Economists Uncut

Global Elite Says #1 Risk for 2025 Is Armed Conflict (Uncut) 01-25-2025

Global Elite Says #1 Risk for 2025 Is Armed Conflict But Is This a Distraction? Matthew Piepenburg

KITCO News special coverage of the Vancouver Resource Investment Conference is brought to you by Snowline Gold. Hey everyone, welcome back to KITCO News. I’m Jeremy Safran.

 

We are here at the Vancouver Resource Investment Conference in beautiful British Columbia, Canada. Lots of momentum today in the markets but also on the ground here. And I want to talk about a new report that’s happening.

 

The World Economic Forum has released its annual Global Risks Report. Ahead of its annual gathering in Davos, Switzerland this week. For 2025, armed conflicts tops the list as the most severe global risk.

 

And according to a survey of over 900 experts from the Academia Business and Policymaking Network, nearly one in four respondents cited war and terrorism as the greatest threat to economic growth in the year ahead, underscoring the deepening fragmentation of the global order. Extreme weather, which has held the top spot last year, is now ranked as the second most critical risk in this week’s annual World Economic Forum in Davos, Switzerland. We’ll see heads of state, central bankers and business leaders gather through January 24th.

 

Matthew Peipenberg is a partner at Matterhorn Asset Management, a multilingual leading precious metals advisory firm, also a KITCO favorite. He’s also the author of Amazon’s number one release, Rigged to Fail, Blunt Spoken Investment Solutions for Unsuspecting Investors, and Gold Matters, Real Solutions for Surreal Risks. Matt, it’s great to have you back on the show.

 

Good to see you. Great to be back. Great to have you actually on location, meet in person this time.

 

Yeah, correct. We’re also meeting at a time where it’s very interesting. Obviously, Trump’s inauguration taking place the day that we tape this, so we’re not sure exactly what’s going to happen, but he’s taking office.

 

We have this annual meeting in Davos, obviously with the WEF coming up. And I wanted to talk to you a little bit about that before the Fed meeting, because in this new survey, I want to get your thoughts coming out of the WEF. They’re saying for 2025, armed conflicts will top the list as the most severe global risk.

 

I mean, we know that Trump’s rhetoric has been no more wars. I’m going to be a peacekeeper. I think he talked about it today.

 

How significant is this for the WEF to highlight it? Look, it’s troublesome. I got to give credit to Jim Rickards years ago when he wrote The Currency Wars. And then, you know, from a currency war comes a trade war and then the risk of a hot war.

 

We can unpack the probabilities that are possible. Of course, it’s always possible. To me, it’s madness in a nuclear era.

 

And certainly Douglas McGregor, Colonel McGregor, was here yesterday talking about the madness of that. I go back to Ernest Hemingway. I’ve used that quote many times.

 

When you’re in a debt-soaked scenario like the U.S. and the whole globe is, frankly, the G7, all the major countries, ironically, except for Russia. When you get into a debt-soaked scenario, that always leads to a series of financial disasters and social unrest, which is always, in my opinion, historically, responding to some form of centralization or distraction, which can mean war. And Hemingway famously wrote, you know, he’s not an economist, not a member of the Fed, certainly not an MBA from Wharton.

 

But he said, look, you know, you can always buy temporary prosperity through debt. But in the end, you get permanent ruin through inflation and war. We’ve certainly seen the inflation headlines.

 

We’ve seen a lot of indirect and direct wars involved with the United States in the last 10 years, mostly disastrous. So the idea of a more military conflict for Davos or anyone to predict that is certainly not a stretch of the imagination. To your point, just today in the inauguration, towards the end of his speech, he made a very strong comment.

 

We’re going to have the strongest military. And they could argue that strength through defense, strength, you know, through defense. And even, you know, Colonel McGregor yesterday was saying we could spend billions on aircraft carriers.

 

You can take them out with one missile. China can do it. We can do it.

 

It’s madness. But there’s the perception that being strong militarily can create more peace. I do think Trump didn’t agree with the Ukraine war.

 

I certainly didn’t. We don’t want to get into that rabbit hole. Certainly McGregor didn’t agree with it.

 

But I haven’t agreed with any war since Vietnam, for that matter. Most Americans don’t. But again, I’ll say the risk of heightened military conflict as a distraction or as an excuse to expand the money supply or to get into full kind of emergency mode economies when there’s a good war, that can be politically powerful.

 

I hope that no new administration in general, and Trump in particular, will use that tactic to throw the baby out of the bathwater and blame military conflicts on the real strong debt and economic problems that he’s facing. We all know he’s facing. And whether he can solve them or not in two or four years is to be determined.

 

It’s going to be determined, all right. OK, well, I’ve got to talk to you because this geopolitical uncertainty has caused last year at least record gold prices, obviously central bank demand. If we continue to see these conflicts at the top of the ballot this year in terms of what we see, I mean, is that not going to be positive for gold? Look, the ultimate cliche is gold loves fear.

 

Of course, when there’s conflict in the world, when there’s headlines in the world, when there’s an event and not just a theoretical event, usually gold spikes on gold loves crisis. There’s plenty of crisis to go around. To me, there’s a lot of fog about different theories whether gold price moves, certainly central bank buying is a big reason.

