The Real Reason Gold Sold Off This Week | Frank Giustra

This week, the President of the United States linked a major foreign policy decision directly to the strength of the U.S. dollar. Now his new deal could return billions of dollars in frozen assets to Iran. Asked why he said he would rather have kept the money than he explained why he didn't take a listen. Well, the unfreezing is an easy one to answer. We have taken a lot of their money and we have their money. We have taken their money. And we froze it. At a certain point in time, I guess we're going to have to give it back. You know, if we didn't give it back, nobody would ever invest in the dollar again. All right, a sitting President saying out loud that holding that money would cost the world's confidence in the dollar. Now lands in a week of other signals during the war, according to Bloomberg, some ships paid to cross-strait of Hormuz in Chinese war and crypto, not dollars. Of course, according to the World Gold Council, central banks have been buying gold at a record pace, continuing three years running. And yet the market moved the other way. The dollar hit its highest since March. Goldman sacks has cut its year-end gold target by about $500. And Gold fell for a third straight week back near $4,100 after January's record of $55.89. So here's the question for this hour. The gold sell-off simply the end of a historic run the way most coverage says or at the start of maybe a different story the market is underpricing. My guest has bought physical gold since 2001. He never sold an ounce. He says the market has this a little bit backwards and in a moment we'll put that to the test. KitKo news in focus with Jeremy Safran. My guest is not a pundit. He's one of the few people who actually builds the minds the rest of the market only talks about. Now, 45 years founding and financing Gold and Copper companies across every single cycle and physical gold being held since 2001 without any selling. Frank Chustra, founder and CEO of Fiora Group joining us. Now, welcome back to the program. Frank, good to see you. Yeah, and I see you again, Jeremy. Now listen, I mean the headlines this week and it has been quite the week. They all kind of say the same thing. We got a strong dollar or Iran deal, hawkish Fed, gold down three weeks and apparently the bull market is finished. So I mean, what's the mainstream missing here? Well, the mainstream is missing the fact that this gold market has not been a typical gold market. This is, we're seeing a structural change in the gold market that has been evolving over the last number of years. It's basically the debatement trade and fueled by concerns of debt, money printing, US partially part as an offset to de-dollarization, which was inspired by the United States, you know, seizing Russia's reserves, dollar reserves. And the point that Trump just made in that clip you played, occasionally he tells the truth. And I mean, he's saying something the rest of the world already knows and that's why we've seen this de-dollarization trend, any switch rotation into gold. And that is continuing. And it's going to continue for a number of years. Central banks work these, make these strategic moves over a number of many, many years. They slowly, slowly sell their dollars and they slowly, slowly replace it with gold. So you're going to see a continuous bit from the central banks in the gold market for years to come as far from over yet. Yeah, you know, I mean, for 50 years, the dollar superpower was pretty simple, right? I mean, everyone needed it. Now Washington freezes the money of countries it doesn't kind of like the president himself as you just mentioned, an interesting quote. Just talk to me a little bit because we know, you know, the dollar's not going away tomorrow. But how does using the dollar as a weapon kind of speed up its own decline? And is the one creeping into this oil trade the real kind of first proof? Yeah, no, and listen, the world took notice when they froze the Russian reserves 300 billion or so. And, you know, who wants to be next? Who wants to be on America's naughty list? I mean, especially these days when Trump wakes up with a whim and, you know, and he treats, he's screwing friends and foal like he doesn't care which side, you know, he's basically taking on the whole world and other people getting very nervous. So I think that that this is cause the cause of this, the dollarization was twofold, mostly fear of sanctions, fear of having your assets frozen. And in the China-led system now, they're creating a mirror system to the entire West financial system to have the system that exists outside the US/Orient system for that purpose. And you're getting many countries joining China, especially the BRICS countries and the EMBRIDGE project, which is creating an entire payment settlement system outside of the US dollar. So yes, I think this is a wound that's self-inflicted. The other part is you look at the United States and their fiscal status. I mean, it's really dangerous. I mean, these deficits are out of control. The debt is climbing like crazy. You got interest costs that are a trillion dollars a year, interest costs, trillion dollars a year. So I just, I think people are seeing that the US has reckless fiscal policy and it also attacks, like I said, friends and foal alike, you know. So what would you do? You would try and find an alternative system. And right now, the only neutral currency in the world is gold. It's the only one that's neutral that has no counterpart. So that's why you're seeing all these gold purchases. You know, I mean, here's that kind of the real story underneath all this that I want kind of your read on. I mean, for 40 years, gold traded opposite to the dollar and to real interest rates when they rose gold typically fell. That relationship seemed to break. I mean, in 2024 and 2025, gold ran to a record with a firm dollar and real positive rates, which is not really supposed to happen. And over that stretch, you know, the IMF, I mean, the dollar share of global reserves