[Music] I'm Charlotte McLoud with investing news.com and here today with me is Frank Holmes CEO and CIO at us Global Investors thank you so much for joining me great to have you here again oh ho ho Seasons great to see you again Charlotte really good to be checking in with you we've spoken a number of times throughout the year this is our end of the year check-in and I think it's a really good time for us to be speaking I'm going to start with gold because we're at really an exciting time for


gold we had new all-time highs recently it's above 2,000 as we speak but I know in the good sector a lot of people have been hurt before and I think people want to know you know is this a real moement gold so let's start there and get your thoughts on on gold's price action lately well since the beginning of this Century from the last big Tech blow up in the year 2000 the bubble of Y2K gold has outperformed the S&P 500 2:1 so gold has been a pretty significant asset class and I was


watching a program with Ken fiser uh talking about why gold is bad and you know he's just uh he's out of touch um and and so I I really think that gold is a critical asset class like r Alo has who's the largest hedge fund in the world that they'll have a 10% to a 15% waiting and what's interesting is that Millennials younger people that also buy that thing called Bitcoin that some of the old gold buns don't like there's a higher percentage of them they have a higher percentage than Baby Boomers my


age owning gold so if you looked at the wealth transfer of my age is going to shift from baby borers to Millennials to Generations XY and z are going to inherit all these trillions of dollars of wealth and they actually like gold and silver and a lot of them say they learn about uh gold and silver from Bitcoin people because they always talk about the same idea that the government uh is going to print all this money and and then they're going to turn around and want to confiscate your private


assets so they've all of a sudden discovered that Bitcoin has had this incredible run but what a goal and and I think there's some interesting similarities and and quite often I've talked to and I on Twitter and I and I cover that I think Gold Silver and Bitcoin are important non what they call alternative asset classes but they're decentralized that is they're not controlled by a Central Bank One bank doesn't control them they can maybe get short-term manipulated but the really important


Alterna alternative asset classes in our portfolio and you rebalance each year I think we're going to dig into all three of those gold silver and Bitcoin and go over some of the market dynamics that we may see in 2024 and I think they're all probably a little bit connected in some ways if we if we look at gold first if and looking forward to next year what do you think the most important drivers are going to be well last time we spoke we talked about several things was gold will trade higher and it and it has because I said


I suggested that I that I thought rates would Peak so the the rising of interest rates uh and and the fact that they were hit some of them hit 40-year highs uh put a dent on gold but if you went back I mentioned that gold would if you really were so bearish on gold and you did the perfect inverse relationship rates Rising gold falling uh it suggests that gold would fall to 1,500 or, 1400 it didn't it actually held itself so well that now rates are starting to fall gold can easily go to $3,000


$4,000 so I I and I think it's a a it's a a suppressed oppressed Market uh that's extremely attractive psychologically uh this is the year of the rabbit in Asia next year is the year of the dragon the golden dragon and we do know that Rising GDP per capita in China or India means more gift giving because 20 I think the number is about 60% of gold demand is love 40% is fear and I've been recently writing about that if China wants to get CAU up to America and how much gold that's in Fort


Knox relative to the dollar they're going to have to buy 300% more gold than they own today to even get caught up but they'll never be what the US dollar is because it's not really it's a two-tier system in China people don't realize you can't use American Express you can't use Mastercard or VISA it's a very controlled Society you you can't watch uh YouTube uh you it's it's it's really hard for people to realize you mean you can't no it's not it's a closed world but they


want the unrattled the US government by making their currency uh the biggest most important but I don't see it happening but I do see they're going to try me and for them to try to get credibility seven years ago Saudi Arabia told them that they have to own more gold behind their currency so what are we seeing more central banks around the world buying gold to protect against currency devaluations Etc so I I think we I was in Argentina last month when the new president was elected I was


there on that weekend and and uh what has he done this week he's devalued the currency 54% now what's interesting in Argentina the culture is if they don't own gold they own um US Dollars and there's 250 billion dollar stuffed in mattresses but when you go to India Indian women they wear their gold and they six times the amount of gold that's in Fort Knox so when we look at this s Global picture I think there's such a pent up demand for gold I think it's going to grow I think when you get fear and love


