Alex Deluce & Frank Giustra: The Future of Gold, Money & Power

The system is teeter-tottering on breaking down. You go back to the last 500 years and all paper money eventually gets destroyed. What amuses me is that people think this time it's different. America is exceptional. It can't happen here. But, you know what? This time is not different. We're coming into an era, a very dangerous time because when the social fabric starts to break down in societies, a lot of bad stuff starts to happen.

>> [music] >> Frank, it's it's great to have you on the Gold Telegraph Show. We've we've had some fun conversations together over over the years in Beaver Creek and but this is I can't believe it. This is the first time we've we've done this officially on the show given everything in the world right now. I think we have a lot to go over.

>> Boy, I don't know how we're going to get through this in an hour. There's so much material.

>> [laughter] >> Well, I guess Frank some I guess for us to start I love to I know you have such a storied career and and but one of the things is I'd love to go back to when you were really young and I think something that not a not a lot not maybe not a lot of people realize but you know your your parents were from Italy and they eventually did settle in Canada but you did spend some time in in Argentina. What do you what do you remember most about Argentina when you were a kid?

>> You know, there are certain traumas in life that you don't easily forget to get ingrained in your brain and you kind of it it sets your view of the world for life and for us it was the fact of my father lost everything in Argentina due to hyperinflation. Um we lived there in the in the 1960s and he [clears throat] had moved us there originally because Argentina in those days was considered one of the richest countries on the planet and um um and uh so he thought there would be great opportunity for us to live there instead of Canada or Italy or anywhere else. And [clears throat] um so he invested some money in some businesses down there. Then he saw the writing on the wall, things were starting to change politically. It was you know, to the whole Peronist movement was happening. And uh he thought he'd better get us out of there. So he moved us back to Canada. And uh unfortunately he couldn't get his money out in time. He had you know, had to settle with his partners and sell. By the time he received his money a few years later, it was worthless. And I when I say worthless, I mean it didn't buy anything. It was worthless in dollar terms and it was worthless in purchasing power. And as a result, we had to live in a a family of six, two parents and four kids had to live in a trailer for 3 years, a very small trailer. It was only 50 ft long and I think about 12 ft wide for 3 years until he could make his money back. Um we had no money. It was you know, we came to Canada like broke. And uh so you remember these things, you know, and uh and I always wondered whether you know, had my father had the knowledge about gold and the and how to [clears throat] protect yourself against hyperinflation, whether that would have made a difference because you know, in those days, I mean Argentina was considered like a there was a term, it was called rich as in Argentine. And that was meant to mean that if you're from Argentina, you were a wealthy person. And that was very true in the '40s and the '50s, but starting in the '60s, it started to go downhill. So and and we were sitting here today and this is why it's important to me thinking it can never happen here, you know, the the sort of hyperinflation. But ask yourself, they never thought it could happen there either. They thought Argentina was set you know, set for life. But you know, it does happen and it can happen here. In my opinion, it will happen here. When currencies fall apart, you know, hyperinflation sets in and then you wipe out you have to wipe everything out at that point and start over again.

>> And and with that, Frank, it's such a good point. Like what you experienced in Argentina, like especially today, most people in North America would never understand

>> this is this is not champ this is not champagne, it's water. But I couldn't find a water glass and I'm in France, so it looks like I'm drinking champagne, but it's water.

>> Well, no, it's >> Sorry, go on. I interrupted [laughter] you. Go on.

>> No, but you know what you know, I think having champagne having discussions about hyperinflation might be fitting cuz it's it's quite [laughter] depressing, but it's but with you know, most people in in North America, like they can't even imagine that event hitting them. Like you you do have first-hand experience of living it. Like when you lived it, what was it like to like really witness for you and your family? Did it shape your thinking I guess now in retrospect as an investor and as an entrepreneur just living through

>> In retrospect, it certainly has. Obviously obviously as a child I you know, I was too young and too really understand what was going on. I do remember vividly the fact that we had no money and that my father said, "I received my money from Argentina and it's worthless." I remember that day when he said it. So, but I I had no idea why and what didn't know what inflation was, but years later, you know, as soon as I started to understand how the monetary system works and how inflation works, how money printing works, how debt works, um you know, it it brought me back to those years and I realized, you know, you know, here we are, we're doing we're making all the same mistakes again that have been made throughout history. By the way, it's not just Argentina. You go back to the last 500 years and all paper money eventually gets destroyed every time. And what makes me what what me is that people think this time it's different. America is exceptional. It can't happen here. But you know what? Paper money are just promises and governments break those promises all the time and they're going to do it again this time. So, this time is not different. You know, when you abuse money as most politicians do eventually, it comes back there's a day of reckoning and we're coming to that day.

>> And and and with that Frank like an interesting con I I know I spend a lot of my time a lot of time in my head about this kind of concept and and just way of thinking. I you know, me and you both like we spend a lot of time talking online about inflation and that but you know, a lot of people think of inflation in the economic sense but they don't they don't think about it psychologically and what it can actually do uh to societies. What what happens when people stop trusting money?

>> Well, basically um it it becomes a self reinforcing phenomenon. Inflation is about and this is why central banks are very careful to anchor expectations. That's the phrase that they use because they understand that it's the expectations of inflation that drive inflation faster and higher. When people think if you think in very simple terms, if you know a loaf of bread is going to cost twice as much tomorrow as today, you're going to go buy that loaf of bread today and if everybody's rushing to get rid of their paper to buy things that they need, it just reinforces that inflationary cycle. So, that's why central banks try and pretend that there is no inflation or they under they understate it as we do with the CPI. The CPI is the biggest joke in the world. I wrote an article on this about I I know seven or eight years ago about how the CPI's manipulated and has been changed about 30 or 40 times in the last 50 in the last 40 years to and it's so confusing. You can't even figure out the the tricks that they use to keep the inflation number low. If you want to read that article, just go to frankjuster.com and it's the article it's titled something about is CPI the right measure for inflation. It's on my blog. Go read it. It you will learn something new. It's you know, inflation is um is caused by money printing, money supply growth, and then expectations that inflation will be there. Those are the drivers.

