 Hi, this is Jack Lipton, and this is Critical Materials Corner, and today I'm very pleased to have as my guest and co-host Byron King, and we're going to start off today by talking about Byron's favorite topic, I think, and certainly one of which she has extensive expertise. Byron, I'm going to blindside you today. Tell me, where is the price of gold going? Everybody listening is fascinated by this topic. Where is the price of gold going, and why? Well, good day, Jack, and you certainly don't blindside me when you ask me about the price of gold. It's truly the first thing I look at when I wake up. I grab my little iPhone, and I check the price of gold even before I roll out of bed, and then I spend the rest of the day taking it from there. Where is the price of gold going in the relatively near future it's going up? A couple of weeks ago, a week and a half ago, I wrote an article in investor intel about, I called it, Russia deploys a new weapon, the gold weapon. Think what you want about Ukraine. Think what you want about Russia, about Putin, whatever. By putting a relative floor, a bumpy floor under the price of gold, 5,000 rubles per gram, although it is negotiable, says the Russians. But by putting something of a floor under that price of gold with rubles, which are now related to natural gas, and soon with Russian oil and Russian ag and Russian minerals and Russian everything else, by putting that floor under there, they've really de-risked, or they've risked up, let's say, the downside of traders who want to take gold down. They've put gold, right about now, gold's about $63 per gram if you translate to rubles, which is right around, like where the price is, $1,800 something an ounce, $1,900. It's right in there. There is a floor underneath the price of gold. The traders, the paper traders, not the real gold traders, the paper traders, can't go down below that floor, or they get arbitraged. They risk going underwater and staying there and get drowned. So the price of gold has a pretty decent floor under it right now. I'm happy with that. It protects the producers too, because if you're producing gold at $1,000, $1,200 an ounce in terms of your cost all in, you've got a nice 50% or so profit margin on top of you. So that's the first part. The second part of that question is, gold is an inflation hedge, has been traditionally, and we have inflation out there as everybody knows who's watching or listening to this broadcast. You see it at the gas station, you see it when you get your electric bill, you see it at the grocery store, you see it when you buy clothing, you buy an airline ticket. Inflation is structural, it's built into the economy. If nothing else, the price of gold is going to be drifting up if not bouncing up on event-driven news. The United States went off the gold standard, and I believe 1971 or two, I can't remember. Officially, the world is certainly not on a gold standard. But it sounds to me like what you're saying is that we're drifting to a commodity standard to underpin our money. Absolutely, yeah. Actually, I do remember, it was August 15, 1971. I was in 11th grade and I was in pre-season football, and you would think when you're in pre-season football, getting ready for high school football, that you would be thinking about football. I walked in the next morning and we go to the team meeting and our coach is up there and said, he said, Nixon closed the gold window last night and we're looking at him like, what are you talking about? We're talking about football and stuff. Well, that's a whole another story. But we've been on this fiat dollar standard ever since, the full faith and credit of the United States government as opposed to gold. You can argue a lot that the technicalities of the gold standard and what is it goes back to 1914 and goes back to the Napoleonic War. There's a lot of history there. But there was something that always kept the monetary base under control. Since 1971, it's only been the full faith and credit of the government and the world's belief that the US government won't somehow pull the rug out from under the whole world and just let the whole thing crash. My view on that, Jack, and this is that again gets back to the Ukraine-Russia situation by putting these immense sanctions on Russia and taking their sovereign reserves by the hundreds of billions of dollars and even things like going around grabbing the oligarch's money. You don't have to like oligarchs. I don't like oligarchs. I don't like the American oligarchs. I don't know any Russian oligarchs. I've never met a Russian oligarch. I've never been on a yacht or anything else in my whole life. But I know some American oligarchs. I mean, I met a few along the way. They took all that money. And when you did that, you crashed the full faith and credit of the United States. Seven billion other people in the world who have dollars are saying to themselves, whoa, I mean, okay, the US is really mad about