Prepare to unlock the secrets of gold's glittering future as we unravel the factors driving its surge and forecast even brighter prospects for 2024. I'm joined by Beans the Brave, offering a fresh perspective on the relationship between the precious metal and the evolving world of cryptocurrencies. We'll navigate the choppy waters of central bank strategies and Fed policies, and discover how these titans of finance are steering the course of the dollar and gold alike. This episode is your golden ticket to understanding the market forces at play and the potential treasures that await savvy investors.
Dive into a treasure trove of insights as we examine the nexus of global power and gold demand, with a spotlight on China's enigmatic gold strategy and Dubai's booming gold sales. We question whether the Middle Kingdom is quietly eclipsing America's gold supremacy and consider silver's role as an undervalued player poised for its time in the sun. The episode's rich vein of discussion uncovers the implications of these shifts for the world economy, and whether we're on the cusp of a new era where possession of gold could rewrite the financial rulebook.
Finally, we venture beyond the tangible, blending philosophy with finance as we draw parallels between Plato's Allegory of the Cave and the realities of Bitcoin ETFs. As we ponder the cyclic nature of history and economics, we contemplate how today's uncertainties are reshaping trust in traditional institutions and tilting the scales towards tangible assets and cryptocurrencies. Join us for this thought-provoking journey that connects past wisdom with future wealth, and challenges you to look beyond the shadows to the true form of financial security.
Prepare to unlock the secrets of gold's glittering future as we unravel the factors driving its surge and forecast even brighter prospects for 2024. I'm joined by Beans the Brave, offering a fresh perspective on the relationship between the precious metal and the evolving world of cryptocurrencies. We'll navigate the choppy waters of central bank strategies and Fed policies, and discover how these titans of finance are steering the course of the dollar and gold alike. This episode is your golden ticket to understanding the market forces at play and the potential treasures that await savvy investors.
Dive into a treasure trove of insights as we examine the nexus of global power and gold demand, with a spotlight on China's enigmatic gold strategy and Dubai's booming gold sales. We question whether the Middle Kingdom is quietly eclipsing America's gold supremacy and consider silver's role as an undervalued player poised for its time in the sun. The episode's rich vein of discussion uncovers the implications of these shifts for the world economy, and whether we're on the cusp of a new era where possession of gold could rewrite the financial rulebook.
Finally, we venture beyond the tangible, blending philosophy with finance as we draw parallels between Plato's Allegory of the Cave and the realities of Bitcoin ETFs. As we ponder the cyclic nature of history and economics, we contemplate how today's uncertainties are reshaping trust in traditional institutions and tilting the scales towards tangible assets and cryptocurrencies. Join us for this thought-provoking journey that connects past wisdom with future wealth, and challenges you to look beyond the shadows to the true form of financial security.
The Do Mango, if he willJust Like Toen.
Speaker 2:All right folks, welcome to the Wise Wolf Golden Crypto Show, first podcast of the new year. We're getting all the technical stuff worked out. It's going to be an interesting year. Ladies and gentlemen, it's kind of weird. We've been a gold bug for years and years and been buying Bitcoins since it was $380 bucks In 2016,. Just going over some of the numbers here in pre-show, just looking at the price predictions and what's happening to the fiat currency system, I'm a long way from telling people to end the Fed. And they look at me and ask you mean the federal government? I'm like well, that too. But in the Fed, we'll talk a little bit about the Federal Reserve today.
Speaker 2:Well, I'm in studio with Beans the Brave. It is the 8th of January 2024. I'm in North Texas, at my Denison Texas location, and it is pouring rain outside, so we may you may get a little background noise from the rain hitting the roof, but we'll survive. I want to jump into. We're going to cover both gold and crypto today. When I say crypto, I mean we've got to have some headlines that cover the periphery of pretty much everything, at least in the live show.
Speaker 2:What I have planned for this year, in 2024, we're going to do the live show here, 11 AM central time on Mondays. You get the live Wise Wolf Gold and Crypto show. You can put in the comments on the Rockfin channel, youtube pretty much anywhere I can see them. If you want to chime in, I'll take a look at that. And then we've got interviews lined up and the podcast channel, the RSS feed. You're going to want to go subscribe to that, anywhere podcasts are found. And if I. One of the things I'm changing up this year too is if I do an interview, if I'm on another show, I try to zip that audio too and put it up on the channel. So you know, whatever I'm because a lot of times you know, even in the interview, I'll think about something that I don't think about in the live show. You guys can understand that All right.
Speaker 2:Well, 2023 was a massive year for gold and I think we've seen that in the record gold price. Gold broke its all time high, shattered it actually here in the last quarter of 2023. But I talked about all year the central banks buying gold. That's what I wanted everybody to pay attention to. That was the shift, you know. And again, there's not just central banks buying, because individuals are buying. That's way up over any other previous year. But we have massive central bank gold buying and there's a reason for that. That because what's coming and I think you can see this too, just watching the decline in the use of the dollar, what's called money velocity the decline in percentages of transactions, financial transactions around the world, done in dollars. In 2001, it was 75%. In 2023, it was down to 45% and that is declining every single month. Because, again, you have things like the BRICS nations Brazil, russia, india, china, South Africa covers 40% of the world's population. They're about a third of the world's economies and growing. They're looking to dump the dollar. They want an alternative system.
