Why Gold Will Fall Before Its Next Massive Move

Hello everyone, welcome to VRIC Media, your most trusted voice in metals and mining. I'm your host Daryl Thomas and today we have the pleasure of interviewing Michael Howe of Cross Border Capital. How are you doing today, Michael? I'm great, Daryl. Very good to be here. Lots going on in markets, never a dull moment. Yes, agreed. A lot of things going on. We potentially have a fragile peace agreement on the table with the US-Iran situation and so it's kind of interesting just seeing what's happening. So I want to jump into your view on liquidity. What are you seeing currently right now on global liquidity? We know that this liquidity is needed for many of these high-tech assets, some of these crypto assets, Bitcoin and many other assets. When there's more liquidity, money's flowing into those assets, but what are you seeing on your end? Well, I think that it's a complicated picture, but I think what I would say up front is that we've got a situation whereby the world economy looks to me pretty strong. All our indicators are suggesting that. And what we're detecting by monitoring liquidity is that a lot of liquidity is basically shifting into the world real economy. It's coming out of financial markets and financial markets are not because central banks are putting their foot on the brake pedal, but much more because you've got a strong real economy effectively crowding out the financial markets. And one way to think about this is that all money that's anywhere must be somewhere. So if it's in the real economy, it's not in financial markets. And that's really one of the problems. So effectively, strong growth is a drag on financial market performance, which is a paradox, but that's a reality. And I think if you kind of extrapolate forward, I mean, you mentioned the MOU that has just been signed. I'm actually pretty upbeat about this. I think this is this is actually good news. And if this opens up the Iranian regime after, what is it, maybe 40 years of herd and terrorist activity, if they bring them into the world economy, I mean, this is a great step forward for the US and for everybody. I think the loser in this is probably the Europeans who seem to be fighting the last war to draw an analogy. But I think this could be actually a lot better than the markets are currently thinking. Yeah, yeah, definitely. Yeah, appreciate you sharing that. So when it comes to liquidity and everything, if that liquidity isn't in financial markets, you mentioned that it's typically going into like the real economy or whatnot. Do you think that the financial markets or the broad indices are topping at this point? What's your view on on these indices that keep hitting all time highs? Well, I think some things are. But, you know, let's take let's sort of look at the range of assets. And I think you've got to really look maybe at three or four different lenses. I mean, one is to what's happening in monetary inflation hedges, things like gold, Bitcoin, which are very, very liquidity sensitive, and they tend to move early in the cycle. You know, I would venture those have seen a peak. It may be a near term peak, because actually we're pretty upbeat, very long term on these assets because governments basically have to print money. So they're going to go up. But, you know, these things have cycles and we've got to remember the cycles because, you know, payoffs are not are not straight lines. I mean, they tend to be very cyclical. So they're being hurt by this downswing already. I think the second thing to look at is to look at the bond markets and particularly to focus on the yield curve. And the yield curve is probably the best measure of the underlying, let's say, direction of the bond market, because the yield curve is already measuring, although this is all wonkish speak, unless you're in the bond markets, term premia, which are one of the key ingredients of bond returns and a flattening yield curve, which we're looking at pretty much across the world now, with maybe the exception at the moment being Japan. But without exception, U.S. markets, European markets are seeing peak. They've already seen a peak in their yield curves. There's a lot of flattening going on this year that's telling us that term premia are coming down. So in other words, you can see in terms of bond performance, the yield curve is peaking. Second thing or sorry, third thing I think you've got to say is then to look at what's happening in the commodity markets. The commodity markets are being fueled unquestionably by strong economic growth. That will continue. But I think we've got to look at this very, very closely because commodity markets will peak before the real economy peaks. And that's because they're very sensitive to the inventory cycle. Now, at the moment, they're still going up. If the dollar continues to rebound, I think that is a distinct possibility, not least given what Kevin Walsh was saying last week. If you get a stronger dollar, that's going to continue to bite into performance. So I think we've got to monitor the commodity markets. We're still in the moment. But let's