keep sliding from about 70% to the high fifties. While, you know, some measures gold overtook the euros, the world's largest or I guess second largest reserve asset. So it almost looks like the buyers changed from Western funds to the non-Western central banks. And you talked about it a little bit before about Russia and Azerbaijan and Turkey. I saw Poland picking up this morning. Do you buy that we've moved into a whole new regime for gold? Oh, absolutely 100%. And like I said, the reason gold has gone up in the last number of years counter to the its relationship with the dollar and interest rates is because it's central bank buying, global central bank buying that does not pay attention. They have a long term strategy. This is a long term strategic rotation from dollars to gold. And it's moving like the dollar reserves are moving down by a, we're on 1% a year, very slowly, but 1% a year, they're disposing of these dollars. And so, yeah, now this is, this, the original move that took gold from 1800 and then ran it up to about 3500, 4000 was all central bank buying. Then obviously the investors came in and the speculators came in and the euphoria entered the market and you saw gold run up to 5500. And it all happened in a very short period of time that whole run from 1800 dollars to 5500. So naturally you're going to see a correction. And we've seen the correction. We're in the middle of it now. So the speculators, the loose hands, the people that bought it for a trade and for momentum are obviously exiting. This is what's taking the price down. But the central bank buying is consistent. They don't care. They're priced in Alaska. They don't care. They're just going to, they have a strategic objective to switch reserves from dollars to gold. And that's happening. And then you said something about the amount of gold. One central bank's own more gold than US dollars now. And a big part of that reason is gold has gone up in value. Obviously the value of those ounces of gold have gone up. But that's, who would have predicted that 10 years ago? But here we are. It's happening. Yeah. I mean, to look east too, there's been that persistent premium in Shanghai over the London price, false, emptying west to the east for years. Is the real price discovery just now being set by the people taking delivery, not the paper market? Yeah. And you, at times you're seeing premiums for physical gold and silver, mostly from the Asian markets, Japan, Korea, China. These premiums sometimes can get quite large. So physicals and point, the paper gold that we're accustomed to watching the paper gold market, which is heavily manipulated and is full of speculators and such. But at times to buy physical and get delivery, you have to pay a premium. And those premiums, the range of those premiums go up and down, but they're there consistently. Yeah. You know, oil has kind of cratered since this whole Iranian framework came out. This MOU, I mean, Brent's back below 80, down more than 8% just this week. A lot of the world's gold buyers are oil states and the golf in particular, you know, suddenly has less petrature dollar cash coming in. And according to Bloomberg, a big rebuilding and defense bill ahead of it. I mean, I guess there's some rumors that there are the golf states, any other forms quietly kind of selling gold to raise cash here is the official sector actually backing away. No, I haven't seen any of that. I've not seen the golf state sell their gold. Yeah, there's been some selling from Russia, which has its own reason sell gold. They're excluded from the US dollar system. [BLANK_AUDIO] trying to finance a war, a very costly war against Ukraine. So they had to sell about, I think it was about eight tons of gold last month. Turkey had to sell about three tons of gold, I think. They were doing to protect the Lera. The Lera was under attack, so they're protecting the Lera. And I think Azerbaijan sold a couple of tons as well. But all in, the central foreign, foreign central banks are net buyers and continue to be net buyers of gold. I mean, this comes back to something you've been writing about for years, that the whole dollar system is slowly being almost rebuilt around gold. So I kind of want to go there for a second. I mean, according to the Treasury, the U.S. now spends about $1.3 trillion a year on interest. And it has to be refinanced. I think roughly $9 trillion in the next year. I mean, you point to Ferguson's law. Yeah. The idea that when a great power spends more on interest than on military that decline has begun, and you say America crossed that line in 2024, this holy ran war is the kind of live example. Tens of billions spent on something you've argued accomplished. Nothing. I mean, the 2015 nuclear deal had not all of it borrowed. For the person at home, why does that one crossover matter so much? Yeah. So if you map out the rise and fall of great powers over just over the last 500 years, I mean, this trend, you can map it back a couple thousand years. But if you just take the last 500 years around 10 or so nations that were great powers, all made the same mistakes. And it was overextension militarily, too much consumption on enough production, borrow your money and then printing a money. Okay. It's always the same pattern. And what the U.S. is doing today is no different than what the Brits did, what the Spaniards did, what the Dutch did, what the French did. It's just, it's the same pattern. So now Ferguson, the economist came up with Ferguson's law by having studied all of this and saying that whenever he saw that the costs of borrowing by these nations exceeded their military spending, it was the beginning of the decline. And I've been talking about this for 25 years now, that this started back when the U.S. invaded after 9/11, when the U.S. invaded Iraq, Afghanistan and Iraq, you could see this coming. You know, it was like, we're going to, we're going to start a war on terror. You know, I don't know how you define that. It's a forever war on terror and they spent literally trillions of dollars on