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 thank you I'm Charlotte McLeod with the investing News Network and here today with me is Rick Roll proprietor at rural investment media thank you so much for joining me online today always great to have you Charlotte always a pleasure thank you for having me back really good to be speaking with you and we're going to kick off with a discussion of the rule Symposium which is quickly approaching this is an event that people can attend in person in Florida or online and I'm hoping that

you can give us an overview and to start off let us know why we might want to attend and what we'll see there I'm of course delighted to answer that question first of all the conference for me is a labor of love uh I'm told I took the conference over from Gora in 2002 which certainly means that the conferences took the test of time and delivered value given but it's uh been under my stewardship for more than 20 years what have we done that works well in the first instance we've done a very good

job of getting the big picture thinkers but not the kind of big thinker pictures that you'd see on CNBC or CBC but rather the Jim Rickards the Daniella demartino booths the Nomi princes uh the Doug Casey's the bill Bonners uh people that have a perspective which has proven to be right over time but a perspective that you don't normally see uh in mainstream media if you agree with that world view and the world view is very resource and precious metal-centric we have some of the best portfolio

managers and analysts in the world people that have been through three and four Decades of natural resource markets through thick and thin not people uh who learn to spell gold or lithium uh in 2020 but rather people who have dedicated their entire adult lives to understanding the sector more importantly Charlotte we have a group that we call the Living Legends entrepreneurs who have built multi-billion dollar public companies from scratch in natural resources people who talk about uh the lessons that they

learned in building natural resource companies over time and how those lessons made them a better investor and can make you a better investor frequently on stage I have the opportunity to ask them a very pointed question what companies other than your own are you invested in and why getting uh an insight into the portfolio of someone who's built a multi-billion dollar company I would suggest is invaluable in addition Charlotte uh at our conference the qualification to be an exhibitor uh is that we like you well enough that

you are owned in the accounts of the conference sponsored there's no guarantee as an example sadly that if I own a stock it necessarily goes up but there is a guarantee that we have vetted that exhibitor and we know them well enough and like them enough that we own them with our own money all of this allows me to make an absolutely gold-plated money back guarantee if you attend the conference either live or in the comfort of your own home virtually two things you will have access to the conference tapes for six months

because there's too much programming 50 hours and four days to understand it all as it occurs the this should be the lesson that you keep on learning but if for any reason you think that we haven't delivered you value for money we'll make it up to you we will refund your money absolute Ironclad money back guarantee whether or not you attend virtually or in person all right well thank you so much for that overview I've attended in the past I'll be there this year and I can I test

that you know you really need those recordings because there is simply too much to absorb all at once so really looking forward to that coming up at the end of the month we'll leave a link in the video description for people who want to take a look and hopefully sign up so I think now hopefully we can get an idea of some of the circumstances that we're in right now leading up to the event so we've reached the half tier Mark of 2023 and I'm hoping we can take a look at generally what you've seen going on so

far this year I remember from our previous discussions all the way back at the beginning of 2023 you were feeling surprised at the resilience of the US economy and about the optimism that people had in the overall market so are you still feeling that way right now or have things changed I am uh the US economy in particular continues strong but the Eurozone economy too particularly given the fact that there's at least a proxy war going on in their in on their borders uh astonishes me with its strength you will notice in U.S

Equity markets in particular that they're very concentrated on Big Deck uh I don't want to comment on that because I don't know enough about big Tech to know whether or not those valuations are real or not but I will note that the length and breadth of the U.S Securities Market has stag has stagnated while the market capitalizations of things like the Dow and the S P 500 have had their the gains really really really truly dominated by monster Tech I think that the strength of uh uh the U.S economy and frankly the

purported strength in U.S Equity markets and the U.S bond market will allow the FED to continue to tighten and I think that the FED has a genuine concern about uh inflation recent statements by fed Governors suggest that the FED itself does not believe that Congress or the president will act responsibly with regards to the deficit or with regards to quantitative easing and I think the FED believes that the only chance that they have to fight inflation uh is through the discount rate which I believe that they will be successful in

increasing speculators then need to consider concern at least two possible outcomes the first is that the FED succeeds I've never seen it happen necessarily before in my life but there could be a first time to the extent that the interest rate Rises are measured enough that they really don't knock the economy for a loop but they slow down economic activity enough that at least the CPI stated rate of inflation comes in less than the yield on savings products uh with the amount of cash on the sideline

