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 [Music] I'm Charlotte McLoud with investing news.com and here today with me is Peter cro publisher of silver stock investor and author of The Great silver goal thank you so much for joining me great to have you online as always charlot it's always a pleasure and thanks for having me of course so we do have a lot of topics to go over today but where I want to start is with the silver Symposium so you recently attended this event in Las Vegas I believe I didn't have a chance to go so I'm curious to

hear about your takeaways anything that you would want investors to know about what happened there sure so what really struck me actually I guess I would say the thing that stood out the most was uh there were a lot of attendees uh just investors retail inv investors who themselves showed up uh went out of their way to go to Vegas and were very intent on hearing and learning about uh what was going on in this market and um that was a bit of a surprise to me because the sentiment in general is is

I'm going to say weak if you if you follow these markets and the the sentiment that I got from these uh retail investors actually uh I'm not going to say ecstatic it was it was quite strong they were they were nonetheless despite you know the the the challenges and precious medals um they were very interested and and seemed quite committed and understood that this was not a short game that it's a long game and that they um need to understand how the market Works uh stay informed participate be ready do their research

now and uh that gave me uh actually a fair bit of confidence in terms of the the ability I guess of uh of some of the uh of retail investors to to be able to um to be able to assess the markets and uh and to uh to gain gain and maintain exposure to something like Precious males which is obviously quite a niche market if you look at uh investments in general okay very interesting although you know out of all the Commodities I would say you know silver does have a very dedicated following so I think that

that makes sense to me that a good crowd would show up there okay so good to get your thoughts on that sentiment in the industry I want to also look at macro issues going on right now and I think the main thing that people have on their minds at the moment is the war in the Middle East so obviously that that means a lot of things across like at a global level but I'm hoping we can we can dial it down a little bit and talk about silver during times of War or conflict and the performance that we might see

there absolutely so so if you look at what's happened in just over the past week or so obviously this conflict has erupted um it lit a fire so to speak under precious metals gold is up about aund or was up about $120 per ounce or about say six or so percent silver gained about a175 from 21 to about 2275 so that's over 8% um but uh you know when people ask me what happens these kinds of situations with precious metals the answer for me at least is that it depends uh normally the war premium will fade and we saw that if you

look back at what happened with uh when Russia walked into Ukraine about a year and a half ago that was clearly what happened gold popped over $2,000 it was temporary it dropped back within weeks or months down to about 1,800 silver rallied above $25 at that point then it retraced to about 21 $1 so unless the conflict escalates I expect to see this premium somewhat dial back and we may already have seen the beginning of that right now but um it as I say if if the conflict escalates then we could see

some of these premiums stay quite High uh I think that um it's it and it makes sense if you think about you know why precious medals are acting like this typically when award like this erupts unless it's a world war or some you know the end of the world in some way um markets get used to it they get comfortable they see that it's not quote unquote the end of the world and so the attractive attractiveness of the safe haven starts to fade somewhat um and so it's not surprising it's not really a

fundamental driver for demand for those metals and that's why you'd expect to see that safe haven buying s start to uh start to lose its shine right I think that is typically what you do here when you have events like this you get that initial Spike and then the pullback so but it is good to go over just so investors have an idea of what's going on so thank you for that so if we look a little bit closer to home I think a lot of people are also focusing on defend so still fighting inflation it

looks like we're going toward a higher for longer strategy there but there's a lot of concerns about whether defend could cause a recession or break something even big so I'm curious to know what you think is next from the fen we do have it coming up later this year pretty soon so I mean the the US CPI numbers came out just a few days ago um the numbers for September were up .4% for the month it was a 3.7% uh inflation rate for the 12 months ending September and that was actually the same as it was in August on the same

pace so really the what's interesting about that is um that really that's still double or nearly double the fed's 2% Target the fit's gonna have a tough time watching back from I believe anyways unless other things come into play but things even with this uh breakout of War inflation's remaining quite high and consumer spending uh that's something we're going to have to see how that plays out but I've been hearing that in certain sectors especially consumers are continuing to spend things like travel

entertainment and so on and willing to spend even um more for in cases like uh where they are willing to spend more on items that are perhaps better for the economy things that are sustainable that kind of thing they're really actually willing to pay a premier on these things so in some areas spending is holding up we know we know that employment is holding up and so uh the FED really is between a rock and a hard place it's going to be hard for them to back down from uh maintaining these high rates I think that November