that. They bankrupted the country. And I, you know, so far they're hanging in. There is a, because the global system is wired with U.S. dollars, it's difficult to escape that system, but China is doing his best to create a mirror system. And there are also other Hodgepodge type trading systems that are being created to exist outside the U.S. dollar system, which in turn create less demand for U.S. dollars. Okay. And again, this is a, this is not going to happen overnight unless there is a U.S. dollar crisis, unless, you know, we get a real panic that let's say over the next few years, we start to see the, the annual deficits at 2.5, $3 trillion. Interest rates stay elevated, and you're watching your interest costs. If, if you, if you tried to finance today's federal debt at 5%, instead of what it's currently average of that debt has been financed at 3.5% at the moment. But if you took it to 5%, you would be paying, paying $2 trillion a year in interest. That is crazy and unsustainable. In my opinion, there, there's a very good chance we're going to see a U.S. dollar crisis, a run on the dollar, a panic. Okay. And that would change, you know, the dynamics forever. That would be, but, but even if that doesn't happen, I think there's going to be a slow erosion for the need of dollars. Already 20% of the world's oil is traded in non-dollar terms. China is obviously demanding and has demanded, you want payments for, for the commodities, including oil and iron ore from Australia. So, you know, they're doing their best to, to create an alternative, but it's going to be slow. Unless there's a crisis. And to your point, I mean, you're not saying the dollar dies overnight, but the real story is kind of quiet or walk me through it a little bit. Just about embridge, you know, what are the gold vaults, China's building, how does gold quietly kind of become, you know, the world's settlement asset? Yeah. So I came up with this thesis about 5, 6 years ago, just watching the central bank accumulation of gold. And it seemed to be all of the countries that were mostly bricks countries and the global south. Okay, so they started buying around 2010 and slowly, slowly bought more and more. And then a really start to accelerate about three, four years ago. Those same countries led by China. And China created this thing called the embridge project, which is a, it was a pilot project with China, Hong Kong, UAE, Saudi Arabian Thailand. And basically it's a payment system that is, it's a ledger to ledger from central bank, central bank for forex trading for, for exchanging currencies. And so those same countries that were in embridge, accumulating gold, and you had to ask yourself, why was this all happening? And I theorized that eventually when countries are trading with each other outside the US dollar system, and they have unwanted currency, because the biggest criticism people that argued against the dollarization being real was that what currency are you going to use? You know, what are you going to hold? US dollars are the most liquid assets in the world. It's a trusted economy, it's a trusted system, and it's used in every, in the depth of US dollars, is, is extreme in its worldwide. And they said, why would, you know, who would sit on unwanted, you want in a trading situation by lateral trade? And I said, well, why, why couldn't they just settle if you have a surplus? Let's say, let's take an example. Saudi Arabian China trading between each other, and they're trading with each other's local currencies. And at the end of a period, Saudi Arabia selling more oil to China than China's buying goods, that Saudi Arabia's buying goods from China. So what would Saudi Arabia do with all its unwanted you wants? Well, China now allows the exchange of, on the Shanghai gold exchange, the exchange of you wants into physical gold. And this is allowed for governments and institutions. Then China announces that they're setting up these gold vaults. The first one's going to be in Hong Kong. They want to put up to two tons of gold into that. They're talking about doing it in Saudi Arabia, Singapore, UAE, Switzerland. Why would you have these physical gold vaults in other parts of the world? Well, in my theory is that if the emberage project works, you have bilateral trade agreements between countries only using their local currencies, and their surplus currency, that country could choose to take physical gold. And that solves the problem. And I think that that's where we're heading. Yeah, very interesting time. I got to bring this back to the immediate market pressure, because I mean that long-term thesis in his dollar trust, kind of, you know, debt, central bank gold buying. But this week that short term hit came from the Fed. Kevin Warsh is coming, kind of sounding much more serious about inflation. And markets suddenly, you know, asking whether the next move is not a cut, but a hike. What are your thoughts on the new guy in town? I'm betting that he's going to hike. I'll take the under. Yeah. Okay. I honestly think, now, you got to understand, he owes his whole gig to the guy that torched the last guy that was disloyal. Okay. And I just want to see whether his resolve will last after Trump's first tweet complaining about interest rates, which I guarantee you will happen before the midterms. There's no way this administration is going to go into the midterms wanting the rates elevated. And they will sacrifice inflation to get their way. So I just, I don't think that Kevin Warsh, despite all of his hawkish narrative, is going to withstand. He was put there by Trump for a reason. And I think Trump will want, he's set it over and over again. He wants lower rates. He wants 1% rates. He may not get 1%. But I think he's going to get much lower than wherever it is 3.5% right now on the Fed funds rate. So I think, I just don't buy it. I think that that Warsh will fold when the time is right. It feels like there's something going on to behind the scenes. I mean, you know, they want a quieter Fed. They're going to tell you less, they're