The Trump Tariffs Just CRACKED the SILVER Market (Uncut) 01-28-2025

The Trump Tariffs Just CRACKED the SILVER Market WIDE OPEN!!

If the metal is not in New York or in the U.S. yet, then they’re at risk of having to import that metal and pay the tariffs on it. Now that’s not 1 or 2 percent, even 1 or 2 percent with leverage could wipe a bunch of institutions out, but we’re talking about 25 percent potentially. So what has happened is since December, a lot of metal has been flowing from London into New York in anticipation of potential tariffs.

And so they’ve been scrambling, these traders have been scrambling to get the metal into New York in case they have to make a delivery on the metal when their contract matures. So just to give you some idea, there was a really interesting report by TD Securities, a senior analyst by the name of Daniel Daly, and he said metal is flowing from London to the U.S. on Trump tariff fears. And yet, I can explain this, but he said just 30 percent of the London silver is actually available for delivery.

You’re watching Capital Cosm. My name is Danny. Today’s guest is Peter Kraup.

Peter, thank you so much for coming on. Danny, it’s a pleasure. I’m looking forward to our chat.

Yeah, definitely. Peter is the author of The Great Silver Bowl and a 25 plus year investor in the precious metal space, as well as a lot of topics that we cover here on this channel. So I’m super stoked to have Peter on.

Peter, for people who may be coming across your work for the first time, if you don’t mind kind of giving us a brief background on your origin story yourself, and then we can kind of dig into key topics afterwards. Sure. So I published about, well, getting on almost three years ago now, a book called The Great Silver Bowl.

And really, it’s all about the opportunity of investing in silver. And what I do is, I mean, it’s really an approach where I try to allow someone who’s maybe a little bit familiar or even somewhat familiar, but get a good overview of silver, you know, and its role historically, its role with economically since, you know, about four or five thousand years and then how it’s used today, where you find it, and ultimately how to invest in it, how to take advantage of it. And even I’m, you know, I’m thinking way ahead, but at some point, how and when to sell your silver and your silver investments, because it’s going to be, I think, really a generational bull market.

But it will it will peak at some point. And you’re going to want to look for those signposts for when to ultimately sell and, you know, move into other assets that are less highly valued. I also publish a newsletter that’s on more or less a weekly basis.

That’s a paid letter called Silver Stock Investor. And I track mostly silver stocks really through there. It’s the only silver investment newsletter that I know of.

And I just launched about three weeks ago a free silver newsletter called Silver Advisor. And that really follows a few silver companies. It’s a growing list of companies that we basically what we do is we follow their news releases, all the news, material news that comes out from these companies.

We review it, analyze it, comment on it. And it’s all companies that we ourselves own as well. So we have an interest in these companies.

That’s why we follow them, because we like them. And so if anyone’s interested in it, it’s Silver Advisor. They can subscribe for free at thegoldadvisor.com slash registration.

And as I say, you know, the price is good. The price is right. Awesome.

Well, hey, let’s just dive right in here, Peter. For you right now at this very moment, what is most topical for you? What is the kind of like the headline story internally in your headspace? Yeah, I mean, you know, obviously there’s a lot going on geopolitically. You’ve got it seems like the world’s polarizing.

But if you look at what’s happening in people’s day to day lives, I think that, you know, if it really comes down to probably one word, and that is inflation, we’ve seen what it’s done over the last four or five years, especially since COVID hit. You know, the Fed kept saying it wants more inflation. And I don’t know if people can remember this far back, but it’s only about five or six years that, you know, rates were near zero.

And the Fed was almost panicking, wanted inflation to pick up a little bit. So they would keep cutting rates and stimulate the economy. Well, when COVID hit and they printed like crazy, we got that, you know, many times over.

And then rates actually ran up to about 9%. I think it was middle of 2022. And they’ve dialed back, but they really haven’t dialed back to anything close to pre-COVID.

We’ve been really somewhere around 3% for quite some time now, despite the Fed raising rates and other central banks raising rates to kind of cool the economy. They can’t seem to get inflation much below 3%. So I think that we’re going to see 3% eventually accepted by the Fed and others as the new normal.

They’re going to start calling 3% the new 2%. And we’re going to have to accept that. I also think that if you look at what’s been happening in the market, so very specifically, the Fed’s been cutting rates since September and they cut what we call 100 basis points.

So that’s a full percentage point. Now, something that I’ve seen recently is that it’s something that’s really never, ever happened, in fact, in the market. So when the Fed cuts rates, normally what happens is interest rates come down on bonds, for example.

