Mike Maharrey: Greetings. I’m Mike Maharrey, an analyst and reporter here at Money Metals, and I’m thrilled to be joined once again today by Greg Weldon. Greg has a long resume and I’m not going to read all of it, but it includes stints as a floor trader, an institutional futures broker, a hedge fund manager, CTA. He’s the producer of independent global macro market research and an all-around nice guy. How you doing?

Greg Weldon: Doing great, man. How about yourself?

Mike Maharrey: Doing well, man. I tell you what, it’s hard to even know where to start with everything that’s going on in the precious metals markets right now. So let’s just kind of start with the basics. We’ve seen this rapid rise in both silver and gold prices today. We’ve had gold over $4,300 silver broke $54 today, and I’m starting to hear some people out there talking about bubble oversold, overpriced. Do you think gold and silver are in bubble territory right now?

Greg Weldon: Man, I mean that’s the $64 million question that I have. Actually clients that are gold bugs calling me and I don’t consider myself a gold bug. I’ll be long, short, gold, I’ll be bearish. I don’t care. I’m not a perma-bull, but they’re calling me now. I’m wondering whether they should liquidate and I find it interesting because you could absolutely suggest it’s a bubble. I mean, just based on the price increases. On the other hand, you could say this is still early stage. So, this is what makes it very difficult here to try and determine what’s happening. I would kind of go back to the drawing board almost and ask ourselves first, how do we get here? It’s not a speculative fervor yet, it just isn’t. This is still open interest in the futures contracts pretty dang low. I mean it really hasn’t expanded that much.

The catalyst for the move that we’re seeing now was in fact BRICS unit buying countries that were dumping dollars and taking those dollar proceeds, buying gold, having the gold shipped locally, draining the vaults, had some tightness, so on and so forth. You could make a case that this is the beginning of the unwinding of the great paper shorts in these markets that have been manipulated for a long time. That has a ring of truth to it as well. But then I would say, look, this move has not been driven by any kind of serious or severe decline in the dollar. It’s not speculative in nature. You’ve had gold and other currencies triple or quadruple in those currency terms. We haven’t seen that in dollar terms yet. So you can make an argument either way. You really could. So, it’s almost like this is a day-by-day thing and we got stopped out of our silver positions.

And as futures traders, when you’re talking about $50 silver and having $3 moves a day, one contract that’s 15-grand a contract, even me, our minimum account size is a million dollars. I don’t risk a percent and a half on any one trade. I want half or 1% of risk. And that’s tough to find here. So, it’s made the markets much more difficult in terms of managing the risk. So the question of whether it’s bubble issues or not becomes even more important because you could get here if it is and you’re wrong. I would say that a couple of things. Number one, I did a recent report and I’m happy to send any of these recent reports to your listeners called in something else We trust it’s always been in God we trust. And on the dollar bill it says, in God we trust and we’re not, look, God is not paying us back $36 trillion.

It just isn’t. So really, it’s in the dollar and in the US Treasury and in the US government that we trust, but we don’t anymore. I mean, how long have they lied to us? Whether it be alien coverups, the Vietnamese war, this whole dynamic around weapons of mass destruction; it doesn’t matter. They don’t really tell us the truth. And what they’ve done is, okay, look, borrow $36 trillion in the name of we the people. We owe that money to ourselves. We also have bought $28 trillion of that debt ourselves. We owe this money to ourselves. And what they have done is you look at the budget numbers in the last fiscal year, there were three months where they spent twice what they took in. It’s become so irresponsible in terms of the spending and how they lie to us about where the spending is going and how Trump has uncovered some of these things around how really superfluous the spending has been and how wasteful this spending has been.

