Gold’s Delivery Dilemma – A Price Hike Catalyst? (Uncut) 02-08-2025

Don Durrett: Gold’s Delivery Dilemma – A Price Hike Catalyst?

Welcome to Palisades Gold Radio, I’m your host, Tom Bodrovich. Joining me today is Don Durett, author, investor, and founder of GoldStockData.com. Don, thanks for joining me today. Thanks for having me on, Tom.

I do a lot of podcasts, but yours is one of my favorites. Well, I appreciate that, Don. And it’s always good to catch up because you and I always kind of go back and we revisit some of the same ideas.

We’re in a very chaotic, a very transitional time right now in not only America’s history, but world history as well, I think. And maybe I’ll just leave it to you to figure out where you want to start today. Of course, I have a lot of notes, but based on our discussion before we hit record here today, I’ll leave it to you to kind of kick us off here.

Yeah, so gold hit an all-time high today. I think it was, we’re only on Wednesday, I think this is the second all-time high that we’ve hit. The spot price- And we’re speaking on Wednesday, February 5th.

Yeah, so the spot price, I saw 2,863. So the futures is like 2,900. So we’re hitting these all-time highs in gold and silver is trying to move, but it’s at 32, I have 3,226.

And the HUI is up to 328. Now I was, and a lot of people are waiting for this breakout. I mean, we’ve been almost over a four-year correction in gold and silver.

We go all the way back to August 2020. I mean, it was a long time ago when we had our last breakout in silver and gold. So we ran from, I mean, we’re going all the way back to 2020, from April 2020 until August 2020, gold, I mean, silver went from 1,850 to 2,900.

And silver, I mean, gold, I forget where it actually topped out, maybe 2,600 or so, and the HUI, I think it went to 365. Yeah, 365. So we’ve been waiting for four plus years for basically to make that run.

So we made that really hard run there in the summer of 2020. And now we’ve been in a four-year correction. Everybody’s waiting for that to break out.

And they’re thinking this is it. And now we had the LBMA news last week come out that said that it’s taking four to eight weeks to get delivery from the LBMA. So the LBMA, it’s not a futures market.

It’s an over-the-counter market. So you’re supposed to be able to buy it today and get delivery in one to two days. Historically, that’s how it’s worked.

Because all they do is just, you might not get it today. It’ll basically be in your possession in one to two days. I mean, I don’t know if they can actually deliver it to you in one to two days, because you might buy a ton of the stuff.

But usually, I don’t know exactly what they mean to the difference. But they’re saying now it’s going to take four to eight weeks, which is unprecedented. Craig Kempke came out with an article.

And he says that he thinks that the LBMA is out of gold. And that’s very interesting. We’re going to find out in the next one to four weeks.

And then the other thing that came out today was the lease rates spiked severely up to 5%. They’re usually like 1% or less. If you look at the chart, it’s like 0% to 1% to lease out gold.

It jumped to 5%, which is totally unprecedented, I mean, if you look at the chart. So something strange is going on in the gold world that potentially could change my outlook on gold and silver. Because what I’ve been saying is that I’m bullish for February.

I was bullish for January and February for the S&P, the stock market, and gold and silver, because Trump was coming into office towards the end of January, January 20th. And the markets have reacted positively for Trump. So I thought, we’re kind of in wait mode.

Nothing’s going to happen until the 20th. And then once Trump gets into office in the 20th, you’re going to get a honeymoon period. And then so I figured it’s going to last at least through February.

So our look in January and February looked really positive to me. And so the S&P is above 6,000. So as long as it’s above 6,000, it’s very bullish for the stock market.

And gold has been following the stock market since March of last year. So for almost a year, gold and the stock market have been hitting all-time highs, which is very unusual. It’s unusual.

Usually, if the stock market is doing really well, gold is doing the opposite. In that situation, people are saying, I don’t need any gold. I’m fine.

The economy is good. Stock market is good. So gold is the canary saying, I don’t think the economy is good.

So I’ve been saying that I thought that this run, because I did expect a run in January and February, this run, and we’re having it right now, is going to be a fakeout and not a breakout, meaning that, yeah, it looks fantastic, but you’re going to get rug pulled at the end of it. And I still think that rug pull is coming. My targets are 2,350 to 2,450 on gold, and we’re like almost 2,900.

You say, Don, that’s a long way down. And then my silver is 2,600 to 2,700, and we’re at 3,200. And then the HUI, I’m like 250 to 265.

We’re about 325. So I’m still expecting that rug pull. But now that the LBMA has these problems, this is really good for us as gold miners, because that implies that if that problem doesn’t get rectified, gold’s probably going to keep trending here and get above 3,000 maybe in February.

And then if it gets above 3,000, it depends on how high it could go. Gary Savage said it was going to go 3,100, 3,200 on this run through March. So he’s bullish all the way through March.

And I was like, well, the only way you’re going to get that is if the S&P doesn’t get rug pulled. And I’m going to go over all the reasons why I think we’re going to get rug pulled on the S&P. But I’m talking about this LBMA because that is the one wildcard that could prevent a major correction in gold, silver, and the miners when the rug pull comes.

So we’ve got to keep an eye on the LBMA and these leasing rates, how the futures, like right now the futures, you’re seeing this big gap between spot and futures. Futures are much higher. And the reason why is because people think it’s going to keep getting worse and worse, this LBMA problem.

That’s why you have this big gap, which you normally don’t have. We have this huge amount of gold moving from London to New York. And the COMEX inventory has been getting massive.

It’s like more than doubled or tripled in the last two months. Well, that’s what I wanted to ask you about. Sorry, Don, to cut you off there.

Is it possible that the gold coming out of the LBMA is being brought into the US in fear or in anticipation of these tariffs? I think the answer is partially yes, but not 100% yes. I think definitely part of it was the tariffs. But as anything else, it’s a little more complicated, right? So it’s like that it didn’t take much for it to go over the edge.

