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Alasdair Macleod: "How Many Ounces Of Silver Are You Holding?" — Transcript

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0:00you know, it's just so mispriced. And I
0:02mean, the Chinese know this. They
0:03understand this, which is why they're
0:04setting up,
0:06>> you know, a new market in Hong Kong. I
0:08mean,
0:09>> yeah,
0:10>> I think one thing that's that's worth a
0:13point worth making is that all the
0:16derivative markets are not markets in
0:19gold, silver, copper, oil, whatever. No,
0:21they're not. They are markets in
0:24currencies which just refer to these
0:26things. I mean, you know, banks and
0:28hedge funds when they deal in in in um
0:31let's say futures, I mean, they're not
0:34taking delivery. They're not interested
0:36in taking delivery um because they work
0:39on the basis that they never have to
0:40take delivery. So, what are they doing?
0:43They're dealing for basis points in
0:45currency. They're accounting in
0:47currency. The, you know, the the the the
0:50commodity involved is completely
0:52meaningless. It doesn't mean anything at
0:54all. So you've got all this credit which
0:57has been created which is just going
0:59round and round and round and round and
1:01when this you know when interest rates
1:03start rising you got to think what's
1:05going to happen to all that credit. I
1:07just I'd like to ask Simon a question
1:09about Israel because um I would have
1:12thought that um Israel is going to get
1:14hit. I mean initially yes uh wipe out to
1:18all the facilities uh in the Gulf,
1:20American facilities in the Gulf, but
1:22this really means I think the next
1:24target is is Israel. I mean would I be
1:26right in that thinking?
1:29>> No, I think you're right.
1:32But I think it's the Gulf States first.
1:36>> Why is this the Gulf States? Why why are
1:38the Gulf States taking up all the ammo?
1:41Well, that's because they've got all
1:43the, you know, all the US bases are
1:44there, like the fifth fleet is based in
1:46Bahrain, etc., etc., etc. So, they're
1:48wiping out all the communications and
1:51facilities, if you like, um, in the
1:55Gulf. And this is why America is
1:57retreating and, as Simon says, has now
2:00retreated to Israel and is putting in
2:02the necessary legislation to merge the
2:04forces.
2:06And um, I mean, to me, that means that
2:09Israel is next in line.
2:11for, you know, for hypersonic missiles.
2:14And I I don't think that that Israel's
2:17Iron Dome stuff actually matters at all.
2:20I don't think it's going to stop
2:21anything.
2:23>> Yeah.
2:24>> I mean, it does not. What's interesting
2:27is that uh around the turn of the year,
2:32Iran ditched their GPS systems, which
2:37was of course Americanowned.
2:39>> Yeah. and in its place installed
2:43China's BU system
2:46which is so sophisticated
2:49that it allows
2:51Iran's missiles and drones to weave they
2:55their way through the defense systems
2:59that America puts up.
3:03So hence you have had these very precise
3:06strikes
3:09and it's a gamecher
3:11complete gamecher
3:14but my worry and it's a worry that a one
3:18or two people are talking about
3:23Iran I'm sorry America has only a small
3:28window open
3:30before it's emerg Emergency stocks of s
3:34crude have been exhausted from which of
3:38course is distilled diesel.
3:42>> Yeah.
3:42>> And diesel is the connecting link
3:48between everything in any economy.
3:51>> Yeah.
3:52And my fear is that it's not going to be
3:57to bombers that will try and destroy
4:01whatever
4:03President Trump wants to see destroyed.
4:07But it could be something much worse
4:11like a tactical nuclear bomb.
4:16>> That's that that is my fear. It is not a
4:19forecast. Modern asymmetric warfare has
4:22evolved rapidly through technological
4:24decoupling. By abandoning western GPS
4:27infrastructure in favor of alternative,
4:29highly precise satellite navigation
4:31networks like China's Bato, strategic
4:34actors have fundamentally altered
4:36missile guidance capabilities. These
4:39advanced guidance systems enable
4:41unmanned aerial vehicles and hypersonic
4:43missiles to navigate around legacy air
4:45defense systems, rendering traditional
4:47interception networks virtually
4:49obsolete. As defense shields lose their
4:52effectiveness against maneuverable
4:54threats, Western militaries face an
4:56operational crisis. Supply constraints
4:59on critical resources, combined with
5:01diminishing emergency stockpiles leave
5:04defense networks vulnerable to
5:05increasingly precise unblockable
5:07tactical strikes across major combat
5:10theaters.
5:11>> You know, it's just so mispriced. And I
5:13mean, the Chinese know this. They
5:14understand this, which is why they're
5:15setting up,
5:17>> you know, a new market in Hong Kong. I
5:19mean,
5:19>> yeah.
