Transcription
Hi everyone. Happy almost long weekend. Uh, let's dive straight in because we have the latest job numbers. They, they dropped. They're raising eyebrows. The US economy added just 57,000 non-farm payroll jobs in June. That's well below the roughly 110,000 that was expected. Unemployment ticked down to 4.2%. But with downward revisions to prior months, the labor market is showing clear signs of cooling.
At the same time, gold is rebounding after a very rough quarter. We're going to talk about that. And of course, now markets are quickly dialing back expectations for any near-term Fed rate hikes. Many voices are now saying a hike looks increasingly unlikely. That's just complete opposite of what we were hearing last week. So, let's just clear out all this noise and get to the real facts. Clem Chambers is back with us today. Clem, always good to have you on. Welcome.
>> Great to be back on. And, um, you know, all the noise, that's what gets people into trouble. Oh, got to go long. Oh, no. They, I got to go short. Oh, I got to go long. And they die by a thousand commissions rather than by getting it wrong or right, you know.
>> Well, exactly. Let's take a deeper dive into that because, uh, just last week I had, you know, experts on, you know, talking, well, look at the latest inflation numbers. The Fed definitely has to hike. There's no, there's no way in hell that the Fed can't hike. Now, I, I have always been very suspect of this discourse, Clem, as I was saying offline, and here we are now this week with, you know, there's a completely different theory of what the Fed will do now, and that, oh, maybe they won't hike rates. So, just give it to us plain and simple. What do you think the Fed's going to do?
Well, if I was going to work for Donald Trump and he was going to send me to be chairman of the Fed, I would not cross that man. And, you know, Jay Powell was absolutely excellent and dug America out of a few holes over his tenure. And, you know, he wasn't doing anywhere near what he was told or asked. He wasn't being a dove. And so he got threatened with being thrown into jail. So the next guy, what's he going to do? Is he going to say, "Oh yeah, sorry. Sorry, Mr. President. Uh, we're not going to be, um, a dove. We're going to be a hawk." He's, it's not going to be, is it? He might say, "I'm a hawk." And, and Trump might say, "He's a hawk." You know, and then he's going to do what he's told, isn't he?
I mean, who, I mean, >> but they're independent, Clem. They're independent. And don't they want to show their independence?
Not really. Not if you're going to get, you know, those sort of legal cases against you like happens in American politics these days that can wipe you out financially because they cost millions to actually fight even if it's clear that you're not guilty of anything. I mean, the, the, the legal system in politics these days is an absolute pestilence for America. You can't be in power without being sued for, you know, huge amounts of money and for all sorts of stuff. I mean, it, it's just a terrible thing, right? It's, it's, it's a great, a kill for America. And you're not going to take that job if you think you're going to be sued by the Justice Department for, you know, licking an envelope too much or whatever they have you for. And that's, that's you're over. You were broke if they do that. So you're not going to take that job, are you? You're just not. I'm independent. Oh, I'm going to be threatened with jail now. I mean, are you really? I don't think so.
So you, so basically you think Kevin O'Leary is just going to take marching orders from Trump and basically lower rates.
Let's just say they're on the same page. They're on the same page. And what is the page? The page is it's all, you know, the whole world revolves around the president now. And what the president giveth, he can also taketh away, particularly in the market. And what do they need to do if they're going to onshore the whole of the bottom of the manufacturing pyramid into America? They can't do that with tight money policy, can they? Who's going to fund that? They're not going to do the AI buildout necessary to at least stay neck and neck with China. That's not going to come free. We know how many trillions that's going to take. Then there's the government running a massive, massive deficit like there's no, you've never seen before to use a paraphrase. That needs, that needs loose money. So you've got three spokes or three legs on that stool of needing loose money. Government runaway deficit, um, industrial buildout and AI buildout. You, you've got to have a print-a-thon. You can't go around, oh no, we don't want any of this inflation. We're going to turn the money off. Stock market collapses and then what have you got left? No industry, no stock market, no housing. I mean, all the American wealth has been financialized and pushed into the stock market. That's why they've been able to print money without there being runaway inflation. Yeah. So that financialization, which was the old globalization strategy, you, you can't get out of that. If you get out of that, what you got left? Actually, Tabby Costa, um, I don't know if you follow his work, but he just, uh, he just reposted, uh, the rise of, uh, M2, uh, money supply. I don't know if you've taken a look at that chart recently.