say we're getting a little bit more nervous than we were maybe a month ago, given given developments. And then you come on to the fourth thing, which is probably what you're really focusing on, which is looking at what Wall Street is doing. And I think that you've got a lot of evidence there that we've got a bubble and, you know, a bubble is is great until it bursts. And then we get we get a loss of altitude pretty quickly. And I think we've got to be very wary about that because, you know, this is a tech bubble which is based on huge spending. But I think there's a lot of questions about the integrity of the profitability and certainly the free cash flow of many of these companies looking forward. And so I would be very sceptic about chasing that bid. So if you come back to what Wall Street's going to do, I mean, my view through this year and I'm pretty much unchanged on that, notwithstanding what's happened, is that you're going to get pretty flat lining of the market through this year. I don't see, you know, a lot of upside and I don't see great downside. And I think that's really the view of the Fed as well. I think they want a market that is probably more likely range bound. You know, if I don't believe that Kevin Walsh wants to raise interest rates, but I think what he wants to do is to let the markets tighten monetary conditions for him. And that really means the bond market or yields drift higher and it means the dollar is firmer. And against that background, I think those are two big headwinds for Wall Street. OK, so curious in your thoughts on the Fed and potentially wanting the markets to be, you know, within a range or whatnot. How does this conflict with Donald Trump? Like Donald Trump, he he typically his administration typically touts the market saying like we're at all time highs and such. That's one of their celebration points. So do you think the Fed, you know, is going to be acting independently of what the administration desires in that in that sense? I'm just curious in your thoughts on that. Well, look, I don't think for any moment that Kevin Walsh is, you know, a hand puppet of Trump has been suggested and he's independent. He's going to come to his own conclusions. I think his view is that interest rates and he pretty much said this at the at the at the presser, you know, his view is that this is not about Fed funds anymore. It's very difficult really to think to have a sober view of really what Fed funds is trying to do. I mean, if you're raising interest rates or cutting interest rate, what does that really mean anymore? And when you've got the government, which is a huge, huge debtor to the private sector, actually, if they raise interest rates, paradoxically, they're increasing the interest bill to pay to the private sector, which means there's more transfer payments going from the government to private individuals who are holding debt. So that's actually in many ways an increase in income and a stimulus. So it's a bit of a head scratching moment, not least because higher interest rates are not going to impact the AI spend that is going on in the US at the moment. I mean, we're looking at very, very different parameters. So I think that, you know, Kevin Walsh is correct to call out the fact that this is not about Fed funds anymore. You've got to be you've got to look at a much, much wider range of variables to assess monetary conditions in the US economy. It's more complex than Fed funds. And I think that he's absolutely right to, you know, withdraw things like forward guidance, which is sort of, you know, ultimately, you know, was an affectation going back to I think the Fed is much better to be on the sidelines and actually keep the markets guessing, which is pretty much what Kevin Walsh is trying to say. And at the end of the day, you've got to start to bring into account other factors into the cocktail, such as what's happening in the fixed income markets, what's happening in the forex markets, looking at credit flows at the end. You know, after all, I think Kevin Walsh from his credentials is a monetarist, so he's going to look pretty closely at what the monetary aggregates are doing as well. So, you know, all part him. I think he's a much, much better choice than the previous incumbent. I think, you know, he knows what he's doing. I've got great confidence in what the what Kevin's going to do. Yeah. Yeah. So to my understanding, Kevin is one vote of I forgot how many. Twelve. Twelve. Well, there's twelve FOMC members, but not all voting. Yeah. Yeah. And then Jerome Powell decided to stay or something like that. And so, yeah, I think that's that's not a very clever move. I think that's a great distraction from what really is going on. I don't know what what Powell is trying to try to prove here, but whatever. I mean, yeah, usually they don't do that. Right. But sorry. I said usually the Fed, the Fed chair. It's I'm not going to say it's unprecedented because I can't recall another occasion, but I don't think it's happened before, but maybe it has. Yeah. Yeah. Yeah. That's interesting. So you mentioned bond yields. I mean, currently bond yields have been