we could see a truly spectacular rally in various kinds of asset classes I believe that's unlikely but the truth is that speculators need to be open to all kinds of possibilities and probabilities the second possibility is that the impact of increased interest rates will be a delayed punch which is to say that we haven't felt it yet one justification for that point of view would be U.S home sales the 30-year fixed mortgage rate has doubled uh buyers look at affordability and they're staying away from the markets

but sellers have price expectations they're three years old the consequence of that is that we've seen volumes dried up there's no match between the bid and the ask Will that reconcile up or will that reconcile down uh if we see as an example a dramatic price decline in resales of single-family homes if we see a dramatic reductions in the sales of uh Consumer Finance consumer durables as an example or if we see a resumption of disintermediation in the bond market I think that the political pressure on the

FED to Pivot would be very very high the last real pivot I saw in my life was in 1975 where the FED had succeeded in dramatically raising interest rates uh cutting off uh inflationary expectations but they also decimated the housing market the stock market and when they pivoted at the end of 1975 that said gold off on an epic route I think investors and speculators need to consider at least both outcomes okay I think that is really important to be looking at different Pathways that we could follow on we've got a couple of

viewer questions that I'm going to intersperse into our conversation right now and the first one is about commercial real estate one of our viewers was asking about do you see contagion and Commercial Real Estate do you see that possibly spilling over I think that fits well with what you're just discussing I sold my own portfolio of commercial real estate not because of Any uh specific fears but rather because over 30 years I had benefited from declining real interest rates so at the same time that my cost of

capital decreased my return on Capital employed increased and the cap rates associated with that commercial real estate uh worked for 30 years in my favor I saw in 2021 the fact that it was likely that nominal and real interest rates would rise and I saw two cap rates that were from my point of view too generous I didn't know enough about how to add value in commercial real estate and so I exited because I thought that the wind was no longer in my sales my suspicion is that an experienced investor in commercial real estate one

who can add value one who looks at it as a business as opposed to an asset class will continue to do well I look as an example at class A office space in places like San Francisco Seattle Falling by 80 percent somebody who knows how to add value can do very well when a market is in panic but people who don't know how to add value would be very very very well advised I think to stay out of it there are certainly areas of strength uh which is to say the new built multifamily apartments in Sunbelt cities

Florida or Texas an example that are gaining population have strong economies uh it would look to me like uh private storage uh he is a sector that will do well but I hasten to say that my real experience in the real estate business is as a lender not a participant so I'm very I'm very nervous about relying too much on my own expertise I think that uh what the listener's question may be going to is there are a lot of commercial real estate first mortgages and second mortgages that are underwater

and I think that there are a lot of subordinated credits to public and private REITs that are underwater and I think that will be a real problem uh they're underwater in two senses the value of the collateral uh is probably less than the value of the collateral that was anticipated when the loans are made um you know clearly that's a problem the other problem is that a lot of these mortgages whether performing or or underperforming are owned uh in portfolios where they're funded with

very short-term or overnight credits that's what broke the U.S savings and loan industry and it's what broke Silicon Valley Bank if you have a portfolio out of you know full of uh 10-year maturity collateralized mortgage obligations and you are funding that portfolio with overnight now deposits you have a big problem your cost of capital is going up because the now deposits are having to be refinanced at higher prices and you have a mismatch in duration uh as an example the Bank of America is alleged

to have a hundred million dollar unrecognized Mark to Market loss uh in their age-dated portfolio and I think that that's a problem that stays with us and I think it's a problem that probably gets exacerbated If the Fed is able to engineer two further 25 basis point rate increases okay thank you for going over that I think that was a very helpful answer and since he started to touch on the banking crisis I realized that's something that has happened since the last time we spoke and I know a lot of our viewers

have questions about if we've seen the end of that if there's more to come so interested to hear any thoughts you might have there yeah we've been doing a lot of work on the banking crisis not least of which because I'm in retirement starting a new bank battle Bank those discussions will be something of real interest at the conference because they should be of interest to everyone I'm struck now that the headlines have drifted away from the banking crisis that people have forgotten as recently as eight weeks ago