It’s a lack of trust in the dollar. Not only that, it gets all the way back to Bretton Woods, the rights of Senior Ridge and the degree to which this trade bullying and honestly, you need something on trade, you need to do something about it. And some bullying tactics were valid, but the degree to which you have used these tactics and reciprocal terrorists and trade sanctions and asset seizures have pushed people away from the dollar when this is already happening naturally because China is three to two times average monthly trade dominance in the world over the US now. So to suggest that maybe trades should be priced in renminbi is not really that outrageous because they’re the major trader in the world. Alright, this all ties back to the bricks and how we don’t hear about it much anymore, but if you don’t think in the back rooms in these countries that they’re not pushing harder and harder and have more of a sense of urgency to get this done, you’re fooling yourself because the trust in the dollar is faltering here.

And that to me is the biggest thing. What are you going to trust in you going to trust in stocks? Corporate America lies as much as does the government. It’s you can’t trust anybody anymore. I mean, I always go back to the Verizon phone and I like Verizon, it’s one of the better companies, frankly. But when I buy an unlimited package for my daughter who’s now streaming movies from her phone instead of getting cable and I get hit with the $900 usage bill for data, and I said, but I have the unlimited package. And I’m not kidding you when they told me, well, you have unlimited, but you don’t have above unlimited or beyond unlimited. And it’s like, wait a minute, do you know the meaning of the freaking word unlimited? Alright, the advertising on TV is just so out of control. Everything. The chaos, the politics, the violence, these cities where they use taxpayer money to house illegal immigrants, it’s insanity, man.

Why would anyone trust the dollar right now? We’re the world’s biggest debtor nation. We’re pushing people away from it. So from that context, I would say no, it’s not a bubble and no silver at $54 is on its way to a hundred bucks and that, no, this is still really early stage. So you can make a case either way. The risk would be if you have a meltdown in stocks that all asset prices get sold and now you are in the territory where there was enough money in gold and silver, especially in the mining shares where if stocks were to get hit, and I think you’re very close to a major selloff in the US equity market. We could talk about that. I call it the Tom Cruise market right now. If you remember the movie Mission Impossible, where he is hanging by a few fingers from a cliff? That’s the US stock market to me right now, right?

You don’t have the consumer, there’s no the XLY, the XRT, these things are breaking down relative to the S&P 500 and have not confirmed the new highs. This is AI chips very narrow and this dynamic is not sustainable in terms of the underlying economy where consumer now spending the consumption expenditures are more than disposable income every month. Now you’re talking about savings that is less than credit card debt. You’re talking about delinquency rates that are second highest in history behind only 2008, 2009, and you’re talking about the third only year over year, 12 month revolving net change, negative in revolving credit and the only other times where the pandemic in 2008, 2009. So to me to suggest the stock market here is going to keep plowing higher, you need a lower dollar, and right now the dollar’s not declining anymore. So to me, that’s the risk for metals here.

And I do believe you will have some sign and some little sliver of time if you see the equity market begin to sell off. And frankly, believe it or not, to me Bitcoin could be a leading indicator for the equity market. It’s been equitized, okay? You remember Bitcoin, I think I’ve said this on your show before. Originally Bitcoin was like, we don’t want to meet the dollar, we don’t want to be gold, but we’re going to symbolize ourselves with a gold coin with a B dollar sign. I mean, come on, give me a break. Then it’s like, we don’t want to be regulated until people got hundreds of millions of dollars of Bitcoin stolen. Now we want regulation. They said they don’t want it to be mainstream. And now whether they’re an ETF and everyone owns it through ETFs, alright? So to this degree, the correlation between Bitcoin and the s and p five hundreds become extremely tight and it has become a leading indicator.

So if you look at the consumer, look at Bitcoin, you look at what the bond market of course has done, which really hasn’t impacted stocks at all, where in the past a 5% 30-year would’ve mattered. I think there’s a lot of risk to stocks, which then imposes some degree of risk on the precious metals. But to say it’s a bubble that’s about to collapse and it’s going to be over, I don’t know, because you remember what happened in 2008? Yeah, gold went down 25%. That was a lot less than stocks did, and gold bounced back first and ferociously. I kind of could see some kind of scenario like that. So to me it’s either bubble issues and you’ll have a great buying opportunity, which is kind of part of what I hope for because who’s going to buy it up here? The risk is too big.