5:20>> Yeah.
5:21>> I think one thing that's that's worth a
5:24point worth making is that all the
5:27derivative markets are not markets in
5:30gold, silver, copper, oil, whatever. No,
5:32they're not. They are markets in
5:35currencies which just refer to these
5:37things. I mean, you know, banks and
5:40hedge funds when they deal in in in um
5:42let's say futures, I mean, they're not
5:45taking delivery. They're not interested
5:47in taking delivery. um because they work
5:50on the basis that they never have to
5:51take delivery. So what are they doing?
5:54They're dealing for basis points in
5:56currency. They're accounting in
5:58currency. The you know the the the the
6:01commodity involved is completely
6:04meaningless. It doesn't mean anything at
6:06all. So you've got all this credit which
6:08has been created which is just going
6:10round and round and round and round. And
6:12when this, you know, when interest rates
6:14start rising, you got to think what's
6:16going to happen to all that credit,
6:18>> it's going to start contracting. And um,
6:21you know, you you've got banks who so
6:24far have been quite happy to play that
6:25game, that leverage game. And of course,
6:27the uh regulators are very supportive
6:30because they say, "Oh, you don't need to
6:32look at the growth positions, you look
6:33at the net positions." And of course you
6:35could always run a net position which is
6:37let's say a trillion dollars over the
6:38whole thing even though your underlying
6:41position the gross bit both by on one
6:44side and on the other side is 100red
6:46trillion you know that's the real
6:48leverage that's where the risk really is
6:50not in the balance and um they're going
6:54to they're going to start withdrawing
6:55out of these markets simply because
6:58everybody is turning into debt zombies
7:01in the private sector. You know, they've
7:03all got leverage at at I don't know 1,
7:05two, 3% or whatever, and now they're
7:07paying five, six, seven, eight, and
7:09they're going to be paying 20.
7:11>> And think what happens to the property
7:12market, too. I mean, mortgages, I mean,
7:15they're going to go through the roof.
7:17That's going to drive property prices
7:18down because property is priced on the
7:21margin by uh the availability of credit.
7:24So, that's going to collapse as well. I
7:26mean, we are sitting on a precipice. And
7:30um this is why I've been telling
7:31everybody who who actually listen get
7:34the hell out of credit because it's
7:36about to come unstuck big time.
7:39Well, I think
7:41when you get real prices coming in for
7:45diesel,
7:47um fertilizers,
7:50uh gasoline, etc. It's going to kill the
7:54economy. and you kill the economy,
7:56that's when the credit crisis start
8:00appearing.
8:01>> Behind the military operations lies a
8:04fragile global financial apparatus built
8:06on unprecedented leverage. The
8:09international derivative market operates
8:11primarily on currency speculation rather
8:13than the exchange of physical
8:14commodities. Financial institutions
8:17trade trillions in exposure while
8:19carrying minimal net positions, creating
8:22a vast network of unbacked credit. As
8:25global central banks raise benchmark
8:27interest rates to combat persistent
8:29inflation, the cost of servicing this
8:31immense private sector debt explodes.
8:34High borrowing costs threaten to
8:36paralyze commercial real estate and
8:38squeeze banking liquidity, exposing a
8:41precarious financial ecosystem where
8:43even minor systemic shocks could trigger
8:46widespread credit contraction.
8:48>> My problem, and Alistister, you can
8:50probably help me with this.
8:54Will
8:56will treasuries and central banks be
9:01able to stem the tide? I have a nasty
9:06feeling that the forces that are going
9:10to appear are going to be far larger
9:14than what
9:17the Fed and and the Treasury can do to
9:20avert it.
9:21>> Yeah. Well, I Yeah. No, you're right.
9:24I'd agree with you. Um, this is far
9:26bigger than than the combined might of
9:28all the central banks put together. They
9:30can't stop it.
9:32>> That's, you know, and and actually um
9:36it's all being triggered by this
9:37needless war against Iran. I mean, you
9:40know, look, it
9:42>> against Russia and against Russia
9:44>> and against Russia. You're absolutely
9:46right. And I I wrote a piece not so long
9:48ago suggesting I mean because again
9:50they're talking about escalating Russia
9:52escalating the situation and a good
9:55friend of mine Steve Jeremy who lives
9:57locally I mean he was he was commander
9:59of um of fleet airarm in the UK uh he
10:04fought for war he was also um a military
10:09strategist based in Afghanistan so you
10:12know he's he he's good he knows about
10:14these things and he suggests gested that
10:16what the Russians would probably do is
10:19they would start attacking the
10:21production facilities for um uh you know
10:25the drones and all the rest of it that
10:27that Ukraine is using. And um you know I
10:31sort of thought you can't do that. I
10:32mean imagine imagine um a hypersonic
10:35[music]
10:36uh you know hitting a factory in West
10:38Germany or in France or in the UK. we
10:40have said, well, it's quite possible for
10:43um
10:43>> I I've heard I've heard exactly the same
10:46thing.