looking at different data. I mean, they're kind of manufacturing something here. Yeah, perhaps. I think that the less you say, the more latitude it gives you to do whatever you want. If you, if you spell out your plans, then you, you kind of bought yourself in. So they're giving themselves extra latitude to go with how, what they feel the necessary move should be at the appropriate time. Yeah. Listen, you're not just a gold man. And I got to do a hard transition over the copper because I mean, it's, it's hit a record above $13,000. A ton earlier this year. I mean, that structural supply deficit, big minds like Grasper, Kamua, Kakluna, disrupted and, you know, demand exploding from electrification AI data centers. We saw that SpaceX IPO. They're going to need some copper. Are you scouting US copper and gold projects? Is Washington kind of cuts permitting red tape? Where do you stand on copper today? I love copper. You know, people see me as the gold guy. But it's like, you know, when you have two children, and you love them equally, but deep down, you have a favorite, but I love them equally, copper and gold. So yeah, copper, the thesis on copper is pretty simple. It's, and it's well documented. There's gonna be a large supply deficit coming towards us over the next five, 10 years. Actually, there's gonna be a, the best estimate, there's gonna be a 30%, excuse me, supply deficit by 2035. About eight, eight, eight thousand tons, and sorry, eight million tons by 2035. And no one knows where this copper is gonna come from, where this supply is gonna come from. You know how long it takes to get one of these mines into production, especially a tier one copper mine, which is usually these large porpharies that you see in places like Chile and Peru. Those take years to put into production and billions and billions of dollars. So I think it's, there's a very good chance that copper, the only way to fix that supply deficit is to have a higher price than copper, and people really motivated to dig the stuff out of the ground. And there's only a few, when you think about it, I think one estimate said that we would need to build about a hundred new copper mines by 2035, of all sizes, in about 30 to 60 tier one copper mines by 2035. You know, outside the majors, the juniors would usually find and develop these things to a certain point before they're taken out. We only know four or five tier one, one billion plus tons of good decent grade near surface, okay, which is gonna be, the ones that are gonna be easy to get to, okay. Where are you gonna get all these copper mines? That's why I'm invested in like, I've got my own project as a Columbia, it's called Copper Giant, it's over a billion tons now, and I think it could possibly go a lot higher and it's near surface, it's a really good grade. My attitude is you buy these things, you hold onto them, and you wait, just be patient, they're gonna get gobbled up. The majors have nowhere else to go, the mines, the existing mines, the grades are going down dramatically. So we need new mines with better grade, and there aren't that many of them around. Like I said, we only know four or five of them that are outside of, that are not already owned by the majors. - So I mean, you talked a little bit about it there, how to solve it, I mean, is this a price problem where copper has to go high enough to force new mines into production, or is it kind of a policy problem where the West simply cannot permit and build fast enough? - I think it's a bit of both, and if you see what the Trump administration is doing, they're obviously saying, we need this stuff so badly, we're gonna permit these, if they're in the United States, we're gonna really permit them very quickly, and I'm involved in one that's gonna get floated next week, I think is gonna get floated next week, and it's in the United States, it's gonna be called Freedom Copper, as far as we know, it's the third largest known undeveloped copper project in the US, and I know that the management of the company has had conversations with the White House, and they want this permitted very quickly. They don't want it to take the two or three year, four or 10 years that it takes. Let's get this done, let's get it permitted, let's get it into production. You know, they're desperate, they don't know where else they're gonna get this copper. - Is copper kind of that a better risk reward than gold right now, you think? - I don't know, I wouldn't put it that way. No, I think they're two very different animals, gold mining is very different than porphyry copper mining, which is where you get most of your copper from, the large mines. And obviously the copper porphyry is required a lot more capital than a typical gold mine would take to put into production. So the economics and the risks are different, but I, you know, and obviously it all comes down to price. Now, copper can easily go from what is a 620 a pound right now. It could go to say $8, $9, $10 a pound. Gold on the other hand could pick a number. Gold can go from 4,000 to some crazy number because it's part of the monetary system. And we know that the fiat experiment as we know it is falling apart, that experiment's over. And so now, so gold has a different upside dynamic potential than copper does. So you buy gold for a different reason than you buy a copper. - Yeah, yeah, well said. And I mean, you talked about freedom there. I mean, permitting kind of is really changing. Does that make the US one of the better copper jurisdictions in the world again, or just less bad than what it was? - It would make it less bad. It doesn't, the problem US doesn't have a lot of copper projects available, not like say Africa or Latin America. We just, you know, there aren't that many to pick from that are of that size. Like I said, there's only three undeveloped ones we know of in the US that are of that size. - So, I mean, outside of the metals, you've been buying energy stocks. You know that, and we've seen this little dip on Brent, but are your bullish on uranium for the data center build? Are