Speaker 2:I pulled up an article today We'll talk about as well, from lurockwellcom on a Russian economist who's looking at the gold ruble, and they had some interesting things to say, just kind of based off of what happened after the sanctions on Russia. That was a big part of the de-dollarization that has gone on in the last 24 months because the United States overstretched, we over, you know, we overextended our sanctions. We have 40 sanctions in 36 different countries Really more now. It's a stat that I read eight months ago, so I'm sure it's more now. And those are the factors some of the factors at least in the declining use of the dollar, which is going to be the death knell for the dollars, the world's reserve currency status. So let's put this up on the screen.
Speaker 2:There's three factors driving gold bulls in 2024. This is Michael Mahary. Let me put this on the screen for you. This is I think it was a very sound argument for why you should be bullish on gold. Again, I'm not giving you investment advice because I'm bullish on gold and silver and Bitcoin mainly because I know what's behind the dollar. It doesn't take that much to get bullish once you realize that you have a free floating, corrupt currency that is run by nefarious morons. Nefarious morons is about, I mean, that's nice. I've got worse descriptions that I guess a family show, but you guys get it right. This isn't going to end well. So let's dive into the three factors driving gold bulls in 2024. Again, michael Mahary, money metals. He just moved over to money metals from Schiff Gold. So there are three factors driving gold bulls as we move into the new year the demand factor, the Fed factor and the January factor. Gold just wrapped up its best year since 2020 with a 13% gain, and the yellow metal now has new records in its crosshairs as we move into 2024.
Speaker 2:Gold faced significant headwinds throughout most of 2023 with dollar strength and higher interest rate environments. But as the markets began to anticipate an end to the Federal Reserve's inflation fight, gold rallied during the fourth quarter. Yeah, how do you like that? We've been talking about this. They're eventually going to have to do something. The drone pal is going to have to move the interest rates down. The economy is begging for that cheap fiat debt and they need it to prop up their casino stock market. And it's an election year. So low and behold, I can't believe it. Shock to the system. They're going to lower rates three times. Now. They backed off on this. A lot of this is just language that they use. These are insider deals. They put the thing out there, then they'll do a qualifier. They'll have another Fed spokesman say something the opposite. It's to keep you guessing. These are all like little intricate games that they play.
Speaker 2:Gold surged to a new record high in early December, topping out at just over 2125 an ounce. It couldn't sustain those highs, but it has since built strong support at 2000 an ounce, creating a foundation for gold to test new highs in the coming year. Let's look at the demand factor. Saxo's bank old Hanson told Reuters he sees three significant demand factors boosting gold as we move into the new year. Following on from a surprisingly robust performance in 2023, we see further price gains in 2024, driven by a trifecta of momentum chasing head funds, central banks continuing to buy physical gold at a firm pace and, not least, renewed demand from ETF investors ETF investors he puts it last because there's a lot of inside investigation that's gone on. It's like we really don't know the full extent of the actual bullion held by these ETFs. I think that's where the price gets bogged down a lot. As a matter of fact, I've got a guest coming on the show, most likely do a podcast. That won't be live, but they've written a book on that. I want to dive into that this year for sure.
Speaker 2:Looking a little deeper at Hanson's trifecta, we can start with central banks. Globally, central banks gobbled up gold last year and there is no reason to think their appetite will decrease. Through the first three quarters of 2023, central banks bought a net of 800 tons of gold. That was 14% more through the same period in 2022, which is a record year back to 1950. I will say this too while I'm reading the article. Remember that there's only one central bank not buying gold. There's only one major central bank, and that is the Federal Reserve Bank. While central bank gold buying was robust, etf investing was tepid, with metal flowing out of gold back ETFs through most of 2023. But outflows slowed significantly in November, with North Americans ETFs charting in flows for the first time in five months. With the price of gold rallying, we see more gold flowing into ETFs in the coming months, boosting overall global gold demand. As Hansen alluded, the price rally, coupled with the anticipation of lower interest rate environment, could also pull some of the institutional investors back into gold. Overall, the demand dynamics for gold seemed to be on the plus side.
Speaker 2:Then he talks about the Fed factor. By far the biggest factor driving the precious metals markets is the Federal Reserve monetary policy Because, again, this is the world's reserve currency. That's why the Fed plays such a big factor globally in the price of metals. I mean that will diminish over time as the world resets. You're going to see a revaluation of all currencies. That's what I mentioned, the BRICS earlier. But I see many factors on the horizon decentralization of currencies as the king dollar, its reign comes to an end.
Speaker 2:The rally in gold started when the markets began to anticipate the central bank would end its rate hiking and pivot toward rate cuts. The Fed gave markets exactly what they were looking for at the December FOMC meeting. The central bank didn't make any policy moves, but it released its DOT plots indicating three rate cuts for 2024, with another four cuts in 2025. That would lower rates to between two and 2.5%. Jerome Palley raised rates faster than any time in history.
