Today we are talking about a timely subject: Investing in tangible assets, ie, assets that increase in value as the US dollar decreases. Listen on Spotify or Apple Podcasts!
About Indestructible Wealth: I’m Jack Gibson. I’m your wealth strategist and I’m here to help you make some money. The Indestructible Wealth Podcast is for young entrepreneurs who want to make, keep and grow wealth to enjoy now, and for years to come.
Episode #18 – The US Government Printing Press is Exploding Precious Metal Values
Podcast Episode Transcripts:
Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.
Welcome to the Indestructible Wealth Podcast. This is the place where we help young entrepreneurs to make keep and grow wealth that you can enjoy now and for years to come. I’m your host Jack Gibson, a senior or serial entrepreneur, founder of multiple seven and eight figure businesses, and wealth building strategist. Each week I’m going to share with you my tips, resources and secrets, to help you create a plan and build the life you’ve dreamed of.
Jack: All right. Welcome back to indestructible wealth you guys, super excited for our guests today. This is an expert as I just laid out on precious metals, Mr. Michael Areas from Colorado and Michael I’m super jealous. That you get to live your life in Colorado and you got all the mountains and the weather and just I’m very envious.
Michael: It’s pretty nice. We do enjoy the nice cool weather and no humidity. It’s nice and dry but yeah, to get out and mountain bike in the summer and ski in the winter, it can’t be bad.
Jack: It can’t be bad. No, no way. Thanks for joining us. Appreciate it. We’d like to start off by telling us a little bit about your background and then how you found your way into the precious metals market. Career that most people think about going into right in precious metals. It’s very unique. It’s very cool. So, tell us, how did he get started? You take us far back as it might.
Michael: Yeah, sure. Thanks for having me on Jack. I appreciate it. Enjoy what I’ve seen from your blog and your podcast so far and learning myself some things I need to do. So, thanks for having me here to talk about metals. Cause yeah that’s been a focus of mine for a long time. I have done sales before and this is just something I believed in where I can get behind and say this is what’s good about it this is why you should have some here’s all the reasons. So precious metals weren’t something I thought about in college but it’s something I grew to believe in as a career. I guess going back to the company I work for is McAlvany ICA. They’re a 50-year old family owned company. So second generation owned been around a long time recommending gold and silver to people for various reasons. The founder Don McAlvanyhad a newsletter for a long time that he published and my parents read that and even heard some talks from Don way back in the 90’s. And so they kind of got the message okay our country’s not going in a good direction. Yeah we need some gold and silver for financial protection. And really early on they got the message. They started doing that. I picked up that message and I even bought precious metals with some savings from working summers in high school and bought silver back when it was $5 an ounce. Now it’s almost $30 an ounce. So there’s been a lot of growth there. I guess from your blog I’ve been more of the capital appreciation guy than the cash flow guy and done that for a long time.
So really since then I’ve really gotten into following world events and understanding what’s happening in the world where the markets are going ever since college and on a really got into reading, just alternative views of what’s happening in the world, very anti mainstream media.
Jack: All right. We’re aligned here.
Michael: Yeah. Even in college when George W. Bush was being elected to president I was with Christian groups and in college and had friends. I was a part of and they’re like “oh yeah, we’re going to vote for Bush. We’re going to have a Christian president. This is great.” And I’m like, are you kidding me? He’s totally part of the new world order and he’s fooling all you guys. What are you talking about? So I was always into these alternative views of what’s really happening, who’s really in charge of the world, things that you don’t hear on mainstream media and just things that most people just don’t get or don’t even see or look into. And precious metals go along with that quite a bit because it’s yeah. Are our dollars going down? It’s being printed away by our central bank. So we need some protection from that. And just seeing where the world was heading it’s something that’s tangible and foundational. So I always enjoyed following it and investing in it. After a number of years of doing sales for a medical device company my sister was actually working for the company I’m at now at McAlvany and let me know there were some openings for very entry-level positions and from where I was at, I was like I don’t want to keep doing this forever. I enjoy telling people about precious metals and the reasons to invest in those. I’m like yeah, I want to go in that direction. I want to head that way. And the doors opened and I met a lot of great people there and was able to get in and get started doing that. And so I’ve been doing that for over 10 years now advising and helping people acquire precious metals and that’s yeah been the finest thing I’ve done in my career.
