 This is Jeff Deist and you're listening to the Human Action Podcast. Ladies and gentlemen, welcome back. Once again, this is the Human Action Podcast. I'm really pleased this week to be joined in studio by a very special guest, Keith Weiner. He is the head, the founder of a company called Monetary Metals, and we are going to finally tackle a topic I've wanted to do a show about for a long time. We're going to do an entire show basically around the topic of gold. What it is, why it has value, what's its role in the monetary system. If any, that's somewhat disputed even sometimes in libertarian circles. There are people who have sort of a dismissive attitude towards gold. It's not just central bankers. And so this is something that I think is near and dear to the hearts of a lot of Mises Institute followers. I think many of us, not all, but many of us believe that some kind of gold or commodity standard ought to be applied to money. And then, of course, money ought to be provisioned privately by the marketplace and not by central banks or government. But we're a long way from that. So here to help us unwind all of this, Keith Weiner, welcome so much. Thanks for having me on the show. Well, so you live in Phoenix, Arizona, and you run Monetary Metals. So just briefly tell us about your company. So our vision is simple and I believe unique. We pay interest on gold. So we don't buy and sell it. We pay interest on it. And so does this put you in the crosshairs of any federal regulators? Obviously, anything that you do today in any kind of business, you're subject to some regulation and anything touching on finance and investment, more so. But we are well-advised by law firms and try to keep our noses clean. So earlier at lunch, you were speaking about the way US dollar doesn't work, the way it's broken for a couple of reasons. First of all, because it's sort of a debt-based instrument. And second of all, because the interest piles up. So can you just give us the quick and dirty Keith Weiner version of what's wrong with the dollar before we even get into gold? So the dollar is people called fiat currency and fiat means force. It's certainly forced on us by a variety of government mechanisms. But economically, I think it's more important to talk about it as irredeemable. So it's a debt that can't be redeemed in money. And historically, you know, if you went to the bank and deposited money, there's no question that money meant gold or silver. And there's no question that you're entitled to get your money back. You could, you know, when you deposited, you would deposit roughly an ounce of gold and get a $20 bill. And then at the end, or whoever you paid with that $20 bill could come to the bank and push the $20 bill to the teller and get back the gold coin. And that was redemption. Today there is no redeemability to it. You bring a $20 bill to the bank and say, give me my money. The teller is going to kind of squint at you and say, what? So the dollar is a debt instrument. They call it a note, you know, the Federal Reserve note is what it says on the dollar bill. Both note and bill are old terms for credit, but it's not redeemable, which means you can't take your marbles and go home. And that's a really important feature that's missing. By taking that out, they disenfranchise the savers. So in the gold standard, if you don't like to interest rate, you withdraw your gold coin. You say, well, it's not worth it. But in the case of the dollar, you can't do that. And so the dollar has two fatal flaws coming from this. And the first one is the rate of interest is completely unhinged. And in the gold standard, it's remarkably stable. And so not only is the interest rate in the United States been falling since 1981 and continues to fall and will continue to fall. But if you look at Switzerland, Germany, a number of other countries, Japan, they have negative interest rates. That means you deposit your currency and you get back less at the end of a year at the end of 10 years. And so that's the first of the two flaws, fatal flaws that are intrinsic to the dollar. These are not bugs. These are features. This is how it's wired. The second one is that there is no extinguisher of debt. We pay debts using dollars, but the dollar is itself an IOU. If you pay a debt using an IOU, you simply shift the debt around. And so the debt necessarily must grow exponentially. And if you look at any kind of exponential trends you find in physics or in biology, thermonuclear explosion is one, disease factors being another, electrical amplifiers being one. Exponential trends grow until they cannot and then they collapse spectacularly. They don't just sort of fade away. They blow up and go thermonuclear. And so that's what's happening in the dollar. The debt necessarily must go up exponentially. It is doing so. And that is obviously not sustainable. And when that finally ends, in a woe unto us, who will have to try to live through that. Well, for most Americans, your wealth, your income, your savings are denominated in dollars. So if the dollar is not redeemable for anything, does that mean that all of us have a counterparty risk of sorts with respect to what we think of as our money or our wealth? That's right. If you own a dollar balance, you are a creditor. And your choice is only to be a creditor of a commercial bank. And if you think commercial banks are transparent and sound, then maybe you can choose that. Or you can be a creditor of the Fed. You can have paper, cash, the hoard under your mattress, and then you're creditor to the Fed directly. Or you can be a creditor to the Treasury and buy Treasury bonds. Of course, there's a little game between the Treasury and the Fed. The Fed is just like a bank. It issues its liability, which is the Federal Reserve note, in order to fund its portfolio of assets, which is primarily the Treasury bond. But the Treasury bond is payable only in terms of Federal Reserve notes, which are backed by Treasury bonds, which are payable in terms of Federal Reserve notes. So it's a circular scheme, and it's basically monetary counterfeiting. And, you know, if you have a dollar balance calling that money, you are a creditor in this system that's based on counterfeiting at its root. Another thing you mentioned at lunch, though, of course, is that at least at the moment, the dollar works. In other words, you don't want wealth and money just to have wealth