And then once people realize, uh-oh, it’s almost as if once the tariff said, OK, give me 50 tons of gold, and the LBMA didn’t have it. It was like they didn’t even ask for very much. Give me 50 tons.

And it’s like, uh-oh, we don’t have it. And then it blew up. Then they’re like, you don’t have it? Then give me 100 tons.

Yeah. Like, give me more, more, more. Because if you don’t have it, then, uh-oh, I’m not going to be able to find it.

So it’s a combination of tariffs and shortages. But probably a third factor that we don’t see, because there’s always a lot of complexity here. But I do think that the tariffs were the trigger here.

Because 10%, 25% is a lot. When you’re talking gold and silver, 10% on $30 silver is $3. 25% tariff on $30 is like $35.

It’s huge. And they put a 25% tariff on Mexico and Canada. Basically, the refiners, they’re going to have a hard time passing that on to their customers, really hard.

And they won’t be able to outsource it from other countries. So all this stuff starts breaking up, causing problems. So let’s juxtapose those three issues with gold.

And how do they apply to silver? Because you said that silver, you think, is going to explode here as well. So I haven’t been aware of lease rates and or shortages for silver particularly. So how do we, just because it’s related to gold, is that what you think is going to create demand in silver as well? Well, I’ve been saying since, I think, 2012, that silver shortages are inevitable, because you have this competition between the fabricators who need 70% to 80% of annual silver supply and the investors who keep competing with the fabricators.

And last year, this year, we’re going to have a deficit of 200 million ounces. Well, why do we have a deficit of 200 million ounces? Now, the deficit is the difference between production that comes out of the ground plus recycling. That’s your supply versus demand.

So demand this year is over 200 million ounces of silver above. Why? Investors. Investors are basically saying, give me some of that silver, because it’s so cheap.

And that’s not going to go away. So what’s going to end up happening is, I think, investor demand is just going to increase when the fear trade begins. So we aren’t even at a fear trade yet.

We got gold. This is kind of amazing. We got gold at $2,850 spot, and we don’t even have a fear trade yet.

The S&P is $6,000. What’s going to happen when the fear trade finally kicks into gear? That’s when silver is going to go nuts. Right now, if you own a coin shop, 5 to 1, 7 to 1, 10 to 1 of your customers that come in the door are selling their silver instead of buying it, selling their gold instead of buying it.

5 to 1, 7 to 1, 10 to 1. That’s what it is right now, because there’s no fear trade. Nobody’s in there buying it, because they’re like, uh-oh, I need to get my hands. Now, maybe the gold, now maybe people are going to go in there and start buying some gold.

But silver, no. Nobody’s buying silver yet. But when they do, when the fear trade does begin, you will not be able to buy any silver locally.

They’ll be out of inventory in a week once the fear trade kicks in, because they just don’t keep a lot of inventory. It won’t take much to wipe them out. So the first thing that happens is all your coin shops, there’s usually only one or two in each city.

They’re out. Then people go on the internet. And then once the 5-ounce, once your rounds, 5-ounce and 10-ounce bars are gone, it becomes unobtainable.

So this is how you get your shortage. Once it’s unobtainable, once you go to AppMex and they say, out of stock, 5-ounce, 10-ounce bars. But you can order them.

We’ll let you order them, but you’re not going to get delivery for four or eight weeks. That’s kind of the- Sounds familiar. Unobtainable, right? That’s what happens.

But this is what happens. The refiners, so AppMex, they need 5- and 10-ounce bars. So the refiners go out there and they buy 1,000-ounce bars, which is your industry standard.

They buy the 1,000s and they turn them into 5s and 10s. Well, when they do that, they suck the 1,000-ounce bars out of the wholesale market. And then suddenly, the big fabricators can’t find any 1,000-ounce bars and then you have a shortage there.

All it’s going to take for silver to go to $75, I don’t think we’re going to get a shortage until, let’s say, $50 silver. But it could happen between $40 and $50. But let’s say once we get in the 50s, you’re going to see somebody big like Apple, Sony, somebody LG, some big corporation is going to put out a news release and say, we had to shut down our factory today because we couldn’t find any silver.

You’re going to see one of those news releases. And when that happens, the second that they can’t find any silver, you’re going to see the same thing that happened with Palladium. So most of these factories in Asia, they will use just-in-time inventory.

They do not hoard silver. They don’t have a big inventory of silver. It’s all just in time.

They have enough silver for this month’s production. That’s it. They don’t hoard it.

That’s how just-in-time inventory works. Well, once you have a shortage, they’re all going to start hoarding. And once they all start hoarding, silver is just going to go absolutely nuts.

I mean, you’re going to go $75, $85, $95 silver in a heartbeat. It’s going to be really interesting. That’s my expectations.

That’s what’s going to happen to silver. But it’s all about, for me, we haven’t even gotten into it. We’re the drivers of gold.

And silver is going to follow gold. In other words, right now, nobody, like I said, 5 to 1, 7 to 1, 10 to 1, people who are going to a coin shop right now are selling silver. They’re not buying silver.

But at a certain point, people are going to want to buy silver. Why are they going to want to buy silver? Because silver is a proxy to gold. So when the fear trade kicks in, someone’s going to go, oh, I want some of that gold.

Well, guess what? At $3,000 an ounce, how many people can afford to buy an ounce of gold? And if you only buy a few grams, you’re going to buy a big premium. So people aren’t going to really want to buy a lot of grams. But they can afford to buy silver.

So they buy silver as the proxy to gold. So gold is the driver of silver. I was going to say maybe we should be calling this step in the cycle.

This is the institutional fear trade before it’s kicked in on the retail level. Yeah, absolutely. It is institutional buying, com-ex buying, central bank buying.

