precious metals are being accumulated here and with respect to the defense winning games that we know we're back to our risk first concept where you know just trying to control our risk because you know we're at a you know part of the story where I want to preserve capital and I'm going out of my way to build as strong of a defense as possible and you know you sit around patiently with a strong defense and I think that also puts you in a better position to make that speculative play if and when you


see it you'll be in better position to make that bet and you know I think that's where the real money can be made is in speculation where we're really scaling our position for [Music] conviction hi and welcome to this interview I've got Paul Brownstein on here with me and I ran across an article of his recently that was uh uh fascinating enough to where I invited him on for an interview Paul how are you doing I'm doing well Mike thanks for having me excited to be here great uh


can you tell us a little bit about your background before we get started yeah absolutely so my story is All About hard work and curiosity and I was raised Upstate New York and it was a broken home so I was at work early with the paper routes and rolled right into the restaurant business at the age of 16 and what is the first thing someone does in the restaurant business is learn all about playing poker and handicapping the horses as we were right by Saratoga Racetrack one of the best racetracks on


the planet and then I went to when I went to college I did not take my first business course until my junior year and when I finished College I realized there was a lot more to learn about business about the markets so I went right into grad school and I got my MBA at pit and I really that's where I did a deeper dive in the markets and I learned how to trade options on my credit card and had a lot of fun till I graduated and I went to Manhattan without a job and it was 1988 and I was competing against a lot


of the crowd that just got laid off from the the crash in ' 87 so I took an accounting job at Payne Weber and I was there for about a year and that's when the Curiosity got the best of me and well I just got a little aggressive I walked right into the cfo's office the CFO at the time was Lee fener stock and I just told him I'm you know I'm done with accounting my mind is on trading I love options and without really even saying a word Lee picked up the phone and called John Kaplan on the


derivatives desk in Manhattan down to I was in Jersey at the time at their headquarters and I was set for an interview that same week I went in and the rest is kind of History I had a 30-year run in derivatives that was in New York the first half where I was trading and then the second half I moved to the sales side of the business and I was in San Francisco where I built Regional teams and offices and then in 2016 I we rip corded to Denver and I built and exited an art restoration business with with my wife


and I was still very you know in love with the markets and I was teaching derivatives I started a fund with my nephew was in college and now here I am with my vanity project which is called charts and parts we started uh earlier this year I have a partner in Portugal and we are really just trying to you know it focuses on risk first we are a markets Channel that is you know just trying to help the Curious investor where everybody else is focused on the reward side of the equation we figured we'd focus on the risk side of the


equation so we you know I welcome the challenge it's not easy distilling these topics down for the average person but you know it's a it's a lot of fun and we're going to be rolling out some productivity tools as well and that's uh that's where we are okay uh you recently wrote an article uh you know the short hand for it is Cody that it's call of the year and uh you know you've got some a couple of major assets here so uh let's run through this article uh just a


little bit here uh you've got um you know it's the time of year when uh all of the market chunes start building their list for top trade ideas for 2024 and tell me about your call of the year so you know I it's it's funny because here we are we try to focus on risk first and not get caught up in the guess work because I do believe it is just that uh people love to guess the direction of the markets direction of stocks all the above I really don't subscribe to a lot of that I feel like


Risk is the one thing we can control but here of course I you know got caught up playing the game so I decided to put it in print and give a shout out for Fiat Alternatives here and you know it's really I just kind of organized my thoughts around these Fiat Alternatives you know whether it happens in 2024 or in the near future is anybody's guess if it you know takes longer to play out I don't think that's going to surprise me or anybody else for that matter they've been able to extend and pretend and you


know surprised we've been able to you know get to this point and I just see a few things lining up where I like the idea of having that currency hedge you know we see uh you know a few things in the marketplace and in the system really that are quite risky and I think the the new risk as I got into in my ebook called newal is really changing the definition of volatility from volatility being a market decline to being a systemic shock of sorts and these assets the Fiat Alternatives I think speak loudly to that systemic


shock because you know we go back and forth trying to figure out or I used to go back and forth trying to figure out you know what's going to come first inflation or deflation and we'd have these conversations with people in the business friends family and it was really tricky and then I just came to a conclusion where it didn't really matter what comes first because I think we'll see both and interestingly enough I think both have the same outcome and that outcome is the what I call Hash FFF


