Systemic Crisis In Gold & Silver Markets (Uncut) 02-05-2025
Systemic Crisis In Gold & Silver Markets | Alasdair Macleod
I think that we are in the early stages of potentially of a systemic crisis in in the bullion markets. This is Kaiser Johnson with Liberty and Finance and these are the Miles Franklin weekly specials for February 3rd through February 10th 2025 while supplies last. This week we feature pre-33 AU $20 gold St. Gaudens coins at just $50 over melt per coin.
We also have backdated silver Austrian philharmonics at just $2.85 over spot. Backdated Canadian one-ounce gold maples are just $59 over spot and pre-65 junk silver dimes and quarters are at the lowest price in years at just $1.49 over spot. Pre-65 junk half dollars are just $1.69 over spot and one tenth ounce gold Britannia are just $29.99 over melt per coin.
To order our specials or any of the many other options we have available call us at 1-888-81-Liberty. That’s 1-888-815-4237. We’re available after hours and on weekends and we look forward to speaking with you.
Welcome back to Liberty and Finance. We’re always glad to have this distinguished returning guest Alistair McLeod based out of the UK is a former bank director. He was also formerly the head of research at a major bullion dealer.
He joins us this Tuesday February 4th 2025. Alistair thank you for coming back on Liberty and Finance. That’s my pleasure DK.
There’s been a lot of hoopla and brouhaha going on for the last week or two about deliveries and strains in the physical delivery of metals off of both the LBMA and COMEX. We’ve had stories of huge cross-Atlantic flight shipments of gold supposedly from London to New York trying to get squeak in underneath the dropping you could call it the trump curtain of imposed tariffs perhaps. There’s also been delivery delays even off of the COMEX.
It’s been difficult according to our back office staff in order to get even thousand ounce COMEX bars we’ve seen stories that instead of a few days delivery we’re talking four to eight weeks or more with uncertainty around physical delivery from both of those two exchanges. You recently wrote an article about what do we really know or what may be just smoke and mirrors as far as these exchanges having difficulty of keeping up with physical delivery demand. Can you clarify that for us and whether the justification the narrative that is so put front and center saying oh it’s all because of shifting metals around to beat the trump tariffs that were anticipated is why there are these huge backlogs of delivery executions.
Can you talk to us about what we are seeing what we’re hearing and what we know about that? Yeah I mean as always we don’t actually know the answer to this. I mean what we do know is that the media presumably tipped off by bullion banks and the LBMA whatever whatever have said that the reason that gold is running up and you’ve got these huge great premiums on futures relative to spot is because trump might bring in 10% tariffs or 25% tariffs against Canada and Mexico and so on. So there’s going to be a shortage of bullion.
Now I don’t actually buy that story. I can see some people maybe going into the market and thinking oh my goodness we better go and buy some futures to get hold of some gold before this comes in. But I would have thought that actually they’re in a minority.
Now that said I think that it could have triggered something else and to me that other thing is probably and I don’t know for certain but it seems to me this is the most likely candidate probably the increased pace of stand for deliveries on Comex. The level has actually been very very high and I think you know we have to bear in mind that the whole point about futures is that you know they’re not meant to end up in delivery. Futures are a credit market.
Nothing to do with bullion. I mean okay you know if you’ve got lots and lots of positions particularly short positions then it makes sense if you like to have some bullion in the background so you’ve got some sort of reserves etc etc. But basically this is a credit market.
It is not a physical bullion market. The problem is that for the last is really since Covid I think I mean certainly 2021 I noticed that these stands for deliveries in other words people deciding to go for physical settlement rather than closing out an expiring future. These physical demands as it were which are known as a stand for delivery have been increasing and increasing and increasing and so I thought well you know let’s have a look and see what the extent of it is and what I found was that in 2021 I mean we had 602.7 tons of gold stood for delivery.
That was actually probably the highest and that was in the wake of the Covid problem. So really between 21, 22, 23 and 24 there’s four years the total amount of gold bullion stood for delivery was 2113.9 tons. That is an awful lot of gold and if you look at the silver numbers the figure there is 25,122 tons.