you finding any value there? I mean, what's kept you from doing a deal there so far? - The old HIST kept me from doing a uranium deal is finding one that I like. You know, the last time I found one I like was 2005. So long time ago, okay, they're not easy to find. Good uranium, and we've looked and looked and looked. Maybe we just haven't been lucky or weren't quick enough on our feet, but our group, the Fira group has not been able to find a uranium deal that we thought was worthy of our involvement. So, but I would love, someone presented me with one that made sense, I'd be all over it. - And I mean, on this dip, I mean, on the miners' dip, I mean, start with the puzzle. I mean, gold, where it is. Producer margins are still near record highs. A lot of these companies still trade below the value of the gold that they hold in the ground. And I mean, we always see that volatility in mining. You know, it's kind of cyclical. You saw that dip. A lot of buying opportunities right now. - Oh yeah, you know, this, we may be a bull market, being a bull market for gold and copper, but we're not in a bull market yet for mining stocks, okay? Relative to past markets, which I've been very familiar with, over here, I've seen quite a few markets over the last 45 years, this is still tame as far as a market. I think most investors, especially in the US, are totally distracted with tech, crypto, AI now, SpaceX, you name it. It's whatever the new flavor of the month is, is getting all the attention, all of the money flow. And most North Americans still are not exposed at all to mining, not at all. A lot of, I need to expose to gold, physical gold. So this, I think we're really, really early in what will be a very long cycle. And I don't think we've seen, you will know when you see the euphoria. I've seen it before. We have not seen anything closer to euphoria. We've seen a nice run up. Some of the miners had a great run, especially the senior miners, the majors. I've done very well by by Nico Eagle. And then I've got my own gold mining companies. They've all done really, really well. But it's not euphoric. Okay, it's not what I've seen in the past, where people, like the way that people are going after tech stocks right now. - Yeah, yeah. - You know, that, or AI stocks, that we haven't seen that in the mining stocks yet. It will come. It will come. I just don't know what. This market could last two, three, five, 10 years. I don't know. - So I mean, we see a little bit of M&A. I'm surprised we kind of haven't seen more. I mean, where are you actually putting your capital today? I feel free to talk a little bit about your book. I mean, are there majors, mid-tier, as developers, early-stage juniors? - Yeah. - And what, what in this market has real staying power, versus what's just riding the tape? - I think the developers. I think what my approach and its work, well, I don't know if it might not work for all for everybody, but is to find a development project that has huge upside economic potential, but needs to be explored. And not explore, it needs to be studied. The economics have to be studied. You know, all of the feasibility stuff has to be done. It has to be fully drilled out. That's where you make your real money. So what I would say to investors is find those type of projects and remember, grade and scale are important. Bigger is better than smaller, okay? And so find something that has good management, because again, I've seen management screw ups of really good projects. And actually, our Fiori group has done very well by finding, fixing, restructuring, other people's screw ups over the last couple of years. We've done really well by that. And so management's important, sponsorship's important. And so buy something that's got well-sponsored good management that has grade and size. And then buy that and hold it. Just be patient, 'cause these things will get gobbled up. The M&A game has only just started. It's just trickled. We haven't seen yet. You're gonna see a lot of more M&A majors acquiring intermediates, intermediates acquiring juniors, juniors merging together to create intermediates. There's gonna be a lot of M&A. And I've seen it in past cycles. And I'm surprised it hasn't happened to the extent that it should happen yet. And I think that part of it is the hangover from the last cycle, which ended in 2012, where there was a lot of M&A people overpaid. There was a lot of silly acquisition taking place. And then it was the extended hangover from all of that, which lasted many years. And then memory of that hangover still exists. But it's good. It with all markets, bull markets cure all sorts of fears. and people will again go crazy down the road, and you will see merger, main, acquisition, main, it's gonna happen. So buy the juniors with the best assets, and just be patient. Buy lots of these things, buy big positions, and pick the ones you like, and just be patient. - Hey, you know, you bring up a good point. I wanna talk about M&A for a second, but you know, talk about management. I mean, because the honest knock on minors is, they've disappointed gold bulls, right? For decades, they diluted shareholders, they overspent, they lagged the metal. I mean, have you seen management really change this cycle? I mean, they seem like they're keeping some cash. - Yeah. - Oh, 100%. I mean, one of my companies is Eris Mining, which is in Colombia, we have two gold mines in Colombia, producing about half a million ounces a year now this year, and we have two other projects in that we own 100% of that we'll be putting production over the next number of years to take us to a million ounces. And we're, I'm the management of that company. I'm a shareholder, I'm not on the board, but I know the management of that company is very careful, and they're not going out there acquiring, just for the sake of acquiring in this cycle. They're going, well, we can manage our cash flow, we're making great cash flow. Let's use our cash flow instead to build what we already own instead of going out and making acquisitions. We