Discover the intriguing insights of Peter Krauth, author of "The Great Silver Bull," as he joins us to reveal the untold narrative of precious metals in our modern world. With a passion for history and economics, Peter takes us on a journey through gold and silver's profound impact on civilizations and their potential resurgence in today's shifting monetary landscape. Our conversation navigates the uncharted waters of de-dollarization, the emergence of BRICS nations, and the intriguing impact of these developments on the precious metals market.
Venture beyond the facade of the silver market and uncover the forces shaping its future. Peter Krauth brings his financial acumen to the table, dissecting the delicate balance of supply and demand that keeps the silver market teetering on the brink of transformation. Together, we explore the burgeoning industrial demand, the intrigue of market manipulation, and the unique mining practices that paint a complex picture of silver's role in our economy. This episode is a must-listen for those eager to understand the often-overlooked intricacies of this lustrous metal.
As we speculate on the evolution of money, pondering silver's place in the digital age, Peter provides a panoramic view of the opportunities that await the savvy investor. From the promise of a precious metal-backed cryptocurrency to the allure of junior mining stocks, this episode is an invitation to reassess your investment strategies. Tune in for a thought-provoking discussion that could very well redefine your perspective on silver's glittering future in the global economy.
Discover the intriguing insights of Peter Krauth, author of "The Great Silver Bull," as he joins us to reveal the untold narrative of precious metals in our modern world. With a passion for history and economics, Peter takes us on a journey through gold and silver's profound impact on civilizations and their potential resurgence in today's shifting monetary landscape. Our conversation navigates the uncharted waters of de-dollarization, the emergence of BRICS nations, and the intriguing impact of these developments on the precious metals market.
Venture beyond the facade of the silver market and uncover the forces shaping its future. Peter Krauth brings his financial acumen to the table, dissecting the delicate balance of supply and demand that keeps the silver market teetering on the brink of transformation. Together, we explore the burgeoning industrial demand, the intrigue of market manipulation, and the unique mining practices that paint a complex picture of silver's role in our economy. This episode is a must-listen for those eager to understand the often-overlooked intricacies of this lustrous metal.
As we speculate on the evolution of money, pondering silver's place in the digital age, Peter provides a panoramic view of the opportunities that await the savvy investor. From the promise of a precious metal-backed cryptocurrency to the allure of junior mining stocks, this episode is an invitation to reassess your investment strategies. Tune in for a thought-provoking discussion that could very well redefine your perspective on silver's glittering future in the global economy.
All right folks, welcome to a very special edition of the Wise Wolf Gold and Crypto show. The gentleman I'm about to introduce I want to say I had a copy of your book come across my Kindle and anything that's precious metals. I try to do some research, see who's putting out what kind of work, and then I just got engrossed into the book and I loved it and I wanted to have you on for a while. I want to give a shout out to Melissa for making this guest possible, but Peter Kraut is here. He is the author of the great Silver Bull. Peter, so glad to have you. Thanks for being here.
Speaker 2:Tony, it is my pleasure, and thanks for that intro and thanks for your kind words about the book. I'm really happy to hear that you've enjoyed it.
Speaker 1:I did and I'm a history guy. That's what really got me started in being in precious metals was history itself and then seeing so much tied to the monetary history. What creates a civilization. I thought the great Silver Bull was packed full of that. It had great information, there was great charts. It was not phoned in folks, it wasn't written by AI, it's not a pamphlet. It was very well done.
Speaker 1:Again, let's just start from the beginning, because we're in this massive shift historically of the monetary system. Those of us who are Silver Bugs and Gold Bugs have been thinking about this for years, but we are on the precipice. It's clearly happening. You've got de-dollarization, you've got the BRICS nations in full force and then the periphery BRICS, brics Plus, is going on with Saudi Arabia, the Petrodollars dying. So much happening. You turn on your financial network. I don't think they totally get it yet. It's got normalcy bias. You're living in the past. I think thinking about precious metals, and monetary metals especially, is thinking about the future. I want to know, peter, your inspiration. What got you into this field? Then, of course, what was the inspiration for the book? What was the message there?
Speaker 2:I've got to say, tony, that I'm going to say similarly to you. I got interested in precious metals because of my interest in history. After I did a finance degree at university, I started working in the industry advising clients, helping them build portfolios. Really, it's interesting how, again, I became interested in precious metals, gold and silver, because of history.
Speaker 2:At one point I'd gone to the back office of this company where I was working to advise clients and I said here's this golden, silver physically backed mutual fund. I'd like to offer this to my clients. They said, oh, this is kind of. We don't usually do this kind of fund. Let us look into it, we'll get back to you. It took a couple of weeks, I guess at least, and then I had no news. Went back to them. They said, oh no, no, this is much too risky. We just do equities and bonds and money market. We're going to stick to that. I remember thinking to myself that is the most ridiculous answer. There's nothing safer than physical gold or silver. If you're concerned, then all you need to do is you allow your clients to invest in high risk tech stocks, all sorts of things. It's a matter of degree. If someone's concerned, if you're concerned about clients. Let's just limit the amount of exposure. Let's say that they could have to this kind of fund that gives them golden silver in their portfolios, but they wanted nothing to do with it and I couldn't give up. I lasted a few more years there and just got more and more interested in this and did more and more research and ultimately ended up had an opportunity to work with a group in the US called the Agora group that has multiple branches but eventually ended up writing a long story short they went through restructuring. I was writing, actually freelance for mining companies. I had been researching, writing and recommending all sorts of resource and precious metals investments for that length of time and then eventually the last couple of years had been writing just silver and gold research and articles on a weekly basis for them. As I say, they went through restructuring. I was on my own for about a year and a half, did freelance writing for mining companies. Kind of got bored with that and said I've got to go back to newsletters and did that.