Oh, I mean, M2, when I last looked at it, it makes you take a very sharp intake of breath. And, you know, money supply. Oh, yeah. You know, you want to know why the, why you can get however much, um, time sales for a SpaceX, 100 times sales because money supply is big. But however, if you push that money supply into equities and you push that into bonds and you push that into real estate, you don't get so much inflation like you would if you did it another way. And, you know, if you're South America, you just print it and hand it out to your mates and you get hyperinflation. But if you do it this way, you print money, you push it into financial assets, it takes the edge off it. And again, if they print like mad to rebuild industry and to build the AI buildout, that won't be supersonically inflationary, but boy will it be inflationary. I mean, you're looking at 5, 6, 7, 8, 9% inflation for the next decade. You can't have a Fed governor that says, "No, no, you can't have that money." Well, what happens then? You know, your stock market doesn't go anywhere. You, you can't rebuild your industry. You can't do the AI buildout. Meanwhile, China's got it all anyway. You're over, aren't you? You're finished. So, this is the thought that people need to have. What happens if this does not happen? What happens to America?
Yeah. What, what happens, Clem?
Well, I mean, it loses its position to China because China makes all the stuff. It can't have a conflict over Taiwan because it can't make its armaments anymore because it hasn't got any rare earth. It hasn't got much in the way of manufacturer. It can't make the basic, can't make ships. Well, you, you become a cargo cult, don't you? You, well, you become like what, what Europe has become, which is, you know, not in the lead, not dominant anymore. You are not the dominant economy, which is why the Trump administration talks about energy dominance.
And why it talks about being able to have lots of rare earth so they can build all the electronics they need to build. I mean, take for example, just tomorrow, tomorrow the aliens swoop down and pluck out Taiwan and beam it up to another planet. What happened to the American stock market? What happened to Apple? What would happen to all those tech companies that rely on Taiwanese chips and for that matter, Chinese chips? Yeah. What, what would happen? It, it would all grind to a horrible halt, wouldn't it? So that is the dynamic. America and China running neck and neck. But America's got the base of the economic pyramid. And America's got, you know, a fantastic top of the pyramid, but it hasn't got the base. If you haven't got rare earth, which is only a, I think, 20 billion, um, market, that props up $7 trillion of economic activity. That one little Jenga block, if you pull it out, the whole pyramid comes down. In this case, tower comes down, right? And China have got many of those Jenga blocks. It controls pretty much all the strategic and critical minerals and all the processing and all the equipment and all the precursors just from one section. So how does America? Well, listen to President Trump. What does he say? Make America great again. And the key word is again. What does that imply? Make America great again. Was great. Will be in the future. And that's what Trump's strategy is. And what a task. What a task.
And you can't have hard money. You can't have tight money if you want to do that. You got to have loose money.
Well, I have to agree with that. And that's why what you said, I, you know, they're going to have to have a print-a-thon. I'm going to put that in a quote. Clem Chambers. And I, I don't see any other way out.
As well, Clem. But at the same token, they want a strong dollar. Well, you can have a strong dollar if you have a strong economy and if, you know, they, there is one right now. Everybody was, everybody was thinking gold was going up because the dollar was going to be devalued. Well, you know, fear. Everybody loves fear. Everybody loves fear currency. China doesn't want to have the reserve currency. It's got, it's got capital controls on its money and for that matter, its equities. Yeah. He's quite happy for America to be the reserve currency and have to push its money into the world so that it has a trade deficit and has to buy stuff in for the world to get the money out there. So the reserve currency is going to go nowhere. And who, who wants to have a BRICS currency? Who wants the Brazilian real? Who wants the Indian rupee? You know, nobody wants those currencies, right? Cuz they, they make America fear look, look wonderful. And, you know, if you have a currency debasing at 8 or 9% a year, well, you can kind of cope with that. So America will be relatively strong. Yeah. But the buying power will go down. But the buying power of everything else will go down more. All right? So, which is where, where your gold, your silver, your platinum, palladium come in. And why now, now we're not going to have World War II. Hope. Well, actually, right now, if you look at what's going on in the market, it looks like, um, you know, America's going to bomb Iran imminently. Absolutely. Could be this weekend, right? Because you've got all the military stuff going through the roof. Gold's kicked up as well, which the short term is hazard if you get that sort of thing going on. So, we're on a knife edge with Iran. I think oil, oil, non-Middle Eastern oil is kicked up. Equinor is what I, I follow. And so, there's a knife edge there. So that might come up in the next week or two. Could be on the weekend. You know, it's, it's looking dicey long term.
Why? Because he's, he wants just this to end. But I mean, it's so, it's extremely unpopular, Clem.
Yeah. Well, so would a nuclear weapon being floated into New York Harbor?
