Transcript
This week, a company claimed it can make real gold out of mercury in a machine. And the internet and social media has decided what it meant because they looked at lab diamonds, which cut the price of diamonds in half. And lab gold is actually a real thing. So, does that mean we should all be selling our gold now before the machines make it worthless? And Winston's very sad at that prospect.
He's a golden retriever. So, should you be worried about gold? Many of you have been asking me that. And I'm here to walk you through all of it and actually separate the fact from the fiction. Because when I really sat down and did the numbers, I found something that was really not what mainstream media and social media is telling you.
So, I'm going to show you the real dangers. Yes. But also the opportunities. In fact, I want to walk you through some gold and silver and just general mining stocks because I think there is again a lot of pain there. And a lot of pain typically also means a lot of opportunity.
So, if you're wondering who I am, my name is Felix Nicholas Pin. I'm an economist and former investment banker. More importantly, that down there is Winston, who does all the gold research around here. And none of this is endorsed or sponsored. We never ever take money from any company ever.
And it means we can say whatever the heck we like, including saying the particular company sucks. And that's kind of how I like it. Now, there's going to be a lot of data in here. Literally a lot of data. Even calculations on this that you're going to want to understand.
So, download all of it at phoenixfriends.org/fake gold. Fake hyphen gold. It's completely for free proper research report. It's all out there. So, you can really absorb this and when people are talking to you about the fake gold thing, uh, then you'll be able to answer it properly.
So, download that. But let's forget the panic for a second and let's check the numbers. That's what I always do. Follow the money. Does the money make sense?
The company in question says it can take a particular type of mercury and turn it into gold using the same kind of reaction that powers the sun.
And this surprises people, but the physics is actually real. You really can knock a particle of one kind of atom and turn it into a different element. And alchemists have dreamt about this for about a thousand years. And this is basically the modern version of it and it works. So I'm not going to stand here and say this is a hoax because it isn't.
But they carefully leave one thing out of the headline. In their own best case, with everything going perfectly, one of these machines might make somewhere between two and five tons of gold in a year.
Now the world digs about 3 to 4 thousand tons of gold out of the ground every single year. and it's done so for a long time. So, one of these tiny little miracle plants running flawlessly would add very very little. Now, you could argue, well, they could make a lot of machines. True. But the real thing to understand is this.
There are no such machines. And the number of these fusion reactors, which is what they are, actually working and making power anywhere on Earth today is zero, which is a fairly small number.
So there is no massive flood of gold right now. But is one coming because the member of the market is forwardlooking? Well, let's understand the economics of this because the special kind of enriched mercury you need costs about $15,000 per milligram and a milligram of gold is worth about 14 cents. So the raw ingredient going into the machine costs them a 100,000 times what the gold coming out of the machine actually is worth. So it's like burning down a house to toast a single slice of bread.
Don't try that at home. But it gets worse for the gold doomers because the gold that comes out of this process is highly radioactive. Well actually slightly radioactive. Um, so it needs to be locked in storage for 14 to 18 years because before you could legally sell it.
Sort of, you know, the Homer Simpsons intro. So yes, in 2040 we might see some fake gold, but unless they can refine this technology, it would cost tremendously more to produce than the price of gold. So at the moment, this is a science experiment with a very, very good PR team attached to it. So the real question is actually why did this story appear this week and who wants you to act on it?
Because at the very same moment something else is going on and I'll come back to every piece of it. The people who run the money, the government's buried in debt, the big investment funds and above all the central banks, the giant national banks that print the money, they are doing what? Are they selling the physical gold? No, they're buying it at a record pace, more than they have in generations. And then there is the story to frighten the ordinary man into selling gold at the exact moment where they are buying it up, right?
Which is an extraordinarily convenient story. Maybe I should put my tin f tin tin foil hat on. But what I always say with investing or any decision actually, watch who is buying and don't watch what they're telling you. Don't watch the news. And at the particular moment where we are right now, the next few weeks matter way more than usual.
We have the American midterm elections coming up. And whatever side of politics you're on, the one thing every election reliably does is it opens the spending taps. More promises, more programmes, more borrowing in a bill that always always gets paid later um through well your savings. So, how you arrange your own money going into these midterms and what you do in the months immediately after is going to matter more than almost any single decision you could take the next two years. And I've studied the data and all the things are aligning in a particular way that make this midterm election, I think, the most glorious investment opportunity we've had for many, many years.
