➡ The discussion revolves around the economy’s reliance on deficit spending for the past 60 years, and what it would look like without it. It also touches on inflation, with concerns about it being above the target for over four years. The conversation further delves into the idea of cutting interest rates to solve inflation, and the impact of inflated asset pricing on the economy. Lastly, it questions the effectiveness of current monetary policy and the potential need for both a rate hike and cut.

➡ The U.S. is considering adding silver to its critical minerals list, recognizing the importance of physical resources over paper contracts. This move could boost the mining industry by cutting red tape and making it easier to start projects. However, there’s been a continued trend of selling precious metals, largely due to people needing money to live on. The Trump administration is speculated to be planning to revalue gold, which would be easier if the gold is onshore.

➡ Bill Holter, an independent candidate, runs a website where he posts articles and resources for prepping. His site includes a column called “Grizzlies corner,” written by a survival expert who shares valuable tips and product recommendations for emergency situations. The website also offers a contact option for those interested in buying or selling gold and silver. Lastly, the host thanks First Majestic Silver for sponsoring the video and shares their positive drilling results at San Dimas, indicating potential growth for the company.

Where they cut rates of full percentage point over three meetings, market rates went up by one full percentage point. So market rates did the exact opposite what the Fed did. What happens if they do this, if this happens again? Well, hello there my friends. Chris Marcus here with you for Arcadia Economics. Probably Wednesday while you’re watching, but it’s a beautiful Tuesday afternoon. I mean like what else could it be when you see Hansonville Holters show up on your computer screen fresh off of a Jerome Powell presser that was so special it sent Silver a dollar higher Bill, I think if we had just gotten him to do an afternoon session, we could have been through 40 they did.

Should just like kept have him read the speech all day long because he said many wild things in there which I’m sure you were in complete agreement with. Have no dispute of anything coming out of the Fed or other portions of the government. So it’s great to have you here today. How are you, sir? Well, thanks for having me, Chris. Well, it is a pleasure as always. And before we dig in, let’s take a quick look at our pricing as of Tuesday, just around 1pm Eastern. Look, there you have it. Gold back over 3400, as you can see.

And I know you’re already well aware as well as many of our listeners, it’s really floated around that 3400 level that’s back to late April. Silver similarly not quite as long, but has been right around that $38 level for the better part of, I’d say two or three months there you see in July. So kind of been drawn to those levels like magnets. And Bill, why don’t you start us off by sharing any thoughts on the recent pricing in the precious metals markets. Well, I think it’s interesting that the pullback from, from the highs has really been a sideways consolidation pattern, you know, in the past, you know, we’d see, we’d see prices break to new highs and get smashed immediately.

And that’s not happening this time. I think one thing of interest that almost nobody’s looking at is the yield on the, on Japanese bonds. And why that’s important is because the yen is the carry trade. I mean that is the, the foundation for the global carry trade. And you’ve had yields, I mean you’ve got what, 3, 320 or thereabouts on the 30 year and 160 plus on the 10 year. Those rates were 0.2 or lower two years ago and they were about half of those levels, pretty close to half of those levels at the beginning of the year.

So yields have really blown out in the Japanese bond market and the, the carry trade is becoming unprofitable from its base. And what that means is a lot of the carry trade belongs. Once you get participants closing out the funding side of it, then they close out what they’re carrying. So it really, really does have the potential to blow things up and, and turn this into a, a, a domino market of all markets to the downside because literally anything and everything has been bought up by, by funds created through the borrowing of basically a 0% interest currency that’s no longer zero.

So there is a cost, there’s a big cost now for them to carry. Well, that certainly is the case. And Bill, in response to that, I’m wondering, do you favor, do you load up Your portfolio with 30 year Japanese bonds or do you figure I want a little extra duration, give me some more and you go for the 40. Which, who is it? Austria that has the hundred year bond, is that right? I think it’s Austria, yeah. I mean maybe I don’t want to meet the guy that’s investing in the, any hundred year bond in today’s environment, but such as the world we live in, Bill and I, I know what you mean.