at least in my view is likely to see a quarter uh basis point um rate hike uh sorry 25 basis point rate hike and um and you know anything's on the table for December but I I'd expect that for November especially with these kinds of inflation rates uh you know if you look at their uh personal consumption expenditure index which is the fed's favored um measure of inflation that's actually above 4% so you've got the CPI you've got the pce both somewhere around 4% and again double their target so they

they really I I feel have very little choice but to keep talking tough raise at least one to two more times and I do think there odds are pretty high that's going to end up breaking something um so we can talk about that a little bit as well in terms of where where that may lead uh but I think that's uh that's on the table too right and you know with all those factors in mind I was going to ask you your outlook for the US dollar because when we spoke last I think back in March you mentioned if you want to

know where silver is going in terms of the price look first to the US dollar yeah so I mean and that has continued to play out uh the dollar Rose just in the last sort of few months the dollar Index Rose to about uh 107 we've seen it come off a little bit in the last few days my my feeling is that and I think a lot of that is uh driven by um uh the rates that uh that sorry by interest rates which is the Fed raising rates makes the makes rates rates being higher makes the dollar attractive uh it

also of course hurts especially longer term treasuries which in some ways makes the attrative but it especially makes short-term treasuries attractive because you can now get a 5% yield on you know a one month 3 month uh even a one-year um treasury so why would investors be looking at stocks why would they be looking at long term bonds why would they be looking at precious metals they they can get a good yield not take risk um and um so the higher rates certainly makes uh for the stronger dollar and it

makes for headwinds on precious medals so we saw the dollar rise we saw silver uh come off somewhat same with gold uh and it's been in the last sort of week because of the conflict in the Middle East that we've seen a bottom really set itself at least a near-term bottom uh or recent bottom set itself in both uh the gold gold and silver prices and they've they've really actually kind of taken off uh from there I think that medium-term we may have seen at least a shorter term peak in the dollar at 107

in the the dollar Index I think we may have seen um uh the the sell-off in longer term treasuries also end and start to reverse I'm not convinced by any means that it's a longer term Trend but I think we're going to get a counter turn counter Trend rally in treasuries and we're going to get a counter Trend selloff in the dollar um in sort of the next weeks and months uh that could easily be a uh dealing for precious metals right I was going to ask you about some of that turmoil in the bond market so I think

that covers what's going on there if we go back to you know that idea of the fend breaking something I just want to touch a little bit more on that because I hear that a lot you know something's going to get broken and is there anything else you can say because it always sounds quite vague but then it is really hard to see these things coming like you just you just don't know well exactly uh the best example is what happened with the British guilts back in the fall last year almost a year

ago uh and then the US banking crisis the uh uh there were we had four Banks go under this was uh around March late March I believe this year um that felt like it came out of the blue uh somewhat of a Black Swan and so if I had to make a guess in terms of what the Fed was going to break like you said very much you're right Charlotte these things are impossible to know in advance and that's pretty much the definition of a black onean uh my best guess would be that the banking crisis is just not over the the

banks are are struggling I read something just recently some statistic that it's the first time in something like 20 or 30 years that we've had I believe it's a quarter uh quarterly period in the U in the US where um deposits have actually uh shrunk in US Banks that's practically unheard of and it's in part because they can't keep up with treasuries treasuries paying 5% um means money market funds are really attractive for investors why would they want to give their money to a bank and

and and deposit their money there when they can do better elsewhere it's uh perfectly safe if not safer they probably feel safer um so their Banks really are struggling and they hold a lot of these longer term treasuries that have themselves been suffering because of higher rates so those treasuries have gotten sold down yes the FED did step in uh for the regional Banks and um you know picked up those treasuries but uh the fed's going to have or could be pushed against the wall at some point too and if a banking

crisis got big enough I'm not sure that they would step in and save the entire Market I believe it's just too big so that would be one of the places I would point to uh as as uh perhaps a more likely um higher risk issue okay thanks for thanks for doing a little bit of speculating on that I know it's a little bit of an unfair question to ask you to essentially predict a black SW we deal with that Stu all yeah we deal with that stuff all the time yes yes so these are these are issues that silver investors

should be paying attention to but I also want to look at supply and demand Dynamics so again toward the beginning of the year we were talking about the silver institute's predictions for big silver deficit this year I think of about 140 million ounces so we are approaching the end of the year I wonder if we we know how that's shaping up is that still looking to be the case what are you seeing there so the silver Institute actually has a um an annual um I guess midyear update which they do in November that is coming up uh

