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Summary
In this episode of the Real Money Show, host Jeremy Wiseman and his co-host, Jerrod Karaya, discuss the fundamentals of the gold and silver markets and why they think silver is undervalued compared to gold and why gold is the best hedge against inflation and depreciating currencies.
Transcript
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welcome to another edition of the real money show thank you so much for joining us today on the
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show we're going to cover basic fundamentals in the market and questions that we get a lot
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from our clients in the market at guildhall we focus on actual physical precious metals
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we don't do paper investment vehicles and we'll do some comparison on that and we deal also with
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helping clients to own actual physical gold and silver in their registered accounts and we're
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going to show you exactly how that works my name is jeremy wiseman i'm joined by jerry karaya jerry
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how you doing this holiday season not bad how are you jeremy i'm very good very good so back on rebel
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let's start with very quickly a review of the fundamentals why own gold why own silver
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at this point in time well i think we have the fundamentals are still at play the old legacy
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fundamentals as we always have done guildhall has been around since 2002 and um hosted the radio show
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since 2000 uh 2008 so 16 years talking about the same thing we talk like a broken record
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and uh that the fundamentals have always been currency debasement which is inflation supply and demand
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and geopolitical risks and concerns so those are the four pistons and the four fundamentals or pillars as
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we as we call them that support the market that support the cause and the why ownership of physical
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we don't deal with proxies proxies add counterparties or layers of risk things like certificates there has
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to be someone to give you the cash value of that or an etf or a pooled account all of these things do
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not give you the titled unencumbered ownership what we provide to you at guildhall is direct ownership take
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it home put it in your put dig a hole put in the ground and and the fundamentals have played out
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nicely over the last 20 years gold's up uh in canadian dollars 900 silver's up about 800 we still think
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silver is incredibly undervalued hopefully we'll give a little bit more reason on that uh throughout
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the episode today and of course we think there's a lot further to go and one of the things that you'll
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you would you would notice or we try to explain to people um is that it's not that gold has risen
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it's that the currencies have fallen your purchasing power has gone a lot less over the years than it
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really should be and that's that's both taxation and inflation i was talking to a client the other day
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jerry and i was saying you know if you've made a couple hundred thousand dollars a year for 20 for 10
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years you've you've given 800 000 to the government over a 10 year period i mean imagine keeping some
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of that that's one of the reasons why we love the rsps because if you can save some of that money back
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and make it work for you uh defer those taxes you'll be happy to pay those taxes later oh right you know
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some people will say as well jerry to jump into this uh maybe a pricing conversation but also this is
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what we do with with registered accounts is people will say well i don't want to pay the taxes that
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i've deferred right but if if you ask them would you rather make a hundred thousand dollars or five
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hundred thousand dollars the answer is always well i'd rather make five hundred thousand dollars
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like you're going to pay a lot more taxes on that sure right well this is why having gold and
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silver in a portfolio is so great because it it doesn't pay a dividend i know it doesn't give
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you interest you have to pay to store it but there is a finite amount of it yeah you need blood sweat
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and tears to take it out of the ground and it is de facto money it is has always been universal money
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which is a store of value and it's been around for thousands of years and so if the currencies can be
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printed out of nowhere and the currencies can just continue the debts can continue to balloon then
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you want to have this asset that counters that that's right my background is in currency so i view
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with that lens everything is denominated in a currency and there is a great chart at goldprice.org
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where you get to see what gold has done what silver has done over the past 15 years versus every single
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major currency and gold has protected it's been your hedge against currency purchasing power loss
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on average about 11 to 12 per year now this year we're fighting back because silver is up
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approximately 120 and gold is sitting around 66 higher all supported with fundamentals the fundamentals
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are now being remonetization revaluation scarcity driven growth industrial and monetary convergence silver
