Election Eve Jitters Trigger More Gold and Silver Volatility

Mike Maharrey: Greetings, I'm Mike Maharrey, an analyst and reporter here at Money Metals, and I'm happy to have David Morgan back on the show with me. David is a widely recognized analyst in the precious metals world and he's the publisher of the Morgan Report and the author of the Silver Manifesto. How you doing today, David?

David Morgan: Doing well, thank you.

Mike Maharrey: Well, I appreciate you, as always, taking a little bit of time out of your day to hang out with me. And I thought I'd start and just ask about your general impressions of an event that got a lot of play. I'm not sure a whole lot came out of it, but that's the BRICS Summit in Kazan, Russia. And they did introduce a manifesto, but it doesn't sound like they did a whole lot in terms of actual concrete movements towards anything. What kind of was your impression on the summit?

David Morgan: It was very similar to yours, Michael. I'm a show me, don't tell me kind of a guy.

Mike Maharrey: Yeah.

David Morgan: That's a lot of talk but not a lot of action. And then of course Putin held up this ... the currency. Well, that was just a mock-up, I mean, I could have given one of my million-dollar bills. I printed up for the investment conference that I used to attend, and actually I did. I had to printed it up and had the logo for the Morgan Report and email, phone and contact points, basically a business card on currency. And then I changed it. The next time I ordered them, I changed it to billion-dollar notes.

Mike Maharrey: Inflation.

David Morgan: Yeah. But I had about as much behind it as this note that Putin held up. So a lot of people are really exaggerating what this means. I mean, the main thing that the BRICS have as an issue is how to make it a viable currency when it's outside the US system. Because most of global debt is in US dollars, which most of these countries or all of them at this point in time, are not going to be able to get out of those debts by paying it off in a different currency. So that's number one.

Number two is that unless you have a lot of countries involved, you don't have much basis for a sound monetary system. It's almost back to barter. So if you're in Brazil and you trade reals for rubles, and that's all you've got. And you don't know what you want from Russia, you just got a bunch of their currency, what do you do? Now if you put in all these other countries, okay, that works because you've got a lot of diversification. You've got 20 different countries, more or less. And you could trade amongst each other and maybe the rubles could be used for something out of South American country or remember.

So the idea that they're totally moving away is a bit overstated. And I'm finishing up the final words into this month's of November Morgan Report. What I'm pointing out is that really what's above and beyond the BRICS? We're going to be writing about the BRICS in this issue, but I'm writing about the ISO 20022, which is the international standard that's going to be used by everybody. And so the BRICS just kind of falls under that. But most people don't see it from that aspect, but I do. Because it's kind of going back to use the metaphor, if we go back to the illness, kind of funny that no matter how bad our enemies were, we all fell in line with the same music and the same beat. Same drumbeat worldwide, very few exceptions, or a few Black men that stood up and basically said, "Not for this country." And unfortunately they're in an early demise. But I digress.

So my point is that I think it's overblown. I think that, yeah, it's good for them and all that. But when you get down to it, the globalist bankers have been in charge for a very long time. And the globalist bankers are going to make sure that everyone Globally adheres to their mandate, which is this ISO 20022, and that's it. So I think I've said enough.

And then the last thing I want to say is that they did suggest that the BRICS meeting would come up with a new trading facility for precious metals. That's pretty easily accomplished. That's not a big deal like issuing a currency against a basket of goods and services, all the stuff that's talked about. So they could implement a new trading facility for gold, silver, platinum, palladium and basically take it off a page from the Shanghai Gold Exchange. Which is much more, in my view, fair. Meaning the leverage in the market's paper to physical is not nearly as extreme as what you get in the LBMA and on the Comex where there are rules, but they just seem to be ignored.

So I do think that was my big takeaway. My biggest takeaway is all the noise and music and fluttering around continues with those that it's BRICS, BRICS, BRICS, BRICS, BRICS. But the real gem in there from my take is that hey, maybe if they start a precious metals exchange and get into the real price discovery, that could kind of upset the apple cart, as the expression goes.