in the next several weeks in about a month or so and I believe that that that's when they tend to update things and revise I believe that they're going to revise upwards this uh forecast deficit uh they did say around 140 million ounces for 2023 I think it's going to be they may come in around my guess would be around 160 million ounces and I think by the time we get to next year and the final numbers are in it'll probably be closer to about 180 million ounces so um a lot of that is being driven by solar uh

solar has just been going wild in terms of new manufacturing capacity China dominates this this this area at about 80% of global manufacturing capacity uh but if you look at the numbers over the last uh few years 2021 saw something like 55% increase in solar panel solar panel manufacturing capacity uh 2022 saw the same 55% increase the forecast for 2023 is I think it's 28 or or so percent and by mid year this year we were already at 18 so if we're if that pace continues we'll be north of

35% so it's just incredible because the the what's driving it is one um mandated pushes by governments but two the costs have come down so much that uh it's becoming cheaper to add uh Power capacity from solar than it is to go with the traditional things like cool or natural gas so you have the international energy agency that now forecast that by 2027 so just four years or three years from now um solar is going to surpass both coal and natural gas as the the world's largest um supplier of of electricity so um there's

that's a really really big push for solar and so if you know your viewers don't don't know um solar is a huge consumer of uh of silver because of its conductivity its reflect reflectivity it's uh it has the highest degree of both of those of any metal and so solar consumes about 12% of the world's annual supply of silver probably this year we're going to look at it consuming closer to about 14% maybe even higher uh so solar is really the gorilla um in the I should say sorry the

elephant in the room to use the the right um the right expression and so with that I think that we cannot underestimate what is happening you cannot ignore what's happening um in the Solar sector when it comes to the silver market is really is a huge uh huge impact on uh on on demand just silver that's very interesting so that that gives us a good look at what's going on in terms of industrial demand for silver if we look over to the investment side how are we looking in terms of the

institutional and Retail investors I know you talked a little bit about sentiment toward the beginning of this conversation yeah so we've seen actually that has been a bit weaker uh last year was a blowout year 333 million ounces uh out of one billion ounce um Market uh so that's like a third went to Silver investment uh demand uh I'm not sure we're going to be able to hold that pace this year however with silver prices being um I'm gonna say not weak but sort of mediocre that

can to some extent attract the attention of bargain buyers so they could very well decide you know that they find silver prices attractive and to continue to buy it what we have seen though is that silver ETFs have seen their Holdings of silver drop off in the last several months so that's typically where you do get retail and institutional but that's typically where institutional play because they can get uh access to large amounts and be and be very Nimble in and out of of the market um and

that's where we've seen supplies drop so you could actually take that two ways does it mean that there's more selling happening and therefore those ETFs have to shed those um silver ounces to keep the uh the nav balanced in their units or is it because you've got some bigger players that are taking delivery I believe it's both I believe that some of the bigger players who want physical silver are doing it by buying ETFs that uh are silver backed and if they buy enough of uh because the unit the

minimums can be quite High several hundred, and up to take delivery that they can do that they can stand for delivery and get access to large amounts of silver that way and perhaps not really impact the market too much which is ideal for them of course because um they don't want to to uh to to affect the price uh to jtic all right and you know my impression with silver is that it's more of a demand side story than supply side but I did want to ask just briefly are there any supply side stories that you think people should be

paying attention to absolutely um the two largest suppliers of silver are Mexico and Peru uh Peru just came out with numbers showing that they their their supply has fallen to 20year lows Mexico um in the last quarter or so is down 19 % the lowest quarterly uh drop in something like four years and and Mexico is by far the largest supplier worldwide of of silver 170 million ounces or so a good chunk of that to be fair is related to new Mar's mind the pinquito line that um has been dealing with a strike I believe

that was just resolved so um that will help going forward but we're still talking about over 30 million ounces of silver from that single line so I think that's had a big impact and that's going to certainly Dent silver Supply from uh from mining for 2023 because that mine was offline probably for about three or four months so um you know given that the two largest the world's two largest silver supplying countries are are seeing multi-year lows in Supply and um you know the the prospects for new