and money. You want it for the stuff you can get. And for the moment anyway, we can take those, whether they're physical notes, irredeemable for gold, or whether they're electronic blips on our debit card. For the moment, we can still go and exchange those, redeem those for gasoline or groceries or vacations or whatever it might be. So in a sense, the dollar works today. Whenever I hear the word work, I always, in my mind, sort of rewrite that term to mean get away with. So they're currently getting away with it. And to quote from Adam Smith, there's a great deal of ruin in a nation. They get away with it longer than you think they can. So that's the phase that we're in at the moment. Now, the one thing I would add, a lot of people have, I think, misconstrued why the dollar continues to have value. And I think it's basically mass delusion or faith or just a matter of one little pinprick to the bubble. And then when everybody comes to wake up and realize the nature of the scheme, the whole thing comes tumbling down. And my view is different. And my view is that it's the struggles of the debtors that give value to the dollar. So every farmer, every miner, every distributor, every manufacturer, every restaurant, every productive enterprise you can think of just about has borrowed to finance their business. And how do we know they borrowed, first of all, just look at the economic statistics? Secondly, the interest rate's been falling for basically 40 years. So if you didn't want to borrow at 15%, sir, would you, how about 14%? Oh, sir, how about 13%, 12, 11? And every step down is a greater and greater temptation to borrow. So at some point, everybody borrows. And if you don't borrow, your competitors will, and they'll beat you that way. So once you have made the commitment to borrow, you now have this debt. Let's say you're a farmer. You owe a million dollars. You must work your, you know, what off to produce enough, let's say, wheat to dump that wheat on the market, dump it on the bid price that is pushing down the price of wheat in order to hopefully desperately raise enough cash to service the mortgage that you have on your farm. If you don't do that, they're going to take your farm and your house away and dump you out on the street. So every debtor is in this position of working like on a treadmill that every time the interest rate falls, the credmills cranking up faster and faster and faster. And they have to produce more and more and more to dump it on the market. So if we define the value of the dollar as the purchasing power of what you can buy, they've got all the producers cranking away on these treadmills. And so that's why it works. That's why the dollar has value, and that's why everybody's comfortable to hold the dollar balance. No one's really particularly worried that, you know, there's going to be hyperinflation by tomorrow morning. I'd like to get your thoughts also on this related point, which is in most places you cannot, even legally transact using gold and silver for purchases, which means that most of the world, certainly the Western world, operates using fiat currencies to buy stuff. And when we're talking about currencies, the value of them is very much relative. So it's not like the rest of the central banks of the world are so rational and sane. It's not like the rest of the treasuries and fiscal policies of the world are so rational and sane. So in part, the value of the dollar, or today's value of the dollar, is based on its relative, on being the least dirty shirt in the laundry. As I say, do you think there's some truth to that? Yeah, I'm going to add to that, but first I just want to say it actually isn't illegal to transact in dollars. So the meaning of the legal tender laws is that if you lend somebody, you know, there's a debt, and then the debtor declares bankruptcy, but no court is going to say, okay, well, there's 100 ounces of debt. They're going to say, well, that was, you know, $110,000 if that occurred at the time the gold price is $1,100. So the creditor has only the right to get back the dollars. And so if the debtor tenders that amount of dollars, any court in the land is going to say, well, Mr. Creditor, take it or leave it, you've been tendered the full amount of the debt. Now there are workarounds for sophisticated parties, but in terms of a retail deposit, that's the issue. You can transact in gold and silver, but of course, a corollary to Gresim's law says basically, why would I want to discourage my metal, which I'm hoarding, when I can just pay this restaurant tab in paper? Right, but there's also the element of taxation. I mean, Fedgov treats gold and silver as an asset you own, a capital asset that you own just like they do Bitcoin nodes. So if you go out and try to purchase, buy and sell in the retail market with your gold and silver, you're in theory creating a taxable event each time you do so. Yes, you would have to create a ledger, let's say you have a stack of silver eagles that you bought or several different times you bought silver eagles at different prices. You would have to have a ledger of all those transactions and when you bought it, and then every time you bought a dinner at a restaurant and you took out a couple of one or two or three of these silver coins, you would have to know which coin you took and when you bought it and then record the capital gain or loss. The reporting may actually be more onerous than the tax itself. All serves to discourage this sort of transaction, but it's too least dirty shirt in the laundry. So yes, number one, I do think that as badly as the US government has abused its credit, by and large, the other governments of the world and certainly most notably China has abused its credit even worse. So the statistic I heard, I'm trying to remember which five-year period this was. It might have been 2009 to 2014. The Chinese banking system created more debt than the US banking system had since inception in 1789. So obviously there has to be a great deal of unsound credit. It's been created that rapidly under some sort of central plan where the central planner says to your district, you are to increase your GDP by X and here's access to all the credit you're going to need to do it. You can just imagine all the dirty, filthy ways that that credit would be used. But the other point that I think needs to be made more often is that all the other currencies of the