Why on earth would the Iranians listen to Joe Biden on a proposal like this? The answer is, don’t forget Biden has given the Iranians tens of billions of dollars. Is the US getting itself into a bigger war? With what’s happening in the Middle east right now, I think you’re going to be surprised to find out what’s really going on. We’ve had breaking news over the last few days out of the Middle East.

Iran sent an attack to Israel, a lot of things heating up in that territory. So we wanted to get our man on the scene, former advisor to the CIA and Pentagon Jim Rickords, with a very, very good look of four 5d chess, a lot of moves playing out geopolitical. And Jim is the guy that can give us the take to keep us ahead. He’s got some shocking predictions.

Here’s what we want to cover on today’s call. One, we want to find out what’s really going on in the Middle east, what’s happening there. We want to find out if this is going to lead the US into another war. Could be scary. And finally, we obviously want to find out how is this going to affect markets, oil, gold, the regular markets, what’s going on and what can we look forward to in the next three to six months? And not to mention it’s an election year.

A lot of fireworks could play out. Jim, thanks for joining us on short notice. Can you get everyone caught up? What’s happening over there in the Middle east? Well, there’s a little bit of a backstory. You’re absolutely right, Matt. Over the course of late Saturday, we learned that Iran had fired different estimates, but 200 or more drone missiles, but also cruise missiles and ballistic missiles. The drones are what they call drone swarm, where an individual drone, I mean, a military drone of the kind we’re talking about is not necessarily a lot bigger than the kind you can buy on Amazon for kids or whatever.

They’re a little bigger than that. I mean, there are drones that are the size of airplanes, but they’re used for reconnaissance and other missions. But an attack drone can be relatively small. Iran makes very good ones. A lot of the drones that Russia is using in Ukraine are made by Iran. That’s a sidelight. But just to make the point that Iran make some of the best drones in the world, but when you send not how many there were, but 50 or 100 of them, that’s called a swarm, where you might be able to hit one or hit two, or it turns out they hit a lot more than that, but it’s kind of hard to hit them all.

But there were also, as I understand, the ballistic missiles, which Iran has very good technology on, and cruise missiles as well. So this was a very, very large attack. And I remember going out to dinner on Saturday night, not being sure, would we all still be here by Monday with markets open, etcetera? It certainly had the pattern of an escalation going up the escalatory ladder to something much worse.

But the backstory goes back a couple of weeks. Israel fired a missile at the iranian consulate in Damascus, Syria. Now, Damascus is the capital of Syria. Iran has very good relations with Syria. And they had an embassy there, technically a consulate with an annex associated with it. Now, just a little fine point of international law. When you have an embassy or consulate in another country, which they do, you open up embassies all over the world.

That sort of footprint of the embassy, the building itself is actually considered your territory for legal purposes, purposes of international law. So even though the israeli attack a couple of weeks ago was in Damascus, Syria, it was not aimed at Iran. The building they hit was the iranian consulate. And Iran was within its rights. Again, and being a little technical to say you hit iranian territory. Yes, it was in Damascus, but they could say you hit iranian territory because that’s our council consulate.

That little plot of land, however big it is iranian. And technically, that is how international lawyers think about it. So when Iran was planning, and by the way, that strike killed three top iranian generals. Now, within the iranian military, they have something called the Iranian Revolutionary Guard Corps, IRGC. That’s sort of a military. Within the military, they’re elite troops. They guard the leaders. They do international operations. What if you want to come terrorism or commando style operations? They work overseas.

They liaise with other military groups. So they’re sort of an elite group, but a large group within the iranian military. They’re the. The best soldiers and the best operators that they have. Israel killed three of the top generals of the Iranian Revolutionary Guard Corps in that attack on the iranian consulate in Damascus. So in military terms, called a decapitation strike. And you chop the head off leadership. It wasn’t the head guy of the whole IRGC.

He was back in Tehran, but it was the head of their overseas operations and two others. So they really, in effect, decapitated IRGC. Very, very successful strike. But they crossed a red line, which is they hit the iranian consulate. Now, everyone in the world knew that Iran was going to retaliate. That was not a mystery. You can’t let something like that happen to you and not strike back.