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is being reintroduced as money gold is going into tech and aerospace and military applications and it's
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moving from hedge to growth catalyst and it's you know it's very wise to start converting and seeing
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you know valuing your wealth in ounces versus depreciating currencies that would be my message
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because you know there was a a mba a stock guy his name is graham summers of game pains capital he
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recently wrote that people like to point to stocks especially today as signaling that everyone is
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wealthier and i heard of us uh what he's financial planners in toronto on bay street telling we're
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just you know we're happily up a lot of us in this room are up a lot in a performance of doing really
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well in stocks but those in the lower lower half of the consumer base they're struggling because of
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inflation that's what he said i remember you telling me this in the office he was saying well you know
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there's a headwind that there's basically there's lucky ones there's the wealthy ones and the headwind
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is that that those who haven't been able to keep up aren't doing well right but with you know with
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guildhall you can buy a 10 ounce bar of silver every month we have a monthly buyer's plan but here's the
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point according to the charts the smp is 500 is up up over 400 percent over the last two decades
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however stocks again are priced in u.s dollars and thanks to the true state of inflation not the cp lie
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the u.s dollar has lost over 40 percent of its purchasing power during that time of the last 20
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years and when you price stocks in gold which cannot be devalued or printed the smp 500 is down
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actually is actually down since 2006 so gold has outperformed the smp gold has been a safer play
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you're not chasing the the winning pick and it's what central banks are doing we want to become our
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own central banks and build your own reserves outside of a digital banking system i i think
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the biggest challenge of course is going to be the cost sure you know um there is a cost to buy
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physical gold and silver and there's other options out there for you know some i'll always be talking to
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clients and and uh this will come up a lot because you know price is always um we like when people are
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price conscious we want them to be price conscious and they'll say oh can i do it can i do it less like
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what what can you do data and you can do it for free you won't own anything but there are etfs that
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you can't take delivery of there's pool accounts you can't take delivery of there's gold backed funds
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you can't take delivery of i'm talking you have to be a very large client almost institutional buyer
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to be able to have access to take delivery yes these vehicles aren't meant for you to take delivery
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they're meant to put assets on the financial institution's balance sheet you pay for it uh but
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you don't get access to the product so you own nothing and if you want to have an insurance for
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your portfolio you actually want the asset and so yes you're going to pay for that but the reason
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you're paying for that is because it's a retail product so let me just walk walk you through what
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that means let's take royal canadian mint as an example they have to source this material raw from
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a mine refine it to 99.99 percent purity i get the point right you think so okay that's almost 100
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percent and and then they have to fabricate it into some sort of bar or coin they have to package it if
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need be right maples get packaged on the silver side gold bars get packaged gold coins get packaged
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now it's got to go to a wholesaler who's going to then store it they have to get it to their
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properties shipping and then they have to ship it to their retailers and diesel has gone up over 400 to
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60 well we hope oil goes down we hope that goes down but um we're very positive that way um now however
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the fact is is this is no different than cotton being turned into a t-shirt lumber being turned
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into a desk uh your your favorite uh chocolate that you know into all these ingredients are put
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together packaged wholesaled and then you're buying it at a gas station or shoppers drug mart so the fact
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is is that these these things are fabricated and they move and they've touched all these hands and so it
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is a retail object that you're buying and then once you own it now this is a difference okay think about
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real estate you you buy the property let's say it's a million forget the new taxes uh and right and then
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but you pay your agent you pay the land transfer you pay uh the lawyer fee then there's all of the
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other incidentals that go along with it but a million dollar property might cost you one a million
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seventy right you don't think about it you're fine with it why because you know it's going to rise in
