Is Global Gold Shortage Brewing? (Uncut) 02-11-2025

Is Global Gold Shortage Brewing? Real Reason Behind Gold Flooding Out of London to U.S. | Josh Phair

Hey everyone, I’m Jeremy Sapper. Welcome back to Kitco News. Well, let’s jump right into it here.

Tariff fears and the growing threat of a major trade war continue to dominate the financial markets. And adding to that now is speculation over a gold shortage in London. Now, this is coming from a surge in gold shipments to the US as traders amass a massive $82 billion stockpile in New York.

This according to the Financial Times, by the way. Now, what’s the reason? Well, there’s concerns over potential tariffs under a second Trump administration are driving investors to move their gold stateside. And the impact is already felt quite rapidly here.

I mean, the withdrawal wait times at the Bank of England have skyrocketed from just a few days to as long as eight weeks as demand for physical gold continues to soar. And people can’t get their hands on gold because so much has been shipped to New York and the rest is stuck in the queue. Now, all of this comes as gold begins the week with another record high with prices now inching closer and closer to the $3,000 an ounce mark on the spot side here to break it all down and to separate the fact from the fiction and to tell us what’s really happening on the ground is Josh Fair.

He’s the founder and CEO of Scottsdale Mint. Josh, great to see you. Good.

Thanks for coming on today. Thanks for having me today. Okay, we got some things to get to.

And I just want to give a little bit of background to the audience here because since the US election, nearly 393 metric tons of gold has been moved to New York’s Comex Commodity Exchange, pushing inventories up nearly 75%, marking the highest level since August of 2022. Now, this according to the Financial Times and market participants say actual shipments could even be higher with private vaults owned by HSBC and JP Morgan, potentially holding additional reserves. And as I mentioned at the top, this is caused by many traders fearing that President Trump could impact tariffs on bullion imports.

And the shipments are also fueled by price disparities. Gold futures in New York are trading at a premium compared to London’s cash market, of course, incentivizing traders to move metals across the Atlantic. And while Trump hasn’t really laid out any specific policies on bullion, he has repeatedly threatened broad tariffs on US imports.

This weekend, for instance, Trump said that he plans to impose 25% tariffs on all US imports of steel and aluminum. Duties are said to apply to imports from all countries. So as I mentioned all this, Josh, you know, it’s a crazy time to be alive.

There’s lots happening. So let’s break down the gold market right now, what you’re seeing. Yeah, you know, we noticed it back in December, there was seemingly a tightness in metals.

We saw the exchange for physical premium grow up, the increase in price. That’s the EFP. Normally, consumers don’t see a small price.

We’re talking, you know, if we’re talking gold, we’re talking sub $1. It might be it might be really, really pathetic on a percentage basis. Suddenly, that price started growing, not only on gold, but also silver.

And so we saw that EFP growing. Some people thought, could this be a could there be a fund that’s blowing up that’s got to cover their positions via physical? Why are the banks offering such a premium? So we’ve seen it traditionally where maybe last year, we saw Shanghai offered a little bit of premium if delivered physical metal into their exchange. And now suddenly, this was growing.

And as we flip into the US after the first of the year, I think everyone realized this is primarily driven by tariff risk. And the banks are not in the business of taking risk. They do not want to pick up pennies on in front of freight trains.

So the goal was to get all the metal stateside. And you know, traditionally, the banks are shorting or they’re selling forward in the COMEX market, right, then they buy the physical metal from somewhere else in the world, and they they import it to the states. And that takes typically more than a month.

Gold is a little quicker if you can find an airplane. But airplanes were very busy right before Christmas, right? You had full loads of passenger vehicles, and you could only fit about four tons of gold per plane. And being well connected with the armed transport industry, you know, this was a big issue.

And so banks were offering, if you can promise and guarantee the metal that can clear US customs before the certain dates, they were getting the business. And, you know, obviously, we’ve seen now, you know, the premiums, you know, continued on. And then just last week, Trump pushed out the tariff risk, at least for Mexico and China.

But I think what we’re seeing now is there seems to be an even greater demand here, almost like is there an unseen hand of somebody wants a lot of gold and silver in the United States. And so I think the theme of jurisdiction matters. And London, you know, traditionally was, it’s more of a trading headquarters, right? There’s not a lot of consumption of silver in particular there.