Jack: Okay. So you mentioned that the government is printing money at huge, at a scale never before seen in human history right? And just last year you probably would be more accurate on this. I think it was a 23% to 27% increase in the money supply? So with that the dollar is getting devalued, right? So when this has happened in the past what effect does that have on precious metal pricing and is that why investors would want to have some exposure to metals?
Michael: Yeah. Typically, precious metals go up in price and whatever currency is currently being devalued. So they’re going to go up in dollar price and we’ve seen that happen over the long-term. Ever since the central bank was created over a 100 years ago. Gold has gone from $20 an ounce to almost $2,000 an ounce. And that’s really not even gold going up, its gold staying the same and our dollar dropping by 90% in purchasing power versus what you could get back then a 100 years ago, what was Cup of coffee a nickel, or if that now, what is it? $2. So it’s that those things don’t change a cup of coffee a cup of coffee it’s the more dollars that are out there. The more they’re demanded by suppliers and retailers and prices go up. So unless your job is paying you 10 times more than it did before. Your prices are going up. Your dollar is not going as far as it did. So as long as the central bank prints money, gold is going to go up. It just tends to get higher and higher in dollar price and silver to a greater extent I’m sure we’ll talk about that later. Just simply because of all the extra dollars out there, and we’ve seen this all throughout human history you go back even as far as the Roman empire they were devaluing their currency taking the gold content out of it we were using gold coins back then they were taking the gold content out of it and replacing it with copper until the point where there was almost no gold left and people didn’t want it. They wouldn’t even use it. They would switch to some other countries currency that actually had gold content in their money.
So gold is always around as a real form of money and as a real store of value at any time throughout human history that a nation or an empire has devalued their currency and overprinted it like we would do today cause we’re printing money or devaluing their currency by taking the gold content out of it. Before whatever it is that has happened so many times throughout history those currencies go away, they lose all their purchasing power and gold is still around as the final last form of money that people can have to preserve their wealth. And even in today’s modern society I don’t think that’ll be any different.
Jack: So the show is called indestructible wealth. So my aim is to help young professionals, young entrepreneurs. So indestructible wealth being the goal, like creating this portfolio that virtually nothing can penetrate are precious metals indestructible. I mean gold can it be would you consider that a form of indestructible wealth?
Michael: Absolutely. There’s no question about that. Gold does not, it’s completely inert. It doesn’t tarnish, it doesn’t react, all the gold we have nowadays has been mined over the past 5,000 years. The gold from Egypt is still around today in some form or another, it does not wear out or break down or go away like pretty much every other element has. . So it’s really, I would say the one thing that God gave us that he put in the earth that can be used as a form of money because it is indestructible. Yeah, its just like the title of your podcast? It’s the one thing that doesn’t go away. It doesn’t rust or wear out or wither away, or turn to dust, at least in this world and in this life while we’re on this planet it doesn’t go away. So it’s the one thing you can pass down to your kids. You can have it. It’s never evaporating, never falling apart.
Jack: How much new gold is being put into circulation like how much is being mined. That creates a little bit of an inflationary effect. But as far as I understand it’s a very small thing.
Michael: It’s very very little, it’s almost negligible. I can’t quote you the exact numbers we’ve followed for the last 10 years and in the different books that come out in mining supply is basically decreasing the majority of the gold that we use year to year comes from recycling from jewelry or scrap or anything else being recycled. We’re not replenishing what’s being used with mining supply. That’s getting less and less. So it’s already an extremely scarce asset; there’s not that much of it to go around. There’s maybe enough for every single person on the planet to have not even quite an ounce of gold, maybe three quarters of an ounce of gold if that. So you’re talking about the central banks that have tons and tons of gold or any investor that has 5 or 10 ounces of gold. How many people are never going to see gold in their life. There’s not that much to go around. We’re not finding more, we’re not replacing it. And that scarcity, in addition to it the durability is what gives it such value and gives it a store of value. There’s an amount of cost that goes into it to pull it out of the ground. Can’t just go and find it or pull it off of a tree or whatever. So if you want an ounce of gold, you can’t get it for free. Either you have to pay for it or you have to dig for it and find it and that takes a lot of effort and a lot of resources. So all of that cost and energy is built into the value of an ounce of gold and I can’t take that away.