Russia and Putin and Ukraine. Okay, I get that. But when you take all their money without due process, we don't like you, we're taking your money. You've just really undermined the credibility of the dollar. So that gets to that other point you made that, are we moving to another standard? Yeah, I mean, not overnight, not in the next five minutes or the next five days or maybe the next five months, but we are moving to something else. Are you not saying that arguably Russia is now on the gold standard? It's, you know, it is one of those things that it's a work in progress. It is a development in progress. A lot of people say, oh, Russia, they're just a gas station with nuclear weapons, to which I say, there's nothing wrong with gas stations. And there sure isn't anything wrong with nuclear weapons. Okay. I mean, I'm an old Navy guy. I was a nuclear weapons officer. I know a few things about nuclear weapons. You don't want to screw around with a country that has nuclear weapons, and nobody will. You know, I mean, and so this isn't putting sanctions on Cuba for 63 years, which have done nothing, or North Korea for 70 years, which has done nothing, or Iran for 45 years, which has done nothing, you know, or sanctioning Libya or sanctioning Syria or beating up on some little country that just, you know, they have a few tanks and a few armored cars in this little crappy little military that doesn't work too well. You know, when you're not, you know, you're not going to push Russia around. I mean, yeah, I know, okay, yeah, they only have a GDP the size of fill in the blanks of Texas, Netherlands, Portugal, Italy, you know, whatever. But they produced a lot of electricity, a lot of steel. They have an aerospace industry. They, you know, they're a technically sophisticated country. They've graduated more PhDs in physics than we do, that's for sure. And so, and they have 6,000 nuclear weapons, and they have missiles and submarines and bombers and anything else. Nope, you know, this is not going to be one of those situations where you were in the long term, you push them around. Whatever happens between Russia and the rest of the world is going to be a negotiated settlement. And it's really just a question of, you know, who's going to come out on the good side of the negotiation, because nobody's going to invade Russia, if they don't want to get note. I know that Russia, which in my opinion is now on a gold and other commodity standard, is doing very well in negotiating with its peers, which are Saudi Arabia, which is effectively Saudi Arabia's the only country I've ever been to that actually has gold in circulation. They like gold in Saudi Arabia. The Chinese love gold. In China, gold is a symbol of luck. The more gold you have, the luckier you are. And they like gold. All gold in China is mined by the People's Liberation Army, not by private contractors. That tells you something about, well, about Chinese corruption and Chinese state policy. But the point I'm making is, when I have those three countries together, I get perhaps the world's largest producers of oil and the world's largest consumers of oil. And they seem to be in a gold block. What do you think? I tend to agree with you. I mean, you know, you know, Russia is what it's 11 time zones, huge country, among the top three oil producers. For as much as Russia and has had its issues with Saudi with the religious side, and there are many and they are deep. The Russians and the Saudis are working. They're playing nicely in the same sandbox, so to speak. The Chinese are more than happy to, more than happy to take the Russian natural gas, the Russian petroleum, the Russian minerals, Russian lumber, Russian agriculture, you know, China needs everything. And China and Saudi are more than happy to work together. Everybody who's watching this has probably heard the stories of the looming Petro Yuan, where China, Russia, or China, Saudi are going to be trading oil for Yuan. And so, yeah, you've got two of the three world's largest oil producers, the US being the other of the three. But we use everything we pull out of the ground, and then we still import a whole lot. So you've got Russia, Saudi, which is a whole bunch of oil, and then China, which is the largest consumer, but it's the world's largest manufacturing power. I mean, it's the world's largest CO2 emitter. China emits more CO2 than the whole rest of the world put together. I mean, China produces a billion, with a B, tons of steel every year, which is 14 times more than the United States. And here's one. Nobody knows this. China uses more steel every year in just its shipbuilding industry, you know, Navy ships, cargo ships, fishing boats. More steel every year in shipbuilding than the United States produces steel, period. You know, you could take every pound of steel that the United States produces every year, and it wouldn't build all the ships in China in one year. I always tell people that China produces