Transcription
Why is the Treasury Secretary again talking about gold so publicly? The world is talking about gold. In fact, we're late to the conversation. The bigger issue for me is not if all the gold's there. I think it is. The question is how much of it is pledged to somewhere else. Gold has finally hit the point where it's ready to blow. I think somewhere between 7 and 9,000 is probably where gold ends up in this run. When you see a 25% drop back in gold's price with no sign of a fiscally responsible politician on the horizon, that tells me that gold is cheap.
If China did announce that it has more gold than the US, what do you think happens to the dollar, to the gold market?
This is the real story with Michelle McCori. Hello, I'm Michelle McCori and you are watching the real story where we go beyond the headlines, beneath the surface and behind the curtain to show you what is really happening with money, markets, and power. And US Treasury Secretary Scott Bent has put America's gold back in the spotlight. He says the nation's gold reserves at Fort Knox are fully accounted for and that the US still holds the world's largest official gold stockpile. During a recent interview with Jesse Waters on Fox News, the Sen said that the nation's gold is present and accounted for. He highlighted that the US holds the world's largest official gold reserves, value those holdings at more than a trillion dollars at current market prices, and reflected on the history of gold and silverbacked currency before the US moved to a fiat monetary system. Let's watch.
These are the displays of our currency over the years. Some of it like we used to have silver certificates. We used to be backed by silver, sometimes gold. And then in the 70s we just went to what was called fiat currency where you didn't have to keep gold or silver in the vault. If any of these are still outstanding though the silver or gold for them is the uh uh at Fort Knox waiting for them to be claimed if so needed.
Have you visited Fort Knox?
I I haven't. I haven't. People on my staff has uh we're going to the treasur's office. The treasurer has been to Fort Knox and I am happy to say all gold is present and accounted for. Uh the US has the largest pile of gold in the world, over a trillion dollars at current market value.
And we're getting more gold from Venezuela here.
Uh we're getting a lot from Venezuela. We're we're getting uh gold these oil sales are going great. It's going back to the Venezuelan people.
Now, those comments raise some fascinating questions. Why is a sitting Treasury Secretary again talking about gold so publicly? And does it tell us anything about how Washington sees gold's role in the monetary system? And what, if anything, should investors read into all of this? Well, joining me now to break it all down and to discuss his outlook for gold is Rich Chucken, president and COO of Asset Strategies International. Rich has over 30 years experience as a full-service tangible asset dealer. Rich, good to have you with us.
Thanks for having me, Michelle. It's always good to be here.
All right, Rich, we have more gold comments from the sitting Treasury Secretary Descent. Now, when we zoom out here, it seems like this Treasury Secretary and administration at large have been talking about gold with unusual frequency, shall we say. President Trump has repeatedly raised the idea of physically inspecting or auditing Fort Knox. He says he wants to confirm that the bold is actually there. And this was after Elon Musk publicly floated the idea of visiting Fort Knox with a live stream. Again, in May of this year in an interview, the president again said he wanted to go and knock on the door of Fort Knox. Several lawmakers have supported greater transparency around America's reserves. bills have been introduced to audit the gold. And early on in his uh second term, the president posted on Truth Social, the golden rule of negotiating and success, he who has the gold makes the rules. Thank you. So, it seems to me like there has been a lot of talk about gold. The scent has called himself a gold bug. At one time, he said that they would look at monetizing the asset side of the balance sheet. He then walked it back saying no, he didn't mean the gold and was sent in interviews has called gold a historical store of value. He's pushed back against suggestions that the gold that the US holds is missing and now again reassuring us that the gold is there and emphasizing the market value of America's existing stockpile. So Rich, what does all of this signal to you?
Well, Michelle, there is a lot to unpack in that little what 20 second, one minute sound bite. Um the and and your comments are are very uh present, if you will. Uh it's not just the US talking about gold. The world is talking about gold. In fact, we're late to the conversation. Uh the world's central banks have been buying gold like it's going out of style for over four years now. Um and it is gaining notoriety in the press. Uh that happens when it becomes your number one tier one asset as a central bank reserve asset. Right? So it surpassed the euro. It surpassed the dollar. Um banks hold more or central banks hold more gold as a reserve asset than than the two major currencies in the world. So um again, I think we're a little late to this conversation. I'm glad we're having it, but it it suggests that there's a lack of faith in other alternatives like the dollar for instance.