together moving for well on demand side then gold can easily make new highs especially with rates dropping yeah I think it's good to understand that difference there and the other topic I wanted to to follow up on with you so we talked in our previous conversation about how we needed interest rates to come down in order to allow gold to rise so we're starting to see that happening what though happens to inflation in this scenario where we have the FED reversing course because you know we see inflation numbers I


think the general markets are happy with what they're seeing but people in their everyday life can feel that prices are higher than they would want them to be so what is your inflation outlook for 2024 inflation is significantly understated because they changed the algorithm that says this is what inflation is and if you went back to the 1980 inflation algorithm the CPI number that's populated and pushed around the world that number would say inflation today is 15% so I I I think we have to be


sensitive over we know as Citizens what the inflationary rate is there's there's always sort of interesting things you have to go and look out that people are pretty smart of what they do um recently came out that there's record gun sales in America but it's not on CNN it have to go to people have to go to outlets like yourself as a media platform it's not on mainstream but 250,000 people are coming across the border illegally and and that's funded uh a lot believe that's funded by Russia and


China to destabilize America so you will feel unsafe and you go buy a gun it has to do with Democrats and Republicans they're going have to fix the policy but people self feel this way can you imagine if that was happening in Canada if all of a sudden you had this huge number of8 million people trying to come across the border into Canada and what would that do on the Health Care System what would that do on the education system uh and so we we looked for those other things that are saying this is


what is happen happening I I I think that people are more educated uh more people are using the reddits uh your network uh following you in YouTube following the Articles you write Etc and you distribute so we're going to see that shift go on and we're going to see a battle between mainstream media and these these sort of uh like like Bitcoin and gold or decentralized media Outlets that is something what is so key you see in Russia and in China there there's no decentralized media Outlets wow they're


all centralized so all controlled for the propaganda uh mechanism and and and I think that we're going to see more gold buying like I said earlier Millennials are buying gold at at a at a much stronger rate than was ever expected uh and and I think that we're going to see this other leg I think the same thing with silver um what is also interesting is how they use the ETF because what we saw in lithium was there so much that people came in to buy Junior lithium stocks it was all the money that flowed into US


lithium ETFs and those ETFs turned around and bought all these lithium stocks that are in Canada that are the assets may be in Brazil and then Nevada but Canada has the intellectual capital for raising capital for Mining and development around the world and so you see the pools of capital changing I was talking to people this morning in London and I believe that sprock partnered with them for a uranium ETF equity and they have like two of them one big cap uranium and small cap big cap lithium small cap but


the money all of a sudden comes through this channel goes into these stocks and everyone says well everyone everyone's buying all these Junior mining stocks well what's interesting is that a lot of them bought lithium and and uranium particular lithium because they bought Tesla so we got the young investor uh your age uh filled with this new energy and new look at the world differently and and so you say well they need batteries so let me go look and on YouTube and I'm going to read this


article and they turn around and go buy one of these ETFs and maybe some of them ventured out to buy the stocks I think we're going to see that in the gold cycle I think we're going to see that happen in uh and and that's the reason why I have go auu but it's interesting for me is that Au is the element symbol for gold number 79 um and a lot of people when I say where this H go auau they don't realize it's actually go gold uh who knows it are all the science people and and it's and I think there's


this ongoing education process that younger people will go through that because they have the ability to go to websites like yourself that are decentralized media Outlets yeah I think there's definitely a shift in terms of young people getting more interested in these battery medals hopefully moving over to gold as we move forward here so maybe we talk a little bit more about what's going on with the gold stocks gold ETFs I know that investors who are watching gold rise to these historic levels are wondering okay


so when are my gold stocks going to move we've talked about this disconnect that we've seen throughout the year I wonder if you see that starting to change at this point I think that people are going to be pretty reluctant about looking at what the exploration project is in as in is in North America to a great degree because the regulatory world is very complex and what Pier Lon they used to call the life cycle of a mind that became called the lon curve and that curve used to last8 to nine years uh two


years expiration success all of a sudden three years development uh building a mine and your production 8 to n years later that's now running 20 to 30 years so where where can you compress that and and and that compression happens in Africa uh where does the Robert fredin go they're in the Congo oh that's high risk no the the CEO of Rio Tinto and the CEO of uh previous CEO of Anglo America uh I was on a panel with them going back preco days and uh they said their their the biggest setbacks at risk were