Speaker 2:Now, that was during the pandemic, so it would have been around the beginning of 2020 and actually the friend I mentioned earlier, just before we went on to record, had a good friend, colleague who suggested that I write this book. I had built up all of this research and information and experience dealing with silver and gold, talking about it, looking at it from the fundamental side, the mining side, and this friend said, peter, you really should write a book on silver. And I thought about it and I said this guy's right, in the sense that I do have a bunch of work where I've archived all this research in terms of the different aspects of silver. And if you look at the economics, the macroeconomics, the history, the supply demand, how to invest in it, in physical silver, how to invest in the mining companies, I thought we're in the middle of the pandemic. Why let a pandemic go to waste? I've got all this time. I'm not going anywhere.
Speaker 2:I've built up this research and I thought, all right, the first step is going to be an outline and, I kid you not, probably within about a couple of days I had my outline all set up. I just sat down and I said what would make sense to have in this book, what I want to cover, what should people need to know and want to know about in terms of the history of silver, why it's important and, ultimately why they need it in their portfolios and how to invest in it. So I put that outline together and then it was a question. I was it moved a few things around, but then it was a question of, over time, of course, start to fill that in, use some of the research I've done and then do new research to fill in all of these different areas. And I kid you not, this was way more work than I had ever expected.
Speaker 2:Many times, ignorance is bliss, and it certainly was for me in this case. Had I known how much work this book was going to be, I'd have probably not even attempted it. So I'm glad I did not know and I'm glad I did it, because it really has opened a lot of doors and my approach to silver and investing in silver is all about education, and I think this I think I hope at least the kind of feedback I've gotten from people is that it has really opened their eyes to this market, the possibilities, the importance of it and how you can go about it. And I really was trying not to be academic. I wanted this to be something that would be simple, easy to understand, easy to read, and that's the kind of feedback that I've gotten, so I'm really happy with the result.
Speaker 1:Well, it's certainly a worthwhile project and that's how. So you know. If you could look back and say, if I knew what I, that's great, and then what I know now, I wouldn't have attempted it and that's how you know. It was worthwhile, but I enjoyed it. Just knowing the changes that are happening in our monetary system, with our currencies worldwide, with inflation, the destruction of the, Was it 80% of all dollars created or created in the last 48 months or so it is crazy yeah exactly.
Speaker 1:It's a big investment. So you start looking around at how do I house value? And some people are asking that for the first time. Those of us who are gold and silver bugs and precious metals advocates are always looking at gold and silver or money. But I think that what's so interesting about the title of the great silver bull is I don't even think we're at the beginning of the bull market, for what's going to happen to silver. And again, this isn't a show about investment Like you're going to make it all. It's going to go to the moon. I just think you Fundamentals, you look at silver.
Speaker 1:How much is being pulled out of the ground? How much is needed? How much is in landfills Because of the? It's not worth stripping out of old computer systems and software and all that stuff to melt. The photography, all the stuff from the previous decades, all that silver is just in landfills. It's not coming back. Gold usually gets recycled. It doesn't get thrown away because of the value. We're just so off kilter with the gold-silver ratio, with pricing models or completely out the. Historically we're nowhere near where we were. Where do we start? If someone is new to this and says why silver? And where do you start with them on that.
Speaker 2:So I don't want to throw a whole bunch of numbers out, but I do want to give people, as simple as I can, an overview of the silver market and the supply-demand pointers to get some A rough idea in their minds of what we're looking at. So the first big important number is that the silver market consists of about a billion ounces a year in terms of supply-demand. So roughly a billion ounces are produced a year or available. About 85% of that comes from mining and about 15% of it comes from recycling. So when we talk about recycling and silver, the easy recycling is things like silver jewelry, silverware, because both of those are mostly silver.
Speaker 2:So when someone's going to melt it down, they can get all of the silver out of that pretty easily. And, like you said, tony, a lot of the other applications for silver industrial applications use so little silver per per unit or per thing that you're manufacturing that it's. So it's hard to justify the cost and effort to go and try and get that back out of the item, especially things like electronics, if it ends up on a motherboard or if it ends up in a little switch or something. So most of the silver in that case ends up not being not being recyclable or we can't get it back, so it's consumed in some form. So, as I say, it's about a billion ounces a year.
