Silver Manipulators Failing - Move Back to $120 Will Be 'Very Quick': Mario Innecco

0:00This is the Commodity Culture Podcast, where we interview prominent investors, fund managers, analysts and companies CEOs to give you an edge when it comes to investing in the commodity space. Mario and Echo great to have you back on Commodity Culture. Silver has taken a step back to around $65 looking like it wanted to break 70 multiple trading days in a row. Took a step back. Some believe the silver price is of course being managed through paper, shorting in the futures market. Do you think this could be part of what's happening now because people are pointing out that just when it's about to hit 70, it goes back down again. Is this price being managed in your view? Yeah, I mean, there's always some shenanigans going on in the paper markets. I think the day that silver actually broke through 71 actually that was people thought,

1:02oh, now we're going to break out. That was the day that Fed Chairman Warsh spoke at Jackson Hole and he used the word hike four or five times in the first minute, but he wasn't talking about monetary policy. He was talking about hiking in the mountains there in Jackson Hole with Ben Bernanke and other central bankers. And I guess the algorithms are so sensitive to what these guys say that they hammered the price of silver and gold. And yeah, it's one of the reasons why gold and silver are so frustrating in the short term because they have these futures markets. And I think they were created for this reason to keep the public out of gold and silver, the actual physical gold and silver.

2:03And we have proof of that, Jesse. It was some communication between the State Department, the US Treasury and Boolean Deal was in London in 1974. Just before gold was made legal again on January 1st, 1975, the Boolean Deal said, well, one way to get Americans to not get involved in buying a lot of physical gold is to create a futures market, a speculative volatile, risky futures market that would trap the public in it. And that would make them scared. I think the silver futures, that had been going on already for a while actually, fun ly enough. But I think that's what it's about. But eventually, despite the frustration, all they're doing is delaying the inevitable.

3:08And I think the fact that we are around 65 is great because it took 45 years to break that 50 level. And I know we went to 120 or 21 earlier this year. But I think there's a lot more to come. The more the paper traders or the Boolean banks and central banks try to manipulate silver, the higher it's going to go and it's going to surprise everyone. Again, I will emphasize that you need the physical silver. You're going to be when what I think happens happens, the futures market will probably be not a great place to be. And yeah, so we just have to be patient.

4:08That's the main thing with gold and silver. Yeah, absolutely. And patience, a commodity that's not in big supply at this point in time with social media headlines, hitting everybody every day, all sorts of charts getting posted. Silver's about to break out. I mean, we're working towards a long game here. And speaking of which, because you mentioned silver's previous all time high, hitting above a hundred and twenty dollars in today, it's peak earlier in the year. At that point, many people thought this is it. The Boolean banks and those managing the price have lost control. We are now going to see silver's true price revealed. Obviously, we've seen downside since then. As you mentioned, it's all about putting things in perspective because if you talk to people in the middle of last year that silver is going to be at sixty five seventy dollars, many people would have said that wasn't possible. So I think we have to put things into perspective. But now that we are here back in the sixty five dollar range, how close or how far away do you think we could be from true price discovery in the silver market?

5:09What type of price would that look like? Well, I mean, it definitely looks like they're trying to defend that seventy level, seventy seventy one. And I think the reason for that is that silver closed last year just above seventy one. And it had a great year last year. It was up almost a hundred and fifty percent. People forget that. Yeah, I don't know what's going to trigger it. But yeah, something's going to happen and silver is going to move like it's going to, I mean, we saw ten dollar days, I think late last year. And you know, the CFTC, the Bullying Banks, they tried everything to stop silver. They tried to stop people from taking delivery. That's what they don't like. That you take delivery from Komex, Komex. Just like that, WikiLeaks communicate that from 1974 is not supposed to, you know, they

6:14give you the option to take delivery, but they don't really like that you take delivery. And yeah, they had those shenanigans of Black Friday. They have to Thanksgiving. The market was closed for hours because they didn't want people taking delivery and the market was going too high. And yeah, so I think we're going to see some big updates. Yeah, there will be volatility, but it's going to be to the upside. And I think it could be very quick. Yes, it took 45 years to break 50. And then it took, it was only a matter of months that we went to 120. So now I think as Michael Oliver says, we're in a new paradigm, a new region for silver unknown. So I think it could be very quick. It's not going to take another 45 years to get to 120, maybe four or five days.

