GOLD, Japan & Inflation - MEGA Trends Shaping 2024 | Grant Williams

Summary

In this special coverage from the Vancouver Resource Investment Conference, host Kai Hoff interviews Grant Williams, discussing global economic trends, market volatility, and the potential for gold. Williams emphasizes the importance of focusing on macroeconomic factors such as Japan's financial situation, inflation concerns, and the role of gold as a hedge against uncertainty. He suggests that the current environment calls for a strategic approach to investing, with an eye on the shifting dynamics of global markets and the enduring value of gold.

Takeaways

• 🌏 The global economy is experiencing a fragmented situation with some regions like China struggling, the U.S. economy being uncertain, Germany in a difficult position, and the UK facing issues, while some emerging markets like Mexico are doing well.
• 📉 Different economic strategies are needed for different parts of the world due to the varying economic conditions, adding complexity to the global financial landscape.
• 💹 The end of the cycle of dramatic interest rate hikes has led to increased uncertainty in financial markets, which is expected to result in more market volatility in the coming year.
• 🤔 Focusing on a reasonable return on investment, such as 5-10%, is suggested instead of chasing high-risk, high-reward investments, especially with the current ease of earning 5% with minimal risk.
• 💰 Understanding personal investment objectives and portfolio construction is crucial for navigating the complexities of the financial markets.
• 📊 The concept of 'inflation' varies as everyone has their own basket of goods and services that affect their personal inflation rate.
• 📉 Gold mining stocks can be volatile, and investors should have a realistic time horizon for owning them and not be swayed by short-term fluctuations.
• 🏦 Central banks have been buying more gold in the past two years than at any time since 1950, indicating a strategic move away from currency reserves to a more neutral reserve asset.
• 🗾 Japan's economy presents a unique opportunity due to corporate improvements, despite a high debt-to-GDP ratio and demographic challenges.
• 📈 The potential for normalization of interest rates in Japan could have significant global impacts, especially if it leads to repatriation of Japanese capital from overseas.
• 💼 The discussion highlights the importance of understanding macroeconomic trends to make informed microeconomic decisions, especially in the context of investing in gold and other commodities.

Q & A

What is the current state of the global economy according to the interview?

The global economy is experiencing a patchwork of conditions, with some areas like China's economy struggling, the U.S. economy either booming or on the verge of collapse, Germany in a difficult state, the UK in trouble, and some emerging markets like Mexico doing well. This diversity in economic conditions is making the global economic situation more complex.

Why is the economic situation described as more complicated than before?

The complexity arises from the fact that different regions are experiencing varied economic conditions, requiring distinct strategies for each part of the world. This is further complicated by the end of a short-lived but dramatic interest rate hike cycle, which has disrupted many people's belief systems about the financial world.

What is the impact of the changing economic conditions on investment strategies?

Investors are likely to face more volatility and swings in markets and economic data, making the business of investing more difficult. It's suggested that investors should focus on their objectives and portfolio construction rather than trying to understand every factor, which can be overwhelming.

What is the current situation with inflation according to the interviewee?

Despite some believing that inflation is under control, the interviewee suggests that it's not entirely resolved. Wage inflation, in particular, is a concern due to its stickiness, and there are indications that inflation could rise again, potentially requiring actions by the Federal Reserve.

Why is Japan a significant topic of discussion in the interview?

Japan is highlighted as a market that has been overlooked but offers significant opportunities. The country has improved its corporate balance sheets and offers value investing opportunities with world-class companies trading at low valuations. Additionally, changes in monetary policy and the potential for capital inflows could significantly impact global markets.

What are the demographic challenges that Japan is facing?

Japan is dealing with a shrinking population, which has been an issue for the past eight years. This demographic challenge needs to be addressed, although it is not seen as an immediate threat in the next couple of years.

How does the interviewee view the role of gold in the current economic climate?

Gold is seen as a crucial asset for its liquidity, its role as a hedge against inflation and uncertainty, and its potential to maintain or increase purchasing power even during times of market instability. The interviewee suggests that gold's performance has been strong and expects it to continue outperforming.

What is the significance of central banks' gold purchases mentioned in the interview?

Central banks are buying gold aggressively as a national security imperative, given the risks associated with holding reserves in foreign currencies that can be subject to political whims. This trend is expected to increase gold's status as a geopolitical asset and could be a tailwind for its price.

What are the implications of reshoring or onshoring production for inflation?