>> And well, well, with that Frank, like with you know, with inflation and you having such a first-hand experience living through hyperinflation, what's fascinating is like your family, you guys were living through that event in Argentina and then the entire world was going through its own monetary experiment. And with in night in the 1970s once you know, when we broke from the gold link in 1971, we're still living through that that a new ex- form of experiment today. Do you think most people appreciate how important 1971 really was? I I don't think most people do cuz most people are not really um informed on monetary systems. You know, most people um don't even know what inflation what causes inflation, you know? They know and that makes it easy for politicians to shift the blame, the policy makers to shift the blame of inflation to things that have nothing to do with the cause of inflation. You know, they talk about unfair trade practices, you know, all sorts of things, you know, relationships, China, Mexico. They they'll blame everything except the true cause, which is debt, Starts with debt. And then it goes on to money printing. And then the the you know the explosion of money supply. That's inflation. And that causes prices to go up. Because you're measuring an infinite amount of currency being created against a fixed number of things, of stuff. You know, that's you know has a fixed supply. So, that's that's how you create That's how inflation is how inflation affects the price of goods. But, inflation is a monetary phenomenon.

>> Well, it's it's interesting, Frank. Like one of one of the most interesting conversations I've had recently was with the former president's economic advisor, Judy Shelton, where she she told me that President Nixon admitted, to your point, like he didn't really understand monetary policy.

>> You'd see it would say Richard Nixon at the top. And then it hit the first line would say your article in today's Wall Street Journal was brilliant. We exchanged letters, um I guess for two or three years. And at some point I told him um my next book is going to be on the Bretton Woods system. And what was lost when that was ended. Cuz I thought I I mean I should at least be honest. Cuz some people saw him as the villain, for sure. And um also I thought maybe he'll tell me something of his thinking. And what he wrote back was maybe more interesting.

>> [music] >> He said, um I know very little about monetary policy. And I thought and yet he's the one who ended [music] that system.

>> And like Paul Volcker at the time mentioned to Judy that he always thought gold wouldn't disappear permanently. That the thinking at the time was that it would be valued and at some point it'd be reinstated into the system. When you hear that, like what what do you like what do you think?

>> Well, you know, what I think is first of all, Nixon was a very smart guy, okay? He was no dummy. Nixon was a very bright guy, but even he didn't understand how the monetary system works. And like I said, most people don't. You really have to dig deep to really get an understanding of how money works, how money supply works, how it affects inflation, all these things. Most people you know, even very very smart people don't understand it. So, I'm not surprised that Nixon didn't understand it. As far as Volcker's concerned, yeah, perhaps he was, you know, being honest that he expected that it to be a short-term cuz they're not when they announced the closing of the gold window, they said it was going to be only for temporary for short-term. But, here's the problem. Once you remove the shackles from politicians and policy makers, it's hard to put those shackles back on. And the problem is that the gold system, the gold back system put shackles on politicians in terms of the amount of spending that they could do without the revenues coming in. And you know, the the Europeans saw that coming in the late '60s that America was overspending. They were creating deficits. And so, they started to ask for their gold. They were exchanging their dollars for gold. And so, that you know, that came to an end very very quickly. But but most people really don't don't get it. They they just don't understand how it works. And you know, and that's why they're easily fooled with you know, stories of, you know, yeah, this is temporary. Yeah, again, once they remove the shackles, they they couldn't put that genie back in the bottle once they took it off. And here we are today, you know, the dollar's lost what, 99% of its value in the last 50 years? And you have to keep in mind that gold was only not money ever just for the last 50 years. We've been growing our generation has grown up to believe that gold is not money, but it's just in our last this past this generation. 50 years. Before that gold was always money of some sort. The the US went out of its way to make gold not seem like money. You know, they downplayed it, they pooh-poohed it. You know, they made all the comments, you know, it's it's an ancient relic, it's this, it's that, it's a pet rock for a reason. Because if you acknowledge the value of gold, you're basically suggesting that your currency does not have that value alone without gold.

>> Yeah. Well, no, it's it's it's crazy to think Frank. Like you're 100% right. Like it's been a 50-year experiment where prior to these 50 years gold was always directly linked to the monetary system. So, it's it's pretty unbelievable to think that the mainstream media's approach when it comes to labeling gold a relic and it's it's an old person's asset. It's it's it's ancient. It doesn't it's it's there's no utility. It's what It's funny, one of my favorite I'm so happy he mentioned it on the show, but it was when Dr. Paul Dr. Ron Paul mentioned his exchange with former Federal Reserve Chair Ben Bernanke when he when he asked Ben if what why do central banks own gold and Bernanke said it's tradition and

>> Tradition.

>> Yeah. Looked at him appalled, but do you do you think people that that made those big decisions that changed the entire global monetary system in 1971? Do you think you know, they if if they saw the world today, do you think they would have a lot of regrets with making that decision? Or do you think they had no choice given the [clears throat] run the run on the gold?

>> Well, they they had a choice, but they did the choice they made was to continue to deficit spend. Um and so that that's what they were doing before the gold window closed and then they they continued to continue to do that and more afterwards. So, you know, the problem is that you you put too much faith in politicians and policy makers. You know, I've come to the conclusion that, you know, they're not they only care about the donor class. You know, who gets them elected? Who who writes the big checks to get them elected? And once they're elected, they're not going to do anything that's going to remove them from office. And so if you if you think of what needed to be done to avoid the situation we're in now, you needed to either raise taxes or dramatically cut spending or both. And both those things don't get you reelected. And so, you know, politicians and they're getting worse, by the way. You know, politicians at least used to have some integrity when it came to managing the economy. Now they could care less. They cuz they're not stupid. They see that this train is heading towards a cliff. Okay? And but while it's still on its rails, they're going to take advantage of it as much as they possibly can. And you see how much they're lining their pockets right now. It's like, you know, like when you see a riot and there's looting, you know, their policy smash and grab at the moment because they know this game is almost over. So they have to line their pockets, stand the gravy train as long as possible, and kick the can down the road so it's not their problem. And you know, and that has been that attitude, that mindset has gotten progressively worse. Now you look at this the current state of what the administration and Congress, how they insight insider trading. They're making hundreds of millions of dollars based on information that you and I don't have. And and And seems to care anymore. Everybody's lining their pockets. It's you know, I have lost faith for politicians of all parties. I'm not a Democrat, I'm not a Republican. I think that they're all they're all useless. They they really are because in your in the quality of politicians that are coming into office these days, I mean where are the leaders anymore? These people they're just they they're just takers, you know. They don't really they they're not very smart. And what they do know they don't use that knowledge for the benefit of the the voter. They use it for the benefit of themselves. So, you know, I I've lost all faith in politician as I think we're coming to the end now. You're you're coming to a climax now where everybody is grabbing as much as they can and um hoping that they can take care of themselves and their family and the hell with everybody else. It's every man for himself now. That's the attitude.