can grow this thing organically without diluting the shares. And I think that that's the general mentality in the more senior gold mining stocks right now. They're being very, very careful. They're not just going out there to make an acquisition just for the sake of getting bigger. I mean, I think Aquinox and Orland did a merger. I'm not sure what was the reason in behind it. And I'm not sure where the worst energy's there, but again, that's one in, what could potentially be many, many companies coming together. And so I think that it's gonna happen. You know, as the boom market gets more heated and these targets acquisition targets get fewer and fewer. As I said earlier, there's only four or five copper targets that are over a billion tons near surface that are not owned by the majors. They're all gonna get gobbled up. All of them, including my company, eventually. You know, some was gonna buy them and you just have to hold on to them. - Yeah, yeah, it's actually a good point. I mean, I remember seeing you and I think we were talking to Coppergiad, I think Ian Harris over at PDAC in Toronto. I think it was the last time I saw you. And you told me that the majors, they kind of move a little late so that they would rather kind of overpay later than risk a mistake now. So I mean, from a perspective of an investor, if that's right. I mean, where does it leave the retail investor? And what is the real risk in kind of chasing the juniors? You think we'll eventually get bought? - Well, the risk is always, in my opinion, is you need to study these things carefully, but the risk is always, the management makes mistakes. That's usually the risk, is that they do things that aren't, you know, well thought through. But I said, what I said, when I think I saw you at PDAC, that majors would rather overpay and not take the risk. You've got to keep in mind, the majors are run by committees. Now, there's no maverick at the top, like there used to be, and I'd like to say tech with Norm Keeville back, you know, 30, 40 years ago, it was a maverick, he would take shots, you know. Now, everybody's afraid to lose their job. So they would rather overpay and not have any risk than underpay and take on risk. So they'll let the juniors develop these things, take all of the risk, sure, the stock price is gonna double, triple, quadruple, or whatever, they don't care. They'd rather, they'll pay higher, as long as they don't, they know that it's fully de-risked. Jurisdiction's cut it back in the headlines too. I mean, this week, Russia sold off a top gold miner, it had seized from a private owner. Ghana is kind of weighing, taking local control of gold fields biggest mine. I mean, you have a lot of experience in your career in this, is someone deploying capital around the world. I mean, how much does political risk and that threat of seizure now kind of weigh on where you will and won't build a mine? - Well, that's always been, listen, political risk has always been part of this business, 'cause your mining takes place in almost every country on the planet. And we know that not every country behaves properly, at times they have to do things that they wouldn't have done previously, just to stay afloat. So Russia obviously is financing a war and is excluded from the dollar system. Gold is very important to them. So I'm not surprised they're seized gold mines. And by the way, they've seized many private assets before within the country, when oligarch falls out of favor. So that's nothing new. Ghana, listen, Ghana's been talking a long time about, about not taking over gold mines, but by buying the gold and keeping the gold internally, by building their gold reserves from their gold production. And I think that's very smart, that part's very smart. We saw what happened in Mali in the last couple of years with Barrick. So these things happen. And typically those risks are priced into the valuation of these companies, maybe not a Barrick. But if you take a junior, one junior has a gold mine in Mali and another junior has a similar gold mine, a similar gray similar size in Canada, they're gonna be priced differently. It's in the price. So and you're always taking risk. But I think that I'm always very careful. I don't think I've ever, in my career had a situation, oh, I'm sorry, I did Venezuela. We were in Venezuela big time in the 90s and the early 2000s until Chavez came in. And he basically took our gold mines away from us. And one company was called Rousseau. And it actually sued the Venezuelan government. Took like 15 years to sum in international courts. One a judgment and got it overturned by another court. Finally, they tagged on to the Citgo sale that the Venezuelan refinery and petrol station assets that are in the US were seized and seized by the creditors, including Chevron, and a whole bunch of these companies were, their properties were taken away from them. And sold to pay off that debt. Not it hasn't gone through yet. But I'm saying that yeah. So I did have that experience in Venezuela when you get someone like a Chavez who came in and the Maduro or the fall that basically just took away people's assets. They stole them. So it does happen. But for me, it's been quite rare. I've operated many countries around the world. That's a very rare occurrence. - Yeah, I mean, some investors would say that, well, as you just mentioned, that risk has already kind of priced in. I mean, these companies trade cheap precisely because the market knows jurisdiction is dangerous. So how do you kind of tell the difference between a bargain and maybe a value trap? - You have to be in this business for a while, I guess. I think that, no, thankfully, I have an organization that does that really well. We have geologists, engineers, corporate finance people. We know how to run models and we look at the average investor that this is why I said earlier, I think the only thing that the average investor can do to compete with people like me is to back people like me and others, I'm not alone in this, obviously. There are a lot of really good