And it makes sense. If the Fed’s cutting rates, it’s because they want to sort of stimulate the economy. And if you think a little bit further back, they had been raising rates since I think it was 2022 or so pretty aggressively to slow things down.

They thought the economy was overheating. So if they raise rates and then eventually cut rates because they’ve been raising them a lot and slowed things down, it’s normally because they feel the economy needs a bit of help. So they cut rates.

And the bond market usually follows and bond rates come down because lenders realize that, yes, borrowers need a little bit lower rates. We need to help them along and so on. But we’ve seen the opposite happen now since September.

The Fed has cut rates by 100 basis points, so a full percentage point. And I hope I’m not getting too technical, but in the 10-year bond, yields have gone up by a full 100 basis points, so a full percent. This has never happened before.

And really what it is, it’s the bond market telling us that they disagree with the Fed. They think that the Fed should not have started to cut rates in September. That the economy was doing just fine and that they’re essentially juicing the market without it being necessary.

And by doing that, the bond market is telling us that rates are going to start going up again. And that’s why you’re seeing this start to get priced in. So if the bond market sees rates going up again, in simple terms, it’s telling you inflation is going to come back.

And I’ve been saying this for about three or four quarters now, for about a year. I said, I think that by the sort of mid-2025, we’re going to start to see inflation bottom and start to trend back up. And if you look at the behavior of the bond market, it’s basically telling us exactly that.

This is what we should expect. And probably within three to six months, we’ll see that start to happen. We’ll see rate hikes start to come back into the fold.

We’ll start to see inflation start to tick up again. Which will precipitate rate hikes down the line. Exactly.

Exactly. Yeah. But here’s a really, really interesting aspect to all of this.

Now, we know that the U.S. is highly indebted, record levels of debt, not different from pretty much any country, especially the West. And as rates go up, the Treasury has to pay interest at higher interest rates on its debt. And we’re at a point now where the interest payments have become the biggest single cost for Treasury, which just gets out of hand.

Now, you get into this vicious circle where they need to print money just to pay the interest. So as you can imagine, that just snowballs. So here’s how I see it.

The Fed’s really in a dilemma. They can stop cutting rates, which they started in September, and which the bond market is telling us they probably should do, because if not, inflation will go up. But if they stop cutting rates and keep rates, let’s say, where they are right now, say 3%, 4% to fight inflation, that’s going to make the debt burden more difficult for the federal government to handle, because it will have to pay these high rates on their own debt.

It makes life difficult for Wall Street, because there’s a lot of borrowing going on on Wall Street. And it makes life difficult for Main Street, because of people’s mortgages and credit card debt, all that sort of thing. So that’s one option.

Stop cutting rates and help fight inflation a little bit. But you cause all these other problems. Or cut rates.

Continue to cut rates. Make the debt burden a little bit easier for the government through its interest payments. Juice the economy even further.

And if you do cut, let’s say the Fed does keep cutting rates and cuts them pretty low, that gives them room for eventually, when inflation comes back again, strong enough that they can raise rates. So if you don’t cut rates enough, you don’t have room to start moving rates back up. So let’s say they do that.

I happen to think that’s the likely path that they will take. It’s the path of least resistance. Let’s say they do continue cutting rates, even if they pause now for a while.

If they do that, they are going to juice the economy, perhaps unnecessarily. That’s going to bring inflation back, and we are going to end up in probably another wave of inflation that’s going to, I think, bring us even higher than 9% that we had in July of 2022. There are some fantastic charts that look at what happened in the 1970s.

That’s the best parallel. I’m sorry I’ve been talking nonstop all this time. But it’s all right.

This is the best parallel to what we’ve seen prior is the 1970s. And in the late 60s, early 70s, you had this. I’m going to do this opposite for your viewers.

You had this one first wave of inflation. It was kind of rounded and kind of smooth, and then it bottomed, and then it started to trend up. I think that’s where we are now.

So that second wave of inflation was considerably higher. And so here’s what happens. You get this inflation comes in.

The central banks say, oh, this is not good. Things are overheating. People are complaining, paying too much for things.

Salaries are getting too high because people want higher salaries to account for higher costs for cost of living. So this inflation wave comes up. They start raising rates.

It cools it down again. And then eventually they have to back off because things might slow down too much. And then you get this third wave probably that will come again.

So that’s really what happened in the 1970s. And we’re just over the first wave. It’s very likely we’re going to get a couple more waves of inflation.

And unfortunately, each of those subsequent waves was actually peaked higher than the prior wave. So if that happens again, the previous wave of July, the peak of July 2022 when inflation reached 9%, we could surpass that in the next wave. So that’s kind of scary.

