Lynette Zang: Silver Rallies Even As Banks Remain Short | Arcadia Economics

If you look at the swap dealers, this green line here, you can see they’ve been getting consistently short as the price goes up. You can see it really hasn’t been, they haven’t been that short since back in February of 2020. Oh, gee, what was happening then? The land of Arcadia. Well, hello there, my friends. Chris Marcus here with you for Arcadia Economics as we continue the new world where we have a silver price over $30. Also the gold price over 2000, well over 2000 these days, back over 2400 and a lot happening, which fortunately, I’m excited to be joined by one of our longtime guests, Lynette Zhang, who is now has her own business up and running Zhang enterprises, which means it’s been an exciting year for you, Lynette, in addition to the things that are happening in the markets.

And we’ll talk about the gold and silver rally, you had some interesting comments on the stock markets and some of the economic data that’s coming out that I’d love to dig into as well and a whole lot more. But before we get started, Lynette, it’s a pleasure to have you back on here today and busy year for you. And how’s everything going? Oh, my God, I’m having so much fun. I mean, I have to say, Chris, thank you for having me on. This has been, what an interesting, unexpected, but an interesting year and actually going back to last year as well.

So, yeah, thanks for having me on. It’s been great. Well, I’m excited to have you here. And for people who may not have heard the news about two months ago, was it Lynette, that she has now opened Zhang Enterprises? And another thing I’d love to dig into a little bit in our call today is also the idea of owning a business or income producing assets, which something that doesn’t get covered in the gold and silver community quite as much. Although I’ve actually had a bunch of people ask me about it recently, so I know you have some good thoughts there.

But of course, let’s begin with the gold and silver pricing. In my mind, I think it’s fair to say this is, regardless of whether it goes up or down from here, a bit of a historic moment, because we’re really in only the third time that silver has crossed $30. 4th if you count a few hours in 2021. But obviously, we had 1980, 2011, and I think especially the way people viewed that $30 mark with a lot of resistance. And we’ve seen the price touch up on that several times in the past year. Soon as it went through we’re now over $32.

So why don’t we start with any thoughts you have on what you’ve seen in the last couple of months, which sure have been exciting. It has been exciting. And what I see happening is that silver is concluding a cup formation. And I think that it will first probably test that $50 mark before it blows through it. So that’s really a confirmation, is an accumulation pattern that indicates that the big money is buying in quietly. But I think we’re coming to conclusion technically on the cup. It doesn’t mean that silver is at its true fundamental value, which I recently placed at about 2000 an ounce, but at least it’s moving in the right direction.

And I personally do not count on Wall street really giving me real, true valuation discovery, maybe trading price discovery, but. And even that, you know, yeah, the paper markets, I mean, it’s all about traders, isn’t it? Well, that is the case. And again, we saw how quickly it moves, when it does move. Although a few interesting notes you mentioned in there that I’d love to follow up with. First of all, you did mention $50 silver for obvious reasons. Important level in people’s minds. Is there any desire to put a time frame or do you have any feel for when you expect something like that? I think it’ll be.

I think it’ll be before the end of this year. Okay, well, it could be. It depends on how this rally, how many legs this rally has. It could be within the next week. And when you said the fundamental value of silver, great topic. And how do you go about calculating something like that and where you see that at? That is really a great question. And it goes to gold as the foundation, because gold is the primary currency metal at which they do those overnight resets. Again, Wall street is not going to give you true valuation discovery on anything, whether it’s stocks or gold or silver.

But the way that you calculate it is since in this system, money is created from debt, right? So you take all the debt that’s been created and you can do this country to country, but I do it globally because it’s a global issue. You take all the debts that’s been created and you divide it by all the gold that exists. The Department of the Interior runs the stats on physical gold and physical silver above ground and in ground. And so you take all the debt divided by all the gold, and that gives you the true fundamental value of an ounce of gold, which is roughly 41,000 an ounce right now.