Speaker 2:But in the last two to three years the silver market has been way off balance in the sense that overall supply between recycling and mine supply, we are roughly at about a billion ounces. But since 2021, that has been there's been a supply deficit. So in 2021, it was about 1.1 billion ounces of demand versus a billion ounces of supply. 2022 was almost 1.3 billion ounces of demand versus 1 billion ounces of supply, and then last year was about 1.1 again or so billion ounces of demand versus a billion ounces of supply.
Speaker 2:So your listeners are probably wondering so how can you have these deficits go on year after year? Now there's a lot going on around that and, yes, some people will talk about is there manipulation? My short answer from me on that is that I do believe that, and this wouldn't just be for silver, as with many other commodities, there is manipulation. My sense is that it takes place more in the short term and you get the price being pushed around by large investment banks and so on, but I believe over the long term they're not able to sustain that. And I'll just point to the fact that in 2001, silver was $41. By 2011, it had rallied tremendously to $49. So if silver was manipulated that entire time, well, it did pretty well and managed to go more than 10 times. It was up 11 times roughly, or almost 12 times. So to answer the question about supplying to the deficits every year, the numbers and again it's not worth going I don't think for your audience it's worth going into too much nitty gritty detail, but the way the numbers are calculated, you've got supply about a billion ounces. You've got demand at roughly 1.1 or 1.2 billion ounces. You've had deficits the last three years. But there are secondary supplies, what we call secondary supplies and those are mostly these 1000 ounce silver bars that are sitting on exchanges or in what we call ETFs exchange-treated funds. So these 1000 ounce silver bars are what can be taken for delivery, and that supply is drawn down to meet the excess demand that isn't met by mining or recycling. So nobody knows exactly how much there is. We do have some rough numbers, but what we also know is that in these last three years of deficits, the three main exchanges futures exchanges that have these 1000 ounce silver bars, are the London fault in London. You have the COMEX in New York and then you have the Shanghai exchange in China, and they're roughly down about 70% in the last three years.
Speaker 2:So the big consumers of silver that have had to have access to this silver to produce their products and I'm gonna get into where I think most of it's going in a moment have, I believe, bought these futures contracts and or have bought sufficient amounts of silver that is backed by physical silver in these silver ETS. These are like a stock you can buy on the stock market. The price follows the silver price and in most cases they have physical silver backing them. But if you own enough of that stock or those units and we're talking big money, often hundreds of thousands or millions of dollars, which big consumers have the ability to do you can say I want to redeem my units for physical silver and they will have to deliver you that silver. It might there might be a bit of a delay and they might scramble to find it, but so far things have been orderly and they've found the silver and they've delivered it. So that's where that deficit has been met for the last three years.
Speaker 2:Again, as I say, we've seen about 70% drop in those three major exchanges.
Speaker 2:That's where most of that silver is that we know of in the last three years and I believe that really can only go on a little bit longer. I'm thinking and that's just me maybe another year or a couple of years and at some point some big consumer of silver is there's gonna be a squeeze and they will not be able to get their silver, whether it's someone that buys one of these long contracts, as we call them, on a futures exchange and they're entitled to get the silver delivered to them and the exchange says oops, I'm sorry, we're out of inventory, we're just gonna give you the cashback and that's not gonna be what they need. They actually need the physical silver and that's when the proverbial you know what it's the fan and it's the game's over. So this is kind of what I see in the supply demand, what's been happening, and hopefully that gives your listeners an overview of the silver market. Now I can drill down a little bit and tell you about where the demand comes from, the different types of demand.
Speaker 1:Yeah, I'd like to know that. First of all, the premise is interesting because I think the general public would be wondering why, when they think of manipulating a market, it's for like a pump and dump or for a gain, and this is the inverse of that. Like you're looking for a long-term strategy of I'm assuming accumulation, you look at the largest silver holder, a physical silver holder in the world, is JP Morgan. Right, exactly, and it's interesting. I've asked several people this and we can get into this later in the show if you want.
Speaker 1:But I have questions about what happened in the 70s with the Hunts, because they were the last people to ever truly I guess you wanna coin it, corner the market, or they just basically made these contracts that they were using. They just exposed that, as they kept buying all the physical, they were shut down. No one has ever come back and you could you could be a whale and come and do that. Now no one does it, no one picks it up, and I think that's the tell. As far as speaking on that, what are the different aspects of what's it's driving it where it goes?
Speaker 2:Right. So in my view it's roughly I mean, I kind of to keep things a bit simple I like to look at it in kind of two baskets. I say that there is mostly investment demand and then you have industrial demand. Until maybe a year or two ago it was roughly 50-50. So about half went to industry and about half went to investment. Now that has been shifting.
Speaker 2:Silver has become more and more, the demand has become more and more industrial and what has been overwhelmingly driving that is solar. So the International Energy Agency put out a chart last year and they're forecast and they're saying that by 2027, so we're really just almost three years away solar will be the single largest source of energy worldwide. It will surpass coal, it will surpass natural gas. So to produce solar energy, to make these solar panels, you absolutely have to have silver. Silver is a crucial, indispensable component to manufacturing solar panels and of course, over time, like any industry, producers are going to look for ways to cut costs, to increase efficiencies, and they've managed to do that over the last 10 years. There are these charts of what we call silver loadings. Loading's are the amount of silver per panel to produce the same amount of power. So that line has actually gone down very gradually and the last couple of years it's actually flat, and so they've been, I'm gonna say, unable to squeeze more silver out of a panel to produce the same energy output. Now I also believe and because I spend my days looking at this stuff and the numbers and all the research that line that's steadily gone down and has flattened is about to spike. I think we're at an inflection point where the amount of silver required per solar panel is going to trend up very quickly.