Reshoring or onshoring production can lead to higher wages and costs due to the need for securing supply chains and potential trade policies. This could contribute to a higher inflation environment, which may be something that markets need to adjust to.

How does the interviewee suggest thinking about gold's value?

The interviewee suggests looking at gold's purchasing power rather than its price. Even if the price of gold falls, if it can be exchanged for more units of other assets, its value as a reserve of capital has increased.

What is the potential impact on the U.S. if confidence in its treasury and central bank is lost?

If confidence in the U.S. treasury and central bank is lost, it could lead to significant capital shifts away from the U.S., impacting the world economy and benefiting other countries that can absorb that capital.

Outlines

00:00

🌏 Global Economy and Market Volatility

The conversation begins with a discussion on the current state of the global economy, highlighting the lack of uniformity in economic directions among different regions. The Chinese economy is mentioned as struggling, while the U.S. economy shows mixed signals, and Germany and the UK face challenges. Emerging markets like Mexico are noted to be performing well. The complexity of having to adopt different strategies for various parts of the world is emphasized. The impact of the recent interest rate hike cycle and its effect on investor sentiment is discussed, with a prediction of increased market volatility in the coming year.

05:01

💼 Investment Focus and Strategy Amidst Economic Complexity

The focus shifts to investment strategies, emphasizing the importance of understanding one's investment objectives and portfolio construction. The change in the ease of achieving a 5% return without risk is noted, and the significance of focusing on specific factors rather than getting overwhelmed by global economic noise is underscored. The discussion touches on the importance of having a realistic time horizon for investments and not being swayed by short-term volatility, especially in the context of gold mining stocks.

10:01

🗾 Unpacking Japan's Economic Position and Potential

The dialogue delves into Japan's economic situation, discussing its 250% debt to GDP ratio, the strength of the Japanese yen, and the potential for capital inflows from overseas as Japan normalizes interest rates. The improvement in corporate Japan's balance sheets and the opportunities for value investors in the Japanese market are highlighted. Demographic challenges and the potential for capital flight from Japan to the U.S. are noted as areas of concern, yet the overall sentiment is optimistic about Japan's market and economic reforms.

15:02

📈 Inflation Concerns and the Fed's Response

Inflation is identified as a key concern, with recent numbers indicating a potential resurgence. Wage inflation is specifically called out as a stubborn issue. The Federal Reserve's actions and the potential for a premature declaration of victory over inflation are critiqued. The risks of ignoring inflation and the implications of higher inflation for the economy and markets are discussed, with a warning against complacency.

20:03

🌟 The Role and Future of Gold in the Macro Economy

Gold is presented as a significant asset in the macroeconomic landscape, with a discussion on its role as a hedge against inflation and uncertainty. The historical performance of gold since 2000 and its outperformance relative to major stock indices are noted. The geopolitical motivations behind central banks' gold purchases and the potential for gold to become a more prominent geopolitical asset are explored, with a bullish outlook on gold's future price and role in investment portfolios.

Keywords

💡Resource Investment Conference

The Resource Investment Conference is an event where industry professionals gather to discuss investment opportunities in the natural resource sector. In the script, it is the setting for the interview and a focal point for the discussion on market trends and investment strategies.

💡Macro Economy

Macro Economy refers to the study of the economy as a whole, including factors like GDP, interest rates, and inflation. The script discusses the state of the global macro economy and its impact on various regions, emphasizing the interconnectedness of economic factors.

💡Volatility

Volatility in the financial context refers to the degree of variation of a trading price series over time. The script predicts increased market volatility and economic data swings, which can affect investment strategies and decision-making.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. The script discusses concerns about inflation's persistence and its potential impact on wages and the economy.

💡Gold

Gold is often viewed as a hedge against inflation and economic instability. The script highlights gold's role in a macro conversation and its potential for a significant role in the coming years due to geopolitical and economic factors.

💡Japan

Japan is highlighted in the script as a country with a unique economic situation, including a high debt-to-GDP ratio and a historically strong currency. The discussion points to potential investment opportunities in Japan and the implications of its economic policies.

💡Yen

The Yen is the official currency of Japan. The script discusses the Yen's role in the carry trade and its potential impact on global financial markets, especially in the context of changes in Japanese monetary policy.

💡Debt-to-GDP Ratio

Debt-to-GDP Ratio is a metric that compares a country's national debt to its gross domestic product. The script uses Japan's high debt-to-GDP ratio as an example to discuss the sustainability of its economic model and the potential risks it poses.