And so US is a gigantic consumer of silver and imports over roughly 80% of its silver consumption. So we’ve seen gold and silver is continuing to come here and is now breathing. What you’re seeing is now there’s concerns of like, why is it delayed out of London? Do they, you know, what’s the situation going on? And so, yeah, it’s a very real and it’s causing concerns from every point of view.

And it’s going so rapidly too. You mentioned there, Josh, this unseen hand that you’re talking about. And we’ve been hearing some of these rumors too.

I mean, why now? And who could that unseen hand be? Let’s talk about this speculation a little bit. Yeah. I, you know, no one knows for sure.

It would seem that perhaps we have a new administration. And so will there be a gold audit of the US gold reserves? You know, they are the largest holder of gold in the world, but we haven’t had an audit in a long time. So maybe, you know, you could see that a new administration, there’s new rules.

So are, did they, did someone get the heads up that they need to make sure there’s an audit and they want more material here? Is the, you know, does the COMEX and the banks, do they just want to create a absolute huge war chest of gold and silver stateside in the event tariffs come? I mean, will there be an exemption to a monetary medal? You know, there’s so many, there’s so much uncertainty with the administration. It’s making things really excited. And then Bassett, you know, who is now in charge of a lot of the money inside the United States does seem to like gold.

So, you know, you’re hearing things about, will there be a gold bond? You’re talking about a sovereign wealth fund that’s now going to be created in the US. What does that look like? So this is, you know, we all have ideas, right? Social media has ideas that go down certain rabbit holes and they might end up being correct. I think the reality is, and what I try to focus on is, what do I actually see? What am I dealing with? And we just try to connect the dots.

Yeah. Yeah. And to get ahead of it too, just like we’re trying.

I mean, as you mentioned, there’s these rumours that Treasury Secretary Scott Bassett supports a bigger role for gold in the monetary policy. I’m curious, you know, have you seen any credible signs that the US might reprice its official gold reserves? I mean, I think they’re booked at just $42 an ounce right now, or is it more of a personal preference than real policy change on the Bassett side? Yeah. I mean, no one knows.

So, I mean, it doesn’t change the value of how much that gold is worth, but obviously they have a model where gold is worth, what, $42, right? And so if they market to market, right, we’re at $2,900 today, an all time high. So obviously that would swell the balance sheet of how they report, but everybody knows it’s there. So I think there’s a theme here that it’s a combination of how much debt, how many dollars do you have outstanding, and then how much gold do you have? And I think, you know, right now we’re seeing a rebalancing act throughout the world.

All the focus has been on Bitcoin as we’ve ended 2024. And it feels like, boy, is it sure shifted to the physical gold market now. And it’s a huge scramble all across the world.

It’s not just the US that’s bringing in gold. We’ve seen the BRICS countries, right, for quite some time are stacking, you know, a huge amount of gold. So is this just the US wanting to make sure that they maintain the top place, the top holding for gold? What are we seeing? And it’s going to be interesting.

Yeah. Talk to me a little bit about the gold prices here, because everything that you just laid out would, I would assume, mean some good upside on the gold prices, right? I mean, talk to me over the next year where you see this considering, you know, Scott Bessin, the upcoming policy changes that are still to be discussed. Yeah.

You know, boy, if I knew exactly where the price would be in the next six months, it’d be a lot, life would be a lot easier. If we take a bigger snapshot and look longer term, right, I think years is, it’s got to go higher. I think we all realize that the financial system has been somewhat, you know, some people would call it, it’s been cooked for a while, it’s been broken for a while.

And so now are we starting to see some fiscal responsibility coming in? You know, obviously we’re seeing a lot of auditing all throughout the US government, and now they’re even talking about going to the Federal Reserve. And I don’t believe we’ve had a modern day audit of that entity. So we don’t know, but I would say my company in particular, we’ve been called and it started in December.

Hey, do you guys know where there’s more gold refining capacity? And these aren’t the normal bullion banks. And so, you know, when you start looking around, clearly the whole worldwide is a big sucking sound of physical metal and it’s being transported primarily to the US right now. Yeah, it’s been fascinating.