So it’s looking like these are kind of the good old days right now while people are still complaining about the prices of things. I think we’re going to see all of that start to come back again. What we’ve experienced the last two or three years is going to come back and potentially even stronger.

Yeah, it’s really interesting, especially when you say that 3% is a new 2%. That might not seem like much, but compounded over time, that is a huge difference. You’re absolutely right.

Exactly. And that’s how it’s kind of sold to us. Oh, you know, it’s 3%, so something costs you $10.

It’s $10.30 next year. It doesn’t sound like a big deal or something that’s $100. It’s actually $103 next year.

It sounds pretty digestible. But as you say, this is on already high prices that have risen in the past few years. So now you’re adding, you could argue a lot of things have doubled in the last four or five years in terms of where they were prior, right? So now you’re adding, you’re still adding 3%, 5% per year on prices that have doubled.

So it’s very meaningful to people, and people really are struggling with this. So it’s not going away. People need to, I think, I think this is why we’re talking.

And that’s why I’m a fan of silver, of gold, precious metals, and commodities in general. Because if you look at, again, the best comparison is the 1970s. And I have this, I don’t have it in front of me, but I have this amazing chart that shows, it compares the S&P, the Dow, gold, and silver in the 1970s.

So for about 10 years, if you look at what happened with the indices, so this is the broad stock market, they went absolutely sideways. Zero gain in the S&P in 10 years, and that’s not even accounting for inflation. So if you account for inflation, it actually lost 70% in 10 years.

In the meantime, so let’s say apples to apples, without accounting for inflation, gold was up 14 times, silver was up about 28 times in that 10 year period. So silver actually doubled what gold did. And gold did really well up 14 times in the 1970s.

And resources were the absolute place to be that whole time. And I think we are coming into that kind of environment again. And bonds are really not at all where somebody wants to be, unless they’re very, very short term bonds, like money market type things, or one year treasuries.

That’s, you know, for safety and liquidity, that makes some sense. Much beyond that, I would stay away from bonds. And people need to look for other things in their portfolios.

And resources and precious metals really are the place to be for the next, I think, you know, 5-10 years easily. What about the fact or the notion that President Trump the other day said that he would demand interest rate cuts from the Fed? Is that just, you know, the art of the deal type of stuff, where he just kind of like starts off hot and heavy, and he’s trying to set expectations with the Fed. If we do get more rate cuts, like one of the scenarios you kind of pointed out, wouldn’t that also be a tailwind for tech stocks and the growth sector as well with like crypto and all those other guys? Like, how would they fare? I mean, granted, gold’s already ripping higher today.

I think we almost… Did we hit an all-time high today? You know what? I’ll be perfectly honest. All right, let me go and look at that right now. Yeah, I think we either hit it or got really close to hitting an all-time high.

Whatever the case may be, gold and silver are both ripping higher today. Yeah, you’re right. Actually, gold is $27.74 as we speak.

So I don’t know when your viewers will see this, but I think the all-time high on like an intraday basis is like $2,800. So we’re $25 away from that. It’s incredible.

You’re right. Very, very close to all-time highs. So it seems like gold is sniffing out this inflationary cycle that’s coming our way.

Where does that leave the growth sector? Where does that leave crypto? Do they also get a little bit of a tailwind from that? So maybe, maybe. I mean, you know, you can never really know. But what I will say is I think the odds are a bit stacked against the broader market for two reasons.

One is a lot of what goes on in the stock market is fueled by debt. You know, a lot of these companies to grow, to expand, they need to borrow. And if 10-year yields, like I was telling you about earlier, have actually ticked up when they normally should not, because the Fed’s cutting.

They should be following the Fed’s path, so to speak. And they’re not doing that, meaning they’re sniffing out inflation. And therefore, the bond market is demanding a higher return.

And that means that the cost to borrow is essentially going up. And, you know, these companies, these tech companies and all the others, they have to borrow, as I say, like everybody else. And they tend to borrow longer term.

Mostly, they’re not borrowing on the shorter end. And so their cost of money, so to speak, to borrow is going up. So that will hurt their profits.

And, you know, I think just yesterday or the day before, the S&P was at an all-time high. I think it was $6,100. And so, again, it’s not an automatic kind of thing, but the stock market’s at an all-time high as well.

In other words, that means that, you know, there’s maybe more downside risk than upside risk, because it’s very, very richly valued. And for the President to talk about rate cuts and wanting, he definitely wants a weaker dollar. And he definitely wants lower interest rates.