Again a very very considerable sum. Since the end of last year in other words just going through January and the first few days of February we’ve had an acceleration in the rate of stands for deliveries of gold and that I think probably helps explain where the panic is. The reason this is important is that when it comes to getting delivery out of Comex vaults it’s actually very very difficult to do so.
It’s a long protracted process and not only that but literally today or yesterday there was a man who used to work for Sprott was describing what happened when they tried to stand for delivery for silver and what was meant to be a five-day settlement actually turned out to be a nine-month hassle with excuses and excuses and excuses and at one stage they asked for a bar list and nothing came and so on. So it was quite clear that this credit market was not really in the business of delivering anything. So now that we have as I said by the end of December the last four years over 2,000 tons of gold stood for delivery the question is how much of that has actually been delivered.
Now the experience of Sprott trying to get hold of its silver rather suggests that there is a hell of a backlog of physical which is being stood for delivery. Now let’s sort of I mean it is it has accelerated in the last you know in this year. This year so far it’s been running at a rate of over 2,200 tons for this year.
This is you know if the current level continues. So this acceleration I think is probably the straw that was breaking the camel’s back as it were. Now let’s put that to one side and look at it from the point of view of the people who are standing for delivery.
We don’t know who they are but I think it’s a reasonable guess to suggest that the majority of them have actually taken out their futures positions and have stood for delivery against those through the Globex facility which if you like is the 24 hour facility outside you know outside New York. So you’ve got all these foreigners who’ve got this stuff stuck in a Comex warehouse and they are now agitating to get their stuff out. Why? Because Trump has been elected.
They are very concerned about Trump. They’re concerned about the future of the dollar. They want physical possession.
I mean the Americans I mean this most sincerely as it were the Americans are not to be trusted as far as the foreigners are concerned. We’ve had in the past gold confiscation. You know you just don’t trust anything that the Americans say particularly if you’re a Chinese, if you’re Russian, if you’re you know in the global south BRICS and so on and so forth which I would guess quite a lot of these stands for delivery are.
So I think that’s what’s happened. We’ve got a panic and this is why they’re flying in huge quantities of gold from London and they’ve tapped out the London bullion market and so much so that there is now a four to eight week queue at the Bank of England to withdraw presumably leased gold from the Bank of England. So you can see that there’s a real panic on here and then this morning Reuters reported or it might have been overnight reported that gold has actually been coming out of bonds as it were what I mean the customs houses in India.
Now this is gold which has not if you like cleared through into the domestic market. What happens is that the big big big consumers of gold will buy bullion store it as it were in a bonded warehouse you know sort of you know under the sort of customs arrangements not paying tax on it until they have to when they then import it into the domestic market. Even they apparently have been sending gold back into Comex.
So you can see that there’s a huge huge shortage of physical gold presumably because these stands for delivery are now coming home to roost and that roughly I think is where we are. Of course the other thing to bear in mind is that while the crisis I think is in gold very very definitely if you look at the way it’s accelerated the stands for delivery have accelerated in the first month and two days this year. You can see why that’s triggered an enormous panic but you know gold you can move relatively quickly that is assuming that you can get it out of the warehouse which is the other problem as I said the Bank of England is taking four to eight weeks according to the financial times in order to release gold to lessees or you know an entity which might actually own it.
I think with silver it’s a different problem because you can’t really air freight silver. I mean we’re looking at you know the last four years something like 25,000 tons has stood for delivery. Now I mean you know you can’t put that on an aeroplane that has to be shipped so you’ve got an additional factor I think when it comes to silver and I don’t think that’s quite reflected in the silver price yet.
Silver is beginning to move a bit but you can see that this is I think I think in a nutshell where we are with this Donegan is I think that we are in the early stages of potentially of a systemic crisis in these markets in the bullion markets. This echoes a number of things that we’ve seen play out in the past they say history doesn’t repeat itself but it rhymes. For one thing the moment that these shortages started affecting delivery times we immediately saw the narrative appear.