Well, I mean, do you think that Washington itself though is beginning to view gold as a strategic asset, particularly in light of the world buying gold, as you just mentioned, central banks purchasing gold at record levels and growing geopolitical fragmentation. Do you think that Washington is maybe having uh some conversations about how gold should be viewed?
I actually I don't think so. Um, believe it or not, um, I think their conversation about gold is more about instilling confidence in the dollar because we have the biggest pile of gold in the world, right? That's what Bant said. So, I I think that's what they're trying to do is they're trying to reassure everybody that we do have that biggest pile. It is for real and it stands behind a currency that let's face it the world is losing faith in right now.
But why does it matter? Because we haven't been backed by gold since Nixon took the US off the gold standard uh in 1971. So why if if that's the reasoning um it doesn't actually matter how much gold the US has because it's no longer been it hasn't been a goldbacked system for the longest time.
Well, that that's true, but we all know that gold is the world's only real money. I think if you ask any individual if they had the choice of holding a paper dollar or some form of gold, I think they take the gold every day of the week and twice on Sundays. So, I do think it matters and and giving a bit of confidence to the dollar because even though it's not backed, we have that big pile. We are still the biggest game in town. I think that's what they're trying to get accomplished here.
So in light of the fact that central banks around the world are buying gold at record levels, the US is still trying to emphasize officially we still have the most gold on record. We'll get to whether that's true or not with regards to China, but before that there have been questions about whether the US does in fact have that gold. Now the sense said in that clip that America's gold is present and accounted for. Um now the last comprehensive physical audit of Fort Knox is generally understood to have taken place back in 1953. There have been partial inspections and vault seal verifications conducted periodically since then but nothing resembling a modern independent audit for every bar. Um not to mention rehypothecation. right now. There was a limited congressional inspection in 1974 that covered only about 21% of the gold bars. Again, since then, Treasury officials have conducted periodic checks of vault seals and internal records, but there has not been a complete independent barby inspection in more than uh 70 years or so. Um that September 30th Treasury report in 2024 that garnered some attention. That report stated that all 147.3 million ounces of gold held at Fort Knox were accounted for. Uh but there's supposed to be more. And it was essentially an internal accounting confirmation based on paper.
So again, not not a physical inspected, weighed, tested, and matched against the official records. Rich, is this level of verification reassuring to you? As someone in the precious metals business, what would a credible modern audit of Fort Knox actually need to include?
Well, I I got to tell you, I have done audits um for our holdings at various deposiitories. Personally, um, it is no fun. Um, for we have a pittance, a a very fraction of of what the US holds if we have that full big pile of gold. And I got to tell you, it takes, you know, hours to do to go through and look at every bar and serial number and verify that it is there. And that's the only way to do it. Um, I can't imagine what it would be like to go through and inventory the gold that backs up 8,133 metric tons. I just can't imagine. Um, and it's not they'll pop in, we'll do the audit, and we'll be out by the weekend. Um, I I got to think to count every bar. It's going to take weeks if not months.
But beyond counting the bars, I mean, you have to actually test that it's gold. I would assume uh on this level of national verification, right? I mean, wouldn't there be some testing and and wouldn't you need to then also confirm that none of the gold has been uh rehypothecated, reallocated to others? again, what would this process need to include for everybody to say, you know what, we're comfortable the gold really is there?
Yeah. So, so my understanding is that there's limited access and it's accounted for every time the door is open, if it's open at all since 70 years ago when they did the full audit, right? Um, so, uh, I don't think you need to test. If you test, basically, you have to destroy some of the gold. There's no other way to do it. Um, but to physically test it with acid typically. Um, I I guess you could put it under a electromagnetic, you know, spectrometer. Um, but they're not going to haul that in to the vault. So, and you're not going to take the bars out. My guess is if it's in there, it's fine. Nobody's tampered with it. That's fine. But you do need to count it and make sure it's all there. The the bigger issue for me is not if all the gold's there. I've never seen it. So, I'm like Scott Bent. I but I can't guarantee and I don't think he can either that it is all there. Um, but reasonably practically I think it is. The question is how much of it is pledged to somewhere else and that's a whole another aspect of this that I don't know. You don't have to take the gold out of the vault to pledge it to someone else.
Well, explain to our viewers what would that that what that means? Pledge to someone else. How would that work? And wouldn't there be records of that?