world, maybe with the exception of say North Korea, like a couple of pariah countries, maybe Iran for that matter, but all the major currencies of the world are dollar derivatives. That is the central banks hold dollars as their reserve asset, or they hold euros, which in the European central bank holds dollars anyway. So they're dollar derivatives. And so they couldn't possibly survive if the dollar were to collapse first, which I don't think it will anyway for a hundred other reasons. They couldn't survive the collapse of it because if you're derived from something and the thing from which you're derived is collapsing, you're going to go down too. It would be like if you had call options on Google and then Google were to collapse. There's no way the call option would still have value after that. Well, that's the dollar's exorbitant privilege, right? That's what Giscard Distang, the French leader, said back in the 60s. He said, you know, the whole world's a Washington dollar, so no one has an incentive to see the dollar tank. And Secretary Connolly said, well, it's our dollar, but it's your problem. You know, there's a certain irony to this exorbitant privilege. I was talking with Addison in the car and the way up from or way down here from Atlanta. The architect of this insane system that began at Bretton Woods. So obviously at the end of World War II, the United States was in a position to tell the rest of the world what they were going to like and they were going to like it or else. Because, you know, the U.S. military was, you know, rampant at that point. So we said to the rest of the world, or they, I won't include myself in this, they said to the rest of the world, this is what it's going to be. The architect of that was Harry Dexter White. And everybody assumes that this exorbitant privilege is good for America, but I would say is it good, is welfare good for the welfare class that's, you know, becoming morbidly obese with a drinking problem, eating junk food, watching TV 18 hours a day. So Harry Dexter White was later criminally convicted of being a tool for the Soviet Union and his goal was actually the destruction of America. And so he designed this monetary system that appears to be to America's benefit, but is actually hollowing out America and destroying their capital. You know, in a problem that was later observed by Robert Triffin, the Triffin Dilemma, and that is that if you were to look at what would be the interest of domestic monetary policy, you'd want some degree of soundness to it, but international trade and world growth require more and more of these dollars. And so there's a conflict between domestic monetary policy and world growth. And so Harry Dexter White, I don't know how smart he was. I don't know if this was accident or otherwise, but his interest was to destroy the United States and help the Soviet Union take over the world. And he gave us a system that contributed in no small part. I'm too late for the Soviets, I suppose, but there's a certain irony in looking at this that way. Yeah, we're doing it to ourselves, that's for sure. Let's turn now to gold itself as maybe the answer to some of these entrenched system-wide problems we have with the dollar and with debt. First of all, you spoke earlier today about, you know, gold may have been in use as much as 5,000 years ago, but it certainly has been in heavy use for at least a couple thousand years. So just refresh us on that. Yeah, so the first gold coin I think was coined in the Kingdom of Lydia, which is now in Turkey, if I want to say, and that was around 600 and something BC, if I remember. So before that, you know, they had alloys of gold and silver called Electrum. They, of course, traded the metal in non-coin form. You know, coins make the metal more fungible because they're readily recognizable, the weights are standard. There's a hallmark on there that, you know, nobody's going to be counter-fitting something with the king's mark on it, you know, at the risk of having his head chopped off in those days. So 600 BC, they have gold coins that go into use in commerce, so I guess you could call it 2600 years. Gold is a unique commodity, and I do think money has to be a commodity. We're physical beings who live in a physical world, and there are certain times at which nothing less than I want final delivery of the goods. No electronic or paper representation or promise or receipt is good enough. I want to hold something in my hand and take it home and take my marbles out of the sandbox and go home. And so it has to be physical commodity, and then of all the physical commodities, gold has been the one that's selected. Manger talks about marketability. Gold is the most marketable commodity by far, with silver being a distant second and everything being distant third behind silver. And what was I saying? So silver's become the shit coin. Silver's the shit coin. No, silver actually serves a different purpose than gold. So gold is great at carrying value over distance. You know, there can't be a local glut in one market and a shortage in another because most major places in the world are no more than a 24-hour plane trip to anywhere else in the world. Gold is actually pretty cheap to transport. Silver, you know, if you look at the evolution in markets, there tends to be a winner-take-all dynamic. And marketability is certainly a winner-take-all. Silver is the most marketable in the small. That is, if you're a wage earner and you want to save 10% of your weekly wage, you know, look at that today. So that might mean somebody saving $50 a week today. Gold is very physical gold. It's very impractical in that size because you're going to pay a gigantic premium to manufacture something with that precision to get down to that size. If you want $50 worth of silver, you know, you're talking roughly three one-ounce coins worth. And so silver, you experience less losses if you're the wage earner trying to buy 50 bucks worth of silver. And historically, that was always so. So silver is more marketable in the kind of quantities of somebody buying, you know, with their weekly wage or selling a little bit for groceries in their retirement. So it served a different purpose than gold in a certain sense. Would you say that you're 100% in agreement with Mises' concept of the regression theorem? Yeah, absolutely. That something doesn't teleport from zero to, ta-da! Money without skipping. Why