gold news

 hi I just wanted to tell you about gold Silver's 111 ounce silver giveaway where you can win win one one one one one ounce silver bar one 10 ounce silver bar and one 100 ounce silver bar so enter today and win [Music] hi this is Mike Maloney and I've got my guest Tavi Costa with me once again from crestcat capital and they just released their latest newsletter Tavi how are you doing I'm great Mike how are you excellent excellent so uh you've got another newsletter and the newsletters

are sort of generally have uh the same message to them but you present uh different information each time that bolsters your case so uh you've got quite a number of charts there and I I've picked a few of them for us to run through that sort of have a common theme uh and so could you run run these uh run through them for me here uh the first one you've got is U.S treasuries are now more volatile than gold and that's pretty amazing yes it is and and it's you know it starts from this whole idea we all know

both of us that central banks have been accumulating gold and you know when you think about large portfolios there's two types there are central banks and there are 60 40 portfolios and 60 40 portfolios mostly focus on uh that 40 is that's downside volatility is that risk of a recession and how do you protect your portfolio and for them it's important to have you as treasuries is as part of that 40 so when you see a chart like this which shows essentially that treasuries are now for the first

time in 45 years more volatile than gold that changes the whole setup of of how do we approach portfolios overall and the fact that we've been under allocating towards the metal for really uh many decades now so in my opinion this is absolutely critical for that change yeah the under investment I mean everybody was chasing yesterday's news in the last in the previous bull market of the 70s and really the public came rushing in in 79 and 80 when gold was made and so there was a heavy allocation

uh during and after the peak and so it was in the 90s where uh the allocations of the typical portfolio had a lot of gold in them but by the by 2000 there was none that's right and it's it's been close to none since it's I believe it's uh less than half a percent of uh of uh of financial assets are allocated to the precious metals and Mike if if I would have a drink for every time somebody tells me that it's great to get five percent yield on cash you know it's it's

it's insane how many people are of that view and and honestly I think this is you know sort of uh painting a picture a perfect storm for gold to outperform not only cash but treasuries overall and make everybody you know look kind of stupid for holding cash and uh you know this is to me it's a good setup right now so yeah um so run us through the next chart which uh also Okay so we've got gold versus the 10-year real yield so we were comparing gold to treasuries before and this is gold versus treasuries but it's

the real yield and something has happened that's right something has happened and certainly that has you know brings the question and you ask a question before even we start recording it doesn't mean gold needs to fall or the red line needs to Rise um and I think to me the meaningful part of this chart is that it really reflects a change or a shift in macro regime this is precisely winning and investor psychology absolutely right yeah it's when inflation really started to get out of control when the FED had to

step in and shift their policy um it's when cost of capital began to uh to also uh stay uh historically elevated it's when value begin to outperform growth I mean there's so many things that occurred during that break of the correlation unfortunately a lot of investors are seeing that as something cyclical that will go back to those times and we would go back to the 70s when we had inflation hit higher than historical Norms what we saw during that time was that 10-year yields were Rising

despite the fact that gold was rising in fact it locked steps I mean they are positive correlated which is the complete opposite of this chart so right we need to point out for the audience that the red curve the 10-year treasury real yield is inverted on top of a normal uh gold price and so uh it's a REV even though they line up so well it looks like they're completely correlated what it is is a correlation you know correlations go from plus one to minus one and this is like a minus 0.99

correlation until 2022. that's right and it begs the question are we in a structurally inflationary period and you know we believe we are I think we're going to touch on that in a second yeah and you know just going back to the 60 40 portfolios do you want to make a comment sorry yeah I want to make one more comment on that last chart yeah uh that I think psychology switched in 2022 when inflation uh changed and basically uh you can uh have the correlation of the in inverted uh yield up until 2022 and then you just have to

take in your mind that falling red line after 2022 and invert it and paste it onto the chart and so gold has to catch up with this there's a big spread there and it's it's due to the psychology of uh of what's going on so anyway yeah go on to your UH 60 40 chart couldn't agree more um thank you yeah um the history of of 60 40 goal is important put into perspective and so now how much do we earn as a yield when we hold the 60 40 per fall that's what this chart is basically representing and