So the Iran retaliation was coming. The question is, what form would it take? When would it happen? Everyone thought sooner than later. And what form would it take? Those are the big issues. As it turns out, Iran attacked israeli territory. Now, on the one hand, that’s crossing a red line. It’s no secret that Iran and Israel are bitter enemies. They hate each other. The Iranians yell, death to Israel, kill the Israelis.

I don’t think there’s a lot of sympathy in Israel for the Iranians. Israel has had a long string going back years, if not decades, of assassinating top iranian nuclear scientists and others in Iran, which is not easy to do. Obviously, there’s good intelligence and operations going on there. So these two countries basically hate each other, and that goes back a long way. But they’ve never actually directly attacked each other.

Israel has never fired a missile at Iran. Until Saturday, Iran had never fired any missiles at Israel. They operate through proxies. The proxies could be Hamas, Hezbollah, the Syrians, Iraqis, Houthis and Yemen. The Israelis had their commander teams. They get basically spies in Iran who tipped them off. So a lot of going back and forth, but they had not directly attacked each other until Saturday. Now, Iran took the view that they’re within their rights to say, hey, you attacked us, meaning the consulate in Damascus, so we can attack you.

You, Israel, cross that red line first. So we’re just responding to you in kind. A lot of people view it differently. They go, well, you know, a council in third country, Syria in this case is not quite the same as hitting Iran, but legally it is. And so Iran felt that they were within their rights to attack Israel. So so far, we’re on an extremely dangerous path. Number one, we’re escalating.

So, you know, you kill three generals, we’re going to just fire 200 missiles at you in your territory. So there is an escalatory dynamic to it. Israel has nuclear reactors and Israel has nuclear weapons. They’ve never publicly admitted it, but no one doubts that. They have a fairly large stockpile of nuclear weapons. Iran has nuclear reactors, they have ballistic missiles, at least so far. They don’t have a nuclear weapon, but estimates are there may be only six to twelve weeks, maybe a few months at most, to be able to actually test a nuclear device and then over time turn that into a weapon.

They definitely have highly enriched uranium, uranium that comes out of the ground or is lightly processed, called yellow cake. You can then enrich it to 5% or 20%. You might need 20% for a nuclear reactor, but for a weapon, it has to be enriched to 20 or, sorry, 90% plus or 95% has to do with an isotope of U 235, uranium 235. Without getting too technical, Iran has mastered that.

Enrichment technology has taken them a long time, but they’re there. They haven’t taken that final step to detonating a nuclear device, but theyre not that far away. So one full scale nuclear power, another power, thats just, as I say, maybe a couple of months away from having nuclear weapons if they want them both with nuclear reactors, which are different than weapons, except if you blow them up, they can melt down.

Youre back to a Chernobyl type scenario. So extremely dangerous. So heres what happened. And this we dont, you know, at paradigm, we don’t do conspiracy theories. We don’t guess. We either know exactly what we’re talking about or we use reasonable imprints. We’re always grounded in the facts, even if the facts are, you know, pretty startling in and of themselves. But here’s what appears to have happened. I have this from several different sources.

There were just one source. You could kind of take it with a grain of salt, but this is coming in from multiple sources in the Middle east, in Europe, and to some extent the United States. It looks like here’s the following that happened. And you got to put everything, in fact, that this is in the context of the fact that this is an election year in the United States.

And I can tell you that the people of the White House care more about the election than they do about war and peace. That’s too bad. That’s sad. You should always put national, you know, national policy and the national security of the United States ahead of your election considerations. But with Biden and Blinken and Jake Sullivan, that’s not what they do. So they’re thinking about, how’s this going to play out in terms of the election? Ukraine is already a disaster for Biden.

Biden has a lot of other problems. The last thing he needs is a war in the Middle east. That would pretty much seal his fate as a guy who either isn’t going to get the nomination to begin with or maybe if he does not win. So what the United States did is they basically called up Iran, operating through intermediaries. The information I have is the intermediary was Oman, which is, of course, on the right across the straits of Hormuz from Iran, physically very close to Iran, but they also have a good dialogue with them, even though they’re arab.

The Iranians are Persian, but they talk. So the US, operating through Iran, said to Iran, I’m sorry, operating through Oman, said to Iran, hey, we know you’re going to strike back. Everybody gets set. We know you probably have to. You can’t just let this assassination of these generals go. But why don’t you do something that the Israelis can defend against, number one. Number two, give us a heads up.