Yeah, it’s kind of a quasi-fear trade. Get ahead of that curve issue here. But yeah, yeah.

Uncertainty. Yeah, I mean, it’s kind of an institution. I think that’s a good way to say it, institutional fear trade.

Sure. It hasn’t started in silver, though. It hasn’t started in silver yet.

Right. Don, the last time we spoke, you told me to make sure that I revisited our last interview. So the last time we spoke, you called for the S&P probably running out of energy to go higher and maybe hit 5,700.

So of course, we’re well above that at this point. What do you think accounts for, let’s say, that overshoot or that continuation of the markets? A combination of factors. The biggest being Trump.

I think if Harris would have won, all it is is just projections, right? But I think if Harris would have won, we probably wouldn’t be here over 6,000. But when Trump won, he reinvigorated this bull market. We’re basically going on 15 years.

So he brought in basically a policy, an agenda, an economic agenda of making sure that the economy grew and the economy works. So in other words, he’s going to bring in his tax cuts. He’s going to do everything that he can, the so-called MAGA, Make America Great Again.

In many respects, that’s all about economics, right? Economic strength, economic success. I think that’s the majority of MAGA is being successful economically, standard of raising the standard of living. So when Trump won, that really, and then, I mean, going back all the way to the beginning of September, Trump was in the lead.

So there’s an expectation that Trump was going to win in early September. So we’ve had this Trump trade on for quite a while. I actually think that we probably would have got a correction in September, October if Harris was in the lead.

But it didn’t happen. So I think Trump was a big driver of it. Now, in tandem with Trump, you had this huge momentum going when the stock market just, you know, up, up, up, up.

But let’s talk about, I actually think, remember, the reason why I say that this is a fake out and not a breakout is because I think that a rug pull, I don’t think that Trump is going to be able to overcome this bad hand that he’s being dealt with the economy. So he’s in the honeymoon period here. But I want to go over the reasons why I think this is a fake out and not a breakout, and why I think that the recession is coming, and why I think a stock market crash is coming.

And when those come, you know, the only thing that’s really going to save us as gold, silver, and gold, silver mining investors is this LBMA problem that keeps gold prices high. I mean, that’s going to help us from a big correction, if you will. But I do think that we’re going to see a big rug pull here.

And it could happen as early as March. Okay, I’m going to start with tariffs, because people are saying that Trump is using these tariffs to secure the border. And I don’t think that’s true.

You know, he basically said that, and the reason why I don’t think it’s true is for several reasons. Number one, he’s a businessman, and he realizes that he needs to get his economic house in order. And we have a budget deficit of $2 trillion.

And 80% of that budget is untouchable. And so he can’t really fix the budget. When you have a $2 trillion deficit, it’s really difficult, you need income.

In other words, you need more income, more revenue to fix it. And he knows that. So you have Medicare, you have Social Security, which is probably the largest one, you have defense, and you have Medicare, and you have interest payments, those big four, you can’t really touch.

So you got 20%. Even if you cut 20% of 20%, can you cut 20% of 20%? Probably no. So I mean, the most he can do is probably cut $100 to $150 billion, which is peanuts on a $2 trillion deficit, doesn’t do anything.

So he knows that that deficit is a big problem for him. And the only way that he can address it is more revenue. And how do you get more revenue? Well, one, you got to get the economy growing.

That’s one way to do it. But the economy is already growing, right? We got 2%, 2.5%, 3% GDP growth. He can’t really pump that up much.

So that’s not a revenue, that’s not an angle for him. So he’s basically said, he looks around and go, what are my choices here, people? And it turns out that the only choice is tariffs. Tariffs can raise revenue.

He needs to get that budget deficit down to 1.5%. And he needs to get his interest payments down. And that’s another, we’re going to talk about that problem. So he’s being dealt this really, really ugly hand.

So he needs to get revenues up to get the budget in place so that he can spend money on defense. He doesn’t want to cut defense. He wants to keep spending.

He wants to at least spend at the inflation rate. He wants to add 3% to the debit to these things. So he’s got inflation problems also on the budget.

There’s this fiscal stimulus problem. So again, that’s why I don’t think that these tariffs are to fight immigration and drugs. I think the purpose for the tariffs is to increase revenue.

This is the reason why he put 25% tariffs on Canada, who we don’t really have an immigrant or drug problem with. Can’t people connect the dots on that? In fact, the problem with our border is actually the other way around. Canada doesn’t want the immigrants that come up from Mexico to go into Canada because Trump wants to kick them out.

So they’re like, let’s just keep going north. So Canada, they’re like, stop people from coming into our country, right? It’s like the opposite of what Trump wanted. And then drugs coming in from Canada to this country, when has that been a problem? And then here’s the clincher to it all.

Trump has put 10% tariffs on the Chinese government saying that the Chinese government is basically a drug trafficker. Now, who believes that? The Chinese government is a drug trafficker? That’s just propaganda, right? I don’t believe that for a second, that all this fentanyl is basically being pushed by the Chinese government. Where’s your proof in that, right? OK, and then I’ll give you- So where is it coming from then? Yeah, Chinese businesses, Chinese gangsters or whatever, corporate mafia, but it’s not the Chinese government.

Yeah, I mean, Chinese, they’re definitely making money doing it, absolutely, but I don’t think it’s the Chinese government. But here’s the final kicker to the reason why I think he’s using tariffs for revenue is he says that he’s putting tariffs on Europe. Europe, we don’t have an immigration problem with Europe.

We don’t have a drug problem with Europe, right? OK, I’m going to bring one more argument into this just to finalize the whole deal. Trump has been talking about how positive it was for the US to use tariffs in the 1800s and that we don’t need to use income taxes. We can use tariffs for revenue.