Is that really a, is, are you really concerned about that? I mean, do you, I, you know, if I had to fight, if I had to debate you back, I would say, well, do you sleep well at night knowing that North Korea has one?
Yeah. But, you know, North Korea don't, North Korea is a puppet of China. It's a little snow globe where China goes, "Look, don't mess us around. This is what happens to China if you muck us about. This is our little demonstration of what China would look like if it wasn't run by marvelous people like us." And that's why North Korea exists. Without China, it doesn't exist. Right? China could shut that down like that if it wanted to. It doesn't because it's a perfect example of what you don't want to have as China. Yeah. And if you think about what China was in the 60s and the 70s, it's not far away from North Korea is today. Yeah. So that's why they keep North Korea afloat. You say, "You don't want that, do you? Do you want that?" Well, you don't want that, do you? No, no, no. So, you know, let's be friends. Yeah. Iran is just a wild card. And if you don't think they wouldn't go down in a ball of flame and let Allah sort everything out, I think you're mistaken. And, you know, I think the Israelis are on that page, too. Yeah. They, they got them. But, you know, those guys, I mean, look at what's just happened. I mean, they've been, they went, "Oh, we've been attacked by America. We're going to blow up everybody." Yeah. If you look at Yemen, you might as well write Iran on that. If you go look at South Lebanon, you might as well cross out Lebanon and write Iran. Yeah. So, you know, give them a nuclear weapon. Why wouldn't you use it? You believe in Allah? Hey, hey, let's go for it. Strike, strike the beast at its heart. Well, how you going to do that? You just sail it in a boat, don't you? Bang. Goodbye. Don't think they do that. Anybody listening to this, don't think that they're capable of doing that?
Oh, Clem, that is, that is why America's doing it. You know, nuclear weapons. It's, this is a can of worms, right?
Um, >> it's not very complicated. Is it a possibility?
Because there's, there's so many schools of thought. They're nowhere close to having the, the, the nuclear weapon. Are they? Are they? I mean, which, what information do we really have, Clem? I mean,
Well, I don't know why that, you know, it's a good job they just don't write a big check to Pakistan and take one of theirs.
Oh, right.
Well, Pakistan's got one.
Well, okay. Do you sleep well at night knowing Pakistan has a nuclear weapon? I mean, I guess the bigger discourse is the bigger question is, and I've brought this up to others of, you know, who gets to decide who has a nuclear weapon and who does not have a nuclear weapon? What constitutes good, what constitutes bad? Well, in the old days, it was America that decides who gets a nuclear weapon. And the idea is nobody gets it.
And that was a big deal. Anti-nuclear proliferation, the history of that is a big, big deal, right? And, you know, because of what those things can do and because now it's much easier than it was 40, 50 years ago. And, you know, that is, that you could do your research on weapons of mass destruction and how important the international community, as it was considered that. But, you know, at the end of the day, that's the big question. That's the big risk of a, you know, massive weapon that can be detonated and, you know, that they wouldn't be bothered otherwise. You just leave them to it, wouldn't you?
And wouldn't it be nice if you know,
Wouldn't it be nice? Wouldn't it be nice? But, you know, stupidity. No short supply.
Oh. Um, okay. Let's go back. I started with the jobs numbers. Let's just talk briefly about this because, you know, we don't even know if we, what, if what truth there is to these numbers. But anyhow, what does it say about the state of the American economy in your point of view right now?
Well, I mean, the, there's, it's choppy is what I would say. It's choppy. And, you know, at the end of the day, if America's economy stays the way that it is, it's, it's got a, a little bit of bounce in it, a little bit of spice. Unemployment is not so high. Um, it's kind of at the level which is meant to be sustainable without creating unwanted inflation. Inflation has been pulled back, but we, we are in a new epoch. It's not even a new era. We're in a new epoch. And you're seeing that with what's going on with AI and what's going on with America and planning to and working really hard to rebuild its industrial base. Yeah. And the breaking of the globalized old model of everybody trading over long supply chains, that's all gone. Now, now whether it come back after a republic, if the Republicans lose, um, control of, of, um, the presidency is another matter. Whether the Democrats will go, "Oh, we don't, we don't want to bother with any of this. Just let friends be friends and let's open up international trade again and let's have long supply chains and let's just bow down to China because they got the population." You don't know.