it was all you ever heard about nothing has changed in eight weeks except for the headline and people seen blightly unconcerned what is the banking crisis I would say it's many things I would say that the mismatch in duration liability the the fact that banks have funded long-term obligations or pardon me long-term assets with short-term funding creates the same circumstance that brought down the Savings and Loan industry I would say too Charlotte that for your whole life uh and longer actually for the last 40

years we've been to very benign economic climate of declining nominal and real interest rates and that's over uh and bankers perceptions and depositors perceptions borrowers perceptions I think we're set uh in a period of time uh that was very benign I don't think that the world's going to hell in a handbasket in the next 80 years but I think it's going to be a lot less kind and I think that Bankers borrowers and depositors need to readjust and that Readjustment is going to take some time

I think two Bankers have come to believe that they can be all things to all people 40 Years of benign economic climate I think has caused Bankers who are good at two or three things to be believed that they were good at a thousand things uh that they could lend to industries that they understood that they didn't understand because they had good access to General business purposes I think that Bankers need to be industry specific so they understand something about the value of the collateral and they can understand

cash flow difficulties when they arise and that hasn't happened and I think that the level of financial literacy among depositors is scandalously low one aspect of the banking crisis is that while depositors still didn't pay particular attention to the solvency of the organization they deposited with about 400 billion dollars fled uh what might have been well-run Community Banks and went to the money center Banks into banking products that paid no interest people created their very own banking

crisis why on Earth would you forego a 4.15 interest rate in favor of a deposit that paid you zero I would suggest that the banking crisis was really precipitated by the financial illiteracy of depositors and depositors need to make themselves better consumers you know people will spend three or four hours comparison shopping comparison shopping pardon me for a 400 winter coat and they'll spend no time at all differentiating between institutions where they're going to make a fifty or sixty thousand dollar deposit

um this is perplexing behavior and people need to address it wow that winter coat comparison is is definitely hits home I've seen people do that before so I've got one wider topic that I want to talk about before we move on to talking more about the specific Commodities and that's the trend about the dollarization new brics currency these are things that I've been hearing come up more and more often and I'm curious to know your thoughts on how to approach that from an investment

perspective I think people hear about these large themes and they wonder how they can relate to it this will be an interesting answer uh I think as an example the US dollar will be the world's Reserve currency at least for the balance of my life if not for yours the US dollar for all its weakness is relatively strong which is to say as good a job as we're doing destroying the US economy other governments are doing an even better job destroying their own our mutual friend Doug Casey wants to describe the US

dollar isn't IOU nothing he described the Euro as a who owes you nothing because there's a broader constituency I think you need to describe the bricks as a nobody owes you nothing many of these are definitions uh the idea that they back it uh without convertible currencies and in opaque markets that are thin is silly from the get-go there's a discussion that this currency will be gold-backed who's gold uh it will be gold denominated not gold backed and if you go to uh redeem that currency

for gold understand that the creditors uh have Sovereign courts and they have guns the probability that you will be able to go to Saudi Arabia or China or Russia and say uh here's my brick may I have some gold uh that's just absolutely positively silly now in terms of the debasement of the US currency that's happening but it isn't happening in Beijing it isn't happening in Moscow it isn't happening in Buenos Aires it's happening in Washington the weaponization of the dollar

the imposition of quantitative easing we've talked about this before Charlotte uh quantitative easing is counterfeiting that's really what it is it's counterfeiting uh and the maintenance of um deposit interest rates that are below the depreciation of the currency uh all are reasons in addition to weaponization why foreign countries believe they have the need to dominate their transaction in currencies other than the US dollar even even if there isn't an alternative uh when I was earlier in

my career was sprought and talking to very senior positions people in very senior positions pardon me at Sovereign wealth funds around the world one of the things that I would ask them is why they had so many U.S treasuries in their portfolio when the yield relative to the deterioration the purchasing power was so low and they said that we had the most transparent and the most liquid Securities Market in the world I would ask a couple of them Point Blank do you trust us they would universally look back at me

and smile and say no but we treat we trust you more than we trust each other so I think that those people who are looking for the near-term demise of the US dollar or even the demise as overpriced as it is of the U.S treasury market will be disappointed that doesn't negate the reason why you would own gold it doesn't negate the reason why you would save and invest in other Securities to do to diversify your portfolio uh it's just that the U.S dollar is the worst currency in the world with the sole exception of