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value you're happy to hold it for a decade plus etc and so you figure well it'll all be absorbed in the
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long term and that is absolutely the case you can't be price conscious today knowing where the market can
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head in the next five years that's correct and we have to be very cognizant of who is buying as well
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who is buying physical precious metals countries are buying physical precious metals i mean the
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retail market has gone a little quiet because let's put it frank frankly you know the average
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household is under a lot of financial stress so that has slowed down that has slowed down quite a bit
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the buyers today in the precious metal space in the sector globally are the sovereigns countries and
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central banks they're buying regardless of price they have made it their the goal and it is their
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strategy of buying and acquiring physical especially silver regardless of price and if it's good for
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them if it's good for millionaires like david bateman and others to buy physical not the proxy because
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central banks in their countries require physical for two main reasons alone liquidity and to decouple
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your wealth outside of debasement of currencies the digital banking financial system
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banking holidays blackouts you know who knows so you want to buy something that you have in your
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possession now what what should someone buy jeremy whenever you talk to someone and they're saying
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well what should i go with coins or bars gold or silver what type of conversations are you having
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right now well the first thing i i always recommend is is not all gold and silver is created equal
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you want to stay away from uh niche mint uh sorry refiners like jerry's like jerry's bullying exactly
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you you want to go with the world's largest most recognizable brands um there's there's about 66 gold
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brands that are regulated to source ethically refined to the proper purity fashion to the proper weight
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and can handle global business and what that means is is that you may pay a little bit more for this type
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of product these globally respected and well-known brands and that's all we deal with at guild hall
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but when you go to sell you're opening up your options it means you can sell it basically
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absolutely absolutely anywhere right um you know your your coin dealer your bullion dealer your bank
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anywhere in the world they're going to recognize that so like royal canadian mint for instance uh
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perth mint all of those type of things uh valcambi pam these are types of products that we offer so
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that's going to be number one you have to buy the right type of product number two it really depends
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um on the situation so we really believe in crawl walk run start small build up and let's say that's
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something that you want to take home with you tube of silver maple is great perfect right maybe even a
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monster box if if you're you have the budget for that um we like one ounce bars of gold because those
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have the lowest premium and the best turnover rate when you go to sell it down the road right
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right right exactly if you're if you're a prepper and i know that many of our clients have been um and
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have been programmed into thinking that they need to you know preserve and have something just in case
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you know a number a massive number of our clients have came on board recently work from from common
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former communist regimes and they want to buy coins they want to buy silver coins we understand and we
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don't scoff at the idea that you may have to prepare for a mad max type scenario but if you're also an
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investor who is cognizant and worried about okay let's lower averages let's get more ounces for my
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dollar you go with larger bars because going back to the premiums and fabrication it costs more to make
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a maple and the artwork that goes into the coin but we're not doing numismatics we don't do
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collectibles at guild hall where you have to be very concerned about touch you can't touch this or you
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can't scratch that these are bars goes to the back of the safe you know liquidity is key as long as
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you're buying yeah the you know major refineries and that's what guild hall brings to the table we
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will not give you product that's going to compromise your wealth insurance you don't compromise in other
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forms of insurance car insurance how home insurance lifer insurance you get the full policy
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so with guild hall you you get it done you get it done with the product and you get it done the right
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way there's a right way of ownership as well that's right and so within registered accounts
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we do gold with serial numbers so we're looking at one ounce bars 10 ounce bars kilo bars and then for
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silver we usually want to go with 100 ounce bars of silver kilo and kilo bars of silver yes so the
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100 ounce bars really give you good economy and the kilo bar is close in price to the 100 ounce bar kilo