moving upwards and such. So is that an attractive asset class for you at this time or are you expecting us to go higher? What do you what kind of your expectations there? Well, let me let me turn to some slides and maybe I can if I do that, I can drill through what's going on. So if you can see this presentation, yeah, what what I'm going to talk about is liquidity and then come on to fixed income markets. So what this chart here is looking at is the global liquidity cycle and what this is. This is the sort of the mainstay of what we analyze and what we consult on, which is looking at the flow of liquidity through world financial markets. And as you can see, that's very cyclical. And hopefully, as you can see, that seems to have peaked and that's coming down. Now, let's just be clear about what this is measuring. This is measuring the momentum of money flow. So it's a rate of change, underlying rate of change shows an index. It's not saying the level of liquidity is dropping. It's saying that we're looking at a slowing of the pace of growth. But that tends to be very important because it's those inflections which tend to move asset markets. And as far as we can see, this is looking at how you would interpret this in terms of an asset allocation framework. Now, I'll try and cut through to the chase on this. But what this is saying is that if you look at the left hand side of that diagram, what we show there is where different asset classes performing in that schematic diagram. Now, in the upswings of the liquidity cycle, it's normally equities. I mean, they are the best asset class. They tend to be a risk on asset. They're very sensitive to liquidity. And they tend to go up when liquidity is accelerating. Then around the peak of the cycle, you tend to find commodities do very well. And that's certainly been the case for what the last 12 months at least. You've seen very strong gains in commodity markets. We might argue about whether that's coming to an end. I think that these things are finite. So we've got to be alert to that. But as you start to go down the downswing of the cycle, you want to be picking up more and more cash and increasingly fixed income. Now, that story starts with cash. It starts to move into shorter duration bonds and then ends up with longer duration government bonds around the trough of the cycle. Now, what you can see from this analysis is that commodities and bonds are really opposites. So when you start to see bonds beginning to outperform, that should be a bell that rings at the top of the commodity markets. And that's what we've got to be alert to. Now, I don't think it's coming yet, but I think we're moving into that frame. Now, what I want to do is just to go back to the fixed income markets and just try and show what's going on in fixed income, because I think that's an important consideration. The first thing to say is this is looking at two measures of the yield curve in the bond markets. One is an unambiguous measure, which is the black line, which is looking at the average slope in the US Treasury market of the curve of the yield curve. It's actually technically the area under the curve gives a true measure of what's going on. And the other is the most popular measure that people quote, which is the 10-2, which is not a bad proxy, but it's not precise. Now, on both those measures, unambiguously, what you're seeing is a flattening of the curve. That is a completely non-consensual view, because on January 1 this year, the broad consensus across the fixed income markets were we were going to get a significant curve steepening. And what we've had is the reverse of that. We've had a big curve flattening. Why is that going on? It's going on simply because liquidity is inflecting and going down, and the slope of the curve is very sensitive to that. Now, what does that mean for the bond markets? This is showing the US Treasury yield in the orange line at the top. And what you can see is that that is basically forming a sort of a neat triangular pattern. And technically, it looks as if that wants to ultimately break out on the upside. And that's really the thing we've got to be alert to. But that is not that's not happening yet. But clearly, we're moving in that direction. The lower line is there looking at the term premia in the bond markets. And what that's showing is an inflection that is beginning to unfold. So that's beginning to turn down more significantly. And that's saying you're looking at yield curves, which are likely to flatten maybe a lot more. Now, the implication of all that is to say that the front end of the curve is going up. And I think that's what you're seeing. If you start to look more generally at what's happening in fixed income, sorry, this chart, this is looking at world bond markets. So it's moving on from the US to look at everything. This is including China, Japan, Europe, etc. And what it's showing is that the front end of the curve, the black line, terminal policy rates, in other words, the underlying level of policy rates that are being set are moving progressively higher. And the orange line is showing term premia. Again, maybe