My point is that tariffs and revenue is Trump’s mentality, not tariffs to fight drugs and immigration. But you don’t think it could be- is there a possibility that it could be some combination of the two? You threaten- because Trump is such a business negotiator, you threaten with the big, high sticker price of the tariffs and everybody comes and gives you what you say you want in return. And then you can come back and say, OK, well, I’m not going to slap a 25% tariff on you.

Maybe it’ll only be 10%. And everybody just kind of wipes their forehead and says, OK, no problem. Plus, you got your bonus issue fixed of border security.

Right. It’s when people are sitting around in a room and they’re discussing this and they say, well, we can- and they basically- somebody pops up, well, we can also use this to help our drug and immigration issue. Also, it’s an add-on.

It’s not the heart of the issue. When the meeting just began, it’s how do we fix the budget? Well, we need to raise revenue. Tariffs are our only choice.

That’s where the discussion begins. And then it flames out in the air. That’s where- and then you use that as an excuse.

We’re going to use the immigration and the drugs as an excuse because we can’t say we’re raising revenue. We can’t say we’re raising revenue because we have a budget problem. We can’t acknowledge we have a budget problem because if we acknowledge we have a budget problem, then we have to address it.

And he doesn’t want to address the budget problem. He doesn’t want to cut spending in the important programs because then people are going to say, well, now he’s going to cut health care. If he says he has a budget problem, the Democrats are going to start screaming he’s going to cut health care.

So we can’t talk about the budget. See what I mean? It’s all misdirection. The immigration and the drugs is all misdirection.

It’s not the heart of the matter. So, okay, so I started, I’m just telling you the rug pull is coming. So tariffs, tariffs aren’t going away.

Tariffs are coming. Tariffs are coming. We’re going to see more of them.

He needs revenue. He’s going to throw tariffs on Europe. He’s going to throw more tariffs on Mexico, Canada.

Tariffs are coming. So that’s number one. That’s your rug pull.

Number two is inflation. Inflation, the Fed did not cut rates in March and February. Excuse me.

They did not cut rates in March and February. I said it twice in a row. And the reason why they didn’t is because inflation is still a problem.

If inflation wasn’t a problem, they would have cut rates. A equals B. One plus one is two. They didn’t cut because inflation is still a problem.

If inflation is still a problem, then high interest rates aren’t going away anytime soon. It’s not as if the Fed is going to all of a sudden cut the federal funds rate 2% this year. The only way they would do that is through an emergency meeting because the stock market crashed.

My point is they’re not going to cut rates. If they just announced in February they have an inflation problem, they’re not going to just suddenly start cutting rates at a clip, at a fast clip. As a matter of fact, we’re looking at two cuts this year.

But I think we’re going to get maybe three when the crash comes. That’s another topic as far as three rate cuts, why they would do that. Back to inflation.

Inflation is a problem. That means high rates are going to stay. That means that’s a headwind for the economy.

That means this lag effect that we’ve been seeing, which you always get with high rates, is slowing us down the economy and is going to bite us. We just don’t know when it’s going to bite us. Back to inflation, this high inflation has caused serious problems to the average family’s budget.

The average family does not have discretionary money. They don’t have any. Each month, they basically say, okay, what are we going to cut? If somebody says, well, we want to go into Disneyland, right? We go to Disneyland every year in March.

Guess what? Disneyland’s out. That’s discretionary money. We don’t have any discretionary money.

Not only is Disneyland out, we’re going to go out to dinner. That’s out too. All discretionary spending.

We’re just trying to get by. We’ve reached the get by mode right now, where families are just trying to get by. They don’t have any discretionary spending.

They’re living paycheck to paycheck. That is not a scenario for economic growth. Now, GDP, if you look at the Atlanta Fed, I looked yesterday, they had it 3.9% for Q1.

But that was what GDP now has. Atlanta Fed ate GDP now. But the average, the expected, the consensus is only about 2%, 2.5%. But if we split the difference, maybe it’s over three.

Let’s say we’re at 3% GDP growth right now. Just about all of that growth is a Potemkin economy. It is not real.

It’s all based on borrowed money. It’s all based on this $2 trillion spending. We’re spending a $2 trillion deficit.

That gets counted as part of GDP. So if you take $1 trillion off of the GDP number, I haven’t done the math, but it’s probably under 1% growth. So we’re basically faking the numbers.

We’re saying, oh, we have 3% growth. Well, let’s say that your income is $4,000 a month. But you go and borrow, let’s say you borrow $60,000 for your house.

You basically say, go in for your equity loan of $60,000. And now you say that you’re making $4,500 a month. It’s BS.

You’re not making more money. You borrowed it. You can’t call that as income.

And that’s what we’re doing. That is a really good example of what we’re doing. Mixed problem is the high dollar.

The dollar is at $1.07. It actually got all the way up to it, which was kind of crazy. I think it got to $1.10 on Monday when they first did these. Yeah, it was all the way up to $1.10 when they had the 25% tariffs on.

Well, guess what? When the tariffs come back, the dollar is going to go back up. And the reason why the dollar is going to go up is because when he puts those tariffs on, those currencies get obliterated. The peso gets obliterated, and the Canadian dollar gets obliterated, and the dollar goes up.

Okay, you can call it Canadian peso. It’s going to be about worth that much. No, I call the Canadian loonie.

Sometimes they call it the loonie. I think we should remove that and just call it the peso. The Canadian peso? Yeah.

No, that’s not nice. I’m Canadian. I can say that.

Okay, so the strong dollar creates fragility in the bond market. And the fragility in the bond market, in many respects, is the reason why gold is at $2,800. Because the US is borrowing such a large amount of money.

It’s unprecedented. At $2 trillion, it’s $166 billion every single month. Who’s going to buy it? Who’s going to buy our debt? It creates this doom loop.

At a certain point, nobody will buy it because it’s too high. And so we’re getting close to that doom loop. I think it already started.

