The Role Of Gold In A Diversified Portfolio
Podcast: The Role Of Gold In A Diversified Portfolio
[00:01 – 15:55] GoldCore CEO Talks About The Role Of Gold In A Diversified Portfolio
- GoldCore believes that the system will fail and that owning gold can help mitigate this risk
- Stephen discusses being libertarian after becoming skeptical of big government and promises
- When everything gets politicized, it becomes difficult to have an opinion on the right answers
[15:56 – 40:06] Gold Keeps Maintaining Relative Value Amidst Dollar Loss of Purchasing Power
- Reducing counterpart risk through spreading gold around multiple vaults
- The world is headed for a systemic financial crisis – physical gold as a hedge
- Cryptocurrency technology on threatening the concept of the modern nation-state
[40:07 – 41:21] Closing Segment
- Email Stephen and check out his website for more information!
Brian’s Linkedin: https://www.linkedin.com/in/brian-c-adams/
Transcript (scroll down)
Stephen is the CEO of gold Corp, one of the oldest gold and silver dealers in the market today that has turned over a billion dollars in transactions and manages 300 million in assets for their clients. After Stephen received his degree at portabella Business College in Dublin, Ireland. He began his career in finance. He held Finance, Financial and trading positions in New York City before joining Goldman as a sales trader and equity derivatives when he returned to Ireland to put his experience in trading risk and financial markets at Goldman to good use. His entrepreneurial drive led him to establish his own financial services firm a gold Corp, where they advise clients on gold and silver purchasing and storage. So when I was prepping for this conversation, I just Googled gold as an investment. And it was interesting, we’re recording this in August of 2022. And the first couple of articles that the algorithm pushed out to me or why gold matters because of what’s going on in Russia and Ukraine. So my question to you is, what problem does gold solve in today’s environment?
Stephen Flood 6:46
It’s a it’s a good question. It’s it’s really make you own gold. Because you’re looking for a an investment and asset allocation that is separated from the economic system. So if you think about if you buy a house for an investment, like an apartment to rent, the rent dictates the value of that apartment. So the rent goes up, the yield goes up, the apartment value goes up, you make money. But with gold, there’s no yield. There’s no cash flow. This is actually only cost if there’s a cost of carry. So it’s actually a liability. to own gold. That in itself actually makes it really valuable because it’s divorced from the economic system. So if you think all stocks are based on anticipatory future cash flows, and that dictates what the value of a stock is today and a bond based on coupons and whatnot. All these investments, they’re all actual investments and they have actually active cash flows to take their value, where you go, you don’t have that. And thereby it’s an investment that people go to in order to protect themselves from negative cash flows in the broader economy. So when you have something like Russia happening, it disruptions to the foods, food supply anything happening in the world, there’s so many different ways the Russian crises can morph into other crises and affect your portfolio. You own gold because it’s a safe haven asset. People go there when they want to protect money, they want a return of their capital, not a return on capital, and that is actually straight to the point. So the safe haven asset it’s where it’s like the dollar, it’s like the yen. It’s like certain treasuries gold is also a safe haven asset.
Unknown Speaker 8:25
Yeah, I’ve always thought of it in my own mind as an almost a negative yielding bond but with some types of appreciation associated with it. I’m sure that’s in artful but to your point, I think people do confuse and I want to get into this and maybe now’s the time. There’s different ways to approach this asset class, right. You can own physical gold you can invest into various proxy indices, or ETFs, etc, that reflect the price of gold. And there’s obviously the mining side of it as well. Does your firm touch all aspects of gold and silver? No,
Unknown Speaker 9:07
no, we’re we’re solely focused on the physical metal. So one other aspect to our offering is that we’re very, very much focused on the counterparty risk that tends to come with traditional investments, which people discount greatly. They kind of trust the system. They trust the feds. They trust the regulator. We will be of the mind that that trust is misplaced, especially in times of extreme uncertainty, that the system does fail can fail and I would put my hand up and tell you that it will fail. It’s on a trajectory to fail, given the Reliance now on printed money to to uphold the financial system, the banks and the players in it, and also to manage the bond market, which is what’s happening now, quite blatantly by the feds. The all central banks in the world are actively managing the yields on government debt. They’re buying government debt, they are printing money. The politicians now have their hands on those those printing presses. And they are they’re deploying those printed monies into people’s bank accounts for doing it. You can see it in the election cycle that’s taking place in the United Kingdom, where they’re literally falling over themselves to promise to print money to put into people’s bank accounts to preserve them from energy costs. So things like gold stand out because when you own gold in your portfolio is part of a diversified portfolio when we don’t think you should put everything into gold, but there’s a very strong argument to put at least 10% in there. And and in fact, if you put 10% in there, the market starts to fall. So there’s a 90% of the portfolio is falling off, because of things like Russia, Taiwan, whatever you want to choose that that 10% will start to grow and it should take the sting out of a correction. And in that case, what it does is it gives you comfort as an investor you’re not all in on the market. So the market falls you’re not looking at a potential zero wash out your all you have gold, it’s always never gonna go to zero in my in my view, it’s going to start rising in times of uncertainty, and you’ll be glad you have it there. And that might even then settle your nerves and allow you to enter the market. Before the rest of the market does pick up bargains when there’s so called Blood on the streets. So I think gold is actually as a as an enormously powerful psychological benefit to investors. We recently just did a survey just last week in the UK and we asked people who own who have bought gold are who plan to buy gold, how they feel about inflation, and they are significantly calmer about it. Whereas people who don’t own gold or have never own gold or don’t know don’t plan to are much more nervous about the market and what inflation is going to do to their household balance sheets. And that is that goes to the very nub and that’s why it’s it’s an incredibly important part of a diversified portfolio.
