Gold, Tears, and Coronavirus

Published on
March 3rd, 2020
Duration
53 minutes


Gold, Tears, and Coronavirus

The Expert View ·
Featuring Dan Oliver Jr.

Published on: March 3rd, 2020 • Duration: 53 minutes

In the book of Ecclesiastes it says that, "there is nothing new under the sun," and in economic and financial terms that translates to the adage, "this time is not different." Dan Oliver, Jr. of Myrmikan Captial LLC joins Real Vision to put the impact of coronavirus into the perspective of supply chain reorganization and the current credit bubble. Oliver outlines the history of how and why credit bubbles form, how the current credit bubble came about, and the mechanisms through which this bubble could pop. Oliver breaks down bubbles from Athens in 594BC to the 2008 financial crisis and what the response from governments has been and might be in the future. Finally, he breaks down his essay called, "Gold Past $10,000," and provides investors with a roadmap to avoid the worst of the end of this credit cycle if coronavirus triggers a meltdown. Filmed on February 26, 2020 in New York.

Comments

Transcript

  • JC
    John C.
    1 December 2020 @ 01:05
    Wow. I want to consume anything i can find from Dan...
  • KS
    Kim S.
    25 September 2020 @ 11:16
    Treasury: "We take that gold now" Fed: "Nope, we don't acknowledge the election. You don't represent the real govt"
  • NG
    Nelly G.
    10 May 2020 @ 20:40
    Hey, just wanted to point out that the Transcript is missing the chart images that are usually there.
  • MH
    Matthew H.
    7 May 2020 @ 03:11
    I have been a RVTV subscriber for a very long time, and despite some of the recent dilution in quality since the broader NYC presence and losing Grant... this video is excellent. This is thought leadership. This is why people come and stay with RVTV. Despite it being the classic old school RVTV gold and bearish slanted view. If you can look beyond the supericial, this is thought provoking and thought leadership. Balance and risk weight the views you see/hear, the point here is that this is abstract/principles oriented thinking that should inform your view.
  • MS
    Milkey S.
    4 April 2020 @ 21:01
    That is why gold can never be effectively restored as a standard. The physical is what needs to be both the base money & therefore liquid, yet it is not. Bitcoin fixes this.
  • EO
    Elena O.
    4 March 2020 @ 14:54
    I am now reading a book about central bankers and WW1 impact and Weimar Republic hyperinflation chapter and what's interesting is that I never thought of inflation and deflation as something that can happen at the same time. But Dan mentions it in his interview as part of what happened back during the days of Weimar R. and now that I think of it, since QE and ZIRP started in 2008, we observed inflation in assets and lack of inflation if not deflation in the everyday cost of living (CPI). The Fed still cannot hit its inflationary target. My hunch is that after debt pile starts imploding, causing a sale in assets, and printing aka QE will resume, we will see exactly a reversal of last 12 years - massive monetary inflation combined with assets value deflation. It seems quite logical to me...
    • DB
      Drew B. | Real Vision
      4 March 2020 @ 21:47
      What book?
    • RM
      Raheel M.
      8 March 2020 @ 16:17
      My guess is ‘Lords of Finance’ by Liaquat Ahamed - a fantastic book that I read after a mention from Grant Williams.
    • SP
      Stephen P.
      10 March 2020 @ 01:52
      I agree with your comments on the surface, however, I recommend reading up on the CPI quality adjustment factor. In short, the Fed can make CPI inflation whatever they want - based on regression models. As such, it appears the Fed and BLS have intentionally underreported actual inflation. I know it sounds weird, but look into it and draw your own conclusions.
    • JV
      J V.
      21 March 2020 @ 05:40
      "When money dies" by Adam Fergusson is another good read I would humbly recommend...
  • CT
    Crispim T.