>> What?

>> [laughter] >> It's it's I shouldn't laugh Frank, but I think one of the reasons I I feel like well, there's many, but I think one of the reasons why we've developed such a a great friendship over the over the years is I think well, one I think gold is uh I think both of us are so uh cynical when it comes to promises and and what politicians and just gold requires zero trust. It's there. It's proven. It has thousands of years of history. Um and I think that it's true like there's no zero counterparty when it comes to gold, especially physical gold. But when you when you look at the last 50 years this is a loaded question cuz it you could go anywhere with this. But what what do you think has been the biggest consequence of abandoning that gold link? Is it discipline? Is it the destruction of the middle class? Is it price instability? What do you what do you think it is?

>> It it it it's all those things. I mean, you know, obviously it's it's um you know, allowing the central bank you know, first of all governments have been overspending. That we all know that. They're overspending, you know, you got uh $2 trillion years in deficits which is just going to rise and I think it's going to be probably 2.4, 2.5 trillion this next year. Um They They just They don't care. So, um but what's happened is that what that's created is an erosion of the middle class. You've created the biggest wealth gap The US has the biggest wealth gap in all of the developed nations. Okay, so you have the extremely rich now because they were able they had assets and they were able to borrow using cheap artificial money to buy things whereas you know, middle class and lower middle class didn't have those assets. They couldn't borrow. They couldn't access money at 1% that we had for for years and years. I know I know friends of mine that are very wealthy people. They were borrowing huge amounts of money based on their assets at 1% and they were just going out buying real estate art, stocks. This is why you've had this big asset bubble. And so it's it's it's basically killed the middle class. You know that in America today half the population can't make ends meet. Credit card debt is at 1.1 trillion. It's a record number. Um it's uh I I think margin debt, you know, which is stock market related is gone 1.4 trillion dollars. There are banks that are underwater. The system is teeter-tottering on breaking down and you've got a population now that's pissed off. And they don't know who to blame. That's why you're getting you can get these populist movements that I'm seeing I'm living in the UK now and I'm seeing that whoever the incumbent is throw them out. It's the next guy. doesn't matter if it's left or right. It's just that the public is pissed off. They've been short-changed and they don't know who to blame, but they have to blame their politicians. So, right now, we're we're coming into an era uh a very dangerous time because when the social fabric starts to break down in societies, a lot of bad stuff starts to happen and I think that that's where we're heading. You know, you got the haves and the have-nots and the and the gulf is getting wider and wider and wider and people revolt and they revolt in different ways. But, you you certainly don't have a stable country and a stable system when half the population can't can't buy groceries, can't make ends meet, can't pay the rent. So, that is the big I think that the biggest biggest outcome of all of this is what it's done to the middle class. It's just it's basically wiping them out.

>> Well, it's it's pretty I think over the years, Frank, the last 10 years since I've been a student of monetary history, I think the biggest thing I've I've learned to come to peace with cuz I've realized there's not not a lot I can do about it, but like I find it unbelievable how, like you mentioned, like we we we saw years of zero interest rates, we saw massive asset bubbles get blown, we saw financial markets get distorted and then you have like the most powerful institution in the Federal Reserve, you have a bunch of people that are on the board there and even, you know, Janet Yellen and it's a revolving door. A lot of them go and work on Wall Street on the other side of their career. So, it's it's pretty But, when you when you when you when you look at central banks today and like all the intervention mechanisms that they've done, do you think they're solving any problems or do you think they're simply managing the consequences of earlier decisions?

>> Yeah, I I I think, you know, I I read somewhere recently that um that all policy makers, including the central banks, are now preoccupied with managing the debt crisis as opposed to preventing a debt crisis. So, they all know it's coming. So, now everybody's trying to figure how do we navigate knowing that there's a debt crisis that's about to, you know, implode the system. So, they have to come up with mechanisms now to to deal with that before before it happens. I'm not sure there's much you can do without creating a tremendous amount of destruction. There's no easy way out of this thing. It's There There's no secret sauce here. You You've got a situation where you have way too much debt, way too much governments, corporations, individuals. Everybody's loaded, especially government. The sovereigns Their debt has gone up sixfold. Global sovereign debt has gone up sixfold in the last 25 years. And and up 50% just in the last 4 years. And so, it's it's spiraling out of control, and it just gets bigger and bigger and bigger. And I don't think that is going to implode at some point. It's going to have and it's going to take down a lot of asset classes with it because everything's leveraged to the hilt. Everything's interconnected. Everything's The world is too interconnected. The system The The financial systems and derivatives and everything is too opaque. And there's too much leverage.

>> Yeah.

>> It's an accident waiting to happen, and it will happen. And I How it manifests itself, I don't know. What event triggers it, I don't know. But it'll be something, and it'll be a great unwinding. The stock market trading at all all-time record highs. This This market is way beyond even the dot-com market of 2000s. And at that point, the Nasdaq uh when it finally crashed, it lost about 80% of its value. And it took 15 years to get back to its old highs. So, I think that there's going to be a chickens are going to come home to roost, and it's going to be very ugly, and there's very little that governments and central banks can do about it, except what they always do, print more money. It's It's It's It's the fallback It's the fallback position because it creates a silent tax called inflation. People can't quite put their finger on it. If you raise taxes, people will notice. If you cut costs and services and whatever, people will notice. But if you print money, you know, all of a sudden things get expensive or whatever, but you can't put your finger on why it happened. Most people don't understand how that works. So, they politicians can their way out of it.

>> One And with that, Frank, like in touching on the the sovereign debt levels that have just ballooned, you know, shifting a bit to purely to gold here, like central banks are buying gold at the fastest pace on on record in recent years.

>> Yeah.

>> What do you think they see that most investors don't? Do you think they're preparing for, like you mentioned, like this sovereign debt problem, where they could essentially revalue gold, or do you think they're using it as a and, you know, neutral reserve asset that can't be weaponized against or, especially when it's at on their own shore? What what's your read on that?