Even those spots that were 24, 2500. And then historically, it was a 20th of an ounce of gold, which is this one little, one teeny weeny coin, right? There’s $1 gold coin. This is a $1 silver coin, right. You can see the difference in size, but a 20th of an ounce to 1oz. So you divide the 41 by 20, and that gets you to a little bit more than $2,000 an ounce. That’s how you get it. Is it going to be to the penny? No, but it’s because so much of the debt is hidden. This is just the $303 trillion in debt that they’re admitting to.

We aren’t really even talking about all of the leverage. So the debt upon debt upon debt, we aren’t even talking about all of the derivatives on that debt, which are just, again, a big leveraged bet. So this is just the basic debt divided by the amount of gold, and then whatever that, it’s nominal, but whatever that number comes out to be divided by 20. Are we going to get to 20 to one ratio again? Maybe we will, maybe we won’t. I don’t know. Does it stop going up the fundamental value? No, it doesn’t, because the more debt that is created, the higher that number goes.

So when the fed pivots and drops those interest rates down, which all the central banks are dying to do, and some are, well, when that happens, then more debt gets created. But anything physical, there’s a finite amount of it. I don’t care what it is. I don’t care if there’s new discoveries. There’s a finite amount. There’s an infinite amount of debt, but there’s a finite amount of sound money. And really, I am definitely a sound money proponent on a global basis. Yeah, it’s a good point. And certainly when you measure the amount of debt versus the amount of metals, does get to some pretty big numbers.

Of course, sometimes I think about how Kathryn Austin Fitts and Mark Skidmore, Doctor Mark Skidmore, rather, they had that report couple, probably five years ago now, where they found $21 trillion of unaccounted for money coming out of the Department of Defense and the HUD, remember, they had a figure a year or two later that was in the hundreds, and people are wondering what that might be about. I guess one example would be the 2.3 trillion Don Rumsfeld lost on September 10, which we never heard about. Yes. If we really have that Ekster’s pyramid flow down to the bottom, it gets pretty stunning.

Although one other question about the rally, lynette, is that something we’ve seen here. Here we have the cot chart. If you look at the swap dealers, this green line here, you can see they’ve been getting consistently short as the price goes up. You can see it really hasn’t been, they haven’t been that short since back in February of 2020. Oh gee, what was happening then? Well you had, I mean here you can see where they were short, the price got clobbered. That was when it went down to twelve before getting up to $29 just a couple of weeks later.

So sets up the dynamic where we could see short covering. With the price now above 32 we could, could see the price come back in. Curious if you have any thoughts or expectations on that? Well if theyre short covering then they were going to be buying and that would in a logical market push the price up more. Its also really interesting because if theyre selling short, which means they dont own the silver, theyre just selling it. How much pressure is there on the buy side to overcome them selling off those silver contracts? I think that could push it faster to the 48 if they really start to cover those short positions.

Yeah. Well with the increased premiums we’re seeing in China being the perfect example of that. Yeah. Yeah. And what about South Korea? I don’t know what’s happening there but I do know that the public is rushing in to buy gold and silver. Yeah they have it in the vending machines there right here and. Go ahead. Yeah. And well I was going to say what gives me a lot of hope and what I’m really excited about, whether it’s China or it’s South Korea or it’s the US or anywhere in the world, is that it’s the younger generation, those in their thirties, that are buying the most.

So some in their twenties, some in their forties and fifties, but it’s that 30 year range. And so I think we may have begun a sound money revolution. I hope so. That’s what I’m hoping. Well when you think about it, maybe 1020 years from now, we’ll look back on that and see that that’s what’s happened. Although before we hit the record button, you and I were talking about the impact of Costco and Walmart selling gold and silver and I know you had some interesting thoughts there and perhaps you could share that. Absolutely. And Amazon is in there as well.

So what does that mean? Well, Amazon, Costco and Walmart are not going to be selling gold and silver unless there is huge demand and theyre selling out really rapidly. Now there are limitations and thats not where I would be buying my gold and silver. But it is clearly a huge indication that the public is beginning to participate in the physical metals market. And regarding silver, I’ve been told that Costco bought out the next two years of silver american eagles from the mint. So have you tried to get any silver eagles lately, Chris? Actually, I did just convert some silver into silver eagles.

