[Music] I'm Charlotte McLoud with investing news.com and cting with me is John Hanson he's a private investor who has been investing in gold and silver mining stocks for over 20 years thank you so much for being here great to have you again oh thank you Charlotte I'm delighted to be here it's going to be fun I think it is going to be fun and I think many people in our audience will be familiar with you we've done a number of interviews over this past year going over your gold and silver stock analysis


process how to build a portfolio and recently you've been going into other areas of research So today we're going to be looking at gold and US money supply this is really hot off the presses and what we're going to be doing is going through a number of charts that you've set me so I'm going to go ahead and bring up the first chart here so we can take a look and I'll let you get to it and you can just prompt me when it's time to move to the next chart so bear with me for a moment as I bring up that


first chart here right so what we see here is the money supply uh it's M2 US money supply from 1970 and to I've got 2030 on the chart there but it shows basically a perfect smooth exponential curve which um and as you can see it I've got it data point every 10 years it's not uh real close except uh there's a oh here we go there the uh it's every five years after 2000 I didn't plot the ones in between the 70s and 80s earlier but it it's right smooth along that so you get an idea the


thing that I was struck by in that not only is it a a perfectly exponential curve meaning that it it it's getting steeper and steeper over time it's like acceleration versus velocity then velocity which is a straight line and acceleration is a curving line because it's it shows that there's an increase in the velocity and uh the mathematicians call that the second derivative anyhow that's the exponential curve and as you can see it just keeps growing and uh I found that extraordinary because the data points


laid right on the curve and you would think with most human activities there would be some variation but it there isn't very much which it it almost looks like there's some sort of natural phenomenon going on here that is being described by this curve and the data just follows it uh over this 50-year who Al it would be be if it got to 2030 be 60-year period which is I find extraordinary I can't understand what's going on with that that that would be true there's one other little Oddball


thing about it you can see up at the top there that the last data point is 2022 because that's what I had but something else has happened that has not happened in well over 50 or 60 maybe 70 years I don't know how many and that is that from the um early 2022 until the present time the US money supply H2 actually went down a little bit maybe 4% which I have no idea why that has happened and it hasn't happened in forever I think maybe the 1930s was the last time that that might have occurred I don't have data that far back


so I couldn't tell you but uh that's weird and and U when we go to uh the next chart uh that will I'll explain why I think that's so strange here i' I've plotted the U US debt level uh with the money supply and it's if you look at it you can see how they follow each other only the uh the debt is following the money supply growth but this is data every five years through that era and and you can see how they they track so for the fact that there's a little bit of a a a blip that has never shown up


before that doesn't make sense when you see how the DAT is climbing the debt I mean and and U and the debt is is climbing ever faster in fact where we are now the the most recent number I have is a 24 2024 number up there uh the money supply one is 2022 so there isn't the one right above it but that was 34 trillion and and we're seeing this uh uh debt level growing at about three trillion a year every hundred days the US debt now is going up $1 trillion which is absolutely amazing so


that would tend and so that's going to go up so the money supply up should be going up as well just as it is for the last 50 years but it's not quite right now and that's a very big puzzle and um because one of the things of course that this shows is that this debt is being covered by printing money that that's pretty obvious and it's been going that way for a very long time so then the question is well if if we're creating more and more debt then who's who's buying


it and and when you look at that somebody is buying it central banks aren't buying it and and uh and the FED is supposedly not buying it but I think what's happening is that the FED is playing games and they actually have created a situation where the US banking system the US banks are being basically strong armed to buy it because otherwise they're the only ones left this because it's so much money but I don't have that answer I don't know that for fact but um I find that quite


extraordinary and ended up coming up with more questions and answers but certainly that the tread is very obvious and is going on for all this time and and the the debt and the money supply going up right together over time and so it tells me that like it or not the debt is being funded by something and and I it may be that in another year or two all of a sudden the money supply will explode back up again or maybe they'll change the way they calculate it and all that but it it it indicates to me that


there there some kind of desperation going on here that the that the government realizes that the debt is growing so fast and and they need to find somebody to to put the money up for it and they're having a hard time doing that so they've gone to some kind of Extraordinary Measures it appears but uh so let's stay tuned on that I think that's an issue that we really need to explore but again it indicates that there's a big problem lurking here and that this debt is growing so fast and