This is the explanation. The explanation is people are just shifting metals from London to into the U.S. domestically to beat import tariffs that may be imposed by Trump and yet as you’re explaining it it sounds like it’s much deeper than that and actually the more credible story sounds like that the the way the dawning awareness on the part of people around the world mostly outside the U.S. has been going on for years now with sanctions against swift system or against people in Russia and China etc and now sanctions against other political adversaries that that Trump may be demonstrating to over and over again that if you don’t hold an asset that is has no counterparty risk you can be subject to being financially punished by the west and that that that is being demonstrated and played out so the rush which has been perhaps a slow rush and then increase accelerating from from central banks and large holders around the world into gold as the premier asset of basically strategic tangible reserve asset has been accelerating. You would like to address that specifically this phenomenon of the awakening of the human consciousness around the world primarily outside the U.S. that you must have gold in your possession or you don’t have access to your money.
Yeah that’s that’s right I mean we’ve been talking about this you know in the various interviews that we’ve done together for some considerable time and I think where we are is that there is a broad broadening realization that possession actually is very important. I think the as far as the global south was concerned the first inkling that this was actually very important came from when the American NATO attempt to cut off Russia from western financial markets by stealing and there’s no other word for it and I don’t apologize for using this word by stealing Russia’s bank reserves alerted everybody to this and in the St. Petersburg economic forum of 2022 this was something that Putin you know majored on in term in his speech and that was attended I think by over 80 nations and something like 14,000 representatives was something I mean this you know this was a very well attended event and the message was absolutely clear and he said you know you don’t want to hold dollars you don’t want to hold euros and if you’ve got any gold stored in the western vaults then get it out. So you know and I think that message is trickling down and of course the problem I think in you know sort of if you like in bullion markets generally is that the really big boys you know central banks and sovereign wealth funds and all the rest of it are pre-empting gold before it even gets to the market so the market is kept short of fresh supplies.
The only stuff that really comes into the market I guess you know is sort of from friendly sources but I mean you know China’s out, Russia’s out, various other nations I think in the middle of Asia are also out so you’ve probably got about I don’t know almost half the world’s gold mine output not reaching the markets at all and as for the rest I mean you know what do you do I mean if you’re really looking to pick up decent slugs of bullion I think what you do is you just get into the queue at the refiners and say let me have what you can when you can and I think that’s basically it’s happening to a greater and greater extent and of course it’s driven the spot price up I mean as we speak today we’re looking at 2840 and you know you’ve then got this problem on the top that you know the credit markets by which I mean forwards and futures over the counter and you know regulated futures those are pure credit markets and they haven’t you know the bullion banks and all the rest of it haven’t actually got their ducks in a row for such a move in gold. Interestingly I think it was yesterday there was actually on a rise in the price of gold the dollar price of gold there’s actually a fall in the number of outstanding contracts on Comex in other words it was rising despite what we would normally regard as you know managed money and other bulls liquidating their positions. So what you know this is actually I think it is actually quite a serious move and I think the point I would like to make is that the idea that you can sort of say well you know it’s moved so far and it’s bound to get a reaction and all the rest of it all that reasonable sort of analysis I think counts for absolutely naught.
The other thing that this reminds me of is what we’ve heard from author David Rogers Webb the author of the great taking and others who basically can underline say that you’ll own nothing and be happy turns into nothing in the bank is yours nothing into the brokerage is yours and it’s starting to sound like perhaps nothing in Comex or LBME is yours and that that that dawning revelation is causing those who seem to be savvy to scramble for physical possession. Can you talk to us a moment about this phenomenon of counterparty risk in the in the face of the world’s reaching out for their for their gold back but the like for example the western investing public has shown almost no interest still in physical possession or in even investing in mining stocks. We’ve heard some theories from some analysts that well the last time that gold the gold price rose the costs because of inflation during the COVID era for example didn’t allow the miners to enjoy the profits that they otherwise would have so that the investing public is still off chasing other things like crypto or tech stocks that sort of thing.
But do you believe that in this environment there’ll be that awakening that reaches the hearts and minds of more people saying there is only one real money in town and I’ve got to get my piece of it. In other words will it be with you see this spreading this contagion spreading beyond the bullion the central banks of the eastern world in the southern hemisphere and going into the hearts and minds of ordinary people which I think is one of the missions that you’ve had for at least the last couple of years. Yeah I mean yes it is extraordinary that here we are with gold shooting into new high ground and the amount of interest in you know if you like the western alliance amongst the people is virtually zero.