Speaker 2:I've gone over this many times, but we had interest rates in the teens in the late 70s, going into 1980, and that was done by Paul Volcker, who was head of the Federal Reserve at the time. They did that because of the Nixon shock and because of inflation. That was the way that they dealt with it. You just make it expensive, expensive, expensive to create new currency, because in a fiat currency system, whenever you borrow, whenever you swipe your card, whenever you get a home loan, that is new currency creation. So that increases the money supply, which therefore increases inflation. When you raise rates, what you're trying to do is you're trying to shrink the money supply because you're still dealing with fake, but it's technically unlimited units If you've got a supply going in that economy called money velocity. And look, I don't even understand it completely. I just know the terminology and it makes sense in my head. That's what the Fed was doing by raising rates faster than any time in history. This is Jerome Powell. They didn't get rates to the teens, but they made those rates, rate hikes, faster.
Speaker 2:I think there's a pivot here, but I think it really only has to do with the election year. There's going to be a lot of false hope placed on those rate cuts and you're just looking, the markets are drooling in anticipation. Nevertheless, fomc members must know that the economy built on borrowing and levered to the hilt can't survive in a higher interest rate environment. The central bank is easing out of the fight now with its fingers crossed, hoping it is done enough to tame inflation without crashing the economy, mike Mahary says I call this wishful thinking. Ironically, financial conditions aren't all tight. Despite the Fed raising rates from zero to 5.5% and Powell's claims that rates are now well into restrictive territory, they aren't. The Chicago Fed's own financial condition index confirms that. As of the week ending December 22nd, the index stood at negative 0.54, and negative number indicates loose financial conditions, while the Fed has tightened conditions enough to break a financial system buried in debt, it is far from tight enough to truly rein in inflation.
Speaker 2:Well right, there's no good answer here. They've done so much damage to not only the world's standing with the dollar and its usage, which takes away its supremacy, but the massive amount of debasement that has gone on from increasing the money supply. This is before COVID-1984. This is going into the last quarter of 2019. You have two things going on at the last quarter of 2019.
Speaker 2:Very important to remember you had the largest exodus in history of CEOs retiring with golden parachutes. They've not equaled that number since then. It was the largest exodus of CEOs in history. Quietly. I remember this is when I first started doing commentary on the David Knight show. I remember they brought me a night. I didn't have a crew. Then I was just me and my dog in San Antonio with my gold shop and my radio show. I was noticing I go.
Speaker 2:Are we watching these numbers that the Federal Reserve is creating to prop up the overnight markets, the repo markets, the overnight for liquidity for the clearinghouses they created? And it's estimated? I remember I took the report, I printed it and I put it in my safe because the number was so astronomical I thought this can't even be real. But it was $6 trillion. It was $6 trillion in overnight currency creation to prop up that system. That was global. That wasn't just the Fed doing that, that was central banks around the world. There was a problem. There's a problem with the entire world financial system.
Speaker 2:The United States has the oldest living fiat currency in the world. Right now. It's the oldest living fiat. Once Richard Nixon took us off the gold standard, august 15, 1971, we became a free floating fiat currency with no backing. We're the world's oldest living fiat currency. Every other currency is also fiat, by the way, but we're the oldest and the average lifespan of a fiat currency is 26 years. There's 52 times more currency today than when I was born on earth. These are staggering numbers. In other words, a win over inflation means more inflation.
Speaker 2:For now, perception is reality and the perception is that everything is fine. That's that normalcy bias. The Fed won the inflation fight with no collateral damage to the economy. Now we can go back to the easy money drug the market's crave. There will be no recession. Good times are here again.
Speaker 2:I agree that rate cuts are coming. I think the Fed will have to go back to quantitative easing, but not because it beat inflation. In all likelihood, it will be desperately trying to prop up a crashing economy as the high interest rates finally pop the debt bubbles. But whether the Fed cuts rates because it thinks it beat inflation or because it is fighting a deep recession, it is equally bullish for gold. Consider this Gold has fared pretty well this year, despite the headwinds, despite the strong dollar, despite the perception that higher, for longer, interest rates were bad for gold. If gold did as well as it did in an environment of raising rates and negative perception, imagine how much better it is going to do when rates are falling, especially if they're falling even as inflation is heating up again. That is a great synopsis too. People forget Again. Jerome Powell raised rates faster than any time in history.
Speaker 2:Technically, the reason that the Federal Reserve is not buying gold is because buying gold, especially in large quantities, increases the demand, increases the price and the dollars at war with gold. That is an open question. Why did gold not go down to $1,200 an ounce? Why did it not crash? Why wasn't there a massive sell-off in gold? Because the Federal Reserve's king dollar was raising rates and therefore taking charge and decreasing the money supply and strengthening the dollar. Why didn't gold go down? Why, in that environment, why did it hit its all-time high? That's because I think one factor he hit on already it's central bank demand, because what's coming is the revaluation. Then he goes on to the January factor. His gold has already has plenty of momentum.