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being a thousand grams 32.15 ounces and so that helps you with some of the liquidity you mentioned
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liquidity before and that's really the big difference between owning a property asset and owning bullion
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asset is yes there's a cost to buy into the market but it's liquid that's right right when it comes time
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to sell your gold and silver it's automatic yes and i think the other thing about what's really unique
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about the registered accounts is that you can deregister it and take delivery so every year
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we have clients who have riffs and lif accounts and i think it's great that if they don't need the cash
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they're happy to take delivery of the product yes whether it's because they're they're giving it to the
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kids right they're giving it to the grandkids or they're just not ready to sell yes right so they're
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moving the product from their riff account and they can either move it into a tfsa they can take
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delivery of it or they could move it into a vault account with client all which is moving it into
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private hands non-register respect so there's there's optionality there which you know you don't get that
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type of option when you're holding a stock no it's sell and and go you can't take home that that stock
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receipt or the stock certificates like wallpaper put up on your wall that's right so um let's talk about
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the one question we'll often get is why guild hall why not why not go to the bank i mean we're if
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you're if you're selling the globally recognized products then everybody's selling the globally
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recognized products why guild hall yeah it's it's a very good question one that i want to get out of
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someone when they approach us because i always believe transparency builds trust we believe that
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that's our philosophy and you know cornering those of those objections is very important we want to
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pull that out of you so why guild hall and what i found is we're a family-run business we're a privately
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run organization we're not a bank we understand your concerns i mean we we were around for a very long
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time and we were the pioneers that put the ability for you the canadian to actually own physical
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precious metals within an rsp we partnered with a firm a self-directed rsp online brokerage to do that
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and what you're getting is titled ownership segregated allocated serial numbers the right way there are
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nine storage requirements and we hit them all it was jim sinclair who put that together and you want
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to get our investor kit to find out our philosophy get the ways to get the gold and silver whether it be
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to take it home buy direct deliveries or even put it into a registered plan it's been a very busy season
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because it's rift season yeah people are removing physical because they're cognizant that the purchasing
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power in the loonies three five years from now to be buying much much less well i think it's not just
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you're protecting i really think it's about the generational opportunity here of where gold and silver
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are being revalued to yes it's a really exciting opportunity it shouldn't be something where you
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know i i i'm really disliking these days this idea of like yes i know you're going to hold it for
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inflation but it's not about the defense side of it it's about we talked about right at the top of
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this show that you've given so much to taxes how are you going to get it back you need to make it back
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somehow that's right here you have an opportunity with these assets that have been suppressed for a very
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long time and that's ending globally and there's all these moves happening around the world you know
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check out the real money show to to find out on a weekly basis but to to talk about why guild hall
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over other other firms or at the bank one of the big things is that we do have these discussions yeah
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that we talk to clients and we tailor to work towards their needs right when are you going to need
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the product how much liquidity do you need is it a short-term thing do you want to buy a house in a year
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you know you just sold a house and you want to get jump back into the market a year from now what
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type of product should you buy i'll have people who will will say i want to do all maples in my tfsa
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or something right as an example and you say so you're going to pay two dollars more an ounce
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you're not going to get allocation you're probably not taking delivery why not do 100 ounce bars and if
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you need those maples down the road you could pay the difference swap it and swap it then yeah oh that
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sounds great let's do it so it's that type of understanding experience knowledge and also
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caring about the the client and one thing that i forgot to bring up yeah my guild hall wealth
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and i think that should be the number one question that you ask if you are looking for a trusted