Okay, well, let’s talk about that because, you know, this gold issue has even dominated the Bank of England pressers dedicated to its latest interest rate decisions, which took place last week. The Bank of England Deputy Governor Dave Ramson told the press Thursday that all existing slots at the Bank of England to withdraw gold bars are booked up, you know, as the market players race to ship the metal to the United States to take advantage of the surge in prices there. We got a clip prepped.

Bear with us. There’s a lot of stumbling in his response, but I think it’s important to watch here. It’s worth given that this is the NPR press conference, it’s worth putting what’s been happening to gold, which is the detail of your question in the context of what’s going on in the economy and the uncertainties out there.

And, you know, it’s also worth bearing in mind that because this helps explain some of the facts around the time it’s going to take to get gold out of the bank’s vaults because of the nature of our approach to the gold. So, I mean, the first thing to say is, and I think this is broadly known, but we have the second largest stock of gold in the world, over 400,000 bars of gold at the moment. That’s gone down a bit since the end of 2024, reflecting the market conditions that you’re talking about and have been a feature in the news.

But the stock has gone down by about 2% since the end of – so that’s important to keep that in perspective. And, you know, the US gold market has been trading at a premium to the London market. And commercial gold holders have been looking to take advantage of that price differential.

So, there’s been strong demand for delivery slots. We can meet that demand. All of our main counterparties, as it were, or better to say, all of those bodies who ship the gold have – you know, they’ve all got the delivery slots they need over the next few weeks.

If you were coming in new to us, you might have to wait a bit longer because all the existing slots are booked up. But this is a very orderly process. It is worth stressing compared to some of the markets we usually talk about.

I mean, it’s an obvious point. But, you know, gold is a physical asset. So, there are real logistical constraints and security constraints.

Getting into the bank for me this morning was a bit trickier because there was a lorry in the bullion yard. I mean, that’s how it – you know, that’s how it – but that’s just the reality of it. It takes time.

And the stuff is also quite heavy, as you know. Yeah, quite heavy. Okay.

So, lots of stumbling there and a little bit of mumbling. But, you know, the Bank of England holds gold for financial institutions, central banks, the UK Treasury. And they publicly stated that what’s often, you know, being called the world’s second largest gold hoard is safe and available.

Does this reassure you or, you know, do you still worry about whether the gold is truly unencumbered and ready for delivery if you were to request it? I’d love to hear your thoughts on this. Yeah. You know, obviously, it doesn’t feel super – you don’t feel super confident when, you know, I think what he didn’t mention is that there are some other factors going on.

So, what is the brand of the bar? What is the origin? It might have a tariff if it comes to the US. So, they’re having to sort. So, a lot of this gold isn’t necessarily been allocated by a per brand, per origin, per location.

It might have slightly different purity. If we go back and again, how old is this gold, right? Is this during the modern era or was this going way back in time? Even the US government in Fort Knox isn’t of a spec that’s deliverable. And so, you know, as you go through all that, those are 40-pound bars, for example, if they’re 400-ounce bars.

And so, it – serial numbers, audits, where it’s coming from. And then I think there is a bit of banks are probably delivering these things and they’re sending them off to be refined if they’re not of the right origin. What if they’re from a sanctioned country? So, it didn’t fully embellish maybe all the reasons for the delays.

It obviously is not easy, but it doesn’t make you feel warm and fuzzy that there couldn’t be some problems there. So, you know, banks are in the business of taking on as little risk as possible. And this is why people are repatriating.

And so, we saw Germany a few years ago ask for their gold back out of the Bank of England. How fast did they get it? Do you remember? It was not – it took years. So, did that make the Germans feel really comfortable? And so, you’re seeing other countries now saying, hey, you know what? We want it back on our turf.

I think we’re ending kind of the world of globalization. Now, people are saying, hey, we need to be self-sufficient. We need to find new partnerships, new things.

Just for the same reason that China has been pulling their metal and buying metal out of Europe now for a couple years. And so, you know, really, I think the encumbrance, like, is it – are bars double counted? Has they been leased out? Look, without diving in, nobody knows. But it doesn’t make you feel warm and fuzzy if you can’t get it within a timely basis, for sure.

Yeah. So, do you think we’ll see a new wave of countries, you know, repatriating? Do you think that this is just beginning? I do. So much so, I’m not saying I predicted all of this, but I moved my company from Arizona and built a whole new facility in Wyoming.