Was not a Costco sized amount, but was able to do that. That’s interesting to hear. They’ve taken a two year allocation. That is what I’ve heard. I haven’t been able to verify it, so I don’t want to absolutely say that, but that is what I’ve heard, and it wouldn’t really surprise me. I mean, I don’t care what form of silver I have, so if I can’t, I have eagles, but if I couldn’t get more eagles, that’s okay. I’m fine with any silver. But, yeah, that’s what I heard. And so why would they be doing that if the demand wasn’t there? And then as soon as they put it up, they sell out like that.

Yeah. And like we were talking about earlier, I don’t know if it’s the type of thing that Costco starts selling it and the price doubles overnight. Yet in terms of seeing it re entered into the consciousness in a place that people are familiar with. And the whole process, I think, has been a bit of stepping stones for the past 1015 years. And one of which, which I’d love to get your opinion on, is, of course, what’s happening with the bricks. And in fact, Pepe Escobar had a report last week that mentioned something that I’ve seen. A couple months ago, someone pointed out to me something called the unit, which now Sergey Glasiev has been on record as saying, that is a project which the dynamics of that has a 40% gold backing, 60% backing of BRICS currencies, and then that now is being formally considered possible adoption as early as 2025.

Again, in the BRICS, we see over 50% of the world’s oil exports and has been a lot of talk. We’ve seen small steps towards golden, but would love to know what you’re thinking and seeing about all of that. Well, you know, you take a look at the Shanghai Gold exchange. I’m not familiar with the units, so I wrote it down so I can look into that, because you can’t follow everything. But I think that no matter where you are in the world, the BRICs, we could definitely see a shift in the power. We also see the level of accumulation of gold by their central banks, whereas in the west, the central banks, I don’t think they’ve added much to their positions, but the rest of the world certainly has buying more gold than they ever have since they started tracking it back in the fifties.

Last couple of years it’s been enormous, and who knows more about what they’re doing to the currency? But either way, we know that everybody has a gold revaluation account, so makes it easy to do that overnight. But they’re going to have to get rid of all of this mountain of debt. And what makes me nervous on the west is the decoupling of the synchronized movement that we’ve seen in the central banks, especially in the advanced economies, with Switzerland lowering rates, the US remaining the same, the ECB, I mean, everybody is being more independent rather than that synchronized message.

That means that the foundation of everything. Yeah, we saw this in the treasury market, in the debt market, where there’s so much volatility because there’s this huge wall of debt that’s coming. So this is like building house over an earthquake fault that’s actually already doing this. And are you saying you’re going to stay in the house or you’re going to get out? I think the BRICS, especially with Saudi Arabia becoming a key member, I mean, that’s the death knell of the us dollar as the world reserve currency, which really hasn’t been since 99. However, officially it still holds that title.

But we’re seeing less and less global business done in that and more and more global business done in amongst the BRICS. But that’s really a trading agreement so that they can use their own currencies in trade and they don’t have to convert to another currency, right? I mean, we have held sway over the Swift system, the financial system that’s been of the world for a long time. I see the Swift system working to become relevant or remain relevant again, and I see a growing influence over on the BRICS nation. But I think that everybody’s got to reset that currency, which is why I think we’re seeing a huge move in the east, in China, in South Korea, et cetera, to people buying gold.

Let me pull that up here and I’ll also put this in the link to the description field. But here’s that article from Pepe Escobar mentions concept that has already been discussed by the financial services and investments at the Brics Business Council. Now again, this was something that I’d heard about for a while, but what is interesting in this article, citing that not just a couple people in Russia talking about it, but unit has already received backing by the Brics Business Council on the agenda for meeting in Russia next month, eventually to be adopted as early as 2025.

And for folks who want to scroll down, you can see Sergey Glasiev, the minister of integration macroeconomics of the EA EU, has also spoken about it here. And again, that will be in the description field, although Lynette, something else I’d love to hear you talk about a little bit we see here is the Nasdaq that hit its low in October, November of 2022. Similar pattern for the s and P 500. Obviously, we’ve had the 5.5% interest rates. Are you surprised that the stock markets have continued to perform as well as they have under the higher interest rates? I know you’ve been talking about a lot of the evidence of delinquencies and economic weakness, and love to get your opinion on that.