Before I hit another point, Don, wasn’t there some rumor or talk that Trump had said something about having another, almost like a tariff on bonds now? Oh, my goodness. This is insanity. Yeah, his head of economic advisors came out and said, we’re thinking about potentially, in order to get the dollar lower, because they realized that the dollar could end up going higher because they put tariffs on.

So they said, well, how do we get the dollar lower? And somebody came up with this crazy idea of charging a fee to anybody that’s holding our bonds. It’s like, oh, you’re holding our bonds? Well, guess what? It’s going to cost you now to hold them. You can sell them.

But if you hold them, we’re going to charge you a fee. It’s like, what? And it turns out that Trump has all by himself. It goes back to Jimmy Carter.

Jimmy Carter did something, and it went to the Supreme Court. And the Supreme Court said, yeah, the president can do that. So it turns out that Trump, he can do two things to bonds, our bonds.

He can actually charge a fee to people that are holding them retroactively. It’s like, OK, OK, here you go. Now you’ve got to pay us for holding our fees.

It’s like, what? Yeah, I don’t think they’ll do it. But this is the other thing that they’re talking about. And I think the fee thing was, I’ve seen this happen over and over in politics, is they make it sound really, really bad.

And then they implement something that isn’t as bad, right? So the fee thing is misdirection. The second thing is what they’re going to do. And the second thing is they can implement withholding taxes, which is revenue.

It’s short-term revenue. But when inflation is at 3%, withholding taxes is like, oh, a mountain from heaven. It’s like free money.

So what they’re thinking of doing is putting a withholding tax on the interest that you have to pay them. So any interest that we’re going to have you’ve got to pay us in advance for what we’re going to pay you back. So they’re thinking of doing a withholding tax on bonds, which they might do, which is also insanity.

Yeah, you end up in a situation where you’re actually at negative real rates on your bond, not including accounting for inflation. Right, so yeah, so thinking of that. OK, so the next one, and I keep telling you guys that this is a fake out, not a breakout, because a rug pull is coming.

And I’m giving you reasons why the rug pull is coming. So the next one is the stock market. So the stock market has a PE.

The S&P has a PE of around 21, 22. And the Nasdaq has a PE of around 27. Well, guess what happens if the stock market goes higher? And I think it will.

I think the stock market, before we get to the end of February, I think it’ll be over 6,200, maybe over 6,300. And the longer we go, if you go into March, you get to the middle of February, and we still haven’t had the rug pull, you could get up to 6,400. Once you get to above 62, you get to 62, 63, 64, you get into that area, you get into the nosebleed area of these PEs.

In other words, the earnings are not going to keep up with these valuations. The stock market is already overvalued. It’s going to become more overvalued.

Well, guess when you get rug pulls? You get rug pulls when the stock market gets extremely overvalued, which is right around the corner. I think it could happen as early as March. It doesn’t happen in March.

You got to look at it in April, May. But I don’t think we’re getting to June without a rug pull. OK, next one is banks.

OK, so we got GDP at 3%, and the banks are hurting. In what world does that make sense? Now, when I say the banks are hurting, let’s look at their business model. Their balance sheets are terrible because they bought all these bonds at zero interest rates, and they’re all underwater.

So their balance sheets are stinky right now, and their balance sheets are not improving. So you got that. Next, you got commercial real estate.

The commercial real estate overhang is going to start to bite them this year. So last year, these commercial real estate loans, they can kind of push them off. OK, we’re not going to call them, right? But at a certain point, the valuation of these buildings gets to the point where people aren’t going to roll over these loans, and a lot of them are going to go bad.

Well, basically, my point is the commercial real estate problem is intensifying. It’s not decreasing. OK, the next one is bankruptcies for small businesses and corporations is on the rise.

That bites banks. Next, you have credit cards, auto loans, and mortgages all increasing in delinquencies. This is not good for banks.

In many respects, as far as banks are concerned, it feels like a recession. Now, the investment banks on Wall Street, Goldman Sachs, Morgan Stanley, they’re doing fine because Wall Street’s doing fine. They’re investment banks.

But your regional banks are not doing fine. And the regional banks are really the heart of the economy. Those are the guys that make the loans to the small businesses.

They’re not doing fine. In many respects, they’re like in a recession. OK, next one is autos.

The auto inventory levels for new cars is on the rise, and the profitability for used cars is going down. So your auto dealers, they feel like they’re in a recession right now. Next, we have retail and restaurants.

Every month, we’re seeing more store closings, not store openings. We’ve been seeing store closings since 2020 in both retail and in restaurants. Many of these companies are hanging on.

Remember, I mentioned earlier about the discretionary spending problem. They’re just hanging on. And so we’re getting really close to a rug pull.

OK, employment. Right now, most people probably don’t even know what I’m about to say. So they have these charts that they follow.

They’re called new hires and new quits. And so the new hires is the hire rate. So we know historically how many new workers are added on a monthly basis.

Well, the new hire rate has been going down. And now it’s down to 3.2%. Which goes back 10 years. So in other words, businesses are not hiring right now.

And the next one is the quits rate. And this usually correlates with the hire rate. So when the hiring rate goes down, the quits slow down.

And the reason why people quit is because they have the opportunity to switch jobs. Well, the opportunity to switch jobs has been slowing, decreasing. So our quits rate is shrinking.

These numbers indicate a slowing economy. So these are all kind of the indicators that a rug pull is coming. So if you think that gold and silver and the miners are off the running, and this is a bull market, it’s not.

So this is my final point, is that the breakout for the miners is gold above 3,000, which I think we’re going to see this month. Silver above 35, we’re at 3,250, which we might see, we might not see. And then the HUI above 350.

Now, if we get above all three of those, we might be fading the fake out. But until we get above those three, I’m going to be saying fake out’s coming because the rug pull is coming. And I think that the stock market is going to literally crash once this 15-year bull market ends.

