[New post] Robert Kientz Gold/Silver Supplies Won’t Last
User ID posted: " https://www.youtube.com/watch?v=NGXqxim9dvY Gold/Silver Supplies Won't Last | Robert Kientz by Liberty and Finance Are gold and silver markets manipulated? It's debated. Learn more: https://is.gd/gold_manipulation "When people run for the exits to"
"When people run for the exits to get out of the system in a Dollar crisis," says Robert Kientz of http://GoldSilverPros.com, "physical precious metal inventory to the retail investors is not going to last past a few days to a week."
Regarding recent price action, the recent price decline in gold and silver does not seem entirely natural market movement. He explains why manipulation is an answer to why metals have fallen recently.
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See Full Interview Transcript Below
Elijah Johnson: Hey, everyone, this is Elijah K. Johnston with Liberty and Finance. And back with us today, our good friend, Robert Kientz, from Goldsilverpros. Robert, thank you so much for joining us today.
Robert Kientz: Thanks for having me on Elijah.
Elijah Johnson: Definitely know, I'd like to talk to you about this price smash, as you've called it, with respect to gold and silver, we're seeing silver, you know, it's bouncing back today, as we record on the 13th. But it you know, it's hovering just below the $24 level, gold is just you know, about $20 below the 1800 level, what do you make of at the start of, you know, Sunday night when we had the market open? We just saw a precipitous decline in both gold and silver and continued into Monday. So what do you make of what we just saw?
Robert Kientz: So the conventional reason given for that, and I had a guest on my show Lobo Tigre explained this is the jobs report at the beginning of each month, you'll have the jobs report in terms of our overall unemployment number. One of the points that Lobo made was when you get a very positive job report or unexpectedly positive job report like we did the last week last Friday, it tends to affect the currency markets and therefore gold. And I do agree with that. I do think that traders trade the currency pairs like the USD, Pound, Euro, USD, all those based upon jobs reports, because I used to work in the currency field for a currency broker. And that used to be one of the easiest trades to make every month that you trade the jobs report. So I do agree, and it does affect gold, because in a short term basis, the dollar and gold are correlated, meaning when the dollar goes up, gold goes down vice versa, not necessarily in a long term basis, but short term. So looking at the short term, yes, that would have affected dollar to the upside because of more positive job growth, gold to the downside. The one issue I have with that argument, however, is that there are two things one, there was a fate and gold leading up to the jobs report because I think everybody expected a positive jobs report Why? There's been a lot of headlines in the news talking about a shortage of qualified positions, meaning more open jobs and people available to fill them, especially in the educated type jobs where you have to have some sort of degree. And so I think everybody expected there to be a more positive jobs report based upon that. And so you saw a fade and gold leading up to that jobs report last Friday. So that when you had that big smash down overnight, all at once, it didn't make sense that some of that jobs report expectation hadn't been baked in. And further, why wouldn't you have seen it on Friday, because the jobs report comes out early enough. In the day that you would have seen some of that trade on Friday. What we saw is it traded after hours for the US market and in other markets. And it in it, it was a precipitous match. Now there was about $100 flash crash in the price of gold into the 1600s. At one point before it started rebound now it has rebounded as I'm looking at the prices now and go price.org, we have gold trading at 1777, silver at 2373. This has been a nice rebound the last couple of days. So I do think that the jobs report did affect gold and silver. I don't think it affected it as much as what we saw. And I think that there was a tremendous amount of paper in the derivative market, especially in in the United States dumped at that time. And it's a relatively thinner period in the market. And it doesn't, it doesn't coincide with the conventional wisdom. Thankfully, however, we've had a rebound. I think traders realize that even though we had a positive jobs report, overall, in terms of the overall labor force participation rate, we're still at about the same level even a little bit less than during the last financial crisis. 2008 2009. So we haven't really made a big recovery even though we had a positive month. So I think traders putting things in perspective has led to the rebound in gold and silver this week.
Elijah Johnson: We also got the inflation numbers recently and you know, 5.4% for the month of July annualized. So your perspective on that. I mean, it seems like there are so many bullish fundamentals for gold or people. Is it because of manipulation we're seeing gold, not rise on that Is it because people are thinking inflation is transitory? What is your take?