Speaker 2:Moving into the new year in January is historically good for gold. According to data crunching by the World Gold Council, since 1971, gold has had an average turn of 1.79 percent in January. That's nearly three times the long term monthly average Over the same period. Gold has charted positive returns in January almost 60 percent of the time, going back to 2000. Gold has gained during 70 percent of January's. The World Gold Council points to three factors that may boost gold's January performance beginning of the year, portfolio rebalancing, season weakness and real yields and gold restocking in East Asia ahead of the lunar new year. Past performance does not guarantee future results and there are exceptions to this general trend. We saw negative returns in January 21 and 22. But as we move into 24, there appears to be a good setup for gold to have another strong January. Well, I think it will, just based off of headwinds coming out of 23. Again, record year, record gold buying by central banks.
Speaker 2:I was talking to David Knight, the Royal Mint out of England. They're up 7 percent gold orders over the previous year from the public. People are buying Walmart selling out of gold. By the way, don't buy your gold at Walmart. Call me and lock in a price. Don't go there and they're out of it or they give limited bars and stuff. Call me, we'll compete. Same thing with Costco. Costco has the lowest price and there's no gold. If people are trying to get gold they keep selling out. You should call wise will. I can lock in a trade. It doesn't even have to be there.
Speaker 2:I agree with this analysis. I mean you've got strong headwinds for gold central bank buying. The Fed's going to have to cut rates. We're in an election year. The public's demand is up. It's everything, it's all the things. It's not just one factor driving the price of gold, it's many things.
Speaker 2:I think what's really going to catch a lot of people off guard is the fact that we've had, decade after decade of pretty much a stock market-based, casino-based 401k IRA. All that has been centered in the American consciousness Since the mid-70s, one of the reasons why we have these financial products and everybody's involved in the stock market was to get in, my opinion, was to get people to not pay attention so much that they can't save their money anymore. That used to be. The American dream was to buy a home. If you put a silver dollar in a coffee can and buried it, or whatever, you could dig it back up, it'd still be a dollar in 20 years.
Speaker 2:But that's not how things work. In order for the system to continue without a revolt, without people becoming skeptical of everything and paying attention, it's to give them some returns. You put them into a thing that constantly just keeps them grinding. I look at the bubble and it's an everything bubble, whether you're talking about commodities or whether you're talking about tech companies and fang stocks, and all that built into it is fake money. Eventually, you're going to have even the elites tell you I don't know why would you use this phraseology, tony it's a great reset. They're going to reset the whole thing. That's why you should pay attention to what banksters do and not what they say.
Speaker 2:When the banksters around the world start hoarding gold, start buying massive quantities of it, they're not hoarding their own currencies. If your currency is magical and wonderful. Why don't you just hoard that? Why don't you have a big stake in your own stuff? Well, you don't. It's like CEOs that have some of their. They quietly sell off their stock when they know something's going to go belly up, or they see the long term and it's not looking well. The outlook isn't good.
Speaker 2:These are the tells. Watch what they're buying, watch what they hold, not what they say, which what they say is pretty much pure evil, because they want to put you in a central bank digital currency. My goodness, are we going to talk about that this year for sure. Central bank digital currency, the satanic money system, like it literally is the biggest threat to humanity so far in history. And we have to talk about that because they've got the white papers, they've got the plans and they've got the political puppets to do it.
Speaker 2:But the game ain't over yet. All right, let's keep going into gold. I have to pick which story now I wanted. There was a story I want to get into on zero hedge too, and it's so much philosophy and it's fun. It's kind of the allegory of Plato's Cave and Bitcoin ETFs. So I'll definitely see if I can. Let me, let's do this one I saw. This is just another indicator. You know you kind of like Walmart or or Costco getting into the gold business. I saw this one too, just going to see more and more of this stuff.
Speaker 2:Gold fever at Dubai Airport, amid record sales for its biggest retailer. The main duty-free retailer at the world's biggest international airport, dubai International, has reported an all-new time revenue sales in 2023. And their items on demand for gold from gold jewelry. All this is up. The biggest airport retailer operating in a single country was held by a healthy demand for gold. From jewelry items to gold chains. Gold has become the third biggest category for the retailer in its mixed-offer stores, behind liquor. Perfumes took the top spot in 2023. The biggest demand for the precious metal led to sales of 773.5 million UAE dirhams $212 million, contributing to 10% of total revenue. This is a big increase in the share. Since the pandemic In 2019, gold was only ranked eighth as a product category. My last year's 10% share is the same as in 2022. Year-over-year sales have risen 23.3% from 172 million.
Speaker 2:So I wanted to read. That's a little blurred, but I wanted to read that because I think this is in the public consciousness and I was talking to David Knight about this. We look at the factor in China, the Shanghai exchange. First of all, china doesn't export gold. Their citizens buy it, their government buys it, their industries buy it and it doesn't leave. They have 60 estimated I don't know this for sure is estimated 60,000 gold mines in China, and I'm of the mind, by the way, and we'll explore this together this year.