 

But it really, like every sector or every asset class or every headline you and I want to talk about, it all starts with what we’re seeing right now. We’ve been seeing for quite some time, it’s really coming to head, is a debt collapse. And it’s driven by a sovereign debt crisis, certainly in the home of the world reserve currency, certainly in the United States, that’s undeniable.

 

And the ripple effects of that debt and what rising yields mean to the world, what that means to real estate markets, what that means to currency markets, what that means to the stock market, which we can talk about with grotesquely overvalued. We’ve been saying this for years, but it’s reaching that tipping point. I was very bullish last year in the markets, very different this year because of the extreme changes.

 

But again, military conflict, headlines, gold price, equities, currencies, certainly precious metals, it all stems from what this debt crisis means, how to sustain it. Debt is driven by issuing IOUs. The US IOU is not as loved, not as trusted.

 

It’s from a broke issuer. When there’s no buyers of those IOUs, you have rising yields. That’s the shark fin that circles everything, that everyone’s terrified of.

 

Rising yields is disastrous for the economy, but more importantly, it’s terrifying to the bond market. And most importantly, it’s terrifying to Uncle Sam. That means Uncle Sam’s debt obligations, the interest on his own IOUs becomes unpayable.

 

So the Volcker option of solving inflation or using rising yields is gone. We have to get those yields down. We cannot afford the interest rate on our own debt.

 

And the only way to do that is to get more demand for your US Treasury. The problem is empirically and objectively, there’s no natural buyers for those IOUs. And so I’m sorry, that has to come unnaturally.

 

And that has to come from a mouse clicker at a central bank near you where you add a zero to the balance sheet to buy those bonds to get those yields down. It’s that simple. If you understand the bond market, you understand everything.

 

And, of course, buying those bonds through synthetic liquidity is inflationary, and it’s also debasing the currency. And so gold rises not because gold’s actively doing anything. It’s sitting back watching currencies lose their purchasing power because debasement, like Hemingway said, is the permanent ruin.

 

That’s where we’re in. It’s a trap. There’s no way around it.

 

As Paul Deuter Jones says, Drucker, Miller, Dalio, we all agree, it’s not just the gold camp. Inflation is the endgame. That doesn’t mean we can’t have a disinflationary disaster like Hugh Henry, a massive disinflationary moment, like a market mean reversion or a major recession that becomes undeniable.

 

So those two forces can be very deflationary, but the reaction will have to be emergency liquidity, which is inflationary, which gold gets the last laugh on, just because we sit back and watch central bankers and policymakers in a debt trap, stuck, and have no choice but to do stupid things. And besides debasing the currency, yes, they can go to war. Let’s hope it’s not that option.

 

Yeah, absolutely. You’re talking about the U.S., you know, the debt, almost $37 trillion. It’s hard to really understand, really, like, what’s going to happen? What’s the blueprint going forward? Because in the first year of Trump’s presidency, you can’t have an economy in the gutter.

 

No, you can’t. You can’t. So is it just printing? Well, again, these are the things, I understand campaign promises.

 

I understand the enthusiasm. I understand, I think, the sincerity of it. I really do.

 

For Trump to be successful, he has to bring the debt to GDP down. He has to. He has to bring the debt down, in particular, because mathematically, Jeremy, mathematically, this isn’t just my theory.

 

Everyone who studied economics from the 1700s to today knows that once debt to GDP crosses a certain Rubicon, well, we’re well past $125. But when you cross $100, mathematically, growth slows by a third. I’ve said many times, it’s like trying to swim with a backpack or a cannonball.

 

For him to grow his way out so that we don’t have so much debt, we first have to get rid of some of the debt. And where do you do that? How do you do that? The DOG program will not be enough, even if that’s successful. So how do you bring that debt down? You can grow your way out, which could take decades and a lot of austerity, or you can inflate your way out at the expense of the currency.

 

So again, all roads come back to inflation. All roads come back to currency debasement. I don’t see any way around that.

 

That doesn’t mean that Trump can’t do sincere things to get growth, to reshore manufacturing, to cut spending in D.C., to try and fix the trade deficit with the BRICS. Those are all sincere, good, optically and decent ideas, but they can’t happen in two years or four years, and they don’t come cheap. Ironically, cutting spending is expensive.

 

And so that’s the kind of trap we’re in right now. And again, like Paul, Tudor Jones. Look, not name-dropping him, very good friends with Scott Besson, good guy, smart guy, not going to speak for him.

 

Even a smart guy like him with the best intentions knows this is not going to be easy. True. And we kind of all know and encircle the friends that, look, there’s no way around inflation.

 

Again, Jeremy, we could have disinflation or deflation in between, but there’s no way around the hit the red button at some point, and I call it bazooka QE. Let’s talk a little bit about Scott Besson, the incoming Treasury Secretary. He has been on the record saying, we’re not going to let the U.S. currency take a hit here.

 

It needs to be the number one reserve currency in the world. Obviously, he needs to say it, but tell me what’s going to happen here. Are they able to do that with this amount of debt? Well, first of all, I’ve never said the U.S. will not be the world reserve currency.