It's interesting in the restaurant service industry. I guess we have to see a breakdown of, of, of these jobs numbers, Clem. Uh, but I just did a recent, you know, drive up from New York City to to Montreal where I am now, and I, I, uh, cannot tell you the amount of restaurants, chains, whatever, basically begging people to come and work. I mean, they've taken out banners that basically cover the entire, uh, you know, walls of their outside, you know, brick-and-mortar places begging for people like, come, we need workers, you know, whatever we're paying per hour. So, McDonald's, Taco Bell, you know, Pizza Hut, Dunkin' Donuts, all hiring. It's like they, they can't find workers.
Yeah. Well, it's very simple. You just put up your wages and you'll find more. You put them up until you don't need to, to, to find anymore. And that's good. That's very, very good because they're the people in your economy that you want to be paid more. You know, people complain about the K-shaped economy and how the rich are getting richer. Well, how about the poor getting richer? That's exactly what that is. So, that's good because, you know, why should people that work in those industries get paid badly? Why shouldn't they get paid much better? So, you know, they will come if you pay enough. They will come. They won't say, "Oh, no. I, you've doubled that salary. I'm not going to do it." They will come if it's worth their while. And that's the whole point about an economy. All, all these elites all around the world importing poor people to keep the wages of the working class down. That's, that's an abomination in my book.
Should get their minimum wage. What do you think the minimum wage should be in the US?
Well, it's not a question of what the minimum wage is. is what the wages people will pay. Going around forcing people to pay a minimum, you know, that, that's a, that that's just one of those things that politicians do to get votes, but doesn't help for employment because it breaks the ladder. It means that you have to go up a certain level of value in a job before, you know, you can actually, um, have people working for you, which, which from in the right wing of which I suppose I would say I was from, that the minimum wage is anti-employment.
Clem, but here's there's another big difference though that people also, and I'm talking young kids, right? That a lot of these jobs are for, you know, kids in college or whatnot. But I remember being that kid in college, horribly paid, working at, you know, some retail store. And I remember it was like, what, seven bucks hourly wage at the time, Canadian, you know, crappy salary.
Yeah. Yeah.
But I still, but I still did it. But I still did it because I couldn't sit home on my butt. You know, my parents were like, "You're not, you need a summer job or, you know, you have to do something while you're in, in, in college."
Well, now you can. So it was also a different mindset, right? Like you couldn't sit home and play Minecraft. I couldn't sit home and mine crypto or look to make, you know, or go online and try and make, you know, become a TikTok influencer and try and make money that way. So there's also the work ethic that has changed, Clem.
Well, you know, if, if your parents are subbing you, then then you're going to make that decision. It's just a financial decision, isn't it? And, you know, if, if that means that you have to pay young people more to work in McDonald's, I'm all for it. And why shouldn't kids play Minecraft? I'm all for it, you know. But if it means,
A list of why kids should not be playing Minecraft 24/7, Clem. So, um,
I'm slightly responsible for that.
All right. Um, let's talk the gold price. It's, as we're speaking, hey, gold's looking, uh, like it's rebounding. Dead cat bounce or do you buy this rally? What do you see in store for gold?
Well, I mean, you know, if the word's out there's going to be problems in a certain place in the Middle East, that could cause it. But, I mean, my feeling now is that what we had this, that the, the boom, the bubble that's over. So, we're in a post-boom bubble bust environment and it will reach a certain level of which I think is about three and a half thousand, but, you know, it's not fate. Now's the time to think about DCAing again, just building up a slow position. You know, a couple hundred bucks every every month or a couple thousand bucks or 20,000 bucks depending on how not rich or poor you are. Now's the time to start DCA again. So, you know, around these levels, probably a bit lower, is the time to start building a position as I would call it because, you know, there will be this, um, inflation coming down the pike. There will be loose money and because of that, gold will go into a long-term positive trend or at the very least won't be going down any further. Yeah. So most people who are into gold are into stacking. Okay. Now, I'm not a stacker. I, I knew it was going to explode, so I had a lot. It exploded. I, and I, and I knew it was going to collapse, so I sold it. I mean, I said as much on your show to much people's horror and your own. Yeah. But now, maybe I won't get three out of three. But my third wild guess is we will reach a, a bottom. I mean, if you're DCAing, it doesn't matter. You buy here, just buying a little bit. So, you're averaging your dollar cost averaging your gold. And the bottom of this, I believe, will be three and a half thousand, maybe a little lower, but who cares? And then you don't plunge. You just buy a little bit. You know, you buy a little coin and you buy another little coin and you buy another little coin and then you buy another little coin and keep doing it because over the next 10 years, gold will go on a nice trend because the value of your dollar bills that you put in is going to go that way and the value of your gold in real terms will probably go sideways, but in numerical terms will be going that way. So now is a good time to think about to watch for an entry to start or restart your dollar cost averaging. Now, a lot of people would have never stopped doing that. They would DCA all the way up and all the way down and all the way along. But for those that want to know what to do about gold, I would say DCA, start DCA at some point. And if you see $35,000 an ounce, that's a good place to start. But now's not bad. I mean, it's only $500 away from that. And if you're just buying a little bit every month or quarter or whatever your your loop is, you know, now is a good time because there is going to be, um, elevated inflation forever now. And therefore, it's a good time to get rid of your fear and park it into a hard asset, whatever you want to park it into. And gold is a pretty good hard asset to park it into. And that's why I urge everyone to reach out to ITM Trading. Thank you for that segue, Clem. Uh, because they could help you properly position yourself and be ready for when gold just is ready to take off because it's not going to give you signs and it, like we saw in January, just takes off and it takes off. And it was not to my horror, a Clem, because, you know, why? I've never sold my gold and do not plan to, knock on wood, unless, you know, God forbid I'm forced to.