7:15Now you discussed recently the potential for silver to become a tier one asset. Walk us through what that means technically and how it could potentially impact the silver market. Yeah, I mean, I interviewed Nomi Prins and she's the one who has contacts with the powers that be like a BIS IMF central bankers. And that's what she's hearing. I mean, it's what's happened to gold as part of the Basel III rules. It is a tier one asset. It doesn't mean to say that all banks are going to use that as a tier one asset. I don't think the US banking system and the Federal Reserve have implemented it. But the fact that they're talking about silver is very constructive. So silver would be used as like a high quality asset to measure the equity health of banks.

8:16So basically, I mean, that's how it used to be, I guess, in our great-grandparents' day, banks that had gold and silver were solvent. Banks that didn't work. And yeah, and I think it's going to come back. But I think a higher price will help silver a lot more to become like a reserve asset for banking institutions because it will become less cumbersome. I mean, can you imagine a story silver at $20 an ounce? You'd need so much silver. It's much easier if it's at 500 or 1,000. So yeah, I think that's going to be the future. A lot of people downplay the possibility of silver coming back as money or currency. I don't because I think things are getting so crazy. I'd rather have someone pay me in silver than in crappy, fee occurrences that are losing

9:19value so quickly. And eventually people are going to wake up to that and realize, while silver up until the 60s was used as money, why can't we use it now? And I know in the 1960s, this is a long time ago, but I was born in 1964. So that was the year, the last year that US silver coins were 90%. Gold has historically been one of the most reliable stores of wealth, but now there's a way to earn from it directly. Monetary metals operates the gold yield marketplace where holders of physical gold and silver can earn yield on their metal paid in ounces of gold, not dollars. Through their platform, clients can earn up to a 4% annual yield on gold paid in gold ounces. That yield derives from leasing physical gold to qualified businesses in the precious metals supply chain like jewelers and refiners. Your gold stays in physical form and you retain title to your metal.

10:22The additional yield is paid to you in gold preserving and growing your exposure to the price of gold. As inflationary pressures, debt concerns and macro uncertainty continue to make gold attractive as a hedge, earning a yield on gold adds another strategic layer to your portfolio. Individuals and institutions around the world have already been earning returns through monetary metals leasing program for almost a decade. So go to monetary-metals.com slash commodity to find out how to put your gold to work. The link is in the show notes below. Now back to the interview. Yeah, I mean, 1960s is a grain of sand in the hourglass of time really. That's essentially yesterday over the course of human history. There's been a pretty persistent premium on the silver price in Shanghai versus New York since around the end of last year, currently around 12% higher in China. What do you think is driving this arbitrage? Why is it remained there for this long?

11:25How do you think China could increasingly be setting the true price of silver moving forward? Yeah, I mean, I think it's because there's a few factors, I guess. I mean, I'm not really a specialist. I know that the silver in China has a bit of a premium, but I would say it's because the Chinese people are a lot more, the retail, they're a lot more into silver and gold. And in the US retail, they're much more into trading into the paper market ETFs and stuff like that in futures. So that's why there's a premium, I think. Yeah, and I also think there's a lot of buy of physical silver outside the US. And they're also taking advantage of this premium. They're draining the silver from the West and taking it east.