Robert Kientz: It was funny. Powell came out recently and tried to take both sides of inflation argument. And this this video is on Twitter and YouTube and things you can see it. He tried to say, Well, yes, there's some inflation, but it's transitory. And we don't expect it to continue. But we'd also don't expect the prices to backtrack to where they were before. So basically, what he's trying to say is that inflation is baked in, and that's now the new base of our consumer prices. We don't expect it to fall, we don't expect deflation and prices. But it's transitory we can't have it both ways. And that was before the inflation print came out and looking at Wall Street Journal's 5.4%. for July, that's the fourth straight month, month, in which we have had much higher than normal inflation, especially in the last, you know, since the last financial crisis, when we've had easy monetary policy, growth through that easy monetary policy, and the amount of money printed, did it affect prices until after the 2020 pandemic, when the 2020 pandemic hit, we created 40% of all the money supply in the United States history in one year 40%, meaning we almost doubled it in one year. And that began to hit at the beginning to hear the producer price index. And then it started to hit now the CPI. And so yes, now inflation is here to stay. And I think that's why the gold price is rebounding because forget the short term jobs report which is affected one month only, and hasn't demonstrably improved the plight of working Americans over the last 10 to 12 years, the inflation numbers are much more significant. And that's why you're seeing a boost in the gold and silver price. And I think that's rational market behavior. And I think, like I've stated I don't expect inflation to subside anytime soon, because of the amount of money printed that is hitting consumer prices, I think that's going to continue, the only thing that would stop it is the Fed, tightening and restricting. But if they do that they risk that 20% stock market crash. And we saw in 2018 when they did that. So Powell has to speak out of both sides. Because he's not trying to spook people and he's trying to manage the situation, what he's trying to do is gain manage the situation with the inflation rate and the economy. But wise people know, inflation is here to stay for at least a while. And it's going to take a while for that to work through the system and reach some sort of price equilibrium. So I expect gold and silver do well. And just in terms of gold and silver, I expect them to do super well, for the rest of the year, because you got the lead trade coming. You've got all of the Asian nations that use gold in their ceremonies, you've got people buying for, you know, jewelry in the US for Christmas and things. So you're gonna see an increase in the price of gold and silver going forward.
Elijah Johnson: For clarification on what maybe Powell was saying, was he saying that we're seeing this increase in prices, but the prices are going to plateau, so the rate of inflation is going to fall. But we're not going to see prices go back down, we're not going to see that deflation. So but your view then is that nowhere continue going to continue to see prices rise, the we're not gonna even see that plateauing of prices.
Robert Kientz: I agree 100%, I think prices are gonna continue to rise until you see producer price index has come down because producers have to pass the price on, they could do it a couple of ways. They can pass it on terms of higher net prices. So instead of paying $1 for a box of crackers, you pay $1.10 or shrink-flation they can shrink the sizes and packages can get smaller quality of product can go down. Those two, two things are actually all happening right now. And people go the grocery store noticing that and starting to put that up on social media. So however, however, he tries to speak about it, it's blatantly obvious that inflation is not going away, at least in the short term.
Elijah Johnson: To my original question, the reason that gold and silver are not rising at this point, is it because of the manipulation? Or is it because they're buying into that story of transitory inflation that prices are going to plateau.
Robert Kientz: If you look at the gold and silver prices, they are down month over month. So at this point in July, gold is trading at 20 1830. Silver was between 26 and 26.5. They still have not recovered to their July prices, so they are still trading down. The traditional explanation for that is the summer doldrums, which is typically the slowest part of the gold trade and a silver trade doesn't really affect silver as much because it's more industrial. So I think that's kind of covered. I do think there's manipulation. I think it's obvious the amount of paper that has been up not only overnight, our Sunday Monday, but that has been dumped in the last month has been extraordinary. It's many multiples of actual mined supply. And so you have to go back to understanding what this market is the comb x is a derivative market. It's paper, it's speculation, it's bedding. And right now it's provide an opportunity for physical investors to get a cheaper price because like I said, you got to love trade coming up. The next five to six months tend to be very positive for gold and silver historically. So I expect the prices to rise naturally. Even if derivatives markets they'll rise. So now's a buying opportunity. But there always be manipulation. Think about money. Inflation is very short term. If you look at gold, gold has out produced most of the major stock indexes since 2000. So even though manipulation has occurred, and I think it's pretty obvious when you look at the data, they can't stop the long term price trend of gold. So what I tell people is don't get too wrapped up in these flash crashes. And don't get too wrapped up when gold runs up 5060 bucks at a time look at the overall trend of follow that overall trend.