And also, a world-class vaulting facility that’s basically set up to work with the banks, with sovereign governments and those types. Because we’re also hitting a new problem, and that’s insurance limits. And so, a lot of these bank vaults, not only has gold gone up huge over the last year, but now this gold’s coming in.

And so, what I call dollar-for-dollar insurance, and these are good companies that are managing this gold. But if you start looking at how much is their total coverage on their entire property, and so, you might get an insurance certificate that covers that position. But if everyone had a total loss in a very unlikely situation, you don’t have dollar-for-dollar insurance.

So now, you’re seeing people, they’re wanting to diversify away from New York, away from London. So, this trend is not going to stop. And I think this is going to continue all around the world, for sure.

Yeah, I always wonder what it’s going to mean for the cost too. I mean, you know, there’s such a speculation of gold shortages out there right now. And it’s not new, right? We’ve heard this before, but could there, you know, really be a shortage of gold? I mean, in what scenario is that even possible? Well, when we look at ratios, if we go back 50 years ago, central banks held, you know, gold was probably closer to about 80 percent of their reserves.

And now, you know, we double up, I believe 20 percent, and it’s starting to grow. And I don’t think the public is not aware. People think of gold as this relic.

But the reality is, it is on the balance sheets of central banks. And if they’re acting more responsible here, and they’re starting to grow, they’re starting to grow their positions. This is, you know, we saw what Singapore came in for the first time in 30 years, they bought just like two years ago.

So, you’re having new buyers come in and step into where suddenly, is the gold in the right place in the right form at the right time? And clearly, right now, there’s a problem. There’s a bottleneck. And, you know, we’re also seeing the same thing with silver, for sure.

It’s not in the right place at the right time. I want to ask you about this, this retail investor demand that we, you know, you and I have talked about it a little bit over the past year, gold has soared by roughly $1,000. Yet, interestingly enough, retail demand appears to have fallen off, right? I mean, central banks continue to snap up record levels here.

Talk to me about this dynamic. I mean, why are we seeing this? Why would we have higher gold prices be surging if retail investor is subdued? Yeah, a lot of it, I think, is distraction. It could be the people that are following the market are already fully committed.

They’re pretty happy. Some have decided to sell it. Discretionary income, we know, is pretty tight at this stage.

And so, maybe there’s just less capital slushing around. And there’s really no been, you know, last year was a big election year. And so, we didn’t really see a lot of gyrations in the financial market, right? The banking environment was very, very calm.

When we see a lot of volatility that hits people’s pocketbooks, when they talk to their financial advisor, and they start looking at what’s going on, they feel like they have too much leverage to equities or too much leverage to real estate. Both are feeling a little topish here. So, I think it’s going to be interesting.

It won’t stay the same. And so, you know, there’s no doubt that the retail, this phenomenon, we’re only a couple of weeks into this even being public. I was not on X until literally three weeks ago and started talking about this.

And now, it’s a growing now. You guys are all over it. The whole industry’s all over it.

But I don’t think this is on Wall Street Journal yet either. So, wait till people kind of figure out what’s going on. There’s a scramble for something and it starts to go to the masses.

So, I do think it’d be really interesting because right now the banks are clamoring for the material, but yet retail is quiet. So, if retail tries to clamor for the same time, you talk about bottlenecks, incredible pressure on physical gold and silver could definitely come. Yeah.

And as you mentioned here, I mean, obviously, mainstream media is still pretty quiet to the stories, but they’re starting to turn over and cover a little bit of the gold and precious metals front. Longer term, do you expect retail investors to return in full force? Or do you think that this is more of a permanent shift in who’s driving gold demand? Probably both. The big dogs are getting positioned in right now.

And a lot of it also is just that they’re positioning it and where they’re domiciling it. Like I mentioned before, the jurisdiction. So, a lot of it, obviously, prices are going higher on gold first.

So, I think it’s pretty obvious to see who is the buyer. Silver’s starting to inch up. Soon as consumers start to figure out that silver is now going to run yet another deficit, which means that we’re consuming more silver than we’re mining each year.

Once they realize like AI, computer chips, solar is not going away. So, we’re going to see a lot of demand that comes into silver. People are going to realize, you know what? It has a lot of opportunity to do really good this decade.