12:27And the fact that there's still a premium for over a year is quite significant, I think, because you'd expect by now with the arbitrage for it to equalize, but it hasn't. So it just goes to show that I think the bullying banks and the people trying to manage the rise of the price of silver are, well, they're going to have a tough time going forward. It's difficult to say exactly when, but I think we're getting close. Let's shift to the gold market because I had Matthew Piperberg on the show recently. I know you spoke to him on your show recently as well. He said basically the only way to get out of the debt trap for the US government here is to either revalue gold, which he saw as a less realistic proposition that they would suddenly come out and say gold is now $20,000, but he proposed they just get out of the way, stop this market manipulation and allow gold to rise up to potentially $20,000, which he thinks is a very real possibility. And then they could use that gold value on the balance sheet to address the debt issue

13:32to some extent, because it would be five trillion plus in new capital on the balance sheet, assuming, of course, that all the gold is there. Rand Paul's audit did so-called audit, did him exactly inspire confidence. What are your thoughts here? Do you think the US isn't a desperate enough place that the leadership would actually look to this type of setup as a solution? Yeah, no, I do think the US is in a desperate situation. We've seen recently a secretary of the Treasury investment intervening in the yen. They're probably intervening in the Treasury market to try to keep long-term yields down. But I would say if the Treasury wants to have its balance sheet padded up by five trillion, if we, it has to do the statutory revaluation. It's not just a market price, because in the books, the gold is valued at $42,22. So unless they change that price with the Federal Reserve who have the certificates, yeah,

14:41higher price of gold will help, but it won't help the Treasury. It will provide liquidity and it will debase the dollar, because a higher price of gold is a lower dollar. And it's the only way, probably, for every country in the world to debase their currency. They have to do against gold, which is a neutral asset. You can't devalue the dollar versus the yen or the euro or vice versa, because it's a zero-sum game. So I agree with Matthew Pippenberg. I'm not sure they... I think all they need to do is to revaluate to around where we are right now. And that would, I guess, provide about a trillion, but it would give gold a real boost. And then they could do it again next year, you know, from 4,000 to wherever the market might be then, because I think if they revaluate the statutory price to 4,000, that means gold

15:45will... I'll never go below 4,000 again. And that would be massively bullish. That would, especially for the miners, but for gold itself, because that's been done before in the 70s. They revalued it from 35 to 38 in 1972. Then revalued again in 73 from 38 to 42, and that was the last time. But gold was already almost at $80 the last time they revalued it. And it never went back to those levels again, ever again. So yeah, they could do a layered revaluations. It won't solve the problem of the debt. And I don't think they want to solve the problem of the debt, because that would mean creating a great depression, reneging on unfunded liabilities and social security programs. So yeah, I think that's the only way out to devalue versus gold.

16:51And I think other countries, of course, currencies would follow. And what would such a rise in the gold price, let's say they either revalued it to 20,000 at some point or allowed the price to rise naturally. We eventually got to close to the 10,000, 20,000 price tag. Would that have a negative effect on the dollar over the long run, or even in the short term? Or because there is really no alternative to the dollar as a, you know, for global trade and as the world's reserve currency, do you think the dollar would still potentially be able to hold up in that type of scenario? Well, the dollar will hold up versus other currencies because the other currencies are still a derivative of the dollar. If you go back, if you do the regression theory analysis of the occurrences, you have to go back to 1944. So the dollar will hold up versus the euro or the E1 or the pound in every other currency.

17:53What it's going to do, the revaluation would do is make every fee at currency, the dollar included weaker versus real goods because ultimately gold is the best measure of value. And if you do value or currency versus gold massively, it means, yeah, people know that it's not worth as much. So yeah, the affordability crisis would get much worse. But I think politicians and central bankers would rather keep the system going and keep people at work than have deflationary collapse. And they can always send some checks to people from the revaluation, let's say they revalued to 10,000, which would mean they would get like, I think, two and a half trillion or something.