and and it's got to get funded and the money is going to get printed somewhere somehow and U so it's a bit of a mystery right at the moment on on that one but the very least we can say is that this is is is the trend is is clear let's go to the next slide this one is is probably the most important one I'll show you today and that is that we have again the same money supply curve but I did plotted the gold price alongside of it and I didn't draw any straight lines through it because there isn't really any straight


line as far as the gold price or any regular curve except that the gold price obviously is following the money supply up that we can see and the other thing that I find really extraordinary about this particular chart is from 2015 if you can see where the the circle and the square is above the that's that's 2015 from 2015 on the gold price followed the money supply right in line with it which was not the case at all in the previous uh the periods the other thing that's curious about that you'll see in 1980


where the gold price was way above the money supply that's the peak in that in the bull market in gold from the 70s and I'll show you that in a little while the other one that's a big anomaly is in 20 2010 and and that again is the second bull market in gold and actually that is the two data points I have there 2010 and 15 as you'll see in subsequent curves there was a big blip up in the gold price so that it deviated even further from the money supply but what tends to happen is over time that it the


gold price falls back in both of those instances to the money supply curve and that I think is very interesting also is that it indicates that um you're going to have a bull market the price is going to deviate substantially but you might want to think about selling at some point in there before it comes back down to the money supply curve again so I think in the long run this could be very useful for investors to realize what the pattern is here how it works so well look at that but again the other


question is why did the gold price and money supply follow each other from 2015 to the present I have no idea why that's happening other than we know that there was major changes that happened in the 2010 and 2015 period that's when the central banks began to buy gold again if you'll remember from my previous interview because before that time they were selling every year and then at in that era they started to buy it and now they've been buying it at an ever increasing rate does that have something


to do with it this I don't know but it seems like there some big things happening in that 2010 2015 period that are very interesting that I I'm curious to know more about what what all really happened here because some significant changes showed up that were different from the previous 40 plus years so that's that's that's that one and we're going to probably refer back to that but I have subsequent charts that will show you the book markets in um the 70s and in the 2000s and and and what those


deviation points from the money supply curve what they actually look like so let's take the next one okay this is the gold bull market from 1970 to 82 in more detail and what you can see is when we got here in about the middle of 1979 then the the price shot up like a rocket and went up and then came back down again by the middle of 81 so you saw about a 2-year period between mid 79 and mid 81 where it b a round trip way up and then way down again uh but the typical thing about these gold B markets


is that the last two or three years tends to represent a a lot of the activity and the where you find the the peak and so on this previous chart that's where we saw saw that gold price that was way up above the money supply well that's why it's because it did that so let's look at chart number five now this is the one the bull market between 2006 and 2012 13 and it looks a little bit different it started to come up sooner than the earlier one but again if you go from about 2010 to


2012 Maybe mid time that's when again most of the increase in the in the gold price was the last 2 and a half years or so and then it tapers off again and it falls back to the money supply curve and uh so that's I think an interesting feature to to keep in mind in terms of what we can expect to see in the current bull market now if we go to the next chart what I did there was to just hypothetically say okay let's say that the this current bull market in Gold started about uh uh mid 2017 and what


might it look like as it moves forward if it is going onto a smooth curve like that and that's what it it would imply but I think that probably we haven't hit the last twoyear period yet so that I would expect 2728 that we would probably be way higher than 3200 but I could say from just what I see here that we would probably see from uh 2200 in the middle of this year up to 3,200 the middle of June of 2026 we would go up at least $1,000 an ounce and I would expect it to be actually quite a bit more than that


because of all the money Supply growth the debt growth all the rest of it that we're going to it's going to have a parabolic rise it's going to be much larger but still I would think most gold investors would be pretty happy with a$1 thousand an ounce bump in the next two years uh and bad would be I think a minimum gase on everything we've seen here so uh anyway I would just just fooling around with that to see what that might look like then the uh next curve please the other thing that I thought would be


useful for investors is to actually look at Silver since we haven't talked about that very much in the interviews that you and I have done and and what you see here is the gold again is the is the squares and and then what the silver did alongside of it and typically what silver tends to do it will follow gold but when you get to the peak as you can see in 1980 it went way up in a big way and then came back down again fairly uh quickly uh so that was a a really hard one to to to manage as far as how do you


make money in silver with in that period but if you turn the curve the to the next slide you will see during this period that the silver um didn't uh go quite so extreme it started to to come up and then it stayed up for a good while in 2011 12 and then down into towards 13 it was up high and uh in relation to the gold price so it it uh it wasn't quite as extreme but you can see silver follows gold but it U it tends to u to be more more volatile so it go up up higher and then down lower towards the