Mike Maharrey: Yeah. Speaking of upsetting the apple cart, looking at the big picture with BRICS, I'm kind of with you. And I'm going to be honest, I was probably maybe a little bit guilty of overflowing the potential impact of BRICS prior to this summit. But do you think that ... you do see some things happening within that block. You've seen some trades that were made that kind of went outside of the dollar just using local currencies. Do you think the rise of BRICS and even maybe more than that, kind of the underlying sense that, hey, we don't really want the dollar to be the only ... I can't think of the analogy. The only thing that's out there that's really significant, do you think that that could start to at least erode away the influence of the dollar, if not creating a currency crisis?

David Morgan: Yeah, I don't know about the currency crisis. But no, you're spot on, Michael. I mean, I forget the exact numbers, but the idea is correct and it is accurate as far as the idea. And that is, if you go back, I think a decade, I think it was 68% of all world trade was settled in the US dollars. Now it's like 58%.

Mike Maharrey: Right, right.

David Morgan: So that's the trend, and that will continue. But it doesn't mean that the BRICS is going to be a head-to-head competitor with the dollar. But what it does mean is that you go back to the petrodollar. I mean, all oil settlements had to be done in US dollars up until recently, that's gone away. Well, that's a huge part of the world market because everything runs on energy. So yeah, you're right, the trend is less and less transaction with the dollar isn't the dominant currency. And now it's not the only currency that you can use for oil settlement. And that will continue on that trend. And then I think the push really is to get into a global currency basically, that they all adhere to. And even that could be subtle.

I mean, I was on stage years ago and people were talking about one world currency, which we talked about for decades. And I held up my Visa card and I said, this is the one world currency. On this trip, I've been to England, France, Switzerland, whatever, two more countries. Now I'm in Hong Kong, and I never had to exchange currency.

All I did was use this piece of plastic everywhere I went. And the end of the month, I'll get a bank statement, they'll do all the exchange disparities for me, all the exchange rates on my trip. And it's been that way for a long time. So you got to kind of think outside the box, meaning sometimes people don't see the obvious. You can maintain separate nation state currencies as long as they all adhere to what the globalists want, the globalist bankers want. And so you make an exchange rate. Now, it'll be a lot easier when they're all digitized and they're all CBDCs or something that fits into the CBDC model. And that's what I'm writing about, again, this month in the Morgan Report.

Mike Maharrey: Yeah, that's going to be interesting how all of that evolves when you start talking about the CBDCs. I was talking about it with a colleague the other day and kind of making a distinction between a central bank digital currency that's kind of used in that global trade exchange and distinguishing that between a central bank digital currency that is rolled out for the public, which actually just did in Russia. I'm pretty wary of the CBDC for consumer use just because of the surveillance and tracking aspects of it.

David Morgan: Oh, absolutely. Well, I'm pushing back on that. But this is hearsay, but I was in Beijing in the early two thousands, and the rumor was that Rockefeller contingency was there as well, and they were meeting with the Chinese banking Consortium. And really what's happened since then til now is that the best, most tested, most experienced central bank digital currency tied to social credit score is China. And I think that China is the model that's been tested and the bugs are out of it, so to speak. And that's the model that'll be used globally. They might rename it, they might whatever. But that's, I think, the goal.

And that's to get everybody involved with a ... and it doesn't necessarily have to be a central bank digital currency. I'm writing about that, as well. I mean, you could have JP Morgan issue the currency-

Mike Maharrey: Sure.

David Morgan: Blessed by the government. That's a digital currency. And now, they, the United States government didn't have to go through Congress to approve a central bank digital currency. It's one of our member banks that good old JPMs putting you in a digital currency for your convenience and for lower transaction fees, faster payments. And all that's true, I mean, there is some benefit.

Mike Maharrey: Sure, yeah.

David Morgan: But the benefit to them is they get to see every transaction you ever make.

Mike Maharrey: Right. Turn it off if they want to.

David Morgan: Turn it off. Yeah, absolutely.

Mike Maharrey: Yeah, I never thought about a private bank issuing it, but that's an interesting work-way. Because there is quite a bit of, I think, even legislative resistance to it. I do some legislative activism at the state level, and a number of states have passed laws in an attempt to kind of mute or block the potential of a consumer-based CBDC.

David Morgan: The bankers seldom lose, and they're usually like two or three steps ahead.