Let us know about when and what, and then go ahead and fire your missiles. But if we know what they are, when they’re coming, Israel can fend them off and you’ll be able to satisfy your own people. Hey, we struck back, but not actually go further down the path towards world war three. The Iranians agreed to that. Now you say, well, wait a second, everyone knows that Biden’s weak, he’s mentally incapacitated.

He says, don’t do this or don’t do that, then people do it anyway. They don’t really care what he says. Why on earth would the Iranians listen to Joe Biden on a proposal like this? The answer is, don’t forget Biden has given the Iranians tens of billions of dollars. He’s released funds that were frozen. Most importantly, he took off the oil sanctions. Iran was subject to very severe sanctions on the export of oil.

Biden removed those sanctions. So now Iran is making tens of billions of dollars more by exporting oil without fear of us sanctions. And of course, the price of oil is up to brand crew, which is the European Middle east. Price is about $92 a barrel. It’s not 60 where it was not that long ago. Iran has probably 20 billion reasons to work with Joe Biden. And that would be $20 billion, billion dollars that he’s given them either in releasing assets or taking away the sanctions.

And by the way, this goes all the way back to the Obama administration. Remember, Obama landed a plane in Tehran and they dumped off, I think, about $20 billion of cash and gold. They had to call the Netherlands central bank to bring up a bunch of euros, 500 euro notes at the time, 200 euro notes also, and gold. So we’ve been, I said, we, the United States. Yes.

But really the Obama Biden administrations had been doing everything possible to help Iran. So Iran would have listened to that. Not because they think Biden is strong, but because he’s, as they say, given them tens of billions of dollars of relief. Okay, so the Iranians say, okay, it’s a deal. Then the US calls Israel and says, look, they’re attacking. You probably knew when it’ll be drones and cruise missiles and simplistic missiles.

But you have what’s called the Iron Dome. You have anti ballistic missile missiles and those missiles that shoot down missiles. We’ll help out with radar and intelligence and we’ll shoot all these things down. So you. And they’ll aim at the desert. They’re not going to aim for Tel Aviv and they didn’t. So now everybody’s happy because now it’s a war. So I don’t know. I’m happy that we’re.

But Iran has the satisfaction of saying, we struck at Israel. We fired off everything we had. We showed them a thing or two. Israel gets to say, yeah, and we defended our country. Nobody was maybe one or two casually, sadly, but effectively, nobody was killed or injured. Nothing was damaged. Aren’t we great at defense? And there’s, and then there’s no further escalation. And that was evidenced by the fact that when it was done, the iranian ambassador to the United nations issued a statement saying, we had to do this.

Israel attacked us. Again, going back to the fact that it was a consulate, even though it was in Damascus, we had a right of self defense, in effect, to shoot back. But we consider the matter concluded. That was a key phrase. It’s okay. They shot at us, we shot at them. Done. Unless they come back again with another attack, and we’ll get to that. Uh, this was done.

Um, and so Israel is now making noises about, well, we can’t just sit there, let shoot missiles at us. We’re going to strike back at you. Interestingly, that came from the president of Israel, not the prime minister, not from Netanyahu. It came from, you know, a top official. But the fact that it wasn’t Netanyahu himself, uh, was meaningful. So, so how does this. Just to kind of wrap, wrap this up.

Uh, Matt, this is kind of like that movie wag the dog. I mean, they were real missiles. They were getting shot down by real planes. I’m not suggesting it was all made up. It happened, but, boy, was it orchestrated. It was almost like a movie set where Iran agreed to do something that looked good to their people but wasn’t actually that threatening. Israel got to shoot them all down and not suffer that much damage.

Why, if Iran was serious, why weren’t the missiles aimed at Tel Aviv or Jerusalem, for that matter? So. And the Biden administration comes out ahead because they awarded world war three at a time when they got enough on their plate with Ukraine. So the US called Iran and said, we know you got a strike, but keep it light and tell us when Israel said it’s coming, but you can handle it.

And the British helped, the Jordanians helped. Everybody knew, other than Americans, probably everybody in the Middle east knew this was happening. It played out exactly as orchestrated. And then as far as the White House is concerned, you say, well, gee, was this acting genius? Was this a masterstroke of diplomacy? Do we put this on a par with Henry Kissinger, James Baker, George Charles? In terms of diplomatic brilliance, I would say no.