would anybody have wanted to hoard it in the first place before it was money? It had some other value. And of course, you know, silver is very shiny. It's a very interesting metal and the ancients could recognize that. Gold, I suppose most of your audience would be familiar with actually holding a piece of gold. Gold is astonishingly heavy. It's so much heavier than it has any right to be. You hold a piece of lead or a piece of iron, let alone, you know, the metals that other coins are made out of. And there's such a reality to it that you can just imagine, apart from its unique color and the fact that it's shiny and malleable and all those other things, just the heaviness of it gives it, there's an attraction to it that you want to lean forward when you see somebody have a piece of gold that, it still has that today. And you can tell in my voice, I very much feel that experience, that draw to it. So do you think Bitcoin fails the test of having a pre-existing use as a commodity? Well, I mean, it's not a commodity. It's an electronic ledger, but right. It's a technology. Yeah, I mean, it's a very interesting technology. And I love what I think are going to be some great applications of blockchain. And I say this, I was a software developer in a previous career. So I get technology and I'm definitely a pro-tech kind of guy. But what is the value of Bitcoin prior to it being deemed money? You know, in terms of Mises regression theorem, I've read articles arguing both ways. I don't see the argument for Mises regression theorem as applied to Bitcoin. All right. But before you get a bunch of incoming hate, do you own Bitcoin? I do not. Okay. Okay. That's a, I like. Full disclosure? Yeah, absolutely. Interesting to know. So talk about gold today. It's up, I guess, about 21% in dollar price over the last 12 months. What do you think is going on with gold today? And what purpose is gold serving in the world economy today? So what is our interesting time? And most of that rise was really made to July or May to August. And since then we've been kind of sideways. The price doesn't really come down much. Just a few bucks. We're in a very interesting time. And I'm trying to think the last time we'd seen this pattern where, you know, my company, we talked to bullion dealers all, you know, retail bullion dealers all around the world. Demanded retail has been almost non-existent. And a lot of retail dealers talk about they're getting, you know, sellbacks on their customers. So this has been a price rise without retail participation and even against retail selling. So this time around, and so there's, you know, three possible sources, I suppose, of buying or selling of gold. There's retail, which typically tend to be stackers. There's institutional, which is on different cycle or different set of motivations. And then there are the speculators that are using leverage because they see something on a chart or they hear a story or the Fed says, we're going to do acts. And then everyone says, all the traders know, like Pavlov's dogs. If the Fed says print more, that was a reliable thing that you could see gold go up 50 bucks every time Bernanke or whoever would get on the TV and hint at that. Boom. You know, there it was. This time around, it's not leveraged speculators in the futures markets. And we measure that. We have a whole bunch of graphs on our website that are constantly looking at that every day. We publish for free, by the way. And it's not retail, not from any of the actually two pieces of evidence. One is what people are telling us. And we talk to them. I don't think they're lying. But then secondly, the premier on retail gold products is non-existent. You call up your dealer and say, I've got gold eagles. I want to sell back to you. You'll be lucky to get spot. And some dealers may say it's spot minus something. And historically, that was never the case. There was always this two or 3% premium on a gold eagle. So it's institutional buying this time around. And so because we talked to, you know, gold owners and would be gold owners about earning interest on it. We talked to a lot of folks, including including institutional and whereas we saw in 2012, 2013, 2014 institutions that had gold. We're trying to figure out how to unwind their positions to get out. That was pretty universal. I don't think I can think of a single institution at that period of time, at least that I spoke to that was thinking of getting in. At this time around, we either get either they have taken positions. I'm trying to think was it was it Ray Dalio. There's a relatively prominent one who recently said you got to buy gold. Or as we talked to institutions obviously off the record and we can't name any names. There's a number of them that are planning to create positions or have recently taken positions in gold. And I think it's because, you know, a couple of drivers, one negative interest rates. I mean, if you're in Switzerland and the deposit rate is negative 75 basis points, three quarters of 1% per year to hold the Swiss franc balance. Gold starts to become more attractive. Just us. Number two is, you know, there's some screwy things going on in the world of credit. We had a little bit of an eruption in the repo market. So repo market for people that may not be familiar with this. If you're an institution or bank and you own treasury securities and you need cash, you can go to the repo market. It's basically a pawn shop for treasury security. So it's not unsecured lending. You have to have a million dollars worth of treasuries. You can force that off on somebody for, let's say, one day or one week duration and get the million dollars in cash. And then there's an agreed on interest rate for the swap to do it and then you get back to treasury at the end. And then the repo market blew out, I think it was September 24th, 17th, I forget which week it was, blew out and the rate on repo hit almost 10%. So severe stress going on there. There's some other weird things going on. And so of course, gold is the one financial asset. So you can own Ferraris. You can own cases of old wine. They have no counterparty risk, but they're not financial assets. And the bid ask spread can be a mile wide in good markets. Gold is the one financial asset that has no counterparty risk. So if you think there's going to be some sort of crisis problem, central banks might do something. Well, they've been