I'm here with John from Australia. I'm at the New Orleans Investment Conference and it's been a great conference and John has a question for me. >> Thanks Mike. Uh thanks for your time. Um I'm obviously on board with uh many of your philosophies and investment strategies, but do you think it's important for investors to maybe have a hedge just in case we're wrong? And would the hedge be something like a five or 10 position in long-term US government bonds or maybe a pro- US


dollar position of some sort just in case we're wrong and we go through a massive deflationary period like we saw after the Great Depression or in 2008 which caught a lot of us by surprise. >> Okay. I think when it comes to gold and silver investors, central banks, especially the eastern central banks are putting a floor under gold and silver. Uh I I see bonds as something that are potentially dangerous. Now uh the US has had its credit rating lowered once again and I think that's going to continue. Uh


I think there's just no stopping all of the reckless government spending and that is going to be causing bonds to become more and more suspect as time goes on. But I mean, you're if if you believe a hedge is a a a good thing and you're only talking about five or 10%, be my guest. You know, people always used to tell me you shouldn't put any more than 10% into gold because gold is so volatile. And I went 100% gold and silver. I used to tell people that I'm fully diversified. I've got both gold


and silver. So uh uh but um I went fully into gold and silver knowing the fundamentals underneath it uh way back in the early 2000s and and uh for u a decade and a half. It was my only investment was precious metals. I didn't worry about hedging with anything and it's been the number one performing asset of this century. Everything runs in waves and cycles and we are in uh one of those cycles right now where uh gold and silver are really shining. >> Could I ask a quick follow-up to that?


Uh for international investors, so for my clients and I, we're in Australia, so when we buy long-term US government bonds, whether it's via an ETF, uh we're currency hedged. So if the Federal Reserve goes into QE unlimited mode and destroys the exchange rate of the US dollar, we just get the the uh price performance of TLT. We don't necessarily lose out on the currency. So for maybe for international investors who aren't US dollar-based, would a small hedge like that maybe make a little bit more


sense? >> Uh that's that's possible, but uh where you know it wasn't long ago that the Aussie dollar was at par with the US dollar, right? >> Yeah. So, >> right. Right. And so, it isn't the US dollar that's been getting destroyed in value. It's the Aussie dollar is being destroyed in value faster than the US dollar is being destroyed in value. And I like to envision all national fiat currencies as skydivers. They've all jumped out of a plane and they're all


falling at different rates and gold is in the plane. >> You know, they're all falling relative to gold and silver. >> Absolutely. Great answer. Um, I agree the Australian dollar has been very weak. Uh, my not to disagree, I agree with a lot of what you're saying, but if we were to go through a commodities boom, the Australian dollar tends to be very strong as as [music] demand for base metals increase, energies increase. I think we have 35% of the world's uranium, which we don't really mind due


to a lot of government restrictions. We don't fully utilize that. So in an environment where we are going through a global inflation, we might see the Aussie dollar perform long-term very well in that environment. So uh anyway, that's just um my that's not my base case. That's just my 5 to 10% hedge thesis. >> I think you're absolutely right. But first, you're going to see a global economic slowdown. Uh the tariffs that the trade wars that are happening right now uh interrupt international trade.


I'm trying to get uh my uh natural farming off the ground and we've identified the very best mobile chicken coupoops made, but they're made in Poland. And so I'm having this problem where I'm I'm I'm trying to go, do I buy them now? Do I wait until mid November when uh the Supreme Court is going to decide whether these tariffs are constitutional or not? Um uh and so it's it's put a the brakes on a business that I was developing and that means that there's a whole bunch of people that I


didn't hire on my farm. Uh and uh so as I I believe that the tariffs are one of the things and then there will be something else that comes along that's a trigger. But I think we're going to to go into a global financial crisis. I think it's going to be worse than 2008. That means there's an economic slowdown. There will be less uh uh real estate projects, you know, houses built, apartment buildings built, cars built. Uh as there's less stuff being built, base metals should fall. Now, at the


same time, gold and silver will be in high demand, and Australia does have quite a bit of gold and silver, but their basic your your economy is wrapped around mining base metals and things. And so as copper and aluminum and and uh everything else uh falls because of lack of demand, I don't think the Aussie dollar is going to gain in strength. I um so you know, I don't know and I'm not an expert on those things. I I study monetary history and I study the precious metals and then the the rest of


what the economy is going to do is just an educated guess and everybody is trying to figure it out. sort of like feeling your way around in the dark. >> Absolutely, completely agree. And I would say I I agree that it's going to be worse than 2008 and also very different this time. I mean, historically, central banks have needed to keep interest rates 2 to 3% above CPI to, you know, we need a a positive real rate of interest. And what's happening, we saw it in Australia a couple of weeks


ago, we've seen it in other countries where inflation is bottoming and starting to trend back up, yet central banks are already going through a cutting cycle. It normally takes 18 to 24 months for interest rate cuts to flow through to CPI to consumer inflation. So, they've been cutting rates aggressively as inflation is bottoming and picking up. So, I'm very concerned to see where it's going to be in 2 or 3 years time, as I'm sure you are. >> Yeah. Uh and cutting rates causes


inflation to pick up even more. And so, uh I I believe that, you know, we're getting toward an endgame where the central banks are trapped. uh they've exhausted, you know, they've got a toolbox of a bunch of hammers. Everything looks like a nail. The only tools that they've got are cut rates. And you know, people say print, but it actually isn't print. It's type. You just type numbers into existence. The US dollar is nothing but a number supply. And you got to ask yourself, how many


numbers are there? >> It's it's infinite. And so, um uh the the You know, I've been saying a lot at this conference that uh national fiat currencies uh the very math behind them, the way that a national fiat, if it's a debt based currency, it's impossible for it to store value. It always has to fall in value, lose value over long periods of time. And therefore, they are not money. And people need to stop referring to them as money. that they are national fiat currencies. The only thing that has


proven to be money over the last 2,500 years is gold and silver. And but it it it sort of runs in waves and cycles. Uh gold and silver were the very worst investments that you could have from 1980 to 2000. They were awful. Uh but ever since 2000, they are the best performing assets of this century other than cryptos. But crypto is the first brand new asset class in like the last 900 years. So, um, anyway, I want to thank you very much. The the your questions were great. Anything you want to say?


>> No, thank you very much, Mike. Thank you for all that you've done. Thank you to Dan as well behind the camera for the hidden secrets of money series. I I make your TV series uh a mandatory starter pack for any new client that I take on in Australia. I say, "Here you go. If you want to learn about money, please watch uh Mike's series, Hidden Secrets of Money. It's a great series. Thank you for everything you've done. >> Awesome. Thank you very much.