And sometimes they lose stuff deliberately. Again, to digress slightly, but in the book 1984, Orwell talks about this perpetual war that they create that they have to keep going to just kind of mind bend everybody. And that's kind of how I look at the BRIC somewhat. It's like, oh wow, we're going to extradite ourselves from the dollar. Well, in some cases that's true, but it's sort of a half-truth because as long as you're controlling both sides of the perpetual war or the currency game, do you really care? I mean, if the puppet masters have got both sides fighting, but they're still above it, what difference does it really make?

And a lot of people don't think that way because inherently we want our freedom. We want to resist, we want to be ... there's a direct tie, as you well know, I mean, no one's done more in my lifetime than I'm aware of, than what Stefan Gleason has done with all the people involved in Sound Money. And there's other groups that they understand honest money is tied directly to freedom. And this is something that people inherently know, but they don't really maybe understand it. But the idea is that this resistance may be more or less mocked up or anticipated and mitigated as they see fit, all the time bringing people thinking they're really fighting for [inaudible 00:13:08].

Mike Maharrey: Yeah, controlled opposition-

David Morgan: Exactly.

Mike Maharrey: As the saying goes. Well, let's talk about real money for a second. Let's talk a little bit about silver. We saw ... I don't know if it cracked $35 or if it was just really close. But had a pretty good little run a few days ago, now we're back down to, as we're recording this, I think 32.87 is what I'm looking at right now. So I think some people were thinking, maybe we'll get that $40 level. Do you see $40 silver in the near future?

David Morgan: Well, [inaudible 00:13:41], but yes, I do. I mean, 32.50 is more or less the line that most technical analysts draw. And I'll use that one. Now we're still above that. I mean, a really, really strong bull market, you'll break through resistance and that becomes support, and it usually tests it one time and bounces off it. So I mean, it isn't to the penny, but just for talking purposes, 32.87, it trades a day at 32.50 and trade X few contracts, and then it bounces off and closes at 32.60, and that's the lowest we see it from now on. Is that going to happen? I kind of doubt it.

But that's the kind of indication that if we did see that, that's telling you really, really with clear vision, we have got an extremely strong bull market in silver, and we do. But I also expect it to not be quite that strong. And silver's really good at fooling people, tricking people. It's like, oh, I should have sold at 35 and maybe it prints in the 29s. Oh man, I could have sold it at 34 and broken even. I bought my silver at 28 and premiums really high back a couple years ago, and I actually ended up paying 34 the ounce. And now I could have sold it back at 34 and now I can't, blah, blah, blah, blah. There'll be some of that. But we'll work through that pretty quickly, I think. I think 40 next year, I don't think it's this year. But you always give the same caveat, Michael, and I don't have to apologize, but there's so much out there.

Mike Maharrey: Oh yeah.

David Morgan: Two black swans do a head-on collision, we could see 40.

Mike Maharrey: Yeah, yeah. That's kind of been my thinking all along. We've seen a really strong bull market in both gold and silver for the last year, and there's plenty of reasons for that. I really think that there's still something that's got to shake out of the broader economy after the insanity that we saw during the pandemic in terms of money creation and quantitative easing. And then the subsequent effort to raise rates in order to quell that. I still think that we're a ways off from really seeing the ramifications of the monetary malfeasance. But I could be wrong, but that's just my thought. I kind of go back to 2008 and in 2007 they were cutting interest rates and they were saying everything's fine. And of course, it wasn't.

David Morgan: Oh, you're right. I mean it's been papered over and we've gotten by with it, but there is a point of no return. I think we've hit it. And how does it manifest? I mean, there's been books written about it, movies made and all that. But no one knows exactly. But it will be painful and it will be an adjustment. Markets tend to adjust naturally. I mean, even when there's a lot of intervention, you can only print so much currency that people don't accept it. And that's where we're at in Venezuela and Zimbabwe and all these countries that have failed in their currency. And to think that the dollar could do that is just unimaginable to most people.

Mike Maharrey: Well, and I think that's why it's important, kind of going back to the whole BRICS thing. Even if you don't have the dollar falling off as the reserve currency or something extreme like that, I think any ... as the dollar becomes less important, there's less demand for dollars. That's going to constrain and at least make more obvious the consequences of the money printing. Because a lot of that is absorbed by all of the other countries that need dollars in order to engage in global trade. So that's why I think it's important that you don't have to have a currency collapse. You really just need a small dip in demand to really start seeing the impact of that. Again, monetary malfeasance.