Yeah, well, the central banks talk about tightening, but when you look at the financial conditions chart over at the Fred Federal Reserve Education Department, you’ll see that conditions are as pretty much as loose as they’ve ever been. So that means that there’s so much money that’s sloshing around the system, and it’s also all of those derivative tools they’ve got to keep the markets going up so that people stay in the system and remain vulnerable at the same time that we’re seeing insider after insider, you know, Bezos, Zuckerberg, diamond, et cetera, selling out into these highs. So when I’m looking at the, and I was there on Black Monday in 1987 as a new stockbroker.

And I remember I went out for lunch and I wake up early, so I like to have my lunch early. And it seemed like a normal day to me until I came back into the office when all Hades had broken loose and the brokers were under their desks. So I think that this is a setup like it always is, into a wealth transfer mechanism, from the few, from the Zuckerbergs of the world to the many, to the public, that just sees the markets going up. It’s fiction. That’s my opinion. It’s flipping fiction. Just like the price of gold and silver.

It’s fiction. Now with that said, are you expecting that we will be seeing a crash in the stock markets? And part B to that, does that last for long, or does the Fed come that quickly with interest rate cuts and whatever else is needed? That we either have a brief or no ultimate correction in nominal terms in the stock markets. I think there could be a little bit of nominal corrections, but at this point, probably not a crash. And when the Fed pivots and lowers the rate, then I expect financial conditions to get even looser than they are.

And if you remember it, back in what, 2012, 1314, something like that, the venezuelan stock market was the best performing stock market in the world. What else was happening? Hyperinflation. So I’m not really expecting to see a big stock market crash, but I don’t think that what’s supporting it is real. Again, I think it’s fiction. And, yeah, I think what happens when people recognize, because when they do pivot and they do start with their money printing again, that what’s going to happen with inflation, and we already have it, where the consumer is losing confidence in the fed, in the government, etcetera.

And at the same time, so consumer sentiment is down, but their inflation expectations are up at the same time. And it’s the consumer that’s really supposed to be supporting this mess. So if they get too black in their thought process, then who’s going to be there? Well, there’s derivatives. I mean, with the hay, it’s not like it’s hard to manipulate a stock market, an intangible market. There’s a great video of Kramer. Not my favorite, but a great video of Kramer that anybody can do a search on where he admits when he was a trader to manipulating the market and how easy that is.

So that’s what I’m seeing, and that’s what I think about it. I think it’s fiction. Well, I hear you on that. And by the way, I love the money printing gun. I didn’t see that in one of your videos. Can you send a batch of hundreds for my man Ben here in silver chopper form? He’s going to throw him right out going, where do people get one of those, Lynette? That seems like a must have item. Well, we’re going to be having our own branded money gun before too long. And I even have. Oh, I don’t.

Yeah, and I even have my lovely face on a wonderful bill with the purchasing power on the back. The official purchasing power chart on the back. But what does this bill say in gold and silver, I trust? Well, that sounds like a good way. Better than the fed or the policies coming out of there. Although, with all that said, lynette, let’s say we go five or ten years in the future. Obviously, the dynamics are what they are. We see prices moving now in certain areas. What do you think ultimately happens? Have we had a reset by then, as the Fed just continued to boost it up? It seems unlikely to imagine them letting a failure in the treasury market occur.

What do you think are the key things that we’ll have seen over those next couple of years and how this ultimately gets resolved? Well, I have to tell you that when they start the money printing machine again, there’s only officially $0.03 left in that dollar. But there’s a big fat zero on that chart. And I personally believe, because of the monetary velocity, the number of times that money changes hands, I personally believe that we are already seeing the very, very beginning stages of the hyperinflation. So over the next couple of years, I think the hyperinflation will become apparent to everybody.

