kennedy forty percent
half dollars. But in the meantime, I bought a bag
of them, one thousand dollars face value bag way back
in was it like two thousand and ten or nine,
(05:41):
after silver had crashed, when we had the great financial collapse,
you know, but we don't know from great financial collapses
in this swirld. But but now, like people, I bought
it for underspot under Milt, under melt value, you know,
a fifty cent piece that's forty percent silver. And now
(06:05):
those things are worth like six times what I paid
for them, even though there may be going for a
little underspot under milt or at milt, whereas ninety percent
might be going for a few percent above. But my
feeling is that when silver really gets tight, people aren't
going to care if the coin is forty percent or
(06:28):
ninety percent. They're just going to want it, and I
think Vietnam could very well be the precursor to that. John. Yeah.
Speaker 1 (06:36):
Yeah. When the supply of something dries up but its
prices is still rising so people fear missing out on it,
you get the potential for some really wild moves. And
I think silver is such a First of all, it's
a small market relative to a lot of other financial assets,
so there just isn't that much silver out there. It's
(06:59):
kind of thinly traded because a lot of people, you know,
especially stackers these days, you know, we don't trade or
we just buy it and put it away. So it's
taken off the market, and it's in deficit right now
as far as industrial demand goes. In other words, the
world's silver mines aren't producing enough silver to satisfy the
demand from solar panel makers and ev makers and the
(07:22):
military industrial complex around the world making missiles that have
silber in them, and that is vaporized when the missiles
blow up, you know, So we're not producing enough news
silver to satisfy the demand, and the existing stock piles
of silver out there are being depleted rapidly. So one
(07:42):
way this plays out, or one way this is revealed,
might be a default on a metals exchange like COMEX,
where you've got you've got a futures contract that allows
you to demand delivery of x amount of silver. You
take it in and say, okay, I'll take my and
they'll say sorry, we're going to have to give you cash.
(08:03):
And that's so you still get paid back, but it's
a default because they admitted they don't have enough silver
to cover the contracts, and that'll cause people just to panic.
If that happens, God that that will be amazing, because
you know, the industrial guys who need silver to produce
the expensive stuff they produce, they don't really have an
(08:25):
option of just sitting back and thinking, all right, I'll
wait till it goes down twenty dollars an ounce, because
maybe then you know, they can't make their cars or
whatever or right on be able to supply the missiles
to defense that they promised that. So you can't let
that happen. So you've got to buy the silver at
any price, and we're the situation is such that we
(08:46):
could see something like that sometime in the balance of
this year or next year.
Speaker 3 (08:50):
I think it's a definite. That's what Keith Neumeyer has
been talking about commercial signal fail. That's based what we're
talking about, where the paper market kind of just disappears,
It vaporizes before your very eyes, and then you're just
(09:10):
left with the physical market.
Speaker 1 (09:12):
Right yeah, I mean if the if the paper guys
cannot produce physical then what are they. You know, there's
just you know, a bunch of financial dufices playing games
with computer code. You know, it's just it's just signals
going back and forth. There's no physical reality to any
(09:32):
of it.
Speaker 3 (09:33):
And done that way for a while.
Speaker 1 (09:36):
Well, I mean, they've been able to manage to to
give metal to people who ask for it. There hasn't
been a physical default yet. But when that happens, that
completely changes the nature of an exchange like comes right.
I mean, if they if they don't have to come
up with much metal, that's one thing, But if they
can't come up with any that's a whole different thing.
(09:58):
And it's totally but something like that happens in the
not too distant future, and it'll look kind of like
the stores in Vietnam where all of a sudden everything's
out of stock, you know, and if you want it,
you got to pay way up because you can't go
through normal channels.
Speaker 3 (10:15):
Yeah, we've been waiting for this for like years here,
you know, and here, sure it's finally finally upon us,
and so many of you out there don't even believe
it because we thought we'd never see the day because look,
they've been controlling the price of silver for sixty plus years.