two wonkish things. But this is how bond markets work. And that's going down. The net effect of those two things is to say what you're looking at is a rising front end of the curve and a falling back end. And that's saying that the yield curve is flattening now to kind of cut to the chase, which I'm going to try and do here on this next chart. This is looking at what's happening to US liquidity conditions and the yield curve. Now, this is illustrating that the two move really closely together, although liquidity is leading by nine months. And this is saying that the picture that is unfolding here is that liquidity is dropping. And I stress again, not because the Fed is tightening yet, but because this is the direction we're marching in. And at the first the sort of the first base is the liquidity is being dragged away because of a very strong real economy. And coming back to my all money that's anywhere must be somewhere point, this is just telling us that the real economy is crowding out financial markets. And you're seeing that through a flattening yield curve. And that's basically what's going on now. What's the next iteration here? The next iteration is to basically look at what's happening in the short term interest rate markets. And what I would point people to is to look at this chart, which is monitoring two year yields and SOFR rates. Now, SOFR are the replacement for euro dollar. They are the price of money in the repo markets. The repo markets are central to funding the world economy, but certainly in the US economy. They're referring to collateralized lending that is going on in the private sector. And the orange line is showing the two year treasury note. And the black line is looking at the SOFR overnight rate, which is really akin to Fed funds or an idea of what the of what short term rates are going to do. The orange line is always a great lead indicator of what the market is expecting in terms of interest rates, in terms of policy rates. You can see how in 2021-22, the treasury market, the R2 line there, the two year note, was a great, great lead indicator of what was going to happen to market rates. And you can see that happening. It seems to be underway again. The orange line is broken above the black line. And that's telling us that the direction of rates is going up. And that's what we've got to be conscious of. So you're looking at higher short term rates. Ultimately, I don't think that necessarily means, let me say that again, that Kevin Walsh is going to sanction an increase in Fed funds quickly, but he's letting the markets tighten for him. And that's what we're looking at in this picture. The two year is going up. Other point to make is that what's ultimately going to happen to the 10 year, the 10 year bond, the note in the US, the central interest rate really in the system, the key benchmark. And that is shown in terms of this diagram. And what this is telling us is that there is a remarkably close connection between the risk adjusted, this is just stripping out the term premium from the 10 year yield, the risk adjusted 10 year, which is the underlying level and nominal GDP growth. And this is NGDP for the US in black. The orange is the underlying 10 year yield. And you can see the direction of that's going in. But what we're looking at is an underlying level of yields of near a 6 percent than four and a half. And that is the maybe the concern. But I'm sure that the Fed is probably happy to allow that to drift up, although it clearly comes at a cost that the interest bill is going to be bigger than maybe once expected. Yeah. Yeah. I'm kind of curious about that, like the implications of the interest bill being bigger than expected. I mean, it's already I think we're spending what trillion and a half on interest. I mean, and that goes up to if that goes up to about 6 percent. I mean, that's going to be, you know, more money spent on interest. So what implications does that have? Does that lead to more, you know, money printing, you know, easier policy or just curious in your thoughts? Well, I mean, ultimately, what this is going to do, Darrell, is it going to it's going to encourage the the policymakers to print money. I mean, this is the only way out of the debt dilemma we've got. And, you know, the issue is that, you know, we may have faced these issues before of, you know, rising interest rates, a bigger interest bill, et cetera, but certainly not against the background where debt GDP levels are such an eye watering the high levels. The fact is that we've been sort of weaned or spoiled with debt, too much debt over the last 10 years or more, going back to probably the GFC in 2008. The root out of this was basically printing money and issuing debt. And we saw that, you know, magnified during the Covid years where interest rates were dropped to zero in cases, negative rates that encourage a big, big take up of debt and a big turning out of debt. And that problem is coming back to haunt us. And so the only way realistically that we can get out of these debt problems or to resolve the debt problems is to print money and effectively inflate it away. And that's