Mike Maharrey: Yeah. Yeah, that all absolutely makes sense. It’s interesting to me thinking about the kind of bubble term. It’s interesting that a lot of the big banks, the Goldmans, the BoAs, they’re upping their gold forecast for next year. Now, of course, part of the problem is that the gold price has already surpassed a lot of those forecasts, but the mainstream still seems they’re not screaming bubbles. So, what do you make of this mainstream scramble to kind of up these forecasts?

Greg Weldon: Well, you have seen this, and it’s an interesting point because there was a day last week where I finished working and I was on the couch and I had Bloomberg on, I fell asleep for a little while and I woke up and when I fell asleep, there was someone from one of the major banks talking about gold at $4,000. This was before it hit $4,000. It was still like $3,680-ish or so, still below $3,700. And I woke up, and I swear to God, there was somebody that was a specific at a stock market house that has really nothing to do with even macroeconomics, right? Not a bank. And there’s a woman on who was young, and frankly she didn’t know what she sounded to me. She didn’t have a lot of experience, frankly, and she was talking about gold in $4,000. Everyone needs to have gold.

Now, if you were to have, and we talked about this last time we were on, and probably the time before that, maybe even the time before that, because talk about it all year, that this would be a market where you would have a rotation of Wall Street money come in. We’ve seen that in the mining shares. They have outperformed even Nvidia for crying out loud in most recent period of time. And I said, if you remember that people end up chasing this market higher because they don’t own enough and they’re kind of in that phase. Now the question is how far does that go? But the degree to which when this woman comes out and starts talking about gold at $4,000 and this, that, and the other thing, it was one of those moments where it was just like, oh shit, maybe this is a problem that this woman is on, bullish on gold now, and I’m not kidding you, within a half an hour, I got a text from my largest money management client guy with a lot of money with me wanting to know whether he should start liquidating his mining shares.

And that to me was kind of a tell. I have this kind of gut feel and this guy calls me and he’s a really smart guy, and I’m seeing this on TV. And it’s like, okay, well the taxi cab drivers in New York must be day trading gold because this is kind of like all those anecdotal kind of instinctual signs. Of course, then gold went $200 higher in a very short period of time. So I think that it probably has higher to go, but the risk here, you can’t buy it here if you’re not already long, you can’t buy it here. To me, that’s the problem.

Mike Maharrey: It’s interesting to me. I think back just not really long ago, maybe two years ago, if you talked about $4,000 or $5,000 gold that was tinfoil hat stuff, and all of a sudden it’s mainstream.

Greg Weldon: I remember in 2008, 2007, I wrote my book on gold, and it was trading around $400, $420. And you remember in 2007, and I said, the fed will monetize government debt, which was considered monetary heresy at the time. You were a nutjob if you said something like that. And I did a book tour and I was on Squawk Box with Kernan and Mark Haines at the time, and I said, yeah, the Fed will monetize debt and gold will go to 1200. And Joe Kernan called me a nut job on national television. One of these guys says, the fed’s going to print money and gold’s going to quadruple in price. And guess what happened? This is exactly what happened. Sometimes you got to wear the tinfoil hat

If you’re going to see the future and have a vision outside of the norm, and you can never dismiss any possibilities in terms of how high prices can go. I always say this, we’ve seen it in coffee, we’ve seen it in cocoa, we’ve seen it in OJ, and now we’re seeing it in gold and silver.

Mike Maharrey: Yeah, it’s funny that you mentioned the monetization of the debt. I just wrote an article today where I referenced Ben Bernanke back in 2008 sitting in front of Congress swearing that, whoa, no, no, we’re not monetizing the debt right now. This is temporary. Here we are 20 years later.

