In a world where investors and rating agencies are increasingly concerned about US fiscal sustainability but have little interest in buying what China has to offer, it appears that a move is underway to allocate out of fiat currency into those things that cannot be printed on paper and with which both east and west will need to build their newly disentangled zones. Welcome to the Morning Markets and Metals with Vince Lancey, where each day he brings you the precious metals and financial news to get you ready for your day. And now here’s Vince. Good morning, I’m Vince Lancey and in today’s morning meeting we’re going to be discussing something a little bit more geopolitical.

The other day Russia and China announced or released a joint statement regarding their ongoing and growing cooperation. And we’re going to cover that, have some thoughts on that. It wasn’t covered in the western media much at all and it should be, it’s very important geopolitically. And well, let’s do the markets first. The dollar is up 19 at 104.81, 10-year yields are 444, steady up two basis points, almost three. S&P 500 is 53.17, down four, a gun, another new all-time high. As long as these things keep going, almost paper keeps making new all-time highs, the press can ignore the strength of gold and silver and even Bitcoin.

S&P 500, 53.17, I just said that. The VIX is 12.12, up 27, VIX is crushed. Gold is 24.14, down six and chain. Silver is 31.81, down 15, copper is 494, down 11. So dollar strength is coinciding with metals weakness would imply people pulling the trigger, maybe something out of China economically is causing that, I’m not sure. Even though it’s making new highs in China, it does affect what’s going on here. All right. WTI down 13, natural gas up one. WTI 7857, keeping a nice lid on that. And natural gas is 260, 261.

Crypto, Bitcoin is 70,079. Down 16, Ethereum is 3725. Down 63, Ethereum holding its gains and Bitcoin doing well as well. Significant information came out about that. The White House made a call to the SEC, I swear, to tell them we changed our mind, you can have an Ethereum ETF. It’s pathetic. But the rules of government protecting you, the nanny state, are only those rules when they feel they can get away with it or bully you on it. But when the people say they want something enough, well, priorities change. And those priorities always change too, I want to get reelected.

And Biden is in full reelection mode right now. Moving to platinum, palladium, you’re going to see they’re mixed again, right? You’re going to see a lot of this, right? You know, palladium is 1017 down eight and change. Platinum is 1056 up $10. You’re going to start seeing a lot of this because they’re both trading around parity and people invariably have opinions on this, whether they’re well-founded or not remains to be seen. But platinum, palladium will not move like PGMs right now. They’ll start to move like competing assets. Grains, 1230 in soybean up 4, 451 in corn up almost 4, and wheat 715 up what? 11.

Wheat’s just a monster. Okay, maybe I should look into that. Let’s get going. Let’s get going. No editorial comments today. There’s the front page. Yesterday we had two very special posts that I thought. One was the Michael Oliver post on some good advice on people that are concerned. Should I get in? Should I get out? Should I add? Should I subtract? I think it’s kind of like you’re not going to get in many other places. Coincidentally, simultaneously, our position in precious metals was further bolstered because Michael Hartnett over the weekend, chief strategist at Bank of America, came out and just said it.

He said gold is in an early secular ball. That is not something easy for him to say publicly, considering the position of his bank. So what’s early for him may be late for you, but his job is to not be as early as us. I think this is a very important signpost for lack of a better word. And there was something we sent out to the gold fix founders. The east west divorce was just finalized. I want to share an excerpt of that with you today because I think that’s that’s in need of more broader coverage and I just don’t see it out there.

That’s here we go. It’s titled the BRICS G7 divorce agreement. At least that’s what I’m calling it today. Premium and commentary. Same idea today. So let’s take a look at that. Over the weekend, there was a Russia-Chinese joint statement. And that joint statement we’ve read and we haven’t included, very lengthy, very detailed, and very pragmatically ideological. It was asserting their bonds and the terms for their bonds. So it was kind of like a a marital agreement. But what it really was was a divorce agreement from the west. And we brought out some key points here and some comments we have as well.

But I just want to throw them at you and then maybe make a comment or two, since you’re not going to get this. You’re really not going to get this anywhere else in the west, which is kind of scary. Okay. They made a joint statement. What is in the joint statement? They announced they have a non-allied relationship. It emphasizes a relationship beyond traditional military political alliances, focusing on no alliance, no confrontation, and not targeting any third party. Now there’s a lot more about this, but they also insist that it’s based on mutual respect for each country’s development path.