why I think you've got to be aware that inflation is probably a much bigger issue than people are aware of. And, you know, this chart probably is, you know, a sobering thought. And this is looking at the underlying level of inflation in the US economy. The dotted black line is inflation, a four year rolling average of the GDP deflator, which is the best broad measure. And the orange line is what is the breakeven inflation rate on the five year tips market. Now, that's a big gap. And I think that, you know, a lot of people are going to start asking the question. I mean, we ask it every day. What's our personal inflation rate? Certainly isn't the number that the federal administration tell us it is. I mean, inflation is much more. I'm sure your personal inflation rate is more than two point eight percent. So it is. And, you know, this is they're fogging the statistics. So, you know, I think ultimately what you're looking at is an underlying inflation level of probably near a four percent going forward. And, you know, if you're talking about underlying GDP growth of what, two percent, probably minimum, you can see why nominal GDP is getting up to near a seven percent. And if that's the benchmark over the long term, the bond markets tend to gravitate towards those yields. So I think you've got upward pressure on on bond yields, nominal bond yields. And maybe that is what Kevin Walsh wants to accept, because I think that means the market does the job for him. Bond yields drift higher. That's putting a break ultimately on on some of these excesses. It's probably curtailing debt take up. It's probably slowing the economy at the margin. It's probably putting some sort of ceiling on inflation pressures. And it means the dollar probably goes higher. If you've got a higher dollar, that's not going to be great for commodity markets. And that's why, you know, we're looking in that direction. OK, so how long do you think this, you know, this dynamic changing, you know, with the bonds and the risk off assets outperforming for a while, dollar higher or whatnot? How long do you think that could last? I mean, looking at the previous chart that you shared back in the 80s, I mean, I think we're in about a 40 year bull market for bonds until we reach that lower bound. And then now it looks like it's reversing back the other way. So do you see this as a long term cycle? Just curious in your thoughts on that. Yeah, I think it well, I think it's a long term cycle in the sense that I think we've broken that big downswing that we saw beginning when Volcker came into the Fed back in in late 78, 79. We we've seen a big, big downtrend in terms of inflation and NGDP correspondingly. The bond markets followed that. But if you look at that chart, you can see there's a very clear inflection sometime after the GFC where the direction of NGDP starts to move higher. Now, I don't believe it's going to go back to where we were in the in the late 1970s because I don't think inflation is that serious a problem. But I think that we have got a higher inflation rate. So, you know, I would imagine that the looking forward, my projection would be the NGDP is probably around the six to seven percent area. So you can look at that black line and say, well, we've got a probably flat line around here, which means that the orange line sort of goes up towards meeting it. And so the underlying level of yields in the U.S. is probably nearer six percent than four and a half percent. And that is not I don't think going to happen overnight. But I think that's the direction we're moving in. But that maybe is what Chair Walsh is envisioning. And if you look at the front end of the curve, probably you've got to expect, you know, maybe a flatter curve, which means that ultimately Fed funds are going to move up a lot more. That's what the front end of the market is indicating. But I think it's going to be, you know, I don't think Kevin Walsh is going to move quickly on that. He'll let the markets do most of the heavy lifting for him. And that also means a firmer dollar. OK, OK. So firmer dollar yields are paying higher. So typically people rotate out of assets such as gold or whatnot because gold doesn't pay a yield. And if yields are paying higher, typically there's a rotation out of the precious metals. So a lot of a lot of resource investors watch this show. A lot of gold and silver bulls watch this show. And so what happens to gold? Well, let me let me do that maybe in sequence. Let's look at the dollar first. I mean, this is a chart of the US dollar and this is my tram lines that are sort of put through that. And this is the I put the DXY there. This is a close equivalent, but this is produced by the BIS, the Bank for International Settlements. And the data goes all the way back to the the early 1960s. And I think you can see the trends on the dollar in this way pretty clearly. And, you know, my interpretation of that data is that what you've got there is still an uptrend generally in the in the US currency. You know, I'm a fan of the dollar. I don't believe that we're looking at the end of the dollar. I think in many ways, the geopolitical