    3 March 2020 @ 21:54
    Meh. These Gold amount are just a total fantasy. Three properties of Bitcoin [vs gold] considerably make that state harder to reach: Portability, Verifiability and Censorship Resistance. Let's have a look at each... 1) Portability: A fatal flaw of the gold standard was that the settlement in physical gold is cumbersome, expensive, and insecure, which meant it had to rely on centralizing physical gold reserves in a few locations—banks and central banks. Ultimately, this made gold vulnerable to being captured by governments (via confiscation or mere accumulation), leading to the temptations that inevitably resulted in the creation of money unbacked by physical gold. Gold was always very hard to move and store, difficult to secure against loss or theft and allowing it to facilitate long-distance trade. When bullion is transferred between a buyer and a seller it is typically only the title to the gold that is transferred, not the physical bullion itself. Transmitting physical gold across large distances is costly, risky and time-consuming. Bitcoin is not limited in portability. Anyone can store millions of dollars of value themselves, something impractical with gold, and transmit them in a permissionless way, with almost instantaneous settlement, as well as carry them through airports or any similar scenarios without risk of confiscation. For the first time in the history of money, it is easy to bypass key entities throughout nearly the entire money life-cycle. This by itself highly reduces the tendency towards centralization, which is needed to boost out-of-control fractional reserves. In summary, Bitcoin is highly portable, while gold was not. 2) Verifiability: Gold was difficult to verify, both in qualities and even in mere existence. Even today it is estimated that the reserves in central banks are partially inaccurately estimated, and even fake bars have been found in vaults. Once again this made gold more prone to centralization and capture as the average citizen not only had more difficult verifying his own ownership but also auditing that the their "gold account" at a bank actually had that value in it and wasn't just a promise. Bitcoins, on the other hand can be verified with mathematical certainty, by anyone, at any time and without the need to be worried about possibly accepting a debased unit (unlike one getting gold of lower purity than expected). If one sends funds to an exchange or withdraws them, that settlement can be verified onchain with absolute certainty. An Exchange can still obfuscate the real funds from a user, but it is now considerably easier to force them to demonstrate proof of reserves, as wallet transactions and balances can be verified in the public blockchain. Some exchanges perform proof-of-reserves voluntarily, while others do not. The latter can be forced to do it (via regulation or merely user pressure). One example of an exchange voluntarily doing this was Kraken, that proved 100% of its bitcoins are held in reserve. (source) And such cryptographically verifiable proof of reserves audits are absolute - unlike in the traditional financial system. Now what about the ones that do not to it? Well, there are still two ways to force an exchange to supply proof of reserves - one is via regulation enforcement and the other is through peer pressure (bad rep to the industry helps no one) and customer pressure. The latter might seem inconsequential but it is not. Some investors like Trace Mayer have promoted the idea that users should remove their keys (i.e. coins) from the Exchanges periodically (Proof of Keys event). In the past this has been enough to unmask exchanges that were not holding the funds they claimed, eventually collapsing - this was for example at the heart of the demise of the QuadrigaCX Exchange, which was unable to settle enough withdrawals once users started requesting them. Playing shenanigans with the reserves is much harder with Bitcoin, which brings cryptographic digital certainty to accounting and can help expose banks engaging in fractional reserve banking when we reach that stage. So in summary, Bitcoin is easily verifiable/auditable, gold was not. 3) Censorship resistance: Gold's physical nature made it far more susceptible to state capture than Bitcoin, as history has shown. One way to do this would be to censor and block transactions considered undesirable, or even having the gold captured in the process (physically or via blocked IOUs). The owners had little or no options except finding alternatives and surrendering or getting rid of their gold. In BTC the individual has sovereignty if he so wishes, having a degree of economic freedom which was not possible with gold. It is nearly impossible to censor and intercept a transaction sent between two independent nodes (that any user can run), which by itself further lessens odds of capture by governments and centralization (although naturally some individuals will still delegate the management and storage of their wealth to third parties - but this time such is a choice, not an inevitability). So in summary, these three areas where BTC is very different from gold (Portability, Verifiability and Censorship Resistance) are by nature contrary to the need to rely on trust, reducing centralization and therefore making fractional reserve extremely hard to achieve. It's superior in every way, yet people still dream Gold will hit those levels in this age? Perhaps, if the USD keeps losing value, but if Gold ends up at $10K, you'll have BTC at $1M. It's almost a mathematical certainty.
    • JD
      John D.
      4 March 2020 @ 02:26
      The market will decide which asset vehicle to use.
    • WM
      Will M.