There should be and that's what I don't know if there are or not that rehypothecation basically you have gold it is in your vault and you pledge it to someone else um this is best way I can explain is the jewelry industry right so they need um you'll see gold sales spike um right around uh this you know the early fall as as jewelers start making jewelry for the holiday season whether it be Diwali or you know Christmas or Hanukkah or what have you right or Chinese Lunar New Year. Um, so they're going to start making stuff uh in the early fall. They need gold upfront to make all this different jewelry that they haven't sold yet that they're going to put on display later and hope to sell. So basically, they borrow it, right? Um, it's somebody else's. They're going to pay a fee to rent it or lease it, but in the end they have to give it back. And usually the way they do that is they give it back um by either sending gold or sending dollars back to the owner once they've sold all that jewelry that they've made. So they they kind of borrow it for a short period of time. Um that's often what happens. That's what rehypothecation is all about. The question is how much of our gold that 8,1303 metric tons is pledged to someone else to use temporarily or what have you. I I have no idea. There ought to be records on that and think
used the national gold. A concern I don't think is that it would be used to make jewelry.
just an example because it's easy to understand why they would use
but I I would imagine that it could be used to to cover some some debt or some payment or or things like that
at at the at the uh geopolitical scale. That's exactly how it would be used. I jewelry is just an easy example. But yes, loans uh that would be repaid back over time by a country that needed something like for instance, although they have their own resources, Venezuela right now, they have a serious need for for some money that would be a loan that would be pledged against that gold, you know, to eventually be
and and we will get to Venezuela's gold because there was an interesting uh comment uh in in that interaction about Venezuela. But but before we do that, um again, it is very curious to me that gold has become part of the mainstream conversation to such an extent that there is now legislation in both chambers of Congress aimed at forcing a full audit of America's gold reserves. You've got the Gold Reserve Transparency Act of 2025 introduced in two versions, one in the House and one in the Senate. The House bill introduced by Congressman Thomas Massie calls for a complete inventory, physical assay, and independent third-party audit of all US gold reserves, including the gold start at Fort Knox. And uh it would require a public accounting of gold transactions, including sales, swaps, and leases going back 50 years.
There you go. Now, the Senate's version introduced by Senator Mike Lee, that's the companion bill, and it similarly calls for a comprehensive physical inspection and testing of the G's purity while also determining whether any of the reserves have been went out, pledged as collateral, or otherwise encumbered. Now, Rich, at this stage, both remain stalled in committee. They've not received a vote. Um, but what does this signal to you the fact that lawmakers are demanding or seemingly demanding independent testing? Does that suggest that they don't have faith in what the the Treasury's current verification process is either?
Well, President Reagan said trust with verification. I think it's been 70 years since we had a full audit. It's high time we had another one. Again, it's no fun. Um, but I I think it just comes out of the fact that gold is in the limelight now. I mean,
Michelle, we've talked before, right? Um, you know, just what's going on right now with gold surpassing euro and the dollar in terms of reserve assets, that's significant. Um, with the central bank buying of gold over the past four years and into this year, that's massive. Um, you see the price of gold hit new all-time highs. It's retracted from those highs. Uh, but there's no question in my mind we're going to hit them again in not too long in the future. Um, and then on top of that, you know, anybody that's paying attention knows that gold actually it's it's I never like to to look at it as an investment. Um, for me it's wealth insurance always. Uh, it's supposed to sit there, collect dust, and protect your portfolio, and that's what it does really well. But it's outperformed every major US indices um for the past 26 years. So, so far since 2000, um, gold is up two to three times, uh, the the percentage that either the Dow, the S&P, or the NASDAQ are. Now, you can pick out individual companies that have outperformed gold, but most investors don't hold individual equities alone. They have a mix. They have a diversified portfolio. They have the index, which has vastly underperformed gold for 26 years.
Well, but let's bring it back to Congress here. Rich, what are the chances you think that one of these bills actually gets passed.
These these bills have been going through committee and getting stalled for decades. Um I'd be surprised if it went through and and nobody wants to go down there and count it. I promise you if they've ever done it.
So So you do not believe that we will actually ever get a full audit?
We may get it, but not not through this round. I don't think there's enough push behind it. You know, you you said
Do do you think the gold is there? Do you personally think the
I personally think it's there. Like I said, what I don't know is how how far out it's hypothecated. So how how many people are pledged that value that have to repay it? Um, but I'm pretty damn sure it's there. If the door was locked, it's locked.
Well, you know, there have been uh theories that in fact the US has more gold than on record. Um, and we've had analysts on the show bring up things like Saddam Hussein's gold, which uh went missing. uh Gaddafi's gold has not been uh accounted for and there's some speculation that in fact the US may have more gold through shall we say um military adventurism than uh officially on record. What do you think about that?