(10:36):
Arguably you could go back to the late eighteen hundreds
and the demonetization and William Jennings Bryant and all that,
but let's just say from nineteen sixty five when they
demonetize silver from the coinage, it's been manipulated from that
point forward. That's not a stretch. And now all of
(10:59):
us sudden the game is up, John.
Speaker 1 (11:03):
Yeah, yeah, well we're close to that. We're close to
the point where the old systems don't work anymore. And see,
you you know, you ideally would like to be fully
invested by then, but if you're not, you still don't
want to jump in with both feet because precious metals,
like a lot of markets these days, are very ball
(11:24):
little and you can get burned. So you know, the
time to have finished our buying would have been like
twenty twenty three. But still, well, whatever you've got you
should hold.
Speaker 3 (11:37):
I was just buying it for fun on eBay, just
to show people you could buy for less than spot,
because I'd wait till a Friday where silver went up
a dollar and then nobody, most of the sellers on
there were not adjusting their prices, so I would get
(11:58):
it at the pre you know, they'd be up there
for three or four days, silver went up to three
dollars an ounce, and they didn't adjust their prices, just
you know, just to prove, just to prove that it
could be done.
Speaker 1 (12:13):
And yeah, a career actually, you know, just going on
eBay and it's exploiting the who aren't in attention.
Speaker 3 (12:22):
Yeah, totally arbitraging it. And it was simple, you know,
like you just knew, like you looked on you could
pretty much figure out the melt value per dollar of
(12:43):
you know, of silver, and ninety percent was like at
twenty six, and forty percent was like at at twelve. Say,
I don't remember the exact numbers, but it was. It
was crazy and you know, like it just totally worked.
Now it could have easily not worked as well. You know,
(13:07):
I'm not the perfect at this game. And the cycles
they can really whipsaw you and you can really wind
up getting burned. But I felt like at this point, John,
you know, I wasn't betting the ranch on it. It
was more just like a fun activity, you know, and
(13:27):
it worked, so you can't beat that, right.
Speaker 1 (13:32):
What else I noticed was a couple of years ago,
a lot of friends wanted to sell their silver, yeah,
and they were willing to sell it at spot. I
bought a monster box off of a friend of siber
Eels at Spot, which is pretty hard to do in
a normal market, and three or four other people sold
me some silver then too, So I think there was
(13:53):
exhaustion at the same time things were just getting started,
there was exhaustion out there on the part of people
who had bought soon over in you know, two thousand
and two or something like that, and just been holding
it all this time. And then you know, it went
up for a while and then it went back down
and it's so boring, I need to get my cash out.
And that's kind of a sign of the mark up
(14:15):
a bottomn when people are just willing to go all right,
just take it away. I thought it was going to be,
you know, better than this, and it wasn't so And yeah,
so that was you know, it was kind of a
lucky break, yeah that around people like that, but it
was also a sign that something like today was going
to happen, you know, where where you get this long,
(14:36):
long upswing that then everybody wants to join and then
it really takes off. So you know, we're up big
today and both gold and silver. Yeah, well we were exactly.
Speaker 3 (14:46):
But yeah, every raid they've tried to bring it, you know,
whether we're tinfoil conspiracy, but just just assume that they
do raids and you'll see in the access market in
the early hour they slam it which is thinly traded
in Asia, and they slam it down a dollar and
(15:06):
then by the afternoon it's it's erased all its losses
and is up or is only down like five or
ten cents. And then they'll time that hitting the silver stocks,
they'll hit the sil the ETFs and the sil j
(15:28):
but it has no lasting effect. So that's uh, that's
pretty indicative I think of what's really going on here,
you know, and yeah, this is.
Speaker 1 (15:40):
This is completely different trading patterns than it used to
because it used to be there at like four o'clock
in the morning, somebody would just smash gold to silver
in the futures markets, but then it would they would
stay down for most of the day. That smash would
have spooked people and they didn't jump right back in.
But now you see the smash and then you see
(16:00):
a gradual increase in the price from there, and it
goes up, and it goes up, and it ends the
day up, even though somebody came in with a lot
of money in the futures market trying to knock gold
and silver down. So yeah, that's a bull market behavior.