💡Central Banks

Central Banks are the controlling entities of a country's monetary policy. The script mentions central banks' aggressive buying of gold as a response to geopolitical risks and the potential impact on gold prices.

💡Wage Inflation

Wage Inflation refers to the increase in the cost of wages over time. The script suggests that wage inflation could be a significant factor in overall inflation, as it is difficult to reverse once implemented, potentially leading to sustained inflationary pressures.

💡Stock Pickers

Stock Pickers are investors who select individual stocks based on their perceived potential for growth. The script positions Japan as a market where stock pickers can find opportunities, given the right conditions and understanding of the market.

Highlights

Special coverage from the Vancouver resource investment conference sponsored by Victoria Gold Corp.

Discussion on the state of the global economy with a focus on the Chinese, German, UK economies, and emerging markets.

The complexity of the current economic situation due to diverging economic directions and strategies.

The impact of the short-lived interest rate hike cycle on financial markets and investor sentiment.

The importance of focusing on specific investment objectives and portfolio construction amidst market volatility.

The significance of understanding personal inflation baskets and the potential for wage inflation to drive up prices.

The disconnect between gold prices and gold stock performance despite gold reaching new highs.

The role of time horizon and portfolio objectives in responding to asset fluctuations.

Three key macro trends identified: Japan's economic situation, inflation concerns, and the potential of gold.

Japan's market potential, corporate balance sheet improvements, and demographic challenges.

The potential for Japan's policy rate normalization to impact global bond funds and currency markets.

The US's unique position in the global economy and the potential for future economic reckoning.

The resurgence of inflation fears and the debate over its sustainability and impact on wage growth.

The trend of onshoring and reshoring production, its implications for cost and wage inflation.

Gold's role as a liquidity reserve, hedge against inflation, and its purchasing power over time.

Central banks' aggressive gold buying as a national security imperative and its potential impact on gold prices.

The outlook for gold as a geopolitical asset and its expected performance in the coming years.

The importance of following financial experts like Grant Williams for insights on market trends.

Transcripts

[Music]