18:55They could send a trillion to the public, to the people who earn less than 100,000 households that earn less than 100,000, just like during COVID. But of course, yeah, it will all be temporary. It's madness. And that's why, yeah, even if they don't do that, they're going to have to keep things going somehow. I think revalued to 20,000 would be too drastic. I think, as I said, 4,000 and maybe next year, if we were to let 7,000 gold, they could do it to 7,000 and so on and so forth. Well, what, yeah, what you mentioned is a real problem with democracy in that these people are serving terms and their goal is to just keep it all afloat. And let's be honest here, extract as much wealth as they can for themselves and their circle of insiders before they get out of office. A lot of these people couldn't care less what happens when they're no longer in office.

19:58They'll go on to some cushy job, but some think tank getting paid a high salary and they'll no longer be accountable for anything that happened under their watch. So I think that's one of the downsides of the way that the political system is set up in the West. Now, let's look at this scenario where everything falls apart because the US recently surpassed $40 trillion in national debt. You mentioned the off balance sheet liabilities like social security. That continues to expand and meanwhile, the yield on treasuries continues to rise, especially in Japan. I mean, Japan's yields are just getting to historic levels at this point, but we'll focus on the US for now. Best and of course, announcing a doubling of treasury buybacks, potentially even more to get the long end of the curb under control. The situation looks dire. What's the result if they can't get this under control and it all collapses because obviously you can keep kicking the can down the road. There has to come a point where the game ends though, right? Well, I think if it all collapses and by that, I guess it would be a bad recession, the

21:04AI and tech sector crash. I think they'll try to print more. They'll throw the kitchen sink at it and I think it will fail miserably. I don't know exactly what will happen, but yeah, it could be the trigger for hyperinflation or it might not succeed. Everything they could print and it doesn't help. The gold and the miners might go down, but they will go down a lot less than the tech sector and other assets that have gone up so much over the period since the early 80s. So yeah, in relative terms, yeah, people even, we might lose out, let's say the gold price might fall 30%, but if the stock market in general falls 90%, then they've done really

22:06well. So yeah, that's the other thing that could happen. If they succeed though in printing and getting the market back up, then it's also going to be golden silver and hard assets are going to go through the roof and they might just trigger the currency collapse or crack up boom or hyperinflation because then people are going to realize they're, you know, this inflationary money printing thing is not temporary. This is going to have to keep going on forever and they're going to realize we don't want this currency. Right now people still think that the fee of currency is the dollar, the euro, the money and the pound are still stable, but I think that's the way I see it. It's difficult to say exactly what, but no matter what happens, I think having some

23:08golden silver outside the system is wise. Completely agree with you. You've mentioned the miners a couple times here would love to get your thoughts there. A lot of people I've been talking to on the show have been pointing out that despite the recent rally, a lot of these names are still undervalued, including the majors, the big names like Barric, Newmont, Technico, Ego, the big royalty and streamers like Wheaton, they have all appreciated considerably over the last few years. However, compared to the price of gold and silver where they're at right now, many say they're very undervalued. I'm wondering what you think about the miners right here and if you're still seeing opportunity in them and potentially which areas of the mining sector you're looking at right now. Yeah, there's still undervalued versus gold and of course versus the rest of the market, even more. I think if you look at the Philadelphia golden silver index ratio to the gold price, we're way below where it used to be even during the bear market in gold from the early eighties

24:12to late early 2000s. Yeah, heavily undervalued in terms of, I mean, the miners, I looked them as more speculative, but I think the way the world's changing, the mining producers, the big producers, they will become the liquidity providers of the future system, the gold money. In terms of what I'm looking at, I mean, I don't know if you know I was invited to join the board of a royalty company at the beginning of the year. So I think royalties are interesting. Yeah, it's called Chance Free Royalty. It was so private. And I think they're interesting because you don't have the problem of managing the mines. You just have a, you put a certain amount of money into a project and you receive a certain percentage in gold or in dividends every year from that company.