Speaker 2:Ladies and gents, I'm of the mind that China possibly holds, whether it's a combination of citizenry or government, or maybe just government, I think China may actually hold more physical gold than the United States, because we haven't been a net buyer. We haven't been a buyer since the 1950s and I think there's an open question on our holdings. We're supposed to have about, I think, 8,500 tons, something like that. And that was what when the end of World War II, at the Bretton Woods system Bretton Woods, new Hampshire, 1944, we set up the new economic world order. That's where you get the IMF and the World Bank and the dollars pegged to gold $35 an ounce since the world's reserve currency. We haven't bought anything since then. We had 50% of the world's wealth and we were 5% of the world's population. It was a massive setup and for the baby boomers and everything that came in. It's been squandered since then and we're now in a free-floating fiat currency debt system, but that's the way it was, and we had a massive supposedly massive gold holdings and I think that maybe have been eclipsed.
Speaker 2:China has been buying gold. If you look at the. There was an article up on Kitco and one of the researchers I think I agree with his findings. This is something looking at the total numbers and doing the calculations. Why would a country otherwise buy gold off the books? Why wouldn't they want you to know? They didn't want to be put into any sort of competition, so they bought stealthily through the beginning of the century up until now I think it was the end of 2022 going in. There was this massive gold buy as well, and it was also anonymous, and then somebody one of the zero hedge reporters uncovered it was actually China. I think it was like 16 tons or something, and that was again. That's been the trend. So something's afoot here and I would pay attention to that. That's one of the things you won't hear on CNBC. They're not even factoring in gold holdings.
Speaker 2:I am part of the secular golden rule, which is he who has the gold makes the rules. I don't like that rule. By the way, matter of fact, I put out a in my membership program for kids on Wolf Cub part of the Wolfpack program. It's $35 a month, by the way, I put out a letter or a little message from Wise Wolf to the Wolf Cubs, and one of them was respecting the actual golden rule, which is treat others as you want to be treated. I respect that more, but let's talk about reality on this planet, with greed and all the other things that accumulate in our lives that we want to push away, that make this life kind of make this world a dark place. That is something we have to pay attention to is who holds the wealth.
Speaker 2:All right, so full disclosure too. There's almost nothing for me to report almost ever on silver. I mean, I can go around the Twitter sphere and I can get into the back corners of things. You'll always see price predictions and stuff. We don't talk enough about silver. I'm going to have some authors on this year as well. That some books I've already requested to get some people on.
Speaker 2:I want to dive into that. I'm a silver guy. I know we talk about gold. It really sets the table, but you don't find a lot of great articles on silver much. I mean, every once in a while we'll get one popping up and it's usually kind of what I already tell you which supply is not what it seems there's an opportunity for. If there was a whale to come in, they could corner the silver market. It's extremely cheap. It makes no sense.
Speaker 2:Silver was $52.50 an ounce in 1980. Show me what $52.50 of 1980 dollars will buy you today. You're talking about $2 to $300 worth of value. There's something wrong with the price of silver. Everybody knows it. The world's largest holder of silver is JP Morgan, physical silver, not ETFs. That's the difference. It's an open question. Do the elites and those who hold the silver, are they artificially keeping the price down for accumulation? I tend to think that it is. It's quiet accumulation. You should really pay attention to that. I think there's, I could feel, just about any order, but I say just about.
Speaker 2:It's an unspoken rule among gold dealers and brokers that, and precious metals dealers, you can't always source silver. If you can't always source, how can you have an arbitrary price? How can you have a price in the below $30 when I know that if I place enough, if I get a bigger buyer that we're talking weeks out to fulfill it. That doesn't make any sense. I think it'd take about five minutes of research and it won't make any sense to you either. We will have some stories on silver.
Speaker 2:I didn't want anybody to think I'm ignoring it. It's just extremely cheap. It's stupid. It's so cheap. The gold-silver ratio is skewed. We're going to talk about the history of that. It takes about 87 ounces of silver to make one ounce of gold. It's was dumb. It's not even geologically sound. It's 17 to one in the earth. Supposedly At most, 20 to one At most. I think during the first part of COVID-1984, it was in that first quarter of 2020. It was 125 ounces to one. Just stupid, right? All right, let's get into some news on crypto. I don't see any. I'll make sure I go to the Rockfinchat really quick just to say hi to everybody. Thanks for being over there in the Rockfinchat.
Speaker 2:This on the America Unplugged channel, rokfincom, you'll find the Wise Wolf Golden Crypto Show, arteburn Radio Transmission, america Unplugged. I see Free Thinker Patrick S, matthew Henry. Matthew Henry says Tony, I don't know what you're talking about, don't you know? Everything is awesome. Yeah, everything is awesome. Well, every day that we're above ground, we're doing pretty good. I don't know about the financial system, though I'm color me skeptical, matthew, but I know I appreciate your sarcasm. It's good to see Max B is in the chat. Thanks for being over there. We've got this show every Monday. It's live. It's just to go over the markets in the monetary system currency, current events, politics, precious metals, bitcoin and banksters all that good stuff. We try to get that done within the hour. All right, let's go jump into it.
Speaker 2:I want to get this article on the Plato's Cave allegory and the Bitcoin ETF. I want to discuss this. That's some really great points. Let me stop this green and start another one. This is just good history. This is just fun. These are the kind of articles that I like. I don't know. It's my wheelhouse. You got philosophy, you've got finance. You've got new systems, the argument of finite versus unlimited. I like all this stuff. This is Zero Hedge, authored by Mark Jephthavik of thebomethrowercom. It's Plato's allegory of the Bitcoin ETFs. Lump investors are trapped within a system they believe is real.