Greg Weldon: And that was a big turning point when they did that in 2008, because what happened, this is when we entered the debt black hole. I’ve talked about this before too. It’s pretty simple. It’s a simple thing, but it’s much more complicated. But if you look at US public debt, we’re not even talking household debt, which adds another 18 trillion onto the total. And then you look at GDP, I mean, you’ve been pretty steady for decades in the growth in the two until 2008 when they started monetizing debt. You pushed the debt above GDP and now you’re about 185% if you include household debt. I mean, that’s crisis levels, and yet the dollars held up really well. So, the bigger picture story in gold, if it’s not a bubble, would be the dollar gets whacked when the Fed comes back in because they will, and this is where to me, the Fed’s making a policy error already.

The data we got today, for example, from the Philly Fed or the most recent CFO survey that the Richmond and Atlanta Fed do very clear in the sense that the spending that these firms are now doing is increasing pretty dramatically, and it is to reduce or replace labor. And when you have a consumer that’s already cocooning for all the reasons I just said, and you’re going to throw the labor market in there in the mix, and you talk about 1.3 million people over age 65 that are dropped out of labor force, you talk about 2 million people that are not coming in from immigration. You see this in the number not in the labor force on a rolling 12 month basis, hit 3.219 million in July. Never have we been above 3 million without some kind of recession. And when you have all these things where the consumer is already hurting, the fed should be neutral. Now you have housing, you have the consumer, you have the labor market now potentially even the stock market, which will probably be the catalyst, they’re going to need to at least get to neutral before inflation rises again because it’s going to, so if you are already neutral, inflation rises, you’re actually getting a little stimulative because real rates are dropping as opposed to we waited too long, now inflation is rising and we can’t cut rates without it becoming something out of control.

So, I think the Fed has lost control of their own destiny here by being too timid. And I think that’s a problem too. And that’s bullish for gold.

Mike Maharrey: Yeah, absolutely. So let’s talk a little bit about silver specifically, because I think what’s going on in the silver market right now, it’s really, really interesting. Of course, we’re hearing about metal shortages in London. Is that jiving with what you’re seeing as well?

Greg Weldon: Sure. I mean, this is kind of the nuance of this decades long. If you remember, you may remember, and you might be able to tell me, was it Bill Williams or whoever used to date used to debate Dennis Garman on GATA? Do you remember those times back maybe 15, 20 years ago?

Mike Maharrey: I remember GATA,

Greg Weldon: It was like 1999 when the Washington Accord hit and they decided the central banks were going to stop selling their gold after the Swiss dumped their gold and the Bank of England dumped their gold. And yeah, there was this big debate over GATA and whether the bullion banks were in fact big paper shorts in these markets. So, the silver squeeze, #siversqueeze, and that’s a real thing, man. I mean, it’s just something that didn’t matter until it matters. And it looks like now this may matter

Mike Maharrey: That hashtag’s trending now. So, what in your view is causing this disconnect we’re seeing right now between New York features and London spots, and do you see this normalizing anytime soon?

Greg Weldon: I can’t really put my finger on it other than that this is movement of physical metal. I mean, so to me, that speaks volumes to a bullish underlying scenario that’s not going to go away anytime soon. And that’s why if you do see the stock market crack and it does bring prices down, it might be the last great generational buying opportunity. So that’s something I can keep in my back pocket to see how this plays out because man, handicapping this market. I’ve been doing this 42 years, and I started on the floor in the gold silver pits, I mean in the silver pit literally for three years. And I’ve never seen it more volatile, more uncertain and more difficult to handicap. It just is. It’s really tough.

Mike Maharrey: Yeah, it’s wild. There’s such a shortage of metal in India right now that Indian firms are actually sourcing metal from us from money metals. We sent a bunch of 1,000-ounce silver bars over there just a couple of days ago. So it kind of gives you, a sense of what’s going on.