      4 March 2020 @ 02:36
      You lose your argument by suggesting that gold is "done" and those of us who believe in it at the right time are stupid. Gold is a historical FACT and money of the last resort, thats why BANKS own thousands upon thousands of tons of the metal. Bitcoin is a speculation, a potentially great one, but a speculation nonetheless. Gold has always had its goldbugs revving it up at all times, even when the time was wrong. However, Bitcoin has its own flaws, and is more favored by the young, but they don't have the real money, the baby boomers who saved do. The latter may / probably should speculate in Bitcoin, but its primarily an eastern phenomenon at the moment with a huge Chinese base. Once the shit hits the fan gold will take off. Pension funds will move more into gold and silver miners and drive the price way up. Once you own the yellow metal outside of your tax jurisdiction your biggest problem will be the likely punitive gains taxes in a financial endgame scenario. However, Bitcoin will have a target on its back as it will be a direct threat to government monetary control. They see it as a route for "criminals and tax evaders" and will likely ban it.
    • SM
      S M.
      4 March 2020 @ 13:30
      Physical gold holders are not anticipating massive returns; they buy the metal because it has held its value for millennia and its' a protector of wealth for those who know how to use it. Again, you can't compare them both. BTC is not purchased as a wealth protector. Further, the world's wealthiest governments and families own physical bullion and I would suggest that they will likely ensure that the value will continue well into the future. One very bad part of BTC is the accessibility to the average person is very poor. It is very difficult to understand the concept of crypto currency and I know that at least 15-20% of the people I know have lost their BTC because of bad exchanges, forgotten passwords and in one case, their hard drive crashed and was not recoverable. Of course their are better ways to back this up, but only a few do and are tech savvy to do so. This is a very big risk and I trust in the future these will smooth out with technology. Will M. has a great point about the direct conflict with central banks. Many countries have already considered banning BTC and other related cryptos; this is a high possibility if BTC gains significant momentum. Then it would virtually become close to worthless. I hope BTC goes on a big run and if it does, I highly recommend taking profits. In the meantime, I focus on gold/silver miners as I expect that the returns in the next 2 years should be outstanding, especially if we get a further crack in the markets...those miners should also fall alongside the markets (perhaps providing another good entry point) and likely they should be the first to recover. Be cautious of certainty--certainty is closely related to assumption--assumption is the Mother of All Fuck Up's.
    • EO
      Elena O.
      4 March 2020 @ 13:35
      I am watching both assets and see BTC going down when Gold is going up and reverse which suggests to me that BTC is still risk on asset when Gold is still risk off. Also, do not forget that BTC is relatively new invention, wheb Gold has been used for millennia. And the true definition of money is when majority accepts it and trusts it to be money. This did not happen yet. Maybe it will when more people understand it. For now I will continue watching BTC volatility in major market risk off situations to have some indication as to whether it is becoming real money.
    • RE
      Renato E.
      5 March 2020 @ 17:06
      The most important asset is knowledge. You are misusing your RV subscription imho. You should listen to others rather than repeating your BTC views over and over. You are so obsessed with BTC, it is not even funny anymore. Don't fall in love with an investment, that's all I can say. One day you will understand.
    • NB
      Nicholas B.
      13 March 2020 @ 10:59
      TLDR
  • DN
    D N.
    4 March 2020 @ 01:35
    How do investors buy gold bullion? Or the closest thing without setting up private vault?
    • WM
      Will M.
      4 March 2020 @ 02:25
      Its easy Gerald. Loads of places on the net that provide options for gold ownership in a variety of ways. Take a few hours and do your homework.
    • MK
      Michael K.
      4 March 2020 @ 03:32
      Goldmoney.com
    • PP
      Patrick P.
      5 March 2020 @ 04:10
      Gainsville Coins .... Tampa FL https://www.gainesvillecoins.com/buy-silver
    • PG
      P G.
      8 March 2020 @ 14:47
      Silver Bullion SG located in Singapore. You can buy/sell bullion through their website in SGD and USD... You can also take a loan out against your metals vaulted with them. Very prompt service. I ditched Goldmoney in favour of them.
    • NB
      Nicholas B.
      13 March 2020 @ 10:58
      Just go buy some dude, once you hold it in your hand, your next steps will become self evident 👍
  • AC
    Adam C.