Speaker 2:Probably everybody reading this is familiar with the Plato's allegory of the cave. Well, I hope so. Those who aren't may recognize in many of its contemporary variations seminal blockbusters like the Matrix or lesser known cult classics such as Dark City, even the memetic thought construct of the simulation hypothesis. They are all expressing the same concept that what we think is the real world actually isn't. It's just a flattened projection of reality. The common folk are like prisoners chained in a cave where, in observed events, are largely acts of puppetry Choreographed from behind their field of vision. In Plato's allegory, the manufactured existence is quite literally the projection of shadows. What is taken for reality are really just images on a wall, a screen, if you will Behind the captives. If one could make their way out of the cave, they could perceive reality for what it is, in the splendor of the full light of day. I describe this all the time where the prisoner escapes, goes out into the wider world, sees the sun and comes back in and can no longer identify the shadows on the wall and the puppetry. He is an outcast. He's like there's something else. You've got to see this, but he's no longer relevant. That is the twilight zone ending of the Plato's allegory of the cave.
Speaker 2:The philosopher goes on to describe the difficulties an escapee would have if they were to reenter the cave and try to explain to those who were still captives what reality is really like the allegory is timeless to open up, never ending interpretation. But one thing it takes aim at is a key observation which society increasingly loses sight of the depictions of truth, renderings of them, even reasonable facsimiles, there are not reality. The map is not the territory I love that phrase to the map is not the territory, the thing that depicts. And the thing depicted is not the thing itself. In fact, the latter may be missing an entire dimension of truth. That rendered is, at it, a muted, faded simulacrum of what is real. I've always drawn attention to how the images on the cave wall were two dimensional and that the difficulty to the returning escapee would be if the in face in explaining reality, is that trying to explain what is 3D, what is real? And this he goes on to say.
Speaker 2:The cave Is the fiat banking system. I love this. This is. This is fun. Inside the monetary cave, what passes for reality are just projections, their spreadsheet models and financialized derivatives of repothecated paper assets. Through these constructs, financial institutions can create renderings of assets which they claim are economically identical to the real thing. That phrase, economically identical was proffered as an objection to my article of several years ago about Bitcoin, futures ETFs and why you shouldn't buy them In the fiat cave.
Speaker 2:A synthetic derivative that is more or less correlated with the price action of an underlying asset is the same thing as the underlying asset. You see, it's. It's the, the passing off that you go into. What a derivative is Like, the what's? It depends on what the definition of is is. But what a derivative actually is, well, it's. It's like a mimicking or the distillation of a thing, but not the thing itself. The mindset is so baked in it's part of our zeitgeist. Other fields like artificial intelligence have Gloomed over onto it. If an AI can demonstrate behavior just like human intelligence, then AI is intelligent. Neither proposition is true. A piece of code that can pass as a tuning test is not sentient, it's just code. And having a derivative is not the same as owning the underlying. And if the recent David Rogers Webbook, the great taking is right, about anything which I have reviewed here Is the same as the asset.
Speaker 2:Bitcoin ETFs ETFs are not Bitcoin. The anticipation around the coming Bitcoin ETF in the US is euphoric. We've had them in Canada for years and they're actually better than the ones coming in the US, as we'll note below. They've made believers out of skeptics. They proved, bitcoin is an unstoppable force.
Speaker 2:In my article about Bitcoin future ETFs, I listed four reasons not to own them. One counterparty risk. Number two dilution. Number three decay. Number four divergence. Divergence from the spot price. While the spot ETFs will, in theory, obviate reasons two through four, the reason the number one reason counterparty risk still looms large. That's so true. Any of this stuff and I I'm very much into the gold and silver aspect of where we're headed financially because of the lack of counterpart, when you hold it in your hand, counterparty risk that plummets. That's you've got it, you own it, whereas you go into something like a spot ETF, which could it be good for the crypto space is going to drive Purchases and therefore drive price. Probably, you know it'll do some of those things, but again, you're still not holding Bitcoin, which the whole point of Bitcoin was for you. You know it's so easy to own, it's so easy to have your own wallet and I think it just we're always waiting for the fiat currency system to come in and make something legitimate, when they should be asking us, not the other way around.
Speaker 2:The spot ETFs have their own challenges. If there's a hard fork, say this ordinals and inscriptions, business and the BRC to 20 craze leads to one. The ETFs will apparently be forced to choose which fork to follow, and they may choose wrong. Make no mistake. Bt Bitcoin ETFs, whether they're spot or futures, while sure to open the floodgates to into institutional enthusiasm for Bitcoin, is best left for institutions, funds and endowments, all of which would still be better off holding BTC directly. There is one advantage that the spot ETFs have over the futures, and it's a big one. They'll provide a pathway to holding long term positions that won't get chewed by decay, at least not beyond the management fees. Buying into these ETFs won't make the lump investor into a holdler, not by a long shot.