configuration that we're seeing unfold in front of us is actually pretty bullish for the dollar long term or certainly certainly at least it's not not negative. And if anything, it's negative for European currencies. But there we are. So if you look at that chart, what it's suggesting is you're still in an upward trend, upward channel for the US dollar. And I think that's that's an important factor. What's more, if you look at this chart, which is let me just explain what's going on here. The the black line is looking an index of our index, in fact, of Fed policy liquidity. And this is basically saying looking at a broad gamut of levers and buttons that the Fed can press or pull. This is saying that it's shown inverted. So as that black line's going down, it's basically saying you're looking at easing a policy. And as that black line will go up, looking at the right hand scale, that index is therefore going down, saying you're looking at tightening monetary conditions. And we think you're at the point of an inflection here. So that black line is going to start going up. The orange line on deviations going back to that chart, the deviations in the DXY index here from the underlying trend, 70 moving average. And so what you can see is indications that if the Fed tightens, the dollar will go up because the dollar is very sensitive to those movements. So I think that's one of the things we've got. We've got to look at now to come back to your key question about what happens to gold. And let me try and let me try and answer that question in terms of China. Now, what this bid is called is China's great debasement. And my view, which is probably nonconsensual, let's say, is basically saying that China has got a whopping great debt problem and China has to inflate that away in the same way that everybody else has to inflate their debt problems away. But China's are more challenging. And what you're seeing or what you have been seeing in the last few years is evidence of a significant debasement of the Chinese yuan. And that is why the gold market is going up. Now, let me just explain what is what is going on. And I'm going to just to move to this chart. This chart is looking at liquidity injections on a daily basis by the People's Bank of China, PBOC. The solid line or the heavy line is a 50 day moving average. And the sort of the the more the higher frequency data thinner line is basically a daily read on the change in liquidity injections from a year ago. The reason we're doing a year ago is there's a lot of seasonality in Chinese data and we need to strip that out. And that's probably the most convenient way of doing that because it's kind of difficult to do normal seasonal adjustment on that data set. So this is showing the direction of Chinese liquidity. So this is, if you like, the growth rate of what they're doing. And as you can see, from 2003 onwards, they've basically hit the gas pedal. They've been injecting a lot of liquidity into their markets until they stopped on March 2nd this year. Now, the March 2nd date, I think, is significant. That seemed to be when tensions with Iran heightened and the Chinese have basically slowed things down quite dramatically. They've hit the brakes in terms of their monetization process. Now, I'll come back to why in a second. But what I want to do is to move on to this chart, which is showing the gold price in orange measured in yuan, Chinese currency, on the right scale. On the left scale, what you've got is PBOC liquidity cumulative. So in other words, the previous chart was the rate of change. And this is the level. And this is shown against the gold price. Now, in my view, what's been driving the gold price higher is not debasement necessarily in the West, but it's debasement in China. China is the marginal pricer of gold in the world economy. The Shanghai market may be smaller than COMEX or London in terms of gold transactions, but it's the marginal pricer and it's becoming more and more and more important. And if you want to know what's happening to the gold price, look east, not west. And that's that's the story. What you've got going on in China is you've had a big expansion in liquidity that has driven the gold price up. There's been tremendous buying, not just from the authorities, but mainly from retail Chinese. That is their monetary inflation hedge. They tend not to go. I mean, real estate is clearly oversupplied. So why go there? The stock market is not, you know, not so widely owned. And so what they do is they're buying gold. And you can see that those in the inflection, the latest inflection in the gold market corresponds to China hitting the brake. Now, if I go back to the chart here on liquidity, why have they hit the brake? I would argue it's because of Iran. This is the up to date data, which is showing what's been going on. You can see that peak that's occurred around about the early part of March that was coinciding with Iranian tensions. I believe what the Chinese have agreed with the US administration is that they would basically slow down their energy use. Is there precedent for that? Yes. They did that once before in size