enough steel each day to replace the United States Navy afloat. So please think about that. And I'm sure, I'm sure you think more than I do. Well, so we're saying, I also noted that the Chinese are paying the Russians for things, including maybe oil in RMB, their currency. And that allows the Russians to buy everything they need in the way of furniture, toilet paper, whatever, what have you in from China. So don't we buy everything we need from China? You go to Walmart, you go to Target, you go to wherever they always cost made in China. The Chinese could sanction us. They're actually quite angry at us. They think we're putting them down as a secondary, as some kind of lower order of human. That's their opinion in China is that we look down upon them. That's what they think is racism. And it's interesting, noting the United States pays attention to that. And we do, we do discriminate against Asian Americans because they're too smart. So we make sure they can't take our places. Okay, the Chinese are very aware of this. The point is, they can do without us, maybe we cannot do without them. That is the real problem for us. You would think the wake up call, you know, if nothing else, the wake up call should have come two years ago when the COVID pandemic broke out. And at least a few people in the United States woke up and said, gee, where do we get most of our medical supplies from? Where do we get our pharmaceuticals? Who makes the pharmaceuticals or who makes the things that you use to make the pharmaceuticals? If you go far enough back up the supply chain, it's all, it's China. I mean, these little pill things that you get at your pharmacy where they put the pills in, where do these things come from? You think there's a factory in the United States that makes, no, this stuff comes from China. And I mean, the plastic that's in here comes from China, made out of Saudi Arabian oil, perhaps. But I mean, the antibiotics, what is it, 98% of US antibiotics are imported. I mean, all the COVID things, you see people with their masks and their PPE and their breathing devices. Or if you go to the hospital and maybe inject you with all the, where does that stuff come from? I have one with China mostly, you know, I mean, there's a few other places, but I mean, the bulk of it came from China. And so you would think that just on a national security level, people would have said, oh, yeah, we need to do that. And Trump started to do that. But between Trump and Biden, it's all American politics and it's worse, you know, to sum up this conversation. Two days ago, the president of Rivian, a startup electric truck maker, which has an order book already of like 100,000 vehicles, including 80,000 from Amazon for vans, said he could not meet any of his target dates because he can't get batteries. And he said, everyone is talking about producing lithium, nobody's talking about what you do with the lithium out of the brain or the mind. And he said America is woefully short of processing capacity. And I know that the Chinese today have around 60% of the global processing capacity for lithium, and they have enough lithium either in their country or bought and controlled overseas to take all of their target production of EVs between now and 2030 already in place. We don't have it. And we're prohibiting it from coming into existence through over regulation. And you would think somebody in Washington would understand that you cannot keep slapping yourself in the face and wonder where the pain is coming from. You would think somebody in Washington would understand, but the scary thing is that maybe somebody in Washington really does understand and that it's intentional and they just don't care. They love watching the USD industrialized because it meets some other objective that they have. And I think that's insanity on their part in terms of what the country is and where the country was coming from. But I think there are people if they do understand it, they just don't care. And it's not just lithium, Jackie. We've had this discussion. It's everything. It's nickel. It's lead. I mean, it's the indium and the tin solder that they put the little circuit boards together with. It's the circuit boards themselves. It's the little capacitors and diodes that go on the circuit boards. Do we make that stuff in the U.S.? No, you don't. I mean, you know, just to sum some of this conversation up, they say that Washington is Hollywood for ugly people. I'm going to add to that and say Washington is Harvard for stupid people. Anyway, thank you, Barry. We could go out all day long. I'm sure about this, and we will sooner or later. Thank you, Jack. And thank you, everybody out there who's watching and forward this email or forward this video to your friends and your colleagues and get us some exposure. Get the message out there for us. Thanks. And don't have an accident while you're on your way to your gold broker to buy some physical metal. Thank you.