>> Yeah, it's a combination of two things. It is the weaponization of the dollar, which is causing de-dollarization, and when you want to sell your US Treasuries or your central bank, what do you replace it with? There's no other really great currency out there no currency option out there cuz, you know, people in the Here's the mistake that most people make. They They look across currency currency rates, you know, the US dollar versus the yen, US dollars versus the euro. But that's just looking at one abstract illusion and comparing it to another abstract illusion cuz these things aren't anchored in anything. Okay, they're just paper promises. The only currency when you sell your your central bank and you're de-dollarizing the same selling US treasuries, the only tier one currency that is not someone else's liability that has no counterparty that is neutral is gold. Gold's a tier one asset just like US treasuries as far as central banks are concerned. So that's their only real option. Sell dollars You want to get out of the dollar the dollar system because you're afraid of sanctions or you watching the US fiscal situation fall off a cliff. You go, why would I want to hold long-term treasuries? Maybe I'll hold up, you know, 30-day, 60-day, you know, 2 years max, but why would I want a 10-year? When when, you know, when they're printing money when inflation, you know, when debt is out of control. So yeah, so I think that that's basically what's what's happening there. It's it the central banks are looking at it from two two perspectives. One is the avoiding sanctions and threats of sanctions, secondary sanctions, and the other one is just why do you want to known an asset that you know, where they're just it's you you can see the fiscal situation is going to end badly. So you why would you be, you know, China's gone from 1.2 trillion dollars in US treasuries down 700 billion. They're selling it all the time and all said like India and Brazil have reduced their dollar reserves by 25%. Um uh Saudi Arabia sold 15% of their holdings. Everybody's selling coming off and now they can't do it very quickly. You can't just sell all your dollars, but you're seeing it you know, they're doing it step by step. China's reducing its dollar reserves replacing it with gold not reporting all the gold that they're buying. They're buying a lot more, you know, they just announced that they're they're uh imported a record amount of gold just was it this last month. And you know it's going into some into some of the uh into the government institutions, but they won't officially report it. They They They claim they only have 2,300 tons, which is absolute BS. No, they've got probably 10 times that amount.

>> Well, and do you think, Frank, like with the obscurity around the Chinese gold hoarding and purchases, do you think there is a chance in your view that China could have more gold than the United States?

>> Oh, easily. Easily. Like I said, if They're They've reported officially 2,300 tons, okay? Goldman Sachs suggested could be 10 times that amount. The US has 8,100 tons. If they have it, we still haven't audited Fort Knox. We don't know or if it's somehow encumbered or pledged or whatever, but supposedly we have 8,100 tons in the United States, and China My guess is they have more than that. And when they're ready to tell you how much because there's a reason to tell you, they will. But right now they're still accumulating.

>> Do you And you you bring up a interesting point, Frank. Like, do you think we will Do you think we will see that that Fort Knox audit? Like, it's been very sporadic in in the media cycle, and the president has been off and on with it. Um I know there's Everybody wants to see it. Do you think Do you think we will?

>> Okay. Okay, there's You ask yourself this. It's a simple thing to do. Auditing for It's not just Fort Knox, it's also the Federal Reserve. So, the gold is in a couple different places. Well, let's say the bulk is Fort Knox. Um it's a To audit your gold is not rocket science. Cuz you walk in and you check all the gold, you make sure it's pure gold, and you make sure there's enough bars and segregated, and you know, depending on who it belongs to, and it's not that hard. So, you ask yourself, why? They've talked about it. They've threatened to do it, but they don't. There's a reason. And I don't know what that reason is, okay? I can only speculate and it could be like very different reasons that are actually tell you different stories. But there's a reason they're not telling you. Is it because they don't want to give gold that credibility? Because if they start to give gold credibility by counting it and reporting it, it suggests that that gold is important. Cuz all along they're telling you gold is worth you know, gold is worthless. You know? Is it because they don't have enough of it? And when you start to dig deep, let's say they even re-price it was a from the 42 at $42 an ounce to its current market value, it's about a trillion dollars worth of gold. But if they do that, then people can start number crunching say, well, okay, now you have a trillion dollars worth of gold. You got $39 trillion worth of debt, you're adding $2 trillion more every year. How's that going to help? I don't think you know, and I know Judy Shelton came up with that idea about the 50-year uh bond convertible into gold. I still don't understand what that will achieve cuz it's only a trillion dollars. It's not going to change anything. It might set the stage for sound money, the concept of sound money, but it doesn't fix the actual problem. So I'm not sure. My guess is this, okay? For gold to play a role in the United States today, they're going to have a lot more gold, they're going to need a lot more gold or a much higher price or both for it to actually make a difference.

>> Yeah.

>> That's my take on it.

>> Well, it's it's interesting, Frank. I think with Judy Shelton's like 50-year Treasury bond, I think what her vision is, it's it's almost like the first step for a sound money era where even that's a first progression into like gold-backed stable coins uh if the United States gets involved where you can almost back a gold stable coin with that treasure 50-year Treasury bill that is redeemable into gold. So, it's it's kind of that that fight that kind of foundational layer that's potentially applied in a digital era. But, it's it's interesting. Like, it's And I think as well, I think one of the things the United States is now paying a lot of attention to, like you mentioned, is China. Like, China's gold purchases, they're very it's very obscure. I think there's a lot of concern that China could lead help leverage their gold position one day. I know you've talked a lot about that in the past of like we could wake up and China could declare how much gold they really have. And, you know, as you mentioned, it's a tier-one asset. So, I I wonder how much of of these ideas um you know, Judy's having and others in the United States is about playing a bit of offense on China given their

>> Yeah, well, China see Yeah, yeah, China's is definitely the, you know, the 800-lb gorilla in in in this geopolitical game that's taking place. It's basically China and the US.

>> [clears throat] >> What China is doing, and they're I I hate to say this, but they're playing this brilliantly. The whole game they're playing it brilliantly. First of all, they're long-term players. They think strategically 20 50 years down the road. And they have a they have a a an objective, and the objective is to be able to function outside the US dollar system. As you know, they created all sorts of mechanisms, including the Ambridge project, including, you know, these gold the ability to exchange your yuans for golds on the Shanghai Gold Exchange, these gold vaults, the first one being in Hong Kong, and talking about other ones in Singapore, Switzerland, UAE, Saudi Arabia. So, they're they've got a strategy, and they're playing the US, I think, beautifully. Just look at this last the the war in Iran China's come across as the responsible, stable, global player that's seeking peace and you know, allowing America to create this blunder which they've created. The Iran war was a complete and utter stupid move. It's a disaster for everybody including the US. And and And China's basically, I don't know if you ever heard of Napoleon's phrase, you know, never interrupt your enemy when they're making a mistake.