special coverage from the Vancouver

resource investment conference is

brought to you by Victoria gold

Corp welcome back to sore financially

and welcome back to the Vancouver

resource investment conference my name

is Kai Hoff and I'm thejr mining guy on

Twitter and the CEO of the S financially

group really appreciate you joining us

here back in Vancouver and uh I'm joined

by Grant Williams Grant been looking

forward to this interview for a long

long time hey guy been looking forward

to chatting yeah good to see you good to

see you it's uh it's good to be back my

C I love this place absolutely I love it

in July more I love it in January but

hey that's all right I don't mind the

rain I lived here for three and a half

years and I don't mind the rain I have

to admit it you're better Am Me Maybe

week three gets a little boring but I'm

English we know all about the r exact

absolutely um Grant we have to talk

markets we have to talk about what is

happening in the world on a financial

and global scale of course let's start

with since you're the First Time guest

on this show a bit of a macro overie

like what's the state of the economy

right now well which economy I mean

that's that's start globally and then we

can on down a little bit cuz there's a

lot of we discussed off camera a little

bit as well there a lot of interlinking

factors so let let's start off globally

and then we can work us and maybe some

of the other nations that we discussed

earlier well look it's an interesting

question right because for a long time

you could talk about the global economy

and give an answer but for the first

time it's not as simple as that it's not

as though everything's going in the same

direction there's there's pockets of

stress you know Chinese economy is

struggling that hasn't been the case for

a while you economy is either booming or

about to collapse depending on who you

listen to uh Germany's a basket case the

UK is in trouble um some of the emerging

market economies are pretty strong you

know Mexico's doing okay there there are

so sudden you kind of got all these

cross Curren I think that's that's a

source of some of the the problems is

that you've suddenly got to have a

different strategy for different parts

of the world and it's just made the

whole thing a lot more complicated and

that's to be expected you know we we're

we're at the end of a cycle where we've

been through this this uh shortlived but

dramatic interest rate hike cycle which

has upended an awful lot of people's

belief system about the entire Financial

World it predicat upon low rates so

we're in a period now where there's an

awful lot of um uncertainty and that is

going to feed through to markets it's

going to feed through to investor

sentiment and so you right now for the

next year I suspect you are going to see

I think a lot more volatility a lot more

swings in markets and in economic data

and that's going to make the business of

investing that much more difficult what

do you focus on when you try to make

sense of it all like you said there's so

many factors going in but uh what what

kind of filters do you use to sort of

weed out the bqu yeah I mean it

depends what a what you're trying to

achieve with investment and be the kind

of style that you're trying to let's say

generate wealth and a positive return on

the portfolio it doesn't have to be 50

or 100% let's say reasonable return of

like 5 to 10% so let's expect let's

start with the fact that you can get 5%

pretty easily now right without taking

any risk that's a really important

change so if that is your goal you know

you've been handed a way to do that with

minimum stress beating

inflation inflation numbers yeah I mean

that's everyone has their own inflation

right that's that's that's the reality

of it um um away from food and shelter

everybody has a different set of

variables they go into their own

inflation basket but right now you know

for me it's a case of understand what

your objectiv are understand how your

portfolio is constructed to meet those

objectives and then focus on those

things if you try and focus on

everything it gets too complicated it's

going to get way noisier than it is now

and you're liable to get lost in that

noise so you know trying to be an expert

on the US and uranium and China and

natural gas and ESG all these things

that we've all tried to be experts on is

going to be a lot more problematic so I

think focus is the most important thing

to remember thanks for clarify on that

cuz like one of the mantras of our

channel is understanding the macro to

understand the micro yeah macro means

everything that's involving the gold

price and commodity prices more or less

to understand why is it why are the

mining stocks not performing right

that's the ending question right that we

could talk about that later but so that

means like we have whole source of

information we got to funnel it through

to understand okay why didn't the gold

stocks move this week when gold reached

a new old time high well look it's

interesting that that that why question

is an interesting one because of course

we all we all want a reason why because

once we have a reason why we can make

sense of things but there's never a why

didn't gold stocks move there just never

is an answer to that question and

everyone searches for it so if you have

a if you have a realistic time Horizon

for owning your gold stocks if you are

buying them because you think they're

going to double in a week if they don't

double in a week get out it's simple if

you're buying gold mining stes because

you think that the next 10 years are

going to be incredibly bullish for goal

don't sell them because they fall 25% CU

that's what they do they're very

volatile stocks so again it's really

about understanding what's in your

portfolio why it's there and what your

time Horizon is because that will

dictate how you respond to swings in the

in the assets and themselves if you were

to pick three macro Trends right now

which ones would you choose and which

ones you know like also would you like

to discuss further you know which are

really important to you right now uh

Japan is one of them we'll we we'll talk

about that in a minute I think Japan is

going to be something that people are

going to once again get familiarized

with and and there's a lot of money to