ahead of the Beijing Olympics in August of July, August of 2008. They were concerned about the pollution that the rampant Chinese economy would impart on the Olympics and potentially spoil a showcase event. So they slowed things down quite markedly. And this is what they're doing again now. They're slowing the economy, reducing oil use, running down their petroleum reserve. And so what we got to look at in the next few days and weeks is whether the Chinese start to goose the economy once more with more liquidity to get things going. And that's what I think you've got to start looking at as a marker. My view is they'll do that. But, you know, proof of the pudding is in the eating, as they say. OK, OK. Got it. And so since China is currently kind of pivoting on some of their liquidity injections. So in your view, this is why this is a big reason why gold is under pressure. Correct. Correct. And, you know, you can see the this is the chart that I draw of the yuan gold price. And you can see that various sort of technical levels. But I think what they've been doing is sort of marching the gold price up in terms of 5000 renminbi steps. And, you know, we've had a break of the 30,000. Let's see if that holds. That's really a key, a key level. And then, you know, divide that by seven to get where you are or roughly seven to get where you are on the dollar gold price. But in my view, it's China that's driving this. And I think what you're looking at ultimately is an evolution of the world monetary system into two spheres, one backed by U.S. treasurers and the U.S. dollar or one using sort of U.S. treasurers to back the U.S. dollar and the other using gold to back the Chinese yuan. And this is the world we're looking at. So it's not just private individuals in China who are buying gold as a monetary hedge. It's also the government who are buying every month. They buy more and more gold in the open market to back their currency. And the reason this is happening is that China doesn't have the luxury of a big, well-known international bond market to back the yuan. They need something more tangible like gold. So this is, if you like, a step back to the old gold exchange standard under Bretton Woods. But China is sort of pushing us in that direction. It's not a return to a gold standard by any means, any stretch of the imagination. But certainly China is trying to use gold more and more to back the integrity of the yuan. And maybe it's succeeding. OK, so curious in how low do you think gold could go in near term? And then also earlier, you mentioned longer term. You have an outlook on gold. Could you speak to that? Yeah, look, I think that if you look at the in terms of the short term, I think you can look at where there's support. And what I would look at is this chart, because I think it gives support much more clearly. I think there is a long, a lot of support around 25,000 yuan. So take that and triangulate that back into dollars. But I think that it's the 30,000 yuan level, which I think is key. And we've got to see whether that holds. And if I'm correct, that will be driven by what the PBOC is doing in the market. So I'd be looking pretty closely at their repo operations. And I think that that 30,000 is a key line in the sand. But, you know, hey, you know, markets are here to fool us. So let's let's watch very closely. I think in the long term, I think really quick for the audience. So twenty five thousand yuan, that's about thirty seven hundred US and then thirty thousand yuan to USD. That's about forty four hundred US. So, yeah, just want to share it with the audience. Go ahead. Yeah, yeah. So that that's what we've got to start looking at. But I think that increasingly we've got to start thinking about gold being priced in yuan because these guys they're the marginal buyers. So I think that, you know, that's important. What about longer term? Well, you know, I think the question is, how long is a piece of string? And, you know, what you've got is ongoing monetary debasement. And if you've got ongoing monetary debasement and that debasement is related to the debt GDP level of of the advanced economies in the West or it's the debt GDP ratio of China, I think you've got to say that the gold price could be substantially higher in the medium term. Now that, you know, on my back of the envelope calculations, that would suggest that, you know, sometime in the mid in the mid 2030s, we're getting up to easily 15000 US dollars per ounce. So I think the gold price has got to has got to be moving up substantially from here. And although people think, oh, you know, whistle and say, this is just pie in the sky, it's never going to happen. Well, you know, look at what's happened in the last 25 years. I mean, the gold market's gone up, what, 12, 14 times since its level in, you know, in year 2000. So you've got monetary debasement over that period. You've got monetary debasement going on again, simply because there's there's no way that anyone can afford the commitments that are being made. And, you know, you look at you look at the world as it's shaping up. Now, you've got, you know, welfare commitments