What does that mean if you’re an American? It means that if you bomb one of us, the other one’s not going to attack. That’s what they claim. So they’re saying we’re economically cooperated, but we’re in a kind of decentralized, we’re in a marriage that will, we’re in open marriage, right? Okay. Now Russia’s not going to be kissing us anytime soon, but you get my point. Okay. Simultaneously, they assert in partnership the one China principle. Russia reaffirms Taiwan as an inalienable part of China and opposes any form of Taiwan independence. That’s something we already know, but Russia is saying we’re not going to be happy if the US encourages Taiwan to be independent from China.

But based on number one, they won’t do anything about it. They won’t do anything militarily about it, but they’ll give them arms. They’ll do whatever they have to do. So again, that’s another divorce from the US, not that we didn’t know about it already. Here’s one that not many people do know, or maybe people thought assumed was happening, but don’t talk about it. Security cooperation. There’s a lot in there on that. They aim to strengthen strategic communication between their defense apartments and conduct joint military exercises. What does that mean in practical terms? They are now sharing intel.

Really important stuff. So, you know, the Saudis and the Iranians don’t share intel. So when the Gaza Strip exploded and Israel and Hamas started fighting, there was a risk that Iran would escalate and the Saudis would feel badly about that, concerned about that, and you could have some pushback the other way, Shiite, Sunni type of thing. But that didn’t happen. I noticed that and a couple of friends of mine out east noticed that. And we concluded then, they concluded, I should say, and I agreed that the Saudis and the Iranians, while they don’t trust each other, both trust China.

So China has both their intel. China is brokering a peace between them, and that’s part of it. So they’re operating as one. They’re trying to recreate what the US says. Economic cooperation. Commitment to deepening trade and investment ties, promoting projects and energy technology, and the digital economy. Now that’s just like a simple phrase there, but there are specifics in the report as well. And I think when you look at economic cooperation, you have to look at they’re trying to replace the intellectual capital of the West. So for example, trade and investment ties, they’re going to cross pollinate each other, promoting projects and energy.

Russia’s got the intellectual capital for drilling and getting oil out of the ground, almost as good as if not better than the US. China does not really have that technology, but they’re going to share that. Technology in general, Russia’s no slacker there. China, I wouldn’t say that they’re innovative, but I would say that they’re better at scale and better at improvements than anyone else. Now that comment about innovation is not a slight on them. Culturally, as a legacy of state communism, they tend to not get in front of trends. They let the trends happen and then they, like an aircraft carrier, turn slowly.

There’s no reward for being first when you’re as big as China is. You can’t afford to make that many mistakes. You need to see that the trend is developed. They’re very patient in that respect. Okay. And the digital economy. Well, that’s obvious. There’s the one that I think that is most disconcerting. They call for objective investigations into the Nord Stream pipeline explosion. Now, the joint statement expresses serious concerns over various international issues, including the Australian, New Zealand, US security pact. Australian, UK, New Zealand, basically the Anglo world in the South Pacific.

Japan’s handling of nuclear contaminated water. That’s a throw in there. And the biological military activities of the United States. Now, taken as a whole, this is a statement to their people. We’re not going to risk your lives. We’re going to make your lives better. We’re going to work together. We’re friends now, but it’s a shot at us. So it’s very politically astute in my opinion. Anyway, there’s a picture of them. Shaking hands after signing the agreement. We have some insights from a tech CEO named Eric Peters, and he’s a tech CEO.

So he’s, you know, digital in nature, but he’s kind of boots on the ground. And so he looks at things geopolitically. So he’s outside of our little world, but he sees our little world. And here’s his take. The West froze over $300 billion of Russian reserves following the Ukraine invasion. Moscow will not be buying our bonds again. China has been reducing its US treasury and agency bond holdings since 2022. It sold another 53.3 billion worth in Q1. Holdings are down to 767 billion, a level last seen in 2009. That’s significant. Oh, it’s only as low as 2009.

Yeah, but in 2009, the world’s economies weren’t that big. Our fluid has increased by trillions and they’re taking a smaller market share of a bigger market. What has rallied is gold, crypto, and real assets. Chinese buying of gold continues, and the share of its foreign holdings held in the middle climbed to 4.9% up 1.5% in 2015. Again, that’s what we know. That’s not the real number. The real number is much higher. Okay. I think this statement here by Eric is very appropriate. In a world where investors and rating agencies are increasingly concerned about US fiscal sustainability, but have little interest in buying what China has to offer, it appears that a move is underway to allocate out of fiat currency into those things that cannot be printed on paper and with which both East and West will need to build their newly disentangled zones.

