GOLD & SILVER Is About To SKYROCKET! Big TROUBLE Coming For The Real Estate Market!

GOLD & SILVER Is About To SKYROCKET! Big TROUBLE Coming For The Real Estate Market!

hello everyone thanks for joining and welcome back to Wall Street Silver Our Guest today is my great friend Adrien Dave from Adrian day Asset Management Welcome Back Sir well thank you Ivan thank you for having me yeah it’s always a pleasure having you come down to Wall Street Silver first and foremost I wanted to say what is happening in the world you see the gold markets the silver markets uh going crazy uh lots of central banks are buying gold at alltime record alltime highs uh what do you see happening with gold silver from now to the end of 2024 yeah yeah well just to set to SC as as everybody knows you know we went from 2000 to 2400 in basically three months that’s an astonishing move for an asset like gold especially when the dollar was staying strong it wasn’t caused by the dollar collapsing you know for for for an insurance asset a defensive asset to move like that is really astonishing we all know the reasons I won’t go into it so we pulled back from the 2400 level we’re now just but you know just above 2300 as we talk um but you know again that’s that’s not surprising given the move we’ve had and I would characterize it um as gold is is really resisting dropping you know it’s it’s it’s it’s it’s dropped whether in Asia or in Europe or in the US it’s dropped in one of those markets and then slowly recovered you know some ground so it’s really resisting dropping and I think frankly that just speaks to I think that speaks to the demanders out there for gold so what what what I see for the balance of the year you know as we’ve said at the moment it’s the vast majority of buying in the last three months but also in the last 18 months but particularly let’s say this year has been central banks and Chinese Savers right we shouldn’t ignore the Chinese Savers because you know they’re concerned about their economy they’re concerned about the Juan devaluation and they’re concerned about uh the fact that China might be introducing easing measures and they’re looking for a way to protect their purchasing power and they’re not going to put their money in the bank they’re worried about the banking sector they’re not going to put their money in real estate which is where Chinese people traditionally put their money and they’re not going to put them in stocks with the stocks as low as they are some of us going into stocks we’ve seen a rally in in in Chinese stocks in the last couple of weeks but most you know most of it is going into gold they can’t put it into Bitcoin as you know or cryptos they’re banned so most of it is going into gold and when you look at those two buyers they are driving the market they have been driving the market they have a vast majority of the Buy that we’ve seen this year uh and uh central banks for last year right when we see as we will when we see a shift in sentiment among Western investors that’s institutions and Retail which we haven’t seen yet remember we talked about this last year the outflows from ETFs we are still seeing more outflows from gold ETFs and we’re seeing inflows which given what gold is doing is really quite astonishing we’re still seeing very low premiums on coins and low deliveries from mints so the demand among retail among institutions is just not there when sentiment changes then that is one whole new wave of buying that will come in and and I think the Central Bank buying is going to continue not at the same rate it did last year I don’t think that at all I think we’ll see this year I think this year we’ll see net buying Strong net buying but considerably less than last year and the year before but when we have a new wave of buying from Western investors institutions and Retail then I think gold and silver both are going to move meaningfully of this year so where will we end the year I don’t know I mean you know I don’t know who it was was it baram or someone WC Fields I don’t know but someone said if you’re going to make a prediction don’t predict price and time yeah that’s true but um I think we’re going to be higher than we are now at the end of the year and a lot depends on the dollar you know the dollar is so strong because Western investors are going to be price sensitive in a way that but Chinese sa who simply wants to get his money who wants to get his money somewhere safe and out of a banking system is is I would say absolutely price agnostic but they’re less price sensitive and the central bank that’s worried about the US stealing our assets they are less price sensitive but you Western investors are going to be more price sensitive um so a lot will depend on what happens to the dollar do you think the do you think the US Dollars like the strength of the US dollar is all an illusion because uh just from 2020 till till this till today uh the US dollar Adrian has has depreciated by 25% from 2020 just to just four years right but you look at the last let’s just pull it up look at the last six months and we are basically at a high uh for the last six months um