Transcription
There's nothing like, let's say, gold that can be used to extinguish the debt because, basically, banknotes or dollar bills, they're not money. They're, they're just like a, a promise to pay in money. So, the, the, the system we're under is completely upside down. They've taken the money out of it, i.e., the gold and also the silver. And they said, well, the promise to pay those now is the money. And the problem with that is that you can't extinguish it. You can't pay it off. And that's why the debt keeps growing. That's why there's 9 trillion for the US Treasury to roll over this year. So that's the bubble. The bubble has been the government debt market, has been the fiat currency, and all this, uh, fictitious fairy dust valuations that we've seen since the early 80s. That is the bubble, that is the mania, and all that gold and silver are reflecting is the collapse of the system.
Saturday, February 7th, 2026. Monaco 64, home of alternative economics and contrarian views. Well, yeah, contrarian views. Uh, but today I want to talk about mainstream financial publications, how they can, uh, very often be, uh, contrarian indicators, especially for investments. When they say something, uh, is not worth investing in, you should think about investing in it. And, uh, when they praise a kind of investment on the cover of a magazine or newspaper, you can bet that it could be the top for, for that asset or commodity or currency. And, uh, for those of you who have been, uh, with this channel for a long time, you probably know about this, uh, editorial by the FT back in 2004, uh, that I, um, yeah, I cut out and laminated it because I thought it was so outrageous.
Um, yes, it's, uh, "Going, Going Gold: The Pointlessness of Holding Bullion Continues to Sink In." Yeah, that was from April 16th, 2004. Price of gold is at $400.65. I had been stacking already for almost two years. And I, I was, uh, on the way to work. I had bought the newspaper at the train station. I, I used to turn to the editorial page first thing for some reason, and I saw this, and I was kind of outraged. But then I realized this is just a scoop. These people, uh, don't know what they're talking about. And that's why I laminated it because I thought it was going to be timeless.
Uh, but what I want to talk about today, aside from this, we're going to go through this because many of you are, are new to the channel. Um, and for those of you who know about it already, it's always good to refresh things. Well, and then we're going to go over another classic, in my opinion, if we, uh, look back in the future. Uh, and this is from February 5th, 2026, and it's from the editorial board again of the FT. "No One's Really Put a Name on It," like, like they didn't put it here. Uh, and, uh, it says, "The Cautionary Tale of Gold and Silver: Precious Metals Mania Is Just One Area of Excess in the Financial System."
So, let's start with this one, right? And before I start on this, just wanted to let you know that Karen, who runs the, uh, merchandise store, the, the Rudy merchandise store, she even did a mug about this editorial, and it's "Going, Going Gold." If you're interested, there's not just this mug, but there are other ones. There's a link below in the description. Anyway, so let's get to this one here. And, uh, as I read it here, I'm going to put it up here in the, um, video. You can pause as well, or you can take a screenshot and keep it for yourself as well.
So, "The Pointlessness of Holding Bullion Continues to Sink In," right? Uh, it says, "The barber's relic, as Keynes called it, is crumbling to dust. When even the venerable N.M. Rothschild has quit the gold market, and the Bank of France, among the most stubborn of the official gold bugs, is thinking again about its bullion holdings. The end of gold as an investment has come a little closer." Well, they mentioned the Rothschilds. Yeah, they, they quit the LBMA and the price fixing that they used to do in their office for like, um, a very long time. They quit that in 2004. And, uh, you've seen that, uh, guy Epstein, he, he was a representative of the Rothschilds, right? So I, I wouldn't even put it past the Rothschilds. They went to the FT and told them to write some rubbish like that because they probably wanted to buy, and they didn't want the public involved, right? And gold at the time was breaking back above 400. It had been down to 250. So, I wouldn't even put it past the Rothschilds to be doing some manipulation there. Yes, they got out of the LBMA, but you can bet, uh, they've got a lot of gold still, and they're probably still buying it.
Anyway, it says, "It will not be before time. The fetishization of shiny yellow metal, decades after it ceased to be used as the anchor of the international monetary system, is a lingering anomaly in modern financial markets. Perhaps Rothschilds." There you go again, mentioning the Rothschilds. And, uh, yeah, they were very, they're very close as well to Peter Mandelson, right? Um, which is a really sorted story. Anyway, let's continue.
Uh, yeah, perhaps, uh, Rothschild's last service to the bullion market could be to keep a live gold trader on display behind, uh, glass as a reminder of a bygone age, like the former coal miners who make a living giving tours of defunct pits. "The one advantage of gold as a reserve asset is that unlike assets based on fiat money, governments cannot make it worthless by inflating it away." Well, they got that right. Uh, what they got wrong is what they say next. "But in an era of low inflation, and given that independent inflation-targeting central banks are the norm across industrial, the industrialized world, that risk has, uh, very sharply diminished. Indeed, uh, for both private and official investors, gold is now a rather risky asset with a nil or low return."