Speaker 2:Now the reason I say that is solar is evolving, technology is improving, and the most common type of solar panel and I'm gonna use these words that are really acronym, so the most common technology for solar panels is something we call PERC.
Speaker 2:The next more efficient technology is something called TopCon and then after that the even more efficient technology is something called HJT. So PERC's the most common. Topcon is gaining dramatically, and HJT is also gaining a lot in terms of the number of panels that are being made every year that are using these newer technologies. So what is important to know is that TopCon, which is actually being forecast to represent 50% of all the new manufacturing capacity this year, already takes 50% more silver per panel. Hjt is a technology that takes 150% more silver per panel. So again your listeners are gonna be wondering well, why would you produce a panel that takes more silver? And it's all economics. It's very simple and it makes perfect sense. It's because they're more efficient. Despite requiring more silver and spending the money on extra silver to put in that panel, you are getting more energy out of that newer technology panel and so it makes sense to use more silver make panels with these newer technologies because your energy output is higher.
Speaker 2:You're just being more efficient period.
Speaker 2:So Last year the Silver Institute which is the most known, I guess, and most used research group for the Silver Supply and Demand and trends in the market initially expected that last year solar would require 140 million ounces. So out of a billion ounces of supply a year, that's already 14%. It revised that number to 160 million ounces in November. When they said 140 back in April, I thought that was way off. I said you know I could see what was happening in the trends in the solar industry and with the technology and the new technologies coming on and requiring more silver per panel, I said we are going to be much closer to 180 to 190 million ounces of silver going to the solar industry alone. And I was right. It turned out. I was right. When they revised their numbers in November they said it turns out that the industrial demand they didn't give the number specifically but it was easy to do the math they said the total industrial demand would be 632 million ounces, so that's over 60% of silver now going to industry. That solar would go from 25% in 2022 to 30% of industrial demand in 2023. So 30% of 632 million ounces is just shy of 919 million ounces. So it was right at the top end of my range of 180 to 190. I think that we're going to see something again very close to that it's.
Speaker 2:When you look at how much the capacity to produce solar panels has grown in the last couple of years, it's been off the charts. 2021 to 2022 saw a 55% growth in solar manufacturing capacity. By the way, china dominates that too. It's there at about 80% of worldwide solar manufacturing capacity. 2022 to 2023 saw another 55% growth in manufacturing capacity. We don't have the final numbers yet for 2023 growth, but it was forecast at roughly 23, 24. I think it's going to be well north of 30% growth. And we haven't even factored in this extra demand, like I was saying about silver, more silver being required because of these newer technologies requiring more silver per panel. So it's just absolutely exploding. If you're not paying attention to what's happening with the solar industry and its requirements for silver in the silver market, then you're really missing 80% of what's going on in terms of demand. That is just really. That is the 800 pound gorilla in the silver market and it's really driving what's going on in silver.
Speaker 2:Now, one last thing about that in terms of.
Speaker 2:I'll touch on a couple of other points in terms of demand.
Speaker 2:But I like to say, for an easy way to remember and understand it, that I believe that because industrial demand is a relatively predictable thing in terms of demand in the silver market, so I like to say that the industrial demand is providing a rising floor under the silver price and that it's going to be investment demand when that kicks in and it does kick in, every so often it's, it's harder to predict, but it creates these, just these dramatic booms in the silver price and that's the sort of a wild card that helps bring these spikes in the silver price which we've experienced multiple times since 2000.
Speaker 2:And I am convinced are coming again. So that's just a, as I say, kind of an overall way to think about what happens in silver and the silver price. And if we talk about some of the other sources of demand, as I said, in industrial demand is about half it's actually more like 50% now and the balance is mostly some form of investment. That includes, in my view, jewelry, silverware and physical investment. So people buying coins and bars and just storing them, sitting on them. That that is sort of how we, how we see the overall, the overall breakdown of silver, of silver demand.
Speaker 1:I think it's interesting too with the emergence of the BRICS nations and you know there's talk of the go back BRICS currency and but you also see, I think, a rumbling in getting away from the Western style exchanges and going to a different exchange system because of the, because it's so rigged. I had Stuart Englert on last week. He wrote the book rigged on the market and we had. We talked about silver too, but you know, I remember, like some of the figures that were thrown around back in February of 2021, when there was a big push to buy physical silver from the same people who brought you the GameStop short, you know, and that my office was lit up. I knew every dealer I knew is people bought physical silver. The next day the spot price went down and then, if you looked on the paper trades, they sold off 1.5 times the annual supply in one day.
Speaker 2:Exactly.