Speaker 3 (16:14):
Who would do such a thing, selling inn selling losses,
making notes in trades by design?
Speaker 1 (16:22):
Why was it any JP Morgan Chase. Yeah, maybe JP
Morgan is just finally loaded up on enough silver that
they're ready to let it rip.
Speaker 3 (16:31):
So that kind of What about the reports that the
gold is pouring into the United States from Europe? I
don't know if you've heard that. We hadn't talked in
a while, but supposedly vest amounts of bars are coming here,
like tons and tons.
Speaker 1 (16:48):
Well, a lot of that stuff is terrorf related. They
just don't know, you know, how how it's going to
be to move metal around, and they want to get
ahead of it because maybe Trump's going to slap a
fifty percent terror on it from you know, starting next
month or something like that, and so that's part of it.
The other part is that Europe is a mess. Europe
is almost over as the continent that we once knew,
(17:11):
you know, And if you look at France, that was
on our list of things to talk about. So now
we could we could segue over there, because here's France's story. They,
you know, were a fairly rich country by basically any
measure twenty years ago or so, and they set themselves
up with really generous a social safety net and retirement
plans and things like that, where you retire at a
(17:33):
young age and you make basically a nice living off
of the government. And the lines just crossed. It used
to be that the average person would make more during
their working lifetime than when in retirement. But the line
just crossed where the average retiree now is set up
to make more during his thirty years of retirement than
(17:54):
the average person makes during their working lifetime. So they
basically set up a completely unsuc sustainable welfare system. So
they did that, and that requires massive increases in government spending.
So they let their deficits go up way beyond the
rules and the master treaty that define the European Union
(18:14):
and the euro It was supposed to be that you
were limited to a three percent of GDP deficit. Well,
France just moved through that. So they're racking up massive
debts and their interest rates are going up because the
blonde market doesn't trust them anymore. So the cost of
the debt is going up basically twice because the amount
of debt is going up and the interest on that
(18:36):
debt is going up, and France is basically and broke,
and so they can't keep a government in place because
the only thing a government can do now, if it's rational,
is try to scale back spending to prevent the fiscal
and monetary train from going off a cliff. And as
(18:57):
soon as they do that, all the French people hit
the streets and they get the government thrown out of office.
And that just happened where the most recent prime minister
was in power for like sixteen days and then he
had to quit. So France cannot fix its problems. It's
going broke in an accelerating rate. And it's one of
(19:19):
the so called success stories in the Eurozone because Normany
is a catastrophe for other reasons. You know, they just
destroyed their energy economy and that industrialize them. Now, while
that's happening, while these countries are engineering financial crises, their
open borders are letting so many people from so many
(19:42):
other cultures in that a lot of different parts of
Europe are becoming caliphates almost, you know, that are ruled
under very different rules than used to prevail in it,
like a liberal democratic, quasi capitalist society, which is what
we used to think of as Europe. So they've i
got a civil war on one hand, or maybe two
(20:02):
different civil wars, one the different cultures fighting each other,
the other the government fighting people who are demanding ever
increasing amounts of social spending. And you know, there's no
way the euro as a coherent reserve currency survives something
like that. So that's the next decade for Europe. They
are a catastrophe waiting to happen. And you know, it
(20:24):
could be that a lot of Europeans are shipping their
gold to the US because of that. They're looking for
a safe haven for storage of wealth and they're choosing
the US, although we're not exactly the most stable system
that you're ever going to see either. So but I
guess relative to Europe were okay. But you know, I
don't know where you hide, really, if you're extremely rich
(20:46):
and you're trying to protect half a billion dollars worth
of gold, you know, I wouldn't know where to tell
you to put it.
Speaker 3 (20:55):
Right now, I guess it comes to the US just
like it did before World War Two, right.
Speaker 1 (21:03):
Well, yeah, and that was a time when the US
was in relatively good shape and the rest of the
world was a mess. So there's you know, that's kind
of an analog. But the US is a mess too.