And it's weird because over the years, friends, colleagues, family, they've asked me about gold, and I say, "Yeah, you should have some. You should buy some." And almost all of them say it's too risky. Uh, so you can see how this affects, um, yeah, affects the narrative. "The intrinsic value of gold, determined by its use in various industrial processes, is well below its market price. Gold does not grow. So its value to any one investor as an asset is dependent on other investors also holding it as an investment asset. The gold price hangs precariously by its own bootstraps. For private investors to hold gold on this basis is their own foolish affair." So there you go. You're a conspiracy theorist. You're foolish. Uh, yeah, there. "For central banks and governments to hold it as a reserve asset is a betrayal of the public on whose behalf they're acting."
Well, I think the betrayal was Gordon Brown selling half of the UK's gold. Uh, so, yeah, Gordon Brown, um, he betrayed the public because he sold, uh, the UK's gold below $300, and here we are now, near 5,000. "Despite recent sell-offs, governments and central banks still hold about a fifth of the world's bullion. Their large holdings relative to the size of the market by themselves make gold particularly ineffective as a reserve asset." Um, well, tell that to the, uh, central banks, uh, who've been buying handover fist since 2022. They've done very well. And, uh, foreign reserves held by foreign central banks, non-US dollar central banks, their holdings of gold has overtaken the fiat dollar, or the "I owe you nothing" dollar, right? "The very active official selling of bullion on any large scale to raise cash will itself drive down the price. This danger was amply demonstrated by the UK's unhappy experience trying, uh, trying to sell some of its gold holdings pre-announced in 1999, right?" They say announced, but Gordon Brown pre-announced it. Uh, I'm sure he was in the pockets of the bullion banks, and they said, "We need the price lower," or Mr. Mrs. Rothschild said, "We want to get gold cheap." Pre-announced it. Gordon announced '99. Yeah. In a sensibly, uh, open, it wasn't sensible and transparent fashion. The sales sparked such a fall in the global bullion price that a group of central banks signed a concord limiting such sales that has recently been superseded by a new agreement providing for limited official sales.
"Given the pointlessness of holding gold, the speed of its official sell-off scarcely matters, unless leeching the gold into the market bit by bit somehow maximizes, uh, the return to the public purse by limiting the impact on the price. That would imply some irrationality on the part of the market. But then holding gold is irrational in the first place. Perhaps the central banks are right to go slowly. Whatever the speed, uh, the direction is clear. Gold is on its way out as an investment and a reserve asset. Three cheers, uh, for that."
So there you go. Uh, yeah, the reason I laminated this, of course, was that I thought this is going to be timeless, and it has proven to be. And, uh, at the time, I, I still worked in the city of London as a futures and options broker in the government bond market. And I had, uh, the guys in the, uh, office, the guys in the mailroom, they had a, they had a laminating machine, and I, I took that down to them, and they laminated it for me. Um, so there you go. And, uh, on that day, gold was at $400 an ounce. Uh, maybe they didn't want gold to go above 400 because if you look at the long-term charts, that was a really important level. It was, uh, pretty much, uh, like 2,000 used to be a few years ago, or even 5,000 now.
So, I'm not surprised that they've come out with another, uh, editorial, uh, in the FT. It says, "Precious Metals Mania Is Just One Area of Excess in the Financial System." And that's really disingenuous and dishonest because gold has been money for thousands of years. And, uh, what gold is telling us, and has been telling us for, I would say, since the beginning of this century, is that, uh, the fiat dollar, and, and all the other, uh, currencies that are a derivative of the dollar, all fiat currencies, they're on their way out because we know that fiat currencies, uh, they always go to zero because there's, uh, there's no backing, there's nothing like, uh, let's say, uh, gold that can be used to extinguish the debt because, basically, banknotes or dollar bills, uh, they're not money. They're, they're just like a, a promise to pay in money. So, the, the, the system we're under is completely upside down. They've taken the money out of it, i.e., the gold and also the silver. And they said, well, the promise to pay those now is the money. And the problem with that is that you can't extinguish it. You can't pay it off. And that's why the debt keeps growing. That's why there's 9 trillion for the US Treasury to roll over this year. So that's the bubble. The bubble has been the government debt market, has been the fiat currency, and all this, uh, fictitious fairy dust valuations that we've seen since the early 80s. Uh, that is the bubble, that is the mania, and all that gold and silver are reflecting is the collapse of the system.