Speaker 1:And there's a reason, see, and that's because it's counterintuitive, because it's against the grain of trying to make a price go up. Nobody really notices it, but you know, you have. You know, JPMorgan traders are convicted of this. I mean, we got three.
Speaker 1:So there is something to it and I mean, if you're looking at, I think, spot today and we're recording this on the 31st of January 24 spot today is like $23 and three cents. I just bought some kilo bars early before I went back in the studio. I just I think of how cheap that is. You know I was born in the day the Soviets invaded Afghanistan in 1979, on December 26. And you know I was what? Six months old and silver was $52 and 50 cents. I'm 44 years old now. $52 and 50 cents in 1980, which is today probably 250, maybe $300 in purchasing power.
Speaker 1:There's something just raw and I think anybody that really looks at this, if they go get the great silver bull and read your book, I mean it's very late, well laid out. For what's the future of this commodity? Not just as a monetary medal but, as you mentioned, all these industrial uses. The entire green economy is built on that. If we're going to be in that system that those things are going to get built, we're also in a war economy, unfortunately. I mean, you know, you look at what is there? 40 pounds of silver in each tomahawk missile. These, these demands aren't going away yet.
Speaker 1:I go to look for and I know you wrote for silver Mining stocks or you you wrote about them it there's not a lot of that going on, there's a lot of. There isn't as much activity like you would think because of this, because of the price, it's just not profitable to pull it out of the ground. So that hasn't even started yet. So it seems like there's gonna be. Do you foresee like some sort like you're mentioning earlier, where they don't have the orders? They, they try to fill the orders with fiat, like you were if you're in a cash-in SLV. But is there a, is there a day of reckoning coming where the orders can't get filled? The price reevaluates and off off we go. I mean, does it? Is it this like? Is it become organic and viral after that, where it just can't? You know, nobody can really put a stopping point on it because it has to reevaluate. But what's gonna happen to silver?
Speaker 2:Yeah, I think that you, you were right, absolutely. That's the kind of thing that will happen. Silver is the only metal of sort of the Major and even minor metals if you think about precious metals, platinum group metals, base metals that is below its 1980 high about 50, for it's more than 50 percent below its 1980 high, and that's not even accounting for inflation. So it has a lot of catching up to do and You're right, it is, it is not that profitable for miners. Something also I think, and I like to point out that's particular to silver compared to other metals, is that only about 20, only about 25% of mined silver Actually comes from primary silver mines. So if you look at, you know, you take a hundred, a hundred Mining companies that have some sort of silver output, 25 of those overall Can say that silver is their main product. 75% that produce silver are really actually mostly producing other metals copper, lead, zinc or gold Mostly and so silver is a byproduct in those cases. So here's, here's how things get exacerbated. The shortage can get exacerbated.
Speaker 2:These companies Don't really hear that much for the silver price. It's, it's a, it's almost an afterthought for them because really, as I say, their, their focus is producing these other metals and oftentimes will just sell off that production to someone and something called a stream, and so they may sell it even in advance of of Building the mine, in order to get financing. So if you think about a year, you've got this deposit. You need to build a mine and you need money to build a mine. You know you're gonna have a certain amount of silver output over, say, 20 years, 30 years you might. Someone comes up to you and says here's, you know few hundred million dollars, I'm willing to buy that silver for you. As long as the mines operating, I'll pay you fixed price of, say, four or five dollars per ounce of silver for that entire time. And and here's the you know one, two hundred million dollars. Again, that miner is oftentimes happy to take it. They get that cash up front. It's not dilutive to their shareholders, so they take that money up front and then that silver is spoken for for the rest of of of the life of that mine. And Again, they don't. They don't care what the price of that silver is. They know They've sold it in advance. And the ones who have not sold it in advance, it's such a small Part of the profit To. In their bottom line they just happily accept whatever the price is for silver and if they happen, you know, to make it it's what we call a byproduct and it actually helps to lower their overall cost to produce other metals. So we'll just take whatever the market prices and and that's that now it can get.
Speaker 2:If that, that can be exacerbated even more in a couple of ways. One is if we have an economic slowdown now. So first of all, it's much easier to to scale back mining. Then it is to try and ramp up mining, and I'm not going to go into all the reasons, but there are many reasons Permitting financing all these things. So it's just Challenging from a geopolitical perspective and financing and and all the rest of it. So, as I say, it's easier to scale back.
Speaker 2:So imagine you have an economic slowdown. You would have likely a slowdown in demand for what we call base metals, so things that are used industrially copper, led zinc which are Important metals that have silver as a byproduct, as I was saying earlier. So if you have a slowdown, if you do have scaling back in production of those metals, well, guess what? You automatically have a scaling back of production of silver. Unintentionally it it's again, it's a byproduct of producing those metals. And if the miner says, well, I'm going to produce less copper for the next six or twelve months, they're going to produce automatically less silver. So, although there may be plenty of demand for silver, because 75% of it comes comes as a byproduct of mining other metals, again, those miners don't care what the silver price is or what the demand is for silver. They may just automatically start producing less silver and it makes the the deficit in silver even even more more pronounced. You could need it just as much as you could need it, but if no one's willing to produce it for you, you're gonna have to scramble and find some other way to get it. So that's one way you could actually see, although despite silver prices being high and maintained high, you could actually still see supply come down.