the final Fiat Fiasco which is the disappearing act of the currency so when I look at it through that lens I like the hedges here of Bitcoin and gold and I'm also a bit surprised that we are not seeing more you know just uh widespread you know adoption of either to be honest with you but really uh precious medals in general yeah me too uh you know you've got the two best performing assets of the 20th century here Bitcoin and gold is is your call of the year and they have been the best performing assets and when I measure


gold against other stuff it shows it from being undervalued to being severely undervalued it doesn't you know whether you're measuring it against the currency Supply or the Dow gold ratio or whatever uh and so it's got a long way to move still still uh to the upside and then uh Bitcoin you I I really can't measure that well because it hasn't existed that long and so we don't know we don't have enough historic data to show whether or not it's in balance with the rest of the


economy whether it's in a bubble or whether it's uh undervalued currently but U these you know Bitcoin is the biggest bull market in history at this point uh and when you say Bitcoin you were talking about cryptos in general correct I was actually just talking about Bitcoin the correlation is so high you can speak to the entire asset class you know just like uh you know with precious metals I'm talking about gold but of course it same concepts with uh silver I just tried to keep things


simple here and focus on bitcoin and gold and the truth is I also swore off all the alts long ago so I'm really just uh focused on bitcoin myself well yeah there's one other that uh I hold and well couple others but uh my Majors would be Bitcoin and uh hashgraph because hashgraph is a different system it's not blockchain uh faster fairer safer more secure more scalable and more versatile it can do anything that the that any other crypto can plus uh it's the most energy efficient and so um uh


that's the one that um that my biggest bet is on be but that's over the long term uh like right now uh a transaction fee is 50,000 times higher for Bitcoin than uh than hashgraph um so anyway uh you've got a chart from uh John Williams at Shadow government St statistics Shadow stats uh here of inflation and this uh chart was included in my first book uh guide to investing in gold and silver from 2008 8 uh and so this is updated to 2023 got any comments on on you know the shadow stats inflation numbers versus the CP


Li yeah you know this is just a another chance to take a swing at the CPI as you saw in my gold presentation I you know had a couple slides devoted towards you know mocking the CPI I think it's uh you know and a lot of this just starts with awareness I think people just need to know that you know the formula has been changed many times over the years and then you have all the you know adjustments and it just really doesn't represent the inflation that is in the system and that we are all feeling and


experiencing on a daily basis so I just thought it was important just to see that there are other measures of inflation and the other one that I think is widely followed is the shadow stats and you know it tells a very different story yeah I think the truth lay lies somewhere in the middle but the CPI is definitely the CP lie uh and then you got uh the number of people employed but absent due to labor force dispute now this was when uh the auto companies were uh out on strike am I correct yeah and the the punchline here


is that this is just going to be wage pressure right wage pressure was you know uh absent in the inflation story for a long time and we can see this is hotting up for sure yeah you know the Federal Reserve has created such uh warpage of the economy we it's just severely warped and uh you know you've got to have this wage pressure to catch up to all the inflation that the Federal Reserve caused so that people's uh standards of living uh don't decline dramatically uh except there's other


areas of the economy that are even slower at catching up and others that are faster that's where the faster is where the inflation comes from uh but uh the the resolution is not really a good one for right now going potentially going into you know you said that 2024 is probably the year it's an election year maybe they can hold it together I doubt it it seems to me like there is an enormous Crisis coming uh sometime soon and this is right after uh the cost of Labor just went way up for all of the big Auto