Elijah Johnson: I think that's so key. And a lot of people have pointed out that these pull backs, or if it is manipulation, regardless of what it is, it's a buying opportunity, because it looks like precious metals are going higher in the future. And like you're saying, the inflation, if it does continue, I mean, it's people are going to realize that they're going to realize that at the grocery store, and ultimately people are going to realize that inflation is here to stay.
Robert Kientz: Yeah, I think inflation is here to stay. I think Sally homemaker knows it. People to go to the store people that have to repair their cars, all prices are going up. Not only that, the funny thing is, I think this is related to the shutdowns in the district the supply destruction that occurred last year in the beginning of this year. It's hard to find furniture. Now I just had this conversation with a bunch of friends. I wanted to buy some bookshelves, it's taken me a month to look at bookshelves, and I'm waiting an extra month for those bookshelves to actually be delivered. So there are a lot of goods in society, they're getting hard to harder to find. You're also finding certain types of labor much harder to find educated labor people degrees or highly skilled workers like plumbers, electricians, and things, those are getting hard to find. And what happens was when you shut down the car, this is the unintended consequence of shutting down the car. When you shut down economies. It kills supply, and it also kills labor skill growth. So now we're that we've reopened, we're trying to catch up to all of that that was destroyed last year. And that's causing shortages in goods, which is going to cause a rise in price. If you need to call a plumber instead of $150 an hour, maybe $200 an hour $225 an hour. And so for that reason, prices are rising. The question really is how much of this is caused by the restart and the base effect of restarting with supply destruction versus all the money printing that occurred in 2020. And how much that is coming in to the consumer price indexes, that's going to be key. If it's if it's more supply destruction, then inflation will start to wane over the next few months. As we rebuild our skills, start filling jobs, you know, building more furniture, getting more lumber, things like that. If it has more to do with the money printing that occurred in 2020, remember, almost half of all in one ever created was created in one year last year. If it has more to do with that, then prices are gonna keep continue to rise. Because if you have 40% of all m one currency created in one year, how long does it then take for that money sloshing around the system to work through, before prices eventually come down? It's going to take a long time, I would expect four to five years at least
Elijah Johnson: it is just crazy to imagine and crazy to understand how much money was actually created or currency was created last year alone. And you mentioned how that's a long term process for that money to actually work through the system. These supply shortages and stuff might be able to get fixed pretty soon. But if the inflation is fundamentally coming from the increase of the money supply, this is inflation here to stay, essentially. And I guess, in your perspective, then is it best then to own physical precious metals to protect against this kind of inflation? Or what is the best way to kind of protect against this inflation? On a personal level?
Robert Kientz: So that's a great question. It's something we talked about on our Arcadia Economics. Last night, I was on with Chris Marcus and Andy Schectman. for miles Franklin, we had this very debate. And what I said was go the physical first, because when I talked to Andy, on our video, which will premiere on Saturday on our channel, when I talked to Andy he said, all the major distributors in United States, they may have between three and $500 million of inventory sounds like a lot. But when you look at the overall size of the economy, trillion dollar economy, trillions of dollars being printed every day, it's a drop in the bucket. And when people start to run for the exits that $500 million, even if you double I told me even if you double it $2 billion, and you're being very conservative in your estimate, let's just double and say a billion and a multi trillion dollar economy with all those trillions of dollars printed in the last few years, when people run for the exits to get out of the system in $1 crisis, that 500 million to a billion dollars worth of physical precious metal inventory to the retail investors is not going to last past a few days to a week and it's gone. And wait until you see the pension funds starting to get in there. Wait until you see a lot of hedge and hedge fund managers. The hedge fund managers don't take delivery of physical precious metals on the COMEX. They're playing the price limits what happens when they actually want the physical, they're gonna go get it, they're gonna take it off the committee here in Stanford delivery, they're gonna try to go buy 1000 ounce bars of silver, you know, in 400 an ounce or 100 ounce bars of gold wherever they can get it and when they can't, they're going to come to the retail sector are going to take whatever they can. So the amount of physical available seems like a lot because premium come down, but in any sort of financial crisis, it is not. So my recommendation always is go physical first, always, always, always. Then you look to the mining stocks, because mining stocks have the gold in the ground, the silver in the ground is coming back out to replenish supply and it also gives you leverage. So there's a couple of ways to do it, but always do the physical first. And don't wait, what I said on Arcadia Economics last night, do not wait. If you wait until the point in which it's obvious to everybody, including your cab driver and your hairdresser and your plumber, that we're having a financial crisis, you will not have a chair when the music stops, you will not be able to get that golden silver, you must do it now. And the flash crash is a blessing Elijah, it dropped the price of gold 100 bucks go buy more. Use it as an opportunity, you know, it's not going to stay there.