So, I do see consumers waking up to this. People that probably don’t own any precious metals might start taking a look at this and diving in. Once this surge on the silver front starts to go, I mean, how far does it go? I mean, we’ve heard lots of people talk about silver going to finally see this magical $50 level.

But talk to me about it here. How far and how quick do you think silver is going to catch up? Well, if you just look at historical ratios, if we take a big snapshot, go back a lot of time, we have seen ratios of 15, 20 to 1 between gold and silver. And we’ve been hanging between 80 and 90 for the better part of the last year or so.

So, I think it’s that gold might do its move first and then silver plays a violent catch up. And so, I think it doesn’t take much silver in the world for it to be cornered. And so, we saw that with the Hunt brothers in around 1980, right? And they were forced to liquidate their silver position.

But a lot of people don’t realize that George Soros took a crack at it. He was slapped. And then Warren Buffett actually took a hard look at silver and started to acquire it as well.

And in the late 90s, was told by the Commodity Futures Trading Commission to liquidate that silver. So, the reality is, is it’s not going to take many buyers to step into an industry to see some significant change. Okay.

I want to get some more on your outlook on silver in a second. But before we do that, I got to talk to you about these gold and silver lease rates, because they’ve shot up, obviously, a signal that the market for physical metal could be tightening or that there’s heavy borrowing demand in anticipation of further price gains. But how does these surging lease rates typically reflect market conditions? I mean, do the current high rates suggest a short-term squeeze or is it something more structural in the supply chain? Yeah, this is very different.

I’d say normally gold-silver lease rates are sometimes less than 1%. Let’s just say around that 1-2%. Now we’re seeing rates closer to 10 or higher.

I think it just shows that normally a bank, they’ll own their gold, but they might lease it out to someone to use it for a short amount of time. And they’re able to create a little bit of yield off of that. But right now they want it.

And I think the biggest reason is they can deliver that into the COMEX exchange and capture a really juicy exchange for physical premium. So they’re making profit by bringing gold to the US. Why would you want to lease it out to someone else if you can make it? So that lease rate is going up to where it’s more equalizing to where their profits might be just on their transfer.

And that, I think, is affecting also the retail market. Typically, a retail coin shop, if they get an estate sale back, they’ll ship it off to another vault and they’ll finance it. And then they’ll slowly buy it back and sell it in their shop long-term.

This is how they smooth it out. But now they might be facing 10% or 15%. Suddenly, trying to make $10, $20 an ounce on gold is going to erode really fast if you’re trying to finance it.

So all that gold is then being sold to the banks, to the refineries. And they’re then taking that and processing that material into COMEX deliverable brands. So really, the banks are sucking a lot of gold and silver out of retails hands right now.

Whether people know that or not, that’s exactly what’s happening. We’re seeing refining backlogs of two and three plus months for silver right now from the COMEX brands, at least here in the United States. So this phenomenon is kind of quite wild.

I’ve not seen it. It won’t stay the exact same, but I think it’s the bigger buyers first that are stepping in. And then at some point when retail learns maybe what’s going on and where this thing could be headed, this could be a wild ride ahead.

Yeah. I mean, we talked about these hypotheticals, you know, we talked about tariffs, but let’s go back to gold and tariff here for a second, because have you seen any tangible impact from these rumored tariffs on gold sourcing or pricing yet? Or is it more of an industry still in wait and see? Yeah, a little bit of both. Some people say there’s no way that gold could ever have a tariff on it.

You know, it’s a monetary metal. But again, I just look at what the banks are doing. Why are they moving it so rapidly here? Why are they charging a higher premium? If you need it, they’re charging a higher premium for it above the above the spot price.

So I think I just look to what the banks, those are the, you know, they’re managing the most amount of money in this industry. And they have a risk department who are, they’re factoring in some sort of risk. Obviously, Trump tomorrow could come out and say, don’t worry, guys, gold and silver, no matter what, even if it’s coming from Mexico, it will have an exemption.

But he hasn’t been in the business of giving exemptions, or at least so far, he’s not given a whole lot of clarity, I guess is a good way to put it. So a risk factor is being attached to that unknown variability. So that’s what I’m currently seeing.