actually in the US where the EPA delayed them with major projects and green piece gets funded and they make all these misinform and and uh they delay the process for developing a resource so I I I think we're going to take a look at the junior mining companies that are in Latin America and Africa um Mexico these places are it's have a faster track where you're going to actually get the cash flow uh I I think what happens is it what it does is that this this line this this from from nine years to 20 to 30 years from date


of discovery to date of production is so long all it's doing is shrinking the supply that there's if there's no exploration going to to production but the world continues to have babies uh we we've gone from you know six billion to 7 billion now 8 billion and sure it's going to be 10 billion people um and and most of that that population growth is happening outside of the US and Canada uh you're going to see Canadian explorers of the intellectual Capal would go to these other jurisdictions so I think those


assets uh are going to be in much easier to develop in Quebec than they are in British Columbia uh they're much easier to develop they thought in Nevada they're much easier than say North Carolina uh they're going to say it's much easier in Africa so maybe we'll get another Renaissance of exploration development in Africa uh Canadian companies that are over there all right so I said we would check in on Silver as well so let's look ahead to Silver in 2024 so we have gold at or near all-time


highs silver tends to follow gold but it it lags gold we know that and then it tends to outperform so silver I think people are still waiting to see what will happen for you what are we looking at in 2024 for silver well I love your book there the big silver short I see behind you over your left shoulder uh I think that um silver gives you much more upside with a gold move for two reasons one is as it's a warrant on gold so the DNA of its volatility is always 50% more than gold on the upside and the downside


so as gold runs through and we get that golden cross which hasn't happened at the 50 days above the 200 day we will see uh silver all of a sudden go through a new run the US continues to have a policy for renewable energy the climate change group all met in Dubai and and the United Emirates and and what you see in that is that push needs silver it needs silver for solar energy so the industrial demand for print is much bigger what is really fascinating is that the the cash silver market that


coin trades at the biggest premium still if you look at the Futures Market it's the cheapest place to buy silver but if you look at what really is get to buy a silver coin it's it's much much higher that premium is substantially higher basically signaling to you that the retail demand is buying silver coins and and and I don't think that's going to go away uh I don't think inflation is going to go away I think they're going to drop interest ratees but they're not going to try to go below


2% unless there is a you know Financial Global crisis but I don't think so and what your listeners have to realize which I was like a Dej Vu moment months ago last time after we spoke was how can the US economy remains so strong and and what's come out is really that the US is setting all these military all this military equipment to Ukraine but you know it's old stock it's old technology it's very new for Ukraine and it's able to show how good it is at battling and pushing back against Russia but we're


rearming everything to deal with China and the great military industrial complex that President Eisenhower talked about is in every state there is a military and Company and and so you have to recognize as the rebuilding the military Machinery military stocks have been growing growing at a 25% kager they've been on a tear like semiconductors have been everyone focus on Nvidia well you take a look at the other semiconductors they've had a 10year run of 25% a year well where's that going that's going into a lot also


the military uh and that new technology well that's keeping the economy alive that's why it hasn't fallen off a cliff uh and all the debt spending so we're going to you know witness that the us is going to continue this big spending and they're going to needs silver and and and that that money is going to be as being flown you get big tax breaks if you built silver firms uh and therefore you need silver so I think that that it's very very bullish for for silver stocks right and I think this leads into


a fun question that I wanted to ask you you know if you look at 20124 what asset do you think is going to perform the best it doesn't have to be a commodity uh I know you've been talking about defense stocks sometimes we speak about what's going on with the airlines what do you think is going to be the best performing asset well I can put on that half for you you know I got I've got Jets too you know Jets is is a good barometer of global economy and it seems to move around with the with the price of oil uh


we had the price of oil going up and and the concern of a global recession uh we have predominant foreigners from Europe and uh institutions leaving the Jets ETF the retail continued because the pricing power I follow the airlines uh for a big reason it's about 9% of global GDP directly and indirectly and and because of Co we have this new million people that can code and they'd rather in the winter leave Canada leave uh uh New York state Pennsylvania manyi Minnesota and fly south fly to Mexico uh fly anywhere