Silver Mines to come on stream to to one be discovered be improved financed built and then come on stream we're talking 10 to 15 years these days and so uh there was an interesting uh bit of research by um Bank of America going back about a year or so and they looked out into the future in terms of where they saw different Metals in terms of Supply demand uh sorry um Surplus deficit characteristics and they they saw silver as having the biggest challenge going out to about 2030 of all um base and Industrial Metals and and you

know we've seen that silver mined silver if you go back over the last 10 years the forecast Mine Supply for this year is the same as it was back in 2013 so it will have not changed in 10 years despite way higher demand for for the metal so it's clear that mining cannot keep up with uh with the demand for silver okay so I should I should not discount the supply side part of the silver story okay that's very helpful absolutely that would be our wise all right all right good to go over that and

so I think now we've got to put all this together when it comes to prices and I remember at the beginning of the year you had told us in the second half of 2023 we'll get a stronger silver price most likely not necessarily in the first part of the second half of the year but maybe toward the time that we're in right now so are you still feeling the same how is it looking for prices yeah I mean I think that we there is a decent chance that we're going to see higher silver probably not quite as high

as I was expecting earlier the year in the year when we when we spoke back in March or so uh but I do think that we there we have the potential for strength one of the reasons is we talked about before I think that the in the sort of near term the dollar may have topped I think that um um that's going to help silver with a Tailwind certainly if if we see a continued uh or or escalation um with the conflict in the Middle East that could be another uh bit of support for silver and then balanc with that of

course is if we have the FED continuing to uh hike rates um so that will um I I would say sort of push back the timeline in terms of where we could see when we could see silver start to climb um I would expect that in the first couple of quarters of next year is when we have sort of a better chance of seeing silver um assert itself more and and have seasonality start to kick in and uh get that to uh push the market um towards a rally more easily okay so we'll look toward that point in time I'm sure we'll

catch up with you then and so I want to ask you as well about your portfolio so I'm wondering when it comes to the silver companies do you have your portfolio set up the way you want it have you made changes uh over the course of this year are you on the hunt for opportunities how is that looking so um actually I did make a change um I'm going to keep this for subscribers but uh they know what I'm talking about um there was one company that has performed exceedingly well since uh the stock was added earlier in

the year um just recently it was up about 180% and so um I took and told subscribers to take uh profits partial profits I took a onethird profit profits on that holding um it's really been a standout performer um and I think that um that's likely to continue so that's really the only change I've made recently I'm I'm being patient with the rest of my buildings and continuing to do research and uh there are some attractive names out there uh they've they've gotten unfortunately some of

them have gotten well in some ways if you don't own them yet they've gotten more attractive the ones that you do own it's unfortunate that they've gotten more attractive but that being said I think that uh patients will absolutely be rewarded in this market so it's an excellent time for people to be doing their research to start nibbling on some of these companies and there are some some really tremendous opportunities out there so uh it's it's time to uh it's time to really uh you know get get your

homework done and and start uh start participating right so so people still have time they can still do that research and get in it's one benefit I guess of the price not quite moving yet so exactly yeah and all right so on another company note I wanted to ask you about this news from first Majestic silver I saw that they are looking to open their own mid I thought that was a pretty interesting move so for someone who follows the silver space closely I wanted to ask you does that make sense

to you what are your thoughts on on that so to me it makes perfect sense because they will sell an ounce for the spot price let's say right now at around $22 or so but that ounce depending on the type of coin it becomes ends up getting sold and in this and you know this is not historically not typical but premiums are still at 30 40 50% and and above in some cases and a lot of that gets captured by other intermediaries like the minc themselves uh by different processors um who take the metal PR PR

prepare blanks Supply those to the mint so the a lot of that gets captured by these these intermediaries I think it's a smart move I think that uh first MJ Majestic will be able to capture a lot more of that premium my feeling is that premiums are going to stay high actually they've they've been abnormally high but that's been the case for nearly I'm going to say three years or so now uh before even coid hit they were high and then they just absolutely exploded they've dialed

back they've moved back up they've dialed back again and then back up but they stayed Beyond what's normal which is around 12 to 15% typically for silver above spot we're still double and more of that and so I think that if you have the the ability to to open your own mint I'd love to own one um they that makes sense for them sure why not they're going to capture a lot of that they produce a lot of silver uh you know there are different options mining companies and I've talked to some

recently that have talked about the idea of actually sitting on a good chunk of their production this is an interesting topic because think about what precious metals are they are supposed to be at least in in part or large part a hedge against inflation so what do they do they produce these Hedges right the gold the silver then they turn around sell it for for cash and then have cash and then need to do something with that cash well that cash is subject to inflation yet if you produce these medals and then you

sit on them to the extent that you can I'm not saying to do that with all of your profits naturally because you need to maintain your Capital expenditures you want to expend and so on maintenance Etc but with a portion at least of your cash you are hedging yourself in the best way that is the entire thesis of and the entire purpose of your company so these are the kinds of things that I see companies talking about doing uh getting quite serious about doing I think we're going to see that probably