Workers so uh tell us about the new lens inflation uh means a lot of different things to a lot of in different people you were talking about inflation and deflation it doesn't really matter right yeah exactly and you know I think uh as I stated in the piece here a lot of people look at inflation and they think it's uh they think it's growth some may think it's an increase in prices and I was just challenging the reader to look at it through this new lens of it being a destruction of


purchasing power and that is really uh and I Ed the house as an example right the house that just went from 250,000 to 400,000 but really the house the house did not change it's the you know same utility and you just need more Fiat to purchase that house so that's the lens oh go ahead in my current book uh the house that was uh back in the Great Depression was $3,000 is now $300,000 so it's the uh fiat currency losing 99% of its purchasing power and it also you know the CP Li says 95%


which is bad enough but when you look at uh real estate or gold take a look at uh you know it was 20 a dollar us to be worth 12th of an ounce of gold and today it's worth 1 12,000th that's a 99% loss in purchasing power so you're absolutely uh correct there the 10 reasons you fa favor Fiat alternatives for our 202 24 call of the year uh and so real quickly run us through these uh 10 reasons okay so you know Ju Just back to the uh that inflation when you look at it through the lens of the destruction


of money uh or purchasing power I just think it's fascinating when you see that that was actually our policy right so the destruction of purchasing power and now we're making it policy it just uh you know should ring clear that there's a red flag there sorts but and it's the destruction of currency not the destru you can't destroy money in my opinion right an ounce of gold that's the thing that defines it as money that it it is a store of value and uh you can destroy you can rob the value out of currency


but you can't Rob the value out of money so anyway yeah go ahead nicely said no that's fine so you know the first thing I mentioned here is the risk first approach and you know this is really what a big part of what our charts and parts focus is all about asset allocation okay and as opposed to the stock selection process and you I think that asset allocation is a much bigger decision and it actually dwarfs the stock selection decision but you know it just doesn't get enough airtime to be


honest with you and the asset allocation approach you know I I we favor a multi-asset approach where you'll have let's say 20% across five different asset classes I'm a big believer in the work Christopher Cole did he did a 100-year back test across all asset classes and he concluded the winning recipe was 20% across you know stocks bonds precious metals commodity Trend and volatility and that's really what this uh focus on precious metals or gold or Fiat Alternatives was all about and


with five asset classes I think a very simp Le concept here if you're holding five asset classes instead of just two with stocks and bonds you have five levers to pull instead of just two so you're avoiding or reducing the odds of making a big big bad mistake uh yeah well you know you're number one and number two uh risk first Insurance because that's what the precious metals are is Insurance uh and then number three under owned it's only seven of 10 investors own no gold only


three out of 10 have any exposure whatsoever and having a 20% allocation uh is I would imagine that that I don't have the numbers in front of me but I would imagine that that is less than one in 10 with a 20% allocation for me I've got uh you know about half of my net worth in Precious Metals so um uh yeah ahe yeah well I was just going to say you know holding gold in their portfolio probably freaks out a lot of people holding 20% it's just going to get laughed at I understand that you know


but again I will lean hard into the hundred-year back test but also it is you know it is uh I I call it well the whole under owned concept I think is you know I I I I don't understand why that is you know know you see the government you know putting their thumb on the scale with respect to the asset and manipulation and the banks are getting fine for it and at the same time they're out there you know accumulating it in record numbers across the globe yeah so you're you're getting a really


interesting or I should say a mixed message from the powers that be and then in the wealth management space I'm also equally surprised that you know but I understand they're they're not talking about owning precious metals in the hundred trillion dollar wealth management space and you know you can go down a dark Road where they are not maybe they don't get paid if they are not uh you know having holding gold inside the portfolio but either way I'm just surprised that number one I'm


surprised more people aren't holding it but also even at this you know sophisticated stage or this late you know the markets are very evolved here spreads and commissions continue to get compressed and at the same time we really don't have great access to precious metals and it is surprising how challenging it is to access precious metals but more importantly how wide some of these spreads are to tree precious metals of course the paper is one thing but we're talking about the physical and when you're trading


physical the spreads are you know much wider than most other assets you will be trading in your own account so you know I don't know if that is intentional why what you know what that's all about but certainly they're not making it any easier to get involved in this asset class and that certainly factors into the asset being under owned in my opinion um well yes it's under owned but it is the insurance and it's one of the number I mean it my precious metals have outperformed the stock market


outperformed real estate and outperformed bonds in this Century so in this Century the best one of the best performing assets it's only behind some cryptos uh uh but gold that can't vanish like you know uh it's possible that uh you know with if if if there's no internet or no power there are no cryptos uh gold doesn't uh go away when there when there's a power outage for instance but um uh it's uh completely under owned and it is like you know we created something called