He’s a real estate guy. That, you know, all adds up. But technically, the Fed is independent.

And Powell has said that, you know, he ignores, you know, what politicians are saying they may or may not want. If that continues to be the case, then you’d expect them to, that should not influence them. Where I sort of defer from that is that, I can, you know, there’s, I think it’s something like at least $2 trillion of U.S. debt that’s renewing just in 2025 alone.

I saw a chart. Unfortunately, I don’t have it, but it was a bar chart that showed how much debt the Fed has to, sorry, the Treasury has to roll over each year. And that’s because, you know, bonds were issued in prior years and they’re coming due.

Now, Yellen, who’s the former Treasury Secretary, missed a really great opportunity. I don’t know why, but when rates were really low, she missed an opportunity, like I’m talking long-term rates. She missed an opportunity to roll over debt that was maturing.

She could have rolled over, you know, 20, 30-year Treasuries, you know, at like 2%, 3%, and she didn’t. She just kept rolling them over for short, instead into short-term, which was even lower, which made things a little bit easier, but now is causing a massive dilemma. Because, like I say, we’re having a huge amount of U.S. Treasury debt coming due this year.

And the Fed can look at that and will tell you, I think, with a pretty much straight face, oh, you know, we don’t pay attention to that. That’s not our problem. It’s not our concern.

Our concern is inflation, trying to control inflation, and maximizing employment. That’s their sort of dual mandate, which, by the way, are contradictory. But so they’ll tell you that they’re ignoring how much interest the government has to pay.

But I don’t believe that they actually do completely ignore it, because they realize that if there is so much debt that is to be rolled over, and because of their own doing, because of the Fed’s own doing, the Treasury has to pay that much more in interest because the Fed’s been raising rates, that they’re causing an even bigger problem. So that’s why, you know, before I was telling you the Fed’s dilemma, the two options, stop cutting, fight inflation, cut rates, and ease the burden for government debt, I believe they will take that path. Now, it’s going to cause bigger problems down the road, but nobody looks very far down the road these days.

You know, most, you know, if you look at public companies or you look at governments, people are elected for a term, maybe two terms. They barely look beyond a few quarters or a few years. And they know that odds are, by the time these problems show up and are serious, they’re long gone and there’s no accountability.

And that’s why I think that’s the path of least resistance. I would absolutely expect them to, if not immediately, continue to cut rates and kick the can a little bit farther down the road. The road’s getting shorter and shorter, but there’s some room left for now.

They will continue to do that, and it’s just going to cause a much bigger problem eventually. Yeah, I mean, I will tell you, it is amazing how far they’ve been able to kick the can down the road. I’ve been watching, you know, before I even started this channel, I’ve been watching this kind of content for quite a while, all the way back from 2010.

And it’s very interesting how they’ve been able to continually find ways to prolong the inevitability here. I want to talk to you about these tariffs that are coming down the pike, namely this 25% tariff that’s been talked about for Mexico and Canada. And as you all know, Canada is a big hub, as well as Mexico, for precious metals mining.

What impact does this have on gold and silver, given that now you’re going to have to slap on another 25% on any gold and silver imported into the United States from either Canada or Mexico? And I guess any other tariff that’s implemented in any other country that imports gold and silver. How does that impact? Is that a tailwind for the precious metals? It seems like it would be. If you’ve been watching my channel for a long time, then you know we talk a lot about protecting your wealth in uncertain times.

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Check them out. Yeah, I mean, that’s what we’re seeing. I mean, my focus is silver.

And from what I’ve seen, there are very similar things happening in gold as well, because essentially, you know, the impact would be about the same. And so what we’ve seen is that for the last couple of months, so once Trump started talking about these tariffs, and there was never a mention of any kind of, you know, potentially excluding things like gold or silver, for example, since that’s what we’re talking about, that these metals would be affected by that. So since December, we’ve seen… So here’s a little bit of an overview of what the market’s like.

So the biggest inventories of metal are in London, in England. And when you have, if your viewers are familiar with ETFs, you’ve got what we call physically backed ETFs. So it’s a way for you to buy silver, for example, through an ETF on the stock market, through a company where they use physical silver to back the units that you’re buying, like a share.

Most of the silver that backs ETFs, not all, but most of it is in London. And so that’s one issue. Another issue is that these markets are very leveraged.

Now, I personally don’t follow in a lot of detail the futures markets. So futures are where traders can actually have exposure to metals like gold and silver and all kinds of other commodities with leverage. So they could actually technically control up to maybe 10 or 20 times the amount of metal that they’ve put money down for.