that no politician is going to renege on anywhere. No one's even talking about stripping down welfare payments. And, you know, the U.S. has clearly got a got a big bill with Medicare, Social Security. I mean, Europe is unwarranted. I mean, this is the they've really created a big problem. On top of that, you've got defense spend. You've got an interest bill. I mean, the Europeans haven't started to defense spend yet. They've been sitting on the writing on the coattails of America, not realizing the commitment that America has been making to them. And now you've got Europe having to foot its own defense bill. And that's going to be a big problem. It's going to be very, very unwelcome. And it's potentially a splitter of the European, you know, of the EU. I think ultimately we're looking at a slow unraveling of this. So that's one of the reasons that makes me sort of negative on European currencies. But, you know, ultimately, what's going to happen here is a lot more money printing, because this is the easy way out. Politicians have shown the cut their colors, you know, twice in big size after the GFC and after the covid crisis, where they just basically let the money printers work. And that's what's going to happen again. And that's why I'm saying if you go back to the inflation picture, you know, they'll tell us that our inflation rate is two point eight percent. But everyone's going to ask, really, what's my personal inflation rate? It's certainly a lot more than that, because there's hidden inflation in the system. And what you've got to try and protect against is that worrying of the money printers. And, you know, although it may well be that, you know, if you're looking if the genuine CPI consumer price basket is three percent or so, that's the way you protect your real incomes or you measure your real incomes by looking at that basket. But the way that you think about your wealth is against monetary inflation, which really means against the gold price. And that's the best way of saying, you know, what's going to happen if monetary inflation is running at eight to 10 percent, which I think is a realistic figure in the light of all this debt that we've got to devalue and repay and an issue. If that's the benchmark, that's what the gold market is going to rise at in the medium term. And if you're growing at, you know, just over 7 percent, I mean, you're pretty much doubling every 10 years in price. And that's what you've got to think about. So I would be a big advocate of buying gold at low levels. The authorities keep telling us that this is a sort of a, you know, busted flush. This is, you know, a bad asset, you know, the barbarous relic or whatever they talk about. Boy, it's been a good performer. Yeah. Yeah. Yeah. Definitely agree with that. So do you have any view on Bitcoin? I like Bitcoin long term. I don't like Bitcoin short term. And I think whereas you've got ballast in the gold price, because I think the Chinese are going to end up in the situation where they've got to print money and that may be holding the gold price up and you've got demand coming from the authorities to try and back the yuan with gold to some extent. You don't have that in Bitcoin right now. And Bitcoin is highly cyclical. My view through this year has been this is not a great year to own Bitcoin. We're down substantially. But I think you just got to think about what happens if there is more monetary tightening going on and just go back to what we saw in 2021, 2022, when the Fed hit the brakes. Then Wall Street was down 25 percent. Bitcoin was down 75 percent. So is there further downside in Bitcoin? Yes, I think there is, unfortunately. Should you be accumulating? Well, never catch a falling knife. But if you start to see evidence of Bitcoin bottoming out, then I'd be moving back because I think the long term looks pretty good. But the short term, no, I'm not there. Got it. Yeah. Thanks. Thanks for sharing that. Well, Michael, I appreciate you for coming on the show and giving us your your take, sharing these slides with us and everything. Looking forward to having you back sometime. I mean, I know that these these markets and data is constantly shifting, constantly changing. So where can people connect with you, subscribe to some of your publications, things of that nature? Well, I think there are two routes, Daryl. Thanks for mentioning that. One is Capital Wars, which is a substack publication. We write three or four times a week on both narrative and provide data on what's happening to global equality, asset allocation, et cetera. We've got a website which goes under the name of GL indexes dot com, which is our data provision. We supply both narrative, but more particularly data for institutional investors. So we cover over 90 financial systems worldwide providing data on what's happening to liquidity through that. OK, well, you all have that information. Michael, we definitely got to have you back on as things continue to unfold and to revisit some of your calls and you all be sure to hit the subscribe button if you haven't subscribed yet. Love to have your support and thank you all for watching.