instav Vault where you can log in online and you can buy it as quickly as you can buy a stock uh and you can sell it as quickly as a stock so highly liquid fully insured but there is a slight a slightly higher initial spread but if you hold it for a while you'll find that uh the management uh fees and so on and brokerage fees it comes out almost the the same with something like instav Vault versus stocks uh and it's fully insured in a vault at uh Brinks Security which has uh not you know Brink security


has been around since the Civil War and they've got a motto nobody has ever lost a penny with Brinks and it's true and they're also not part of the banking system so they're not subject to a bank holiday uh they were during the week of 911 when the banks were completely shut down they were still delivering precious metals uh to the dealers so highly liquid uh very easy to get to but most people just don't know about it most investors are sort of stuck in the stock market or in real estate and they don't


really investigate the Alternatives but to me the alternative is much much easier real estate is very ill liquid it takes a long time to turn real estate Into Cash um stocks are actually um you know the all of the voting uh the mail that you get when you own a bunch of different stocks is is uh owning gold is to me so incredibly simple it's very much like owning cryptos they are both simple and both incredibly liquid uh in and out of them very easily and with gold uh you know it's if it's in the vault uh it's you


know with us it's fully insured while it's in invol so anyway um can you bring bring up a great point that we're not uh should not be as concerned about spreads if we're not actively trading it I mean technically this is an investment it's long-term and you know like yourself we're you know not making sales here so it's just a one and done if you're going to trade you should probably be in a derivative such as GLD or SLV or uh or uh Futures uh some sort of derivative uh


is uh very very liquid for trading and you'll avoid the higher spreads that way but those uh things like Futures have a time constraint on them and GLD and SLV have management fees so they deteriorate over time uh at you know what turns out to be as as uh great a rate or even bigger uh than the storage fees so for me I mean uh you know gold was is 2,000 now it was 250 roughly back in in the year 2001 and so it's up eight times the stock market isn't up the stock market is up a little bit uh around half that I


think or less uh the same thing with real estate so uh the gold that I bought back in uh 2003 when it was uh $315 an ounce now buys about four times more real estate than it did back then so the the performance has already been spectacular but when I measure it against all of the other things in society it has not yet fulfilled its Destiny and because it's the insurance I just see a huge like explosive move when the next Crisis hits so um dollarization uh you know you've got the end result as the final fi Fiasco what's


your opinion on this again so yeah actually I'll just make one last comment on the insurance uh argument here which I think is kind of interesting and almost funny but you know I look at the precious metals as insurance part of the portfolio and at the same time we can say that you know it has the price of the insurance has not gotten away from us yes it's being suppressed and so it's basically on sale because governments around the world are not governments but central banks are accumulating it and it's better to


accumulate it at a lower price and so it it has been suppressed but it periodically gets away from them and uh and I believe that that uh time is coming again and time is getting short and so to me I consider it basically on sale it has not kept up with the inflation of the currency Supply so I'm sorry it's it's on sale as the house is burning yes so that is that gets kind of interesting that being the case I'll take two right exactly yeah so okay enough of the insurance the final Fiat Fiasco I just


think this is interesting I mean the dollarization story is you know everybody knows about this it's you know it's Global it's obvious and I just think it's smart we would we would be doing the same thing if we were in their shoes okay I think you you know the US freezing or seizing the Russian assets was a you know a big nail in this coffin and I think that is really it's solidified uh the thinking for a lot of people a lot of Institutions a lot of banks and we are going to see the


implications of that and this is you know I I think a big part of the story and then I was as I mentioned earlier having this back and forth about inflation and deflation and I think it was it's a very interesting conversation because you know I can make a case for either very easily and I don't think we should you know rule out the possibility of the right tail and in the markets where the right tail being the Market's just getting away to the upside but if they're not keeping up with inflation


you know that may not be any good you know you can look at some of the you know South American countries where the current you have a currency crisis but you know the the equity markets are doubling and tripling on a you know a regular basis but you know you can make an argument that equities are a an inflation hedge as well so you know I think through that lens it was you know very dizzy and going back and forth with this argument inflation versus deflation and then I just came to the conclusion