And yes, gold and silver maybe got a little bit ahead of themselves in the last month or so, or the last few weeks, but it's not going to go away. And we're going to look at the charts, and that's why I think they're completely wrong. The mania is a fear currency. I think it's dangerous. It's going to make a lot of people look twice, think twice, and not really protect themselves because that's what gold and silver are. Uh, they are protection against the collapse of the fiat, fiat money system. And even Ray Dalio admitted we are right in the in the middle of this, uh, process.
And, uh, with that, I'm going to show you some charts. And, and these are long-term charts. Some of, uh, mostly like quarterly charts because I, I think it's good to look at the bigger picture and see that, uh, the fundamentals for gold and silver haven't changed. Uh, the fundamentals for the dying fear currency system hasn't changed. Uh, and, uh, yeah, hopefully this will, uh, calm your fears or like erase your fears. Of course, many people who don't watch this channel or other channels like ours, uh, and only read the FT, they're going to ignore gold and silver, and they're going to be kicking themselves in a few years when, uh, the whole system implodes, and the only, uh, monetary asset left, uh, that has any value, uh, is, uh, physical gold, and also physical silver, of, of course.
So, uh, let's start with, uh, let's see, let's start with a gold chart. The granddaddy, like, uh, Michael Oliver calls gold the granddaddy of the monetary metals. And here I have a quarterly chart going back to the late 60s. And, uh, yeah, I mean, it's still early, early doors here. If you compare the move that we've had since we've broken, uh, yeah, we've broken definitively above 2000 back in the beginning of 2024, right? It's a, it's a good healthy move, but you compare it to the move we had from, uh, 2001 to 2011, uh, we still have a lot of time left, uh, in my opinion, and a lot of upside left, and downside for currencies as well. And if you compare it to the 1970s bull market, the same thing. And this chart, of course, is a logarithmic chart. It's not an arithmetic chart, uh, which makes, uh, the current move look parabolic, right? And, uh, so to me, uh, you can't even see the correction we've had in the last week or so if you look at the quarterly chart. And I wouldn't be surprised, uh, if at the end of the quarter, i.e., at the end of March, we're a lot higher than we're now. Uh, it settled yesterday, gold just below, below 5,000, 4,964.
Um, the next chart I wanted to show you is the Dow Gold Ratio. And, uh, I think it's really important to show you this right now. And why do I say that? Well, you're going to see a lot of headlines, especially in the financial press or even in the mainstream media, about $50,000, uh, Dow, right? And I'm sure, uh, politicians are also going to play that up and say, "Look, we're doing great, $50,000 Dow." But what the Dow Gold Ratio does, it tells you what the Dow is really doing in terms of real money, not confetti, right? Because that's what the fiat dollars become, confetti. Uh, not, and I'm not having a go at Americans because all our currency here in the UK is confetti as well, and everywhere else.
Um, so as you can see, um, that chart looks very bearish, and that means that gold is going to continue to outperform, uh, the Dow. And, uh, I, I don't think there's, uh, much time left to, to get out of paper assets because this is what the Dow Gold Ratio is saying, that hard assets are going to outperform, uh, paper assets going forward. And by paper assets, I mean stocks and bonds. And, um, if you don't have any exposure to gold, silver, or other commodities, I think you're going to lose out big time. I don't think 5% will do. I think it will be need to be a lot more. Even Morgan Stanley has admitted that you need at least, well, you need 20%, up to 20% in gold. You know that that portfolio of 60/40 is now for them, 60 stocks, which I still think is too high, 20 bonds, and 20 gold. I think it should be, uh, 80% gold, uh, and miners, to, uh, yeah, maybe 10% bonds and stocks, uh, and, uh, yeah, the rest cash if you want to have a bit of cash. That's what I would say.
Now, we're going to look at silver, a quarterly chart. Uh, yeah, this is another way to look at it. Yes, it got ahead of itself, but, uh, it's not like out of the realms of possibility that by the end of the quarter, or end of March, we'll be, uh, back up. Uh, we could be even higher than we were recently, around 121. Um, and, um, the other thing about this chart is the, uh, cup and handle, which is a really bullish formation. Uh, and I don't think we've seen the last of the, the silver bull market by any stretch of the imagination.
And the only reason why gold and silver feel, feel like they're risky and volatile is because the currencies in which they're denominated in, they are the risky and volatile, uh, instruments. They're the ones that are dying, right? The fiat currency. My sovereign hasn't changed in size and weight. My 1964, uh, 90% silver quarter hasn't changed, uh, in, in weight and size. It's the currency that's dying. And that's how we have to look at it. And of course, there will always be speculators who, who really have no clue what's happening. They just want to make profits in a dying currency. And, uh, you should, uh, try to avoid joining them.
And with that, I'm going to wish you all a, a very good weekend. Take care. Bye.