Do you think like if tariffs were imposed, would that likely drive more gold trading into alternative global hubs? Or does the US market, is it just too dominant for that to happen easily? Probably both. So, but at the same time, are the other hubs going to give away their metal if people are paying a premium somewhere else? So this is where I think you’re going to see, almost like when you go to a restaurant in Europe, right, it’s bad included. So you sit down in a restaurant, it’s all included.

Whereas if you’re in the US, right, you’re going to get hit with all these taxes at the end of your bill. So it’s a little different. It’s similar to gas station, right? It’s all in with gas.

I see the world is just going to say, you know what, these metals are worth more. And so we may settle at a different worldwide price. There’s just so much consumed here in the United States that it’s going to need to come in here.

And so like we were talking before, it’s going to keep changing. It could get worse in terms of we just, there’s so much uncertainty. So it’s hard to predict exactly what’s going to take place.

I’ve got to ask you too, you know, there’s another rumour, it’s kind of surprising, but that’s, you know, certain central banks long associated with gold holdings might also consider adding silver to the reserves. So I want to talk about it because it’s obviously unconventional giving silver, silver’s industrial uses and price volatility. But is there any real substance to this chatter about central banks diversifying into silver or is it mostly speculation? No, the chatter is very real.

Russia put out a draft budget report for 2025 and it included silver. So I think now everyone’s going, wait a minute, if Russia has significant influence over the rest of the BRICS nations, right, what if they were to put X percent of their reserves into silver? There’s just not enough of it. So I think whether it’s silver or other critical minerals, there is no doubt that governments are looking at precious metals of all types.

And I think we’re going to see rare earth minerals, that may not be a monetary instrument for them, but it may be a strategic importance for either technology, for military use or whatever. I mean, even the United States had a silver stockpile. So for military, you know, 20 something years ago and that’s depleted and gone now.

So, you know, I think this chatter is based on actual fact. And the question is, does this expand out? Yeah, yeah. And to your point, I mean, talk about BRICS for a second.

China has just announced a pilot program allowing 10 major issuers to invest up to 1% of their assets in gold, an opportunity that could unlock nearly $27 billion in fresh demand. And at the same time, Beijing and other BRICS nations keep boosting their central bank gold reserves. So, I mean, talk to me about these moves.

Do you see it as a broader push to challenge the U.S. dollar’s dominance? Or are they primarily about, you know, economic security and maybe diversification? Totally, it’s both. I think as people are looking at their balance sheets and look, an insurance company, right, they don’t want to go out of business. Insurance companies, do they make money on the premiums coming in? It’s only when they reinvest those premiums, right? And so they’re trying to make a vig on those premiums long term for investment.

So I think the fact that you’re seeing China basically kind of pushing their insurance companies to really de-leverage some of their risk, that might be in real estate, right? China is, it has some financial and economic headwinds and some problems as well. It’s not just the rest of the world. Everyone’s facing difficult times.

So I think that definitely shows a willingness to want to de-leverage a little bit, their balance sheets and to build a little more gold. But to your point, I think it’s very clear that the BRICS countries want to be asset backed. You know, their sovereign wealth funds have been buying mineral rights all over Africa for the last decade.

And for the most part, the United States has been kind of quiet in this realm. So, you know, I think there’s no doubt that people want to be leaders in terms of growing, whether that be oil and energy or whether that be minerals, for sure. Yeah, such huge policy shifts over the past little bit here.

Hey, Joshua, if China’s insurance pilot proved successful, do you expect other BRICS nations to implement similar policies? I mean, obviously further driving up global gold demand? I would imagine. I mean, every time the BRICS does a meeting, everyone’s like, hey, people are always asking what are they talking about with gold? And so, and, you know, we’ve even seen Trump has, you know, posted on X a few times warning for the BRICS not to create a competing currency and not to back it. Now, he didn’t say back it with what.

So I’ll let you and the viewers think about what that might be. But I think this is a very real thing that the BRICS countries, whether they get along historically or not, it definitely feels like there’s economic ties that are being grown and being driven, especially as we leave the globalization world. And it’s almost like a two-world system.

I’m not really sure what this is going to look like, but clearly trading partnerships are rapidly changing. Yeah, we got to talk about these hypotheticals. You and I talked about it briefly here, Treasury Secretary Scott Bessing, you know, it’s clear he’s a fan of the gold market.