    4 March 2020 @ 15:41
    Does anyone have suggestions on good Jr. Gold Mining stocks worth looking into further? Seems like it's worth buying a few dollars (for someone with no experience in the market) worth to play the board.
    • KB
      Kenneth B.
      5 March 2020 @ 01:11
      A) Buy physical gold/silver and vault it, B) Buy gold-backed ETF (not GLD, but PHYS or other that has 100% backed, C) Buy miner ETF (GDX, then GDXJ - J is the junior version), D) Individual miners (look at the list in GDXJ, E) Finally other juniors see 321gold.com or listen to Rick Rule, Marin Katusa, or others.
    • PP
      Patrick P.
      5 March 2020 @ 04:06
      Equinox (EQX) Equinox Gold’s Chairman, Ross Beaty, was inducted into the Canadian Mining Hall of Fame in January 2018 in recognition of his significant contributions to the Canadian mining industry. You can learn more about his mining industry career and watch the tribute video here. https://youtu.be/wyt5RwPlLoU Ross Beaty is the Babe Ruth...Ted Williams ... and Micky Mantle of mining. Look for his interview here on Real Vision.
    • JB
      Jonathan B.
      5 March 2020 @ 16:58
      Second EQX, which traded under $7 last week for US listing. Ross has over $100MM in it, $65MM in PAAS and $35MM in Lumina (Ecuador). I am in all of them. Not a recommendation, but worth a look.
    • bc
      bo c.
      7 March 2020 @ 21:15
      also might want to consider the streaming/royalty cos like FNV, WPM, SAND since their costs are less subject to upward pressure in inflationary environment than the miners
    • EK
      Edward K.
      9 March 2020 @ 19:51
      Nova Gold (NG)was featured in an RV interview fairly recently. Took a small position and there is significant volatility up by 20% and as of this writing down by 6%. Guess that's just the nature. Correlates against GDX and GDXJ (more the latter than the former). Would have thought this would hold up better in this volatile regime of the last few weeks but holding on to see if "store of value" actually holds true.
    • DC
      Douglas C.
      11 March 2020 @ 02:31
      Marin Katusa loves Liberty Gold. Or try juniorminerjunky.com, David Erfle knows what he's doing!
  • Am
    Abdul m.
    9 March 2020 @ 23:46
    I see that he has a gold fund. Anyone has any experience with it? How much does he charge?
  • CT
    Crispim T.
    3 March 2020 @ 21:45
    Gold is up 55% since its bottom in 2015. Bitcoin (BTC) is up 4800% since its 2015 bottom. Not to mention the decade as a whole. Does anyone well informed here still think the current decade will be any different? If so, I have a Gold bridge to sell you. And it comes in IOU form for extra profit.
    • PP
      Patrick P.
      5 March 2020 @ 04:14
      Tulips were good for awhile too......not so much so today.
    • JS
      John S.
      9 March 2020 @ 01:14
      Comments like this make me like traditional stores of value more...not less.
  • TH
    Timo H.
    7 March 2020 @ 07:13
    There are 7 counterparties between a GLD claim and the actual metal. Each of them has heavily limited liability about tail risks. Tail risks are the main reason why gold is bought. Think about that...
  • CW
    Christopher W.
    6 March 2020 @ 11:49
    One of the most compelling cases for gold I have ever heard. Bravo sir.
  • dm
    dude m.
    6 March 2020 @ 02:50
    RealVision, your members agree....this interview totally rocks. Thanks to all RealVision staff who supported this interview. I cannot find content such as this, anywhere! On behalf of your viewers, you deserve a standing ovation. Thanks so much!
  • DM
    Douglas M.
    5 March 2020 @ 15:11
    Oliver is great. His supply chain and access to debt capital explanations are concise and clear. Excellent interview.
  • CT
    Crispim T.
    3 March 2020 @ 19:19
    There is absolutely no way Gold will hit $10K in the age of BTC. People are getting educated. A new generation is coming. It's inevitable.
    • MH
      Martin H.
      4 March 2020 @ 00:43
      You seem to have an agenda going here. LOL. I'm going with 5K years of history. BTC can get nailed by .gov despite what is said. .gov crypto is coming and they will not tolerate competition. There is very real risk in that space. Its a gamble.