10:47>> As geopolitical tensions compound
10:49economic volatility, market participants
10:52question whether central banks still
10:54possess the tools to stabilize global
10:56markets. Decades of monetary
10:59intervention have pushed debt levels
11:00beyond historical precedents, severely
11:03limiting the effectiveness of
11:04traditional policy measures.
11:07Simultaneously, kinetic conflicts
11:09continue to expand, threatening vital
11:12global supply chains for diesel,
11:13agricultural fertilizers, and essential
11:16industrial inputs. Strategic analysts
11:18suggest that modern proxy warfare may
11:21target manufacturing facilities
11:23directly, bypassing traditional defense
11:25agreements. When compounding resource
11:28shortages intersect with an unmanageable
11:30credit crisis, the resulting market
11:32forces inevitably exceed the
11:34intervention capabilities of even the
11:36world's most powerful central banks.
11:39>> Yes, exactly. But it's quite possible. I
11:42mean, the way it would work, and I
11:43hadn't really thought this through, is
11:45that they would ring um their opposite
11:47numbers, call their opposite numbers,
11:49say in the UK, and say, "Unless you shut
11:52this down, we are going to take it out
11:55and we will [music] give you a week to
11:57sort it out,
12:00and if not, bang." And that is
12:03interesting. And the other thing he said
12:05is that this article five is actually
12:07being misread by everybody. It doesn't
12:10actually commit anyone uh to join in on
12:14a war. I mean it it commits you to
12:17support if you like um uh you know the
12:20people who have been attacked or the
12:22nation within NATO that's been attacked
12:24but not actually to go to war and all
12:26the NATO members I can feel pretty sure
12:29of this are going to back off [laughter]
12:31at that moment. So
12:33>> yeah, I I I
12:36I was chatting to my good friend in
12:38Moscow earlier today
12:42and he's he's a well-connected guy
12:47and he said, "I'm just putting a piece
12:51together which I'm thinking through, but
12:54I am concluding
12:57that the war
12:59between America and Russia
13:02by NATO over Ukraine ain't going to end
13:07anytime soon.
13:11>> I think the other altern
13:16>> for me it's all part
13:19of a plan that Putin and she finalized
13:26when Putin was recently in Beijing.
13:30If you look at what's happened since
13:34they since Putinian came back,
13:37he's become more aggressive.
13:40Iran has become more aggressive.
13:42>> While Western economies navigate rising
13:44interest rates and debt burdens, major
13:47eastern powers are pursuing structural
13:49economic realignment. Beijing and Moscow
13:52have aligned their long-term economic
13:54strategies to insulate their domestic
13:56markets from Western financial pressure.
13:59Russia maintains a low national debt to
14:01GDP ratio and a simplified tax structure
14:04while China continues to expand its
14:07massive global trade surplus rather than
14:09depending on dollarated reserves.
14:12Eastern economies are actively divesting
14:15from Western sovereign debt. By
14:17fortifying domestic balance sheets and
14:19expanding independent bilateral trade
14:21agreements, this coalition prepares to
14:24weather global economic downturns while
14:26shifting the geopolitical center of
14:28gravity eastward.
14:31>> It's as though the time they've said
14:33that the time has come for the pips to
14:37really start squeaking in America and
14:40the G7 world. And when they really
14:44squeak that is when we can launch
14:49whatever we are going to launch
14:52gold back currency whatever it's going
14:55to be.
14:56>> Yeah. Yeah. I think that's right. I
14:59mean, part of I think rather than um
15:02yeah, sort of doing the attack line, the
15:05military attack line um or the missile
15:07attack line, [music] I I reckon that um
15:12both Russia and China have their
15:14economies in a sufficiently robust state
15:17that they can afford to see G7
15:20economies fall apart. That being the
15:24case, then there is an argument that
15:26suggests they should give it a push over
15:28the edge. Um, and that would effectively
15:31end the forever wars. It seems to me
15:34that that would be a sensible approach.
15:38>> I agree completely.
15:39>> Give the G7 economies a push over the
15:41edge.
15:43>> Sorry, I didn't I didn't get that,
15:45Danny.
15:45>> No, no. So, give the G7 economies a push
15:48over the edge in what way?
15:50>> Well, quite simple. I mean, you've got
15:52China for a start who's going to I mean,
15:54she's already told her banks to dump US
15:56treasuries. She will dump anything else.
