Welcome to this week’s market wrap podcast, I’m Mike Gleason
Coming up in a moment, we have an exclusive interview with Brien Lundin, editor of Gold Newsletter and the CEO of the renowned New Orleans Investment Conference. Money Metals’ Mike Maharrey and Brien discuss the gold and silver markets and the ever-growing importance of sound money.
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Brien also shares the origin of the New Orleans Investment Conference, how the recent re-legalization of gold ownership back in the 1970s was a key aspect of the launch of that conference, and also tells us why he thinks we’ve still got a long ways to go in terms of the gold price.
Mike and Brien dive into that and much more, so you’ll definitely want to stick around for a fascinating conversation with metals and financial industry insider Brien Lundin, coming up after this week’s market update.
Gold and silver have traded quietly but with a positive bias this week, and it looks like we'll be closing out the week on a positive note.
As of Friday midday recording, gold is trading at $2,709, its highest mark in a month and up 2.1% for the week. Silver meanwhile is coming in at $30.65 which is a gain of just over 80 cents or 2.8% since last Friday’s close.
At the same time, though, there are some very interesting developments unfolding in the global gold and silver markets, particularly with respect to silver. The implications could be huge, even if price moves have so far been small.
Here's the situation.
Since December, fears have emerged that President Donald Trump may impose tariffs on imports of many commodities, including, potentially, gold and silver. The tariffs would not be imposed on most countries, but Canada, Mexico, and China have been among those mentioned.
As it happens, Canada and Mexico export vast quantities of gold and silver to the United States. If Trump slaps a tariff of, say, 10% on metals coming into the U.S. from those nations, that would have a huge impact. 10% on silver would amount to $3 per ounce.
As a result of this worry, the price of gold and silver – as traded on the New York futures market – has risen sharply above the prices seen simultaneously in other markets. London is a massive hub for precious metals trading, for example, with many gold and silver transactions worldwide priced based on the London spot price. So, this dynamic involving potential U.S. import tariffs has led to a large discrepancy in price between London and New York.
That risk has created a high incentive for parties all over the world to get their gold and silver into the U.S. before any tariffs are imposed. Including those buying metals in London (simultaneously selling in the NY futures), withdrawing the metal from London vaults, and ship or fly the metal to the U.S. to deliver onto the exchange to close out the futures position.
In silver, the spread between London spot and New York futures has at times reached as high as $1 per ounce. One dollar per ounce is dramatically more than the cost of transporting silver across the Atlantic, so many opportunistic traders are scrambling to do just that and pocketing most of that $1 spread.
This dynamic is having the effect of draining London vaults of gold and silver at an unusually fast rate -- and at some point, these lower levels of vaulted metal in London could create price dislocations in that market too. At the same time, those who have short positions in the New York market are in danger of getting squeezed, especially if they have trouble getting their hands on enough physical metal to deliver into their short positions.
It's too early to tell, but these developments could lead to a true short squeeze in precious metals, particularly with respect to silver. We'll be watching this situation carefully and will keep our readers and listeners updated at MoneyMetals.com.
Well now, without further delay let’s get right to our exclusive interview with the man behind the famous New Orleans Investment Conference, Brien Lundin.
Mike Maharrey: Greetings. I'm Mike Maharrey, a reporter and analyst here at Money Metals, and I'm here today with my good friend Brien Lundin. Brien is the publisher and editor of the Gold Newsletter. He is also the man behind the annual New Orleans Investment Conference. How you doing, Brien? Happy New Year.
Brien Lundin: Happy New Year, Mike. I'm going great. I'm going great. I find even after all these years and knowing better that my emotions ride the roller coaster of the gold and silver price, so I'm holding steady right now.
Mike Maharrey: Right, right. Yeah. Your mood is range bound.
Brien Lundin: Yeah, that's true. That's true.
Mike Maharrey: Kind of has been since the election, I guess. But I think it's interesting, and you actually mentioned this in an article that you wrote that we've got published over at Moneymetals.com/news that we talk about gold kind of correcting after the election, but really when you look at it in big picture, it wasn't much of a correction, was it?
Brien Lundin: No, it was at the time, but it just depends on how zoomed in you are. If you look at a one-month chart, oh my god, it's terrible. Three-month, that's still pretty bad. One year. It's like in one of the things I wrote about in that article was that we were talking about a huge correction down at its lows. It took us down into the mid to low 2500s. Now let's just flash back to a year ago and what we would've given to be in that situation where severe correction that has its all Nervous Nellies took us down to support in the mid 2500s. I mean, it's been a hell of a year. It was a hell of a year and a lot happened over the course of that year, but we're in a pretty good spot right now. We really are.