mining guys that have had a tremendous track record of delivering, that are honest, that basically work very hard to create value for shareholders. So great assets, as long as the asset looks good, good management that has a track record, that's the best you can do. Unless you're a geologist and an engineer and you're gonna go out on site and look at these things yourself, you have to kind of trust that the management is gonna do it for you. - Yeah. - Does your restrictional risk, does that push more capital towards boring jurisdictions, even if the grades are lower and permitting is a little bit harder, are you seeing more cash flow going that way? - Yeah. - Yeah, no, I think if you look at what's happening in Canada today and the US, but Canada mostly, there's a lot of, whereas a few years ago, it was hard, Canada had actually a bad reputation for permitting in regulations and all of these things. Now you're getting a lot of money coming, 'cause you know, in Ontario, especially you're seeing a very mining friendly province, and that it's attracting capital, 'cause everybody now knows that provinces, countries, need those metals. So you have to get rid of the red tape, you have to, the idea is that you have two agencies permitting, they should streamline into one agency, that permits everything. There's so many ways to get rid of the red tape, and I think that as countries get more and more desperate for the metals, you're gonna see permitting made a lot easier. - You know, does the US kind of midterms change the calculus at all? I mean, if control of Congress ships, does that slow permitting reform kind of change mining incentives? No. - No, I don't think so. I think the only thing that would change mine reform is it's a new administration. - Right. - And that's not till 2028, we're not gonna know what's gonna happen there. Out of the midterms, I don't think I'm gonna have an any impact on permitting and mining. I think the Trump administration has made very clear to the mining industry what they want. - Talk to me a little bit about to the average kind of person here watching the show as we wrap up. I mean, in the middle of this reset you describe, what do they actually do? I mean, not a hedge fund, not a mining financier, but somebody trying to just keep their savings from melting away. - By physical gold. - Okay, I'll tell you what I do. And I did do. Obviously, I might have a little bit more, a few more resources and most people, but generally speaking, if you have anything to invest to protect, okay, some wealth, I, I would put 15% into gold bullion and just forget about it. I would put 15% of your portfolio and that worth whatever, put it into into into into bullion and just forget about it, that's your insurance. I would put another 15 to 20% into the miners, because that's where you're going to make your money. You're not going to be able to buy something and sell it higher as as this market continues. I'll tell you what the things I don't do, I don't buy overpriced US tech stocks, even though I've missed a lot of the upside, I don't care. I'm not going to take that risk of buying something at 105 times future earnings. I'm sure SpaceX is going to do very well, but it's grossly overpriced and I think eventually as the market has a correction which it will, all bubbles burst and this has been the biggest bubble in history and it will burst eventually. And the SpaceX's and all the, you know, and videos and all these are trading a ridiculous values, great companies, but overvalue. So I don't buy overvalued stocks. I just refuse to so I look for stocks that are mostly outside of the US that pay great dividends that have global businesses, great cash flows, you know, and are not grossly overvalued, trade within a certain range of earnings multiple. There's loss of those around Canadian prefers has been very, very good to me. I look for dividends, I look for companies that have paid dividends and have paid dividends for a long, long time, I have a good track record. And cash, you have to have some cash, although I hate cash because it gets eaten away by inflation and I see inflation is being very sticky, it's not going to go away. You need cash and I'll tell you why you need cash because we're going to get a correction, a very big correction in the markets. It's going to be huge. And if you don't have cash, you're going to be able to take advantage of that. So I'm about these days of about 20, 25% cash. Interesting. Yeah. I'm just waiting. I'm just going to wait and see what you know, because I think there will be a big pullback and there will be great opportunities. Yeah, good time to deploy. Speaking of AEM, like Igniko, we saw that run up, took a little bit of a drop, still an amazing dividend, lots of cash. These stocks are still a buy or are you waiting for one more dip? Well, Igniko, I was thankful I bought it early, I bought it early and I kept it and it tripled in price. I mean, it was just incredible. But it is probably one of the best run gold mining companies in the world. So, you know, I like Igniko Eagle. But no, I always wait for pullbacks to buy gold or buy gold stocks. And so I have my core positions. And again, my trading might be different than other people's, but I have my core positions that I don't sell because I'm watching these companies grow. That's in this box, in this in this category here. Then I have other ones where I just trade where I trade the run ups and the dips. And so like I watch the gold market very carefully and I know when it's overextended, when it should be pulling back. And I know when it's oversold. And it's, you know, you never time it perfectly obviously. But I do a lot of that kind of trading just for fun, you know, just to make, you know, make, make some extra money while I'm waiting for my companies to mature. Yeah, make sense. Okay, well, let's, I'm going to leave you with this. I mean, you called yourself a dinosaur and said that, you know, there's perks to that that you've seen enough cycles to kind of know nonsense when you hear it. Leave