>> [laughter] >> So, and so China's just sitting back allowing the US to hurt itself, to inflict its wounds on itself. It doesn't have to do anything. It just sits back and it gets stronger and stronger economically. It's growing its gold reserves and it's positioning itself not that it wants to supersede America as the global hegemon. They don't want that. What what China wants is to displace the US as the sole global hegemon and create a multipolar world. And and they have the strength to do it. I mean, you know, Trump has tried those tariff threats. You know, he tried everything against China. It was like water off a duck's back as far as China. You know, I don't know if you ever saw the movie The Godfather Part II with when Michael Corleone where there's a senator who's trying to to blackmail him and and Michael Corleone, he wants the money, you know, to to allow Michael to get his gaming license and he goes uh and he makes some outrageous claim and and and Michael Corleone goes You want to hear my offer now? My offer is this. Nothing.

>> Mr. Senator, you can have my answer now if you like. My offer is this. Nothing. [clears throat]

>> In fact, I would like you to pay for my my gaming license or whatever. And and and China's saying the same thing. Basically, they gave Trump a nice reception, a nice photo op when he went to China recently. You know, the girls school girls dancing all that. It was a nice photo, but he walked away with nothing. They they they're not giving any concessions. In fact, what they've said is our offer is this, nothing. And in fact, you have to pay more for critical minerals and and and and and rare earths. That that was their counter offer. So, I think China is playing this cuz they know that the US is destroying itself with their their policy. I mean, taking on the entire world with tariff threats, including their allies. I mean, you have to ask yourself, you know, where does that get you? You have no friends left. And everybody is trying to get away from your system now, and it's fueling this de-dollarization movement, and I think it will fuel the purchasing of gold. So, that that's the world we live in.

>> How how much do you think Frank is like, you know, mentioning some of the geopolitical um kind of events that's that's taking hold right now around the world. And we also saw the United States uh going to Venezuela. Like, how how inter- intertwined is the whole de-dollarization trend to these geopolitical kind of hot spots emerging around the world? Do you think

>> Yeah, I wrote I I I wrote an article about this a couple of weeks ago. I don't know if you read it it and it was called the petrodollar police.

>> No, I I missed that one.

>> Okay. So, for your audience, go to my blog, frankjuster.com, and about a 3 weeks ago I wrote this article called the petrodollar police. And what I pointed out in there, and I'm not the first to point it out, so but is that every time an a large global oil exporter has made threats or moves to sell their oil outside the US dollar system, something bad happens to them. So, uh Saddam Hussein threatened to say he was selling oil in euros because the US had sanctions against against Iraq. What did they do to Saddam Hussein? Libya, Gaddafi was trying to convince the oil producers to sell oil in gold dinars. What did they do to him? They took him out. Venezuela, Maduro was selling oil for yuans at a discount. What did they do to Maduro? Iran, same thing, selling oil to China in yuans, not dollars. What did they try to do to Iran? They didn't succeed, but they tried. You have to understand when when they closed the dollar the gold window and the dollar went into free fall against gold, the only thing that saved the US dollar was the introduction of the petrodollar in 1974. And that, for your viewers that don't know what that is, is basically they cut a deal with Saudi Arabia saying, "We'll provide you with security guarantees. You only sell oil in dollars. And we'll give you a security guarantee. We'll protect you." And uh then they'll everybody adopted that within OPEC. And so, that's what's kept the It's the demand for dollars to buy oil, which is the largest biggest commodity in the world, that creates demand for dollars. And you know, the Saudis in turn initially recycled those dollars back into US treasuries and more recently into your US assets, stocks, real estate, etc. But always something in dollar terms. And that's if the petrodollar goes away cuz now 20% of oil is sold outside of US dollar system, yeah. As that becomes a a bigger number, you know, the sold not in dollars, it's going to create a problem for US dollars. So, they're they're quickly trying to figure out how do we stem the tide? So, you can stem it by threat making threats, but you can't you can't stop this forever. So, they have to think, what is the next what can we do long-term to prevent dedollarization? And I I think I explained it in another article recently about stable coins. I think the stable coins, the biggest reason they want this Clarity Act through is cuz stable coins, when you have to have US Treasury backing. So, if you create a stable stable coin to create payments and settlements of financial apps and all sorts of applications, you need to back that with US Treasury. So, it creates demand where demand did not exist before. At a time when central banks around the world are selling their US Treasuries. So, I think that that's one of the the main reasons they want stable coins to be the next sort of banking mechanism. Uh obviously, it's you know, still caught in the Senate and I'm not sure if I'm not sure it's going to get approved this year. There's a lot of opposition from the banks. The big banks don't like this at all. And so, we'll see if that actually happens, but that's the reason they're doing it.

>> Yeah. One, it's it's interesting, Frank, like I I wanted to get your thoughts on something that that I mentioned this week, but I don't think it's receiving a lot of attention right now. And it was it was reported, and there are reports that BRICS nations are developing a blockchain-based settlement token backed partially by gold and partially by member currencies. And importantly, this there's the report stated that it's not a common currency, and I know that's the United States has made it very clear that if BRICS creates a common currency, there'll be a tariff. Um it's a settlement mechanism designed to facilitate

>> Yep.

>> trade without relying on the US dollar. When you look at developments like this, do you do you view them as isolated experiments or are we witnessing the early stages of a gradual restructuring of the global monetary system?