Oh, yeah, I got to finish with this, Tom. So here’s the scenario. As long as the S&P stays above 5,500, Wall Street will remain bullish.

5,800, there’ll be a few complainers, but nobody’s really going to jump off the bull market until sub-55. So above 58 to 55, you’ll start to see here’s some mumbling. But once you go below 5,500, you’re going to start seeing people jumping off the boat.

Then the next level is going to be 5,200. And then above 5,200, you’re going to see a lot of people jumping off the boat. 5,200 is really, that’s the beginning of your retail crowd jumping off.

5,500 is the beginning of institutional jumping off. The next level is going to be 5,000. Once you go below 5,000, then a lot of retail will jump off.

But we’re still OK. Just below 5,000, we’re still OK. Bulls are still there.

We’re still thinking it’s going to turn. It’s going to turn. Don’t worry.

We’re OK. We’re OK. We’re OK.

There’s only two lines in the sand left, 4,800 and 4,500, two lines in the sand. You go below 4,800, and most people are going to say, that was my line. You go below 4,800, most people are going to be jumping off.

The only people left at 4,800 are going to be the diehards. And then you go below 4,500, and that’s when the recession hits. Now, the rug pull, it begins at 5,500.

So once you’re below 5,500, that’s when that rug pull starts. That’s when your gold starts. The gold and the miners and everything start going down.

That’s when that rug pull starts. And then we don’t know when will gold bounce. I think gold all depends on the LBMA, but I think gold will bounce somewhere above 4,800.

So depending on LBMA problems, 5,200 to 4,800, I think we’ll know the bottom in gold and silver. I don’t think we’re going to have to wait for 4,500 to get the bottom in for gold and silver. A lot of people think we do.

A lot of people think gold and silver is just going to keep going down, down, down, down. I don’t think so. I think gold will bounce somewhere between 5,200 and 5,048.

And if we’re lucky, it’ll bounce above 5,200, fingers crossed. I got through all my notes. You let me cover everything.

That was great. Well, it’s always hard to interrupt while you’re on a roll here. But I’ve been taking notes, so hopefully we can hit all those points.

But my first point that I want to touch on, Don, is thinking about, let’s say, the precarious position or lack of a precarious position that the stock market seems to be in right now. Last week, we saw Deepsea came out. There was many analysts that believe this should have been a nail in the coffin for all of the NASDAQ, which could have spread through the rest of the general indices.

So why do you think that that wasn’t such a nail in the coffin? And do you think that there are some Fed programs that maybe have something to do with that? Its timing was really good. That problem with NVIDIA happened during the Trump honeymoon. So the Trump honeymoon basically trumped it in car talk.

It basically trumped the crash in the markets. And I was bullish. I basically said, when that happened, I told somebody, I said, the S&P will be above 5,900 by the end of the week.

And basically, I’m saying that we’re going higher here in February. Nothing stops this trade in February was kind of my point. Now, I think it’s a big omen.

So right now, we only have, of the max seven, we only have two that are in the green for the year, only two, five or under. So we have Amazon and Meta are the only two stocks that are in the green. And ironically, I actually think those are the two weakest names.

And the reason why is because Amazon is, they’re going to get rug pulled by this recession that’s coming. Because they’re dependent, in many respects, on consumer spending, discretionary spending. So I think Amazon is kind of at risk here.

Well, they’re all kind of at risk, but I see Amazon as at risk. And then the other one is Meta. I don’t know.

I’ve always been pessimistic about Meta because I just think that their social platform, it’s going to have trouble growing. And I think a lot of the young people don’t like it. As people get older, they’re going to move away from it.

But as a social program, social platform, I’m not bullish on Meta. So those are the two that are in the green right now. And I’m bearish on both of them.

So I think that’s another omen for the rug pull is that the MAC7, last year, they were holding up all the earnings. Like 50% of earnings came from the MAC7. And so the MAC7, if they’re starting to wane a little bit, that’s another reason for the rug pull that’s coming.

And if Nvidia can’t get back on its feet, that might be the precursor to this rug pull. So Don, once we get the rug pull, what do you think the Fed’s reaction is going to be? And what problems arise from more QE? Yeah, so there’s that they lost was the ability to cut rates basically to zero. They don’t have that tool right now.

Because of inflation? Yeah, because of inflation. And their other tool is to print money to stimulate QE. They don’t have that tool either because it causes inflation.

So they don’t have their two tools. So they’re in total reactionary mode right now. That’s the reason why they’re fighting inflation, because they want their tools back.

They want their tools back. And they’re not going to get them. And so they’re in reactionary mode, and they’re trapped.

And the other thing that’s interesting about the Fed is the Fed and Trump are, let’s say Chairman Powell, and Trump are literally at loggerheads right now regarding interest rates. Trump wants lower rates, and Powell wants his tools back. And Powell can do whatever he wants.

There’s nothing Trump can do about it. They’re an independent body. And the only way that Powell’s going to lower rates is if we get a grub pull.

It’s the only way he’s going to do it. If the stock market is above 6,000, and inflation’s above his, the PCE core doesn’t go down, he’s not cutting rates. I think PCE core was 2.7, I think, last time.

He wants it down to 2.2, 2.0, 2.7, 2.0. If it stays at 2.7 and goes higher, he’s not cutting. And so then the second question was, what happens if the Fed, we hit the rug pull, and then the Fed starts doing QE? Well, of course they’re going to do QE, right? Well, at that point, Powell has basically said, we can’t allow a meltdown on the financial system. So we have to inject liquidity.

And you’re going to have all these bankruptcies that they’re on, basically, companies have their head barely above water. And then you go into recession, and they go bankrupt. You get a slew of bankruptcies right off the bat, where banks realize, these guys are toast.