be in Japan I think um um I think

inflation is still a very important

subject to have a handle on everyone

thinks it's dead and the FED of hung the

mission accomplished banners up and

everything's gone away I don't think

that's the case I think it's still there

we saw just today um a big strike at one

of the universities in California or the

faculty walking out wanting much bigger

wages I think we're going to see more of

that and wage inflation is the worst

inflation of all in terms of how

entrenched it get you can't you can

lower prices in food if you increase and

it's tough to lower wages once you INE

so I think inflation is still something

that we need to worry about and I come

back to Gold I think I think gold is

it's time for gold I think all the

pieces are in place for gold to become a

much bigger part of the macro

conversation uh I think the reasons for

owning gold have been strong for a while

but they're starting to be strong for a

lot more different groups of people

particularly the centry banks we've seen

them buying more gold the last two years

than they have since 1950 and that's

important because they're you know they

don't care what the price is they just

need to own it and diversify out of out

of their currency reserves into a

neutral Reserve assets so I think this

is a lot of ta wins for gold so for me

Japan gold and inflation are the three

things that I'm kind of keeping an eye

let's start a little deeper on those

topics because Japan like is a topic

nobody really talks about because I

think people don't understand of what

what's going on there like a few

commentators have mentioned of course

the Yen uh dropping crazy and the N

exploding and really generating some

wealth and there's been you know

discussions about the Yen dollar pair

trade meaning you borrow on Yen and then

you buy us bonds cuz uh it just makes

sense can make money on it the over TR

right but Japan is a topic nobody

understands and the 250% debt to GDP

ratio as well everybody's trying to

figure out why that economy hasn't

collapsed entirely as well yeah maybe

you could clarify a few things there

yeah I I'm biased because I began my

career in Japan in the ' 80s when it was

the hottest Market on the face of the

planet you know Japan was where

everybody was going to make and and if

you look at the performance of the Nick

through the 80s it was extraordinary was

like the NASDAQ in the UNS um and you

know that market stopped going up on

December 31st 1989 it started going down

it's been going down for most of the

intervening 30 plus years but you know

things are changing and the Nick is plus

or minus 40,000 now is about to break

out to new highs for the first time say

since 1989 which when you think what's

happening in the US and other major

markets that's extraordinary but more

important than that is the fact that the

um over that time corporate Japan has

really got its balance sheet in much

better shape because it's had to uh the

companies have become much better

stewards of shareholder Capital uh you

know returning Capital to shareholders

BuyBacks dividends all these things that

were really not part of corporate Japan

before they made great progress and you

can go to

Japan uh if you're a stock picker and

you can find world-class companies

trading on single digigit pees Trading

below Book value you can find all the

kind of things that value investors want

in a big economy in a first world

economy that uh has challenges and we'll

talk about those in a second but finally

if you're looking for a big liquid deep

Market that can accept capital and

people say there's no game in town under

us Japan's not as big as the us but it's

certainly a lot bigger than a lot of

other markets and can and can absorb an

awful lot of capital added to which the

Japanese is the big Japanese are the

biggest creditors in the world so

there's an all full of Japanese Capital

overseas that when we start to see a

positive uh yield in Japan is going to

start to come home and when that changes

when those Capital flows out of Japan

and into US stocks and bonds

particularly reverses it's going to

change things dramatically and so you

know Japan's challeng is the demographic

challenge is a clear one and other

country is the population is shrinking

it has been for the last8 years um that

needs to be addressed it probably won't

be in a short order um so it's something

to be aware of I don't think it's a

clear and present danger in the next

couple of years but it's something to be

aware of Deb GDP you talked about that

before we started filming the numbers

are incredibly High the bank of Japan

has a massive bloated balance sheet um

it has cornered the Japanese Sovereign

bond market which is not a good thing um

and and so there are these challenges

that the that the extraordinary monetary

policy has put in front of Japan but

with the change of Governor from kodan

to way last

year they have a chance to Kitchen syn

all this and say that was there this is

now which they're starting to do and

they've talked overtly about normalizing

interest rates and it's really important

to understand what that means you know

the policy rate Japan has been negative

10 basis points for a long time they've

basically had Zer for two

decades um talking about normalizing

policy rates is a big deal in Japan even

if the rate goes from -10 basis point a

positive 10 basis points doesn't really

make a difference but the message it

sends and the fact that the Japanese are

finally going to try and normalize rates

whatever that means but if you got

Japanese rates to 1% if you got the

Japanese policy rate to

1% the shift that that would precipitate

in global bond funds the money that that

would bring home into Japan from

overseas bonds the the effect that would

have on the Y which is the currency as

you said the carry trade everybody's net

short the Y effectively whether they

know it or not um these are profound

changes and so I just think that finally

Japan is started to make the right noise

know it doesn't hurt having someone like

Warren Buffett putting a lot of money to

work in Japan about 18 months ago that

got people sitting up and taking notice

there is value in Japan and it it is a

stock Pickers Market it is a place where

you can go and practice the art of