Mike Maharrey: Yeah, I agree completely. And I mean even since then the price has really held above 2600. We were in that 25 range for a little bit, but for the last couple of weeks we've been in that 2600, 2050 or 2650. So yeah, not really too bad. So we kind of look back over the last year and certainly I would categorize it as a bull rally. What do you think kind of looking back was, and I know it might be hard to pick just one, but one or two of the biggest factors in your view that drove that gold price?
Brien Lundin: I think you can't get past central banks coming in and buying. And in fact this year it kind of woke everybody up that they're really buying, but they had been buying for two and a half years. They really started accelerating their purchases with the sanctions on Russia post the invasion of Ukraine. And that points to that concern that they want some independence from the dollar and at some point being able to be sanctioned by the US. But beyond that, I think if you look beyond that, they're also concerned about the fiscal situation in the US, the risk involving debt service for the US in other developed countries. And I think that concern has bled over into the investment markets and we see some institutional big money demand for gold for those reasons. And that as evidence of that, we're also seeing treasury yields rising. So I think that's a reflection of those concerns.
Brien Lundin: It's not just at what rate are we going to get for our funds, but the risk of getting our funds back to some degree. And I don't think that that's a huge risk, but the bond vigilantes are definitely out, and I think that's one of the reasons we're seeing rates rising and there's some disbelief that inflation has been whipped and that's reflected as well. So it's kind of a hodgepodge, but it's uncertainty over the fiscal situation in the US that I think not only central banks but investors around the world are hedging their bets with gold and silver.
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Mike Maharrey: Yeah. It's funny, I did my podcast this morning and I hit every single one of those topics that you just mentioned. So we're in complete agreement. And I think it's interesting, it's kind of if you want to theme that, it's like, ooh, is the dollar getting kind of dirty? I think that obviously it's still the reserve currency and some would say the cleanest dirty shirt in the laundry, but I think you're right. I mean, why hold on to this fiat currency that's constantly depreciating and that you are running the risk if you fall on the wrong side of the politicians in the United States in terms of your foreign policy or whatever, that you could have your assets frozen. And I think a lot of people are just saying, why not hold more of this sound money, gold, silver. We even saw Russia announce late last year that they were planning on holding some silver in their sovereign reserves. So interesting times we live in. Right?
Brien Lundin: Yeah. And if you try to put that in some kind of a theme, I think it generally is safe haven demand. There's a few ironies there and interesting parts about that, we see dollar strength and we tend to forget that the dollar is a safe haven investment around the world. So when there is a global uncertainty, money flows into the dollar. That kind of explains some of the dollar strength that we've been seeing. But gold, the playbook says gold should weaken when you have dollar strength and rising treasury yields. And it's not just now, but all year long over the past year we've seen gold trade contra to that reality. And I think that reflects on the safe haven thing.
Brien Lundin: Now historically, you see treasury yields fall when there's a burst towards safe haven investing. Well, that's true if there's some kind of a geopolitical issue or something like that. But rising treasury yields can be a sign of safe haven investing as well because the concern there is with the US fiscal situation as I just mentioned. So the dollar vigilantes are saying things are a little too risky right now with your debt service situation, we demand higher yields to reflect that risk, higher return, and that's why we're seeing higher treasury yields as a function of the safe haven investing right now. So it's a three pillars really of the investing universe that's kind of support everything is gold as money, the dollar as the reserve currency and treasury yields is really the liquidity sink of the world.
Mike Maharrey: And I think that's really notable to point out the fact that if you go back and look at last year, there are some things that you would think would be significant headwinds to gold. I mean for most of the year we were operating in what, at least looking back over the last 10 to 20 years was a high interest rate environment. We did have a period of dollar weakness when the Fed started kind of jaw-bowing or jaw-boning about lowering interest rates. But nevertheless, we still had this well over 26% approaching 30% gains in gold despite what you could consider a lot of headwinds. And I keep making the point that should we have a recession or an economic crisis or the debt bubble bursts, it's hard to even imagine what the ceiling for gold might be in that kind of scenario.
Brien Lundin: And people argue and they're right that the US is not going to have a classic default. It's not going to stop paying its debts because it can print out whatever it needs to. But that's the issue, isn't it?
Mike Maharrey: Right.