Jack: Okay. So that’s good to know. So what’s more valuable or what are you more bullish on right now? Gold or silver, what do you see happening over the next year?
Michael: Well I am more bullish on silver. I would like to have both and currently I would want to have a heavier position in silver here. Here’s my thing overall in our company at McAlvany is what we encourage people to do is have a foundation in precious metals. You want to have some amount. I think we would probably recommend a little higher amount than what you would recommend or what you said on your blog you have and it really just comes down to someone saying all right, how much of a safety net do I want? Because if everything goes bad your gold and silver what’s going to be left. That’s the thing that doesn’t go away or it doesn’t go to zero. So you’re like how much of a safety net do I want to have? That happens too and also as a side note I personally think gold is insurance like you do. It doesn’t go up perfectly with inflation year by year, it goes through bull and bear markets. And we’re now at a point where it’s in catch-up mode. It’s going to probably look like a growth asset for a few years, as it catches up to all the money we’ve printed versus just being an insurance asset and in a worst case scenario. So I think we’re going to see price appreciation and growth. Quite a bit multiple times in gold and silver for the next few years. So all that being said have a foundation in precious metals that is always there, no matter what and protects your purchasing power and within that foundation, whether it’s 10% or 20% or more or less than that within your given foundation and precious metals, what we try to do is strategically have more of one or the other depending on which is set to outperform Silver’s a smaller market and is more volatile than gold so it makes bigger moves when they’re going up it shoots up faster and makes a bigger move percentage wise. And when they’re falling, it falls further. And on each side of that cycle, when there’s price highs and price lows in the metals the price ratio between gold and silver will favor one or the other. In other words one metal will buy more of the other on each side of these high and low cycles and as we follow that price ratio and as we see it go up and down depending on where someone is starting out with metals
If you’re on the right side of that, then you use that to your advantage. When one metal is outperforming the other, we get extra growth from that. We’ll actually take some of that. And trade it for the other metal and get more ounces of the other one than we could have started with. And it’s basically a matter of shifting back and forth between gold and silver partly, not all the way. We’re not going to go all in one or the other, but I want to be heavier silver in certain times and heavier gold at other times. And as that ratio goes back and forth switching that portion in between to go heavier one way or the other and within that portion we’re capturing free ounces.
Jack: So what do you see about silver right now? What’s going on that you would consider more bullish than gold?
Michael: We’re at the part of the cycle where silver is going to outperform on an up move. When the precious metals are very bullish and when they’re heading higher that’s the time where silver makes a bigger move and goes up further percentage wise than gold. So at this point based on where the price ratios are based on the way the price charts are set up silver is poised to outperform gold. So we definitely want to have both we want to have certain types of product in each category but I would have a heavier allocation towards silver because we’re at that point where it outperforms gold on a big move up. they’ve both started new bull markets in the last year or two, where they’re going to make another big move up. They’ve been slowly working their way up for 20 years, kind of stair-stepping their way up and down. But over the last 20 years they’ve been in a major long-term bull market. We’re metals have gone up precious metals have gone up multiple times and we’re at the point where they’re starting another swing up in that long-term trend and that’s when silver makes a bigger move and catches up more to where it should be.
Jack: So with silver though doesn’t it have more industrial use than say gold does is there more intrinsic value in terms of actual usage? I mean gold to me as you’re buying it and you’re storing it and it’s like you said, it’s indestructible. It’s the only probably real money that has ever survived over the last several 1000 years, but silver, although not priced of course the same, has a lot to do with the scarcity of the ability of new silver to be mined. Tell me a little bit more, what we’re looking at.