Speaker 2:And a more intricate way is that you, if the price is high or even goes higher, you could have silver miners say, well, this is fantastic, I'm making good profit. And I'm talking about, let's say, mostly primary silver miners whose product is mostly silver. They can say this is fantastic. Silver prices are now, let's say, $30, $35 an ounce. My bottom line might my. You know, my main focus is to produce good profits for for my shareholders. So rather than because, because silver prices are high, rather than produce silver from the same place in my deposit that I have been getting the ore out of the ground for the last couple of years, I know that there is an area of my deposit that has lower grade silver, and if I mine lower grade silver and I produce less silver per ton of ore, for example, because the concentration is lower, I'm still gonna make a decent profit because the price of silver is high now. So you could, in that scenario, again get less silver output despite high or reasonably high, sustained high silver prices. So this is contradictory in a way if you think about it.
Speaker 2:But so and I talked about it in the book silver what I say in the book is that silver is the silver supply is inelastic to the silver price. It does not necessarily always and or immediately. Over time, yes, but over perhaps some considerable amounts of time, you could have silver just simply not react or go in the silver supply go in the opposite direction to the price, making the price spike even higher. So that is, these are some of the ways you get these spikes and that these spikes become so big and they just kind of take on a life of their own. And we haven't even talked about all of the social media kinds of things around that and the excitement and the fear of missing out, the FOMO that drives all of this. This thing really can go wild.
Speaker 2:And so in the book I talk about all of these things. I talk about the things that drive silver, why it's a very particular kind of market, different from most, and why it can go crazy and why I have such a well, I mean, I again I've said many times my ultimate price target for silver is not to be sensational. It's what I think is truly realistic. Again, I've done the research, I've done the homework, I've looked back at prior bull markets. You look at inflation, you look at what's driven the silver price, you look at it relative to other assets and I just think it's realistic. And I've heard people who are very, very accomplished and have managed billions of dollars and have even higher price targets than I have. So I don't feel so crazy when I talk about that.
Speaker 1:Well, you know it's interesting too. You look at the as a dealer, the timelines when the first quarter of 2020, after the executive order was signed you had this massive spike in the stock market. It was like the highest it had been since 1929. And then it's the lowest since 29. They went and, just, you know, peak in Valley and then, and so I remember, golden silver temporarily went with it Exactly and so in theory, right in paper, because it was down like 12, 13 bucks an ounce or 11 bucks an ounce.
Speaker 1:People were calling me trying to lock in trades. I don't have it Exactly. It's funny, that's the tell. It's because I didn't. There's nowhere to get it. I mean you're saying, well, this is the price for spot silver. I couldn't really get any kind of significant product at the time. You had prices had to rebound, there had to be a recovery, and then it stabilized enough for where there was supply hitting the market and that's where we are in the papers. I just that just one area alone shows that we're not, this isn't evaluating correctly, and then I call the stuff that you've laid out here in the interview.
Speaker 1:You know, with the lack of supply, and again, I just think it's one of the. It's going to be one of the greatest financial stories of our time. It's because it's going to come out of nowhere for a lot of people to see. Well, silver just never does anything. Silver just never does anything. And one of these days it's just going to have that perfect storm. Things are going to line up and I agree with you, it has to do with the, not only the monetary use, but the industrial use of silver, the demands just going to hit.
Speaker 1:That was one of my theories. And again, we don't. We're speculating. We don't know why. Why do these? Why do the big players want to suppress? And the only thing I can think of is accumulation, for they know this is. They're doing the simulations, looking into the future. What's the next move? Can we, what can we? What can we do cheaply? One of the things you could do is silver is just again the time frames add up and especially where we're going and how to. How to keep it under 30 bucks an ounce, which I don't think will last very much longer. But we don't know. We're not. Neither Peter or I are given investment advice.
Speaker 1:This is more of an exploration of the manipulated markets. But, peter, looking into the future, do you see and it's kind of a veer off topic a little bit do you feel like silver will have any sort of official monetary use again with governments, or are we, is it's going to strictly be something that is, or the private citizen?
Speaker 2:So I guess my answer to that is if we think, in an ideal world it absolutely would have a role, and I mentioned in the book. That doesn't mean that we have to go back to that. But silver has been money for longer than gold has. It has over time represented more value of transactions just because it's more of a daily type of money. Where you've got these you've got smaller value. I guess in the same weight An ounce of silver is obviously a lot cheaper than an ounce of gold. So for daily transactions it's made a lot of sense, and your listeners, many of them, probably do know that for much of history, going back 5000 years when silver started to be used as money. For nearly all of that time silver has had been continuously used as money until about the late 60s when in the US and elsewhere most of the developed world they started to remove silver from coinage. So it's, and then it's officially since 1971, since Nixon, you know, closed the gold window and said you know we're not no longer going to back our dollar with gold, that there have been no more precious metals and nothing of true value that has been backing currencies, and so we've been living in an experiment ever since then. So the last 70 years have been an experiment. Sorry, the last 50 years have been an experiment in terms of, you know, operating a worldwide financial system with fiat money.