Brien Lundin: That it can just print out whatever it can, it needs to. So it's not so much the classic one-step default, but it is a slow default otherwise known as a depreciation. Historians looking back 100 years from now, they make not so find a distinction between a steady and aggressive depreciation and purchasing power and an outright default.
Brien Lundin: When we look back at the Roman Empire, we say, yeah, the currency collapsed, they defaulted. Well, that happened over a couple 100 years, but still it was a default. It was a slow-motion default. And that's what we're saying. You probably believe like I do that at some point we're going to have some sort of a reset because the debt loads that have been built up are just too large. And who knows what that debt reset is going to look like or the great monetary reset I think is going to involve gold in some form or fashion. But still, if you look down the road, you don't have to have financial apocalypse, you just have to have the repercussions of 45 years of ever easier money and ever greater debt accumulation. Those repercussions are going to mean that the purchasing power of your currency usually and primarily the dollar these days is going to fall at a greater rate. So you need to lock in the current exchange rate with real money and protect yourself through monetary metals.
Mike Maharrey: Yeah, absolutely. And I think you hit a really important point. Of course, the Federal Reserve can create money out of thin air and they can backstop the borrowing and spending. And I mean the MMT people will tell you that the modern monetary theory people will tell you you can do it forever. But we saw what happens when they abuse that with the massive amount of money creation during the pandemic, and we had that bout of price inflation.
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Mike Maharrey: So the central banks are really walking this tightrope right now. On the one hand, they're trying to keep that inflation under control, and by under control I mean so people don't notice it. And on the other hand, they've got this massive bubble of debt that is having to now be serviced at these higher interest rates, which is also unsustainable. And at some point you walk a tightrope, you're going to slip and fall. And I agree with you, at some point there is going to be this reset. And I'm kind of with you in the sense that I think it's going to be more of a slow bleed as opposed to an amputation so to speak, but not to get too graphic with my analogy, but yeah, it's definitely problematic. And again, that's why people like you and I hold on to precious metals because I'm not real fond of seeing my hard-earned wealth dribble away. Thanks to central bankers.
Brien Lundin: Yeah. And there are some really smart people out there who make really good arguments that it's not like it was in the old days. A lot of this money creation is sterilized by just going back into reserves at the Fed not being loaned into the economy by the banks. Therefore, you don't have the multiplier effect. But one of the things they forget is that that debt is money that has already been spent, has already been injected into the economy. And even if the debt then is sterilized and held like a water balloon of liquidity over the economy and not circulating, the original expense is circulating.
Brien Lundin: So you had the 15 trillion or so dollars that has been accumulated or spent in the economy over the Biden and Trump administrations has been just injected into the economy and had its multiplier effect and it's still in the economy because it's some people's stories that were paid. It was in the fiscal largesse, everything else.
Brien Lundin: I tend to think of things much more simply that you spend money, you create money, and you cheapen the money that's out there. And that's obvious in treasury yields. If you look back at the inflection point is when the Fed started lowering rates, when it did the first rate cut. From then on, treasury yields shot up and have kept going. And that shows that the smart investors, the smart money out there doesn't believe what the Fed is saying and thinks the Fed is essentially whistling past the graveyard. I don't think the Fed's that stupid. I think they are looking at the interest rates and the debt resets that are coming for corporate America and not just the federal fisc and saying that that's going to crater the economy unless they start lowering rates. You just can't set stats at these rates.
Mike Maharrey: And I'm not a betting man, but if I was, I would bet that we will see more than two rate cuts in the coming year despite the fact that they lowered those dot plots and whatnot. It's interesting, if you go back and look at the history of the dot plots and the projections that the Fed uses for their interest rate policy, they're only right like 33% of the time, which is kind of astounding when you think about it because they're the ones that are actually setting rates and they still can't figure out what they're doing.
Brien Lundin: They can't, and they're losing control as we see from treasury yields. You're losing control of the market at the longer end, not necessarily the long end, but the longer. You get away from the rate that they absolutely set and you can see where they're losing control.
Mike Maharrey: Yeah, even as low as the five years are jumping up there. Well, I want to shift gears a little bit and talk a little bit about the New Orleans Investment Conference. You just had the, I believe the 50th anniversary. Am I correct, back in November?
Brien Lundin: Yeah.
Mike Maharrey: How'd it go? What were a couple of the big highlights for you?
Brien Lundin: Mike, I could not be more pleased. There were a number of highlights. I did not have a big political speaker like we have been known for in past years. It's been a while since we've done that. And I tend to avoid that because most of these big political speakers, they're popular today, they're hated tomorrow.
Mike Maharrey: Yeah, exactly.