more and more especially uh if you get one Higher profile company doing that and committing to it I think we're going to see that more from others and and it's very logical uh you know you've you've you've drisk those ounces they will sit on your balance sheet they are they become a hedge vers versus cash the best type of hedge that we know that this industry is is is meant to be and so um th those ounces will just continue uh to gain value and versus taking the cash and putting it at

risk looking for more ounces looking to build new lines that kind of thing so again not that it's an all or nothing kind of strategy but it is very logical and uh I hope we see it happen and I hope we see a lot of uh companies start to adopt that uh that approach yeah that would be very interesting to see so keep an eye on that and I have one one small follow-up question there on with premium so you mentioned they are high but they've been high for quite a few years now at this point so can you talk a

little bit about why that is what do we need to see them come down wow that's a tough one I'll be honest because uh we we you know I get different I get different feedback from different uh different participants in the in the sector uh some some um Distributors for example will say uh that they can't get supply others will say that they can get supply uh that they just continue to charge the premiums because the Market's bearing it um really that that is the kind of feedback that I'm getting and so I I do

believe that supply has a good um good part uh is a good part of the explan explation for for that we know that the US Mint for example is way down on their uh silver Eco production I believe that that's a difficulty that they have in in terms of getting uh in getting product uh that they can use to to produce the coin withd the blanks and so the market is tight it's just quite simply tight and I think that um if you look at what Mine Supply looks like if you look at what recycling looks like and if you look

like what uh the demand for Outlook is I have a hard time seeing that change uh dramatically anytime soon I think that to go back to the normal premiums of sort of 12 to 15% on Silver I I'm not sure we're going to see that for quite some time uh yet it could be probably several years may maybe not even until the end of uh of this uh secular bull market okay very interesting and you know I I asked because you know if you've been buying silver all along you'll you'll know what's going on there

but for new people who come in maybe they have a little bit of of sticker shock when they go to the star and it's like oh my goodness it's a great Point okay okay so I believe I think that wraps up everything I had for you this was a a really good discussion on what's going on in the market but any final thoughts you would add for investors we're heading toward the end of the year gradually anything else you would add what I would add is uh you know I think that the a lot of the attendees at

the silver Symposium they got it they um you know one of the things I I kind of like to repeat is that we can be our own worst enemies as investors and I think that recency bias is a big one you know if you look at what's happened over the past 40 years you had around the end of the 70s so around 1980 or so early 80s we had the end of the precious metals bull market and then you had the start start of of the long-term 40-year arguably a 40-year stock and bond bull market well that's already essentially

nearly double what a typical bull market is and so but that was wonderful and and and for those invested in those assets and um it's also I'm going to say not misleading but uh maybe a little bit because you've got an an entire generation that's really seen nothing else and it's hard for them to have their minds open enough to be willing to accept that these things do end and they do just the way the the precious metals bull market ended in the 19 the end of the 1970s um the stock in the bond bull

markets are are more than likely essentially over at this point and so but yet the transition so when you had the end of the precious metals bull market and the start of the stock and bond bull markets around the early 80s these were what I call messy transitions these transitions don't happen overnight they're not obvious they're not always clear to everyone and they can take a couple of years to play out and that was the case with all three uh precious metals with Bond and with stocks so

precious metals were were at their Peak bonds and stocks were at their troughs but it was really not that obvious and you had you know you had kind of these wild swings for a while and it was easy to kind of get people who became Bulls perhaps in those markets to get thrown off the bull because uh they were shaken and you'd get these run UPS you'd get these sell-offs and then ultimately the the the troughs showed themselves proved themselves and you had these the beginnings of these long long long bull

markets and I think that we are in a similar period in the precious metals and I think that people really do need to realize that um it stocks and bonds have had their time for 40 years is a heck of a long time um they need to realize that we're in a we're in a new age it's an inflation age unfortunately um and to look for the ideal ways to play that Commodities and precious metals uh are ideal in this kind of an environment and so don't be too influenced by the recent past the the future is is

going to be considerably different from what people have uh have experienced recently okay okay I think that's a great place to wrap it up I have to say I don't like the idea of an inflation age but that's all right we'll we'll get through it thank you so much for for coming on to talk about what's going on in the markets that was a pleasure Charlotte thanks for having me thank you again and once again I'm Charlotte McLoud with investing news.com this is Peter Kraut with silver stock investor and author of

The Great silver bull 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 [Music] time