15:59She will she will um uh you know, push
16:02the dollar down and you've got the
16:04Japanese institutions who are in the
16:06similar position and they're going to
16:07panic out. I mean, it's and not only
16:10that, but China can start buying in oil.
16:13She can drive up commodity prices. She's
16:15already bought gold and all the rest of
16:17it. Um she can drive up commodity
16:20prices. she can really turn the whole
16:22thing over. I mean that there is no
16:24doubt and this idea that um oh she can't
16:28do that because uh she would suffer from
16:31loss of export earnings and all the
16:32rest. She doesn't want dollars for God's
16:35sake. She's got more dollars.
16:38She's earning her her trade surplus is
16:40bigger than it has ever been in history
16:44[music] despite all this sort of stuff
16:46about you know tariffs and all the rest
16:48of it. I mean the reasons for this well
16:52we won't go into that but I mean it is
16:54quite clear that she's dumping dollars
16:56as quickly as she can all she need need
16:58to do is accelerate the pace um and uh
17:02then I think that she will be able to
17:04say right the rate between the yuan and
17:07gold is now fixed at x bank
17:10>> the final stage of this global
17:12realignment centers on the restructuring
17:14of international trade currencies major
17:17Asian financial hubs s are transforming
17:19their capital markets by expanding
17:21physical commodity vaults and
17:23facilitating seamless gold transfers by
17:26linking physical gold reserves directly
17:29to domestic currencies. Emerging
17:31economic blocks aim to establish an
17:33alternative settlement system
17:35independent of traditional fiat
17:37mechanisms. Regulatory adjustments now
17:40streamline physical gold integration
17:42with international trading networks,
17:44paving the way for commoditybacked
17:46currency stability. As capital migrates
17:49toward these newly established financial
17:51frameworks, the decadesl long dominance
17:54of western debtbacked paper currencies
17:57faces an unprecedented structural
17:59challenge on the world stage.
18:02>> And but I think what she will want to do
18:04is she will want to demonstrate to the
18:06rest of the world that this is to defend
18:08her own currency rather than to
18:10undermine all the other currencies. So,
18:12I think, you know, if I was in her
18:15shoes, um, she's a lot clever than me, I
18:18must say, but if I was in her shoes,
18:20that's what I would do. That's the
18:22[music] way I'd play. And Russia, I
18:24mean, um, Sergey Glazier wrote about
18:26[music] this back in uh, I think it was
18:2920 21 um, for a Moscow business magazine
18:34magazine called Fodmosi. And he said,
18:38"We can go on a gold standard." And he's
18:40dead right. I mean, you've got an
18:42economy. Incidentally, our econ our
18:45analysts get this entirely wrong. They
18:47say that the Russian economy is in dire
18:49straits. Hold on.
18:51>> Debt to GDP 18%. Um, uh, flat level tax,
18:56what rate? 13%. Income tax. I mean,
19:00what's not like not to like? I mean the
19:03fact that I don't speak Russian um you
19:05know if you like is probably the main
19:07thing that prevents me plus my age of
19:09course from going to start a business in
19:12Russia.
19:14I mean these are
19:16>> a lot of people have been doing.
19:18>> Yeah. Yeah. And I mean the same as far
19:21as China is concerned. I mean Hong Kong
19:23is really taking off again. um you know
19:26and all the families who left uh you
19:29know when back in 2014 whenever when um
19:33uh the sort of Chinese took it over uh
19:36properly um they've all gone back
19:39because I mean money fantastic
19:42absolutely fantastic that's where the
19:44world is we're a third world country
19:47here in the UK and the same is true
19:49around Europe
19:51>> I mean
19:51>> what China's what China's done with Hong
19:54Kong has opened up the R&B trading there
19:59and the gold as well.
20:01>> Yeah.
20:02>> Completely opened it up with a Shanghai
20:05gold exchange vault in Hong Kong.
20:09>> And not only a vault, but now but now if
20:11you if you want to export gold from
20:14China, you don't need to get the PBOC's
20:16permission. You just get the normal
20:18customs forms.
20:20>> Yep.
20:20>> Now that's a new thing. Um, and it links
20:24the SGE on the mainland very much with
20:26the new Hong Kong um, dealing and
20:29settlement system um, in Hong Kong. I
20:32mean, it's we see it before our eyes.
20:35This is happening. And tomorrow, which
20:37is Friday the 24th, uh, speculators are
20:40being uh, um, stopped from speculating
20:44in in in effect using their bank
20:45accounts um, on on the mainland. Um, and
20:50I think that's probably more a
20:51regulatory thing, but uh, you can see
20:53that there is a plan behind all this and
20:56the plan is quite simple to secure the
20:58value of the yuan.
21:01[music]
21:09[music]
21:14>> [music]

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