Brien Lundin: Even now, if you get somebody political up there, half the audience is going to be hate them and other ones are going to applaud wildly. So it's just weird these days. So what I've done is focus on the people who I think are really smart thinkers, the people that the extraordinary mindset are explaining extraordinary times that we live in right now because none of this crap we're going through was normal and there've been some really smart people out there. And we had just an incredible bench strength of speakers and presenters. We have James Grant, we had Brent Johnson, George Gammon, Danielle DiMartino Booth, Rick Ruhl, Jim Iuorio, Dey Colum, Lyn Alden supplied exclusive content for her, although she didn't appear in person. Tabby Costa did the same thing. I'm beginning dozens of names of just tremendous array of experts. And no matter what you do every year somebody has something to complain. There's a few complaints you get here and there.
Brien Lundin: This year we did not have a single complaint, the first time ever that I, in the 38 years I've been involved in the event that we never had a single complaint. It was just we went off fantastically well. I think our audience really appreciated the message. And it's not a really homogenous message. We had some variance, but the common thread I think is a lot of what we're talking about. None of this is normal. You've got to be prepared. The future is uncertain. You can't really plot out the path ahead in any detail, but you have to have a good feeling that you're going to want to own gold and silver and those associated investments going forward because I think we're entering what I count to be the fourth big bull market in gold since 1971.
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Mike Maharrey: Yeah. We've got a pretty cool thing over at Money Metals. We've got a commemorative silver round that highlights the 50th anniversary, and on the front of it, it has a guy's face and his name is Jim Blanchard, and I'm sure a lot of folks probably aren't familiar with Jim. Can you kind of tell his story real quick and let people know who he is and [inaudible 00:17:42]?
Brien Lundin: Yeah. And first off, to give credit where credit is due, I had wanted to do a commemorative silver round for our 50th anniversary, but was kind of getting stymied which way to go to get it done. And Stefan and your organization stepped in and really just made it happen for us and really appreciate that it would not have happened without y'all's aid. But it is, it commemorates the 50th anniversary of the New Orleans Investment Conference, which is really the brainchild and the legacy that was created by Jim Blanchard, who we featured on the commemorative round.
Brien Lundin: Jim was hired me as a junior copywriter in 1985 for his organization that was already well up and running, and he was just an incredible individual, amazingly charismatic and insightful. And he was one of the driving forces, if not the most prominent driving force in getting gold legalized. In 1971 when Nixon closed the gold window on August 15th, Jim then and there decided to lobby for the return of the right private gold ownership, as you know was illegal to own gold at the time, and he started Gold Newsletter, but then and there is one of his tools to lobby for that. Then he did a bunch of crazy stuff, had a legalized gold banner flown over Nixon's second inauguration and things that would get you thrown into the Guantanamo Bay these days.
Mike Maharrey: That's awesome. Right.
Brien Lundin: He did. But he got gold legalized and it was signed into effect on December 31st, 1974. So we've just passed the 50th anniversary not only in New Orleans conference, but also legalized gold ownership in the US. And the conference, knowing that it was being legalized in 1974, Jim decided to have a conference to basically teach Americans how to invest in gold, and that started our event that had its 50th anniversary this year. We've had an amazing array of speakers. We had Ayn Rand's final public presentation at our event. Lady Margaret Thatcher, Milton Friedman a number of times, Alan Greenspan a number of times, Barry Goldwater. Gosh, the list goes on and on. All of the real giants of the Sound of Money movement. It was a key event where you got to hear those people and meet them in person. And that's kind of the tradition we're carrying on today.
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Brien Lundin: Back then, it was an extraordinary time. You had an underground media at the time of hard money investment newsletters that had some really smart people talking about what was going on and advising people and trying to figure out what was going on. These days we have social media and primarily Fintwit, Financial Twitter and now X, where a lot of these people are commenting on, and really smart people, and we are kind of bringing all that together again through the New Orleans conferences. I think that's kind of our role for you to get to meet these people that you see online. So it was an incredible event and hopefully continuing the legacy in proper fashion.
Mike Maharrey: And it's tremendously important. Even today you'd think, well, that was 50 years ago. If you look at the landscape of financial news and financial reporting, I still think even a lot of people that are professionals in the investment world don't really understand gold and silver. They don't understand sound money, and so there is no shortage of education that needs to be done. So I think the work is absolutely important and must go on. So we'll give you the two thumbs up for keeping it going and carrying that legacy.