So these contracts are contracts that, technically, they could ask for delivery if they buy a contract for, let’s say, I don’t know, 1,000 ounces or 100,000 ounces of silver, they could technically ask, and it matures in, let’s say, three or four months, they could technically, when that contract matures, they could ask for the metal in return. That’s almost never the case. It’s usually just used to have exposure to the metal.

And so you have some who use these contracts for leverage and to trade and because they speculate. And you have bigger companies, let’s say, like miners, gold or silver miners, who receive their income based on the price of the metal. So they produce gold, they produce silver, they sell it.

And they could be adversely affected if the metal price drops, right? Because, let’s say, in three or four months, they’re going to deliver X amount of ounces of gold or silver. If the price drops, well, they get less income. So they can use, they can actually be what we call short in the futures contract so that if the price falls, they actually make a gain that would offset their losses from selling the metal at a lower price in the future.

So I know I’m getting into a bunch of details, but here’s why it’s important. A lot of this trading takes place in New York. If the tariffs come in and some of these contracts come to maturity and they have to be settled and somebody wants the physical metal for an exchange for the contract and the metal’s not here yet, or when I say here, let’s say in New York, if the metal’s not in New York or in the US yet, then they’re at risk of having to import that metal and pay the tariffs on it.

Now, that’s not 1% or 2%. Even 1% or 2% with leverage could wipe a bunch of institutions out. We’re talking about 25% potentially.

So what has happened is since December, a lot of metal has been flowing from London into New York in anticipation of potential tariffs. And so they’ve been scrambling. These traders have been scrambling to get the metal into New York.

In case they have to make a delivery on the metal when their contract matures. So just to give you some idea, there was a really interesting report by TD Securities, a senior analyst by the name Daniel Galley, and he said metal is flowing from London to the US on Trump tariff fears. And yet, I can explain this, but he said just 30% of the London silver is actually available for delivery.

So if I may, I’m going to try and share a chart with you. And this will help explain things a little bit. So let me try and get this set up.

All right. So only 30% is up for delivery? Only 30% is up for delivery. And even that is debatable because… So is it usually the case that 100% is usually up for delivery? Or is it normal for only a certain percentage of this kind of stuff to be up? It’s actually normal.

So here’s a chart that I put together just a little while ago. So it’s pretty timely. Can you see this? Yep.

Okay, so great. So here, first top line is that London’s total silver in inventory is about 825 million ounces. These black bars are what silver ETFs hold.

So that’s about 525 out of the 825. So about 60%. The green part is actually what’s left over.

So what we call the free float. However, what needs to be available for daily trading, because these metals move around and so on, you need this liquidity, actually is 250 million ounces out of the 300 million ounces. That leaves just 50 million ounces if deliveries are required.

That’s historically very low. I’m going to show you another chart that is New York. Now, it’s similar, but there’s less total ounces because like I was saying earlier, more of the ounces are held in London for whatever reason.

So we’re talking about 300 million ounces in New York total inventory. And these inventories are split into what we call registered or eligible. So it’s only the registered portion of the inventories that are available for delivery.

And if you do the math, it’s about 23%. And that works out to about 70 million ounces. So again, a small portion of the COMEX silver stocks are actually available for delivery.

So if you have a scrambling to get physical metal, because again, you’ve got this concern about having to get your metal from outside of the US and having to pay suddenly 25% on top of the price, then people are going to scramble for what’s currently available. And I’m going to show you a couple of other charts. This is COMEX silver inventories.

So we’ve seen in the last, like I said, since December, we’ve seen this trend up very quickly so that this suggests very strongly that metal has been coming from elsewhere and being accumulated in New York. And if you look at this chart, which shows delivery, so this is metal that’s in New York, but being taken in physical delivery. So it’s actually coming out of the exchange.

And it could be anyone. It’s usually large banks or whoever, but that are saying, okay, it’s fine that I have a claim to this metal on the exchange. I want the actual metal and I’m going to stick it in my own storage vault.

And so this spike, which was at the end of last year, last month, shows that that’s exactly what’s going on. That not only are the inventories in New York growing, but despite those inventories growing or the metals growing in inventory, but it’s also eventually coming out of that inventory because people want to have control of the physical metal. And these are the deliveries in New York.

So we have something a little bit similar in Shanghai. I think they’re concerned about the trade tariffs as well. We’re seeing their inventories spike up.

And here’s proof of what you were asking about earlier in terms of the prices. So the bottom part of this chart, it has been a little bit higher for some different reasons. I think, you know, market tightness and production in China, especially of things like solar panels.