They did orchestrate it, that’s for sure. But it was all because of the election. It was all because the White House doesn’t want another war. We already have a war in Gaza, but it doesn’t want a bigger war, doesn’t want a war with Iran at a time when they’re trying to win the election. So it’s a lot of kabuki. I mean, it was, you know, got real missiles, real shoot downs, some damage.

Not much. I’m not making light of it, but I’m saying this thing was orchestrated from the get go. Yeah, we appreciate the insight. And again, especially looking into the release of sanctions and a lot of money coming from the Obama Biden administration over to Iran, which, again, is probably, if you just look at the dollar followed money, funding the missiles that are shooting over. You know, it’s. The whole thing’s crazy.

China’s not listening to Biden, Russia’s not listening to Biden, but Iran was. Because we’re giving, as I said, we’re giving them tens of billions of dollars. Yeah. Diving in. I mean, obviously, you’ve been ahead of the whole situation in Ukraine, and that’s turned into a mess. Now we’ve got. This is just another piece of sort of Israel, Gaza, then Hamas, then the Houthis, Iran. There’s a lot of things happening over there.

Could this lead to the US intervention? Us, anything over there in the Middle east, could it lead us into some sort of war? Well, it’s possible, but it’s certainly the last thing the White House wants. For all the reasons we just went through, they did everything possible to orchestrate this. Okay, do what you got to do, but let’s not escalate this. And then as soon as the shooting was over again, bear in mind that everyone knew this was coming.

The White House comes out, says, we will not help Israel launch a counter counterattack. And then Iran said, as far as we’re concerned, the matter is over. Israel is making some noises, but haven’t actually done anything yet. So it looks like this thing is over. Although bear in mind, Israel did kill three iranian generals so I would say they, and militarily they came out ahead, but Iran at least got to save face, if you want to put it that way.

Could it get worse? The answer is, of course it could. The White House is going to do everything they can to make sure it doesn’t. Iran doesn’t want a war with Israel. Who would win, how it would play out? Those are big questions. But you can be sure that Iran’s got a pretty full plate right now. Theyre supporting Hezbollah. Theyre supporting the hoodies. Theyre supporting the Hamas. Theyre supporting the Palestinians in the West bank.

Theyre selling a lot of oil to China. Theyre making a ton of money. Theyre working on the technology. With all that going on, they dont want a war that would actually set back a lot of the progress I just described. Israel doesnt want a war with Iran because they got their hands full in Gaza. May have they fired some missiles the other day at Hezbollah. Hezbollah is in the north, Gaza Strip is south of Israel.

That’s where the main military activity. But if you go north of Israel into Lebanon, that’s the home base for Hezbollah, and they’ve been firing some missiles. The Syrians are always working around the edges. And Israel is getting a lot of pushback from around the world. Why don’t you wrap this up in Gaza? The civilian casualties are too great, etcetera. So Israel doesn’t want to war with Iran because they’ve got a full plate.

Iran doesn’t want to war with Israel because a lot of things are going Iran’s way right now. They’re piling up a ton of money. They’re making technological advances. They’re selling drones to Russia. They’re selling oil to China. Things are joining the BRICS. Things are really going well for Iran in a lot of respects. They don’t want to mess that up. Neither side wants to war. And the White House certainly does not want to war because of the election, as I described.

So my forecast would be this is not going to turn into a wider war, full scale war between Israel and Iran, at least for the foreseeable future. It’s not a five year forecast. Make it a, call it a six month forecast or one year forecast. I think that’s right. But it wouldn’t take much to ignite it again. This is like a pile of dry kindling. It only takes one match to start a fire.

Hopefully no one’s lighting the match. I don’t think they will for the near future, but the potential is there. But I don’t think it will turn into a wider war for the foreseeable future. Yeah, in a minute. I want to get to how this affects the market, but one question in between, obviously, we’re six months or so from the election, and I would assume across the world, all eyes are on the US election, presidential election.

There are a lot of countries out there that probably want Biden to win because he’s such a weak leader. Right. Is there anything that could happen there that any country saying, hey, if we started this or lit the powder keg a little bit, could probably that would lead to Trump, which they might not want. Is there anything happening there? Well, yeah, there’s a little war called Ukraine, but that’s out of Biden’s control.