And I'd like to teach you that. I'd like to teach you the exact setup, the exact opportunities in a completely free live training how to invest for the midterms and beyond. And it's going to be free, no charge, also no replay. It's genuinely live and you need to show up to actually learn it. And I'm going to walk you through how an election year actually moves your money very significantly.
What kind of investments have historically moved first when the spending starts? and how to tell the real scarcity from the fake kind and how the professionals, the Wall Street guys are arranging their money right now before any of risk reaches the news or social media fod because reading this is a skill. It's a skill you were just never taught. You were taught a great many things at school, right? Uh that you've probably never used in your adult life. But nobody ever sat you down and taught you how money really works, how midterms and politics really, really affect your money and your wealth.
So, it's not your fault. But you might want to learn it anyway because, you know, they're telling us a lot of nonsense, but the actual data gives us a very, very clear story. So, go to midtermsinvesting.com, links down below in the description, and grab yourself a free seat and show up live. And if you're going to do that, write show up in the comments down below. I'm going to have some fun and I'm going to teach you a ton of stuff you weren't aware of.
Now, let's get back to the story.
Almost everything in your financial life comes down to a long slow war between two kinds of things. Things that can be created at will and things that cannot. The money in your bank account can be created at will. A government that owes far too much can just conjure up new money with nothing more than a keystroke. and it does and it'll keep doing that. It's just too tempting, right?
Imagine if you had a money printer at home. You'd say, "Okay, let's be responsible. You know, let's only print a certain amount, right? So we don't go crazy." And what do you think you would do the next week? Ah, it's just a little bit more.
Why don't we do a little bit more? A little bit more, right? It's like the crack addict. So the total amount of money sloshing around the system is growing at the fastest pace since co, which was the fastest pace in human history. Every major rich country is running some version of the same Ponzi scheme because their debts have grown too large to ever be paid back honestly.
And it's just tempting to go to every election and promise people free stuff is how you're popular. Sort of the incentive there. And they're not going to suddenly announce they cannot pay. They're going to pay you back in money that is worth less and less each year slowly over a long time while you're distracted by silly things like fake gold. So what's their only enemy?
Well, if you can print money, the only enemy is that the stuff you can't print. For 5,000 years, that thing has been gold. Not because it's shiny, although it's very shiny. It's very warm and nice when I like you, you know. Anyway, I get distracted.
But it's genuinely physically stubbornly hard to get out of the ground. It takes real energy, real machinery, real risk, and years to pull a single ounce out of it of the earth. I have a friend who's trying to start up a gold mine. It's taken him, I think, more than a decade so far. And that difficulty is the entire point.
It is the one honest unfable thing in a system built almost entirely on promises. And yes, I think they will make fake gold at some point. It's unlikely to hit us in the next couple of years. Just because the technology isn't yet there yet, does that mean it'll never happen? No.
And again, I don't marry an asset, right? I go with whatever the best thing is at the moment. But for the moment, the fusion story, what is it actually telling? Well, the cleverest people with the deepest pockets and the most advanced science on the planet are now willing to spend a fortune attempting to manufacture a tiny speck of gold. Why would they bother trying to do that unless the real thing was extraordinarily and increasingly valuable?
Nobody builds a machine to counterfeate something worthless, right? Nobody forges a $3 note. There is no $3 note, but you get the idea. The very existence of the attempt is the single loudest confirmation you'll ever be handed of what the real gold is truly worth. So, they're not ringing gold's death bell.
They're accidentally ringing the dinner gong. And this is where the diamond comparison, which is the one being used to frighten you, falls completely to pieces. because when you understand it properly, it proves my point and not theirs.
Diamonds were never actually rare. Let me say that again slowly because it's the whole trick. Um, diamonds are not rare. They are quite literally mountains of them. Back in the 1930s, one company, Debeers, came to control around 85 per cent of the world's supply of rough diamonds.
And what did they do with it? They held most of it back. They kept it off markets in warehouses and they released only a tiny trickle to keep the price skyhigh. And then in 1947 they ran one of the most effective advertising campaigns in the entire history of the business for words. A diamond is forever.