Speaker 2:No, it's funny. I saw this first when I was looking at somebody had, somebody had bought was it the Robinhood app? And maybe it's changed. But I said how much Bitcoin do you have? And I think it was a few thousand. And I said we ought to move that on to your wallet. And I didn't know at the time. I just I was been buying Bitcoin for years. I had you know relationship with exchanges and stuff. And they said, oh, I can't move it. And I thought what do you mean? You can't? You can't move your own BTC. No, because you don't really own. It's kind of defeats the whole purpose of Bitcoin. You should have your own wallet, decentralized, have your 12 phrases. Well, we'll do a class on that for the podcast to.
Speaker 2:I need to get some crypto people on here, and right now. When I say crypto, I mean I follow pretty much everything, but I'm I'm just a Bitcoin maximalist at this point, not not for any sort of ideological reasons. I'm just waiting for you know, I'm waiting for something to happen in the space for other coins. I own other coins and we'll talk about some of them. I'll have some people on, but right now I'm not. I'm definitely not telling you to go buy any other coins. Should learn the space and do your own research. We're not going to make any recommendation on coins.
Speaker 2:And this is the extra dimension of Bitcoin is math. Those who have been in Bitcoin before now got there because they had left the cave. We left the cave because of math. I agree with that. The math that says, among other things, that we're in a debt bubble that can never pay off or even be meaning meaningfully reduced.
Speaker 2:Our currency is backed by nothing. It actually steals from people with every new unit printed. That's exactly what it is. It's theft, it's a hidden taxation. It's a crime. They rob people of value. Never explaining this. You know fixed income people. What happened to all those folks? You know when they did the massive PPP money? You're talking 80% of all the dollars created in the history of this country. 80% were created in the last 48 months or so. Absolutely criminal. We can't stop expanding either bubble money supply and debt, because if either contracts, it will crash the global financial system.
Speaker 2:Remember when I told you where the world's oldest living fiat currency? Every other currency followed. 52 times more currency today than there was in 1980. 52 times more currency on earth. How much? How much devaluation? By the way, when I say where the oldest living, there's been other fiat currencies that disappeared in between that time. You only need look to history.
Speaker 2:And we use a specialized area of math public key cryptography to assert property rights in the real world. He goes on to say Bitcoin is specialized expression of mathematics, secured by energy. Private keys can be represented in a memorable seed phrase. I've used this. This is I mean. These are all things that work. The Bitcoin protocol is implemented through zero trust mechanisms. Any alter, alteration to the protocol, such as the 21M hard cap would create a fork, a challenger, rather than change Bitcoin In a cave world. This all sounds great, great to the inmates. Hard money secured by energy. They scoff. You mean tulips backed by nothing.
Speaker 2:It's funny that people always try to put the the tulip mania. You know that was a. I remember learning about this watching. This is back 2008 or nine, when Oliver Stones, wall Street, money never sleeps and he had just this framed picture of the tulip and tulip mania. You know this is something that happened to the Dutch. I want to say it was like around the 16th century or so, and you know the tulip bulb was used as currency because it was so well. They just made a bunch more of them and then the whole thing came crashing down because, you know it becomes ubiquitous. It's not so rare, doesn't carry the same value and you know they can easily just grow them, you know, and so they.
Speaker 2:Somebody found a way around it. That's not what Bitcoin is. Bitcoin can't be created In fun item like that's. There's not more units of them. There's only 21 million Bitcoin that will ever be Mine and this you know.
Speaker 2:Gold and silver very similar. Their finite. There's that. We know that they're a finite resource. You could argue about crude oil and other things. That may be a natural occurrence or it may be replenishing itself, but gold and silver certainly don't, unless you're talking about millions upon millions of years. And I don't even know then geologically I'm not an expert. But you have, it takes so much work and energy to get them that even they I mean it's comparable, it's finite. We don't know the number, but Bitcoin is even harder than that because you know on the ledger we know that there's only 21 million. So tulip may do, look many has no bearing whatsoever in the real world.
Speaker 2:Let me see if I can get just a little bit more out of this article. Yeah, we can't fault them, for this is kind of an institutionalized Stockholm syndrome. They've none never done the work to peer outside the cave. As I type this, bitcoin is still under a trillion dollars in total market cap, and I think it would be interesting to watch. Going forward will be the ratio total, the and this is again that's talking about the Bitcoin ETFs to ratio against the overall market cap. Well, it's good, good article.
Speaker 2:I like the Just opposing it to Plato's cave and that so much can be said in that realm when it comes to how we're looking at the monetary system and what's happening and why gold and why cryptocurrency are so important. You're talking about massive historical shifts that have not been seen so far in our lifetime, in in in generations. You know, at the end of world war two you had the Bretton Woods system. I know I say this a lot, but it's worth repeating. That was a new economic world order out of the ashes of world war two and the victors. You know we're assembling a new financial system. That was, you know, coming up. It's 80 years ago. It is 80 years ago. That's a fourth turning, that's a saccharum, but the Romans called so about 80. Every 80 years or so, you have a massive turning Of all institutions, history and cycles.