you can see the white line goes up and then down and up and down and there are times when 60 40 portfolios are historically undervalued those are times like the beginning of the 80s which was uh the end of a stagflationary period or the very bottom of the Great Depression or the beginning of the Roaring Twenties and then you'll have today where we are on the other side of it historically overvalued for bonds but also for equities and you know if we're gonna see a upper movement of this I believe we're

going to go through a restructuring of 60 40 portfolios and that means we're gonna just hold a more you know we're going to rebalance those portfolio hold a more balanced uh a number of assets and gold will likely become a large percentage of those traditional ways of investment strategies I've got an untraditional 60 40 portfolio 60 is silver and gold and 40 is everything else let's let's move on to the next two which can be covered very quickly because uh they correlate uh quite well

so that's right about these and I believe you are exactly right on with your you are here Arrow I hope we are right um and I think we are as well so you know it's interesting how policy makers and investors have been neglecting an important lesson throughout history that inflation happens through waves and we've seen this in the 70s as you can see in this chart and you know it's just math we see prices go up and then the year-over-year change of a price uh after it goes up a lot and you kind of

see that deceleration process we've had that already we're now in the process likely of a bottoming period for Consumer prices and when I show this chart initially a lot of people would say yeah but this is not the 70s it's more like the 40s aha well here's the next chart 30s and 40s also went through three waves inflation and then you know to me this is if I was a policy maker I would certainly have that on top of my agenda in terms of how to approach inflation overall and unfortunately I

think if anything what we're seeing is you know absurd fiscal stimulus uh and and still a a way of of managing uh you know the the whole macro economy right now uh in which I think hard assets are going to become more and more favorable in this environment yeah well there's the uh hard asset cycle too you know Commodities versus equities uh cycle that and uh Commodities are so incredibly undervalued compared to equities right now historically that uh you know it supports all of these other charts that

you're showing so let's move on to the next one yep and the next one is a compelling case yeah we're finally at Gold let's talk about gold now yeah that you're you're comparing an economy that's been in sort of a stagflation for a long time yeah and uh there and we are going into I I think there's going to be more printing and so on and so uh yeah so tell us about this sorry I no no this is a road map right it's a compounding case for developed economies have been facing

what I think it's a chronic that problem with embedded inflationary issues and they're very structural at their nature and so what happened with Japan is the red line the red line is gold in the end terms has been surging to new highs and you looked at that relative to gold and USD terms or US Dollars you can see that there's a lot of skepticism but likely we're going to go to the same path uh Japan itself has about 250 55 percent of debt to GDP on the government side the U.S is about 120 and not thinking we're

not going to go to 250 in the US seems to be absurd to me so now but that's that is the road map in my view and why we're going to see that white line follow the red line so this is absolutely critical if you hold gold or if you're you know considering to do so yeah you know you mentioned central banks a while back and what amazes me is the central banks especially the eastern central banks uh China and and India and turkey and Russia and so on there's an accumulation of gold that is sort of

counter secular cyclical to what the public in the west does and it's like are you going to be on the side of the biggest smart money in the world and over time they win uh you know these uh gold going sideways or down is just an opportunity for China to simulate more and uh and and I look at it as my opportunity to accumulate more as well uh and you know you want to wait until you want to accumulate and wait wait until uh something breaks so yeah yeah and to your point this is the history of

gold Cycles where you know I kind of listed the first and the second and the third Cycles uh that I think we're into a third one but the first and the second and I listed some of the reasons behind it in Aspirin an inflationary era um central banks were accumulating gold at that time very similar to now there were a lack of discoveries of gold across the major companies and miners overall and uh production of gold was falling as well so the the second cycle is interesting because production of of

gold was also falling across most of the major companies but we didn't see central banks buying gold as as much as we see today and what happened at that time was that China was entering the WTO and becoming a global manufacturing plant and we saw a construction boom that drove Commodities and so today if you ask me I don't think we've ever seen so many reasons to be long gold um and skepticism is in a level that I don't think we've seen before um lack of this yeah that first cycle of

the 70s the reasons basically were inflation uh Oil Embargo and the uh there was a Gulf War going on yeah uh and we uh had uh we had just become a fiat currency for only eight years and there was a distrust uh today there is there are so many imbalances we've got this we've got all of the same reasons that we had in the 70s plus another list that's like another 20 bullet points long I mean the deficit it wasn't an issue in the 70s it's an issue today that that problem wasn't an issue in the 70s an