 

That’s not going to change. That would take a long time to undo, even if everything the BRICS were trying to do. And I’m a big proponent or realist about what de-dollarization means.

 

I called it as soon as we did the sanctions against Putin. Grant Williams did it. Jim Rickards and Roberts did.

 

That wasn’t rocket science. So there’s no doubt that de-dollarization is a real force. It’s a powerful force in the repricing of the dollar and the demand for the dollar.

 

And to Brent Johnson’s point, there’s still a lot of natural demand in the derivatives market, in the euro-dollar market, in the SWIFT system, in the petrodollar system. But there’s definitely a change in the FX reserve percentages. There’s definitely a moving away from the dollar.

 

That doesn’t mean the end of the world reserve currency. So Scott’s right. We’re not going to lose the world reserve currency status.

 

We’re not going to be the prettiest girl in the dance anymore. We’re not going to be the most talented player on the team. We’re going to have to share some of that talent.

 

We’re going to have to date other girls, so to speak, because the world, whether we like it or not, is going multipolar, and it’s multidysfunctional, but the dollar just doesn’t have the superiority, the supremacy that it used to. It’s not going away. The puck is just moving slowly away from it.

 

I mean slowly. They’re not going to deleverage from the dollar in one year. That would cause, actually, the dollar to go higher.

 

So even the BRICS know that. Saudi Arabia knows that. The UAE knows that.

 

Frankly, Scott knows that. But, no, that’s an easy headline because we’re not going to lose our status. We are going to lose our purchasing power.

 

Again, regardless of the DXY, that’s a relative standard. It certainly matters if you’re an American living in Buenos Aires or Venezuela or Istanbul, as I’ve said many times. Yeah, I’d rather have the dollar on a relative basis.

 

But in absolute terms, in isolation, for Americans, they all know that dollar buys less today than it did 10 years ago, 5 years ago. So paint the monetary system, and more so, you know, the whole global trade system that we’re going to see this year. I mean, Trump’s come in, he’s talked about tariffs, even though this morning with the Wall Street Journal reporting that there might be a possible delay in at least Canada and Mexico’s tariff.

 

I think that’s why gold’s still around $2,700 today. But, you know, what are you anticipating as shifts this year? What’s your outlook? Look, the main thing he’s going to say about Trump, when he says he’s going to do something, he’s going to do it. Now, whether that’s effective, whether it works, that’s to be determined.

 

There’s a lot of probabilities on both sides of the case. It’s very easy to criticize tariffs as inflationary, and I’ve openly said it is. But you’ve got to put yourself in Trump’s shoes, and I was reading something recently about the difference between a leader and a winner.

 

Leaders are very cooperative, they bring coalitions, they bring compromise, and they lead through example and kumbaya. A winner, which is what Trump is, he said the term winner probably seven times in today’s speech, a winner sees things very binary. You want a dog, you ask for a horse, the art of the deal, you come in spanking, you want to win, someone’s got to lose.

 

And in terms of the tariffs, Trump wants to win. And it’s not just because he’s a bully. And you’ve got to put yourself, it’s easy to understand the BRICS position and why they’re de-dollarizing, from Trump’s mindset, which many Americans will identify with, he’s very upset about a number of things that explain the tariffs.

 

First, he can’t stand that we’ve offshored all our jobs to China, that the American dream is made in China. What he doesn’t remember is that’s not necessarily the Chinese fault. That was jobs.

 

Nike, Apple, they make all American products in China because the labor’s cheaper. That’s for their better salaries. China didn’t ask them to, they did it voluntarily.

 

So that little Nike shoe or that iPhone comes with an American flag, but it’s made in China. But nevertheless, cheaper labor in China, lost a lot of jobs in the U.S., Trump’s bothered by that. He definitely doesn’t like that.

 

He’s also bothered by a $300 billion trade deficit with the BRICS. You can’t blame him. He’s bothered by the national security problems of most of our military chips for our missiles and planes and computers are made by our adversary in the Cold War in China.

 

So he wants to reshape the deck chairs a little bit. He wants to be strong on the tariffs. You can understand why he thinks we’re suckers.

 

That’s the term he uses. Now put yourself on the side of the BRICS. They feel like they’re the suckers.

 

They’re suckers because for the last generation or so, they’ve had to basically import American inflation. That’s a fact. For the last generation or so, they’ve had to suffer the usury policies of the IMF and the World Bank.

 

If you read John Perkins’ book, Confessions of an Economic Hitman, it’s pretty entertaining. And they have to also suffer an unloved U.S. Treasury as a tier one asset that doesn’t give them any yield in real terms. And they have a weaponized dollar.

 

So the BRICS feel like they’re the suckers. Trump feels like we’re the suckers. And now they’re about to collide.

 

And unlike Canada, where Trump famously bears Trudeau, the BRICS ain’t Trudeau. And I think in terms of what we just saw today with Canada, look, Canada buys more American goods than China, France, the U.K., and Japan combined. Canada’s a big buyer of American products.