I mean it’s come off in the last few days but other than the last few days you know we’re at a six-month High basically in the dollar right that’s that’s what I was meaning I wasn’t yeah yeah that makes yeah that makes sense but if gold keeps going up while the US dollar is strong what happens to to Gold you know as the US dollar goes down it’s just of course yeah yeah absolutely I mean that’s the thing about gold and silver right now is the strength is in the face of a macroeconomic environment that should be negative for gold right you know a strong dollar a aggressive rate hikes and rates still high and the FED pushing back on cutting rates this year so all of those things in a quote normal environment or if you are only looking at the macroeconomic environment gold should be falling and significantly lower than it is right now do you think buying pressure is it just the buying pressure that’s uh just incredible right now from central banks and countries is that what’s keeping it up I I I think it’s yes absolutely it’s it’s it’s h it’s for buying pressure central banks and and and Chinese Savers and also so it’s clear to me that there are some big buyers in the market in Europe as well as the us but primarily in Europe as well as middle easn Asia some big buyers who are concerned about the fragility of the financial system frankly right I think we probably discussed that last week but and again if you’re concerned about the fragility of the system and you want to start getting some money out of financial assets and into something that will hold up in a financial crisis again you’re less sensitive to price than a typical investor right um yeah so it’s that buying pressure that’s that’s pushing it up and what do you think a lot of the CH chatter lately has been talking about you know delinquency rates and what’s happening uh like right now office delinquency rates the floating rate office cmbc the loans hit 20% so uh you know they spiked to 20% recently and in 2012 and 2013 it says the delinquency rates of office cnbc’s eventually exceeded 10% is one of the many consequences of the financial uh crisis so now we’re seeing it at 20% these delinquency rates what what does that tell you there yeah no I mean it well it tells us what everybody knows which is commercial real estate is in a heap of trouble right and it’s it’s obviously the the the the remote work hasn’t helped but that’s only one part of the equation you’ve also got the equation that so much so much real estate was was purchased on excessive leverage by borrowing when rates were you know at zero or 1% and obviously rates moving up has not helped at all so everybody knows it’s in trouble um except it seems the banks and the banking Regulators because they’re still holding most of it um at book right so they haven’t marked down at all by and large by and large I shouldn’t say haven’t marked down at all but but I think a lot of a lot of the loans on Banks and also the insurance companies um are being held at artificially high high levels in a you know defer and pretend absolutely do you think do you think that uh like do you know or do you like do you have any idea of when these banks have to uh make these losses realized because now it’s unrealized losses but do you know any by any chance when like does it take a year or like how long do they get to just keep it on the books as unrealized losses um no that’s a good question there’s two two answers to that one answer is when the banking Regulators come around and start looking at looking at the loans and telling them they have to mark them down which is what we saw in 20089 right I don’t think they’re going to do that right now because the banking Regulators have to know that the banking system I’m not talking about Chase you know but a lot of the banks even some of the bigger Banks but a lot of the banks are are are are in a fairly precarious situation right now I don’t think the banking Regulators want to force those kind of cuts on them that will that will drive some banks to you know into the arms of the fdac right the other issue of course is if I’m if if I’m A lender I mean if I’m a borrower from your bank and I default then at that point you have no chance you have no option but to but to uh write it off make it realize like if lender who gave the lender money but wouldn’t that but the bank wouldn’t have to make the because if it’s a central bank or if they’re giving loans would they have to are they the lenders the bank no the banks are the lenders so I I would go to the bank and I’d say listen can we can we cut the interest rate can we term you know make it a longer term on a debt can we renegotiate right and most banks are going to go along with that at this point because they don’t they want to avoid writing the loans off so you’re saying that the lender the lender the lender will cut the rates if the client comes to them and says because they don’t want it to be a or in yeah in certain circumstances I mean if you if you think the the borrower is just playing bankrupt there’s no extending extending it so what H what happens if like all these people start going