I mean, we we've got the same We've got the
kind of French problem going where we're borrowing insane amounts
of money and the interest on that debt is going
through the roof, and there's nothing we can do to
stop it because if we try to cut spending, then
(21:25):
whoever does that gets kicked out of office almost instantly.
And you know, the military budget is a trillion dollars.
So we have problems that are similar to France's. Their
big problem is the social spending. Our big problem is
the combination of the military industrial complex and social spending.
But either way, the currencies of countries like that can't
(21:50):
survive for long because the value of the currency starts
to fall, and then you have a choice of do
you raise interest rates to protect the currency, which blows
up your financial system, or do you just let it fall,
which blows up your financial system. And multiple countries in
the world are there right now. They are at that
decision point, and the US is not far from far behind.
(22:13):
So that's when I say the fiat currency experiment is ending.
That's basically what I mean. It's that this idea that
everybody has an unlimited printing press and they manage their
economies via creation of money out of thin air. That
whole thing is ending. And it's a phenomenally good thing
for gold and silver to take us back to where
we started, you know, and that kind of an environment.
(22:35):
Everybody wants real money, and they will throw unlimited amounts
of fake money, that is, fiat currencies at the real
money to get as much as they think they need.
And those are the things that are coming right now.
Speaker 3 (22:48):
The Minski moment is here. Yes, Hey, so what about
the government shutdown? Like nobody's even noticing it, right? You
noticed it was shut down? Well, you know, The government
shuts down all the time in the US. We have
that debt limit law, and that's always the lever that
they use when they're negotiating. We're going to shut down
(23:09):
the government unless you give us whatever we want. And
so the government shuts down for a little while and
then there's outrage, and then they cut the deal and
the government goes back online. What might be different about
at this time, though, is that a lot of people
around Trump love the idea of a government shutdown because
that lets them fire government workers with immunity. You know,
(23:33):
you can't take them to court when they're laying off
workers during a shutdown, but because you can legitimately say, hey,
well I don't have money to pay these guys, what
am I supposed to do? And so these guys get
to go in and clean house in a bunch of
government agencies now, and they actually are are kind of
enjoying that. So it could be that there isn't the
(23:54):
there isn't the urgency to cut a deal this time
around that there once was. You know, we could end
up with the Democrats begging trunk from the government by
by accepting their latest proposal of surrender, you know, because
they don't want a million government employees to be laid off.
That's a horrifying idea for the Democrat or their voter base. Yeah,
(24:19):
But for the Republicans, it's like, well, so what, you know,
they aren't going to vote for us anyhow, So who
cares whether they can feed their children or not?
Speaker 1 (24:28):
So we'll see here.
Speaker 3 (24:29):
Yeah, Well, the whole government government work is a form
of welfare, is kind of coming to an end now.
I think that's what we're seeing, and they're willing to
let it happen. And you know, the government union lobby
is not what it used to be. I think they've
(24:50):
laid off three hundred thousand, fired three hundred thousand government
employees so far federal government, and another one hundred thousand
are putting in their retirement papers now as we speak.
So we got all these buildings in downtown Washington, d C.
(25:11):
Maybe they can turn them into deportation centers or something. Well,
this is the landscape of a currency reset, you know,
when when the field currency system ends and we go
to something new, like a gold standard or something else.
You know, some kind of sound money where the government
doesn't have the ability to borrow unlimited amounts and just
(25:33):
print the difference. Then we have to live within our needs,
which means government spending has to be cut by a
third to a half in most of these big countries,
which is we can't have all those government employees, so.
Speaker 1 (25:45):
They're going to get fired. Regardless. Even if the government
starts back up tomorrow and everybody's rehired and everything, we
still have the currency reset, which is going to involve
a massive decrease in government spending and employment. So this
is coming regardless, and we don't know what the form
(26:06):
what we'll take, but it could be a government shut
down over the budget or it could be a currency reset.
Either way, one third of federal government employees are looking
for private sector work within the next few years.