    • MK
      Mike K.
      4 March 2020 @ 03:07
      Keep pumping that agenda Crispim. The rest of us sober folk, will rely on rational critical thinking.
    • PP
      Patrick P.
      5 March 2020 @ 04:19
      Only a fool makes a prediction of certainty for the future..... Death is the only certainty.
  • BP
    Bakulesh P.
    5 March 2020 @ 03:31
    Excellent information that provides much of insights on how to gauge gold as ultimate value at the end. Please interview him again and again every few months. Await his book. Invaluable.
  • CM
    C M.
    5 March 2020 @ 02:52
    A spectacular discussion. He should write a book on this topic!
  • CT
    Crispim T.
    3 March 2020 @ 19:33
    It's strange how some people seem to forget why the Gold Standard failed. All the limitations of Gold are still present. And this time governments are even more adept and exploiting those same exact weak spots (lack of portability, easy to censor, permissioned, very difficult to secure, etc). The Gold Standard isn't coming back. It failed. It would fail again. Markets always beat governments and better technologies beat old obsolete technologies. Bitcoin is Gold now.
    • DS
      David S.
      3 March 2020 @ 21:52
      Since we can buy both Bitcoin and gold, there is no problem. Both can go up/down. Some investors will have both, some one, others none. I feel the reason that the US went off the gold standard is it constrained politician from spending money - end of story. DLS
    • MH
      Martin H.
      4 March 2020 @ 00:40
      Yeah, no.
    • LL
      Lawrence L.
      5 March 2020 @ 01:53
      The gold standard did not fail. Our Government failed. They abandoned the US Constitution which wisely said that only gold and silver can serve as money. Get your facts right.
  • LL
    Lawrence L.
    5 March 2020 @ 01:46
    This is one of the best interviews I have seen since subscribing about a year ago. Dan's historical knowledge of money, the credit cycle and the role that gold plays in the monetary universe is outstanding. Very balanced, not just a gold bug rant, but rather the historical context and underlying mechanics of why gold plays such an important role in the monetary universe. Very few really understand what Dan is so clearly describing. I learned a lot, and I am a gold guy. Anyone who wants to understand what is going on and why gold is important now, be sure not to miss the last 20 minutes. The first half is the set up. The second half is the road map.
  • JK
    Jim K.
    4 March 2020 @ 03:29
    How do you print and / or email the reports from the iPad? The app is very frustrating and much worse than the previous app.
    • PG
      P G.
      4 March 2020 @ 03:50
      I agree. The apps need major help. I can write a list of bugs I suffer from every day. I reached out to the team multiple times and all they told me is that you can expect an update in the next few months. Still waiting.
    • M.
      Milton .. | Founder
      4 March 2020 @ 20:06
      hey Jim, The app will get a major overhaul in the coming months and with the current version of the app not having live talks and reports inside them (we had to disabled them while we update the website), it's best if you use the browser version of RV which works very well on mobile devices.
  • PM
    Paul M.
    3 March 2020 @ 20:35
    Re btc...consider GBTC for your IRA. I know I'm talking my book but this is worth investigating.
    • CT
      Crispim T.
      3 March 2020 @ 21:51
      No need for GTBC. Just buy own own and hold the keys. Full self-sovereignty.
    • PM
      Paul M.
      4 March 2020 @ 17:20
      Crispim T. -- btc not suitable for IRA accounts in US.
  • JH
    Jesse H.
    3 March 2020 @ 21:18
    Excellent from Dan Oliver as usual, but it would have been easier to follow if he had slowed down a bit / spoken more slowly. Will be watching this again. Thank you. :-)
    • EO
      Elena O.
      4 March 2020 @ 13:36
      Yeah, I felt like I am running on a treadmill 😳😳😳
  • FB
    Fred B.
    3 March 2020 @ 13:10
    Dan Oliver must have been the inspiration for The Most Interesting Man in the World! Please keep him coming back on Real Vision as I could listen to him all day.
    • CS
      Calvin S.
      3 March 2020 @ 20:17
      I was thinking the same. Man I learned a lot from that. Lessons from the history of money. Lessons from recent business cycles. Thanks Dan!