And the point, Matt, is that, as I described, the US had leverage with Iran. Most people would find that hard to believe, but we actually do for the reasons I mentioned, which is they’re making a ton of money. We’ve given them a ton of money. They want to keep a good thing going. They don’t want to war, so they’ll actually listen to us. The Russians are not going to listen to the United States, and the Chinese are not going to listen to the United States.

But in terms of your specific question, the Ukraine war is already on guard. So that’s there. Maybe we talk a little bit about that. China no doubt wants to be an East Asia western Pacific hegemonic power, or they want to dominate the South China Sea. They want a lot of things. Eventually, they might want to take Taiwan, but again, they’re not going to invade Taiwan in the next six months, maybe not the next four or five years.

I’m not ruling it out. Longer term, that issue is not going away. They’re confronting philippine work boats. The Philippines are trying to do what South China has already done, which is take some reefs, basically, and dredge up the sea bottom, pile blood sand, make it an island, build facilities on it. That’s what the Chinese did. They created islands out of, if not quite thin air, just like you said, dredged up sand from the bottom of the ocean.

China is pushing back, sending coast guard vessels in, using water cannons as a weapon to douse these philippine boats and make it impossible for them to do a lot. So there’s tension there. But again, nobody wants to see that escalate into a war, at least of all the Chinese. These things may turn into wars in the future, and that may well be the case. But for now, again, China’s got a full play.

China’s economy is not doing well. China’s economy is slowing down dramatically. Bad debts are piling up, commercial real estate sectors imploding. Apple has already moved not quite, but almost 15% of their iPhone production to India. Us businesses are not investing in China. On the whole, they’re looking at Vietnam, Malaysia, Thailand, even Kazakhstan, India, wherever. I mean, it all depends on whether you need natural resources or manufacturing capacity or technology or whatever your inputs are.

But american business is already pivoting away from China towards South Asia and India. So Chinas got a lot of problems. And again, I dont think they want to dial up the geopolitical tension beyond whats there in the background. Russia is different. Russia is, if you ask me, are there any surprises in Ukraine and say Ukraine is losing, Russia’s winning. I’ve said that from the beginning. I said when the war broke out, I said before the war broke out, even in December 2021, January 2022, I said, watch out, the war is coming and Russia is going to win.

So. But I am a little surprised that it’s happening faster than I thought. The ukrainian defenses are just collapsing. Large units, meaning battalion sized units, are surrendering, they’re in full retreat. The Russians are annihilating them. Sometimes when you retreat from a fortress, you’re running for your life, but you’re out in an open field. The Russians have what’s called air supremacy, meaning not just air superiority, but supremacy, meaning the Ukrainians had almost no air defenses at all.

And the $61 billion that the US is supposed to give them, I mean, that’s. We don’t have time to kind of go into all the depth of that. But that money’s not going to Ukraine. Hopefully, it won’t get approved at all. But if it does get approved, it’s not like we’re writing Ukraine a $61 billion check. What we’re going to do is give Ukraine a bunch of used equipment, some of it 30 years old, say good luck, and then spend the money on buying new weapons for ourselves.

So that’s a little accounting gimmick. But Ukraine’s out of shells, out of 155 millimeter shells almost. It should be completely out by the end of June. They can’t make them fast enough. The factories that were long ago shut down in the United States or greatly diminished, and it’s not that easy to gear them up. The White House clearly wanted to avoid this war in the Middle East, Iran, Israel, which we talked about, but they have no way of avoiding the war in Ukraine.

That’s way too far along. And Ukraine is in a state of collapse. Russia is. There are a lot of things that Russia could have done two years ago with ease that they didn’t do because they were hoping either that there would be peace talks or the west would tell Ukraine to, in effect, settled down and talked to Russia. There could have been some settlement. There were humanitarian considerations.

No one gives Russia any credit for that, but they do take it into account. But after that massacre, that crocus city hall theater just outside of Moscow, where I believe 150 or more people were killed by four terrorists who then got in a car. And for Ukraine, the evidence is not 100% clear, but it’s looking more and more as if those were either, if they were not ukrainian nationals, they were paid for by Ukraine.

