I’m recording before Mumbles gets out there and does his thing, so I can just imagine you’ll be riveted by the time he has come your way. And then we have today’s show where we have at least as of the morning oil up, gold and silver, down again, which fortunately, as I’ve been suggesting, might be a wise expectation, at least for the immediate future. You see the gold futures down $51 to $45.57. And as a reminder, the all-time high earlier this year was at $56.26. And here we have the silver futures down $1.73 on the day, back down to $72, seems just not all that long ago when silver was up above $80.

And there you can see we had over $83 at $83.24 back on April 17th, just 12 days ago. And in either case, what is the main driver of that? Well, certainly you can look to the oil market where we see that Brent Crude is up $5.50 to $110, basically. This time we’ve not seen the inversion. It’s trading over West Texas at $105.51, also up $5.50 on the day. And why would that be happening? What could account for such a thing? Well, let’s just say that the situation with the Iran war not progressing well, well, certainly at least headed towards a direction where now we’re talking about the closure of the Strait of Hormuz and the blockades being extended.

Here we see Trump has ordered preparations for an indefinite blockade of Iran after telling advisors in a situation room that resuming bombing or walking away were both riskier. Trump says the blockade will continue to pressure Iran into capitulation on the nuclear issue. So there is that. At the same time, there was also put out a message, Iran can’t get their act together. No more Mr. Nice Guy seems somewhat unnecessarily inflammatory at this particular time. And yet what is the result of all that? Your oil prices extend multi-day rally as Trump issues new threats.

I don’t see the seems like CNBC gets a higher fee than what I see on investing.com where we saw basically a peak at 110. They’re saying 114 here continue to hear as the shortages of especially jet fuel and different types of fuel reach different places that prices internationally are a lot different. And as you can see here, though, we are starting to see the effects of that. And again, as we’ve been talking about oil up, you can expect a good chance that the precious metals will be lower. I would think if you extend out a bit farther in time, that will take care of itself.

But at least for the near term, that’s something that you can expect. And also, as you might not be shocked to see the bond yields are back up, we’re getting back towards up there and crosses over 440. We’re not at the peak yet, but the bond yields certainly have gone up this week and are getting near. Let’s try and refresh this. They’re getting near the peak that we’ve seen since the war began. And I remember 394. If we go back, let’s get the before this began. And yeah, we got up to a peak of 448.

So we’re not quite there yet. But if you look at the one month, you can see here was one of our ceasefire’s back on the 17th. We see a lot of things change then. And where are we here? Down to 422. So 18 basis points in 12 days. It’s a decent sized move at the same time as we will dig into in just a bit that Hank Paulson, former treasury secretary, is talking about a vicious debt crisis in the treasury market. And he’s not alone. There’s more. So we will cover that. And anyway, quick note on silver.

Here we see in Shanghai, price still at 80 bucks, so the premium still elevated, although it has come in, was over $10 now down to 871. And we will certainly keep an eye on that for you. So again, things not seemingly getting closer to being resolved in terms of the Strait of Hormuz. And one of the effects of that, one of the many consequences and effects of that, but one in particular, your US trade chief urges allies to pay more for critical minerals. We’ve heard plenty about shortages of rare earths. We saw silver added to the list of strategic critical minerals.

And we’ve seen multiple governments, including both US and China, talk about stockpiling critical minerals of which silver is one of them. And now we’re seeing, we’ve, we’ve heard talks about price floors and here won’t go and read this whole article, but basically they’re saying rather than being reliant on China, we might have to pay more. So that seems quite inflationary. And especially if more things are going to struggle to get through the Strait of Hormuz for even longer, that would not seem to help facilitate a resolution there. I’m not going to go into some of the consequences that I am hearing from people I highly respect, but in terms of the damage that has already been done, that is going to now start filtering through the economies, let alone if the Strait remains closed for an extended period of time, but things that are really going to affect people’s lives and very concerning to me.

So I will leave that at that. Although I’ll mention, here was an interview. This was with Ronnie Stuyferle, who writes the Engolvy trust report. He was talking to Craig Tyndale, who has written quite a bit about some of the fragility of the supply chains and also Luke Grohman, where if you want to hear it, I’d highly recommend listening to that. And they talk about what kind of damage they think would be done if the Strait is still closed by July 4th. And we’re about to hit May, so that’s two months away. Very concerning.