Michael: Yeah. All of that I would agree with what you’re saying. So gold is a long-term store of value and it is mainly a precious metal. 90% of it is just used for investment demand and jewelry. And a very small percentage is used for industrial applications. So gold is money. Gold is a long-term store of wealth and that’s why you have that. And in addition with gold and silver you’ve got something tangible that you can hold in your hand and nowadays you might argue something that’s not digital something that’s not hackable, something that is completely outside the system that retains its value no matter what happens to our power grid or anything else. So another side note there but it is a long-term store of value. Silver is a precious metal as well. It acts like money. It will preserve wealth over the long-term as our dollar is devalued just like gold. But it’s maybe half industrial use, half investment demand. So there’s a lot of uses for silver. Industrially, I think that adds to the volatility and it can add in a good way, because silver is irreplaceable. As far as the applications that it’s used for, there’s not a substitute where silver gets too expensive. We’ll just use this metal instead the way it conducts electricity and does a handful of other things. There’s no substitute for anything that does it near as good as silver does.
Jack: What’s a couple of examples of things I’m not even thinking of that Silver’s used in. I can’t even think of anything like I have no idea.
Michael: I mean the computer you’re looking at right now has silver and I mean every electronic component has a small amount of silver and it just because of its electrical conductivity is better than most metals. So your computers, TVs, cell phones, anything electronic to one degree or another use of silver and every time that little drop of silver it’s not much is put on that circuit board and done billions of times all over around the world and then those machines become obsolete and they get thrown away that Silver’s gone. So the silver is being used up in addition to being just used and having that demand on it we can’t just get it back and recycle it. Maybe at much higher prices it’ll start to become economical to do that. But essentially that silver is gone and no longer accessible.
Michael: There’s increasing investment demand by people now that want something real. And that’s why we’ve seen silver double since it’s low last year. There’s tons of industrial demand for electronics, solar panels, electric vehicles, all kinds of things where there’s no substitute for it and all those things are increasing and needing more silver and so all of those demand factors are going to drive up the price and there’s not enough supply to go around. We’re not finding any more out of the ground. It mainly comes from silver, mainly as a by-product of mining other metals like gold and copper and things like that there’s hardly any primary silver mines. So we’re not finding very much of it, there’s very little to go around and it’s a much smaller market than gold. The amount of gold out there that’s investible can be measured in the trillions, whereas Silver’s measured in the billions. So it’s much much smaller and as demand is moving into metals it gets pushed up higher quicker because there’s not that much to go around there’s really really not that much to go around.
Jack: Okay. I’m getting a lesson on silver here. This is great. Yeah. I was thinking about what you said if you throw out a computer or any electronic device nobody’s going into it and try and harness the silver off?
Jack: It’s just getting trashed and that’s it. It’s gone.
Michael: Yeah. Yeah, you hear about thieves taking catalytic converters out of cars because you can easily get to it underneath and you get a decent amount of platinum and that’s a thousand dollars an ounce. but yeah, with all the little bits of silver out there it’s not economical to get it. There’s less and less of it available, there’s more and more demand for it and if you ever talk about supply and demand on your podcast that’s basically what’s going to drive it way up and they’re very strong factors. All sound like a silver guy right now, but I’m a precious metals guy. I’m a hard asset guy. I want to be heavier silver now. And you better believe when silver makes a bigger move. I’m very much going to be a gold guy because I’m going to be getting free ounces of gold for my silver winning out performs. I’m going to trade some of it for gold and when it makes a bigger move percentage wise to a certain trigger point that we’re looking for within our metrics that we follow I’ll trade some for gold and, get some free gold for it. So I’ll have my metals position but sometimes more silver and sometimes more gold and along the way I’ll have free ounces that I never paid for out of pocket. And I’ve done that before already. I’ve experienced that where I’ve given myself free silver that I didn’t actually pay for out of pocket.
Jack: That’s pretty cool. Yeah, my son yesterday, he went to the store and he bought nine bags of jolly ranchers. He took his bike on, came back, he pulled out all these, and then he goes to school and he sells like 4 bags, profits, $11. And there’s one thing he said that I’m just still cracking up about. He’s like all these kids that gave me money and then I got to eat my jolly ranchers for free. So what you’re saying is you’re trading your silver in, depending on the price technicals and you’re getting it for free which is always a great thing. Yeah, I love it. I love it. Okay. So that’s the kind of thing that leads into the question: what, are the price starting to tell us right now? Keep in mind, I’m at very average intelligence. So talk to me as if on that or not yet as if I am that.