And it’s not, not all that different with the US Long term yields. Maybe not as extreme as Japan, but certainly they’ve been climbing as well. That’s. Here we go with the U.S. 10 years been. Yeah. On the, on U.S. treasuries. Understand that what was it a year and a half, two years ago when they were going through the, or yeah, year and a half when they were going through the, the cutting cycle where they cut rates of full percentage point over three meetings, market rates went up by one full percentage point. So market rates did the exact opposite what the Fed did.

What happens if they do this, if this happens again? Because we’re going to go through another cutting cycle. Yesterday, Lisa Cook, one of the Fed governors, it looks like she’s going to be fired or at least hamstrung and it’s going to end up Trump’s going to have a majority on the Federal Reserve Board. So he’s going to get what he wants, which is lower interest rates. And lower interest rates also means a lower dollar. But the question is what does that mean for market rates? Do market rates go higher if they go through a cutting cycle race again, that is absolute illustration that they’ve lost control of the yield curve.

Yeah, I know what you mean. And I will pull it back up here. Because here we can see on the 10 year chart there was in September when following last year’s July meeting where we don’t really need to cut anything. And then now we need to cut 50, which despite the economy being strong, while inflation was already above its mandate for going on three years back then, now we’re on to four years and seems like September might just be Jerome’s favorite month. And actually. All right, we’ll go to this right now. We, I have some, we got silver added to the draft list of critical minerals in Saudi Arabia and a bunch of other stuff.

But Bill, some of these clips here were rather confusing. I’m gonna play a couple of them and I’d love to get your comments on these. So let’s, let’s take this is from who is, who is the rocket scientist in Saudi Arabia that decided to buy paper silver? I don’t get it. Well, I, Bill, I can’t understand why they didn’t call you, because I know you help customers safely and securely secure their metal. Securely secure their metal. I guess maybe that was, figure out a different phrasing, but we’ll, we’ll come back to that. Although it is interesting because while everyone assumes that the only one buying silver in 1980 was the hunt Brothers, if you remove a bit more space dust from that novel there, there were Saudi Arabian people investors and involved as well.

But we’ll come back to that, Bill. And hopefully this will give any Saudi investors watching today’s show, they’ll be able to warm up and say, like, hey, should call Bill. But let’s, let’s hear from Jerome first here, my friend. Overall, while the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers. This unusual situation suggests that downside risks to employment are rising. And if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.

At the same time, GDP growth has slowed, notably in the first half of this year to a pace of 1.2%, roughly half the 2.5% pace in 2024. The decline in growth has largely reflected a slowdown in consumer spending. Now, Bill, where do you think the chances that there could be some connection between what he said, the layoffs, let alone the inflation of the past couple of years, to this slowdown in consumer spending? You said it’s an odd balance. What would you say to that? I would say, go look in the mirror. You did it. I mean, maybe not him.

Personally over just last few years. But it’s the system itself. And think about this. One thing I pulled off from that is he’s talking about the economy is growing at 1.2%. What’s the growth rate of treasury debt? What is the number? I’m guessing it’s probably, it grows at what, 7% plus. They had over a trillion in the most recent quarter. Well, yeah, they’re over a trillion on interest paid and I think for the quarter it was a trillion because the first quarter or the quarter prior to that, they borrowed way less than they had anticipated and then jammed it all in the first week or two weeks of the next quarter.

But my point being, if you’ve got debt rising so much more rapidly than you do the economy, the real economy, to support, to support the debt, to support the, the cash flow and thus the interest payments, it just seems to me that it’s, I mean that’s a mathematical equation. You can’t, you can’t do that. And we’ve known this for years that, you know, you, any household that operated like the treasury would be either bankrupt or in jail. So I think it’s, you need to ask yourself the question, if we’re running a deficit of 2 trillion per year on an economy, what’s the size of the economy now? Close to 30 trillion.

That’s 6, 7% deficit per year. What would the economy do or what would it have done if it wasn’t for that additional spending? Of the 2 trillion that was borrowed by the treasury, what would the economy have looked like over the last 10, 20, 30 up to call it 60 years or 60 plus years because we’ve deficit spent every single year. I mean back in, back in the old days. When I say the old days, I’m talking about the 40s, 50s, 60s. Wow, it was. Oh, that’s like ancient days for you, Chris. You’re around in the 40s, Bill.