South in Europe the they're all flying from Germany going to Italy to Sicily to Portugal and Spain to get out of the cold weather and they can code there they do all the coding you can do you actually can do your video Zoom video from uh akoko and uh and it's recognizing so the airlines adapting and adjusting for that and so we see in the west coast the big merger of of Hawaiian Airlines in Alaska because they want to basically have a dominant play along the Pacific coast for business tourists uh and and we saw


jeffl going after Spirit to get the East Coast everyone going down to the Caribbean islands so it's recognizing that the airline tickets have not gone down they've got you're not seeing big deflation before you used to build a book six months old and the tickets would be cheaper that's not happening they're they're steady and so there's big profit margins there and I would say to share with you that I think the airlines are so inexpensive about the trains and trucks that they are telling


you then they've come off their bottoms that the economy is going to be stronger next year it's about six-month leading indicator pmis purchasing manufacturers index I write about every month is very very good at showing you how the demand for copper and iron and oil will be and it's bottomed so oils falling below the 200 day but it's basically suggesting that in 6 months from now oil is basically going to have a bottom but we're and I mentioned this last time in your program that when you're in the


third year of for presidential elections I go and you have a Democratic president and a republican Congress markets go up double digits that's just math of of of 60 70 years of the four-year presidential election cycle when you're in the fourth year and the president is a Democrat and the Congress is a republican the odds are you're going to be up 90% of the chances going to be up 8% well well when you have falling interest rates in a presidential election side go you can double that and and so that's what we're seeing


now we're going into that perfect presidential election cycle and all these people don't like Biden you it's very difficult the CET usually wins if rates are falling and there's a big say Trump is going to win whatever but I I myself rather look at government policies and there's always this imbalance between their monetary and fiscal policies and the bigger the imbalance the better it is for gold the better it is for silver and now it's become the darling for the younger Generations is Bitcoin and that


ecosystem but I I think what we're going to see is that we're going to have a very strong economy now what happens when you have a stronger economy and the stock market is going up and the price of gold is going up guess what happens to Junior Gold stocks they go through the roof they they they they the big cycle 2002 3 4 5 6 7 8 we had a strong stock market we had a strong gold price strong silver price so the biggest players the biggest Capital flows into the stocks and I think that that's what's going to happen


in the same thing with the crypto mining stocks uh as you know I'm being the chair of uh and co-founder of Hive uh that we have this idea of this Bitcoin coming out well that will all of a sudden usher in higher prices but unlike gold bitcoin's got a model an algorithm that every four years uh during the year of a president election cycle it's very interesting how that algorithm is created uh it Habs so the supply actually havs so if you ever producing if the world is producing 90 million


ounces a year and all of a sudden it goes to 45 million the price of gold is going up it's going up much faster than you ever thought so that's what's happened with Bitcoin so the Bitcoin ETF and the having means there's going to be less Supply and and and I think this and and interest rates are going to fall but they're we're not going to get Negative we're we're going to get to negative real interest rates again that these all these asset classes are in a secular


bull market so I remain very very bullish uh in for next year I think that's a really good summary I can tell what you're thinking is coming for next year which is really useful any final thoughts as we wrap up that you would leave investors with you know one of the biggest things is a study was done by m uh and that is optimism and and there's many benefits for for being optimistic you live longer uh and uh you actually are able to capture better Investments and and you you're better at stock picking uh a


pessimus is not gloom and dmer is not uh it's not ignoring reality but is being optimistic and the biggest thing to start that off with is to be grateful we have to be so grateful uh we're so critical in North America Canadian politics American politics but we have to be grateful we're in two great Nations and and on a relative basis to the world there all the other countries in Latin America they all want to get into Canada they all want to get into the us we're not running the lead


to go to these other countries or to Africa they want to come here we have to be grateful we have a great nation we we have health care we have education uh we can always make things better and improve but be grateful it's it's happy holiday season time and Nick sure look for the opportunities okay what a great way to wrap up this conversation I think that's so important for people to remember so thank you again for coming on to talk about gold silver Bitcoin the markets really great to have you thank you


Charlotte and it's lovely being with you again of course and we will check in with you next year so see you then for now I'm charot McLoud with investing new.com and this is Frank cols with us Global Investors thank you for watching if you like this video make sure you subscribe to our Channel we'd also love to hear your thoughts so leave us a comment below we'll see you next time [Music]