But in the last few months of 2024, I don’t know if your viewers can see this, but the premiums actually rose again to just under 10%. So in China, they’re paying 10% over what is being paid in the U.S. for an ounce of silver, just because they are so anxious to get their hands on it. And if you look back about a year, there was a president of a larger silver producer that told me that they sell about half their production to China, about half of it to the U.S. or to the West.

And they said that they see very, very clearly just how tight inventories are. He said the Chinese are coming to them and they’re saying they’re willing to pay two weeks in advance of delivery and they’re willing to pay a few dollars above spot price because they need that silver so badly. Most of it is to manufacture solar panels, which have become about 20% of all silver consumption today.

So solar has really become strategic in that sense, in terms of silver. Well, it seems like both China and the USA are incentivized to kind of keep the silver price down, is it not? With manufacturing being a key component, silver being a key component of manufacturing, as well as military equipment and things of that nature, isn’t there this mutual benefit to keep the price of silver down from the U.S. standpoint, as well as the China standpoint? Yeah, I mean, and I’ve heard some really good arguments lately about the military side of demand. So some people will say that it’s not accounted for, others will say it is accounted for in the yearly numbers of supply and demand, except that it’s not broken out specifically.

So it would fall under the electrical and electronics portion of industrial demand. But it is, in my view at least, it’s strategic. The requirements in two ways.

One is there’s no doubt that there’s a lot of silver that’s going into military applications and they could simply not do without it. It’s irreplaceable for many of these applications. Think about batteries, think about communications equipment, things like missiles.

I mean, I’ve heard numbers for Tomahawk missiles, for example, that require potentially up to 500 grams of silver, like half a kilo of silver in one missile. So once that missile is fired, you’re not getting that silver back. So industrial consumption, most of it is one time.

It ends up in the landfill or something like that. So you don’t recuperate it. And then the other side of it is the whole sort of green transition where obviously, you know, this is a big thing that’s being pushed pretty much globally.

And there’s a lot of that is mandated change. There may be some, you know, pullback on that, I think in the next couple of years, but a lot of it is sort of baked in. And so, yes, to your point, I agree.

I think that it is quite strategic. There would be, for sure, a lot of incentive to try and keep the price down. And so I’m asked often, you know, is the silver price manipulated? And again, I’m certainly not an expert in that aspect of it.

I don’t pretend to be. But what I would say is that I would agree that I think in the short term, in short time periods, that the silver price can and probably is manipulated. We’ve seen that actually proven out a few times in the last sort of 10 or 20 years.

So I don’t think there’s much sort of denying that. But in the long term, I don’t think that silver will be kept from going where the market needs it to go. And my best example of that is just look at the period from 2001 to 2011.

So people will say, yes, even during that time, it was manipulated, but it actually managed to go from about $4 in 2001 to $49 in April of 2011. So it did more than a 10X in 10 years. So, you know, I don’t think that participants who wanted, you know, a suppressed price were able to keep that from happening.

So that’s why I say that over the longer term, it will still trend where the market needs it to be. Despite the kind of pressure that you may have from the kinds of applications and the users who really need it in a strategic sense. I see.

And why do you… Well, I’m not gonna put words in your mouth, but do you see silver as having the greater upside relative to gold in this case for that reason? Or is it because of something else? I think that for, you know, silver is a… both a monetary metal and it’s an industrial metal. So it’s unique in that sense. You really cannot say that about anything else.

The closest ones obviously would be things like gold or maybe platinum, palladium, to some extent they’re used in jewelry, but both platinum and palladium are mostly used in industry. And gold is mostly used in savings and in jewelry. So not industrially, it’s too expensive.

So really silver is very unique, like I say, because it’s approximately 50-50. And I think both of those broader aspects of demand for silver are going to help it move a lot higher. So if we just look historically at what has happened in bull markets for precious metals, silver has always outpaced gold in a precious metals bull market, always.

It’s always come out with higher gains. It’s only that the gains tend to be more back-end loaded. In other words, it will underperform for quite a while.

And then in the sort of latter half or latter quarter of that bull market, when you can see that in hindsight, is when it outperforms. And the best example we have of a long-term market like that is the 1970s. Gold was up, I was saying earlier, 14 times.

Silver was up 28 times. So it actually doubled gold’s returns in that decade. But again, most of that outperformance came at the very end.

A couple of reasons for that. I think that more attention is paid to gold. It’s the king of many things, king of precious metals, king of safety, king chaos hedge, all that sort of thing.

It’s the reference point. So people will simply pay more attention to gold. And if people are not, you know, that maybe big followers of precious metals until we get into these exciting bull markets and they become eventually more aware of them later in the bull market, they look at gold first.