Speaker 3 (26:20):
That's virtually baked in the cake, you know, has to be.
So what about AI here, like AI the Big Savior?
You see bumps in the road for it. Huh.
Speaker 1 (26:32):
Well, I wouldn't presume to have any idea what AI
is going to do in the next five years, because
it's doing amazing stuff right now. But you also have
people talking about the limitations of it and that you
literally can't make it much smarter than it is right now.
Because you hit kind of an event horizon where to
(26:53):
make it anything like mistake free, it takes more money
than there is on right now. You know, you just
you can't get it beyond a certain point. But the
point it's at right now is pretty astounding. It's doing
a lot, you know, it's taking a lot of college
or computer programming jobs, so that that avenue to job
(27:14):
security isn't there anymore. You can't just go learn the
code and then know you're going to work forever. And
it's doing a lot of other stuff, very interesting stuff.
But there's a business practice out there that is really
scary in the short run, and that is kind of
vendor financing right now, where say Nvidia, which is the
big chip maker in AI, invests a bunch of money
(27:37):
in open Ai, which is building a lot of AI
server farms data centers, and so then in order to
build more data centers, then open ai comes around and
buys computer chips off of Nvidia. So Nvidia is in
effect financing its own it's buying its own products, right
(28:00):
And businesses do that every once in a while. That's
kind of a common thing. You give a loan to
your customer so they can buy your stuff. You then
record that as sales and profits, and the debt gets
shuffled over to the balance sheet where nobody's looking. And
that works as long as your customer can pay back
(28:21):
the money that you've lent them. And where you're getting
into trouble it's where the customer goes bankrupt and then
all this debt that you thought was going to be
just paid back via profits and cash flow has to
be paid back some other way, and so you risk
going bankrupt too. So that's happening now in AI. And
(28:43):
you know, they've got so much money coming in from outside,
it seems reasonable. You know, if your equity market cap
is four and a half trillion dollars, you can throw
one hundred million dollars at vendor financing. It's a drock
in the bucket. But that's that's what that's what it's
like in really good times. But as soon as time
gets times get hard, those loans become really onerous liabilities
(29:08):
of the lender, and so we'll see, you know, it's
a dangerous thing that's happening. And equities, especially tech stocks,
are as richly valued as they've ever been in human history.
So based on historical measures evaluation. We're due for at
least a correction and probably a really nasty bear market.
(29:33):
And if we do get an equities downturn, then all
this vendor financing is going to become front page news.
You know, people are going to be wondering how that
was allowed to happen, and that won't be good for
stock prices when it happens.
Speaker 3 (29:46):
Yeah, that's for sure. You know. The one thing about
the AI is like the big companies using it, Like
you get open Ai, which is strictly just an AI company,
but obviously x which is using it at a grock,
and then you have Google with Gemini, Microsoft with Copilot,
(30:09):
and Meta with Facebook whatever the heck they call theirs,
and even Amazon is getting into the act. For them,
they're not AI first companies, so they're probably sustainable. But
for companies that are just like Claude, there's there's a
zillion just pure AI companies. How do they survive? Why
(30:32):
is there is any better than chat GPT? Well, interesting
times ahead. I guess we will get together again shortly,
and probably I expect the next time we talk John
that there will be either a massive fight to keep
silver under fifty dollars because that is the line in
(30:54):
the sand, and maybe gold will be over four thousand.
That I think is a layout up, but at some
point we didn't talk about it. The gold silver ratios
gota compress. Especially if gold is you can buy all
the gold you want as long as you're willing to
pay for it, but you can't buy silver because it's
(31:15):
just not there, regardless how much you're willing to buy. Anyways,
make sure you go over to johnsite Rabino dot substack
dot com and our site which just go to Financial
Survival Network dot com. It'll take you to our substack. John.
We will talk to you again soon. Be well.
Speaker 1 (31:33):
Thanks Carry you too, talk to you soon.
Speaker 2 (31:35):
Thanks for listening to carry Letz's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network
Speaker 1 (31:48):
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