Michael: Well, I guess the way to try to explain that I guess for myself I used to very much only be a fundamental guy where I’m looking at okay what’s going on in the world? What are the forces driving these things? What do I want to invest in? So there’s, fundamental factors that are important to know where our economy is heading and what the central bank is doing. What taxes are doing and what our current administration is doing are important. But in addition to that something I’ve added on in recent years is looking at the price charts. You can look on any investing resource or platforms online, or even just your brokerage account and see. The price charts where it’s got the squiggly lines that go up and down and up and down in different ways and what’s what the price is doing. It’s just a graphical representation of what the market’s doing and all the buying and selling. And there are people that look at that and look at the mathematical patterns that it follows. It’s sort of an expression of just human behavior and human psychology and what’s going on in the world and it just distills it down.
But there, there are guys that just look at these price charts and follow the patterns that it makes and even just ignore the news and ignore what’s going on in the world and just trade off of that. and I’ve looked at that and when there is something to that I don’t do just one or the other, but there is something to the price charts and what they picture as far as the thing the forces behind the scenes that drive that and how they represent that in a measurable and in a visual way. So looking at the price charts I’m sure everyone’s heard the term bullish and bearish. If we’re in a bull market, it’s something that’s going up and if we’re in a bear market it’s going down. The precious metals and when you look at the price charts you can see this drawn-out they’ve been in a bull market for the last 20 years since the early 2000s, when gold was 2-$300 an ounce. Now they went way up into 2008. Pull back with that crash and then made another big run-up again to 2000 and 2011. They pulled back from that bottomed out in 2015 and now we’re back up there again and set to go much higher. So it’s again these waves, these big up and down or maybe stair-step moves that you see on the price charts with precious metals going up.
And now at this point we’ve had another bullish signal in the last year or 2 where it’s like, all right we’ve entered another at least short-term bull market. They’ve been in a long-term bull market where they’ve just been going up trending up for a couple of decades in between that going up and down; while they’ve been down on a recent down move now they’re heading up again and they’ve essentially crossed a line on the price charts to where all right after this point, people aren’t interested in selling it anymore. They’re just going to buy it because it looks like it’s going to go higher. So the price charts look very very bullish. They’re making a bullish formation; they’ve crossed the line essentially with the patterns that are made to where there’s just no more downside left with the type of market action that we’re seeing there not going to crash back down. They’re not going down at all. I would imagine that the downside is very limited. But they’re in a phase where they’re going to keep moving higher and reaching back to their old highs that they made before and probably go beyond that and set new highs in this long-term trend.
Jack: You think bulls it has to do with this incredible amount of money printing going on by the government is what’s really driving this continual bull market that you’re saying.
Michael: Yeah it’s the money printing and its fear and uncertainty. So the more money we print the more Gold’s going to go up over time. But also when there’s chaos in the world, when people aren’t sure about the future then gold is a safe Haven asset that people will start to buy up and that traders will go into to try to play the price. So really with everything we’re seeing I think we’ve crossed a line within the last year or 2 fundamentally as well where the central bank can’t keep this party going anymore. They can’t just keep stocks going up forever and the economy booming forever and everything’s going to be great. We’re now starting to see inflation kick in right now whether it’s lumber prices or everything else that’s going up that’s now noticeable that now people can’t ignore anymore. And we can’t just keep printing money or going into debt to fix that. Because that’s been making the problem worse. So now we’re going to start having the consequences of all this. And that’s going to be a drag on our economy and not on any real growth that can potentially happen to all of this stuff. So when there’s uncertainty about the future, when there’s potential lack of growth in our economy, when there’s too much debt that we can’t pay back. That’s the kind of time to be in a safe Haven asset like gold in addition to the money printing driving up the price just as there’s more dollars to account for. All of that I think those things are driving it and on the price charts you can see a new bullish formation that is pointing much higher. Really at this point, just to give just a little more technicals when silver it’s a 27, 28, right now, if it gets past 30, it’s going to shoot up to 40 or 50 real quick. It’s just kind of another line to where after that, Oh buying is going to step in and push it higher. Traders force that for its next leg up. So after 30, Silver’s going to shoot up and gold 1950 is the next line in the sand to where it’s made a move up since $1,400 a couple of years ago. It’s taking a break, taking a breather now after 1950, 1960, it will be off to the races again, probably going somewhere between 21 and 2,400 in the next year or 2. So that’s where the price starts. They’ve moved up, they’ve taken a break and a pause. And now they’re poised for another breakout where they’ll have another big leg up again.