It is extraordinary. The interest is all in Asia and associated nations let’s put it that way. I think that part of the problem is that nobody actually understands money.
They don’t understand that everything is credit other than gold and we’ve had 50 years of propaganda from the US treasury saying that gold is no longer part of the monetary system and the dollar is you know is now money which is bill propaganda but people tend to believe it. So it’s a long hard battle getting people to understand what is actually going on. You’ve got the debasement of the currency.
To give you an idea of how bad it is in the UK bear in mind that in 1932 before the second attempt at a gold standard was abandoned one gold sovereign coin was worth one pound and you could exchange it at the Bank of England for one pound. So you take your one pound note and you exchange it at the Bank of England for one sovereign and you could do that on demand. That was the whole point about the gold standard.
So that was 1932. Today the value of a sovereign is over 540 pounds. That gives you an idea about the debasement of sterling credit over the last 90 years.
Now it’s a process which is now accelerating. This is an important point. People think okay we see prices rising and all the rest of it.
Inflation is what you know CPI is what 2.3% or something. I mean for a start you can’t measure the debasement of a currency that way. The only way you can measure the debasement of a currency is by comparing it with real money which of course is gold.
And we’ve seen in 2024 we’ve seen that you know the purchasing power of the dollar measured in real money which is gold has declined by over 25%. That is an acceleration on the previous year. What we’re now seeing I think potentially is a crisis in western markets whereby the credit system has entered into gold commitments which it cannot deliver.
And what that means is that the value of the dollar the purchasing power of the dollar is going to decline even more rapidly because people will want out of the dollar and into real money. And then there’s a further problem because as soon as people start really doing that in earnest you’ve got all the debt that needs to be rolled over and nobody to buy it. So what happens to the value of that debt? Well it goes down in other words the yield rises.
And we are likely to see the yield on the 10-year US treasury rise through 5% quite quickly. And I suspect it will be on its way to 10% before very very long. Now don’t ask me for a time frame on that.
But I think the point worth noting is that when it gets through 5% or if it approaches 5% and they were well 4.6% at the moment then you’re going to see an equity market crash develop. Why? Because we are in the biggest credit bubble seen in history. That is a consequence of going off a gold standard and not allowing successive bubbles to actually properly deflate, wipe out bad credit, bad debts and all the rest of it.
Debt being the other side of credit. But just postponing it postponing it postponing it. Do you remember when we used to say they were kicking the can down the road? We’re not saying that anymore because we can’t kick it down the road any further.
It’s not a phrase which is in common use now. You know it’s not an option. So with that in mind what happens to credit? Well when it starts collapsing there’s nothing the Fed or anyone else can do anything about it because this bubble is now a tsunami going to break on all our shores.
It’s a dollar-based double bubble and the election of Donald Trump, well in many ways I would very much support him, I think has exposed a horrid ignorance at the highest levels and I mean presidential levels about what money is, particularly with him backing cryptocurrencies. I mean he’s got no idea at all about that or indeed economics. He’s getting into trade wars.
Now okay if you know people are saying that Donald Trump was using this as a negotiating tactic against the Mexicans and the Canadians and that’s right rather how he’s putting it but actually what he wants to do is he wants to replace income and corporation taxes with tariffs. So the idea that this is you know he’s going to back off and all the rest of it, forget it. I mean he might back off from you know extreme positions but he’s going to want his pound of flesh through tariffs and we’re talking about a world which is very interlinked through supply chains and everything else including I mean just you know British industry.
I mean Apple a very very good example. You know I bought a new iPad the other day, made in China, designed in California but made in China. How’s that going to work out? You know and in the past of course a lot of American industry has ducked this by moving production or assembly or whatever into Mexico and of course Mexico is now you know in Trump’s sights.
So yeah this he is going to destroy the global economy. I mean that’s what it boils down to. So if you’re sitting here and you’re analyzing this from outside and particularly if you’re not sympathetic to Trump which most foreigners are not, you will think I don’t want dollars, I want gold, I want real money and that’s why there is now a run on the system and because gold is real money and all the rest is credit, this is extremely dangerous as far as the mountain of credit is concerned and a lot of that mountain is in derivatives.