We’ve got to cut them off now. So they’re going to have to inject liquidity. Now, the problem for the Fed, and this is where I actually think it’s going to be a lot worse than people think, is that the regional banks are going to have a problem.

Remember, I talked about it earlier, about their balance sheet being a mess and their clients being a mess. So the FDIC and the Fed are not going to have enough money to bail out all these regional banks. And that’s going to have huge ramifications.

It’s going to spiral. In tandem with all this, you’re going to have these tariff wars going on, where Trump is trying to generate revenue. It’s going to be absolute mess.

I think that we are going into a storm here. We just have a few months to go. I think we only have a few months to go here before this doesn’t all implode and the rug pull comes.

So I’ve warned people. People are buying miners now, but you really wanted to buy them when they were really cheap. A lot of them are cheap now.

But people are going to chase these, thinking this is the breakout. First Majestic went to $6. I think Heckler is at $6.

Newmont might be at $45. They’re still fairly cheap. They’re not pricey yet.

But when they go up another 25%, which is going to happen, they go up another 25%, and people are buying Heckler at $8, First Majestic at $8, Newmont at $55. They buy them at those levels, then they’re going to get that rug pull. So the key to miners is you’ve got to have good entry prices.

You’ve got to be careful. It’s not too late to buy, but I think you can expect lower prices at some point this year. But that said, I’ve been buying cheap stocks.

I always bought at the beginning of the month. I think we’re running out of time to buy. I bought a company called Borealis.

They’re going back to production in Nevada, and it prints as a 10-plus bagger. So maybe it gets cheaper, but it’s so cheap already. So I’ve been buying these.

I bought Argeno last month. It had a market cap of $27 million. It’s just ridiculously cheap.

And then I bought Lahontan. It had a $5 million market cap. So if you can find these stocks that are just super, super cheap, there’s no reason to wait.

When they’re 10-plus baggers, I don’t see it. But the more quality companies like the Newmonts and the First Majestics, those companies, you want to make sure if you don’t have a big enough position and you want a big position, save some powder because you’re going to get an opportunity to buy them cheaper is my expectation. So is there no, considering how you see this playing out over, let’s say, the first two quarters of this year, is there no point to kind of run that up and take some profits and reestablish that position at a lower level that you see coming? Yeah.

If you’re a trader, this is really an ideal situation for you. You’re going to actually get, so let’s say you’re in right now and you’re riding these companies, you can ride them all the way up to the rug pull and then get out, wait for the rug pull, and then get back in. I’m not a trader, but if you’re a trader, this is really a good situation.

It’s tricky on timing, absolutely. Maybe you don’t sell everything. Maybe you just sell half and then wait.

Let’s say that, Heckler is a good example. So let’s say that, I think Heckler’s trading around $6. So let’s say that you own Heckler right now and it runs to like $8.50. At that point, you sell half and then you wait and you just go on the sidelines and you wait until this rug pull comes and Heckler probably goes all the way down to $4.50. So you basically went $8.50, sold half, get back in at $4.50, and now your cost base is in $6.50. That’s a smart trade, but I’m not a trader, but I think that would be a really smart trade.

That’s what I see coming. So Don, is there a way of almost playing this as this cycle works out to, let’s say you establish your position in some big miners and start to accumulate gains in those big miners? Do you start to trickle that down to the next tiers, maybe explorers or smaller projects, so that you can get exposure to the whole thing if you don’t already have those positions established? Yeah, that’s in my book. So my book, the 10th edition just came out and it’s really good.

You can get it on Amazon. I highly recommend it. If you own any gold and silver mining stocks and you don’t own, haven’t read my book, just go to Amazon, search my name, look for my gold and silver book.

Yeah, so that’s how I recommend it. I call it a pyramid approach. So what you do is start with a base.

So the base is going to be physical, and then mutual funds, ETFs, and then quality miners. You start there, you build a base. And then after you get that base really solid, then you work up the pyramid.

And that pyramid is risk, right? So after you get done with those quality miners, then you go into the juniors. So you go into the developers and you go into the explorers. And yeah, and you start exposing yourself to some big alpha names.

But I don’t like to expose myself, I don’t want you to expose yourself to the only big alpha, especially when you get these quality producers that are all printed as 3, 4, 5 baggers. I have Newmont and Barrick. I had them traded at a 4 bagger when they were at 37, but maybe it’s a 3 bagger now.

So they’re still at 3. Those are the biggest names. Barrick and Newmont are printed as 3 baggers at $4,000 golds. So everybody else is printed as 4, 5 baggers mid-tiers.

And then you go to juniors, you’re looking at 10 baggers. I actually am seeing 20 baggers still, which is unusual. I mean, quality 20 baggers.

And I’ve done three videos recently. I did them on my top 20 silver stocks, top 30 gold stocks, and then optionality plays. And I’m seeing some quality 20 baggers out there, which just kind of blows my mind.

But if we go to $4,000 gold, I think we’re going to see a bunch of 20 baggers in the junior category. So I think doing some research on these juniors, because there’s a lot of them, I have 80 stocks in my favorites list. 80, that’s a lot of names.

The reason why I have 80 is because that’s how cheap these stocks have all gotten. They’ve all gotten ridiculously cheap. I mean, that list will shrink to 50 once gold gets to like, I don’t know, 3,000, 3,100.

It’ll start shrinking as these stocks start getting pricier. But right now, there’s just no pricey stocks out there. I want to say one other thing, since we’re talking about talking stocks here, is that one of the things that I’ve done is I’ve taken a couple names, and I put them to the side, and I said, OK, these are the two names I’m going to buy when the rug pull comes.

And you should do that. And you could have 5, 10 names. I only have two.

And they’re basically stocks I don’t own. And I’m like, OK, these are the two I’m going to buy when the rug pull comes. RAOUL PALSY.