I think that's the way most countries in the past got their gold uh to the victor go the spoils, right? Um, and and that's nothing new in our world. Um, although we've kind of moved away from that for for for many decades. Um, it's possible, but I I my gut feeling is no. Um, that is something that doesn't happen without a few people noticing. Um, and I can't believe that that's still a secret if it's in fact true.
What? That there is more gold?
Well, yeah. Yeah. Where where is it? Where did they put it? There were people involved in moving that metal if that happened from Libya to here, from wherever to here. Where is it? Who was involved? And not all of them are going to keep quiet. I'm sorry. Not in this world.
Well, I mean I mean maybe that's uh where these conspiracy theories have come to my attention from because they haven't kept quiet and somehow it's trickled uh you know in into the zeitgeist here that there could be more gold than
than we're led to believe. But either way, officially the US approximately owns 261.5 million ounces of gold. It does give it the largest official national gold stockpile in the world officially. Um here's the interesting thing that caught my attention in that clip. Again, so many nuggets, pun intended, in what was said there. Um he said, uh he referenced America's gold at today's market value, which would be more than a trillion dollars rather than its statutory book value. Um now on the books, the price of gold is at $42.22 an ounce. That was a price established in the early 1970s as the US was leaving the Breton's monetary system. The accounting has never been updated. So percent raising this up and giving gold's current market value. Is that perhaps a sign that the Treasury is looking at revaluing gold to at least market value? Because we have had some speculation that the Treasury could mark the gold higher. But do you think that this is a sign that the Treasury could officially revalue gold to its market value?
They may. I I it tells me one thing. I read I listened to the clip several times to make sure I didn't hear it incorrectly, but he needs a new calculator. Um 261.5 million ounces at, you know, $4,14 an ounce. I get 10.5 trillion. I don't get a little over a trillion dollars. Maybe maybe I need a new calculator, but I always thought that was the figure. Um, and at current value, 10.5 trillion, which is still just a drop in the bucket of our current debt, 40 trillion. And that's not even considering unfunded unfunded liabilities.
You get 10.5 trillion. I think we got 1.5 trillion.
You really? Okay. I maybe I need a new calculator. Maybe I was doing this too fast. Um, but yeah, I got one497133. I might be off a decimal place.
That's that's that that's a that's a big error.
That's a big decimal place. That's a big decimal place. But you know, um, it is very interesting that this conversation has come up. But what would it actually accomplish, right? Um
nothing.
What would it accomplish if we revalue the gold? If we have 39 trillion uh in debt, what does that actually accomplish from an accounting perspective?
Michelle, for me, it it it does nothing. Um, because it's not tied to the dollar. It hasn't been tied to the dollar since 1971 when Richard Nixon closed that convertability window. So there's no value in that unless somehow we move back to a gold standard. Now clearly we can't go for one one for one. Uh, but there could be some sort of fractional backing of a dollar um in circulation for the amount of gold backing it up. That could be a possibility. um my gut feeling and and you know gold is a topic all around the world and like I said with central banks I think there's more to this central bank buying. I think it's partly the weaponization of the dollar um which is driving central banks to do this. I think it is partly lack of faith in the dollar and more importantly lack of faith in in our politicians to be fiscally responsible with the treasury or or with the dollars that that our neighbors, our friends around the world are borrowing, right? Um, so they don't see that as good value. Um, I think the world is looking for some sort of return to a gold back standard. Um, and I think that's why they're all hoarding gold. I mean, and that is certainly, you know, a topic that we cover extensively on the show that gold is being repositioned as that neutral reserve asset in response to excessive weaponization of the dollar which has led to doltoriization in response to fiscal irresponsibility and that gold is emerging as that neutral reserve asset and perhaps you know the US is understanding this and also trying to position the narrative that even if that does happen, we do have the most gold.
Yeah, I I I think that's part of it. I still think it's a big confidence issue. Um, we have the biggest pile of gold, therefore our currency is sound. I think that's a message they're trying to say without saying.
Although, you know, uh, there has been some contemplation whether China in fact has the most gold on on record. I believe it has uh around um what uh on on on record 2,300 metric tons, but many analysts believe that that number only tells part of the story. Um China is the world's largest gold producer. Much of the gold mine domestically remains inside uh the country. Um, so
and they're a net importer on top of that.
Yeah. So I mean there is a lot of speculation that China could have uh somewhere between 5,500 metric tons on the high end 20,000 tons. What what do you think? Do you think China significantly understates the amount of gold it has and it's planning for a big reveal at some point?