doing something crazy for a long time. Some new crazy things that they haven't done before. And you think, okay, I don't necessarily want to decrease my exposure to that. Gold is the asset that, you know, that you're turned to. So I think the institutions are looking at that. But I think, and this is kind of tragic in a way that the retail newsletters and the retail gold dealers have been, you know, frankly, crying wolf. You know, every price blip since 2011 when the price peaked, gold's going to go up. It's going to be a skyrocket. And, you know, the retail public has been burned so many times on this that I think crying wolf just simply doesn't work anymore. The village doesn't get alarmed about the wolf anymore. So institutions are looking at things probably arguably in a more sophisticated way. Retail is like been burned too many times, ain't going to go there again. And so, you know, we had the price of gold run up from, you know, what was it, 1,300-ish to 1,500-ish. And retail was selling into it thinking, whew, I was able to get out with half my shirt. All that gold I bought at 1,800 bucks all those years ago, I finally got out. And, you know, 1,500, I didn't lose that much. That's where we're at at the moment. Either the institutions are going to be proven wrong. I don't think that's likely to be the case. Or retail is going to be proven to be wrong. And then the people that are selling may turn right back around and being, you know, buyers again. Well, some people might be old enough to remember gold in 1980, I guess. It peaked at about 800, which I think would be over 2,000 today. I don't know if anybody in the audience recalls that. I know Ron Paul has spoken to me about that day. And of course, nobody knew that that would be a peak-peak for so many decades afterwards. But I will say this, one set of institutions has definitely been buying gold since the crash of 1808 and that central banks themselves. They've been net purchasers of physical gold in their own reserves since the crash. So what should we make of that? Is that important to us as individuals that central banks seem to believe in gold? You know, and I think I said earlier today, having met a number of central bank people, not at the level of Bernanke or Powell, but one level down, both in the U.S. and around the world. They're generally not the most thoughtful or the most historically aware people in the room. You know, they're sort of operators. They do what they do because they have their formulas. So I think there's a certain risk in what I call the risk of the famous buyer. So the central bank buys, that means obviously 10,000 people sold. And there's a risk in saying that the 10,000 people are obviously the wrong ones and the central bank is obviously the right one. Maybe that's true and maybe it isn't and I certainly want to point that out as a risk. In this particular case, it could be that the central banks are aware of rising stresses in the system and seek to hedge against whatever risks they perceive. It could be that negative interest rates. So negative interest rates affect the central bank as well. So their balance sheet is denominated in their local currency. They issue their local currency, which is a liability, to fund their purchase of assets. If their assets have little to no yield on them, then the central bank is kind of sitting there as a sitting docket and they're not maybe even losing money. So if they think that the price of gold is likely to rise, then they can issue their own currency at low or zero interest rates or maybe even negative interest rates. And then by gold and then if the price of gold rises in local currency terms. So this is an interesting one for Americans, right? So we look at the price of gold and say it ain't nowhere near where it was in 2011. And a lot of other currencies around the world that's at or near record highs. Those currencies have come down. So Southeast Asia, absolutely. Australia, I think even in the euro, it's pretty close to its all-time high. Of course, the euro today is buck 10, buck 11. And in 2011, when price of gold was 1900, the euro was trying to remember buck 30. So the euros come down quite a bit. So if you're in Europe looking at the price of gold measured in your home currency, it's looking sharper than it does here. And then if you're alternative is to deposit and get negative interest. So I think these are some of the drivers. And central banks would have the same drivers that other institutions would, certainly when it comes to the attractiveness of negative interest versus gold. What I don't think is happening. I absolutely positively do not see any signs of it. Central banks thinking, well, there's going to be return to the gold standard. I mean, if you say gold standard to these people, they get that slightly annoyed look, you know, that adults would get if a five-year-old comes up and they're like, can we go now? Can we go now? And you just got to the cocktail party and your five-year-old is like already poking you in the room saying, let's leave. They just don't think about it. They get dismissive. Yeah. And it's not an act. I think these people really don't think about it. They don't get it. And they certainly don't see an end to their own power and their own regime. So for them, gold is the same as to any other speculator. Hey, if you buy it at 1,000, it goes to 2,000. It's all good. That's, I think, how they look at it. But I also think that part of their antipathy towards it is it threatens their omniscience that gold is something they can't sort of control or fine-tune as easily as they can to fiat currency, obviously. And that's why it was so refreshing to me. Judy Shelton, who is, of course, a Trump nominee to the Federal Reserve Board, came up with this term. I don't know if she came up with it, but she's the first person I've heard use it. She calls them fed bugs. And of course, there's been the long-standing critique, and I really hate this, because it's just such a nasty. You call people gold bugs. Oh, you Austrians, you're still hung up on gold. This ancient metal that has no real purpose in the modern financial system. And why you guys are still waiting for some bunker doomsday scenario where all your gold in the backyard is going to be worth $5,000 an ounce. And so you're a gold bug. Well, Judy Shelton comes along with this term fed bug, which is similarly a term for someone who's