Goodness, is that the 1840s or my, my point being deficits were supposed to be used during bad times to goose the economy. And then we were supposed to run a surplus during good times to save up for the hard times. Well, for 60 plus years it’s been nothing but deficit spending. And I would ask you, what would the economy look like had there not been any deficit spending? So are you suggesting that borrowing $100 to make 50 is not the ideal structural arrangement? Okay, you’re absolutely right, but that is the structural arrangement. Well, Bill, I think you’re going to be darn well qualified.

You might even be able to Explain this next one to me, which is where I continue to get confused. But I did go to business school so that’ll set someone off course quite a bit. But that’s why we got Bill Holter anti business school in the House here today. So here next he’s explaining inflation. You’re gonna like this one. Another possibility is that inflation expectations could move up, dragging actual inflation with them. It’s possible they could go higher transitorily of course, but inflation has been above our target for more than four years and remains a prominent concern for households and businesses.

Measures of longer term inflation expectations, however, as reflected in market and survey based measures appear to remain well anchored and consistent with our longer run inflation objective of 2%. Of course we cannot take the stability of inflation expectations for granted. Come what may, we will not allow a one time increase in the price level to become an ongoing inflation problem. Whoa, whoa, whoa, whoa. Right. One time increase in the price level to become an ongoing. Here’s our CPI index. It’s up 26% since May of 2020. And that’s with numbers so fraudulent that Trump just fired the guy who compiles the labor numbers.

And let’s just say these aren’t much better. But one time price increase, we, we can’t let that become ongoing. Earlier in the clip he mentioned how we’re four years into being well in excess of the Fed’s mandate. And how is he going to solve this? By cutting interest rates. And I’ll pull up the futures curve, but it looks, I’m hearing a lot about 50 versus 25. So which part of the math am I missing there, Bill? Well, you’re exactly right if he’s talking about cutting rates, but inflation could be a problem. I mean it’s what the markets already told them, told them a year ago when they, when market rates went higher and after they cut interest rates.

I, I suspect that’s going to happen again. I think we’re going to have a weak bond market in, in this cutting cycle. And it’s math. I mean if I was there, if I was a journalist asking questions, I mean there’s so many questions you could ask him. But the biggest one of all is isn’t inflation a result of monetary policy? I don’t think he believes that, or at least inflation is a monetary policy event. Now one thing he said was a one time price increase. The only two things that could come to mind would be all of a sudden stuff, costs more because of tariffs, or is he talking about a reset? Is that what he’s talking about.

I, I don’t really follow what he’s talking about. A one time price. I think he was saying they’re not gonna, you know, have some big jump. They’re going to be vigilant and on it, which, you know, sounds great, but it’s like, all right, we’re all still paying for the last one that still has not gone down to their mandate yet are going to cut away. Although, Bill, this one I, I think might have been a slip of the tongue, but it makes it even funnier when you hear it. So I present. This is your birthday present.

Don’t say I didn’t get you something this year because in particular we said that following periods when inflation had been running persistently above 2%, appropriate monetary policy would likely aim to achieve inflation moderately above 2% for some time. Did what? In particular, we said that following periods when inflation had been running persistently above 2%, appropriate monetary policy would likely aim to achieve inflation moderately above 2% for some time. So I’m assuming he meant to say, he meant to say lower on one half of that because, I mean, certainly flies in the face of the other one that we just heard as well where we’re not going to have it above 2%.

Yeah, I think it was, I think it just misspoke. But Bill, here’s, if he really meant that, then he’s, he’s babbling. But why is there not the adjustment when we’ve had the inflation surplus? In his, in his May speech, he talked about, you know, and he was talking about inflation targeting, basically raising the mandate because they, they came up with the new buzz phrase. Just imagine this was like tested in front of market groups and like, how do you feel about inflation deficit or, you know, if it was an inflation shortfall. So he introduced that earlier this year saying if there’s an inflation shortfall, we’ll run the thing hotter.