There's no question. I think that you know they they don't look to like what's going to happen next month. They're looking 50 100 years down the line. I think they're are doing everything they can to build up the credibility in their currency and their economy and their ability to be the next uh country to have dominance over the world, if you will. Um, so, uh, part of that is trust in the currency and trust in what's backing that currency. I I don't think there's any chance that they have just 2,000 metric tons. I think they have significantly more. I have no feel for how much more, but I know what they're working toward because we have a published figure of 8133. Um, and I think that's what they're headed for more.
They're working towards 8133.
Yeah. 8,133 metric tonses. That's
to to to officially overtake the US. Well, as I said, some people have that number as already potentially exceeding it. And and you know we do know that uh they have ambitions of taking a seat at the global reserve currency table that was made public. Uh that President Xi has those ambitions um that they have been reinstating gold again as that neutral reserve asset while working with the digital yuan and and trade with other countries. If China did announce that it has more gold than the US, what do you think happens to the dollar, to the gold market? If they do come out with this announcement at some point, what do you think the response is?
I don't think we just flip a switch and say, "Okay, China, here's the baton." I I don't think that's what happens. Um I I don't I think they have a lot of other issues they need to work out before gold and a gold backing their currency and a sound currency is one aspect. there's a lot of other things that they have to do to play nice with the rest of the world and to be a leader for the rest of the world. And I I think they they have a lot of work ahead of them still. I I don't think anybody is in the position to supplant the the US in that role anytime soon, but it doesn't mean they're not working toward it. That's what I think we're seeing right now.
All right, let's bring it back to what we did hear from Bent and he was going through the archives there. Uh he was explaining that the old certificates that he was showing uh Jesse there represented claims on physical gold and silver. And he appeared to suggest that if someone still had one of those old certificates, they could come and claim the underlying gold or silver. Let's watch.
We used to have silver certificates. We used to be backed by silver, sometimes gold. And then in the 70s we just went to what was called fiat currency where you didn't have to keep gold or silver in the vault. If any of these are still outstanding though the silver or gold for them is the uh at Fort Knox waiting for them to be claimed if so needed.
Now, Rich, uh, according to my understanding, gold certificates ceized being redeemable in 1933 after Rousel suspended domestic gold redemption. Silver certificate redemption ended in 1968. Now, those notes today remain legal tender, but only at their face value, not for redemption into precious metals. Um, what do you make of that? the the secretary of the treasury effectively misstating monetary history.
Yeah, I I I might give him a little bit of a pass here. I think what he was trying to say is the gold is still there. If you have a certificate, you know, again, driving home that the medal is there, but to say that you it's waiting for your redemption, nobody can redeem you anything. That that has gone by the wayside. Uh, like you said, in 33 it was illegal to own gold. So, they're not going to give you gold if it was illegal for you to own it, no matter what you gave them in in exchange. And in ' 71, President Nixon shut that window down. Uh, August 15th, 1971, he said, you know, the window is closed for convertability. Um, those certificates are are nice little museum pieces, but they're not going to get you any gold.
Certainly not Fort Knox, West Point, Denver, or elsewhere. Well, the certificates may have some uh numismatic value, right? Some collectible value there, but no longer claims on the US Treasury's gold reserves. Silver certificates do remain legal tender at face value, but cannot be redeemed for silver. But but you know, you look at those certificates and it is remarkable to remember that US currency was once literally redeemable for precious metals. how different that monetary system was from the one that we have today. I mean, talk us through that. Talk us how we got from that to fiat. Give us a quick historical background here, Rich.
It's it's very simple. Um, we got to a point um largely because of the Vietnam War um and and paying for that and all the social programs back home. So, the guns and butter, right, campaign, um, basically, uh, we were we were sending out more money than we were taking in. Um, and basically the people we were selling things to, um, were coming to us and and asking for gold in return. Uh, and it got to the point where I guess President Nixon and his Treasury Secretary realized that if this continued, we would have no gold because they were not being good stewards of the dollars that were supposedly standing uh in front of that gold. Um, so they said, "Listen, we're going to close the window temporarily." I don't know if anybody remembers that from the speech that that Nixon gave, but they were going to close that window temporarily in August 15th of 1971. And it's still temporarily hanging out there. seems very permanent to me. Um, and it's because politicians cannot balance the budget. Um, they're they're after votes. They they're not fiscally responsible. And that's why we're in the mess we're in right now with 40 trillion in debt.