Jack: Okay. All right. So an investor is interested in buying gold or silver. Those are the two that you sell. You sell platinum?
Michael: We sell platinum as well. Yeah. Platinum and palladium are way more industrial. They’re a small portion of your precious metals that you can have and you usually want to have one or the other. So platinum is the one that’s undervalued right now. So I would say heavy and gold and silver are your monetary metals, potentially a little platinum if you want. But we can discuss with anyone’s individual needs if they want to contact us.
Jack: Okay. So then if anybody’s interested, they can just give you a call shoot you an email. They can buy it from you directly. And then what you do, ship it to them or how does it work.
Michael: Yeah exactly. So we’re a precious metals brokerage. We buy and sell physical gold and silver. So we’re not dealing with paper and ETFs. We have the actual commodity so people can hold it in their hand. And yeah you can sell it back to us anytime or liquidate something you have. But if you want to buy from us within an IRA or retirement account, you can do a gold IRA. And use those retirement funds to buy precious metals and they’re stored and held in trust at a depository or outside of a retirement account. You can buy from us directly and we’ll ship it to you and you can have it in your hand. You actually own the gold coins and the silver bars and can touch them and we’ve done that for 50 years, help people acquire that and let people know the best stuff to get. And how does strategically set up the allocation now going forward?
Jack: Yeah, my question that I asked you, I’m like, okay, I’ve got this gold and silver. How do I ever liquidate it if I need some cash? Like I can’t just go on Facebook and be like hey guys got some gold and silver, does anybody want to buy it? That’s not going to work.
Michael: Yeah. Do that but put your home address on Facebook.
Jack: Right? Yeah. That’s not good. No.
Michael: You definitely want to be discreet with your gold because that’s part of the issue too but it’s funny we used to think cash in the bank was safe and cash under your mattress wasn’t safe now it’s cash in the bank isn’t safe and gold under our mattress is a little more safe as far as preserving value. But yeah you just have to store it carefully and keep it safe. But we are a full service brokerage we buy and sell so people can send it back to us and we can liquidate it and buy it back if they need to. I’ll still advise on the timing, the price, what we’re recommending, if they should hold onto it or. But yeah essentially at some point there’s going to be a time where I think that yeah grown too much and gone too far in accounting for all the money we’ve printed and we’ll probably pull back to a new normal than I still think is higher than now. I don’t think we’re anywhere close to where they should be. I think the metals are going much higher but at some point, whether we’re trading one metal for another or it’s time to pull some gains off the table, yeah we can buy those back and liquidate them. It’s not like you have to go find a buyer or trade with someone or whatever. You can always do that because it is a real commodity that has intrinsic value, but at the same time we can make a market for it and help do that and advise them when to do that.
Jack: Before we end because we’re probably going to probably have the last question here. Tell me about the silver squeeze that happened three or four months ago with the Reddit game, they were all pumping silver and trying to short squeeze. What happened there? Did that actually work? How did that affect the price? It’s kind of a cool story but I didn’t read too much.
Michael: Yeah that’s a good question. And I was going to ask too would it be possible to give my phone number for your listeners? If they have any questions they can call me directly?
Jack: Oh yeah, absolutely. We’ll put all your contact info in the show notes.
Michael: Okay. Sounds good. So as far as the silver squeeze that was an interesting thing because silver Compared to the stocks that were being squeezed. Silver is a big market. It’s controlled by a lot of big bullion banks. And there’s just a different animal when it comes to this physical commodity that you can buy futures contracts for, you can take delivery of it, or you can settle in cash it’s just a very different animal and a lot bigger than a bunch of retail investors trying to go out and buy coins from any website or any dealer out there. That’s not going to cause the short squeeze the way it will with GameStop or AMC or anything else. So it was kind of interesting to see the attempt at that. I think there’s much bigger forces and much bigger trends at play with gold and silver and I think they’re going to have a huge run that’s going to look like that short squeeze. I would prefer it to go naturally and go on its own over time because it’ll be more sustainable as the metals catch up to all the money we’ve printed and a short squeeze like with GameStop where it goes straight up and goes all the way straight back down. That’s not necessarily beneficial, but I don’t think that can or will happen with the metals either. Anyway, They’re going to go up on their own and do it in a more sustained way and just doing something like what happened in early February caused some excitement and caused the price to push up a little bit. But yeah that’s not something where in the metals market it’s going to work the same way with a stock like GameStop that it’s just not going to work the same way.