bankrupt like are those start you start seeing bankruptcy because they can’t afford these high interest rates and they own all these properties and you start seeing a domino of all these not just Banks but like regular people start start going bankrupt one after another then they they just realize losses just like that you you mean something broader than commercial real estate all over yeah yeah everyone Real Estate Investors well yeah I mean obviously if if I can’t pay my um mortgage or I can’t pay pay my car loan um you know if it’s if it’s if it’s collateralized against an asset the bank takes the assets right but Banks as you know don’t particularly want a portfolio of of broken real estate and old cars you know that’s not the business like let’s say let’s say I’m a private investor and I have hundred let’s say a billion dollars in commercial real estate but now you no longer can afford these loans and interest rates at these rates and you’re starting to make crazy losses and then you go bankrupt on that but that does the bank and the lender and the the do they declare that as a realized loss now well they would have to they they would try to you know they would try to re they try to negotiate with all of the borrowers because it’s typically more than one um all of the creditors whatever other creditors there are if it went to bankruptcy you know the whatever whatever assets that that L that borrower had would be spread among the creditors and the lenders and then the bank you know the banks would be left with the real estate and they would try to find a buy at at the best price they could get absolutely which in this market is not good yeah yeah especially not in this market before you uh go Adrian do you have any last words for Wall Street Silver any good anything you good anything like on your mind what do you have to say yeah I mean one thing I do want to you know I’ve been saying for some time that I think the US is heading towards a recession I I I don’t think we can avoid it um uh and and and but but two things on that one is you know the lower half of the income um are are in much more trouble than the upper half and particularly the Upp 20% um so so when people say to me well the economy is doing great the econom is doing great I say it might be doing great for you but it’s not doing great for 50% of the population that’s one thing the other thing though is when you and we’ve said this before but when you have Ultra easy money for so so long and we had Ultra easy money from 2009 all the way through to 2022 and particularly after covid but you’ve got that easy money for so long and interest rates they were zero lower Bound in the US for a long period of time where people could borrow money particularly they collateral at very low rates then it takes longer it takes longer for the impact of higher interest rates to to show up in a recession but everything is pointing in that direction and if I may just just in in closing I know you’re in a hurry just no I’m not in a hurry we go another we can go another half an hour looking at a a specific look at the jobs report today the payroll report today on the surface yes the number of new jobs was lower than expected but you might say we’re still we’re still generating new J yeah wasn’t so bad but lift up the hood and incrementally incrementally everything is getting worse the unemployment rate ticked up a tenth of a percent admittedly and I can’t help thinking Jerome pal when he spoke on Wednesday Jan pal of the Federal Reserve head when he spoke on Wednesday he must have known what the unemployment rate was going to% because he said you know we’re not going to be worried if it ticks up by a tenth of a percent well anyway it ticked up by a tenth a percent um but then you look at other indicators like the hours worked was down because of slack work meaning companies have an employee but they simply don’t have enough work for them so they work fewer hours um the other thing to watch is um uh the last two payroll reports they were revised downwards which is a a trick that the Bureau of Labor Statistics does fairly regularly these days it seems so why why do they revise them downwards well how how do they revise them well because they say they had more information you know the initial report is is based on whatever information they have and then they get more reports in and they analyze the data better and and they can revise downwards or upwards It’s Not Unusual to revise the prior month up or down but what we’ve seen for the last uh really for the last 12 months is we’ve seen two revisions um you know prior two months and last year something like so that’s that’s 24 revisions something like 21 of those 24 revisions were downwards that’s not a surprise it’s it’s I that’s not a coincidence it’s either an indication that the Bureau of Labor Statistics methodology is is inaccurate right or if you want to be a conspiracy person it’s a it’s an indication of something more nefarious but at any rate it’s definitely an indication that things are worse than the than the headlines first appear and of course I’ve said this before when when the job