that we very well could see both we will see both and with the outcome being the same and just resonated with me and I've been able to sleep a lot better at night because of this hi I just wanted to take a moment and thank you for subscribing and mention that if you'd like to help our Channel please consider my company goldsilver.com the next time you buy precious metals we're one of the most trusted names in the industry our prices are sharp delivery is fast and we have an insiders program where you find out


exactly what I'm doing with my own Investments thanks for making goldsilver.com your dealer and now back to the video Yeah excellent uh so 6040 is showing signs of cracking and you know when you back test it uh if you've got it you know 20% gold is what CPM group came up with uh as far as the best risk adjusted and best performance portfolio 20% gold and then the the balance is split 6040 between stocks and bonds uh and you are basically showing that uh you know today uh 6040 portfolio is


showing signs of cracking and we have seen a positive correlation with stocks and bonds uh so that mix of stocks and bonds in your portfolio are not necessarily protecting your portfolio anymore uh and so you get this tremendous outperformance to the upside uh in in some periods of times but then this magnification of losses in the downside so uh tell us about this and uh what you see as the uh solution yes so you know correlation a funny thing right you can pick your start date and stop date and come up


with different numbers and I think it just gets uh gets squirly in a hurry and you know I I you just take a step back and you realize that you know for the last 50 years both stocks and bonds have been in an amazing bull market right so that's there's your positive correlation right you can I I I think it's very easy to see that they've been moving together over the long hul and now you know I say the 2022 was a shot across the bow and but you see that the you know and a lot of it is due to inflation I think


interest rates and inflation are certainly the one thing that can you know ruin this party so to speak and we are you know we saw it we saw in extreme fashion in 2022 you know obviously this year is a little bit of a regroup uh at least for stocks you know bonds still struggling but you know I think that inflation is a very big part of this story you know we just have the inflation Genie out of the bottle and it is yes it's only been a few years but these seeds have been swn for decades and you know where inflation was really


their only solution to the declining markets and declining economy right and you know you can call it a different program or a different tool whether it's you know this bailout program or this you know support of the system but at the end of the day it's inflation it's injection of currency units and you know that's their one tool and only tool to fight any to fight the declining markets and now inflation is the problem so it's almost like there if when you look at it through that lens they're kind of added


tools and that's what you know I'm seeing and again this is just a a thought experiment as opposed to any certainties of course yes okay so uh defense wins games and watch what they do not what they say yeah exactly I mean you know they are just accumulating precious metals we saw that you know the 2023 was a new record for Central Bank buying you know this better than anybody and they may not be talking about it they may be putting their thumb on the scales as they're you know trying to buy it


through the back door or whatever but it's just really uh you know very clear that they are being precious medals are being accumulated here and with respect to the defense winning games that we know we're back to our risk first concept where you know just trying to control our risk because you know we're at a you know part of the story where I want to preserve capital and I'm going out of my way to build as strong of a defense as possible and you know you sit around patiently with a strong defense


and I think that also puts you in a better position to make that speculative play if and when you see it you'll be in better position to make that bet and you know I think that's where the real money can be made is in speculation where we're really scaling our position for conviction and you don't hear a lot about that uh either I think that's a very interesting concept but that's what makes the speculation so powerful and it's going to be I think you know there's an argument to be made where


speculation is actually cheaper when you have a better defense than a you know 6040 or multi-asset base versus a 6040 yeah I don't you know gold is the defense uh and but it also there are periods of times when it just outperforms everything else uh and then when we do get to certain uh Dow gold ratio gold currency Supply ratios gold silver ratio uh then we'll sort of know to me I mean this is what measure that it's time to move into another very undervalued asset class but until we


reach that area uh I just don't see much downside in Precious Metals except over the short term uh when we had the crash in ' 08 and when we had the covid crash gold and silver both did a pullback uh silver much more so than gold both both times and so uh during that and both times I used that as an opportunity to load up on a whole lot more at very low prices and uh so I've been very pleased with I mean U you know when uh the covid crash came uh I was I didn't nail the exact bottom but I got a couple of days


on either side of it and I got a bunch of silver at some incredibly uh good prices so um uh you've got let me see comx deliveries and you see this enormous explosion in uh uh you know from the pandemic basically but it hasn't completely settled down and now uh with GLD and so on we are seeing some outflows recently investor outflows while the central banks are buying it all up how convenient yes here's the Central Bank purchases now this is from Ronnie stet of incrementum Ag and the in gold