Brien Lundin: I appreciate it. Like I told people at our, we had a retrospective panel and people were congratulating me for continuing it for 25 years after Jim died, and I said, I'm no hero if you would've told me at the time, "Oh, here it dumped it in my lap," and said, "You're going to have to run this for the next quarter century." I would've ran for the hills. But you do the next one because you just did the last one, and you do the one after that and one after that and pretty soon you look back and it's built on the legacy.
Brien Lundin: But yeah, I do think it's important. One of the things I talked about at this year's event is trying to restore the sense of mission with our event and working with your group and some other groups out there to try and on a federal level, because obviously you all have done such a great job in the state level of getting gold and silver legalized and return to their role as money. I am trying to organize an effort to do that on the federal level as well. So stay tuned for that. But I am trying to take our event and what we do at Gold Newsletter and restore that sense of mission to bring back sound money because it's more important than ever because history's rhyming again as we speak and there's going to be some interesting times ahead and people need to be able to protect themselves.
Mike Maharrey: Yeah, absolutely. Well, let me get you out on one more. I'm going to shift gears a little bit one more time on you here. And one of the things I thought was interesting kind of looking back at last year is that the miners never really caught up with the Gold bull run. As you're looking ahead and analyzing the landscape, do you see the miners as picking up? I mean, is this kind of a buying opportunity now or are we still going to face some of those headwinds that they were dealing with last year?
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Brien Lundin: Yeah, I think it has to. They are so cheap and they have always offered some degree of leverage to gold. And the higher the gold price goes, the more attractive the economic argument is for miners and finding new deposits and the like. So it will happen. It's been mixed up this time. It's not a typical bull market for a number of reasons, but primarily I think that the speculative end of the metals, the speculative fund flow has been stolen from it to a large degree by Bitcoin, by crypto, by AI and other ways to get leverage on the metals. You can go through, you can have 2X ETFs out there for gold. You can buy the indices for the miners and then do that with leverage. You can play futures and options have been much more popular now than they were even 10, 15 years ago.
Brien Lundin: So there's other ways to get leverage, but I think it still comes back to the fact that the miners are obviously necessary, and the higher the gold price goes, the higher the silver price goes. Again, it's inescapable that they will start to attract more funds and they're going to catch fire against. The issue with them or the advantage with that sector is it's so tiny. It's a fraction of the market cap or volume that you get in any other investment assets. So you don't have to have it be the new flavor du jour in CNBC. You just have to have it attract, dip a ladle in the fund flows to go to these other speculative sectors and it's going to catch on fire. And I think that's going to happen. And I think this year is the year where it does.
Mike Maharrey: Well outstanding. So where can folks go to find your newsletter to follow your work and learn about the investment conference? All things Brien Lundin, where do they need to go?
Brien Lundin: Well, it's not as easy as BrienLundin.com, but it's not far from it. You can go to Goldnewsletter.com.
Mike Maharrey: That's easy.
Brien Lundin: Very easy. And there you can get a free copy of our Investors Guide to Gold and Silver, which covers all the different ways to invest in the sector, and NewOrleansConference.com to find out about our annual event. It's coming up this next fall, the first week in November, this fall of 2025. And the earlier you register, the more money you save. We don't have the speaker roster begun yet for this year's event, but if you look at last year's event, you can bet a bunch of those people are going to be back and you'll get a flavor of the kind of people that we get. And also all of our recordings and transcript for last year is available for to purchase. So you don't have to miss out on all that great market intelligence.
Mike Maharrey: That's awesome. So what folks can do is they can register early, take the money that they save and go buy a couple of those cool silver rounds.
Brien Lundin: I love that idea. You should be my marketing manager there, Mike. A great angle. I appreciate that.
Mike Maharrey: Well, you know what my wife says, even a blind squirrel finds a nut every now and again. Well, I really appreciate you taking time out of your day. I know you're a busy man and really appreciate the work you're doing, and again, I give you the two thumbs up and look forward to talking to you again and seeing how things play out as we move into 2025.
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Brien Lundin: I look forward to it as well, Mike. And back at you, the work that you are doing, the work that your team is doing is just incredible, and very happy to be associated with you all in any way.
Mike Maharrey: Well, I appreciate that, and again, thank you so much.
Well, I hope you enjoyed that interview, and that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. And tune in to the Money Metals Midweek Memo podcast as well. To listen to any of our audio programs just go to MoneyMetals.com/podcasts or find them on places like Apple Podcast, Spotify or other podcast platforms.
Until next time, this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a wonderful weekend everybody.
About the Author
Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.