>> The latter. Absolutely the latter. I mean, there are a number of these mechanisms being created. I've heard about the one you're referring to. I think that they suggested should be 40% gold, 60% local currencies and for trading purposes only not trading and settlement as opposed to reserve currencies held by central banks. And this is the point you were just making. Um

>> [clears throat] >> Yeah, no, I I I think that this is the beginnings of what will someday be a new monetary system. And much like the 1930s, until Bretton Woods after the war Bretton Woods created a new monetary system, but during the interwar period you had a whole bunch of hodgepodge payment systems between countries. There was even barter involved in a lot of places well cuz there was no supreme global currency. Uh the British pound had lost its appeal and the US dollar still hadn't been, you know, the system where it was backed by gold for the world had not been created. So, absolutely. Now, I think that the intermittent period between now and the time we have a brand new system, it's a long period and it's going to be a lot of chaos in between because I doubt we're in a in a world where all countries are going to get together like in the Bretton Woods agreement and and agree now without the hitting the fan first, agree now what what the system's going to look like. And you basically have this China-US competition. So, I doubt it's going to be happening in friendly terms. I just hope it doesn't happen with a kinetic war, which is usually what happens when global power shifts from one to another. So, yeah, but I I definitely think we're heading towards a new system, but in the meantime we're going to see a number of different systems all designed to operate outside the the US dollar. Yeah. That's That'll be the main concern.

>> When and with that Frank, like with with gold being this ubiquitous asset where it is valued around around the world and as countries like BRICS with that framework, whether it's 40% gold, 60% localized currencies with that type of mechanism and then you add stable coins on top of that with, you know, if the Clarity Act gets gets passed, don't you think the Western world needs to leverage their needs to leverage gold in some capacity or the Eastern world who represents half of humanity essentially, that that could be I I know you've talked a lot about uh the multipolar component of where we're going, but like don't you think with what gold represents, it it shouldn't be like this uh two very different systems being, you know, don't you think it comes together, it converges at some point?

>> Yeah, I I don't I think at some point, yes, but again, Alex, I don't think it's going to happen until it's forced upon people. I don't think it's something that that's going to voluntarily happen today where China and US sit down and say, "Okay, let's create a new monetary system. This is going to let gold going to play a role." I just don't see that happening today. I think that the US is behind the eight ball on this and they're going to have to do something to catch up. Now, they may think that the stable coins is the solution to create demand for dollars and maybe it will be. I I think it's way too early to tell. Um and we're still not sure whether the US what the US thinks about its gold reserves. We We don't know cuz they're not telling us. If I If you ask me, if If the US If I were the US president or I ran Congress, I would you know I was in charge. I was a dictator. I would be buying I would

Take all my funny money that I'm printing, and I would buy as much gold as possible. I would exchange my funny money for gold. I would absolutely do it covertly and not tell anybody until I had enough gold. And maybe they are doing that. I doubt it, but yeah, there's a chance they could be accumulating gold. That's what I would do. That's the smart thing to do. But, you know, not all politicians are very smart, so.

Well, it's funny too, Frank, to think that like, you know, even some of the people that knock on gold in the media, like you, and that you see the central banks who issue the fiat currency buying record amounts of gold. What other signal do you need when you see that? They're the ones issuing the fiat currency that is backed by nothing, and they're stockpiling all this gold. It's, I've always found that when you think about it with that logic, I just shake my head. It's just like, yeah.

Yeah, you shake your head, but you have to understand, if you're a normal Joe in the United States and you watch CNN or Fox or whatever you're watching, they're never going to explain that to you, okay? That gold is that important that you should own it to protect your wealth because it is ultimately the only currency that's going to be left when everything else blows up. And they go out of their way, the media, politicians, central banks, they go out of their way to make sure that you don't understand gold enough. And that's why Americans are not, you know, they what do they buy? If they turn protectorate, they're buying Bitcoin, okay? That's, they've been told that Bitcoin is as good or better than gold, actually, is what they're saying. So, you should own Bitcoin to protect your wealth. You know, when they start printing money again and money supply grows, Bitcoin's going to do real well. I, sorry, I don't buy it. I think Bitcoin's had its day. I think it's lost its, the enthusiasm is gone in Bitcoin. It's, you know, what happened is all these Bitcoin maxis were creating this FOMO that it was going to a million and 10 million, and people piled in as a function of greed and FOMO. It didn't work. You know, it topped off at 125. It's gone down. It's lost its energy. Nobody cares anymore. Like, you know, I don't know where they're going to find the next buyer because it's, it's kind of like a Ponzi. It's not, I don't call it a Ponzi, but it's kind of like you need new buyers all the time, and I think they've lost it. I think Bitcoin, which has been touted as good as gold or better, gold is going to lose its efficacy, and I think that eventually people will start to, you know, to look at gold. And I think what will motivate them is what always motivates people: when it goes up in price.

Yeah. The more it goes up in price, the more people want to jump in. Now, we've had a correction in gold. It's come from 5,500. It's down to 4,000 today. That's a correction. It happens, you know, nothing goes straight up. I mean, it tripled in price in a very short period of time. What do you expect? It's going to correct. But the next run, and whenever it happens, you know, I, I, I never time these things out, but the next run, as central banks continue, because they've all, 68% of them said they're going to continue to buy gold, the foreign central banks. And this is a long-term purchase program. It's not like you buy a bunch of gold. It's done over a number of years because you get rid of one currency, you have to replace it with gold. So, it happens very slowly, but it's happening. And as we see this continue to happen, I think people will start to realize that there is value in owning gold, and you have to own it. You have to own some physical.

Yeah. Well, and with that, Frank, like, it's so interesting too, like, with the whole Bitcoin and crypto side of things, like, we're even starting to see, like, like Tether, uh, who's essentially the plumbing of the entire crypto market, being the largest stablecoin in the world, they've totally pivoted towards our world, whether it's mining or physical gold. Um, so, it's almost like they foresee and they agree with central banks where they want to have that exposure. And with their gold position now, they're sort of becoming like a central bank. So, it's interesting how you go from saying Bitcoin and the crypto world is going to just totally dominate and supersede gold, and now you have one of the biggest players in that market participating alongside central banks. But, one of the things, Frank, a quote that has always stayed with me since 2022 is a quote that Vladimir Putin said, where he said, "The economy of imaginary wealth is being replaced by the economy of real and hard assets." When you hear that, what goes through your mind?