And we got breakfast at Tiffany's and many wonderful films. And they convinced the whole western world that a common lump of carbon was priceless, especially your wife. And they more or less invented the idea that you must spend two months or three months of your salary on a ring to prove that you love someone. And the scarcity was manufactured start to finish. It was a brilliant story propped up by a near monopoly and a genius marketing.
So what happened the moment somebody worked out how to grow chemically identical diamonds in a factory for a fraction of the cost? Well, the story break. The wholesale price of lab diamonds has fallen by 90 to 95 per cent since 2015. The parent company behind Debeers has written down $7 billion on diamonds. So it collapsed.
The scarcity was fake the entire time. So a cheap fake scarcity product was always going to shatter it. Right? So the lie finally met the truth. Now gold is the precise opposite in every single respect.
No company on earth controls it. No advertising campaign ever invented its value. Its scarcity wasn't a decision taken in some boardroom in South Africa. It's a law of physics and geology. And as you've just seen in painful detail, you cannot yet build it in a machine for anything less than a fortune.
So when someone looks you in the eye and says, "A lab diamonds crashed, therefore lab gold will crash." They're comparing a thing that was always fake round with a thing that is genuinely round. And that's the whole trick of one sentence. So when you see that story, when you hear it on the news, well, you will understand what's actually going on here. So the fusion thread is decades away uh and physically tiny. And the diamond parallel is backwards.
So the obvious next question is the most useful one you can ask in a market. What are the people with the very best information actually doing with their own money? Not what are they saying? What are they doing? Because that tells you more than a thousand headlines.
And the answer couldn't be clearer. The world's central banks, the very institution that create money out of thin air, have been buying gold at record pace year after year after year. If I look at the major central banks buying gold here in the win, Poland, Turkey China Russia Eastpakistan Kakan, Azabajan, Ghana, basically every country with a decent sensible central bank or government. So the guys printing the money who understand the value of money are buying gold. But at the same time, they're telling you inflation is, you know, two or 3 per cent or whatever, some small number that is going to make you feel warm and fuzzy inside.
But let me give you the measure that I actually trust because the official inflation figure gets adjusted and fiddled with and massaged until it tells whatever story that's convenient that year. So at the pre institute, we actually do proper research on this and we measure prices not in money but in time. How many hours does it take an ordinary person to work to afford the things that they're trying to save up for? Because your hours can't be faked or spun or printed, right? So it's a measure that can't be manipulated.
Now what do people want and say for a house, decent car, right? Bit of savings. And since 2000, what would have cost you a 100 hours of work now costs you 300 hours of work. So it's tripled. The price of the stuff you really want to own in life has just tripled in just 26 years.
And that, my friend, is the real tax. That's what they mean when they tell you inflation is under control.
Under control for whom exactly? Well, not for you. And then let's put the whole thing together because it is actually all one thing. Debts are too large to repay. Money is being printed to escape them.
And the very people doing the printing are buying gold. And then you get the story out of nowhere that's telling ordinary people, "Oh, gold is going to be worthless. We can now print it, right? You better hurry and sell." Well, you don't need to believe in some secret society in a dark room or something. You just need to understand who stands on each side of the trade and to make sure that the person handing over their gold for pennies at the bottom isn't you.
That would at least be my picture here. I'm a financial adviser. I'm not telling you what to do. You got to come to your own conclusions, but hopefully this will help you think this through a little bit. Right.
Right. I promised you something practical. Right. And I'm going to be very straight with you about it, including the parts that are less exciting. gold and silver and the mining shares have had an enormous run. Gold is still north of $4,000.
Silver more than doubled inside a year.
And when anything on Earth runs that hard, it eventually pulls back to catch its breath and people take profits. And it just did that. Now, a great many of the mining shares are down 20, 30, even 40 per cent from their recent highs over just a few weeks. And it's simply a very popular popular trade taking a rest, which is exactly what you should expect. what happened right before every major run higher in the historical records. In the 70s, gold went flat and then fell hard and then we had the greatest run pretty much ever.
So the dip is what? Well, the dip is the metal being used as emergency cash because that's exactly what's happening probably mostly in the Middle East by countries and you know you own a lot of gold and the cash flows dried up. So, they're selling the thing that they bought for the rainy day. Well, today is the rainy day. Maybe rainy day isn't the greatest analogy in the desert.