But what about the inflation surplus that we still have? Where is the undershoot for that? Right? There is none. And one thing you’ll never hear a Fed chairman talk about is they constantly talk about cpi, ppi, because those are the government figures. I would say all you need to do is look at markets themselves and there’s your inflation. I mean, you’ve got inflated equity markets all over the world. You have interest rates way below what would be considered normal historically, going back hundreds, hundreds of years. The low interest rates are inflation, if you will, in the, in the pricing of bonds because there’s so much capital out there trying to find a home so there’s your inflation.

I mean, yeah, it sucks when you go to the grocery store and stuff costs more or gasoline costs more, or you, you’re paying somebody more to cut your lawn or do work or whatever. Yeah, that’s one form of inflation. But the one form of inflation they’ll never tell you about or talk about is inflation in asset pricing. They call that a bull market. That’s good inflation, but again, it’s inflation nonetheless. Well, not so good for someone who’s facing the inflation which boosts GDP when they jack up college tuition rates. Then kids end up with a mortgage now.

And if they’re trying to buy a house or start a family one day, then all of a sudden that gift of home price and real estate inflation is less, less enjoyable. Bill, I pulled up the. Here’s the Fed’s preferred measure of inflation, the PCE bullshit. Here is the core. Still. What have we got? 2.8% last month beat the expectation. Even Wall street couldn’t calculate it that high. Then here non core at 2.6% again, scoring higher than even the finest Wall street economists expected. Bill, I’m curious. Has the Trump team reached out to you perhaps as a possible Fed chairman? I mean, we were talking before we started that you promised me you’re going to be Ben Bernanke for Halloween this year.

I mean, you’ve got the haircut already and the mustache and I’ll be Bernanke for Halloween, but there’s not a chance in hell that I’d ever take the Federal Reserve or any type of job like that because it’s fraudulent. Well, hey, I guess that’s fine. Start growing the beard and we’ll have you back here on the 31st. And a little disappointed to hear you’re not going to throw your hat in the ring because basically, so far the leading candidate is this man who explained what means I need the rate hike and the rate cut. They need a rate hike and a rate cut so as only our friend Jim can lay out.

But I mean, it’s essentially that’s the monetary policy that I think Powell is getting at. Well, I think that’s pretty close to correct. I mean, they need a rate caught to try to save the system from imploding upon itself, but they need a rate hike in order to support the dollar. I mean, the dollar is going to be the sacrificial lamb in all of this. Well, not to mention that the Trump administration and basically everyone outside of the, the basketballs I heard have not talked about the overvalued dollar yet but all of the living people have and I’ve had some smart folks on here in the past month or so.

I’ll send you this one by this guy Michael McNair I think you’d find intriguing his thesis of how they’ve already been influencing the dollar lower which I think there’s no phoretic consensus yet but a growing school of thought that one way or another they’re going to get it lower because they really have no other choice. Although Bill, obviously we hear a lot about monetization and we’ll get to that. Although the big news yesterday, I know you had some thoughts on this silver getting added to the U.S. critical minerals draft list. It is not final yet but we did have that news come out.

Looks like they have about 30 days, 30 day period before this would become policy. And any thoughts you had on that, It’s, I mean becoming a listed critical mineral, it seems to me like somebody’s waking up in Washington to understand that, you know, you, you can’t create supply by creating paper contracts. They understand, you know, you got to dig for, dig for minerals, you’ve got to drill for oil. I mean it’s a physical, it’s a physical anomaly if you will. I mean it’s not, not something that they can create with paper. And some, it’s good that somebody in Washington is realizing that.

I mean they did that with other rare earth minerals. I mean there’s all kinds of things that the United States needs to really get to work on and should have been on to work on five, 10 years ago with the way that our supply chains are. I mean we rely on enemies for, for things that we need to make war. And that’s just, that’s a ridiculous supply chain. It doesn’t seem ideal. And even before you said it, Bill, I was pulling this up. There’s MP Metals and here unveiled a multi billion dollar deal with the US Government to boost output of rare metals.