got too much faith in the fed, too much faith in the omniscience and technical aptitude of central bankers to sort of smooth everything out. And I think, A, I think it's a great term. And B, I think she's right. I mean, the whole point of central banks was supposed to smooth out these dooms and busts. Well, if we're having one every 10 or 15 years, despite all of their machinations, what good are they? You know, a big pet peeve of mine is this idea that the fed is going to smooth out the business cycle. And of course, when the fed was created in 1913, they didn't have the Humphrey Hawkins requirements of either inflation or unemployment, structural unemployment and inflation largely being basically unknown. That wouldn't have been terms that people would have been buzzing about at the time. It was to smooth out the so-called business cycle. Well, I encourage anybody to go put together a look at a graph of anything you want to pick, interest rate or otherwise, and take a look at from the inception of the United States, you know, called 1790 to 1913, and then take a look at the post-1913 reality and then tell me which one was more stable. So my favorite chart to look at would be the interest rate. The interest rate was amazingly stable. I mean, it had some blips when there were existential threats, a war of 1812, obviously the mid-1860s, you know, some other lesser things along the way. It was amazingly flat. And then after 1913, it all goes completely off the rails. And the people who manage the off-the-rails process have the nerve to say, look at how much more stable we made things because we've taken it off of the rails. We've taken the interest rate down to absurd depths. We've taken it to the moon in 1981. But yeah, our system is somehow more stable. Mendatius, I'm sorry. Well, you know, there's been a lot of talk about, unlike the period around Bretton Woods and then the end of World War II, gold more recently has been flowing or allegedly flowing from west to east. In other words, the idea that the west is decaying and dying and becoming more abundant. Meanwhile, people in the east and far east, the Chinese, the Turks, the Russians, the Indians, both on an individual and commercial level have an interest in buying and holding gold. First and foremost, is that true? Is gold flowing west to east? And second of all, if it's true, what does it maybe mean for us? I just want to add a slightly amusing aside. The mercantilist era began when Europeans began to be aware that India, and I think the term was, was a sink into which the gold would flow and never come back. I'm not exactly sure when they made that observation. My guess would be around the time of the Medici, probably. So they started to think about economics as a field and it wasn't just a day-to-day grind of subsistence. They've started to be able to study these things and kings, obviously. And so India even then was a sink into which the gold would flow and never return. And so that's not a new thing at all. If somebody's interested in, and so there have been times when gold was, let's say, flowing to China. It was a very one-way flow. I'm trying to say five years ago, that was certainly the case. If you want to see if that's happening or not, the way to really see that is to look to see if there's a spread. So gold, you know, anything will flow, but particularly gold will flow if there's a positive spread. It's like water going downhill. So if you can buy gold in London for, let's say, 1460 and sell it in Shanghai for 1470, the spread wouldn't be that big when I'm just giving it, for instance. Then you could be sure that that trade is happening at scale. Somebody's buying a 1460. You can ship it around the world for a heck of a lot less than 10 bucks and selling it in China for 1470. I just recently visited Shenzhen about a month ago. They were saying that the price of gold was, I'm trying to remember if it was higher or lower. I think they said it was cheaper there, because they were looking at, do I want to be their supplier of gold? And I said, no. And then they said, well, actually, cheaper we can buy it here. But then as we were trying to calculate it based on closer day prices and the conversion of the yuan to the dollar, plus the amount of 10 or 20 cents. So if there was a spread there wasn't much, probably not enough to make the shipping worthwhile. The other thing I discovered in Shenzhen is that it is possible to ship gold out of China. I thought their capital controls kept it all in. All you have to do is manufacture it into jewelry and then you get the export license. And so anybody who wants to take their gold out of China will just spend the 5% or 10% premium to manufacture it into cheap jewelry that isn't really jewelry per se, but it will pass the customs inspection that will come right back out. So that can be a two-way flow. From what I saw in that very rough back of the envelope calculation, there wasn't really much of a spread either way at that moment in time. Well, I'm sure the unrest in Hong Kong over the past couple of months is not helping their vault business there in terms of people putting gold. Interesting you say that. I had a meeting in Singapore with one of the big logistics companies that operates vaults and secure carriers around the world who has vaults in both Hong Kong and Singapore and other places. And this particular person was in charge of the whole region for his company. And without saying any names, he said at that moment in time, this is mid to late August, as of that moment in time, they saw no movement of gold out of Hong Kong. The rumors that I've heard since then as recently as say early to mid-November is that they're starting to be movement of gold out of Hong Kong. So whatever that may be worth, this is rumor or nothing more, but this is what I'm hearing on the street. Well, speaking of vaulting, why don't we do a quick PSA here and just tell folks who own physical. There was an article a couple of months ago in the New York Times about how absolutely awful the safe deposit box business is at local physical bank branches. They don't want to be in this business. They don't audit your box. They don't manage it. They don't know what's going on. You could show up one day and it could just be empty and your bank branch manager would just be clueless about this. People ought to be thinking about how they're holding their physical gold. You