25:17So I think royalties are interesting, but also just any golden silver miners, I think it could be a little bit like the dot com bubble, you buy anything with dot com, you're going to do well. And of course, there's the junior explorers, they are very risky. I'd say like one out of 10 might succeed or even less, but if you buy 20 of them and one of them is like a hundred banger, you do well. So it's that kind of a sector, but of course the barracks, new morns, the first majestics and silver, those are good companies and they're paying dividends as well. Their cash flow is huge. And I think the general public is still not awake to it. And there's very little investable percentage of investable assets in the precious metal

26:22sector mainly because the stock market and tech is still quite elevated. But I suspect that if we see a big correction in the general stock market, we could see that people say, well, let's put a little bit into the mining sector and a little bit of trillions and trillions in the general stock market would be like, yeah, like there's that analogy about Niagara Falls, putting the Niagara Falls through a hose. So that's how I see it. I loved your comment there that it still hasn't really caught on with the general public because we live in an echo chamber where me and you were talking to people about gold and silver all day. We're talking about it all day. We're following that community on X. So to us, it feels like, wow, it's a mania, everybody's in on it.

27:23But if you were to go into any financial institution and talk to a financial advisor and ask them what do they think about putting your money into gold miners, they'd probably laugh and try to usher you into an SMP index fund. I mean, it is completely off the radar of the vast majority of people. So I think we're still very early. That's a great point. I want to talk about war. You released a very interesting video on your channel called If World War Three Breaks Out What Happens To Your Money. And as we sit here today, these wars continue to expand. We're seeing Iran striking US bases. We're seeing allegedly killing soldiers depending on which sides spin. You believe in the media. The US apparently striking a wedding ceremony in Iran killing at least for wounding over 50 other innocent civilians. I think at least one child was killed. Now again, you're getting different media spins on that one side saying it's actually around the Chata missile that it misfired. The point is that the conflict isn't winding down anytime soon.

28:24Russia, Ukraine massively heating up major strikes going back and forth, particularly by Russia on Kiev recently. And Zalensky threatening that it's not safe to fly in Russian airspace anymore. I mean, this is getting really crazy. Of course, you still have Israel and Lebanon. I mean, the list just goes on. We certainly could be on the verge of a World War Three scenario here. Could you walk us through the potential financial and economic dangers ahead if that scenario unfolds? Yeah. In that video I did about a possibility of a World War Three. I went back in history and looked at 1914 when at the time the Great War, they called it before the Second World War, kicked off in Europe. Things don't really repeat perfectly, but what happened was that when the war broke out,

29:26yeah, the financial markets froze. London was the center of world finance. And it ran really well under a gold standard. It ran through the gold and really never changed hands. It was bill of exchanges. Once a war break breaks out, everything becomes uncertain and people want their money. And at the time it was gold or cash, paper, promises or more gold. And they had to shut the stock market to the next year, early 1915. Even the US stock market was closed. New York was closed. Even though the US didn't join the war right away, of course. So as I said, it's not going to, if we do have something happen in Europe, and it seems to me, and I'm like Switzerland, I try to be neutral, I only observe.

30:29It seems to me that the European leadership, the people in charge of the EU and the UK, they've got a death wish. They keep provoking Russia. And I think they've been very patient to Russians, but were they to strike targets in Western Europe? I think yes, the markets are going to be, yeah, they could shut the markets for a few days. They could bring in like Braconian rules and regulations like martial law, and that would change everything. And that means money and your investments. And it's another reason why I think it's good to have golden silver outside the system. As for the miners as well, that will be uncertain. So you have to keep that in mind. It's something I wanted to say earlier when I was talking about the miners.