every other one yeah so we have talked about that before so that was that was a great answer to that question and now we will move over to talking about the specific metals and commodities so beginning with gold so many things that we could say about gold when we look back at the first half of 2023 I think I'm going to go in a simple Direction and just ask if it's performed as you expected so far this year very much so I need to say I was surprised by the strength in the U.S economy but gold did what I asked it to

do it preserved my purchasing power uh it was stability were there assets were there assets yes like apple that did better would I have ever owned Apple knowing how little I know about it no what gold is for me is liquidity a storm a store of value and insurance so I'm very comfortable with the performance of my gold Holdings and I'm adding to them on a fairly regular basis all right and when you say gold Holdings are we talking about physical gold gold stock yes in this case in this case I'm

talking about bullion I regard the gold stocks as a different asset class okay just clarifying that now another question on gold in our recent conversation I had with Lobo Tigre he mentioned that real interest rates have entered positive territory and we've talked a lot in the past about how negative real rates are generally good for clothes so what does that signal to you that transition in terms of gold well at the risk of offending my long-term friend Lobo I think he's wrong uh if what Lobo said is that the

deterioration of the US dollar as measured by the CPI I would agree with him I don't think that the CPI is an adequate measure of my cost of living uh which is how I measure inflation how it impacts me in the first instance when it's inconvenient for the big thinkers they measure the CPI net of food and fuel well that would be okay if I didn't eat or drive but as you can see by looking at me I do both so that's sort of silly but more importantly for me the cause the so-called cost of living increase uh

index pardon me doesn't include government the single most important expense of almost every household in North America is taxation it is in most households greater than shelter greater than food greater than fuel greater than Transportation combined and a cost of living in uh index that doesn't include government uh to me isn't an adequate measure of the deterioration of the purchasing power of the dollar as I measure inflation as it impacts the basket of goods and services that I consume my

purchasing power measured in US Dollars seems to be deteriorating at about eight percent a year if you add back the increases in the cost of government if I buy the U.S 10-year treasury the most common savings investment asset in the world that pays me 4.4 percent so the US government solemnly promises to pay me 4.4 percent in a currency where the purchasing power is deteriorating by my count by eight percent compounded in lobo's defense in the mirror term in the near term pardon me perception

matters more than reality and the length and breadth of the consumer and the shareholder and the voter across North America seems to believe the big thinkers uh measurement of inflation the CPI uh I believe it's a fallacious measurement and I believe that my belief will be borne out uh in the next year or two or three all right okay interesting to hear your thoughts on that and I'll leave the link to his interview as well in the description so people can go check that out if they want to so moving on from

gold I want to check back on a couple of sectors that we spoke about at the end of 2022 I believe I had asked you where people should be looking this year and you had said if you are income or value investor especially if you're Canadian stick with Canadian Oil and Gas if you're a Speculator probably want to look at uranium so looking first at oil and gas I know we've seen oil prices go lower this year we've seen gas prices really take a hit but Arlo's Canadian oil and gas companies still offering

opportunity for you I think they're offering superb value uh absolutely superb value uh you need to be cautious in the Canadian natural gas sector I'm attacked I'm attracted to it because it's done so well for me over 40 years but it certainly punished me from time to time the only thing that stands between the Canadian natural gas sector and real Prosperity is your Parliament uh you have a wonderful natural resource endowment you have wonderful technology wonderful labor force in Alberta you

have the ability to sell it to willing markets but for some reason your prime minister doesn't believe that there's a business case um I suspect that might have to do something with his business acumen that notwithstanding uh the Canadian Oil and Gas sector is generating a lot of free cash some of the better companies are reinvesting enough of that free cash that they are maintaining or increasing their production even while Distributing very generous amounts back to shareholders by way of dividends and I

think this only increases the oil and gas business on a global basis uh is under investing in sustaining Capital they're doing it among other reasons because governments say they're going to put the oil companies out of business in 2030. that's not going to happen it's just not going to happen but the industry is systemically under investing about a billion dollars a day which means that their ability to produce is constrained given the prices who said ultimately by supply and demand