 

So putting a 10% tariff on them because of immigrants flying in from the north probably wasn’t a technically smart thing to say. So tariffs is a lot of yes but. There’s very strong arguments on both sides.

 

Won’t get into too much history, but we tried this in 1930 under Smoot-Hawley, under President Hoover. Hoover didn’t get reelected. Smoot and Hawley were both kicked off the Senate.

 

And frankly, American exports dropped by 30%. So in that particular case, it didn’t work. And frankly, in the first Trump 1.0 version of the trade war, using steel as an example, it didn’t result in more jobs.

 

It was a net loss in employment. So again, I’m not saying that’s going to be history repeating itself, but so far it’s not going to be as easy as it looks. And he’s got some bigger fish to fry.

 

I mean, let’s get to the facts. During today’s inauguration address, he said, and I have to quote this, America’s decline is over and that the golden age of America begins right now. He also declared emergency at the southern border.

 

He reiterated his plans to change the name from Gulf of Mexico to the Gulf of America and also taking back the Panama Canal. So, I mean, we’ve got four years. What’s it going to look like? Wow.

 

I mean, we all saw that. He didn’t mention taking Greenland from Denmark. Didn’t do it.

 

Didn’t mention the Bitcoin reserve either. No, he didn’t. That’s interesting.

 

That’s a whole other rabbit hole. Look, again, what I can love about Trump is he’s refreshingly blunt. There’s no mystery.

 

And he’s certainly patriotic and he’s certainly America first, almost America only. And after years, what many people see is failed progressivism, failed kumbaya globalism, which is the WEF, by the way. That’s kind of refreshing to just take America as a priority.

 

And there is strengths and weaknesses in that argument. The question is the rest of the world doesn’t react always the way he thinks they will. What I think Trump knows and what his team knows, if you’re going to be a bully, if you’re going to show power against the BRICS, against Panama, this is your last window.

 

We still have 58 percent of FX reserves. We’re still considered the strongest global power. We still have the strongest military.

 

He has a House, a Senate, a Supreme Court, and the White House, obviously all Republican. If he’s going to be tough, this is it. It’s the time.

 

This is it. Because in five more years, we’re going to have even more headlines. What happens in the next two years in Panama? How Panama reacts? How China reacts as they control a lot of the shipping through there? Look, how do I know? How do you know? It’s easy to see that might not be as clean cut, but this is his last chance.

 

Teddy Roosevelt speaks softly, but carry a big stick. Trump speaks loudly and carries a big stick. So it’s going to be a very interesting—look, everyone knows it’s going to be a very interesting term.

 

Let’s switch over to BRICS, because as you mentioned, obviously the de-dollarization trend isn’t going away in 2025 with this kind of debt. But you’ve also said that the U.S.-led sanctions against Vladimir Putin, obviously, was one of the greatest U.S. policy errors in the past 250 years. You just kind of talked about it, but break that open.

 

Expand on the terms and why this has had such a rippling effect on the economy. How long will it continue to? I think it’s irrevocable. I think it’s an irreversible.

 

I’ve said many times, once you weaponize a neutral reserve asset, once you break the trust of your currency partners or users, it’s like a spouse. You lose the trust, it’s gone. You can get counseling.

 

You can try every million things. You can apologize. It’s gone.

 

You can’t take this back. And I think why it was the biggest mistake, a number of reasons, but it boils down to that loss of trust. Now, I’ve used this analogy many times.

 

If you’re banking at Citibank and they freeze your assets and don’t let you make wire transfers, you’re never going to recommend that bank to me. And you’re never going to trust them again. And that’s what happened when we weaponized this world reserve currency.

 

And why it was a disaster was because we broke the trust. It was already an IOU that most people didn’t want anyway. China and Russia have been actually de-dollarizing since 2013.

 

But this gave them the pretext to go to plan A to move the hockey puck away from the dollar. But look, I’m not alone in this theory. John Maynard Keynes had never do this.

 

Robert Triffin, who’s a great economist, came to our Congress and begged them in the 60s, don’t weaponize the U.S. dollar. And ironically, the last person to say, don’t go there with weaponizing the world reserve currency, because once you do that, no one’s going to demand it in the same way. It’s going to bring the dollar down.

 

It’s going to cause problems. It was Obama in 2015 when we were talking about tensions with Russia during the Syrian issues. Ironically, his vice president, Biden, came into office and did exactly that.

 

Did the thing that Obama said we should never do. Again, you could question who was making decisions for Biden. It was probably the military industrial complex that Eisenhower was worrying about in the 60s.

 

But it was a disastrous policy. And now, look at the movement away. Again, slowly but steady, slow and steady, away from the U.S. dollar.

 

I don’t think that’s going to change no matter how much negotiation. Again, the BRICS isn’t the European Union. They’re not trying to create a new euro.

 

They’re not trying to create a new currency. They’re trying to create a new system, a trade settlement system. They’re not going to give up their own currencies.

 

They’re not going to create a BRICO. It’s just going to be a new trade settlement. Enbridge gave us what it is.