31:31I see the miners as a speculative part of pressure, the metals and best things. So I would never put like 90% of my savings in miners and 10% in golden silver. I would do more like the other way around. Yeah, that makes a lot of sense. Now, I just want to follow up for a moment because we have been seeing reports on social media that the UK, some news outlets in the UK put out one or more articles about, you know, if Russia attacks, there'll probably be a conscription. And if you don't join the conscription, you'll be penalized. It was really weird because no conscription was announced. And yet these articles, at least they hit X. We don't know what's real and what's not, but from your perspective, when you're at in, where you're at in the UK, have you seen any sort of this chatter in the local media? To be honest, I don't really watch the mainstream media, but I do see what you said on X. And my wife watches programs like the Jiren on YouTube and Larry Wilkerson, Danny Highfong,

32:39and they talk about this. But yeah, I think people are aware of this. And I think they're going to, for the general public, I think a lot of people are completely not aware of the fact that we're provoking the Russians a lot. A lot of them think, yeah, Putin is bad, Russia is bad, serves them right. But the thing is that despite the fact that Russia has been at war with Ukraine for four and a half years, they still have a massive, there's still a massive military power. And I think they could wipe out Western Europe very quickly. You know, the UK armed forces are like, they're not the same as they were back in 1914.

33:40And you hear the discussion here I've seen in the papers today that the big debate is whether they're going to raise a defense spending to 3% of GDP. And there lies the problem as well, Jesse, not just for the UK, but for the rest of Europe. We're in so much debt that this is the bad time to start spending on defense. I mean, are debt levels are pretty much like at the end of World War II? And if we're going to start World War III, how are we going to do that if our debt levels are that high? So yeah, I don't know. I don't know. I mean, people ask me, do you feel safe there? I mean, anywhere really is not safe anymore. So we'll have to see.

34:46Yeah, interesting times ahead to be sure. Now, given everything we've discussed today, how would you approach portfolio construction in our current market environment? Would you be mostly physical metals? Are you of the mind of that 90% physical, 10% miners? Do you advocate for keeping cash on the sidelines in case of a big correction? And are there any other areas of the market that you think are worth considering right now? Yeah, I mean, I advocate having a good portion. I mean, I'm not a financial advisor, but that's what I think people should do, have a good base of physical gold and silver. And it depends on people's age as well. The younger they are, the less maybe they need. They can be a bit more speculative. And aside from the mining stocks, gold and silver miners, I think anything to do with natural resources is pretty good. Things like Copper, tungsten is something that I've been involved in with chance to re-roilty as well.

35:51Even that we don't have a royalty there, but we're involved in a company that has a mine in South Korea. We're restarting that mine. And I don't know if you know, but tungsten is not 85% of the tungsten supplies controlled by China and North Korea. So even the UK government recently invested 7% into tungsten west, which is a tungsten miner in Devon in the west of England. So they're starting to wake up to the fact that we need tungsten. And it's not just for defense. tungsten is used in machine tools. It's used in tech and everything. But the problem is that the wars that have been raging the last four and a half years, that's drained a lot of the supply of tungsten. So yeah, things like tungsten and even oil, I think I was looking at the chart of oil. I don't really, I do follow it, but I don't not really involve, but it looks very

36:56bullish. And when it reached 148 in 2007 or eight, I think the money supply of the world is a third of where it's now. So just under $100 is still really cheap, I think, oil. I completely agree with you on everything you said, especially on oil. I'm very overweight, the energy sector. Mario, this has been a great conversation. For those who want to follow your work, Meneco 64, tell us about your channel and anywhere else you'd like to direct people. Yeah, I'm on YouTube. I've been there since late 2015. I'm the home of alternative economics and contrarian views. That's basically where I am YouTube. I'm also on X. I'm fairly active on X at Meneco, 1964. And I'm on LinkedIn as well. So there you go. Great. I will put all three of those links in the description below. Mario, as always, thank you so much for coming on the show.

38:00You're welcome. Thank you for joining us today on commodity culture. Earn up to a 4% annual yield on your physical gold paid in gold ounces through monetary metals. Go to monetary-metals.com. Slash commodity to find out how to put your gold to work for you. Link is in the show notes below.