Greg Weldon: Let’s consider it this way. Think about it this way because if you remember, okay, it’s kind of interesting really, we could tie this together. Just recently, we were talking about where was the overhead resistance, where it be the breakout points silver, it was $36.50 specifically on your show. If it’s through the $36.50, you need to own it because this is what’s going to happen. And remember I said it’s not, will it get to $50, it’s how fast will it get to $50? And that’s exactly what’s happened. Alright. And I said at the beginning of the year, you’ll chase this, mark and I, that’s exactly what’s happening. But think if you asked yourself, when gold went from $35 when they unleashed it to $110, was it expensive? No, it sure as heck wasn’t. Does that mean silver at a hundred dollars is expensive? Yeah, maybe not. Maybe not at all. Especially when you think about copper and silver and all the potential uses down the road for technology and all the different things. And even some of the properties, we’re not even sure we yet understand that apply to something like gold. So to me, yeah, the upside is much greater than the downside. But for sure, because price have rallied this much, the downside has expanded potentially in terms of risk.

Mike Maharrey: So my cohort, Josh asked me to ask you this, he said, is the oscillation of precious metals, this movement of metal between countries that we’re seeing right now, is this a sign of something more ominous in the making?

Greg Weldon: Yeah, no doubt. Absolutely. And it gets back to trust in the dollar because it’s not just trust in dollar trust state currency. And I mean this is problematic if you have a situation where central banks have to address, to me it’s stagflation, it’s all over the place. I mean it’s written even in the Philly Fed data today, stagflation was glaring in that report. It really was. When you talk about the labor market dynamic and how it’s a hollowing out of the labor market. You remember that phrase in the eighties?

Mike Maharrey: I did

Greg Weldon: Hollowing out of the US industrial economy.

Mike Maharrey: Yep.

Greg Weldon: You’ve had the same thing here with the hollowing out of the US labor market has taking place. We’ve seen hollowing outs, various steps along the way, even going back to when the internet was created and you had price discovery and that was a big deal. You had a hollowing out of commodity prices and inflation to whatever extent. So we see that happening too. And in that context, this happens everywhere and we’re seeing this everywhere. And what happens in those cases, silver, gold, they become strategic metals in terms of backing your country in terms of ability to maintain trade even. Can you imagine a scenario down the road where, okay, it’s not the bricks unit, it’s not the dollar, it’s like we want gold or silver if you want to trade with us. That’s not outrageous to think about. It really isn’t.

Mike Maharrey: No, it’s not at all. It’s interesting, I saw and actually kind of summarized an article that I saw about Italy. And Italy has the third largest gold reserves in the world and they’re sitting pretty right now. Whereas Spain, England, a lot of those other European countries, they sold all their gold holdings. So it’s kind of just,

Greg Weldon: Yeah, and you think that Italy’s going to sell some of their gold to them and Spain and says, well we’re EU partners. We need some gold. It’s one of those things like you watch some of these post-apocalyptic TV shows where you have all the clans and they’re always fighting each other and they have alliances and they break on the alliances and stuff, but it’s like this could become the currency in global trade going forward. And when you talk about Joshua’s question, you obviously have really bright guy and it’s a really good question. To me, ominous is the word because to me, everything makes this look ominous. The irrational behavior in markets right here makes it ominous. And that particularly applies right now to the US Germany, some of these stock markets. But I mean the US stock market to me could be the next big move and that’s going to really put a whole new monkey wrench into the entire picture.

Mike Maharrey: Alright, I’m going to get you out on this one. This is a little bit of a shift in subject, but I want to talk a little bit about the tariffs and the threats of tariffs and how is this impacting the markets, particularly in commodities. And I guess the specific question is it seems like there’s a movement with US policy toward deglobalization. Is that good for the US? And what about investors?

Greg Weldon: Yeah, I would say that that’s good for the US on a relative basis in some cases and bad for the US in relative cases. Otherwise, what I think that’s good for is China, Russia and OPEC and the triad of the powers that be on the other side of the world. Now I really do, and this is something that’s been trending since 2018 when they opened AC crude oil market, they chose the Dubai OPEC grade, they priced it in, they got benchmarked Russian Earl CR against it. That was the beginning of the end for the dollar. So, when you kind of look at it from that kind of perspective, I would say that yes, this is much bigger picture in that vein. What was the exact question again? I started thinking about China and PEC and the other side of the world and the power global de globalization.