 

It’s very similar to what the IMF wants to do. Basically have a new asset, a new trading asset, which is backed by gold. Could you compare the tariff talk, Trump’s proposed tariff talk, about doing the same thing? I mean, it’s kind of weaponizing the U.S. dollar.

 

It is. Look, usually when you’re going to make tariffs, you don’t want to make them prematurely. If there’s an industry you’re trying to save, you put tariffs so that they can fill the gap while the other countries can’t import to you.

 

Let’s say it’s the auto industry or steel that you want to protect. Right now, our industries are so weak, there’s no manufacturing to protect. So the tariff clearly isn’t to protect manufacturing.

 

It’s all offshore. That’s the problem. But it’s a form of weaponization because it’s not really a protectionist tariff.

 

It’s an FU to the BRICS tariff, and it’s an America First tariff, and it’s a form of weaponization that hasn’t gone so well for us since 2022. The BRICS haven’t bent. Russia’s definitely not going to bend.

 

And as Putin said, you just buried the U.S. dollar. You’re digging the grave for the U.S. dollar. Again, not overnight.

 

It’s slow and surely. Yeah, I wonder, you know, how much it’s going to backfire and kind of accelerate de-dollarization. I mean, at the inauguration today, Trump confirmed his plans about establishing external revenue service to collect all tariffs and duties coming from the foreign sources.

 

What are your thoughts? Again, he’s trying to monetize our debt not through the American people, which all of us would love to hear, obviously. An ERS is better than an IRS. And so that’s on the assumption that the rest of the world will comply and pay those tariffs.

 

What they’re going to do is what they did in the 1930s after Smoot-Hawley, I think, is find new ways. Necessity is the mother invention. Desperation causes creativity.

 

The BRICS and other smaller emerging market countries are going to find new trade arrangements, faster acceleration of net selling their trades outside of the dollar. They’re going to push back themselves. It’s mutually assured destruction in a nuclear way for China and America or Russia to fight.

 

It’s equally mutually assured destruction. These are two huge demand pulls for products. If China pushes back, it’s fine.

 

You’re going to put an import on us or a tariff on us. We’re going to put a tariff on you, too. It’s hard to know how the reactions are going to come.

 

But I think the idea that suddenly everyone’s going to pay a tariff and come in is a little naive. But I think his main motive, which I applaud and I respect, is if I am a Nike or an American widget manufacturer with 90% of my labor in China, and I’ve got to pay for the higher labor in America, I’m going to have to sell a house in Nantucket for it, my share price is going to go down, but I’ve got to bring this back. And that I applaud because I find it repulsive that most of American CEOs and CIOs are making a fortune on share price appreciation because they’re making their money on cheap margins and cheap labor.

 

I think it’s un-American to make your products outside of America. So in that regard, I applaud Trump, and I think that’s the real motive. And I think if we start seeing American CEOs bringing their labor back to America, I’m willing to pay some pain short-term.

 

Well, they were all certainly there today. That’s another irony. Even Elon Musk, come on, a lot of his components for Tesla, a lot of his buyers for Tesla are in China.

 

I would love to be a fly on the wall when Trump and Musk are off the record, billionaire to billionaire, of what these tariffs mean for Elon’s bottom line. Let’s go back to BRICS here. Obviously, it’s gained a lot of attention.

 

Again, to our viewers, the block of Brazil, Russia, India, China, South Africa, expanded in early 2024 to include Iran and the UAE, Ethiopia, Egypt. Saudi Arabia, also new. What does this mean for the global order? I mean, they’re gaining momentum, but now we have Trump in.

 

I’m curious how global trade is going to shift here. Well, look, those are all very interesting lists of new countries. The most important two, I think, is the UAE and Saudi Arabia, because what does that mean? That’s oil, right? And oil, there’s two main fulcrums in my world view, and one starts with debt and the other is oil.

 

Oil, of course, since the 70s is what keeps the dollar up since we dethroned from gold. So oil was the new gold standard in a sense. And having oil states agree to sell oil in dollars is what kept our dollar from being disastrous.

 

And so when you see Saudi Arabia and the UAE flirting with the BRICS about, look, we’ll do some trade deals in oil outside of the dollar, we’ll work with you. Already 20% of the oil sales are outside of the petrol dollar, unthinkable five years ago. Look, Kyle Bass said this years ago, China’s number one priority is a non-dollar energy solution.

 

They need to find, they’re importing their oil. Russia is a major exporter of oil. They have no problem paying yuan for that oil, and Russia takes that yuan, converts it back into gold in the Shanghai exchange, and there you go.

 

There’s an oil trade outside the dollar. That’s a major shift in global trade. That’s a major shift in the U.S. dollar.

 

I’m sure it’s a major concern for any of Trump’s advisers looking at the back row picture of the long-term faith and trust of the dollar in U.S. Treasury. And I think this idea of Saudi Arabia and the UAE already looking to the BRICS to sell oil outside of the dollar isn’t the end of the petrol dollar arrangement or agreement. But I joke many times, it’s like you take your girlfriend to dinner, and she’s looking at the waiter.

 

She may not be leaving you yet, but you see she’s already looking at the waiter. That’s a bad sign. That’s an awkward drive home.