this with us. I mean, if you're right, the old system is quietly kind of being rebuilt around gold. What does the other side look like for the people who saw it coming? Well, you know, listen, it's always nice to be right and vindicated. Obviously my biggest concern has always been about preserving my wealth. I like, like I think you mentioned the beginning of this piece that I started buying gold 25 years ago and I started writing about gold 25 years ago. And it's been a very good bet. Gold is outperform the S&P in the last 25 years. Most people don't know that, but it has. It's self-performing the S&P. So it's always nice to be right, but I'll tell you what I really enjoy. Jeremy is that because I get a, you know, I post my articles and I get a lot of comments and on, on X, you know, I also post my articles and I post them on my blog. And I see the comments that come back at times that are thankful that the, listen to what I said over many years ago, made, you know, made the investments and bought a house or put your kids through college or something. That is really, I'll tell you, I love making money for myself. Of course, who doesn't? Yeah. But I love it when other people make money. I just think that is so much fun. And I love people sending me notes going, thank you, thank you, thank you. You know, I followed your advice and I did well so that it's rewarding. I mean, you know, you know, I've got an equal to. Yeah, well said, man. Okay, listen, speaking of your, we should plug your website because you do have some great notes out there and you were talking about a book that you reviewed lately. And you know, you kind of made that point of the danger is not always the dramatic collapse, everyone imagines, right? It's the slow institutional delay, the bad incentives, the debt, kind of the public only realizes it after the system has already changed. So I mean, how much of that is today's gold story? I mean, not, not fear of one event, but the slow realization that the older financial order is just not as solid as people thought. Is that, is that clarified? Well, yeah, but you know, it's interesting that most people don't understand that we're going through a profound change in the global monetary system. Most people, even if they hear it, they don't understand it too. They don't believe it. They go, how could any replace you as are? That's ridiculous. It used to be Tina. There is no alternative. I heard all that BS. And you know, when I ignored it because you could see the trends happening, you could see all of the changes happening around the world. The problem with most North Americans is they're North American centric. They only look at what what they're, what what is what are their surroundings? Okay. They don't see it's a big world out there with billions of people wanting different things. So I think that we're going to people are, again, most people don't believe that we're going through this change. And most people won't believe when it happens. But it may happen, like I said, it may happen very slowly and incrementally in which case people, you know, see it as it's unfolding or it could happen. We could get a US dollar crisis. That's not out of the picture. That could happen. And, you know, that would be, that would be scary because the US, I wrote an article recently called the petrol dollar police. My blog has all of these articles. It's called Frank juxtrot.com. And I read an article almost once a week. Go to the one called the petrol dollar police. Just to see how the US deals with countries that try and do their business outside of the US dollar. What they've done to them, especially oil producing countries that try and you'll see in this article that I give all the things that happen to Iraq, Libya, Iran, Venezuela, all big, all producing countries, all of which were either selling in Uwans or made threats to sell in Euros or made threats to sell in gold. And what happened to them, they all got taken down. They were all eliminated except for Iran, which now, you know, they tried, they didn't succeed. And it looks like they failed. But, but seriously, the petrol dollar, if it goes away because it was an exorbitant privilege that was given to the US to have their reserve currency and then the petrol dollar. And they've treated that privilege like an abused wife, okay, a battered wife. And so I think that that we're going to see this change, but you're going to see the United States react very harshly to those that try and exit the US dollar petrol dollar system. Okay, now they can't obviously do that to a China, but they could do to a Venezuela. They tried to do to Iran. They certainly eliminated Gaddafi and Libya and Saddam Hussein and Iraq. So read that article. You'll find very interesting. The facts and their speak for themselves. Yeah, interesting times. Thanks for your, you're enjoying writing, huh? They've been, they've been great. Yeah, well, I love it. Yeah, I appreciate your time today. Thanks again. All right, my pleasure. All right, thanks Frank. All right, that was Frank, Juice Trap. The coverage this week read, the gold sell off is the kind of the end of the run. Frank reans the same week and sees the opposite. Now you decide who's right. Hit subscribe. Tell me in the comments. Is Wall Street wrong about gold or is the bull market over? I'm Jeremy Safran for all of us here at Kiko News. Thanks for watching. KITCO News in focus with Jeremy Safran. KITCO's new and improved award-winning gold life gives you access to the latest market price quotes, charts, precious metals news and expert opinions in familiar but improved and exciting user experience. All the news and information you love in a better, faster and more intuitive package of our existing app used by millions of users with an average user rating of 4.5 stars, customizable widgets and market alert features. Download the official gold live app and get all the latest updates so you're always on top of the latest precious metals, finance, stocks and mining news. now on the App Store or get it on Google Play.