Again, I’m hoping to be wrong about some of this, but it is quite concerning the impact that we’re seeing. I don’t think this is going to be one of those, like when you had a couple banks fail in 2023, paper it over and just move on. And that interview would be quite eye-opening if you are wanting to understand that better. But anyway, because behind all of this, even before this came about with Iran and the war and everything else that’s going on, we had these conditions that, now Hank Paulson didn’t say this before the war, but these conditions that have led him to warn of a breakdown in the US government debt market that would pose a different case from the past financial crises and could be a dangerous thing with vicious effects.

Dressing the fiscal deficit would require increased revenues, taxes, and dealing with expenses. Well, it doesn’t seem like we’re going to be getting increased revenue right now when we have the oil price soaring. So inflation is going higher, debt’s being added at a faster pace. Trump wants to increase military spending by 50 percent, and all these costs are going to hurt growth. So it seems like they’re heading right into the things that Hank is most concerned about. And I’ll mention that, again, this is the guy that he was there when the housing bubble was collapsing.

And even as that was collapsing, he wasn’t concerned yet. Now he is warning of what US budget experts have for years said of the potential for a doom loop where investors start demanding higher yields on treasuries due to the risk tied to the government’s swelling debt. And especially if we’re cutting off half of the globe, it seems risky. One of the points Luke made in that interview is that if countries need money to buy resources, especially at elevated prices, are they going to hang on to their treasuries or would they be willing to sell treasuries to raise cash? If they are willing to sell those treasuries to raise cash, then that would seemingly feed into that doom loop.

And if you have a Bloomberg subscription worth digging into this one, there’s a lot of stuff going on, but we should not forget the deficit. Although Pete Hegseth and others have said that it, I don’t know if Pete said it. One of them said that if basically, is there any amount, there maybe was Bessin. Is there any amount that would be too much where we’d have to say no to more war? And they said, of course not. And in the end, the Fed, see, I guess mumbles probably won’t be around to print the balance, but guessing Kevin Warsh didn’t get the interview because he would be opposed to printing whatever is necessary.

And perhaps that’s why Jamie Dimon of JP Morgan warns of some kind of bond crisis ahead. Although he says that also that we’ll be able to deal with it. I’m not worried that we’ll be able to deal with it. And why would they be able to deal with it? Because whoever is running the Fed, which it looks like will be Kevin Warsh will backstop whatever needs to be backstopped. I mean, I know I’m not reinventing the wheel here. This is the way it’s been. This is the way that at least I would bet on it being likely to be.

Hey, you always got your black swans out there, but that’s Jamie Dimon and Hank Paulson warning. Meanwhile, tech warns of higher fuel costs from Mideast energy shock and tech resources warned of higher fuel costs for its key Chilean copper mine as the War in the Middle East chokes supply chains even as higher commodity prices breed the company’s earnings in the first quarter. There you go. This is the evidence behind the thesis we’ve been walking through. As the word disrupts global energy shipments, there could be an amplified impact on costs at our Chilean operations due to the requirement for diesel imports.

So growth is going to be slowing with higher oil price because now at least the suggestion today is that Trump is going to re blockade the blockade to keep it closed longer, which we’re seeing the impact on energy. And that’s going to have an impact on growth, but the costs are and inflation are going to be rising. It’s like the old Jim Willie. You need the feds going to hike and cut simultaneously. I am stunned that the stock markets continue to just keep soaring, although not, not, not advice for anyone at home kids.

Although I did call my buddy Punisher from the coastal journal and asked him for some of the junkiest tech stocks, especially I continue to hear that there’s a helium not getting through these trade of hormones. And if you don’t have helium, I’m told that you don’t build your chips. So maybe when we wrap up here, I will look at buying some puts. It’s been on my list of things to do. I haven’t done it yet. We’ll get Punisher on here soon to talk a little stock market. I am of the school of thought it, I mean, based on the things I’m reading and seeing you would seems like we are headed towards something similar to the illness that occurred back in 2020 where for a while it was happening.