David Morgan: That's correct.

Mike Maharrey: Kind of looking at silver and gold, and this was one of my cohorts wanted me to ask you this. And this, obviously, neither one of us has a crystal ball, so we'll put in that caveat. But what do you think would be more likely to see first? $3,000 gold or $40 silver?

David Morgan: That's a good question. Yeah. I think it's more likely $3,000 gold. The reason is that gold really is establishment. I mean, no one will say that on one of the major financial channels, but look at what the central banks do. And not what they say what they do, and they've been collecting gold for quite some time and they've sped up their collection and they know it's a money of last resort as the late great Jim Dines used to say, "Gold is the monetary hitching post of the universe." And so will there be a gold back currency or a CBDC that's tied to gold or whatever? I don't know. I doubt it, at least initially. I don't think the bankers want to have any restrictions on what they do.

Mike Maharrey: Right. And the governments certainly don't.

David Morgan: But nonetheless, it's possible that it could. And the way the late Jim Sinclair outlined it to my understanding was they would try something that would be modern money theory, doesn't matter how much we print, it's digital. And maybe they'll put a time on it. That's another thing. Now, can they track and trace what you buy, but if you've got over, pick a number, I don't know, let's call it 5,000 USD or USDC in your account, that that's too much. You're only allowed to have a balance at the end of the month of 1,000. So if you don't spend that 4,000 into the economy some way, shape or form, then you're going to lose it. I mean, these are just absolute bizarre ideas you never even contemplate 30 years ago or whatever, but they are possible today. So like a time value on money in the opposite direction, which you've already seen negative interest rates.

Mike Maharrey: Yeah, I was just thinking that.

David Morgan: [inaudible 00:19:53] blower. But it's basically that idea that you've got money in your account, but unless you spend it, you're not going to have it. Especially on a UBI, when they put a lot of people on the UBI means Universal Basic Income for the audience as a refresher, and that would be probably very restrictive. You're given 1,500 a month and whatever you don't spend at the end of the month does not roll over, that kind of a thing. So a lot of control. I mean, this whole idea that they know what's good for us and we don't, they could control our lives and make it better, is just an antithesis to everything that I live and breathe.

Mike Maharrey: Yeah. That's the story of government right there in a nutshell.

Looking at the gold silver ratio still in the eighties and it's historically high. Do you think this is kind of showing that silver hasn't really confirmed a new bull market that can be sustained? And dovetailing off of that, if you can maybe explain a little bit about how do gold and silver historically behave relative to each other? And why is this kind of an anomaly that we're seeing right now?

David Morgan: Yeah, that's a lot. First of all-

Mike Maharrey: That was about three questions in one.

David Morgan: That's okay. No, I got it.

So first of all, the demonetization of silver took place a long time ago. From a practical aspect, not all that long ago, meaning 1965, we started the Johnson Slugs, we've never seen silver in the circulating coin since then. So the answer to the gold silver ratio simply is this, gold silver ratio never got above 20 for the 1300s, 1400s, 1500s, 1600s, 1700s, 1800s. But only in the late 1800s did it get above 20. And the reason it stayed at 20 or lower, which is pretty close to the natural ratio, is that both served one function and one function only, that's money. So the highest purpose of silver by a gold silver ratio is that it's money.

Mike Maharrey: Right.

David Morgan: When it's an industrial commodity, it gets into these 40s, 50s, 60s, 80s, 100, 125 during the illness, the outbreak in March of 2020, the ratio got to about 125.

So now you have to look at, well, is silver money or is it just a commodity? And it's really both. Legally it's money. I mean, I can prove that in a court of law. I can take a Silver Eagle minted in 2024 that says $1 on it, put five of them down on a counter in Walmart, and they have to accept it at face value as legal tender because it is. So legally, it's money. Economically, is it money? No. Why would I spend something that's roughly 30 times face value? So five, so 150 bucks, for something that's really printed as a $5 in fiat, I would never do that unless I'm trying to prove a point or [inaudible 00:23:02]. So it's not really, and it's not coveted by the bankers. I mean, they cut it off in basically the crime of '73 where the eastern establishment went to gold oil. If you have one commodity or the majority of one commodity and you make that the money, it's a lot easier to control.