Unknown Speaker 11:57
So you alluded to this right now in your statement, and I’ve got friends who are gold bugs, and they typically own physical gold for the most part, there is seemingly a strain within this community of distrust towards some of these larger global organizations. You referenced the Fed what’s happening in the UK. It says central governments central planning what is it that got you into gold? Was it a similar mindset? I mean, you you used to work at the guts of Wall Street and you saw the machine firsthand. Right? Was that part of the journey that brought you to where you are today?
Unknown Speaker 12:38
Yeah, I’m a free market capitalist. I become a libertarian, the more I read I I’m very skeptical about big government promises. I do think that there’s an awful lot of dumbing down of the population. I’m not as political as many of our American customers might be and in America is everything’s getting gets politicized now, and I don’t know the right answers. I’m always learning and developing. But I do come from Wall Street. And I very much enjoyed my time there. It was very much part of the financial technology side of things. So how do we trade how do we manage risk? I wasn’t really into the portfolio allocation side of things. But when I got into gold, I did so quite accidentally, my old school friend Mark, had set up gold Corp a few months previous when I got back to Ireland, and I was looking to set up a financial services firm it could have been a brokerage of some description. I was looking to put my well my experience to work when he needed help. So we went into business together and that was 18 years ago. He sold out about two years ago and has left me in charge now. But the but the the my entryway into gold wasn’t based on history or an appreciation of gold or whatever anything. It was really just a financial opportunity. But since then, and my customers and clients have massively educated me and I and I really sympathize and empathize with them and the motivations behind why they have gold. To me it comes down to the individual looking for personal sovereignty. And that’s really as personal as financial sovereignty. You know, you know, having a home having having land having control over your financial life. Safety is very, very important. And, and financial sovereignty is something people don’t look at. They’re, they’re all in on digital currencies. They’re all in on digital banks, their mobile phones. Many of these systems are highly susceptible to hacking to been down and I don’t think it’s crazy or go buggy to kind of say, You know what, I don’t want to be all in on the system. I want to have my hedge. I want to have my my go bag ready to go hoping to God I never need it. So gold kind of fulfills not important role and I think it’s absolutely makes sense. And that’s why people have it there. There are people who go 100% In on gold, and that’s okay. As long as they know what they’re doing, and they’ve done their research and they’re comfortable doing so. We have retired people who are all in on gold, they have no debts. They just want to draw down a small amount of it every year just to pay their bills. And that’s it. So it’s a it’s there’s a huge, very eclectic mix of people and motivations behind owning gold. But I do think in today’s world of technology, integration hacking. I think it’s never been more important.