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precious metals dealer yeah we were the first back in 2015 to put together the rsps the physical
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precious metals rsps we've been around since 2002 and we're private but we don't borrow from the banks
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and when people ask well what happens if guild hall goes down well why would we go down
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a company goes down because they have debts they have liabilities to the bank the banks can change
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the capital requirements the margin requirements really quick and they can call that loan instantaneously
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and because we do not borrow on consignment everything that we own at guild hall whether it be the precious
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metals or the natural fancy gold diamonds we have under ownership we also own some crypto as well
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you know we have other things we have growth potential so gold and silver with guild hall we
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want to position you for the new fundamentals and you know set up that hedge especially if you don't
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have precious metals right now set up that hedge but it's moved from just wealth protection you want
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to position for that growth catalyst that's what it's going to provide your portfolio and ultimately
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the thing is is that when you own physical gold and silver there is no counterparty so if it's in the
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vault it's yours we don't have a claim on that whether it's um through a depository account or
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through a precious metals account uh with registered accounts we don't have guild hall doesn't have a
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claim on that so the product remains at the vault and you would need a new custodian and either brinks
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would give you a new custodian because we work with brinks um the custodian of the registered accounts
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would then either take it over or provide a new custodian the fact is is that it's your product it's
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not we had don't have a claim on it um there's no reason to end up cashing clients out yeah so let
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let's move on one of one of the things because that that leads to another question which is confiscation
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which is a question that we'll often get well won't the government take it from us
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and i'll start off please do um i find that funny because i always like to frame the question with
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they take 35 to 45 of your income tax they charge you after tax here in ontario hst 13 and then there's
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the hidden inflation which is probably eight nine percent when they say it's two percent so they got
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you for almost 60 or higher and you're worried about them confiscating actual physical assets and
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then in the meantime the price is rising and if you don't own it you're not gonna own it you're gonna
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own nothing and i don't think you'll be happy so or you're just rising is satisfied with the yield
00:22:15.340
right but the price rising is a confiscation yes if you're not getting into the market there's nothing
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to confiscate you confiscated yourself yes they they allowed the price to rise to a level where you said
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no too much yeah too too too too much uh flavor for me too expensive so and what did that what ended up
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happening you didn't own anything yeah well it worked you know they've been on a the the powers
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that be you know the bankers oh you want to call them they want to keep you away from physical sorry
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by the way in 1933 when they did it yeah only 30 percent of the people complied non-compliance we
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know all about with the threat of going to jail 30 percent yeah said okay i trust the government
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you're backing our currency very different time basically no income tax at the time very different and
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all of a sudden the you know 30 said i believe 70 believed in the american system that said no
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you're not taking my guns and you're not taking my silver you know it's private wealth it remains
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private wealth to this day yes this has been you know under attack the ownership side of things we
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know that they want you to own nothing and you will somehow be happy and since the 70s or the 60s when
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they remove the silver standard and they remove the gold standard there's there's been a tremendous
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campaign to keep you away from gold physical gold and silver ownership saying it's too difficult
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who's gonna buy it who's gonna sell it gold and silver the most liquid markets gold is the largest
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market globally market cap traded around the clock around the world silver as well number five passing
00:23:49.980
microsoft recently but you have liquidity in the market but since the 70s it's worked to the to the point
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where in north america less than two percent of the population own any physical precious metals so if
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they do decide to confiscate they'll end up with nothing and the fact of the matter is the government
00:24:09.340
has already showed their hand they've already passed a bail-in law where if your money is just
00:24:15.360
sitting there in a banking system catching a three to five percent yield because that's safe for you
00:24:20.200
and it's beating inflation which is not inflation's closer to double digits so you're actually losing it
00:24:25.940
after one year the bank's bail-in clause how can they just bail in money of course we went back and