investment that you can't do many places

anymore because of ETFs and for me I

just think it's a place where there's

going to be some real opportunity this

year to make money just a up on that as

well like higher Bas higher base rate as

well in Japan like can Japan afford it

at the Deb level well this is my point

fromus 10 to to to minus 10 Bas points

to plus 10 basis points it's about the

signal not the number right but if you

get to 100 basis points all of a sudden

a little higher because but again the

Japanese Central Bank has a lot of bonds

on their books which they own you know

zero interest rates once you start

seeing that Capital come home and the

Japanese you know effectively pension

money market accounts have their

negotiations in March when they set the

rate they're talking about that being 75

basis points this year so suddenly at 75

basis points there's an awful lot of

demand for Japanese domestic debt from

domestic Pension funds institutions so

there is a scenario it's unlikely to be

smooth but which the bank of Japan can

actually let all this debt go into the

Pension funds you there are ways they

can get around this there's there's the

famous trillion dollar platinum coin the

zero coupon all that stuff right but you

have to realize that but Japan has been

doing this for 20 years and it hasn't

fallen into the sea the the economy has

gotten better and not worse the

corporate balance sheets have gotten

better not worse and yes it's a massive

problem but is it an insurmountable one

I think it isn't and I think that the

opportunity on offering in the Japanese

stock market is such that you can you

can you look past this with one eye and

and not think that precludes any

investment in Japan I just don't think

it does I like talking about Japan

because I always bring it up also in

conversation because I'm looking for a

way for the US maybe moving forward as

well and I look I'm looking for endgame

scenarios or potential scenarios how

this all could unfold and play out and

Japan of course is where it is right now

do you see the us moving in that

direction as well because it feels like

we're keep kicking down the can down the

road and looking at the depth in GDP R

for as an example we still got a long

way to go in the US to getting to the

Japanese levels but it shouldn't it sh

yeah so sure there that's an interesting

one but but shouldn't the US should

never really be able to get to Japan

levels because the currency is so

important to the rest of the world so it

should matter you know Japan's been able

to do this in relative peace and quiet

because China has kind of taken the

attention of the world as it's as it's

come up Japan's been able to get its

corporate balance sheet in much better

shape kind of quietly without anybody

really paying attention to it the US

doesn't have that luxury you know with

the with the with a congressional budget

office uh estimates of what the deficit

is going to be for the next 5 six seven

8 years

the us is going to face a recking for

sure we don't know when it's going to be

but the numbers don't work they haven't

worked for some time it hasn't mattered

but it will matter I just don't know

when and and when it matters the world

is going to need a home for a lot of

capital that currently sitting in the US

if people lose faith and confidence in

the treasury in the US uh Central Bank

which I'm amazed they haven't already if

the election makes people concerned

which either way it has the clear um

potential to do

um I think the us is going to face

challenges it doesn't mean it's not

still the biggest economy in the world

or the most powerful Market or the home

for the most Capital that the margin

we're starting to see shifts away from

that and that's all it really needs for

for other countries to benefit thanks

thanks recovering Japan like I haven't

talked to anybody really about it so

it's they L spending a lot of time I'm

sure a lot of people think why is he

talking about Japan but for me it's it's

it's interesting again after 25 years oh

it's a new angle for us on the channel

as well cuz we often touch on it we

really never dive in deep this quite H

is a lack of expertise as who cares

you're right who cares so um second

topic you mention is inflation and we've

just got the inflation numbers last week

as well they actually were higher than

expected yeah uh what do you make of

that cuz inflation fears seem to be

coming back a little bit into the

markets true inflation is down below 2%

but all the other inflation indicators

are pointing up you mentioned wage

inflation uh as well what's your opinion

really on inflation how sticky is it do

we see a massive rebound do we see 9%

inflation again no I it's not beyond the

real of possibility and if you think

about that um for the longest time it

was it was almost impossible to conceive

inflation above 2% because they couldn't

get it they what we did so uh could it

get to again absolutely could it would

it would it would take probably actions

by the Federal Reserve in terms of

slashing interest rates to see inflation

get out control but the wage price stuff

does worry me because it's very very

sticky inflation and so yeah I always

worry when they hang the mission

accomplish banners and they did that at

the tail end of the last year um talking

about how they've got it under control

and talking about you know signaling

Cuts because they know that the market

needs that promise of lower cost of

capital in order to function properly

now um and that's the word they've

created with their policy so they have

to try and maintain it um ultimately it

is doomed to failure it just is and the

math just doesn't work after a certain

level but again um everybody is very

happy to play along because it's easy to

make money when interest rates are low

and asset prices are rising so people

tend not to put their fingers in their

ears and Shout la la la but when rates

are going up and when inflation is a

problem we saw what happened in the bond

market through last year we saw what

happened in Silicon Valley and the

Signature Bank back in March um once

these problems become real and they have

to be faced facing them means Banks

going out of business and you know

prices going up and people out on the

streets and all these things that we've