They see what gold has done. And gold, let’s just make examples, come up with some rough potential ideas here. So let’s say gold goes to ultimately $4,000, even $3,000.

I think it’s going a lot higher eventually in this cycle. But if it goes to $3,000, that’s going to, I think, and that’s not very far off right now, but these big round numbers are psychological triggers, I think. And so we’re going to see people start to pay attention a lot more to it.

And yet they’re going to look at gold and say, wow, geez, you know, gold’s gone from $250 in 2001. It’s more than 10 times now at $3,000. And especially if we see the stock market roll over, let’s say tech stocks start to, you know, underperform, broader markets underperform.

It’s almost absolutely guaranteed bonds are going to be a guaranteed loser for the next decade. And that continues. We’ve seen that happen over the last few years.

Bonds are absolutely not the place to be. It’s almost a guaranteed way to lose money, long-term bonds. So if you get this happening in stocks and people are looking for alternatives and they see that you’ve got these alternative investments that have really been stalwarts and they’ve been pushing higher and higher and higher and they pay attention because they see, you know, the media starts to pay attention because you have now gold at $3,000 and they say, geez, you know, maybe I should get some gold, but that’s kind of rich.

$3,000, what else can I buy? The natural alternative is silver. Everyone knows of silver, silver jewelry, silverware, whatever. People know of silver.

And let’s say gold is $3,000 and silver is $40 or $45 at that point. That’s a huge difference for unit cost, right? And they’ll say, wow, maybe I can get a lot more silver for my money for the same. If I’m buying $1,000 worth of metal, I’m getting a lot more silver for my money than I am buying gold.

And I think that’s kind of what happens. That’s the mindset. Then there’s FOMO as well.

People will see this becomes very exciting. It feeds on itself. And then people will say, geez, you know, silver has gone from $35 and it went to $40 and it only took a few months and then it went from $40 to $45 and it only took a few more months and people start to feel like they’re missing out on this.

And then it really feeds on itself. And then it really pulls silver higher. So silver also tends to be more spiky than gold in bull markets because you get these run-ups and then the corrections overall.

Over a long-term cycle, it does also trend up. If you remove the spikes, it does trend up pretty steadily. And then the big spike comes at the very end.

And like I say, that’s when it really outperforms gold. So, you know, for all these reasons, it’s definitely a place to be. I think people are well-advised to know and expect that it’s going to be volatile.

It’s going to be more volatile than gold. And if you talk about silver stocks, that’s another, you know, it’s exponentially more volatile. And yet it’s the volatility that brings the opportunity.

So if people, you know, get to know these markets, get to know what to expect, they can use that volatility to their advantage. And if they, let’s say, haven’t participated in it, and they see a spike and a run-up, and now they feel, oh, geez, I’ve missed it. Well, if it was very exciting and very fast, you can almost be guaranteed it’s going to correct.

Maybe it’s not a bad idea to wait a little bit, let things calm down. And let’s just say silver, I don’t expect this, but let’s say silver were to spike to $45 or $50 and then went back to, let’s say, went to $50. And then you saw it correct very quickly to $40 or $38.

I would see that as an opportunity. It really, when you get a quick correction after a relatively quick run-up, odds are that you’ve got people who bought right at the peak and they’ve seen it come down and they say, I’m out. So they’re not people who’ve bought with conviction because they maybe don’t understand the market.

So they get out of it quickly. That causes a lot of very fast selling, and then it pushes the price down. And that’s when things calm down is when you have your opportunity to actually get in or buy more if you owned some previously and you feel you want to have more exposure.

Well, this has been a fantastic session here, Peter. I want to give you the floor one more time to talk about anything else that we didn’t get to seemingly on this show. If not, then where can people find you? Okay, so if what I can do is that what I wouldn’t mind sharing is some charts that I had originally researched and happy to say others found useful.

So let me just share this with you. One of them is the how silver behaves when the Fed starts to cut rates. And here we are.

So this is the chart that looks at silver once the Fed starts to cut rates and what happens with silver within the first 24 months. So what we’ve seen, if you look back over the last, say, 20 years or so, we’ve had three cycles of the Fed cutting interest rates around 2000, around 2007, and then again in 2019 or so. And from the moment they start cutting rates for over the next two years, silver gained on average 32%.

So that’s really encouraging because the Fed started cutting rates back in September. And we have seen, in fact, we saw silver reach quite a high of $35. I think it was back in October.

So we saw that start to happen. It’s still higher than it was back then. And I think we’re going to see that $35 high probably revisited in the next few months, probably at least by mid-year, we’re going to see $35 revisited.