So, I mean, if the U.S. did decide to revalue its gold holdings closer to market prices, what impact could that have on global confidence in the dollar? I mean, especially with China and other BRICS nations accumulating bullion. Yeah. So what is kind of interesting is I think all of us would agree that the United States for decades now has had reckless spending.

Where is it going? And you look at what’s happening with Elon and basically he’s sticking in his AI systems and looking at where those slush funds are going. So, you know, if you can control your expenditures and reduce some of that, call it hugely irresponsible spending all throughout and talking about knocking out complete departments, some of this could almost be deflationary in a sense. And then we’re going to have some economic turmoil that comes with it.

So in return, you can imagine if they are beefing up, let’s say, the gold reserves is almost like a bond rating, right? We saw, what was it, 15 years ago, ish, someone like the S&P downgraded the U.S. debt. So, you know, we could be in a situation where Trump and the new administration is trying to bolster the United States. After all, he says it’s going to be a golden age.

Again, maybe he’s just saying it’s going to be so amazing. Everyone’s going to feel like spending money and having a lot of things, or maybe there is some sort of tie with the actual gold product. But clearly, you know, I think you’re seeing an attempt, right, to control spending and perhaps shore up some of the balance sheet.

Yeah, yeah. It’s been interesting even on the, you know, the law-making opportunities, too. I mean, here at Kitco, we’ve been exploring the sound money, you know, the approach.

We had Judy Shelton on the show. And meanwhile, there’s a number of states that are exploring treating gold and silver as legal tender again, or as even holding bullion in state coffers. Could this grassroots movement eventually push the feds to rethink gold’s role in the monetary system, or do you think it’s just too fragmented to make it a real thing or a real impact right now? When you look at, so in the United States, right, there’s obviously there’s quite a bit of federal money, but a lot of people don’t realize how powerful individual states are.

So take the state that I’m in, for example, Wyoming. They manage, it’s in the 30-something billion, not even including their pension funds. And if they were a sovereign wealth fund, they’d be a top 20 in the world.

So I testified just two weeks ago to the House, sorry, the Senate Revenue Committee, and then it ended up for a gold bill for Wyoming to own gold. And so it’s going to pass, it’s going to go on to the House. I believe there’s a total of, I think there’s more than a dozen states right now with bills about buying gold.

So when you start looking at, now Wyoming’s a little bit different than most states, it actually has lots of capital. When we start looking at states, if they look at their retirement accounts and everything, you talk about a significant amount of gold buying pressure that could exist. And clearly states have problems right now, and it’s all related to money.

It’s all related to inflation. Budgets are blown, right, and then the people are getting, you know, there’s bills that aren’t getting paid, right, so they have to keep increasing taxes. And then certain states, people are moving, right? So people are fleeing, you know, businesses are fleeing New York and California, and they’re going to other states.

Well, that impacts another state. It could impact them good or bad. It depends on what they do with those revenues coming in, how they spend it, what they do with it.

But if we look at what’s going on at the central bank level, and we look at it, how states are managing their mega billions of dollars as well, you talk about a whole new buyer of gold that hasn’t existed in most of our lifetimes. Yeah, not to mention this new sovereign fund that’s been signed over and looking into it too. What a year, Josh.

Any anticipation? What do you think is coming up next? What are we going to report on? Oh man, good question. I think we’re going to be talking more about tariffs and then the impact on, you know, obviously we saw steel and aluminum got hit for 25% today. So I think you and I probably will be talking about something coming soon.

I think, you know, at the end of the day, I’ve been in this space, you know, for quite some time. I’ve never seen anything quite like this, but yet consumers are really unaware of what is happening. So things are rapidly changing.

We were joking earlier. It’s like, kind of look at the watch. Every hour there’s news, news dropping a single day, and it’s hard to keep up with it.

And frankly, I don’t think people are able to even understand what is happening. But I definitely think that major, major change is just going to be an explosive decade ahead. Yeah.

Well, if you’re watching the mainstream media, you have no idea what’s happening, but we’ve got it over here at Kitco News. Josh Fair, founder and CEO of Scottsdale Mint, joining us today. Thanks for this, my friend.

Appreciate the time. Great. Thank you.

Thanks, Josh. I’m Gerry Zafir for all of us here at Kitco News. Thank you for watching.

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