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forth with some lawyers is not in black and white well which account are they going to bail in jerry
00:24:36.380
they're not going to tell you which bank account they're going to use you won't keep your money in
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that bank that bank account if they told you where is the rsb whereas if it's for example in a registered
00:24:45.140
account and it's physical it's held in a vault facility outside the banking system this is not ones and
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zeros it's not paper it's not in the computer and this is something that actually when it comes back
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to the cost of doing business we also have to explain that these are manual trades right we're
00:25:03.100
manually going to submit that to quest trade their team's going to work on it that's who we work with
00:25:07.660
and then they're going to submit that to brinks and then the the workers at brinks have to physically
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put it into a vault record the serial numbers put it into put the zip tie on it put it up on the on
00:25:19.640
the shelf in gold they put it into a segregated safe that's a vault inner vault and they need two
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two people with two keys it's like um it's like um uh the hunt for red october you know 100 and um
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so there's a lot of work that goes into making sure that you own the product and have access to the
00:25:39.980
product it's a lot of work because you do have to deregister it to take delivery which you can but
00:25:43.800
which you can and if you've made a lot of a lot of money in it you know it's it's relative yes right
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we'll have people we'll talk to them they'll say oh i don't want to pay the the taxes to the
00:25:53.720
government but what do you what do you have 100 000 okay so you don't want to pay 30 000 to the
00:25:58.520
government that's right okay make 130 sell it when it's worth 130 then you can pay the taxes and you
00:26:05.440
still get to net 100 yeah how's that sound oh yeah i had a conversation so let's talk about where
00:26:10.560
it's going we've got just a couple minutes left so let's talk about where gold and silver are headed
00:26:14.700
um we don't necessarily look at price we're looking at value and the way you can ascertain that
00:26:23.520
is you want to look at how much gold and how much silver does it take to buy blank so for example
00:26:30.080
in prior bull markets the gold market peaked at one to one against the doubt doubt in 1980 doubt
00:26:38.460
traded at 850 points gold traded at 850 that's a one to one ratio in 2011 this the dow was coming
00:26:48.300
off its lows that's right and we hit a four to one ratio today we're currently i believe around 11 to
00:26:56.180
one ratio okay so we have a long way to get down to one to one or even four to one so there's a lot
00:27:03.220
of room to grow another is uh property how much how many ounces of gold should it take to buy a house
00:27:09.560
forget what the price of the property is how many ounces of gold should it take what what should my
00:27:15.220
income be in gold comparatively over the decades right and then you also look at silver and you say
00:27:23.020
okay well what's the what's the historic ratio oh it's 16 to 1 they pulled out 16 ounces of silver
00:27:28.360
for every ounce of gold what are they mining it at eight to one right now right well what's the
00:27:32.740
current rate as we record this episode it's 68 to 1 67 yeah 67 we have a long way to go to get into
00:27:41.440
the ballpark of 16 to 1 and so we want to look at all of these criterias together and then as well as
00:27:50.400
price to start to triangulate the following and this is going to be a big takeaway for the entire
00:27:56.900
episode which is how do you know when you're done how do you know when you should sell the majority
00:28:01.220
i believe you should always keep some of it yes right you're never going to sell all of it but
00:28:05.160
what how do you know when it's over right those criteria you're going to look at all those different
00:28:10.620
ratios and see that it's fallen into a nice territory and then you also want to say what's resolved
00:28:16.820
true has inflation come down significantly meaning are you paying 40 50 to fill up your gas tank
00:28:23.920
this type of thing yeah uh is there more money in your pocket are you saying hey sweetie let's go
00:28:28.880
on those vacations that we've been missing the last 10 years it's getting better hey you know what i
00:28:34.120
feel like shopping for jewelry you know i feel like giving i feel like hey let's all go out for dinner
00:28:39.640
these type of things this quiet like tightening of the belt that oh oh go do all of these things is
00:28:46.960
only for for lucky people right right no once you start to feel yeah i feel like these things are
00:28:53.000
resolved i'm not saying we need world peace but a semblance of it um would be nice but again yeah
00:28:59.900
inflation the stock market's rolling where you don't feel like well look at these valuations they're
00:29:04.780
massively high i don't feel comfortable buying these stocks with uh you know that the valuations are way
00:29:11.460
way too high so uh jerry we got about 20 seconds left i'm sorry i took a little bit of time no i think
00:29:17.020
what are your final thoughts well yeah to know where we're going we have to use these cycles we have to
00:29:21.380
use the ratios that have surpassed the data that i think the data that we use is is junk i mean the
00:29:27.880
cp lie amongst other things we cannot use these metrics we have to go back to historic metrics the
00:29:33.840
silver to gold ratio and we follow technicals and cup and handles are still alive uh the 160 year
00:29:40.020
cup and handle the 50 year super cycle chart that suggests gold and silver have tremendous top side
00:29:46.640
potential based on the charts but we also have to add in with the fundamentals to know who's buying
00:29:51.340
india's remonetizing silver india's pretty much cornering the silver market and they've just allowed
00:29:57.620
the people to own gold and silver in their pensions so things are happening gold and silver are the future
00:30:04.400
for the financial system we're going to be seeing a remonetization to potential revaluation very soon so you
00:30:12.000
want to be a part of that thank you so much jerry uh again my name is jeremy wiseman we are coming to
00:30:18.380
you from guildhall wealth working with rebel news here and we hope you enjoyed the show on the
00:30:23.940
fundamentals of gold and silver and a little bit about how to acquire it for yourself directly as
00:30:29.420
well as in registered accounts you can contact us at guildhallwealth.com and speak to us or follow our
00:30:35.980
show at guildhall um on youtube as well guildhall wealth management and we can't wait to speak to