And what is backing the dollar? The full faith and credit of the US government. Well,
what does that mean, Rich?
Well, now you see the problem, right? You see why the world is pushing back on dollars and they're reaching out for gold. Uh, because they have lost faith that this divided government that can't talk to each other and figure anything out. They can't figure out how to not overspend. Um, they have lost faith that the full faith and credit of the US government actually means something. Right? So they're not getting good value on their investment when they invest in treasuries and and the world is pulling back from the treasury window. They're still buying treasuries, but nowhere near at the level they did. Um, which just means that we have to absorb more of that debt and the only way we can deal with that internally is to increase our money supply further, which again adds to that debt over time.
Well, we'll get back to that, but I just want to finish what we heard from Bent. And there was a curious comment there regarding Venezuela at the end. Um, Jesse Waters says, "We're getting more gold from Venezuela, I hear." And, uh, Secretary Bassen says, "Uh, we're getting a lot from Venezuela. We're getting gold, and these oil sales are going great. It's going back to the Venezuelan people." Uh, what's the connection? Talk us through Venezuela, gold, and the United States.
Yeah. So, I I think this is a little bit different. So, this is not to the Victor go the spoils. This is not us going into Venezuela snatching up gold and saying it's ours because we took out Maduro and now you're you're at our mercy. That's not what's going on here. Um, those are Venezuelan resources. Um, and uh, the gold market in Venezuela for years has been a absolute mess run by bandits and gangs and whatnot. Um, two billion dollars worth of assets that's not benefiting the government whatsoever on an annual basis. So, uh, what we're trying to do there is restore a little bit of order to to the resource market. Um, that benefits Venezuela and their government because they get the benefit of selling those assets to the world, in this case, us. Um, and then it also benefits us because they don't only have gold there. Um, they have boxite and coal and other uh tangible assets that would be of benefit to us. Um, so if we can open up those markets, it doesn't just benefit Venezuela, it would benefit us as well. But this is this is trade. This is not um confiscation,
right? Uh, yeah. The US government recently struck a deal to bring some of that newly mined gold back into American markets. US interior secretary Doug Bergam visited Caracus and then a license was issued authorizing American firms to work with the Venezuelan state-owned miner Manurvan leading to the shipment of hund00 million in gold to US refineries. So I'm assuming on some level they're referring to that.
Do we know where that gold actually goes after it gets to the US refineries?
Do we know what happens there?
I don't know. I'm sure somebody does. Um, but it again this is trade so this is this could end up very well in jewelry or in other applications. It may even make its way to a coin or two that are sold. Um, but again this is this is trade. This is not confiscation. I mean the proceeds will go back to Venezuela with a with a kicker.
It was interesting that gold was a top export of uh the United States a couple of months ago. So that was actually an interesting data point perhaps linked to this in terms of where the mind
getting rid of uh maybe they're getting rid of Gaddafi's gold without anybody knowing.
Uh, I don't know that they do that but um in terms of Venezuelan's actual gold uh that remains frozen at the Bank of England by the way where it has been since 2018 due to legal and political disputes. And uh Venezuela's interim president formally wrote to King Charles to request the release of those reserves, stating that they are in fact urgently needed for reconstruction and humanitarian relief following the devastating earthquakes in June uh of this year. But um so far I don't think the Bank of England has released that gold. Um
I think they officially said no. Um, but I don't know if that's the last word. and and that's about 31 tons about four billion if my calculator is still not broken. Um, but that's a significant amount of money and it could help the relief of the double earthquakes down there and they need
I I I I'm sure it could and that is indeed a very you know tragic turn of events but the gold that the US you're seeing is assisting miners bring it back to the US or find it
and I mean I'm sure it advantages the US to some level to have that Venezuelan gold wash to the US. I I doubt it's purely uh you know altruistic. Yeah,
absolutely agree. But think about where that gold went before Maduro was taken out before we were able to work with you know uh uh Deltio Rodriguez. Um prior to that that was going to China that was going that was going to our enemies uh from our own sphere of influence. So um that was not something that was comfortable for the US. I I think this is a bit more of a comfortable situation. they can benefit and we can too. And this is this is our part of the world, I guess, is what we're trying to say.