Bon, what about buying something like, I mean, you mentioned optionality plays, but what do you think about royalty and streaming companies? Are they an area that, I’m sure you and I have covered this before, but for anybody that hasn’t heard that interview, I think it’s always interesting to kind of get that opinion of that side of the market as well. Yeah, I mean, a lot of people love the model. The thing that’s awesome about the model is you have really high margins, usually 80%.

80% of your revenue just all goes right to the bottom line. I mean, it’s fabulous margins. And so as gold prices go up, they get more revenue, and the revenue just goes right to the bottom line.

And so people love the model for that reason. I’ve never owned any because I chase alpha. But if you like dividend stocks, majors, I think the royalty model fits in really well in that area.

I’m not a big fan of chasing the smaller royalty companies for alpha, but some people do. Because they don’t really have control over their growth. It’s really difficult for them to grow their company.

You just don’t know because they don’t own the mines. They just do contracts. All of their deals are based on a contract.

So they have to go and find another continent. In order to grow the company, they have to find a contract. It’s getting a lot more competitive.

So we don’t know how fast these companies are going to grow. But the bigger ones, the big three, Franco, Nevada, Wheaton, and Royal Gold, those big three, I think they don’t really need to grow their growth. They’re just going to benefit on the higher gold price and higher silver price.

They will pay dividends. They fit in the major. If you’re after dividends and you like the model, a lot of people like the model.

But for big alpha, they don’t really fit me, so I don’t own any. I prefer to diversify using GDXJ, SIL, some of the ETFs. And SLVR is the new one for Sprott, Sprott Silver Miner.

I prefer to use those because I think those will perform as good as the royalty stocks. And so I prefer to diversify that way and not use these for diversification or income. ETFs are going to pay some dividends, too.

The one thing that I will bring up about the royalty model is I think the model could break once silver gets above 50. The reason why is because the contracts are set, are fixed. So a lot of these, I think the one place where they’re going to break first is the silver contracts first.

But they will happen to the gold contract as well. So if you have a, I’ll just give you an example of what I mean by the models could break after 50. There’s a lot of these contracts are fixed at $4 an ounce.

So if you get to, let’s say, $60 silver and inflation pushes cost up to, let’s say, $15 cash cost, company is going to be losing, let’s call it $10 an ounce. On every ounce that they have to give this company for $4, they’re going to lose $10. And the other company is going to get $56 in net profit.

They only have to pay $4 for it. So you lose $11 and they gain $56. How many companies are going to keep paying them that money? Somebody is going to, I don’t know who, but somebody is basically going to just stop paying and say, call me when you’re ready to negotiate.

Otherwise, sue me. That’s going to happen. They’re just going to say, call me.

And then the contracts are going to start getting renegotiated. And when that happens, the model broke. And then everybody’s renegotiating.

And then what happens is your 80% starts to squeeze down to 75, 70. At that point, you’re not getting the return that you expected. So you’re still getting money.

And the relative companies are going to still do pay. But you need to realize that when the model starts to break, the returns will start to decrease a little bit. Basically, it’s not a total slam dunk that you’re going to get that $56 in net profit when Silver gets to $60.

ALEX ROSENBERG Even if it is just a small percentage takeoff, let’s say it’s a 2% or something like that, they’re still going to want all of their profit no matter what. MICHAEL ISIKOFF Yeah. What happens is the contracts become too one-sided.

Once they become too one-sided, something’s going to give. It’s just game theory. So the model is going to get impacted.

I actually talked to a CEO that’s in the business. And he totally agreed with me. ALEX ROSENBERG Oh, interesting.

MICHAEL ISIKOFF Yeah, he said absolutely. As a matter of fact, he said it’s already happening where the contracts are getting rewritten when they’re too one-sided. ALEX ROSENBERG Right.

Well, Don, there’s certainly a hell of a lot to take into account here to watch. I think as we said last time, hopefully you have some physical gold and silver that you can de-stress a little bit with on your portfolio. Is there anything that you’d like to leave our listeners to think about before we wrap up here? DON LEMON Yeah, just one final thing.

Everybody should have 1,000 ounces of physical silver. And the reason why is because it’s going to be very handy for bartering. People will accept silver for bartering because when you barter with silver, they can turn around and barter back with it.

It’s going to be a very good barter item. People are going to know that silver is worth $50, $70, $100 an ounce, and they’re going to want it. So accumulate 1,000 ounces of silver.

It’s your piggy bank. And don’t think of it in terms of, well, wait a minute, Don. I’m going to be paying $35, $37 an ounce for this stuff.

It’s expensive. I’m not going to make anything back. Don’t think of it like that.

You’re converting cash for silver because you’re not going to be able to get cash out of the bank, and you’re going to have that silver, and you’re going to be able to use that silver for barter. So the silver barter is when the banks are closed and you need something. Nowadays with our smartphones, it’s pretty easy to barter something, if you will.

It’s like, do you have this? I have some silver. I’ll meet you here. Let’s swap.

So physical silver is going to be a very useful barter item if you need it. Now, if you have 1,000 ounces of silver, that’s going to be worth $100,000. That’s a lot of barter power.

That’ll go a long way. It’s a nice little piggy bank. That’s why I always say you need 1,000 ounces of physical silver.

You got that, you’re in fairly good shape. Put it this way. If you need some water, can’t find any water, if you’ve got some physical silver, you’ll be able to find somebody who’ll trade some water for silver.

I guarantee you that. So for anybody that wants to keep up on Don’s work, of course, GoldStockData.com. Excellent Twitter follow as well, at DonDuret2Rs2Ts. And of course, Substack as well, DonDuret.Substack.com. Don, thanks so much for your time today, and look forward to checking in with you in a couple of months to see how the rug pull thesis played out.

Yeah. How about first week of April? Perfect. Sound good? Yeah.

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