number comes out everyone looks at the headline and the first revision gets very little attention and the second revision gets almost no revision but both two months two months were Revis down Wards this month hours work downwards um so you know you had you have a lot of indications underemployment is up again that was the other thing I was going to mention so unemployment rate moved up a tenth of a percent but so did what they call underemployment right which is people working part-time so a lot of indications that the employment picture let’s put it that way the employment picture is not as strong as it a years and I’ve said this before you’ve got an unemployment rate but if half your people who are who are employed are only working parttime or are working two jobs to make it you know to make it to cover expenses that’s not a sign of a healthy employment picture so the employment picture is a lot worse than it first appears and the second point is that it is slowly deteriorating but again when you had all these handouts particularly covid handouts to individuals not to have to work handouts to companies but got reimbursed for keeping employees on well obviously obviously you’re go obvious you’re gonna have you’re gonna have consequences it’s well and it’s going to take longer for those consequences to become apparent that’s even that’s even worse yeah so so I I think I think the economy is slowing and you know it’s very clear from from Powell as well as some of the other fed members but but but they really well from Powell in particular he really wants to cut rates but he wants to do it when this when economic reports allow him to do it which is simply not doing at the moment right um but but I think at some point this year the the the at some point this year the economic reports will be weak enough that he can justify cutting and remember why he wants to cut or why they have to cut I should say is not because the unemployment rate is sticking up by a tenth of a percent is as he nicely put it shame if you’re that tenth of percent that just got laid off but anyway and it’s not because the employment the um econ economy is sort of slowing a bit it’s certainly not because of a stock market but but they have to be concerned about the federal government budget they have to be the interest that the government is federal government is paying on its debt that’s why Jen Yellen went to China two weeks ago to beg him to buy to buy our treasuries interesting that’s why the FED announced this week why why Jerome poell announced that they were cutting back on their on their QT on selling off selling down their bonds remember they’ve been selling them down not by selling them but just by not rolling them over right they’ve cut that program from 60 billion a month to 25 billion a month this week why did they and and significantly he said we’re going to keep the program going on the mortgage back Securities but we’ll sell fewer we we’ll we’ll we we’ll sell fewer we we’ll roll over more treasuries right we’ll be selling fewer treasuries in the market why did he do that why because they’re concerned about the fraking treasury market there’s no one no one wants to buy them at these nobody wants to buy the like China is getting begged to buy them China yeah China’s got enough thank you they don’t want anymore Russia’s certainly not buying right and the people that are buying now are pre the foreign buyers that are buying now are primarily hedge funds that are not looking that are not looking to buy and hold that means that that Supply will be coming onto the market at some point and and they are very sensitive you know they’re not buying as a reserve asset um you know you’ve got hundred billion dollar to employ well you’ve got to put it somewhere in treasuries are an obvious place to put it but if you’re a hedge fund buying through the Cayman or through Brussels you buy because you think you can make money on the trade in the next month or two so you want higher rates right now absolutely well aan the wealth of knowledge that you give us is is such a huge pleasure uh you coming down to Wall Street Silver especially our chat today I think it’s it’s going to get crazy out there from now to the end of 2024 it’s going to get crazy uh where can people connect with you oh it’s U the website is www Adrien day.com perfect I’ll put the link in the description below so everyone can uh go straight to your website as well okay thank you awesome take care everyone thank you so much Adrian have a good weekend [Music]

Adrian Day returns to the show to discuss the intriguing dynamics of the gold and silver markets amidst global turmoil. Adrian discusses the central banks’ significant gold purchases, the shift in retail and ETF investments, and silver’s unique position compared to gold.

Adrian’s website: https://adrianday.com/

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► I am not a professional financial adviser, nor do I offer financial advice. This video is for entertainment only. Please consult your investment and tax experts for financial advice.

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