Speaker 2:I believe in this, the cyclic Theory of history. I also believe in the conspiracy theory of history, because that's where all the scholarship is. But if you look at that, those cycles, and so we're in a we're right at it, folks we're in a fourth turning. So when you put those things together and you see that institutions losing their credibility, and look at what's happening to the Federal Reserve, this isn't your father's or grandfather's stock market. We're not even. They're not even talking about profit anymore. It's talking about esg. So I'm looking around for what's still what's real and people are craving that right now. It's like it's Instinctual and I think that's why you're seeing so many, like the Dubai airports and and just average people, the Shanghai exchange. Everybody's trying to get gold or they're getting into Getting into crypto. I think you should and you should look in.
Speaker 2:I don't recommend cryptos, but the reason I put it as part of the show and why I deal with it in my, in my brokerage, and because it's absolutely pivotal that we, as Human beings, start realizing that the system that we are under it's built to serve just a few. They're gonna pull their ripcord, they're gonna, they're gonna have their golden parachutes. Don't get trapped in the normalcy bias that you know Tomorrow will be like today because it was like yesterday. That's not. That's not how any of this works. I've got to defeat that in myself. So this reason I it's good for me to go live and do the show, because I have to remind myself Not to be so caught up in the normalcy bias.
Speaker 2:All right, one last, one, last article. Real quick, man, I really and I. I just was an afterthought, but I wanted to read a little bit. Oh, let's see if I could try. I'll try to cut it down. All right, let's, let's put this up on the screen. This was what I was talking about earlier with the the economics of the gold, russian rubble and what happened the blowbacks after the sanctions is up on lu rockwellcom. Let's put this up. This is a. This was an interesting piece and I I will Get these in the show notes as well. We'll start having making sure that the wise wolf golden crypto show has a lot better show notes. But we all know what happened, you know, after the sanctions on russia, and let me get see if I can get through this really quick the sanctions imposed against russia. And let me do this. Let me give attribution, insight into russia's view on gold, and this is alice dare mclow Uh, it's, it's, uh, they're substack. And again, lu rockwellcom. I always kick myself if I don't, if I don't give some attribution.
Speaker 2:The sanctions imposed against russia boomeranged on the western economy. The geo political instability they provoked, rising prices for energy and other resources, inflation Negative factors put strong pressure on the global economy, in particular, the global financial market. In 2023, all these circumstances will objectively affect the change in the stereotypes Of investment policy in the world, from risky investments and complex financial instruments To invest in traditional assets, primarily in gold. According to saxo bank analyst, in 2023, increased demand for this metal will lead to its price rising to 3000. As a result, there is a real opportunity in the very near future to significantly increase reserves due to increase in physical volumes of gold. And revelation of what this author is talking about, by the way, is a new Financial system for russia and the gold back rubble.
Speaker 2:Large gold reserves allow russia to pursue a sovereign financial policy and minimize dependence on external lenders. The amount of reserve affects the country's reputation, its credit rating and investment attractiveness. Large reserves allow you to plan the state budget for a long time, buying off many economic and political risk. In 1998, the lack of sufficient international reserves became one of the causes of the crisis, which ended in default for russia. Now and he's talking about russia now our country already has large gold and foreign exchange reserves, being fifth in the world after china, japan, switzerland and india and ahead of the united states. And there's there's a reason. These countries are moving away From the dollar system, the swiss system. You know these, these alliances like brazil, russia, india, china, sath africa.
Speaker 2:I'm telling you this is the stuff to watch and I'm running out of time too. Over the past 20 years, gold mining in russia has almost doubled. Why the united states? It is almost decreased by half. By dismantling real wealth, the united states has lost its competent and interest In the production and processing of strategic resources, gold and uranium, etc. The printing press funds the purchase of everything they want. Gold production, which today barely occupies 1% of russia's gdp, may well grow to do to the growth of production and relative oil prices. And that's all I can do on that article. But this is.
Speaker 2:There was a lot in here and really talked about the, the ruble system After war war 2, that the soviets had signed the bretton woods agreement but they didn't ratify it. They went to their free floating currency in 1961 With cruise jiff had dire consequences. They came back to gold and you know, for a second time now this is going to be the ruble 3.0 Stuff to watch folks, especially when you see those sanctions, the way that they were and the the whole point of them. What was supposed to come down after Russia invaded ukraine. All right, so much to cover. We'll be back next week for sure.
Speaker 2:Watch the Podcast channel for the wise wolf golden crypto show. I know if you subscribe to me in other places. Please go subscribe to the actual podcast because there's going to be interviews put up there, even short snippets. If I find an article I really want to read, I'll just go and read it and upload it to the channel. So please do that. It's going to be a crazy year 2024. We're going to. There's going to. There's geopolitical upheaval, financial echo, the Internal, sociological everything. Folks, it's the everything bubble and I'm glad that you're here. It really means a lot to us.
Speaker 2:We're sponsored by wise wolf golden silver, obviously, and we have a membership program. I put wolf pack together because I Got two years ago, because I got tired of watching the same ads from these 1 800 number gold companies that really just trying to target people with 10,000 and 20,000 and 50,000. All I was the same. You know I was starting out about my first gold coin when I was 22 and, uh, I wasn't treated very well and I, you know, I didn't know what I was doing and the guy knew it. We don't do that.
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