Buy way more now. I could buy way more. Look, people,
I am. Yes, and I'm, I am adding, full disclosure. So,
But it wasn't to my horror. I don't get, I don't get, I so I don't lose sleep over owning a gold. That's the beauty of it. So even with, uh, the horrible quarter gold had, it's like I'm not losing sleep over it because I know I'm in it for the long term.
I don't plan to die on a golden bed. And when it's too expensive, I'll sell it. And when it's too cheap, I'll. And it's a good place to turn. Take your confetti and turn it into a hard asset. And I'm sure your company is is very good at doing that. But if it gets to it, if it goes up vertically and it looks toppy and you can sell it and when it comes down, you can get more for your, for your, for your confetti. So, you know, at the end of the day, buying it and holding it forever and hoping it's going to go vert, you know, it's just a good place to to have a diversified portfolio of risk.
Well, no one, wait. I don't want to die on a golden bed either.
Yeah. Well, you got to sell it then, haven't you?
I'm not selling it. I'm passing it on to my children.
You got to pass it on. Okay.
Well, yes. Yeah. Exactly.
Pass it on to the next lot. And the next lot. You'll be the richest poor people in the block. Uh, well, I feel good about it. So,
Yeah, that's good. Gold, that's a wonder benefit of gold is lovely. It's lovely. And cuddling your gold, the swimming in your swimming pool like Scrooge McDuck is, is, is a wonderful thing. But, you know, I like to take my emotion out and, um, I find that when I jump off my diving board into my swimming pool of gold coins, it hurts my head.
So, you know, sell it when it's expensive. Buy it back when it's cheap. Let, where, so where should, where, where's a smarter place to be parking your money?
A smarter place in a diversified portfolio of risk. Yeah. Because that way, if you get it wrong or things run against you or some idiot drops a load of bombs on somewhere they shouldn't or whatever, you, you're smoothed. You have a smooth response and, and you are much better prepared for the vagaries of the world. So some gold, some people say two and a half, some people say five. I would, I would say probably if gold was cheap, over a little bit over five. When gold's expensive, very expensive, zero. And when it's normal, two to 5% of your net wealth or your liquid wealth in gold. And you can spread that in silver. You guys do silver. Platinum is ridiculously cheap in my book. And palladium. So why not? Yeah. And then, yeah, you know, a nice investment. Sure.
In stocks. Why not?
Yes. Diversified amongst metals. I don't have a problem with that. I want to own some mining stocks.
I'm getting thrown down the stairs with metals at the moment, but yeah, absolutely.
Uh, always good speaking with you, Clem. Thank you for joining me. And, um, are you, are you watching any of this World Cup action?
Yeah, 22 guys kicking around a bladder. That's, that's, that's not entertainment for me.
Okay. So, we don't have a World Cup fan here, so I, I'm not even going to ask you who you're rooting for.
Well, I don't know. If I find out that England's in the finals or something, I'll watch it because I'm, you know,
Yeah, they're gonna play Mexico next.
Your guy, King.
I have no idea. I, they would probably go in the final and win and I wouldn't see it.
All right. Well, uh,
Sorry guys. Sorry guys. They're gonna hate me saying that. Sorry. Sorry. It's a great sport. It really is.
You might get a call from David Beckham like, "What?
It's a beautiful game. Clem, thank you so much for joining us. To all our American viewers, happy 4th of July. Enjoy the long weekend. And next week, we will be broadcasting from Rick Rules, a natural resource symposium happening in Boca Raton. So, stay tuned for awesome coverage from there. We'll see you soon.