And I remember back when this happened a couple weeks ago, I noticed materials used to build weapons, electric vehicles and many electronics. And I’m thinking gee, I know another metal that, that sounds like obviously in silver. And Bill, as I was pulling this one up, here’s a few other interesting headlines. Trump weighs using $2 billion in Chips act funding for critical minerals. So again we, this is no matter what, Chris, this is, this is bullish if you’re a minor. That’s what I was just going to get at where I mean the receiving similar language being used that could apply and rare earth prices at 2 year peak after MP mysterious stops China shipments.

But yes. Anything else you could add on what you think could be an impact would seem to have to be good news on some level for the, the miners? Well, yeah, I mean, obviously if you have an administration that’s friendly to an industry, it makes working or competing in that industry easier because you’re, you’ve got a government that, that favors it and is, is cutting as much red tape as possible. And that is one thing about Trump as a businessman is he understands, you know, you don’t look at, you don’t look at the price of something because the price can be painted, can be manipulated, can be altered using leverage, using derivatives, but getting it out of the ground.

He understands the permitting process, if you will, with all the buildings that he’s put up. So I think he understands that the permitting process is huge. One thing he’s certainly not followed up on. Look what’s going on in California. I mean, what is there five houses now total that are under construction from the, the quote, wildfires. I mean, talk about red tape. You only got five houses out of thousands. What was it, 13, 14,000 houses, I forget what the number was, but you only have five of them that are able to rebuild already because of the red tape.

And that’s what, you know, that’s what they’re doing, I think with the, the mining industry is cutting the red tape, making it easier to get product or projects started and moving along. Yeah, I would agree. I remember when Keith Neumeyer was on the show a year or two ago talking about how they had petitioned the Canadian government and at one point I asked him, so if they say yes, what does that actually mean? And the main thing he was talking about was the permitting situation. Also in terms of California, I’ve heard several of the mining folks say that if you could ever get through the red tape there to mine, that would still be some of the greatest land ever.

Yet, like you pointed out. Good luck with that and also appreciate what you’re saying about those changes in the governmental policy. I never quite understood that fully until I started reading Austrian economics, but it’s similar. Like you give the tax break on the mortgage, the mortgage payments and so that directs a lot of money over there. So this certainly encouraging step. Although, Bill, I did want to ask you, obviously you’re quite in tune with the retail market. Premiums have stayed low. Continue to hear of selling, but anything you could share there? Yeah, the selling has somewhat continued, I think for the last month or two months.

It Slowed down a little bit. But, I mean, the first six months of the year, we handled more sales than I think I had in the previous 15 years combined. And when people want to sell, I generally ask them why. And you’ll get someone who says, I’m buying a piece of land or I want to buy a business or something like that. But the vast majority are, I need the money to live on. I think, you know, people have spent down their other savings and now they’re, now they’re eating into the bone just to survive. Yeah, that is what I’ve heard from the dealers that continue to reach out and ask.

I would have thought it would have been more people, you know, bought it in the teens, decade and finally hits 30 and they want to get out ahead. Although I keep hearing what you were saying there, so. And, but the premium levels are still pretty low right now as well, right? Yeah. Premiums across the board are pretty much the lowest you’ve seen in the last 15, 20 years. Okay, well, that makes sense. And Bill, I guess we’ll make this the last one. We had all this gold and silver flow from London to New York earlier this year on tariffs that never existed.

I don’t know that they were ever talking about actually placing a tariff on London in particular. Anyway, now, the medals here, I know we talked about this a little bit last time, but any updated thoughts on. There’s some who speculate that perhaps the government was bringing some of the medals. But any, as you maybe you’ve learned more or less anything about what happened and what happens now that it’s sitting here with. On the other hand, London inventories seemingly a little low. I guess some could go back, but anything on that one, I really don’t know the answer to that.

It’s just my guess they wanted. When I say they, I’m talking about the administration, the Trump administration wanted to onshore gold because I think it’s their plan at some point to revalue gold. And it’s obviously much better if you have it on your shore or in your control as opposed to overseas. I. I view it as what they did was they onshored, unencumbered collateral because there’s so little collateral, little collateral left anywhere in the world to borrow against. And if they’re going to revalue gold, they want it onshore so that that collateral gets revalued higher. Here.