Even more interesting is this next chart. And I looked at, if you let the whole rate cutting cycle play out, so give it more time, and look at how silver performed in that environment. So if you look at, so silver tends to bottom, and you can only see this in hindsight, but when the Fed starts to cut rates, let’s say rates are at 5% and they, for argument’s sake, they end up cutting them to 1%.

And then you know, in hindsight, that’s where they cut to, and then they stopped cutting. So when they reached halfway, so let’s say that would be about 3%, that’s typically when silver bottomed, in that it’s price bottomed in that rate cutting cycle. The returns after that, even after they stopped cutting and they let rates go sideways, if you look at the bottom, that happened in the middle of that rate cutting cycle, until silver eventually peaked.

It could take a couple of years, it could take three or four years. The average return from that point until the peak was 332%, which is just tremendous. I mean, we’re looking at three prior periods like this, and the average was 332%.

So if you think about when they started cutting, back in September, silver was about, let’s say roughly $28 or $30, let’s say $30 for easy calculations. If it were to do another 330% gain, that would bring it up to nearly triple digits, somewhere around potentially $100. So it doesn’t mean it has to do 300% this time around as well.

Even if it did 200%, you’d still be looking at about $60 or $70 silver, which is just tremendous. And what that does to silver stocks, which have built in leverage on the silver price, it’s just phenomenal. And silver stocks, which is what most of my focus is, is a very, very small market.

I mean, and I’m not going to get into too much detail, but if you want quality silver stocks, you need to filter them out. A lot of companies will have silver in their name, but they’re not true silver explorers or silver miners. So anyways, that’s what I do in my newsletter.

And I focus on the ones that are what I consider true silver companies and also quality silver companies. And when the money starts to flow in there, it’s just mind boggling how quickly. I mean, I kind of hate to say this, but they could be like crypto.

I mean, they really can be absolutely just off the charts. It’s like one guy who’s an old timer in the newsletter industry likes to say, it’s like trying to get the contents of Hoover Dam through a garden hose. There’s just no room.

Yeah, Doug Casey says that all the time. Got it. Exactly.

There is just no room for the money to flow into. They have to buy into a few names and they go ballistic. So anyways, I don’t want to be sensational.

I just want to kind of summarize what has happened and what the potential kind of is. So yeah, I mean, it’s I think that and to be fair, this is something that I talk about in the book. Specifically, I give all kinds of examples how silver stocks have behaved in bull markets.

And there are two companies that are still today the two largest publicly traded, largest market cap publicly traded silver companies. One’s a royalty company, which means they don’t actually produce silver. They lend money to silver producers and one is a silver producer.

And at different times in the last cycle, from 2001 till 2011, one of them within a span of about three, I think about three years was up 16 times. These are the largest companies in the silver space. The other one in a span of about two years was up 17 times.

So to give you some idea, this is the kind of leverage you can have in the biggest companies in this space, which means technically amongst the lowest risk for exposure to silver production, let’s say, and you can get these kinds of returns. So you don’t have to go for the real sort of fireworks type of plays. These guys can still, these plays can still give you these incredible outsized returns.

Yeah, but you have to pick the right ones. It’s all about, they can be lottery tickets or landmines. I like to say that.

But great, great interview here, Peter. Thank you so much for coming on, my friend. Where can people find you? So the easiest way is, if you want to get an idea of the overall opportunity in silver, go Google the Great Silver Bowl.

That’s my book. You can find that on Amazon. What I call kind of like a real-time way of following the silver market is my newsletter, Silver Stock Investor.

Go to silverstockinvestor.com. I have my now free newsletter that is starting to follow more and more companies, and that’s Silver Advisor. You can go to thegoldadvisor.com slash registration and sign up there for that. Otherwise, I’m pretty active on Twitter at Peter underscore Krauth, K-R-A-U-T-H.

And I’m also on LinkedIn, Peter Krauth, so you can find me there and follow what I do. Fantastic. We’ll have those links down below, so be sure to check them out, guys.

Also, check out my partners over at ITM Trading to get a specialized consulting strategy call for completely free regarding your gold and silver acquisitions. Go ahead and give them a call. Link is down below as well if you’re interested.

And also like and subscribe to the channel so you don’t miss an episode. Comment down below, Go Peter Go, if you agreed with what Peter had to say. If you disagreed with anything, however, do let me know.

I do read the comments, so really interested to get your takes. And yeah, thank you guys for watching. Peter, thank you for coming on, and I’ll see you guys in the next episode.

Bye, y’all.