I mean we’re talking about hundreds of trillions of positions with counterparty risk in there which well certainly in the over-the-counter derivatives, I mean it’s counterparty to counterparty. When you look at the futures that’s you know you’ve got a central counterpart in the form of Comex. Is Comex going to survive this? Well this is I think it’s a force majeure maybe in prospect if this really does deteriorate and this is where David Webb’s book The Great Taking comes in because what happens, I mean you know The Great Taking is taking what you think you own in terms of bonds and equities and all the rest of it registered through a central counterparty and that central counterparty taking that because they have a prior lean on it as it were from the issuers direct with the issuers, they would take that and use it as collateral basically in the event of a market meltdown, credit collapse, whatever however you like to describe it.
You know okay they’ll still leave it to you but you may not quite like the idea of say your gold ETF being taken from you and deployed for you know for other things without your permission. I mean the fact is you don’t own it you know and not only do you not own it but also the central counterparty doesn’t own it but they’ve got a piece of paper that says they can use it as collateral. That is basically where we are and I think this crisis is really beginning to hot up.
I do see higher interest rates as a result of the credit bubble deflating. That will take down capital markets big time and getting back to what you were saying about you know why people just don’t understand you know the gold is money and all the rest of it. I mean you look at the mining sector and the big brokers have spent nothing on researching mines at all.
I mean to them it’s been a dead duck for so long. They’ve been chasing you know cryptos and you know Nasdaq stocks and all the rest of it. That’s where their research effort really is.
Not the research in high-tech counts for very much because that’s all momentum stuff rather than value stuff. But you can see that with nobody really covering the mining stocks that is why there is so little interest in the mining stocks. That is obviously going to change and I suspect that with gold going over $2,800 and I think maybe even going over $3,000 in the not too distant future there’s going to be a wake-up call for people who don’t have gold, don’t have mining stocks and thinking what do we you know we better you know equities are tanking, it’s not doing terribly well, my goodness what do we do with our portfolios? And I think you’ll find that investment managers will rebalance by which I mean they will sell down the momentum stocks and they will look for value elsewhere.
And there’s one sector which is absolutely screaming out value and that’s the mining sector and I think that’s where they will go. But they’ve got to be forced into, they’ve got to be scared into selling you know the momentum stocks first and incidentally you know I’ve run charts in the past comparing Bitcoin with Nasdaq there’s absolutely no doubt at all that it’s the same cohort in both markets and when Nasdaq crashes I mean I remember was it in what they call the great financial crisis which will be minor compared to the one which is potentially ahead of us. I remember how Nasdaq really plummeted I mean I’d lost I can’t remember what it was top to bottom but I mean you look at sort of a it’s 80% of something like I mean you know if that happens again and it will happen again and I think it’ll be more than 80% you know where’s your Bitcoin gone.
And again I think that a lot of people have gone into cryptocurrencies as an alternative to gold and they’re going to get a very very nasty shock. It’s just totally the wrong thing to do. I mean okay if they banked some you know they banked some of their crypto gains and moved it into gold I mean well done them but most of them will go to bed with this one you know they’ll lose a lot basically.
You’ve brought it from the initial crisis point which is perhaps the stone being removed from the dike of the shortage on the Comex and LBME shortage to the overwhelmed difficulty delivering. You’ve brought it all the way up to the geopolitical big picture of foreigners distrusting the dollar distrusting the the western exchanges pulling off their stuff then you’ve taken that all the way up to the derivatives mountain that’s been built on top of the U.S. bond market etc. which in loss of faith and credit in all of these derivatives could cause that whole system to come crashing down and now you’re bringing it back down to the individual and the choices that are facing them.
Ironically at the retail investor level right now there has been so little demand as you’ve pointed out that availability is more flush than it’s been in a long time for retail investing bullion. Premiums are lower than they’ve been in years for retail investment bullion so it’s like this uncanny opportunity that the big boys are making their big moves and yet the little individuals I mean sure there are those dedicated stackers who got their religion a long time ago and they’ve been plunking away and taking advantage of these low premiums and availability but for the ordinary retail investors who are just waking up to this there seems to be this very potentially brief moment of opportunity when there’s still something to be had at low premiums before the crowds wake up. So we hope that and this is one of part of your mission is to wake up more and more moms and pops and more people in the ordinary walks of life to protect their themselves so that they don’t get wiped out in this potential great taking that’s coming their way.