 

And I think UAE and Saudi, already very comfortable talking to the BRICS, says that they’re not going to just do whatever the West says. They’re not going to just be the dog wagged by the tail of U.S. policy, U.S. monetary policy. That’ll be an interesting challenge.

 

Again, we’re all going to have to speculate on how other countries react. You know, the art of the deal is all about win, win, win. Getting the yes is all about compromise.

 

I don’t know if Trump’s capable of compromise. But the shift from the dollar, from, you know, trading oil and gas, I mean, how big is that for the global economy? And this is all against the backdrop where Trump’s saying, drill, baby, drill. We’re opening it all up.

 

Yeah, no, of course. And he should. We need to get our strategic reserves back up.

 

Look, it’s not necessarily about who has the most oil. It’s about who’s going to be buying the most oil in dollars. And if Saudi and the UAE consistently move a little bit further, step by step, drip by drip, towards selling oil outside the dollar, demand for that dollar shifts dramatically.

 

And that isn’t the end of the, again, not the end of the world reserve currency, not the end of the dollar, just significantly less demand. And less demand means they’re going to come up with more inflation to create more support for the bond market. So that is a major fulcrum point, the oil market, and not the end of the petrodollar, but the dilution of the petrodollar.

 

You could say the neutering of the petrodollar. This is a seismic move, which, of course, never makes headlines because it is so seismic. And once you understand that, again, it’s not a conspiracy theory.

 

I’m not making this up for gloom and doom gold bug selling my book. The oil trade is huge. The bond trade is huge, and they’re both happening at the same time.

 

So there’s major ramifications. Well, I mean, part of your thesis is that BRICS is not creating a BRICS currency, right? I mean, you’re kind of—this alternative trading and net settlement system and strategy, backed by gold. So unpack this a little bit.

 

Talk to me in the audience about what you see going forward with that. Well, again, I think as America pushes, the BRICS are going to push back. Because, you know, they’re 37 percent of GDP.

 

They’re nearly 45 percent of the global population. They have a massive amount of natural resources. They’ve created their new development bank, which is just the equivalent of the World Bank.

 

And they’ve got their CRA, which is basically the IMF. Now, granted, they’re about one-fifth the size. And America still has massive GDP and massive power, but China does, too.

 

They’re both dysfunctional in a lot of ways, but they both have massive power. So, again, what the BRICS are going to do, they’re not going to win overnight. They’re not going to win next year.

 

But they’re going to push back, and they’re not going to fold, no matter who’s in the White House. And so what they’re going to do with trade is, again, be more creative. Just like after Smoot-Pauly, they did that in the 30s.

 

Other countries got more creative. They’re going to retaliate, and they’re going to come up with new measures, and they’re going to accelerate their trading system. They’re going to accelerate the Shanghai exchange.

 

They’re going to accelerate this new Enbridge, whether they get the BIS’s support or not. Necessity is the mother invention. Desperate times, desperate measures.

 

China and Russia very much would like to cooperate. Certainly, China would like to cooperate. It would not like this Ukraine war to continue.

 

It’s hurting their trade in Europe. And they’re not all aligned. Brazil and India don’t think exactly like Russia and China.

 

And Russia doesn’t think exactly like China. But to answer your question, what they’re going to do is what we’ve already seen. And again, take the example, simple example of the oil trade.

 

China needs oil. Russia’s got it. Russia sends the oil.

 

China pays for that in yuan. Russia doesn’t want yuan, but it uses that yuan to buy products in China, which were once made in America. Whatever the difference is, they put that in gold, convert it in the Shanghai exchange for rubles, and get their money back.

 

And that’s net settling in gold, not creating a gold-backed BRICS currency. And that can be replicated and scaled throughout the BRICS universe, which is growing and not getting smaller. Of course Trump sees that.

 

Of course his advisers see that. He misspoke when he says, if they do a BRICS currency, we’re going to… It’s not a BRICS currency. They’ve said we’re not doing a BRICS currency.

 

That was in the headlines a couple of years ago in South Africa. I pooh-poohed that right away. That’s not going to happen.

 

But they are going to net settle. It’s more of a new system, a new strategy. It’s not a new currency.

 

Certainly not yet. We’re not even close. You talked about BRICS nations not being very unified.

 

And there are some that aren’t, you know, after the same things as the others. I’m curious, when you look at the mainstream media, for instance, I mean, who carries more power? Well, look, the mainstream media, I think, is almost becoming obsolete. Platforms like yours is what’s changing the world.

 

It’s what’s getting more people informed. Now, granted, alternative media has all kinds of crazy as well. But I think the mainstream media underestimate the intelligence of the people.

 

After a while, the people just started to say, I’m not believing this. Something’s off. I’m going to go look elsewhere.

 

You can see quacks and crazies and kooks all over the Internet. But most people are discerning. They can smell BS.

 

And they find their truth. Most of us, whether we’re in the equities, risk assets, precious metals, even cryptos, a lot of things I understand about crypto that make a lot of sense to me. But all of us are finding our voices or our audiences individually.

 

Because CNN or even Fox on both extremes have lost confidence. They’ve been so politicized. And this is something Neil Ferguson talks.