kind of forgotten about since the 70s so

um to say that inflation as a as a

concern is over I think is way too PR

way too well we had Noble laats come out

and say we've beaten the war we won the

war in inflation I was a yeah one

particular Noble

La well quite controversial don't say

his name in case you summon him it's

just you say it three times like Beetle

Juice exactly right we don't want that

happen no let's not like Okay so let's

wrap up that inflation debate because

everybody sees it onshoring is another

Trend as well or reshoring whatever you

want to call it bringing production back

on comes with cost and wage inflation

look it does and the question is is it a

choice or is it is it a policy you know

is it is it something they decide

they're going to do or is it something

they have to do because uh other

countries are forming blocks left and

right that that are antagonistic towards

the US um the US is needs to secure its

Supply chains CO's proven that and the

only way to really do that is to move it

back on Shore or to friendly countries

maybe you move it to Europe Mexico is

obviously a favorite destination right

now but moving it to Europe is expensive

moving it onshore is even more expensive

um the chances are that's going to lead

to higher higher wages and higher cost

so we just have to deal with that and

and I think after so many years of low

inflation we just have to accept that

we're in a world of higher inflation for

a while and it it's just going to be

that wayas all right last topic I we

need to touch on is your topic of the

conference here as well because we're at

the M resource invest it is gold your

title is called rise and shine gold has

risen is it Shining I I think this year

and the next couple years could be big

years for God and I don't I I'm I'm very

happy to talk about gold often but I

don't normally come out and say I think

this is going to be a good year I've

done it two or three times and my track

record has been pretty decent with those

times um I don't think of it as

something to buy and sell I think of it

as a liquidity Reserve I think of it as

a a hedge against inflation I think of

it as a hedge against uncertainty and I

don't think about the price of gold I

want to own gold uh I want to keep my

savings in gold and then exchange it for

things that uh I want to own more at a

given point in time and the point I was

making in my presentation was you look

at Gold's purchasing power not the price

so um in 2008 for example gold spiked

into the bare Sterns collapse performed

incredibly well and then when be STS

went under it fell and everybody was

saying what the hell's going on why

goals not supposed to fall in times of

Crisis but it was liquidity and people

that had margin calls were selling gold

CU it's liquid is liquid Capital um but

importantly gold fell

30% uh it quickly rebounded the S&P went

on to fall 65% and so even though gold

was down your purchasing power increased

and that's how I try and get people to

think about gold is the price went down

but if you can buy twice as much there

twice as many units the S&P today even

with a reduced pricing go you might want

to own the S&P more now cuz it's

corrected 66% so I just think of it as a

as a liquidity reserve and capital and I

think to exchange for other assets as a

when the relative values alike and if

you think of it in those terms you know

gold has done tremendously well if you

look at headline terms since 2000 when

it bottomed when the uh the Central Bank

stopped selling gold um it's outperform

the S&P it's outperformed the Dow Jones

it's outperform the S&P on a total

return basis and all you've had to do is

sit there with it in a safety deposit

box you haven't had to worry about all

the ups and downs in the market which

stocks to pick it's just outperform and

I I suspect that outperformance will

actually increase if we get some

instability in uh Equity markets in the

US particular which I fully expect to

see before this year's out how do you

political as the GOL press right now uh

it's becoming more so yeah it's a great

question it it it's becoming more so

because we are seeing central banks

aggressively buying gold and there's

only so much of it there's only so much

additional Supply every year and when

you have an increasing number of uh

price insensitive buyers looking to

acquire it that tends to lead to higher

prices but more importantly the reasons

these centes are trying to buy gold is

because it's a national security

imperative you know once once the US

Treasury frows Russian assets when they

went across the border with Ukraine

every single Central Bank in the world

that owns Dollar reserves was on notice

that this could happen to you and while

the majority of them I'm sure think well

we're on the same team as the us we're

not going to upset them they can't take

that chance now because it's been proven

that it can happen and if your um if

your uh reserves are a national security

imperative which they obviously are you

cannot have them at the whim of a

capricious foreign government and gold

is essentially the only neutral Reserve

asset out there and that explains why

central banks are moving to acquire gold

and I think that is going to make gold

more of a geopolitical asset it's going

to be a Tailwind for the price and I

think that's a big part of why we're

going to see a good year for gold this

year and on that note Grant fastic

chatting with you we have to conference

we keep the conference interviews a

little bit shorter you back later in the

year of course as well and see how the

trends are developing how Japan is doing

how we're doing on the inflation cycle

and business cycle as well most of all

any talk where can we find more of your

work uh easy ground- williams.com that's

it that's it nice and simple it's uh

it's all there fantastic awesome thank

you so much Grant really appreciate been

you do this for a long long time and uh

everybody else thank you so much for

tuning in we really I really enjoyed

this conversation with Gran Williams

make sure to go follow him on his

website he's also on Twitter I think yes

I am yeah I am I'm TTM G which is things

to make you go put description catch

that earlier so um really appreciate you

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thank you so much for joining us