Mike Maharrey: Sure.

David Morgan: If you have a Bimetallic standard and the miners, farmers and civilians out in the west have a lot of silver and you can convert silver to gold, gold to silver. They have less control because they don't own it all, the majority of it. So anyway, that's a side trip.

So I do want to see it below 80 as confirmation. Why do I choose 80? Because I chose it.

Mike Maharrey: That's fair.

David Morgan: When I started the Silver Investor before I changed it to the Morgan Report, the top of the market at that time, meaning silver was undervalued, the gold was eighty to one. And it stayed under that for a very, very long time. And it's a good metric. I mean, you could do a curve fit and all that. I mean, it's called [inaudible 00:24:16] losing regression, I'm not trying to pressure, you've got a good math background. But the point is that's a good number, it's kind of a rule of thumb. So I really do look for it. I want to see that silver confirms gold move. And I really want to see silver catch up on the monetary side.

I mean, a couple of analysts and their friends of mine have said, "Well, it's kaputski, it won't." I believe strongly that it will. In fact, I still believe it will outshine gold. I think a minimum we'll see a forty to one ratio. Which means relative to gold, it'll do twice as well in percentage terms. I really don't think that's outside the realm of reality. Even if you don't think of silver as money, people think of it as a store of value. And that's a hard asset. And it's hard for the maybe North Americans to think silver still is money because there's so many arguments against that. Yet the romance languages, the word silver is money not gold.

In all the romance languages, it's kind of hard to tell a Hispanic in Mexico that [Spanish 00:25:23]. Silver's not money. Money isn't silver. What do you mean? They look at you with a blank stare. And these people don't have that background or thought about it or whatever. So whether or not it is. I mean, you look at Rhodium, people invest in copper. I still believe silver is money, as I just outlined. And it's used more and more in the, excuse me, crypto world because there are several gold and silver backed cryptocurrencies. So again, the market does always have a free market aspect to it. And as people start to resist this CBDC push or this digital ID that'll be required and all these things that are near future, they'll look for ways out. And they'll do it. Maybe illegally, it just depends.

Mike Maharrey: Right. Did you make anything out of Russia announcing that it plans to add silver to its wealth fund?

David Morgan: Well, I'm very conservative, as you know. I mean, if you look at me from the lens of a certified financial planner, I'm radical because they think the best investment is money right now. Trade that currency into money, it's still exchangeable. But yeah, I'm looking at it carefully and I think it has potential to move the market. But I don't want to say that without more information, more data. I'll be a federal, I'll put my fed hat on, I need more data.

Mike Maharrey: Right. We're data dependent.

David Morgan: Yeah. But I do think ... in fact, it was interesting because there was a picture I got from someone. I don't think it was directly from Russia, but it showed Putin walking through big pallets of silver, which there's a few pictures of the queen doing that, and it's always gold. I thought, "That's interesting."

Mike Maharrey: That is interesting.

David Morgan: He knows it's a strategic metal, he knows it's needed for any kind of war effort. He knows it's imperative for a technological world. That's interesting. They're actually stockpiling silver in Russia, and that was a couple years ago, before this announcement. So yeah, it could. Again, it depends on how much. And of course if they're smart, they're not going to announce how much. Just announcing this amount.

I want to go off on a vector here real quick, Michael.

Mike Maharrey: Please.

David Morgan: But the thing about China, I remember, I don't know what it was, probably four years ago or so, maybe longer. And China was having all their gold refined from 100 ounce bars or 400 ounce bars into kilos. There's a reason for that that no one ever talks about. And that is that they were getting fake bars from the authorities or let's say entities of high status that were tungsten covered in gold. Not a lot of it, it wasn't like it was half of their inventory or anything. But it was enough to where they paid the price to have it re-refine.

Mike Maharrey: Interesting.

David Morgan: Because now they know it's all 9, 9, 9, no shenanigans. But no one ever talks about that. And they wouldn't want to cause an international. I don't know much about the Chinese, I've been to Beijing once, I've been to Hong Kong several times. I don't know the Chinese mindset. Art award doesn't teach you ... it teaches you a lot, but doesn't really teach you the philosophy of China. And it varies. But the point being that from my observation of my age, they don't stir the pot very much. They're very quiet, long range thinkers. They're not looking for next quarter's earnings. They're thinking in decades, not in quarters of the year. And for them to make a big fuss out of relatively a few bars, why cause an international scene? Why not just re-refine it?