issue today we didn't have 60 40 portfolios being expensive and you know looking for a New Alternatives and so to me now I call this a trifecta of macro imbalances is that that problem of the 40s the inflation of the 70s and the valuation problem of the late 90s and I'm very concerned that you know ultimately well concerned but also excited about how to capitalize on those those changes and I think just means that the white line in this chart is going to go much higher personally that's just the way yes and I noticed

your arrow uh goes up you know between eight to ten thousand dollars per ounce and there for some reason there's a bunch of calculations that I can make uh you know uh gold compared to the M2 currency Supply and there's a whole whole bunch of them that come out in that range of eight thousand to ten thousand uh dollars per ounce when I did my first book it was six thousand dollars an ounce uh and uh another thing I want to point out to everybody uh is that you know at at the beginning of

this third cycle you you can see at the end of the second cycle gold forms a cup and handle or Panda pan and handle formation you can sort of see the AFT after the end of the second cycle between the second cycle and the third cycle so take your cursor and point out that cup and handle and then we have the handle it has a triple top on it there's three times and typically once you've got a triple top where it can't bust through a uh a resistance level the next time it tries it blasts through it and

it's Off to the Races uh but that is also making you know if if we have this pullback that we're in right now uh go for another three to six months we'll have an inverted Head and Shoulders pattern on that handle so technically this is an extremely bullish chart so uh anyway Let's uh move on to your uh last chart here and yeah this one is one of my favorites because uh you know when you if if you want to shoot and arrow the furthest you pull back the bow the most right build as much tension as possible

so tell us about silver oh I love the way you set it because it's it's exactly what I think it is as well and I never thought it that way but monthly chart of silver has been in a downward trend for a while I mean since 2011 we've seen this downward Trend and uh we've had a built a resistance line all during all this years and decades and right now we've been kind of hitting on that resistance and at some point um as we know of resistances is that they break and historically once we see

that knowing how silver tends to be extremely volatile as a commodity as well uh we're likely to see an explosive move back to the 50s and at least and so you know this gets me excited it's why I am I'm always thinking how do I not only own silver but the best ways to really be um belong this uh this this sort of upper pressure on on precious metals prices but particularly silver it's the main focus I have and I think it's the cheapest metal on Earth yeah I keep on saying to people name

something else anything that is selling at a discount to its 1980 price the only thing you can name is computer chips and that's because that was a infant technology at the time but you know what you see here if you look at the um the uh candles on uh there's basically the wick on the candle is the candles are this is a monthly chart so it's the open and close for that month and then uh uh entered week intraday swings uh are the Wicks that stick out the top and the bottom but you're

talking about uh you know in uh 22 from 2008 to 2011 going from about eight and eight and a quarter bucks or something here I actually think intraday it went down uh into the sevens and then going up to 48.50 at that P week and it didn't even exceed uh the 1980 high of on on one of the exchanges in 1980 it hit 52.50 and uh that was the intraday and uh so uh we have we have not exceeded the 1980 High yet but yes I believe that once this gets over 28 or 30 dollars and it will uh with all this energy that is

building then it's a pretty clean move all the way up to the 50. it'll encounter some resistance do a little bit of a pullback probably but then it'll go over 50 and then that becomes support I believe and I do believe that you know when you compare it to all of the other things in society and the indices and the currency supplies I do absolutely believe that silver is destined for triple digits because that's sort of what puts it back into balance with the rest of the economy right now it is so far undervalued uh

and I think that when there's the as China slows down their real estate boom ends most silver it comes as a byproduct from mining other base Metals copper and uh lead and zinc and so on and so um as they as that usage goes down when they are not building as many apartment buildings and homes in China and we have a global Slowdown it should end up sometime or another coinciding with some sort of currency crisis where there's a rush toward the monetary Metals so less demand I mean less Supply more demand that can only be

solved with far higher prices that's right I agree 100 that is my last chart by the way so okay okay I want to thank everybody for watching thank you Tavi for being here and we'll see you next time thank you Mike hi I just wanted to tell you about gold Silver's 111 ounce silver giveaway where you can win win one one one one one ounce silver bar one 10 ounce silver bar and one 100 ounce silver bar so enter today and win