And I’d say within five years, we’re going to be in the thick of a huge crisis with them attempting to stuff the cbdcs down our throats. Because even in this test, when it’s been shown that the people do not want it, they don’t really care, right? They don’t really care. So they need to create a huge crisis. And I’ve personally built my barterable silver and gold portfolio based on ten years. That’s how I built that, because I don’t think this is going to be. It’s global. There’s no place that you’re going to be able to go and hide unless you have everything set up and, you know, food, water, energy, security, barter ability, wealth preservation, community and shelter.

And frankly, Chris, community has become the absolute tippy top for me. And I mean, it’s been part of the mantra for a long time, but I believe that we are running out of time really fast. So the luxury of time that I’ve had, and you’ve been here, you’ve been to this urban farm, and you saw what I’ve created. But I started that back in 2010. We don’t have that same luxury. And that means that it becomes imperative for people on a local basis to create your community, create your tribe, create those people, bring those people together with a variety of skill sets and a variety of assets that they have to help the whole survive this.

And then on top of that, we really need to come together as a global community, create a peaceful revolution in sound money by converting this stuff into this stuff. And so that we, if there’s enough of us, it can be a peaceful revolution. I’m not promoting anything that’s harmful to humans, but a peaceful revolution so that we can have a seat at the table and have a say in what this next financial system is going to look like. And I have a lot of hope because, of course, I’ve had people say, oh, wow, you can’t do that.

One person can’t do that. But I’ve been watching the rise of the unions and the say that they have. I’ve been watching what’s happening in China, where they got very heavy handed. I mean, China shows you how to control a population until they pushed that population too far in the lockdowns and in their real estate market, etcetera. And so we’ve been seeing verbal protests out of China, as well as quiet protests, where now the chinese government wants people to have more than one child because that benefits them. But the people just are not okay. They can’t force them to have babies.

Right? So they can’t force us to hold on at this point anyway, to this stuff. Right. A quiet revolution, but globally, so that we’re all coming together and we have a. That. That table, to me, that is the highest tippy, top priority, because one person can’t do it, but a bunch of people coming together can. Yeah. And certainly, I find it’s generally a really nice group of people that fall into the metals community who believe in doing things honestly and just want to have a good, equitable way of life for most people on the planet. So I certainly share that sentiment.

And, Lynette, perhaps the last one to run by you today that I mentioned earlier, been talking with a couple of people lately sometimes that have a large metals holding, but are wondering about the question of creating income. And obviously, people can create their own business. They can invest in other businesses, they can invest in dividend paying stocks. There’s a lot of different options. I think it’s hard for a lot of people when they feel the metals prices are a lot lower than they believe they should be, because there’s a tendency to want to wait for that price appreciation.

Yet whether now or for someone who’s waiting for a higher price and then might want to do something, maybe one of the traditional options in real estate becomes a little tricky. Not that there aren’t ways you can’t do it if you think prices are still overvalued, but anything you could share on the thought process of whether now or at a time in the future for people who are interested in using some of their assets to create income and what you might advise to people. Yeah, 100%. I’ve been a stockbroker forever, and I’ve been studying currencies since 1987.

And so I’m very familiar with currency lifecycles and what that pattern represents. And just briefly, here’s a great example is my life cycle. I have a granddaughter that just turned nine. I’m about to turn 70 in just a few months. Well, I’m telling you, you’re not going to look at her at nine and think that she’s going to be 70, and you’re not going to look at me at 70 and think, I’m about to become ten. So the reality is, there are patterns that you can see in an aging currency, and also patterns that you can see as this currency shifts.

So the strategy that I developed for myself, which we are definitely using at Zhang Enterprises, is built on layers, right? So we talk to each client to determine what their income needs are currently and in the future, and then we help them develop a sound money portfolio that’s layered so that no matter where we are in this cycle, they can meet their income needs. Having said that, the opportunities in you brought up real estate, which, you know, when I was a stockbroker, in the beginning, nobody ever talked about running out of your money, but now, oh, all right, well, you’ve got enough money to last until you’re 82.