that in and of itself will sustain Supply if you want safer dividends you need to look in the United States uh you need to look to the exons and the Chevrons and the devons and people like that but if you want some upside to go with your yield Canada's where the upside is okay thank you for the update on that one and moving over now to uranium a sector that is always of interest to our audience so what I he keep hearing as we've made it to this halfway mark of the year is chemical doing well up quite

a bit year to date the other uranium equities are lagging we've talked a lot in the past about Catalyst Ford price and for the sector as a whole which continue to build and I think now what people wonder is what is the Catalyst for those stocks I think I think we're going to stealth uranium bull market again uh I think 2023 what you're seeing is a small increase in the spot Market but you're seeing a big increase in volumes in the uranium Market taking place in the term Market in the contract

Market that's good in two senses the term and contract Market provides price stability for producers so that their cash flows become more predictable but they're also being done at higher prices so while the spot tells you 55 56 the market is telling you 60 or 62. uh what I think you're going to begin to see is not just the chemicals of the world but rather the second tier uranium companies beginning to sign five to seven year term uh uh marketing contracts at prices that are high enough

to allow them to establish new production or put mothball production into place and I think that is when the industry really truly begins uh to rebound that is where the equity price is rebound I note that sentiment around uranium is lousy uh the spot physical uranium trust is trading at a discount to net asset value despite the fact that the uranium price is up and supplies are getting tighter I can only assume Charlotte as you and I discussed at the beginning of the year that this is around the fact that

uranium expect some uranium speculators had excessive expectation with regards to price moves and didn't understand the time frames that are usually involved uh in a market reacting to what is good news I think the third lesson for this though Charlotte and I hope your viewers take this into account is that this bull market is acting exactly the way bull markets do which is to say the biggest and the best and the most liquid and the most visible producers are benefiting first that's chemical

when generalist investor money is attracted to a theme they look if they can to S P 500 components but they certainly look to visibility they certainly look to scale they certainly look to liquidity after that move has begun to exhaust itself the money begins to move down Market looking as an example for people whom camaco might take over or what the next chemical is so this Market is is uh is proceeding precisely the way it could with the uh possible exception of the fact that I would have expected the

underlying commodity or the reflection of the bull market the underlying commodity to be reflected in things like the Sprott physical uranium trust and yellow cake when you see this discount go away you will see that perception has changed enough that the equities should respond accordingly all right and you mentioned this broadcast uranium trust as well as a yellow cake I think we're all definitely familiar with those this is another viewer question and it's about whether we may see more physically Iran

investment vehicles enter the market over the next 12 months this is something that I've started to hear a little bit about and what the impact then could be on the market I I the answer to that is yes I think there are at least two more ready to come to Market uh it astonishes me that there are frankly uh but the truth is that the financial services Community can create any investment vehicle where there's sufficient demand and they will do so for a fee bringing a new vehicle to Market

probably costs you three to three and a half percent of capital raised so the idea that investors would put money into a vehicle at net asset Value Plus three and a half percent when they could buy the Sprott at a nine percent discount is amazing to me uh it shows me that in the near term investments are sold not bought if investors were bought if pardon me if Investments were bought uh people would look for the best value for money uh but Investments to offer sold which is to say the impetus for the investment is

somebody calling somebody else and making a case for something uh so I think it's silly that there are new vehicles coming about admittedly I have a dog in the fight being a Sprott shareholder but I think the fact that new vehicles are coming out at 103 or 104 of spot when there are existing liquid vehicles uh available at a discount to spot is an illustration as to how naive many investors are okay very interesting to get your thoughts there and I have another viewer question this time about fertilizer

companies which is another topic that we've discussed at least a few times in the past so the question is what's your take on fertilizer companies it looks like stocks like nutrient Mosaic and Yara are totally out of favor at the longest I would agree with that uh I would agree with that to play that game you must play it for the long term but you're beginning to see uh consolidation in the sector the recent uh bungee vatera merger as an example can only be good for the sector uh looking longer term

uh there's eight billion people on Earth Charlotte at one constant is that they all like to eat uh without the inputs as an example of nutrient despite my organic friends protestations to the country we can't field we can't feed eight billion people we're going to have uh increasing challenges meeting the food needs of humankind we've done a good job by the way in my lifetime the proportion of the household budget dedicated to food has fallen from 32 or 33 percent done to 14