So, you know, Rich, you've been watching the precious metals market for decades. When you compare today's environment to everything you've lived through, what feels different this time, if anything,
I I I think it's finally time. You know, it's kind of like a pressure cooker that's that's had the lid on for a long time and it's finally ready to blow. Um, I think gold has finally hit the point where it's ready to blow. Think the the debt um that's already out there in the system uh the increase in the money supply has already baked in a much higher price for gold. I don't think $5,500 is the end of this. Um I I think if you know just do a a quick analysis of like the the Dow to gold ratio. We got to get down to 5 to1 which means the Dow's got to get down to 20,000 or gold's got to get up to about 9,000 an ounce. I think somewhere between seven and 9,000 is probably um where gold ends up in this run. Uh, we'll see how it plays out, but I think it's all baked in. This is not something that is going to develop over time and there's going to be more of a demand and you know uh for gold. I think that demand is already baked in because of the debt that's already been uh pledged, you know, above ground in this world.
yeah, go ahead. and and and Rich, you know, we have gold dipping below $4,000. So, what's what's your read on that?
Uh, I think it it was needed. You know, we ran we we tripled the price in just a few few years. Okay, that's that's a big move for any commodity, any asset. Uh, we needed a bit of a correction. We got a major one, 25%. Um, but we've seen this before. Uh, we've seen anywhere from 29 to 30 some odd percent decreases in the value of gold after hitting a new all-time high. Uh, but then they turned around and continued the process up. If you look at the long-term graph of the gold price versus the dollar, you know, there's no question. I I I we were just down at a conference. One of the slides I put up was just the the six-month gold chart. And and that fall off the cliff from the end of January to now seems massive when you look at the six-month picture. When you look at the hundred-year picture of gold, I mean, it's not even a blip on the radar screen. Um, gold is in a long-term bull market because the dollar has been mismanaged and therefore is in a long-term bare market. There's no two ways about it. Uh, gold's going higher.
And you said $7,000 gold, $9,000 gold. How much higher?
Uh, I think that's next few years. I think we can get there. I don't think we're going to see that this year. Okay. By the end of this year, I think we probably get back to our all-time highs, and I think we build on that next year in a much more uh methodical approach than we saw over the past few years. Um, but I still think it's a steady climb higher. Um, I I we've talked off offline. Um, and you know, I've said on your program and elsewhere for many many years, this is the biggest no-brainer in the history of no-brainers. Um, gold is going higher until politicians learn to balance a budget. Until they learn to balance budget, there's no question gold must go higher because their only way to solve that is by increasing the money supply, which means more of those diluted dollars which are worth less will then, you know, command less gold. Um, so that that's going to happen. And and a friend of mine shared a quote with me from Milton Freeman. I don't know if you could put it up or not. I'm not going to read the whole thing, but Milton Freeman said, "Keep your eye on one thing and one thing only. How much government is spending." All right? Because you're going to feel that no matter what. If they can keep that under the income, right, then you have no worries about debt whatsoever. If they don't, and they haven't for many years, then you're going to see that in the form of a tax. It's either going to be an explicit tax, you know, sales, income, what have you, or you're going to pay for it indirectly in the form of inflation or in the form of borrowing. But make no mistake, when the government overspends, you are taxed. And your best protection against that for many, many years has been gold and I don't see that changing. I think the world sees it too.
And and yet again, um we have gold trading lower. What do you think the markets are missing right now? What's the biggest misconception that investors have about gold now? Is it linked to the Fed? Is it linked to dismissing uh increased spending that can come from this conflict in Iran? Either way, however that resolves, there's been increased military spending.
What do you think is the biggest error that the market is making about Bull right now?
Yeah, I think they're tying it way too closely to the Iran conflict and the impact of that on the Fed and what they might do with interest rates. I every single day um when there's talk of peace, right, gold goes up because everybody says, "Okay, gold's going or the there's peace, therefore oil will flow more freely. Therefore, there will be less inflation. Therefore, it will not force the Fed's hand to go ahead and raise interest rates. If there's war, everybody says, "Oh my gosh, there's war. Oil will be constrained. There will be higher inflation because oil affects every good and service that comes to market." Um, and that's going to force the Fed's hand to raise interest rates. And and raising interest rates in the in the big picture, uh, is typically bad for gold. Uh, lowering interest rates is typically good for gold. And but they're making that connection like because somebody fired a missile today, the Fed is going to raise rates. And nothing, Michelle, could be further from the truth. We're sitting at three and a half percent rate of in uh rate of inflation, right? 3.6 or whatever it was. We got three and a half percent interest rates. There's a zero real return on your on your assets um if you put them in a treasury or some sort of term deposit. Um, in order for that scenario, that equation to get more attractive for term deposits and less attractive for gold, to dissuade people from buying gold, you've got to get to high singledigit, low double-digit interest rates. And guess what? We cannot do that. We have 40 trillion in debt. Back in the 70s, 80s, Vulkar could take interest rates to 20%. And that killed inflation and it killed the gold's rally. Okay? We do not have that luxury because you can't finance $40 trillion worth of debt at 10% or higher. It cannot happen. Um, we're not going there. Gold is your answer. There's no two ways about it. Biggest no-brainer.