end of the bull market but again the interesting thing is that these uh most of the gains in in these bull markets is in the last two or three years and I think we are at the beginning of that period which is why I think there's so much potential for gold and silver investors and um I really think they should look at this as a once in a generation opportunity to make a lot of money because all the fundamentals and everything when we look at the history indicates that we are at the cusp of a


major upswing then the price of gold and silver based on what we see here so uh I'm I'm I'm very excited about this market and I hope that your audience has uh benefited from seeing this to realize that uh this is not just hype that they they're really some very solid fundamentals that tell us that gold and silver are going to do extremely well and in relation to Silver um I have not mentioned anything much about that but I do have four favorites that I've invested in and I will be happy to share


that there are three producers and one Explorer I think the Min the risk level is quite low there aren't a lot of silver companies to be invested in but my favorite is a company called a gold and silver and I I think it's it's an extraordinary company it's the only company that I've run across that produces silver and 100% of their revenue is from Silver alone and and and the management is is outstanding they've had tremendous success in in Africa in the past a man named Beno Lal is a


tremendous uh management CEO of it and it's located in Morocco which is up in the northwest corner of Africa and a pretty safe place to be and and I feel really comfortable about the location but they're going to grow their production from 2 million ounces of silver year to 10 uh at least eight between eight and 10 in the next year or so U so it's a a terrific company another one that I like is Silver Crest metals and that's in h Mexico and that's also uh very lowcost producer both Aya and Silver Crest


their cost of production is around $10 an ounce which is I like that very low so even if there's struggles there's they're not going to have any problems making a profit so an excellent company and also fairly well Market capped I think both a and Silver Crest are maybe one and a half billion Canadian Market capab but that doesn't bother me I I think they're excellent companies very low risk and the silver price goes to $50 they're going to go up by four or five times I mean multi Mega cap companies in this


sector happen all the time I mean uh you know agnico Eagle is $30 billion do us so I mean that that that doesn't uh trouble me too much when I see that the fundamentals are so strong for both of those companies but then there's another one in in Mexico called Endeavor silver that's been around a long time and and and they're they're a good company and and they uh aren't 100% silver but there's about 2/3 silver onethird gold so that's fine a lot of other silver producers that call themselves silver


producers maybe produce 60% silver and the other 40% is zinc and lead and copper and a bunch of other stuff so I'm I'm much happier to see the the Endeavor and and the they're a much smaller company right now but they're uh in the process of putting a new m in production in Mexico that will bring them up into the same relative quantity of production as silver crust and a in the 7even eight million oun a silver a year and silver equivalent in their case of course which is also gold but U so


and that's maybe only half a billion dollar market cap not small but been around a good while and well managed and I I like them too the other one is a an Explorer also in Mexico Mexico is the largest producer of silver in the world you probably know that and it's called viszla Silver Vizsla and and um one of the things I like about that is that the amount of silver that they have in the ground already discovered is much larger than either of the previous three companies but they're only an Explorer and they


haven't got it you know they aren't mining it yet or anything but the potential for them is is is considerable so I wouldn't invest much money as much money in an Explorer as a producer because there's more risks involved but uh this is going to be a mine it's it's huge and it's going to be I think quite successful so those are the four that I would recommend if you're interested in getting into the silver market and I think it's a good time to do that because silver is very undervalued now


the gold silver ratio is at an extreme it's about 90 and um in recent years that cold silver ratio has fluctuated between 50 and 100 and then so maybe 40 and 100 it it's been in 2010 it was actually in the low in the mid-30s the gold silver ratio so it's at a very high level so it's very underloved and so I think it's a really excellent time to get in the silver Miners and bu silver bullion because it's so undervalued with respect to Gold so um anyhow that's what I I might think and I've been I actually


shifted fair amount of my money last year in the silver sector because I thought you know silver is so unloved nobody likes it and that's when you want to buy it exactly okay wow thank you so much Don for going over all your latest thoughts I think as usual you did such a good job of taking historical data and showing us what it means for the present and also the future so that investors can hopefully position themselves so this is really great thank you so much oh I'm delighted it's always fun to do


these with you it is always fun and hope to have you back again but we'll wrap it up here for now once again I'm Charlotte moud with investing.com and this is Don Hansen 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]