I want to break this down for a second because he’s saying something that we’ve all seen coming at it from a different perspective. He sees the world dropping US Treasuries, dropping US brands, dropping US safety, dropping US. He does not see them adopting China, buying Chinese yuan, buying Chinese bonds, and certainly they’re not going to buy Russian bonds. He sees the world as putting itself in a safe area. That safe area involves gold, crypto, and real assets. We talk about frequently inflation as a reason to buy real assets, and those are real reasons.

He’s talking about reasons beyond inflation or monetary policy. He’s talking about, which we talk about as well, but he’s talking about it from saying they’re selling one but not buying the other. It’s a parking spot. Now, not implying they’re getting out of the parking spot any soon. It could be long-term parking, but the reality of it is if you think the world is going to heal ideologically overnight, you’re out of your mind, and these parking spots will be long-term parking. I agree with his assessment and I appreciate his perspective. In market news, the Biden administration will release 1 million barrels of gasoline for reserves held in the Northeast to reduce prices at the pump ahead of the 4th of July holiday.

That’s pathetic. Whether they’ve done it before or not, I don’t know, but I’m pretty familiar with this part of the policy. Gasoline cannot be held too long anyway. It decomposes so either you think Biden’s a moron and he’s giving away our strategic reserves, which I don’t in this case because gasoline decomposes, or you know that Biden’s politicizing something they had to do anyway. I don’t know what the answer to that is, but I do know this. It’s really scummy to do that. He’s not doing it because of the 4th. They probably do it every year.

I don’t know, but gasoline keeps six months to a year. They have to release some of it every so often anyway. Anyway, they’re manipulating the market. Last week, Google introduced a radical shape of search that presents users with AI-generated answers to their queries. Now the company says it will soon start including ads inside those AI overuse. All right, I’m going to call it. It’s not happening tomorrow. I don’t know when it’s going to pop, but AI is a bubble, and I’m not saying its capability is a bubble. The internet was a bubble.

Dotcom was a bubble. Great idea, got ahead of itself, but this is just nonstop bullshit. They’re just taking the current model and they’re throwing something else in there. Your customer service is now AI. Now, we’re going to put ads in your customer service. That’s AI. It’s all complete novelty bullshit. It will end ugly because it won’t generate more profits. It will decrease expenses, but these companies will be stuck holding the bag on all these computer chips. These computer chips are a commodity that will devalue over time. They’re not gold and they’re not silver.

They get worth less as time goes on. On that note, Amazon’s cloud computing arm has halted orders of NVIDIA’s most advanced super chip to wait for a more powerful new model. Boom, there you go. People are stopped. Companies are not spending money on these chips. The smart companies are. Meanwhile, there’s other companies that want to raise billions of dollars to buy them. It’s needs to collapse and it’s going to collapse in a deflationary collapse. You’re not going to make any more money from it. They are going to start laying people off and you’re going to stop spending and you’re going to have a deflationary collapse on the business side.

It won’t drop the price of commodities because we’re not the only ones buying them. All right. Down on deck today, two o’clock minutes of the Fed may FOMC meeting. I brought the word stale there. I don’t know that it’s stale, but I think a lot of the banks think it’s stale. I think we got all the things we had to get out of the last Fed meeting. But nevertheless, at two o’clock, if you’re a trader, look at the market as having two trading sessions today before 2 PM and after 2 PM, especially in gold and silver, because right now these markets are hot.

There’s people looking at them. It’s on everyone’s screen, everyone’s radar, and they will be looking to maybe buy dips before the data comes out and maybe sell dips after the data comes out. Anyway, I’m Vince. Have a great day. Thanks for watching this morning’s markets and metals update with Vince Lancy, brought to you each day by Miles Franklin Precious Metals, where this week’s special is 2023 dated one ounce silver Cougarands from the South African Mint for only $3.10 over spot. And even with the price rallying, fortunately, the premiums are still on the lower side.

And to get a full price list or place an order for silver Cougarands at $3.10 over spot, just email us at Arcadia at Miles Franklin and we’ll be happy to get you set up with anything you need. And as always, thanks for watching. Hope you’re having a great day out there. Please note that this video is not intended as legal licensed financial trading advice and is to be used for informational purposes only. Please contact your financial advisor before making any decisions. And thanks for watching. [tr:trw].

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