Is there anything that in your mind derails your case for gold?
Find me a quorum of politicians who are fiscally responsible and good luck with that. By the way,
that's uh that's the only thing that derails your case for both.
That's the only
you're tying it back to to government spending.
Overspending. Yes. As long as we're based in a fiat currency, overspending is is the only thing that's keeping it. It's what's keeping gold alive. balancing a budget and drawing down our debt is the only thing that would derail gold's um I guess uh attractiveness. No two ways.
Would it though would it derail at gold's attractiveness or maybe moderate moderates it?
Uh, I think over time if we can consistently undersspend, pay down our debt, I think over time um gold will be less important um to the individual investor. And you know I'll still have my allocation of 5 to 10% or whatever it is. For me it's 10 um that I hold as wealth insurance. That's not going to change for me, but for a lot of people it will. Um, when you lose faith in the dollar, you switch to gold. that's what the world's doing right now. When you have faith in the dollar or whatever might be the reserve currency of the time, um, then you have no need for gold typically is the way people think. Um, so I do think it will come down and and you know, we've talked about this. I'm an internal optimist. I I hear people every day say $40 trillion, we cannot make that go away. It's too far gone. The hole is too big. We can never fill it up. Um, I don't agree. I don't agree. I do not underestimate America ingenuity um and the ability to to survive and thrive. I think sometimes we lose our way and it has to get really bad before we start doing the things we all probably know we should do deep down. But I think we'll find our way and and and I do think we can grow our way out of this. But a lot of things have to come together to do that.
But even on the optimistic positive side of that argument, Rich, um, purchasing power has still declined over 93% I believe, if not more since the creation of the Fed, right? Gold still remains an ultimate store of value. Even if the US does regain its footing, even if uh inflation is uh moderated somehow, even if there is growth, um gold still is your ultimate store of value as it has been for thousands of years.
Absolutely. But the world functions on dollars. We're not we're not going to Starbucks and giving them, you know, a gold coin or one grand bar or whatever the case. We're not doing that. Um, we're we're paying in dollars. dollars are what the the economy needs to have faith in to grow. Um, and I think once we have faith in dollars um the important thing is if we can grow our economy we can bring down our debt. Now ultimately ultimately that would mean u potentially decreasing the money supply and that would be deflationary for gold and and honestly Michelle I don't think that's a bad thing.
All right, you're looking at it from from the big uh picture and and I appreciate and I respect that. Let's circle back to how we began this interview. As we wrap up here, what is the biggest takeaway that investors should have though from the fact that seemingly gold is working its way back into the conversation?
On a national level, on a political level, and on a geopolitical level.
Yeah. I've been telling people for years, be your own central bank. Um, the central banks helped create this problem. They're not the ones who overspend, but they're the ones that had to inflate the money supply in order to go ahead and deal with the overspending, right? So, they're very aware of what the problem is and they know the solution and they've been acting on it for four years. They've been buying gold. Okay? Um, we should follow that example, not not the overspending and not the the the debt laden example. we should follow their example of how they're dealing with that right now, which is owning gold, increasing their assets in gold. And and if you look, the banks are doing that regardless of price. Um, they for four years they've been buying, we started this at about $15, $1,800 an ounce. Um, we got up to $5,500 and they did not really slow up. I think only 850 tons last year instead of a thousand tons. Um, I'm not saying you have to follow that example. Um, but when you see a dip like we have right now, when you see a 25% drop back in gold's price with no sign of a fiscally responsible politician on the horizon, um, that tells me that gold is cheap. Um, and silver, which falls further, more is more volatile, is even cheaper. Uh, you should be backing up the truck right here, right now, and taking advantage of that.
All right, Rich. Thank you. Always a pleasure chatting with you, Rich Checkin. Appreciate your time. appreciate your insights. You may need to work on your math though.
I know. Sorry, I'm off by one decimal place, but most math is okay.
Rich, always a pleasure. Thank you so much for checking.
Thanks, Michelle.
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