    • TZ
      Tibor Z.
      4 March 2020 @ 12:21
      Watching this for the 2nd time!
  • TZ
    Tibor Z.
    4 March 2020 @ 12:20
    Best interview since a month!
  • RD
    Ron D.
    4 March 2020 @ 11:17
    Dude is a train running over you, but it actually worked. He basically covered the functions and history of our economy in 25 minutes AND contextualized it properly - that should be kind of impossible. It was one of the rare examples of a top down presentation actually being valuable. By covering so much ground in such a narrow timeframe, he is able to draw a more a complete picture. Something bottom up presentations can never achieve, because you are only looking at 1 or 2 pieces of the puzzle. I liked it a lot - welcome change of pace, quite literally :-)
  • db
    don b.
    3 March 2020 @ 22:42
    Dan Oliver is a stud.
  • SM
    S M.
    3 March 2020 @ 20:53
    Great historical content. Felt that the RV team didn't aid Dan Oliver enough as he mumbled some of his concepts and found his communication manner not so easy to understand, but his message is good. Comments below give me confidence that investments in gold will go further than one believes. I also own BTC but this is not comparable to gold; BTC is purely speculative and will likely also go up very high until it doesn't and that point of reversal will be fierce, with a fast & furious unwind. That is not stability. You'll have wanted to take your profits on BTC and ensure you have plenty of gold silver stashed in a safe country as that will bring much more comfort.
    • CT
      Crispim T.
      3 March 2020 @ 22:00
      You do not understand BTC if you think it is "purely speculative". That's how most people start. Keep investing time in it. It will give back to you generously. Nothing is is as good preserving wealth at this time in human evolution - nothing. It's the best store of value mankind ever found so far. Gold has been losing value to BTC for 11 years now. ELEVEN years. Do you really think the next 11 will be different? That's not a bet I recomment. It's like shorting TCP/IP in 1990 or Cisco in 1995. I've lived through those days and haven't seen anything like BTC since then, 30 years ago.
  • WG
    Wade G.
    3 March 2020 @ 21:52
    Really wanted a 3/4 speed button... wow. Outstanding thoughts shared. Thank you. I feel like the rather intense gold/miner price action Friday reinforced his admonishments about hubris and respecting volatility and timing challenges. Again, great content, thanks.
  • PS
    Pablo S.
    3 March 2020 @ 21:39
    Very good. Very good questions
  • MS
    Michael S.
    3 March 2020 @ 21:31
    loved this vid pls get Dan on again would love to see narrow and deep views
  • JE
    James E.
    3 March 2020 @ 19:58
    Impressive video.
  • DS
    David S.
    3 March 2020 @ 18:51
    Enjoyed the interview and the insurance policy in junior gold miners is a reasonable conclusion. Inflation from the expansion of the money supply, however, does follow the money. QE directly caused the inflation in financial assets. As the bubble bursts, trillions of inflated financial assets will be wiped out. Hopefully this will happen over time, but I fear passive selling will overshoot the correction - press the sell button on SPX one time and eliminate your position at market. The new COVIN-19 virus is part of a whole new game. The Fed is fighting the last war. The administration wants zero interest to save money on the ever-expanding debt. So many new variables. Bubbles are not new, but each one plays out differently. It is like a game of chess. Same rules, same game pieces but a thousand different outcomes. "The game is a foot." Be careful! DLS
  • RD
    Ryan D.
    3 March 2020 @ 15:04
    I wish we could get some more insight into harbingers of the credit bubble bursting, what to look out for, when the musical chairs for treasuries will stop. This was one of my favorite interviews this year. Things are going to be very dynamic over next 6mo I would imagine.
    • bm
      brian m.
      3 March 2020 @ 18:32
      I would say its going to be hard to predict, other bubbles were predicted by few, but the whole thing is far more complex now. I am focusing on dry powder.
  • RC
    Richard C.
    3 March 2020 @ 15:24
    Very informative production. Dan Oliver is saying what everyone is thinking.
  • DC
    Davide C.
    3 March 2020 @ 09:38
    "Hic situs est Phaethon, currus auriga paterni, quem si non tenuit, magnis tamen excidit ausis". Really enjoyed this interview, cheers.