might have to Google it. It might be paywall. But if you look up this New York Times article, I'm just going to suggest to you, Keith, that people think about this because your safety deposit box at your local Barney Fife bank may be actually a terrible place to hold it. Yeah, I can't argue there. The bank specifically absolves any knowledge of what's in it. There's no insurance on it. The bank assumes no liability for it. So if you show up and it's empty, I don't know what the risk of that is. But if you show up as an empty, go through the bank and you probably wouldn't win and the contract you signed wouldn't give you any recourse. Do you think there are good private vaults in the U.S. that get people's physical gold out of the banking system or away from, let's say, a bank, a government seizure or a bank holiday? I'm not asking you to name companies or names. I'm just asking you to talk about the vault industry in general. Gold seizure by the government. So I've written one article about this arguing that in 1933 Roosevelt had two reasons for taking the gold and they both had to do with he wanted to manipulate the money because at that time obviously gold was the root of the monetary system. He wanted to stop the run on the banks when people withdrawing their gold coin was a run, which today it wouldn't be. And secondly, every time somebody withdrew a gold coin it forced the bank to sell a bond and push the bond price down, which is the same as pushing the interest rate up and Roosevelt wanted to push it down. So the government today doesn't have the motives that Roosevelt had in 1933. I don't think they're likely to care about it. If anything, they'd be cheering on if the price of gold is going up. Every buying and selling is generating capital gains taxes. I think they'd be laughing and collecting the taxes on it. The state of Texas passed their, I forget what their act was called, but created a gold depository. And the depository itself is not all that interesting. There's a lot of depositories around the country similar to theirs. But the law contains a provision that the state of Texas would be obliged to stand up if there were to be a confiscation from the federal government. The state of Texas would somehow be obliged to stand and defend your gold. I have no idea how that would work out. That sounds like a constitutional crisis. If not an armed standoff, I don't have any clues to how that would work. But that's kind of an interesting feature of that. Other than that, there's your usual suspects, your brinxes, and your luminesces that have vaults around the country. There's others, particularly Delaware. There's several. And I would generally recommend not keeping, I was joking, say, look, if you want to have half a dozen gold eagles in your sock drawer, you probably should have a certain amount of gold physically in your person or easily at hand. But because of the risk of certainly fire, flood, but also home invasion, I know somebody who woke up and he had a gun stuck in his face by a guy wearing a ski mask. You shouldn't really have the majority of your wealth at home. It should be in a professional depository, not a bank depository, but a private depository. And I think that's probably the least risk to, you know, least risk you were holding it. Well, the other thing about private vaults, it might keep you away from certain creditors. And, you know, there are also, let's say, estate tax authorities in your state who could come along and perform an audit of your safe deposit box when you pass away and potentially seize, you know, the contents thereof for payment of estate tax. I mean, there's a lot of scenarios. But let's talk about a worst case scenario, for example. And this goes back to the gold bug criticism. And this is a devil's advocate question for you. You know, people have said this for years, oh, come on. You know, any scenario where in or whereby gold goes to $5,000 or $10,000 or $100,000 an ounce because of some, you know, economic collapse or stock market collapse or war or something like that, you know, that's not a scenario where you're going to be able to do anything with your gold. Who's going to buy it? How are you going to, you know, can be able to exchange it for bread or gas or any, you know, toilet paper, any emergency stuff you're going to need. So this is just some sort of libertarian pie in the sky fantasy. So give me your response to that. I guess there are three responses. The first is as a value proposition, if you're approaching, I guess we'll call them muggles, you know, from the Harry Potter analogy, we're approaching the normies that aren't intergold. And we're making a value proposition and saying, look, you should consider owning gold for reasons X, Y and Z. The reason X is, you know, we're going to have a Mad Max end of the world. It's not a real attractive value proposition. I'll just leave that at that. Number two, nobody, you know, and I say this often in my writing, be careful what you wish for. $20,000, let alone $100,000 an ounce. You may have a lot of nominal dollars, but, and even if those nominal dollars have the purchasing power you expect, just probably not likely, you're not going to want to be in that world because, you know, the peasants are going to be out there with the torches and the pitchforks. You know that 99 point, I don't know what it is, seven of my guess percentage of Americans don't have any gold. These people that suddenly, you know, had been, you know, prosperous or suddenly impoverished and very, very angry, you wouldn't really want to be in that mob with your Ferrari that you bought with the winnings on your gold because they'll just smash it and smash you and, you know, that's it. So that's that's the second issue. The third issue or the third, I have a personal anecdote to relate. So I studied economics under this old Hungarian professor named Fekete who escaped Hungary one step ahead of the Soviet tanks in 1956. And there was somebody all studying at the same time that I was another Hungarian, you know, who was, so Fekete was an adult when that happened or around 20 years old, I think. This other guy would have been 10 or 11 years old and his family was trying to escape to Austria ahead of the Soviet tanks. And they got to the border and there were guards there. And the father had a gold wristwatch, not a paper claim to gold, not GLD, ETF gold, not gold futures, not, you