 

Look, when five companies owned the media, in the 80s there were 50 companies. Now there are five that own all the media in the U.S. That’s simply not rational. That’s simply not objective news.

 

And, again, not to be sensational, that’s Mussolini’s definition of fascism. In a democracy, when corporate-owned media is in bed with government, it has a politicized agenda, we all see it left or right, how politicized the media is. So we all have political biases.

 

But when it comes to markets, gold, oil, mines, math is math. Facts are facts. People can interpret the facts however they want.

 

As long as we speak to these facts and don’t just spit out our opinions, I think the Canadian, American, Australian audience is quite comfortable discerning for themselves what to do. What about China here? I mean, it’s going to be an interesting year for them. According to mainstream media, they’re in the biggest recession.

 

I’m not seeing a lot of people in Russia in recession either. I mean, what’s happening with these two nations? They seem to be, we’re getting alternative facts. Yeah.

 

Look, ironically, Russia has an, even though they have very high interest rates, they have very high wages, and they have very low debt. And their ruble and their markets are doing far better. You know, the famous statement, well, with these sanctions, Russia’s going to run out of money before the West runs out of energy.

 

That’s simply, quantifiably not true. And in Europe, I talk to Russians and Ukrainians all the time. In Vienna, in Austria, some come into France.

 

You meet them whether they’re in cabs or hotel lobbies or on airport lines. It’s fascinating what you learn, as you say, in the Stammtisch. Speaking to them.

 

Speaking to them. It’s very, very different than the media. China, of course, has a lot of problems.

 

It still has massive GDP and massive power. It has a banking crisis just as bad as our banking crisis. It’s on a QE respirator to keep yields down.

 

It has a terrible problem because it has to import food and energy. So, no, China is not just suddenly swinging through the roses singing the Von Trapp family love song. It’s not like everything’s going great.

 

But not everything’s going great in America either. So, as I said, it’s multipolar, multidisfunctional, but they’re also resilient, tough, used to suffering, and they’re proud, just like Americans are, in a different way. And it’s also a totalitarian state, which gives them more power, more risk sometimes, because they’ve got to keep the masses from pitchforks.

 

But they’re strong, despite all their dysfunctions, just like America is. So, it’s not the end of China. It’s not the end of the BRICS.

 

It’s not the end of America. It’s not the end of the world reserve currency. But we’re heading into some real iceberg-filled waters at top speed right now.

 

And with Trump at the wheel at high top speed, can you avoid them? Do we have enough light boats? Will we hit the iceberg? It really is a scary time. It’s exciting, but it’s a little creepy. Exciting.

 

The fear of the unknown, I like to call it. Okay, tell me about your gold outlook for 2025. A lot of people here wondering what that’s going to do.

 

I mean, we’ve had it, I think, up 3% year-to-date, and we’re only at the 20th. So, not too bad here. Yeah, no, of course.

 

I mean, look, we had a 27% year in dollar terms last year. Frankly, it’d have to go another 20% higher in inflation-adjusted terms just to beat its 19-year record. So, we’re not even really at all-time highs in real terms.

 

And compared to the broad money supply, oil is pretty much as cheap today as it was in the 70s. I mean, gold is as cheap as it was in the 70s. In terms of the year ahead, of course, I see it going higher.

 

I don’t see it going in a straight line. And I’ll caveat that by saying, if we do see a market mean reversion, when you’ve got the Buffett Index at 200, and you’ve got a narrow market, and NVIDIA insiders, I know, every hedge fund manager I know is dumping NVIDIA, dumping tech. Some big names.

 

And that’s not selling my book. That’s just a fact. That doesn’t mean I know NVIDIA is dropping.

 

But there is a lot of risk and overvaluation. The 200% GDP, we’re really at a tipping point. And the Fed isn’t as dovish as it was a year ago.

 

I’m far more bearish this year on the markets than I was last year. If markets truly tank, and not just a 10% or 20% correction, but a real uh-oh moment, look, I agree that gold, anything that’s not nailed down, goes down for a while, including Bitcoin, including tech, certainly the S&P. And gold can retrace.

 

But as we’ve seen, and I see more and more, it doesn’t go that far down, and it retraces much faster. More importantly, look, I see no end to the real thing that’s driving the gold price, obviously central bank purchasing, but it’s fiat currency debasement. And if we have a deflationary moment, the central banks around the world will react concomitantly to print more money.

 

And in a really worst-case scenario, if we have a Bretton Woods 2.0, like the IMF telegraphed in 2020, even a new debt jubilee brouhaha after a real global crisis, I’m saying that’s going to happen. Even if the worst-case scenario happened, they’ve already told us that the new currencies that come out of that are going to be gold back. Either way, gold wins.

 

It doesn’t mean it goes in a straight line. I’ll never say that. Goldman Sachs is looking at 2,900.

 

I’m looking at 2,900, 3,000. But again, I invest for 20, 30 years out. I invest for my children and my grandchildren.

 

I never look at the daily price. I’m not a trader. I’m no good to a trader.