Jack: Just realize maybe we lost some of the listeners with the question that I asked that might be like what, are you talking about? They might not have been paying attention. So the short squeezes that regional short squeeze that we’re referring to was with the stock gain stock. So now a lot of billionaire hedge funds were shorting the stock. So in other words a simple way to think of a short is that they were betting that the price would go down and so they put a lot of money on their bet that the price of the stock would go down. So a group of retail investors on a check called Reddit all got together and they based on what we love about this company we don’t want to see them manipulated by the big billion greedy hedge funds. Let’s all pile in and buy the stock up like crazy. what we can do is force these big hedge funds to then have to buy the price of the stock at a higher price. And so that action from retail investors it’s like David versus Goliath essentially it forced the stock to go up parabolic, right? So then, they get super excited and competent and then they try something similar in the silver market and as Michael alluded to it didn’t really work out so well because it’s just a wholly different market and it’s a much bigger beast. Yeah, I know that there was a pretty good run on silver though during that time I mean did you see a shortage of supply during that time?
Michael: Their did get to be a brief shortage of supply and there weren’t enough large bars for the ETFs, like SLV to buy, to back up all the shares that were being bought and got to where there wasn’t much available supply on the commodities exchange for large silver. So it just got to that point where it’s huh, this could get interesting, but really it would take a very large player taking delivery of a bunch of silver bars to start to break down the house of cards. that’s there because there’s not enough to go around, prices going to go up over time and account for all the money we’ve printed. But in the meantime the paper price you see online or on TV is really controlled by the banks in the futures market where they can buy and sell contracts without having to move the physical metal. I mean they’re not having to actually get rid of silver they’re not even actually having to own or possess any silver. They can dump contracts on the market which looks like selling, which makes the price go down but they don’t even actually have to settle up in silver or deliver any silver or do anything like that. So there’s a certain amount where the paper prices are manipulated. We’re starting to see that breakdown because buying the actual commodity where our investors are buying silver to own it, it’s getting harder and harder to find and premiums over spot are going higher and higher. We’re starting to see the real price of silver detached from the paper price, but that paper price that everyone follows it’s still very manipulated and the Reddit guys aren’t going to be able to do that kind of short squeeze and push that up because the banks have a lot more power to force selling or print up futures contracts and sell them without having to have it backed by silver and push the paper price down. So all that to say, yeah, the short squeeze was interesting in early February to see them try on silver and ran up a few bucks. Silver ran into $30 an ounce and came back down. But the bigger picture pattern it’s making on the price starts silver didn’t go down very far. It set a higher, low and it started to work its way back up again. So there really wasn’t much damage done to silver as far as pushing it back down or changing the trend that it’s on when the short squeeze didn’t work and now we’re just heading back there again to try to attempt to break 30 and when it does, it’s going to shoot up big time. So yeah, it’s a little bit different than what the Reddit guys were trying to do in February, but I’m fine with that. I would rather it do its own thing because it’s going to do it in a more long-term sustained way anyway when it doesn’t on its own.
Jack: That’s right. Very good. Okay. Thank you so much for joining us. Appreciate all your knowledge and expertise over a decade in precious metals. Very enlightening. I learned a ton so how can listeners, what’s the best way for people to contact you Michael if they’re interested in adding some precious metals to their portfolio, your website, email.
Michael: Yeah. So I have a direct toll free number I’ll give you that and all say it a couple of times for anyone that’s just listening. So my direct toll free number is 866-221-8986. So once again, that’s 866-211-8986. So that goes right to me or my partner Jensen who may answer the phone as well and it’ll bypass the front and go right to my office at our company and I’m available to answer questions to advise and to help people get started with precious metals and build that safety net foundation in intangible assets.
Jack: Perfect. All right Michael. Thank you so much. Appreciate you being on.
Michael: Yeah, thanks for having me Jack. That’s fun.
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