That was a ukrainian operation. As far as Russia is concerned, the gloves are off. They were bombing transformers and power grid components, but now they’re actually bombing the, the power stations. The electricity generating stations are not stations or plants, large plants. Theyre destroying them. Its not a question of a temporary blackout. Youve got to fix the transformer or whatever. Theyve wiped out their capacity to generate electricity. The Russians also blew up a very, very large natural gas storage facility.

Whats interesting about that is they were not just, the Ukrainians were not just using it to store natural gas for Ukraine. That was a natural gas storage facility for all of Europe. Russia just blew it up with cruise missiles and bombers and so forth. So now you could be looking at natural gas shortages in Europe. Forget Ukraine. Their power grid, essentially, the power grid is, their electric generating capacity has been to a great extent destroyed by the Russians.

So the gloves are off. Russia’s rolling. They haven’t even launched a full scale counter offensive. But they’re advancing on a number of areas of the front lines without a full scale offensive. Having helped the Ukrainians, when the Russians do launch their offensive, which I would expect this summer, so Ukraine may fall, actually surrender, or if they go into peace talks, it won’t be an evenly matched bargaining session.

The more or less have to accept Putin’s surrender terms, which include former provinces of Ukraine, going to Russia, et cetera. But that could very well happen before the election. So Biden’s got one fiasco. Of course. This is, in addition to Afghanistan, a lot of other disasters that Biden has at the border. I don’t have to go down the whole list of issues, but there could be another major fiasco related to Ukraine waiting for Biden pre election.

So the last thing he wants is another disaster for the american people to consider. Yeah, well, let’s wrap it up with, I guess, big picture stuff. What effect does this have? And maybe thinking about all geopolitics, including Ukraine, whats happening in the Middle east? Anything else youre seeing? What does this look like for the markets, for the oil market, gold market? What are you seeing there? What could happen in the next few months? Ed? Great question, Matt.

Whats interesting is that the oil market was going up and the gold market was going up before all this happened. Might have been a little bit of response to Ukraine, but gold was going up for other reasons. In fact, it didnt go up at all because of what happened in Iran and Israel over the weekend. Uh, if you had taken the pulse on Saturday afternoon because the markets were closed, but if you take in the post on Saturday afternoon, a reasonable person might have said, oh, golds gone, you know, straight to, uh, the, you know, $3,000 an ounce and oils gone straight to $100 a barrel.

That’s it. This is it. Middle east is blowing up. Give me some gold. And, uh, you know, and they’re going to close the streets of our moves, et cetera, et cetera. That didn’t happen. Uh, the price of oil was down a little bit, not a lot, just a little bit. Price of gold down a little bit, not a lot, but 30, $40 an ounce. We didn’t get those big spikes because whether people internalized the fact that this whole thing was orchestrated, which we just explained at the beginning of this interview, quite apart from that, even if you didn’t know that, but you just said, well, looks like things have come down a little bit.

Yeah. And what we’re seeing today is maybe even a bit of a rally, what’s called a relief rally, which we thought it was going to get a lot worse and it didn’t. So buy stocks somehow. That’s the psychology sometimes. That’s the psychology of Wall street. So short run gold is going to continue to go up and oil is going to continue to go up, but not for reasons specifically related to this.

Iran launching missiles on Israel has to do with more fundamental reasons, which Saudi Arabia and Russia have reduced supply. There’s geopolitical concerns with gold, I would say. We’re calling it the everything hedge. Everyone says, oh, get me some gold to hedge inflation. Well, if you have a lot of inflation, gold will go up and it’ll preserve wealth. It does perform that role. But that’s not the driver right now.

We don’t have some inflation. Not a lot. The driver right now is just geopolitical uncertainty, uncertainty across the board, what’s going on in Ukraine, what’s going on in China, what’s going on in Israel and Iran, what’s going on with the price of oil? What’s happening with the economy? We could spend hours on those four questions I just asked. But the point is, from an investor’s point of view, theres just way too much uncertainty in the air.

And its not just, I dont know whats going to happen to the economy in the next six months. Its much bigger than that, where you have to ask yourself, is there going to be an invasion of Taiwan? Are the Russians going to roll over Ukraine? Is there going to be a bigger war in the Middle east? Is there going to be a nuclear war? These questions, which used to be really a stretch, lets say, are front and center, doesnt mean theyre all going to happen.