Well, when you compare two asset classes, um, one you can print to infinity. So, how do you assign value to an asset class that you can create out of thin air, as much as you want, compared to other asset classes that have fixed supply? And the things that you need in life, commodities, energy, water, all the things that are food, the things that are necessary, that are limited in supply. And to me, that's the world we're headed into, where you're going into a hard asset environment. And not everybody's bought into it yet. I certainly have. And you know, and I know yourself, hard assets, tangible assets are where you have to be. Because the world, especially now with the geopolitical fragmentation that's taking place, there's a scramble to secure all sorts of resources that are scarce. Um, and onshore them, friend shore them, find them. So, there's a bit of a battle for resources right now. And, you know, we're not a unified world anymore where we're cooperating. And that ship has sailed, you know. The world order is dead as the dodo right now. And until we get a brand new world order after a lot of chaos down the road, you know, it may be different. But right now, you need to own things that people need and that are in short supply. And, you know, every metal, oil, gas, food, fertilizer, whatever else we need to function as a society, as a civilization, that's the stuff you got to invest in. The paper stuff is all levers to the health. It's got derivatives. You don't, like I, you have all of these financial products that are derivatives of each other, and they're levers to the health, and it's so opaque, you can't see behind it what's really going on. It's a disaster waiting to happen. And it will implode at some point. But if you have a hard asset, you own it. It's physical. You know, if you have a chunk of gold, a bar of gold, that's yours. They can't print that. They can't leverage it. That's you own it. And if you've got other metals that we need, copper especially, you know, those are the important things. And that's what you need to invest in today. Things that are not easy, that are limited in supply and can't be printed.

And with that, Frank, like how you've been arguably one of the best resource speculators and investors in history. What, when you look at this mineral kind of cycle or hard asset cycle that we're in, how is it different from previous cycles that you've lived through, and just what feels different?

That's a really good, an important and a very good question. The difference between this market environment and past bull markets that I've witnessed in metals is that this time, this is a structural change taking place. This is not a normal bull metals market that's driven by investors. We're talking about a change to the global monetary system, an entire structural change. And most people don't know that yet. They don't get it. They, you know, if you read when these legacy media write articles about gold and they ask some expert why people buy gold, they're missing the whole point. You know, I've been asked, and sometimes I supply answers. They won't print my answers, usually, but, you know, it's, we're in a very different market right now. This is structural. This is a structural change that only happens every 80 to 100 years, and we're long due now. And it's the same pattern every time. So, I just don't think you can compare this to the markets that we've experienced, especially in my lifetime. I've been doing this gig for 45 years now. This market is very different than the last cycle, which was from 2001 to 2011. That was completely different reasons. Now we've got a structural global change that's driving the gold price up.

Yeah. And with that, Frank, I know you've been, and you just touched on it in this conversation. And I know you really are starting to talk about it, and it reminds me of when you've always championed and gold and highlighted the importance of gold, but I've noticed recently, especially the last couple of years, you've really started to get, um, educational and loud on copper. What, you know, I've heard you say before that people dramatically underestimate what's coming in copper. Why is that?

I don't know why, because by every measure, it has been well-documented. Okay, it's not like it's one person that's saying it. It's almost every major mining company, every economist, everybody that's in the industry, bankers, whatever, have come and told us that there's a supply deficit of copper facing us, and it's a big one, and it's happening in the next five years. The next five years, I think it was JP Morgan said we're going to have an 8 million ton deficit. You know, a 30% supply deficit. 30%. We're currently producing about 23 million tons a year of copper. A 30% supply deficit in the next five years. And no one knows where all this copper supply is going to come from. No one. You know, a friend of mine is the chairman of Rio Tinto. He said, we don't know where this, you know, because their mines, the big mines owned by the majors, are being depleted. Their grade is dropping like crazy. They have to mine a lot more dirt now, move a lot more dirt to get that same amount of copper, so it's becoming more expensive. There haven't been any major, not a lot of major new mines put into production in the last 20 years. And it takes a long time to find a tier to find and develop and put into production a tier one copper mine is really a long, long time. You know, tier ones are the big porphyries that you see in places like Argentina and Chile and Peru. Those take a long time to find, develop, and put into production. And there are, by one estimate, we're going to need 30 to 60 new tier one, tier one copper mines in the next, uh, in the next five years. We only, like I look at what's not owned by the majors, okay? Tier one assets are over a billion tons of copper, usually a porphyry, you know, decent grade, point, you know, 3.4.5. Um, and I only know of five of them that are owned by juniors, not only owned by the majors, that are undeveloped, near surface, over a billion tons of decent grade. And so, you're going to need, the other estimate that I heard is you're going to need about 100 new mines of all sizes, like even the smaller mines. And I know you've got the Abitibi company in Quebec, you know, that's going to be a medium-size mine. It's not a large porphyry, but it, you know, in this, we financed the Selkirk mine in the Yukon. These are, we need so many of these to meet that supply deficit, especially the tier ones. And the tier ones, the big porphyries, take a long time. They're, they're, they're multi-billion dollar projects to put into production. And so, you know, I've got one that's in Colombia called Copper Giant. It's over a billion tons, and I'm going to stick with it. And my recommendation to people is find one you like, buy it, because the M&A frenzy will come. The senior mining companies, the Rio Tintos, the BHPs, they're going to have to take over some of these juniors with these large mega copper deposits. They're going to get gobbled up. So, my advice is find one you like, good grade, near surface, over a billion tons, or an underground mine like yours with high grade, really high grade mine, 2, 3% copper, buy those and just hold on. If the economics make sense today, they're going to get gobbled up.

So, that's my strategy.

What's interesting, Frank, like it's, as you mentioned, is like the VMS deposits versus the porphyry deposits. Like the VMS, high-grade, smaller scale, uh, higher grade, always has higher profit margins, but the porphyries have that scale, long-life assets. And we're both shareholders of Copper Giant, and it's quite exciting with what's going on with, you know, the drilling looks good, and I guess next steps for Copper Giant is at the PEA coming in by the end of the...

Yeah, the PEA, there's a PEA coming at the end of this, uh, third, third or fourth quarter of this year. Um, they just had an election on the weekend in Colombia, and the pro-mining guy won the election. He's going to be the new president. So, it creates a whole different perception of Colombia. So, yeah, no, I think they're on the right track. I think it's going to be way bigger than a billion. It's 1.1 billion tons right now. Just looking at where these drill holes are, it's open in all directions, open at depth. I think it's going to, my personal opinion is going to be over, it's going to be a much bigger number than a billion tons. But a billion tons is all you need to value one of these porphyries because, you know, that's about, I think for us, it's about a 30-year mine life. You know, after that, you know, when you discount the future cash flow, it doesn't really add any value. But the big companies like it because they want multi-generational projects that last forever.