Any more thoughts for ordinary individuals? I guess you should say what about your place where you’re right all the time now on your sub stack is a good place for people to get started. Absolutely I mean I think if I can carry on the point that you were making you know the moms and pops will be sort of I have no doubt looking at gold through investment eyes they will see that it’s gone up and they’ve probably missed it and they wait for it to come back. In fact I had an American friend who lives in the village here who said what have you been doing to gold? He apparently wanted to buy some he thought it would come back and it didn’t.
Your fault. It’s not an investment it’s not an investment you know I mean the point is that it’s it’s not gold going up it’s the dollar going down and if you can understand that then you understand that gold is not an investment it is safety that’s the whole point about it. It is getting out of risk and getting into safety that’s the whole point.
So price is actually immaterial. I mean unless you’re playing unless you think suddenly there’s been an improvement in the outlook for the dollar in which case sell gold by dollar but personally I don’t see that. I see this huge great credit bubble which is deflating and it’s going to be punctured and it’s going to people are going to lose an awful lot of what they think is money they will lose a lot of value.
So I think that’s the thing really to hoist on board you know that it’s the dollar going down and yes I mean you know the reason I sort of really moved from head of research gold money was because I mean that audience sort of pretty well understands the argument. I wanted to hit a wider audience so we’re looking at social media we’re looking at a substack channel for really not much money very little money you know a starbucks coffee once or twice a month you can actually understand what these risks are understand the difference between money and credit what is money and what is credit and I think it could be a means of saving an awful lot of your wealth if you do actually understand that. So that if you like is my mission and you know the series of broadcasts that we’ve done together has been a wonderful opportunity for me to try and get that message across.
Andy Sheckman quotes someone with the saying that during a major deflationary depression if markets come crashing down in the derivatives perhaps led by the derivative markets or coincidental with that it’s not who makes the most it’s who loses the least that’s going to end up coming through the best. So that protection the ability to hold on to what you have worked hard for and earned and set aside for either for your own future or that of your children and grandchildren your family will be paramount in getting through the next decades. Alistair you’re a big part of that for our audience so folks if you haven’t already checked out Alistair’s substack go to substack and look up how will they find it what’s the name of your substack? It’s alistairmcloud.substack.com and you know probably if you google it google McLeod finance that should take you there it’s a bit easier to spell them than Alistair McLeod.
And remember folks if you’re not part of our free newsletter and only a few thousand of you are we have over 100,000 subscribers and more than twice that many viewers on YouTube alone let alone Brighton Rumble and SoundCloud all our other outlets so more than half of our viewers are not subscribers all you gotta do is click the little subscribe button click the bell you’ll get informed by YouTube but if you don’t want to miss a single episode with Alistair or any of our other guests here on Liberty and Finance we publish every day of the week Monday through Saturday and also put our weekly specials in there make sure you just go to libertyandfinance.com that’s our website libertyandfinance.com it’s all free just put your email address click submit make sure you confirm on the confirming email you’ll get one email per day in your inbox with our latest interviews with Alistair or any of our other guests and any weekly specials Alistair on behalf of all of our viewers and subscribers thank you once again for joining us here again on Liberty and Finance. That’s very much my pleasure. This is Kaiser Johnson with Liberty and Finance and these are the Miles Franklin weekly specials for February 3rd through February 10th 2025 while supplies last.
This week we feature pre-33 AU $20 gold St. Gaudens coins at just $50 over melt per coin. We also have backdated silver Austrian Philharmonics at just $2.85 over spot. Backdated Canadian one ounce gold maples are just $59 over spot and pre-65 junk silver dimes and quarters are at the lowest price in years at just $1.49 over spot.
Pre-65 junk half dollars are just $1.69 over spot and one tenth ounce gold Britannia are just $29.99 over melt per coin. To order our specials or any of the many other options we have available call us at 1-888-81-LIBERTY that’s 1-888-815-4237 We’re available after hours and on weekends and we look forward to speaking with you.