or 15 percent so we've actually lowered the impact of food prices uh for Humanity by half uh despite the fact that there is higher quote value added by way of Labor in grocery Goods than there used to be I think those Trends might continue but the truth is that the nutrient business uh is a very very very good business for the long term I will note too that while owners of those stocks have not done well by way of capital gains they have kept pace with the broad Market while earning substantially above Market

dividends okay great to get your thoughts on that as well and now I have a question about a comment you made in a recent interview about the Juniors so you mentioned 90 of them are lifestyle exercises or dreams and I guess I'm gonna try to phrase this in a way that makes sense so we all know that the rate of success among the Juniors is not high very few discoveries become online I think I always had in the back of my mind that that's just because it's really hard like there's probably a lot of companies out there

that are doing good work but the rate of success is so low that they just won't regress so I guess I'm wondering if there is a scenario where we can clean it up and improve that rate of success that we can see I hope that some of the work I do in the mining classroom will allow uh Mining stock speculators to be more educated speculators I hope that uh Bank depositors become more informed depositors uh I hope voters pay more attention to the budget than they do the narrative the key to cleaning up the junior Mining

stock market would be for investors to boycott non-viable companies what you said at the beginning of the question is very true it is a hard business but I've never run into an easy business in my life uh so that's no excuse but the woes or many of the woes of the junior mining industry are in some ways self-inflicted the general and administrative expense in the junior mining industry is scandalously high in the interview that you listened to I mentioned that an intern who worked for us pulled 25 Juniors at random from the

tsxv and found that the median Junior in that survey had General and administrative expenses above 60 percent of the total Capital raise if Charlotte you and I were managing a third party exploration program let's say we we farmed out something that we had to Tech and we were operating that they made allow us 12 of project expenditures by way of GNA while the Juniors were at 62. uh some not all some of the salary expectations are scandalous uh what is beginning to bother me is the change of control fees not that many of

these things would be taken over but I saw a Canadian Junior not too long ago where the officers and directors change of control fees were five years of their average remuneration in terms of salary and bonus relative to the market capitalization that mean that meant that about twice the value of any potential takeover would go to the opposition directors ironically these people had an interest in seeing the share price lower so they could facilitate a transaction and get paid these exit fees and all of

this is publicly available information all investors have to do is read it is really really really really simple but you have to do it yeah and I think what strikes me about what you just said there is these are considerations that you should probably look at even before you start looking at what are they looking for have they seen any exploration success what are they doing with their project are there any other things you would mention that kind of come even before you get to what they're actually doing

well thanks for the ability to give you a commercial uh go to the mining classroom which is free uh and look at the material that I've done uh on evaluating Juniors there are numbers of things uh I would begin with the people have they been successful before uh if so uh has their success been related to something very similar to the task at hand if they're exploring for copper gold porphries or epithermal gold deposits in Peru have they operated in Peru before do they speak Spanish do they have a knowledge of tertiary

volcanics and accreted Terrain in other words it isn't just enough that they have been successful they have to be successful at something related to the task at hand uh how are they compensated how much stock do they own how much did they pay for it uh I don't want to speculate with hired managers I want to speculate with Partners I want somebody to get really really really rich if they succeed so that they'll work hard to succeed and I want it to hurt them just like it would hurt me

if they fail uh the truth is that there's probably 15 factors many of which we've dealt about at the mining investment College one more commercial many of which we will deal with at the Boca Raton investment conference that's what it's all about it's about investor education in investing and speculating in mining an oil and gas all right I think we have kind of come full circle there we can wrap up there unless you had any final thoughts that you wanted to leave our audience with

and again I'll have links to the show Below in the description that people can look at if they would like to well Charlotte merely to thank you for uh your efforts over time I've enjoyed watching you mature as an interviewer uh thank you for the for the role that you uh are fulfilling in investor education around mining I look forward to uh hosting you uh in Boca Raton I know that you're going to learn a lot and I know that you're going to have a good time and I look forward to hosting you down

there hopefully uh with a lot of your listeners well thank you so much I'm really looking forward to attending and if anybody in the audience is there I do hope they'll say hello so thank you again for coming on to talk once again I'm Charlotte McLeod with the investing News Network and this is Rick Roll 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

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