Okay. So, so again, find ones you like, buy them, be patient.

And do you think, do you think we are entering a true copper super cycle? And if so, Frank, how long, how long do you predict it could last for, just given all the deficit projections?

I think until 2035, 2040.

Yeah. Because it again, it takes so long to get these things into production, and that deficit's going to come at us. And the only other thing that's going to fix it, two other things: higher copper prices is a fix, one of the fixes, and less regulation. You know, the permitting process by countries, especially the US, Canada, has to become more accommodating to allow these things to be permitted faster. And believe me, when that supply deficit hits, they're going to start permitting these things a lot faster.

Yeah. And with that, Frank, transitioning to the kind of the last theme of this, and by the way, Frank, thanks for your time. It's always great having conversations with you, and we got to do it more. But you've spent decades...

Yes, we do.

...financing discoveries, building companies, and studying history and watching markets. When you look back on your career, what are you most proud of?

I just wrote a book. It's going to be out this fall. It's basically my life story. It's a journey which talks about, you know, coming from nothing, making a bunch of money, realizing that that wasn't enough in life, and then where it took me from there. But I wrote an entire chapter on Goldcorp. And at the end of the chapter, I said this was the proudest, this company, Goldcorp, which we created, starting it was started as Wheaton River back in 2001, and finally was acquired by Newmont 10 years ago. Um, proudest achievement in my life was founding and creating Goldcorp, which became one of the biggest gold mining companies in the world. Uh, I'm more proud of that than I am of building Lionsgate, you know, creating Lionsgate. Um, in Lionsgate, the movie company that I did for six years, I'm way more proud of how, because if you, when you read that chapter, if you get the book and read that chapter, you'll see what a journey that was. It was not easy. But man, it was exciting, like thrilling to create from nothing, from an idea, to create one of the world's largest gold mining companies in a period of 10 years. Like, it just, we just did it. And, you know, obviously, I was the creator, the guy that put it all together, made, brought the people in, brought in Ian Telfer. Ian Telfer made it work. It was his management genius that made it work. I was a great cheerleader after that, but, you know, but I put it together.

One of the things, Frank, too, about the whole Goldcorp story, correct me if I'm wrong, but one of the things I always thought was incredible when I heard the story is when Ian would mention like your conviction during that stretch in gold. Like a lot of people at the time when you guys were doing acquisitions, a lot of people thought you were overpaying, but in hindsight, on the other side of that, it looked brilliant. So that truly comes down to the conviction and the just the...

Yeah. It's, yeah, I...

Yeah.

Yeah. And you had to have the conviction because we were working against time. We knew that, well, we knew I felt very strongly that gold was going to go up in price very quickly. And I was right. And so we had to move quickly. And so that means sometimes we paid full price for things with the knowledge that gold was going higher. And we'd go, I mean, I'd tell the analysts, they were so, they were so, they hated us. Every move we made, they hated. You paid too much. It's too much silver, not enough gold. Too much copper, not enough. Is there everything we did, they hated until it became a very large company, then they loved us.

[Laughter]

Well, what's my last question, Frank? With everything you have seen over the years, and we've covered a lot in this conversation, but what are you paying attention to today that almost nobody is paying attention to that you haven't really discussed?

Yeah, that's a very good question. I think that the, the, the, the part that people are missing in today's market, but I'm not, everybody, but I would think that the majority of the investing public is missing is that, A, as I just mentioned, we're going through a structural change in the global monetary system. This is not like anything we've ever experienced in our lifetimes. It, like I said, this happens every 80 to 100 years because people after 80, 100 years, they forget. So, our generations don't know what they went through 80, 100 years ago. But it's, so we're going through a structural change in the global financial and monetary system. That's the one thing that people are missing. The second thing that people are missing is they don't see, they tend to dismiss the dollarization because they see, "Well, the dollar is strong." You know, today it's, you know, one of the reasons gold is down is because the dollar is strong. It's, the DXY is over 100 now. It's 101. And they go, "The dollar is strong." But you're confusing cross-currency rates of dollars which are in demand because of the liquidity, I'm sorry, there's mosquitoes out here, liquidity crisis is going on around the world that people need dollars to buy oil at a much higher price. All these things drove the dollar higher. And and and they confuse that with the fact that central banks are selling US Treasuries. Okay? You and a lot of countries have to sell Treasuries to get dollars to pay, you know, whether servicing debt or to buy oil or buy commodities. So, there's a demand for dollars right now, but that doesn't stop the central banks from selling Treasuries. So, you're having both these things happen now. You've got a strong dollar in the cross-currency rates, but you're also having a de-dollarization, a reduction in dollar reserves at the central banks. I think people have missed that part. Okay, they don't, they say, "No, the dollar's fine. It's strong. Everybody wants the dollar." No, they don't. They don't want, they're trying to get rid of their dollars, but they need it for short-term payments, so there's, I, you have to sell dollar assets to get dollars. The third thing that I think most investors are missing, uh, is that this metals market, it's got a long ways to go. There's a real need for all of these metals, and there's going to be an M&A frenzy coming our way...

Yeah.

...in the next few years where majors are acquiring juniors, juniors are coming together to create bigger companies, uh, intermediates are acquiring, merging with, like, there's going to be a merger mania because the only way you're going to access these metals, the easiest way to access is through acquisition as opposed to trying to find them. They're becoming very hard to find now. The, the easy deposits have all been found. Now, it's getting much, much harder to find deposits, so what do companies do when they can't find them? They acquire. And so I think we're going to see a merger mania happening at some point in this market. And like I said, what you, as an investor, what you should do is find really good quality assets. Remember, scale is important, grade is important. Uh, bigger is better with sound management. Okay? Because management can really screw up these things. You know, you can take a great asset with bad management, and we at Fury are very good at cleaning up other people's messes. But so with good sponsorship, good management, great, buy them. Just hold them.

Yeah.

Be patient. They're going to get taken out. They're going to get gobbled up.

Well, Frank, this has been an incredible conversation. I'm also looking forward to continuing this discussion with you live at Beaver Creek in September. It'll be our third year. We'll have lots of fun. Thanks for...

It'll be fun. I, my, my, my pleasure. You know, Alex, I always enjoy talking to you. And thanks, everybody, for watching the show.