Well, what do you do after you’re 82? So the strategy that we employ at Zhang Enterprises is based upon those occurrences that happen every single time. But again, it’s in layers. So there’s a layer of cash, and it’s going to be based upon your needs, your goals, and your circumstances. I mean, if you’re young and you’re still working, you have the income. You don’t need as much cash put back. If you’re retired and you’re depending on those fiat money assets for your income, then you’re risking your principal for that pickup of interest. And what happens when that principal goes away.

So there is a certain level of cash that you need as a line of first offense. And then I go into my silver and my barterable gold, which can then be used. We talked about the cut formation earlier. We’re going to see that again in income producing assets. And when we see that formation, then you’re going to start to convert some of your gold holdings into those other income producing assets. But you’re going to have enough barterable wealth that if you need to use it directly, fine. But if you need to convert it into fiat money to pay your taxes or pay off your mortgage, or do a number of different things, then you just want those different layers.

So that you can take advantage and build out an income portfolio that can span generations that you can’t outlive and then can transfer down to your children and hopefully your children’s children, et cetera, et cetera. So, you know, there are all different ways to approach your need for income, but they’re specific to you, right? So that’s a conversation to make sure that we’re meeting those needs in a whole bunch of different ways. But again, in layered, it’s a very layered approach for now, for the intermediate term and for the long term. Well, I think that’s well said.

And Lynette, I’m going to pull up your website in the background and perhaps you can tell people a bit more. Although before I do, give us one more shot of the money gun, please. There’s a $100 bills at our audience look at that. Can get some easy to do. It has no value. And every time they do that, the value of what’s already out there goes down. That’s the inflation that you and I see is the value, the purchasing power value. It does. Here, I’ll give you this one too, because you know what I think about this? It’s garbage.

Absolutely nothing. That’s what I think about it. But this is, this is our wonderful brand new website. We just went live on Tuesday of last week. And yes, you can schedule appointment with our strategy specialists that will take the time to help you define those goals and those circumstances. And yes, we help people build a sound money portfolio. It is a 1oz minimum. That means if somebody wants to buy one silver dollar, they can buy one silver dollar. If they want to buy 1oz of raw gold or any gold, they can do that too. Because we want to democratize.

We want everybody to have some gold and some silver, some sound money, regardless of your circumstances. And I have to say how proud I am to be part of the Zhang Enterprises community. Because the quality level of every single person that’s participating and how much they care about doing the right things and putting the clients first, it’s all right there. And I’m so proud. So proud. Well, that is obviously an important step. And people can find you at lynette zang.com also in the description field below. If anyone doesn’t even want to type that out, but just click on the link.

Of course, Lynette, you still have your YouTube channel, which is a new one that you started, but already going quite well. And I’ve enjoyed some of the videos there. And of course, people can find Younetzang on Twitter. So, Lynette, really great to catch up with you. Really happy to see that you’re doing great and have your own business going now, certainly in a time where I think that’s going to be needed. And go ahead. Most definitely. And do you love our new phone number? Because I love it. It’s eight three three gld z a n g.

Well, let me get pulled back up here so people can see how slick that actually looks. The 833 Gld Zang, and certainly one of the great voices in the silver and gold community. And I think before it’s all said and done, people are going to appreciate having heard a lot of this from folks like you before. Some of these things, I won’t say before some of these things happen because some of them are happening now, but evolve further. And either case, great to catch up with you again, Lynette, and we’ll have to do this again soon.

Oh, absolutely. It’s really good to talk to you, Chris. I appreciate being here. Well, thank you to Lynette for today’s call. Always fun to catch up with her, as I know she is a fan favorite and also really exciting to see that she is doing well and has started her own business. So again, congratulations to Lynette and thank you at home for watching. Before we wrap up, did want to mention we had a bit of news out today. Congratulations to Fortuna silver as their Yaramoco mine has produced its 1,000,000th ounce of gold. This was part of the deal with Rocks Gold back in 2021, and as of 2023, Yerimoco has a mine life of two years, although they have had success in extending some of the mineralization, something that Jorge Genoza talked about in his last appearance on the show, where he joined us following their first quarter earnings.

And you can find out more about how that went for Fortuna, as well as what’s going on at Yeremoko and a whole lot more in the video coming your way now.
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