Mike Maharrey: Yeah. Is it good for us?

Greg Weldon: It’s bad for the us. We’re the large biggest debtor nation. It’s very bad for the us. It’s bad for the dollar. It puts us in a position where gold could be $10,000, $15,000 an ounce. Why? Because the dollar’s getting devalued all the time because nobody wants to own it. And the Fed is having to print so much money that it begins to look like many of these emerging market countries that have huge amounts of debt, they devalue their currencies all the time. Stock market makes a new high. Say this all the time, Argentina, the MERVAL makes a new high all the time. Think the standard of living is better in Argentina? Absolutely not. What it’s bad for, I’ll say this, what it’s bad for longer term is the standard of living in the US and frankly around the world. I mean it’s unfortunate, but we have lived above our means for so long and created so much debt. I go back to the great Bill Bonner in the day of reckoning. I mean that comes closer and closer and ominous gets back to the word that Joshua used that I used the other day. This just feels ominous and it feels that way to me. It feels heavy. It feels like something is about to blow. Something big is about to happen. So, in that case, I don’t think that bodes well for the US at all.

Mike Maharrey: Yeah, I agree with you completely. That’s my sense too. This is all signaling. We can look at the prices and we can look at some of the specific things and we can look at central banks buying gold, but it’s really important for people to grasp that. This is I think, a fundamental shift that we’re seeing right now in the global financial system and who knows what the ramifications are going to be at this point.

Greg Weldon: It’s something else we trust. People want to trust in something else than they’ve trusted before. And that’s a major shift. And I 100% agree with what you just said.

Mike Maharrey: Yeah, absolutely. Alright, so before I let you go, I do as always want to let you let folks know where they can avail themselves of your information, your website, all of that stuff.

Greg Weldon: I’ve done couple of really good reports lately. I just did the Tom Cruise market of course hanging by a couple of fingers on the rock. I’ve done a couple of other ones. The “Debt Black Hole” of course is one, and then “In Something Else We Trust,” is a big one. So, when you look at those things, I’d be happy to send those reports to anyone get you on a free trial to my research, it’s Greg Weldon, G-R-E-G-W-E-L-D-O-N at Weldon Online. You can follow me on Twitter @WeldonLive. Always posting some good stuff on that. I like to post articles from Bloomberg or whatever and tie it in to kind of the more odd nuances of what’s going on and how we can navigate these things more efficiently given how complex and how really difficult it is to do that right now.

And of course I am a CTA registered series three. We do manage money. Our minimum counts a million dollars. And people say, why so much? It’s like, well now you’re starting to see why so much because the gold contract’s going to be half a million unto itself at any moment. So any information on that, we have really, since we put this new program together in the beginning of 2018 on the back of China, creating a crude oil market on the back of all this leading to higher inflation into a whole different monetary paradigm and a whole dynamic around what you just said, a bigger shift. The program we’re executing right now is designed specifically for this. And we have really kicked butt. I know I’m a humble guy, but the numbers are the numbers. Happy to show you the numbers. Just shoot me an email. Greg Walden at Weldon online. Of course, we also do the podcast, which is Free Money Markets and New Age investing hosted by Buzzsprout, but available everywhere.

Mike Maharrey: Well, you are fantastic. You’re a benefit to the world and I always appreciate having you on, not just because you reaffirm a lot of the things that are going through my head, but just that you have such a good sense of the bigger picture. And I think a lot of folks out there in the investing world miss that. They get tunnel visioned on minutiae. And I like the way you always bring things back to these big pictures things, the debt, black hole, losing trust, those types of things. And that’s really important. So thank you so much for spending a little time with me today as always, and I’m sure we’ll have you back on again soon and just keep up the great work.

Greg Weldon: Thanks, Mike. You do a great job there too. Money, metals, and Joshua, you all are fantastic and people are lucky to have someone like you out there promoting their best interests.

Mike Maharrey: Well, I appreciate that. Have a good day.

Greg Weldon: Take care, man.