Yep. When I say here, where they have control over where they can use it, whatever, where they can lend it, you know, I mean, obviously that’s the Once they revalue it higher then all of a sudden you’re going to get, you know, gold as collateral to be borrowed against. So maybe that’s, maybe that’s their plan for the next inflate or die cycle. Do you think there could be any connection to we heard Fort Knox audit and then they’ve gone awfully quiet on that since. Do you. I mean obviously we’re guessing here but do you think they.

Trump found an answer, wasn’t expecting or what any. Anything you’ve heard on that that I’ve not heard anything but that would be. My guess is that he heard something he was not expecting. Don’t do the audit because you won’t like the results. Well, I think obviously the solution here is that Trump should go on over to Billholter.com which is a fine website that explains all of these things. Bill, I know you said you’re not down for but I’ve heard some speculate that Bessant might move over to Fed chair. What about Treasury Secretary? Could take that one on now.

Let me put it this way. I’m at a point in life where I can basically say and do what I’d like to say or do. I mean you can’t call my daddy, he’s passed away many years ago. You can’t call my boss because I don’t have one. So I kind of like it the way it is and I get to say or do or whatever what I please, what I please. I mean within reason. But I don’t. The point being I don’t have to answer to somebody for what my views are. Well, I like it sounds like maybe independent candidate just become president then you can shoot it.

You do it like Bill would. Look at that handsome cowboy in there. Bill, could you just let people know just what you have on the site And I know you allow people to contact you as well, which is always nice. Anything you can mention there, my friend. Yeah, you can go to billholter.com There is a contact button. I post probably three, four, five articles per day. Do some writing. There is a really good column. It’s right in the center there. Grizzlies corner. I was just seeing that. That sounds like you. Excellent, excellent resource for prepping. The guy who writes that has been into into the.

The no man’s land of Idaho for six months at a time. Him and a pack of mules and comes out smelling like a rose in that. On that particular, that whole column that he’s written and I mean he’s posted probably a dozen times or more. There are links to things that he has used that he feels are, are, you know, are valuable, you know, good value. And the things that he’s used are things that are necessities for when, for when the lights go out. So that’s a really great resource. You can go back. I think he started writing a year and a half, two years ago, but there’s definitely some great information there.

Well, I see mentions the IRS here and one of my highlights of the last year I’ve been giddy over enjoying fact that even in the IRS his own hand manual they continuously refer to the voluntary tax code which I’m sure is just an oversight by their editor. But can find this brilliant man, bill holter@billholter.com and then there’s our contact tab at the bottom in case you anyone is in the market for gold or silver or if you do have to sell your silver, unfortunately Bill, I know you can help people with that too. And they can find you at Beholder Proton Me.

And we’ll put all that in the description field below. And just be grateful that you made some time to join me. It’s a couple of you, geez, however many years we’ve been doing these, Bill, but I appreciate you and it’s nice to see you again and excited. You’ll be visiting my state of Florida in a couple months. So we’ll, we’ll have to go out and cause some ruckus when you get here. We will. Thanks for having me, Chris. All right, take it easy, Bill. Well, thank you Bill, for joining us for today’s show. It’s always fun to catch up with Bill doesn’t hold back much and in either case, hope you enjoyed that at home.

And one piece of news to pass along before we wrap up is that I’d like to thank First Majestic Silver who kindly brought us this video. And in addition to doing that, they also recently had some new drill results out at San Dimas, which is certainly an important part of the company. And as Keith Neumeyer mentions here, they got strong results from numerous veins at San Dimas near mine extensions at Elia, Sinaloa, Roberto and Santa Teresa, which left Keith feeling that the results confirm their view that San Dimas has not only growth potential, but can remain a cornerstone asset for a long period of time, which of course is good news, certainly on the heels of their recent earnings where they did have record free cash flow, which benefited obviously the acquisition of Gatos and also the higher silver price which is going to looks like we’re going to be even higher for the third quarter than in the second quarter.

Guess we got a month to go. But either case, link to this press release with the drill results in the description for the field below. And for a full recap of that, where we go through the actual numbers, that one is coming your way now.
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