But then at some point the markets collapsed when it really got recognized. That’s what it seems like we are headed towards. In my opinion, we’ll see. Anyway, with all that happening, this came out last week, but Morgan Stanley, we set the gold price. So we’re about the same range. Although we don’t worry, we won’t guess. We’ll look at the one week chart. So they’re a little bit higher, 4,700. So we’re 150 bucks higher yet. With all that said, Morgan Stanley, they cut their gold price, but they cut it from 5,700 to 5,200. That’s kind of interesting because often when you see the sell offs, then usually at least my, what I’m used to from Wall Street, it’s that, you know, if something starts rallying, then, you know, you suggest higher and higher targets.

The move’s never done. If it’s selling off, normally they would have a target below the current price. Oh, the rally normally would have headlines saying, look how the bubbles pop, the rally’s over. And if gold is currently trading at 4,500, you’d say like, oh, is breaking below 4,000 next. Yet instead, that’s actually pretty wild. Well, you still think gold’s going to go up just not as much this year. Let’s see today. Do we get any insight into the years ahead? I mean, but when you look at what’s happening and I guess in what happens when Trump comes, doesn’t seem like we’re on track no matter who wins that this is like, it’s not a situation where, well, once this one guy’s out of office, the next guy will come in and patch it up.

I’m not sure I would bet on that happening either. And in the end, you know, what are you supposed to think with energy and resources getting siphoned off of which half the world is now being forced or choosing to go off the petrodollar system. And if China’s underpinning it, and if gold is underpinning what China’s doing, that just to me, it seems difficult to think 10 years from now in on April 29th. All right, I got homework assignment for everyone here. April 29th of 2036. In the comment section below, do you think the gold price is going to be higher or lower than 4,600 bucks 10 years from now based on everything else that’s going on? To me, I think it I don’t even think I could make the argument that it would it’s possible for it to be the same.

Yeah, that’s just me. And again, by all means to incorporate all the information, come to your own decisions. Yet that’s at least how I look at it. That is why I have been buying mining stocks, which are down again today. So as I mentioned in yesterday’s live stream, not in a rush to do so because what if this does escalate further? I mean, it I don’t know that we’re ready for launch time. I do think there will be some point at which the gold and silver prices both set new all time record highs.

And when you see things like how especially on the silver side, if they’re you know, how is that going to work? If you have critical minerals of which silver is one, you don’t have enough and wars are escalating. Flation is going higher. The miners are already warning about higher costs. And I mean, we saw the stories in Australia where they were warning of the diesel shortages where it wasn’t just higher costs, but you don’t get out in mine. So if that happens to the metals and miners, including silver, I mean, at least seems plausible to me that you would have.

I think that’s in fact, one of the outcomes that could give you the Michael Oliver three to five hundred dollar range. And again, we’ll look forward to talking with him at the end of May. So hit the subscribe button and the notification bell right down there. So that when we talk with Michael about that, you can be on board with it. And also in terms of silver mining companies, there is Kuya Silver and interesting because in the midst of all of this, they just reported growing production at their Bithanya project in the first quarter record quarterly production.

And then check this out. Ninety one percent of record and quarterly revenue came from silver in the quarter with an average selling price of eighty two dollars per ounce. Now, let’s just rewind for a second because in the fourth quarter, even though we got up to the eighty dollar level before the end of twenty twenty five, a lot of that happened those last couple of weeks. It moved quickly. So your average realized price for silver in the fourth quarter, I believe, was fifty nine dollars. And now they just had record product.

Kuya just had record production while selling at eighty two dollars per ounce. So certainly that is extremely good news, let alone what could happen over the longer term that we’ve discussed in terms of the pricing. And then as I am looking forward to sharing with you, I did call David Stein who runs Kuya over the weekend. I called him on Sunday. I’m like, I don’t know if I’m fucking you, but he does. You know, he’s kind of a reserved guy. He’s not out posting wild claims. But when we started looking at some of the multiples being applied in the market for silver producers versus what is being priced in for Kuya.

And if there’s any sort of narrowing of that divergence, what that could imply for Kuya certainly was quite exciting to hear. And again, just great news from Kuya. So you can find out more about them at KuyaSilver.com or to hear directly from David, because he really shares a lot of interesting information about the supply and demand dynamics. Well, you can just click on the video that’s coming your way now. [tr:trw].

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