Mike Maharrey: Yeah. Yeah. That's my impression, as well, of not just the Chinese, but kind of the eastern mindset. It's much more, more of a long time horizon. And ours is getting shorter, I think. Sometimes it's not much longer than 30 seconds.

David Morgan: Yeah. How fast could you scroll?

Mike Maharrey: Yeah, exactly. Well, let's touch real quick on the election we've got coming up and just ... you don't have to go into real depth, but just kind of your impression of what it's going to mean to the precious metal markets with a Trump win and a Harris win.

David Morgan: Yeah. Okay. So the beginning of the market report, it's not published yet, it'll come out this weekend. So much to discuss this month. One of the major topics, of course, is the US election, and we are going to ignore it because there are numerous ideas of what will happen with any given outcome. In fact, there are even rumors that if one candidate is elected, a lawsuit would ensue and file to disallow entrance into the White House. Rather than focus on the hypotheticals, it's more important to look at developments that are in place regardless of which party is sworn in office January, 2025. So that's my opening statement on this month's issue.

Mike Maharrey: I love it.

David Morgan: But I'll answer your question.

Mike Maharrey: No, I think that's a great answer right there, really. I wish more people thought like that because I don't know. The personality ... I don't even know what the word for it is. It's almost a personality contest as opposed to any kind of meaningful debate over leadership.

David Morgan: Well, the meaningful substance is really what we talked about in the next paragraph. There's plenty to discuss surrounding BRICS and how it'll influence global finance in the future. We'll discuss that later. But one important fact is that all countries have signed ISO 20022, which is a global managing standard for financial transactions. This is what the Fed Now program was all about. And I go on from there.

But just so people can say, "Well, David didn't answer the question." If we get a Democrat in office, history shows that the metals do better than a Republican. But that doesn't necessarily mean that'll take place this time. But that is a historical standard. So if you get a Democrat into the White House, the Democratic Administration, usually the history shows that the metals do better. I'll give you that.

Mike Maharrey: That's fair. That's fair. Well, I'm going to let you go on that one. But before we do, let folks know where they can find the Morgan Report and other things, David Morgan.

David Morgan: Sure. The best place is the landing page of theMorganReport.com. Please get on our mailing list. You never know, I mean, the powers that should be have got more and more control, especially on the media, although that's lightened up with Twitter being bought by Elon Musk. But still, there's a lot of censorship. So I've been shadow-banned on all the platforms except Twitter, they've been open to me. But my YouTube channel never gets promoted, Facebook, I really don't care about. LinkedIn, I'm probably free there. But the best thing to do is get on a free email. So that way if anything goes down or whatever, we've got your email and we can get information to you.

Outside of that, I'm still working on the documentary, SilverSunrise.tv. Finished filming. We have one guest we really, really wanted in the film, but he's just got too many concerns regarding how this avant-garde's pushing the envelope message might interfere with his wealth holdings basically. And I could see it from that perspective. For me, I'm radical. I look back to our lives, fortunes and sacred honor is what we would give up to bring freedom to this country. That's where I stand. But some people rather ... it's a free market, he has the right to say no, I don't want to be in some of that controversy.

Anyway, I'm doing long-winded, but it's almost done, I think it is done with the filming. Which means a long editing process. Hopefully still have it out around Christmas. And of course, they'll be coming back to Michael to have everybody there watch it and give me some feedback.

Mike Maharrey: Yeah, for sure.

David Morgan: And do a sequel. What would you like to see in the movie different than what we did? Or what's your thoughts or whatever. So hopefully it'll be a big wake-up call for not only people that's already aligned with what's wrong with the financial system and a political class. But what we can do going forward as individuals to basically regain some of our liberty and our self-responsibility and just ignore these guys.

Mike Maharrey: Yeah. That's the ideal right there. Just ignore them into oblivion.

Well, thank you again for taking time to be on the show, always appreciate your insights, looking forward to the film. And hope you have a good Halloween. Actually, we're recording this on Halloween, so once it comes out it'll be past that. But again, just really appreciate your time.

David Morgan: My pleasure, Mike. Thanks for having me.