know, whatever, but an actual chunk of gold. And he took the watch off and he handed it to the guards or the captain of the guard and the guard said, I didn't see you, you're not here, but get lost. Because if you're here in 10 more minutes, my men are going to shoot you. And then he deliberately, you know, drove off in a Jeep or whatever it was. And they had 10 minutes to get to the border, which was, you know, half a mile away. So they escaped because they had physical gold. That said, so gold may afford you a life saving option to get out of where you need to get out of. That said, some years ago, I saw a traveling, I think it was traveling, museum exhibit somewhere in Europe. And I don't remember which city it was. And it was gold hoards that dated to the time of the collapse of Rome. So 476 AD. And, you know, they had whatever a dozen different, you know, fines. So these were all hundreds of ounces of gold to thousands of ounces. So these were very wealthy people because a hundred ounces of gold then, as it is now, is a lot. And these hoards were all lost and basically were dug up post World War II in the building boom, you know, as construction companies were coming in and excavating foundations for taller buildings. They, you know, you know, they disrupted these things and they called them the archaeologists and then they dug up all this gold. This gold was lost for, you know, 1,500 years. And so there's a moral in the story to that, in my opinion, and that is these were very, very wealthy people who obviously had a lot of gold. It didn't avail them as in they either escaped with their life, but they couldn't get their gold. And I imagine they would tell their son and then by the grandson or the great grandson generation, oh yeah, Grand Papi's gold would just turn into like one of those eye rolling, oh yeah, myths from, you know, Grand Papi, or they didn't even escape with their life and they got killed and that was it. So gold may afford you an opportunity in that Mad Max world to get out, but it may not avail you. So you're better off with gold than without, but it may not be enough. So we should all be thinking about how do we revert this catastrophe rather than how to plan to, you know, put scare quotes or a profit from this coming catastrophe. Well, amen, I agree with that 100%. I think that's a great answer. A couple of things I want to wrap the show up with. First of all, one of the criticisms leveled at gold in the financial system or certainly at a gold standard itself and even among libertarian circles is that, well, you know, the supply of gold can't expand quickly enough to let the economy grow. Rothbard disputes this and what has government done to our money says, you know, prices are just. We don't care what the money supply is. But as Safideen Ammus points out and lots of other people point out, we should care about the stock-to-flow ratio of whatever our money is and that we should judge money by its hardness. In other words, we want a good stock-to-flow ratio. So do you agree with Rothbard here that we don't care per se what the money supply is and that the criticism of gold as, you know, not being able to expand the supply quickly enough is a red herring? Well, yes and no. I certainly agree that there's no problem with the amount of gold and, of course, the gold standard worked for a long time so we have historical proof of this. It's not a matter of prices adjusting. It's a matter of discounted interest adjusting. So it's not the case that prices are going to suddenly jump up because gold becomes too scarce. Virtually all the gold ever mined in human history is still in human hands. So the sheer amount of it that we have today is off the charts high. But at 0% interest, none of it will circulate. So I looked back in historical records to see just how much gold that they have in London at the peak when London ran the World Commerce and the World Monetary System in the mid to late 1890s. That amount was 160 tons of gold. That's it. To put that in perspective, gold mining in the state of Nevada today is 166 tons. We produce more in one state in the United States than London had when it ran the World. So there's no problem with quantity. We need an efficient credit mechanism that allows trade to clear. And they had that in 1890. Today, of course, we have a dollar mechanism for it and that part of those works reasonably well. But if we're going to return to the gold standard, we just need a decent mechanism for creating. It's not the gold that's going to come and go. It's the credit based on gold that's going to come and go. And the credit can expand and contract with the demand. Unlike today, when credit expands with a dollar, it can't contract because there's no extinguisher in the gold standard. The credit can be extinguished just as easily as it was created. And so it wasn't a problem in the 1890s. I don't think it would be a problem again. Well, I want to finish up with a question about that actually, about claims to gold or gold credit. A few years ago, there was a scandal. I think it was with Dow, which had actually issued far more stock than its market cap would account for. And so nobody really knew how all this stock out there circulating would ever be redeemed. And there was definitely some monkey business going on with their internal financial accounting. Do you think that there are far more claims to gold out there, legal or financial claims than there is existing physical gold? Do you think that's a problem? I'm not a believer in that particular line of inquiry. Conspiracy theory, is that the phrase you're looking for? Am I a conspiracy theorist? I mean, there's a variety of conspiracy theories sort of related to that area. But the idea that each ounce of gold has been sold 100 times over, I don't agree with that. And I don't think that's... I think there's a lot of problems in the banking system. I think there's issues with GLD, there's issues with Gold Futures, but I don't think that's one of them. Well, Keith Weiner, tell us how people can find you. How can they find monetary metals? How can they find you on Twitter as we wrap up the show? So our website is monetary-metals, that's plural, monetary-metals.com. On Twitter I'm kweiner01. On Facebook I think I'm Keith.weiner5. And we pay interest on gold. Well, thanks so much for your time today, what a fantastic discussion. Thanks for having me. Thank you.