Speaker 2:Central banks know what's going on. It's not an accident that last year sorry, two years ago, in 2022, and I don't have my numbers exactly, but I know that I'm close I just read some recent stat this morning. In 2022, central banks had bought 1000, I believe it was 1087 tons of gold. In 2023, that number is about 1040 or so tons of gold. So if you look at a chart, a bar chart, that shows the amount of central bank gold buying, first of all it was selling until 2009,. It reversed to buying in 2009. So think about what happened then. Great financial crisis. Everything has flipped on its head. We've had consistent buying by central banks of gold and in the last two years it has been off the charts. It's been way more than in the prior years. What happened in 2022.
Speaker 2:Russia walked into Ukraine, the US froze Russia's treasuries and then Russia saw that they no longer had control over. I think it's hundreds of billions of dollars worth of assets, and so you have to imagine that central banks around the world governments and central banks looked inwards and said what if that were to happen to us? We're sitting on piles of treasuries. What if that were to happen to us? So I believe that and that's being led by China. But we've heard, you know, it doesn't take much to know, and I follow this, but it doesn't take much to know that there have been plenty of central banks around the world, mostly in the European Europe, eastern, in Asia, in the Middle East and so on, that have been dramatically accumulating gold and I believe it's to build a true reserve of liquid, of a liquid asset money, true money, real money. That push comes to shove, they can use, anybody will take it from them. It's easy to transact. We know that that's been been going on and has has that has really kicked into high here in the last couple of years. So I mean that's a little bit of a roundabout thing.
Speaker 2:I started talking about gold but, as I say, silver has been money for 5000 years. The last 50 years we've been living in an experiment fiat money and if I think a little bit philosophically about what money is and what it should be, really it's it's a store of value and it's a means of transaction. Those are the two basic functions of money. Well, fiat paper is not a store of money. That is pretty clear. It's down about 98% in the last 50 years in terms of its buying power. He's a transaction you do have with paper money. It's readily accepted for now and and it's, you know, it's government decree, so you've got to use it to transact etc.
Speaker 2:But you know, I thought about this when I wrote the book and I thought about about what has happened since. You know we've had this. You know we've had this development of Bitcoin and all these cryptocurrencies and there is, there is a bit of a, a, I guess, a hang up, if you want, but ultimately, ideally, what you would have is some kind of digital money that was fully securely backed by gold and or silver or because you've got you've got that, you know, multi thousand year, I guess confidence of something holding its value, difficult to produce, and therefore every new ounce that comes out of the ground has value. Because it's difficult to produce, effort has to go into it, and then you have the ease of transaction, of transferring value through some kind of a cryptocurrency to anybody anywhere, instant, almost instantly, and what we call frictionless. So I almost no cost, and if you can do it on something like a blockchain, where you've got a decentralized ledger and everyone has confidence that, yes, you know, this person or this entity that I'm transacting with is sending me this, this value in this currency, then, as I say, that would be the ultimate form of money.
Speaker 2:So do I think we're going to get there? I don't know. What I do know is that it is for central planners to have fiat is something that they would not want to give up and would not give up easily. It would take a dramatic. I think it really would take a dramatic. I'm not saying I'm not hoping for it and I'm not saying we'll get there, but I think that for them to give up the power that comes with fiat currency would take a lot dramatic reset. And I think if we got there and gold and or silver became somehow backed a new form of currency, then I think that would be the ideal to have it in some form of precious metals backed crypto. It would be absolutely ideal.
Speaker 2:But the real hiccup that you have there is trust, right?
Speaker 2:I can imagine you're smiling at it because you know where I'm going with that and that is the. That's the flame the ointment. If you have that form of money, can you? Will you have trust that you're sending these, this currency around the world? Are you comfortable accepting it? Is the is that physical silver or gold in that vault and you're told is there? Is it actually there? And if you need to get it, can you cash that currency in those coins, those, those virtual coins, and get that if you want it? And I think that will always be sort of the issue if, if you can do it, if if there were private maybe private, ideally private crypto currencies. There still will always be kind of you know this doubt perhaps in people's minds, but if you have regular audits, if you have confidence in the audits I mean, we're really going off on a tangent here, but these are kinds of the kinds of things that that the debates that we would have to have around, that kind of of a ranger.
Speaker 1:Counter party risk. Exactly, and I start with the premise that if the government's involved in my currency, I automatically don't want it. There's no in history. You know, when you have decentralized at least there's, the levels of trust go up. You know, the more decentralized, the more transparent, the more open. Then yes, and I agree with you because I like the technology of blockchain when it can be used decentralized. You know I do buy Bitcoin. You know we talked last week on the Bitcoin ETF, myself and Stuart Englert, and just manipulation is everywhere, and we're, you know, those of us who follow the precious metals markets are seeing the Bitcoin ETF stuff the same skeptically, the same way. Well, so we could go on forever.