 

But for the reasons that I own precious metals, honestly, I’m not trying to be smug. I don’t look at the daily price. I just know it’s going to hold its value better than an ice cube, which is a U.S. dollar, Swiss franc, euro, Canadian loonie, whatever.

 

They’re just paper money. Before I let you go here because you’re a busy man, I’ve got to ask you your biggest risks that you’re looking at. I know that there’s a whole ball of them, and I know we’ve been talking about this tipping point throughout the year and going into next.

 

What’s the biggest risk this year in the market? Oh, look, there’s two. Well, inflation is really a debt risk. Debt and inflation are kind of tied together.

 

Debt, I don’t see any solution to that near term. I don’t care if Doge comes out swinging and fires everybody in D.C. That’s not enough. So debt risk and what that does to yields and what the central banks have to do to save them, to me, is inflation.

 

And the other risk is obviously geopolitics. Geopolitics and inflation. And I talk to a lot of family offices.

 

That’s the key discussion. And again, debt is very predictable. That’s very certain.

 

That is so certain. Trump, very uncertain. Geopolitics, very uncertain.

 

So I think a lot of us are looking at a certain certainty in one area. We know the debt solution’s not going to come fast and easy. And the uncertainty is Trump is a disruptor.

 

He’s going to move fast. And geopolitics, how the world’s going to react to Trump, how he’s going to react to them. And I hate to quote Donald Rumsfeld, the unknown unknowns that we don’t know about.

 

And those are the things that, I guess, worry me in terms of the safety of the world. Gold can’t save all those things. That just protects you from currency destruction.

 

But yeah, look, geopolitics and inflation, I mean… And Jerome Powell’s still in there. Jay Powell’s still there. What’s that mean for the Fed? We’ve got an upcoming meeting.

 

Well, again, Jerome is very proud. He’s a human being. He’s human all too human.

 

He’s not going to be bullied by Trump. Trump wants a compliant Fed. For him to get that GDP down, what he wants is lower rates and get the money printer warmed up, get it ready if I need it.

 

And frankly, I don’t think Powell has much choice. But Powell hates to be told what to do by somebody else, in particular Trump. So that’ll be an interesting clash of personalities.

 

I think there should be a whole other book just on the psychology of a Powell and certainly on the psychology of a Greenspan. They become different when they’re in the chair. But I like former Fed officials like Thomas Hernig.

 

He has similar views to us. And look, there’s still not a lot of room for Powell to do anything. Because the truth is, he can’t raise rates much higher when we’re at $36-37 trillion.

 

And we’ve already seen our fiscal deficit. This year, the American budget starts in October. The numbers have come in for October and November.

 

We’re already $690 billion in deficit, in debt. So we’re looking at trillions already in deficits before we even get started, before Trump even gets started. Powell doesn’t have much choice.

 

With that much debt, he can’t let rates go high to fight inflation. He’s got to print money to keep those yields down. So again, I don’t see any way out of that.

 

So that’s very certain. I don’t think Powell has that much flexibility. He really has two hammers, rates and balance sheet.

 

Every problem looks like a nail. He can either fatten the balance sheet, contract it, raise or lower rates. But eventually, we’re already seeing, even when he’s cutting rates, yields are going up.

 

The Fed’s no longer in control. The bond market is. And Trump has famously come in and said he wants to be transparent.

 

I’m curious if he’s going to come in and show us the actual data. I’ve had revisions all year being made. I’m curious how the economy actually is, him going into it.

 

Well, look, Scott Besson is refreshingly candid about the data. He was talking in front of the House about the deficit, the GDP. When Yellen was up there in front of the House, she couldn’t even tell you what the exact debt numbers were.

 

I’m sorry, Janet, but that was embarrassing. Scott’s a Yale guy, works at Starbucks. He’s smart.

 

He can memorize some data. But he also understands what that means. So I’ll credit him.

 

I don’t know how he’s going to solve it real quickly. But at least he’s aware. And I think that’s far more transparent.

 

I think Trump is promising anything but the cure to cancer right now. I think that’s too much. But you’ve got to love the positivism.

 

You’ve got to love the enthusiasm. But there isn’t a lot of transparency on the debt reality. I don’t think there’s a lot of understanding.

 

But I think Besson understands it. I think Powell understands it. I think Scott and Trump want Powell out.

 

They want a more Trump-friendly Fed. But technically, legally, the Fed is quote-unquote independent. But it’s not going to happen.

 

We’ll see. All right. Appreciate it, Matt.

 

Joining us here at VRIC, of course, the partner over at Von Greyer’s, right? We changed that name a little bit. Yeah, we did. About a year ago.

 

In honor of my great colleague and friend, Egon Von Greyer’s, who started our company decades ago. You thought I was trying to put the name on the door? Heck yeah. Why wouldn’t you? Okay, man.

 

Appreciate your time. Real pleasure. I’m Jeremy Savin.

 

For all of us here at Kidco News, we’re over at VRIC, the Vancouver Resource Investment Conference in beautiful British Columbia. We’re going to have great content coming up all week long. Hit the subscribe button.

 

We’ll see you next time. Kidco News special coverage of the Vancouver Resource Investment Conference is brought to you by Snowline Gold.

 

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