Elijah Johnson: Right. And obviously, we can't give financial advice on this channel. But you know I've talked with Andy Schectman, quite a bit about this very topic of like, does it even matter? what the price is, you know, should you wait and stuff like that? And one of the things that is key is kind of Well, do you have physical metal? Right? Do you have that because first and foremost, physical metal is there as insurance, right? And it doesn't ultimately matter what the price of insurance is going to be. You just want some right. But once you have that core position, then you can kind of take advantage right? Look when the price is dropping and buy on those dips and stuff like that. But I think that's so key that to remember, you know, it's important to have insurance, insurance first and definitely not to wait on getting insurance.
Robert Kientz: You buy the insurance before you have the car accident or the fire and I'll use a lesson from when I was a real estate investor was for 18 years in North Texas had two companies. A one or two years before I ended up selling everything else is about 2016-2017 timeframe, I had a fire on one of my properties, there was a rodent that had gotten into the house and had chewed on a wire behind the stove 10 or 40 volt wire behind the stove and started a fire. And I wasn't there it was the tenant had just moved out. We were doing our make raise to move in. And thank goodness that tenant was not there. It could have been catastrophic. If people were in the building. We were doing our mech readings, it occurred overnight. Nobody was there. My neighbor called me at three in the morning said, Rob, your house is on fire. I drove over as the fire engines were trying to put it out. And if I had an insurance, it would have ruined me on that property. So the insurance was there to protect me in case of fire. Well, that's what gold and silver is it's there to protect you in case of a financial system fire or some sort of Black Swan event. And the Black Swan event doesn't have to be a bank failure. It could be riots coming to your area, we've seen that recently, some sort of unrest, some sort of stock market pullback, you know, gold and silver protects you for all of those things. Not only that long term, it's wealth storage that Andy always likes to say, to pass on to your air. So whether or not you think that we're headed toward another financial situation, it doesn't hurt to have some precious metals because they stand the test time that have for 6000 years. And it's a good thing to pass on due to errors if you want to save. And it takes all the rest of the banking system out. When you have that golden silver, you don't have all the risks in the banking system, whether they're liquid or liquid or somebody defaults. Or they have to have a bank holiday we sent all those things in history, gold and silver, are insurance against all of those things.
Elijah Johnson: Robert Kientz has been a pleasure having you on and having you share your insights with us. I guess before we let you go, if our viewers are interested in more of your work, where can they find you?
Robert Kientz: So you can find me on goldsilverpros.com. And if they want, we have an upcoming virtual conference, the 19th and 20th of this month, the money metal summit. You can find that information on our website and on our social media.
Elijah Johnson: Perfect. And I believe Andy Schectman is going to be there as well for miles Franklin, is that right?
Robert Kientz: He will be there representing Miles Franklin and a lot of other golden silver experts that we see on your channel and on other channels will be there as well.
Elijah Johnson: Fantastic. Any last thoughts you'd like to add Robert?
Robert Kientz: Last thing you asked me before the interview about Basel III, and there's not a big update to Basel III, there has been a little bit of argument over whether or not it's going to affect silver, platinum and palladium as much as gold? I say no, because the gold market is bigger. And because gold is called out in Basel three as a potential high quality liquid asset. The other precious metals are in there, but they're really secondary markets to gold. So I want to answer the question because I get it so much. Yes, I do think that if Basel III effects, especially the London OTC market it Yes, it's going to affect so we're planning to play it but it will affect gold more. And I just wanted to clarify my thoughts on that.
Elijah Johnson: And I know we talked about this last time, it's going to be more not an immediate effect. It'll be kind of over a year or so. Is that still your view?
Robert Kientz: Yeah, I think it's gonna take a while. I think essentially what it is, is, other players in the market outside of London are wanting to become more prominent. And so I think you're going to see some of that trade move out of London, but I think it's going to take time.
Elijah Johnson: All right. Well, Robert kings once again, thank you so much for your time and God Bless.
Robert Kientz: Thank you.
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