Speaker 1:I want people to go read your book that's I did and I'm better off for it. And I want to say the title of the book again is the Great Silver Bull crush inflation and profit as the dollar dies. That's a great title. By the way, peter, peter Kraut, ladies and gentlemen, now you tell people where they can find you, and do you still have a newsletter? Do you have any kind of paid subscription or anything like that? You have a website.
Speaker 2:I do. So I've got a copy with me. I'll just show it. It's always good, I think, to have a bit of a visual so you can see what the what the book looks like. I didn't bring it with me, so it's the Great Silver Bull actually, just as a little side note, last year I was approached by a group in Germany and the bulls actually the books actually available in German, nice, yeah, so that was kind of fun. You can find this on Amazon, it's available in print in Kindle, it's available as an audio book version on audible etc. So it's easy to get, it's easy to read and the idea was really to bring the opportunity at what I feel is a generational opportunity to invest in silver and and everything that surrounds it, the different ways to invest in it. And I think at least the feedback, as I say, that I've gotten is that it's it's it's a simple, easy read that does give you that overall view of the opportunity.
Speaker 2:So now I also write an investment newsletter that that is, from what I know, the only silver focused investment newsletter out there. It's called. It's called Silverstock Investor, so you can find that at Silverstockinvestorcom. I've partnered with Gwen Preston, who writes her own newsletter that focuses on junior mining, and the website is resource maven. But if you want to find my newsletter, it's Silverstockinvestorcom. You'll. You'll see these other newsletters posted there as well, and other than that I'm on. You can follow me on LinkedIn, on Twitter.
Speaker 2:I do want to say about the newsletter that that is subscription based. I'm out of Canada, so it's $49 a month or 499 a year, which in US dollars is probably somewhere around 350 or so a year. $35 or no, yeah, about $35 US per month. And I cover the whole investment, silver investment space everything from ETFs, silver backed ETFs, silver mining ETFs, large silver royalty and producing companies, developing companies and then all the way down to junior explorers that are looking for silver, and it's a relatively small field there. You know, when you look into this in detail, you start to realize there really are not that many companies that focus on finding silver. It doesn't occur that easily in in, in what I'm going to say, high enough concentrations that make it attractive to to mine Most of the silver that we find. Most of the deposits that these companies have are going to be in Latin America, in Mexico, in Mexico. In Mexico, mostly concentrated along the western coast or the western parts of the US, of Canada. You have some in places like Poland and Russia, a little bit in Europe Western Europe, some in Australia, and that really covers where silver is found, as I say, in interesting concentrations.
Speaker 2:You know, you don't have to take big risks If you want to invest in the companies that are involved in silver, and I give a couple of examples. So two of the bigger names in this space are Pan American Silver and then you have a company that is a royalty company called Silver Wheaton or, sorry, today it's called Wheaton Precious Metals. It used to be called Silver Wheaton, and here are a couple of interesting examples. I have these in the book as well, but from I believe it was, I think from I believe it was 2008 to 2011, wheaton Precious Metals, which is a multi-billion, probably the largest public company in the silver space period that you could invest in, was up 17 times. Its stock was up 17 times in three years from 2008, and from not even three years.
Speaker 2:November of 2008 to April of 2011,. That stock was up 17 times. So you don't have to take big risks to get really big payoffs in the silver space. But you know where you really have sort of the driving explosive potential gains is in the juniors, of course, and discoveries are rewarded. And I'll give one sort of small example.
Speaker 2:Just last year my subscribers got into a company called Hercules Silver which is exploring in Idaho actually, and they hit a discovery and initially we got in around 18 cents. Ultimately the price went up to I think it was about $1.50 or so Canadian. So they were up about 800% eight times. That has come back a little bit but still remains very attractive and they have a really, really good discovery. So that gives you some idea of you know how these stocks can actually explode.
Speaker 2:But you do want to be careful if you go into the explorer side of things because that is much higher risk. You want to spread your money across several names and, again, you don't need to go into that area, but I do talk about them if you're a bit in the newsletter and everyone has to know themselves and I say silver can be is quite volatile, but you need to make that volatility work for yourself. If you're someone who is lower risk, that does not mean you should not be exposed to silver. I believe it's a question of perhaps what form of silver and if you go into the stock side or the equity side, which risk profile in terms of companies that you're comfortable with and build your portfolio that way.
Speaker 1:Well, I'm definitely going to subscribe. I'm going to do that and say that website one more time.
Speaker 2:So that's Silverstockinvestorcom.
Speaker 1:Silverstockinvestorcom. Great Well, peter. Again, thank you so much for being here. Love the book. Thanks for the content. It was a fun conversation. We could go on for hours. We sure could. We're not asking questions, but we'll try to keep these things within an hour. Folks, go subscribe, go check him out by the book and I think we're all going to have to be prepared for the next chapter in the story, the saga that is silver, and I think it's going to be an interesting ride. All right, thank you, we appreciate you. Folks. Thanks for subscribing to the podcast. Be sure and check us out over on freeworldfm, the new stations carrying us on Mondays. All new show coming this Monday. So 11 am Central Time Wise Wolf Golden Crypto Show In a world of bulls and bears, be the wolf. See you next time.