They probably quite like rain, but you get the idea. But there is one thing I watch out for in these stocks and these shares. And it's something I call the heartbeat. A share stops moving, it trades sideways in a very, very tight narrow range. Looks a bit like this.
So, your stock stock chart collapses and then it does that. That's what we watch out for. The longer this goes on for, the better. And then when it eventually breaks out, that can be a very, very good thing. And there are a few more conditions that are apply to that.
Why does that work? Because the longer you go sideways, the more people who wanted to sell actually sell because they get bored, right? They get they sell and they want to do something else. So, I want to show you a few stocks. I'm not telling you to buy these at all.
I just want to give you some value and highlight some things that you might otherwise not see and also show you how you can see this with your own eyes. Okay. miners. The sad story is that unfortunately gold miners and this is the index fund GDX are very much in a downtrend. They tend to mirror the gold price, but it's more exaggerated than that. But is there still opportunity?
Are they cheap? Well, the market priced in these very high gold prices. As gold prices pulled back, the market gets more fearful and these miners are essentially leverage play on that.
Now, there are one or two that are looking a little bit more decent. Let me pull one up for you. for example, called SECCO, Southern Copper. And I'm just looking generally at at sort of miners here. Why am I saying that? Well, we have a heartbeat pattern here, which is the pattern I was referring to.
But what's the problem with it? Well, we have a lower low here than the previous one. So, generally speaking, there is an uptrend. Yes, but we are kind of at the the lower end of that. So, where would I be interested in this again?
I would be interested at this at approximately $40 more than it's trading at right now. That might seem crazy, but my probabilities of it actually performing at that point and actually making me money would be much greater if we were here. So, I'm not a fan of dip buyers. I'm not a fan of discount averaging into something that is this volatile. And there are one or two others that look decent like TGP B rather, but still it's pulled back fairly heavily.
And yeah, most of these miners have the same pattern that simply mirrors gold. So is this a time to buy it? For me personally, not. I mean, you can come to your own conclusions, but I think this is an industry at present in decline. It doesn't mean it'll always be.
And do I buy gold miners? Yes, I certainly do. Uh we can make a lot of money out of those moments. But where was the last real opportunity? Well, let me show you.
The last real opportunity was over here. This was in early 2024. This was the real like sort of breakout here. Um then we had another one in late 2024. Again, you see a beautiful heartbeat here, zigzaging slightly upwards.
And then yes, we got a correction, right? Real correction. But when you finally broke out of that previous high here, well, what happened? You got the mother of all rallies and we made quite a bit of money on gold miners. So for me, if you're a trader, wait for the good and right opportunity.
Don't just buy something because you want it to be the case because the market doesn't really care for your or for my opinion and therefore I would skip it. Same applies to silver miners, rare earth miners. Everything at the moment has been clobbered and generally speaking you can be right, you can contract a conviction but it doesn't really help you. The only thing that matters is is the money, the big money buying the thing. At the moment they're selling the thing.
So let's summarise all of this briefly.
Yes, there's a company that can make gold in a machine. The physics is real. The economics are a fantasy for probably the next two decades. and they're using this genuine collapse of the diamond market to frighten you out of gold when it's actually probably the one thing that's going to benefit the most from this inflation that's coming and that's already here. Central banks keep buying gold is the one thing I keep watching for. And elections lead to more spending which leads to more printing which leads to more what?
Dollar losing value. The strong stuff you can't fake generally does relatively well. Now I am very excited and I haven't been this excited about the stock market since probably last summer. Last summer was a lovely run because midterms change things. There are three things that are piling up together right now that we haven't seen in a very very very long time and that I think are going to open up a tremendous beautiful shiny opportunity for us investors and us traders.
And I want to teach that to you at midtermsinvesting.com. It'll be live this coming Saturday depending on where you are in the world. It'll work for you if you're in the US or if you're in Europe or even in Asia or somewhere else. So grab yourself a seat. Uh, let us know in the comments that you're showing up for yourself.
Just write a show up in there. And I look forward to seeing you on Saturday live. All the best. >> Right now, I think we're going through some sort of weird phase transition. And normally when you get bad economic news or you get bad jobs data that people are going to fly to safety into the bond.