Im not saying that. I’m saying the fact that people are trying to figure it out at all says get some gold. And the other driver, which I don’t think is getting enough attention, or if it is, people don’t understand it. There’s a move and it may come to a head in a matter of days, not months, but days or weeks at the most, which is Russia bought approximately $300 billion of us treasury securities with dollars.

They earn dollars selling oil. They took the dollars to invest them in us treasury securities as part of their reserve position. And the amount is approximately $300 billion. The US and the Europeans are talking about stealing that money. They’ve already frozen it. That money with those securities were frozen right after the war began in February 2022. But freezing doesn’t mean stealing. Freezing means, okay, they’re still yours. They belong to Russia, but you can’t have them back.

You can’t collect the interest. You can’t pledge them. You can’t get principal maturity. They’re yours, but you can’t do anything with them. That’s freezing. Seizing is different. Seizing is when you steal it, basically. And that’s what’s being talked about now. And as you know, there’s a US Senate demanding $61 billion for Ukraine. The House, conservatives, Republicans are, are pushing back on that. But what Speaker Mike Johnson might do is say, ok, Ukraine, you can have 61 billion, but we’re going to take it from Russia.

We’re going to steal it from Russia. Or maybe we’ll borrow the money and secure the loan with a pledge of the securities. And when Ukraine defaults, which they inevitably will, the creditor can take the securities as collateral. I mean, there are a lot of Mickey Mouse structuring issues around this. But they all boiled down to the same thing, which is stealing the, their russian money. Now, leaving just kind of putting that to one side, that’s playing out, I think would be an enormous blunder, world historic blunder on the part of the United States to do that.

But they might, they’re heading in that direction. But look at the rest of the world. Think about China, Taiwan, South Korea, India, Saudi Arabia, etcetera. A lot of other countries, Brazil, who have tens or hundreds of billions or even upwards of a trillion dollars of us treasury securities. I should put Japan on the list. When you watch the United States steal the US treasuries from Russia, how comfortable do you feel holding us treasuries in your reserve position? Can you comfortably say, oh, the US will never steal them? How do you know? What if you do something that the US doesn’t like and they say, well, we did to Russia, we’ll do it to you.

So then you look around and say, well, where else can I put my dollars? Because they earn dollars through exports, etcetera. Where else can I put my dollars? Well, do you like italian bonds, german bonds, japanese bonds? Better if us treasuries aren’t secure. If the US doesn’t follow the rule of law, if, for that matter, the Europeans participate in stealing the russian securities, which they would have to because most of them are actually in Europe, european custodians.

Why would you feel any more comfortable with german, italian or japanese? Boss? I think the answer is you wouldn’t. So where else do you go? Gold. I’m not making a gold bug argument. I’m not saying we’re going back to a gold standard. I’m just saying if the US steals the russian assets consisting of us treasury securities, and you’re not comfortable being in sovereign securities, the only place you can go is golden.

That’s what’s driving the price, because the Americans are too dumb to understand that. I did some calculations the other day. It was kind of interesting. So the US is talking about stealing the 300 billion of us treasury securities owned by Russia. And sometimes they say, well, we’ll just take 6 billion, we’ll take the interest. Whatever it is, it’s theft. But they haven’t actually done it yet. Meanwhile, Russia, Russias gold reserves.

Russia has 25% of the reserves in gold today. Theyve been in that position for a while. The value of their gold went up by $50 billion when gold went from $1800 an ounce, where it was a couple of months ago, to about just under $2,400 an ounce, which is where it is today. That delta, that change of dollar, 600 /oz times the number of ounces, and they’re 34,000 troy ounces in a metric ton.

Approximately. Russia is 3000 metric tons. But when you do the math, the number is about $50 billion. So just by talking about stealing the securities, the United States has enriched Russia by $50 billion because they’ve created a gold bull market and Russia owns gold. So it just shows you how dumb us policymakers are. But Russia right now is counting their winnings because, as you said, they just made $50 billion on their gold holdings.

Jim, as always, thank you so much for your time. This is a fast moving situation, and we’ve got a lot of things shaking out here in an election year. All around the globe, things are happening. If you’re at home, you liked what you saw, throw a comment down below for us, give us a like. And please, please, please. It’s an election year. There’s crazy things happening across the globe.

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