We Trust report uh but uh you know you look at at uh the all-time high there of 20123 and uh this chart was done when 2023 was not done so it's actually higher than whatever this chart shows because this is a few months old here uh so yeah they've got their thumb on the scale keeping the price down while they gobble it up and other investors uh get tired out and sell just at the time when I believe it's about to explode uh I just with the way the central banks have pushed everything


into a bubble real estate the stock markets bonds into these huge bubbles bonds have been deflating since uh interest rates bottomed and and have been coming up but that is sort of the trigger that should cause uh the big crisis that just causes all hell to break loose and uh this whole thing to revert back to Fair values and Norms so you've got the new volatility and inflation and you're closing so uh let's wrap this up and and tell us about uh these three pieces here well the newval piece is a series I


wrote four-part substack series and this was this was really challenging actually I try to bridge the gap between Financial Risk and what I believe is the best solution set out there which is the Peak Prosperity model of uh building personal resilience you know I'm a big fan of uh Peak Prosperity I know you know Chris and I've been drinking that Kool-Aid for many years and it just really resonates with me and I just took on this Herculean task of Bridging the Gap and the way I did this I had to


redefine the definition I changed the definition of volatility itself instead of volatility being a market decline volatility is a systematic shock okay and with that we took an insurance approach to managing risk where we will we'll absorb the smaller risk which in this case is the market decline and we will buy insurance or protect ourselves against the bigger shock systemic shock and we do that by filling our eight buckets of capital and this is a solution that I think not only is it a uh a winning solution but I think it can


enhance the quality of life at the same time and I believe that you know a lot of times our most valuable asset is not on our balance sheet you know I think it's a a very powerful concept I think it's uh it's challenging for it was challenging for me to uh write and to still down for others but I I got it out there I hope it resonates and I think a lot of this and a lot of the great work you're doing Mike is just bringing awareness to these issues and that's what I was that's really what I was


trying to do there and you know trying to do with this call of the year just bring attention to you know this asset class and some of the uh some of the variables in play and supporting the purchase yeah you know you mentioned Chris martinon and uh that influence is what has led me to uh buy my farm uh Go offgrid Solar uh make sure that I've got my own food and water is it's and a group of like-minded people around around me uh that are all sort of on the same path so uh uh it's part of the uh


the being super resilient and that's what I'm trying to do myself and a big portion of that to me right now is the precious metals they are the thing that has proven themselves throughout history so uh do you have anything to say in closing then you know I was just going to you know give a shout out for the emotional bucket of capital and I just think it's super important to you know and Chris says this all the time it could be the most important uh bucket to be filling out there just being as strong you know


spiritually emotionally and physically as possible and just being prepared for anything that comes our way because I feel that you know we're at a part of the story where nothing should surprise and trying to get to that point you know emotionally and mentally is very challenging because we're seeing some pretty funky stuff out there but I think uh it's very important to have that you know mental state yeah can you tell the audience where they can find you absolutely oh there it is serial AMX


uh right now it's on our substack charts and parts and we're building out the website to move everything over onto the website and to roll our productivity tools out there as well but for now it's going to be the charts and parts substack so charts parts. substack do.com right there you go yeah yeah you know this in your serial nomics that that um Ronnie has updated that chart of all of these different currencies from the year measured from the year 1900 against gold and and their loss in


purchasing power and um uh you know the when Nixon took us closed the gold window in August 15th of 1971 uh that was one of about 10 charts that back in 2003 I think it was or 2004 I went to a Robert kosaki event and this is part of what sort of put me on this path and that was one of the charts that I presented at that uh little conference in Scottsdale with about 300 people it was the first time Robert put me on stage and so uh anyway uh it's just interesting seeing this chart sur survive and being revived uh throughout


time but if you look at the decline in all Fiat currencies against gold you realize the difference between currency and money exactly yeah okay I want to thank you very much for uh this interview I want to thank the audience for watching smash that like button hit subscribe and hit that notification Bell we'll see you all next time thanks Mike