Unknown Speaker 15:24
So you referenced personal sovereignty. I want to unpack that a little bit more, and push back a little bit. You know, gold is not completely divorced from the global economy, right. The pricing and valuations are impacted greatly by these other levers being pulled across the globe. Be it markets, fixed income, or some of these larger central banks that you referenced earlier. How do you wade through that conversation? Because no matter what you do, you’re still going to be part of this what is today, global economy you can’t truly divorce, the pricing, where the valuation of even physical gold bars from everything else happening in the world. No,
Unknown Speaker 16:11
absolutely not. And it’s all part of the ecosystem. And gold has has had bad years and good years. What’s what’s really interesting is if you look at the performance of gold across almost all currencies, in the world over the last, I think it’s a we have statistics going back to 2002 but 20 years, and its average return is between something seven and 12% annualized across all currencies, not always at the same time, because they’re all in different economic cycles. But it’s consistently performed relative to other assets. And if you look at it as part of diversification, when you add it to a portfolio, it reduces your your your volatility, and it can increase and improve by a few basis points your return that’s exactly the kind of folic acid that you want to introduce to a diversified portfolio. And it’s amazing that it does that because it has no return. It doesn’t actually do anything. It should be actually zero. It should be valued at zero neck, it shouldn’t be valued at negative zero, because it actually costs it has no purpose. Now it obviously has a lot of industrial uses and stuff like that. But for the most part, investors lose money or holding gold, but they make it on a capital appreciation. But it what it has is a scenario value that’s attached to it. So when that Black Swan appears, and inflation goes crazy and hyperinflation or deflation, whatever particular economic scenario, gold comes into its own and it becomes something that people want and appreciates. And that that that goes to the original point I made about, you know, bounced, settling the nerves and keeping you you know, you know, on the straight and narrow you know,
Unknown Speaker 17:49
so I’m not asking you for financial advice, and this is obviously a question that you get a lot from folks you referenced earlier. What is a reasonable allocation, right? If you just to your point, someone like me, you know, I’m not all in on gold, but I do believe in this ability to act as a diversifier act as a hedge against inflation. What’s a rule of thumb that people can at least start the conversation with their financial advisors on?
Unknown Speaker 18:20
Well, most financial advisors will probably steer you into an ETF or some proxy gold investment, which you mentioned before. I was very impressed that you mentioned the word proxy.
Unknown Speaker 18:28
I want to I want to get into that as well like these artificial proxies. I think they’re really poor substitute for actual physical gold. But I mean, is it 10% 15%? What is your opinion? What’s your experience?
Unknown Speaker 18:42
Again, not financial advice, only my opinion, but typically the the I love this old Wallstreet adage that says put 10% of your money into gold and hope it doesn’t work. You know, so if that’s in there, it’s going down, everything else is going up, and vice versa. If it’s going up, everything else is going down. I think that goes to the nub of it. But I think the older you are, the less risky you want to take. And depending on how you determine what risk is is a counterparty risk is a bank risk, is it return in capital return risk? Is it single asset allocation risk, you know, or market risk depending on what you how you determine that will really inform where you are so, we go through we have a strategy session with most new clients and we ask them a number of questions about their motivations. Like what is it that got them on the phone? Why are they calling? Did they read an article did they get there was a good friend told them to buy and depending on what they say, We will steer them into different ways of owning gold. And typically, some people might be very worried about the world we say right? Take physical possession, have it at home, bury in your garden, whatever you need to do. It’s your go bag. Other people are looking for asset allocation, and they have large amounts of of assets. So we say Right, let’s store that. But let’s store it in multiple vaults locations around the world. So we would say Zurich might be a good place because it’s very unlikely that’s going to become compromised. London perhaps is too. Let’s put something in Asia. Let’s put something in Salt Lake City. And so you spread it around. And what we tell them is like we’re kind of the Watchers on the Wall. You know if a situation like Hong Kong develops now, Hong Kong a few years ago was a major financial center. It’s been carved out and empty. Now because of the acts of the CCP CCP in China. We told our clients years ago, hey, we think Hong Kong represents a risk now, because there could be civil unrest, your insurance policies or cover your physical gold could be compromised. We need to move your gold to Singapore Hands up who wants to get on the plane we had the plane lab setup and 97% of our clients move their allocated segregated gold to Singapore. That’s key because what we do is we have everything segregated allocated, which means your gold and my gold don’t sit right together all mixed up. They’re separated on the shelf. And if you want us to go to one vault or go back home fair enough, give us a phone call. It’s out the door. And we think that’s really important if you want to reduce counterparty risk. So I’d say you know own it the right way, own it physically own it segregated, own and allocated, spread it around multiple vaults, have someone home and then B and then b be a vigilant watch you’re on the wall. With us and our clients and share information with us when when you see things that might go awry. And that’s typically you know, 10% would be a good starting point. If you’re really worried about the world maybe 20%. I think getting above that you’d want to be you want to take you know take to do a lot of research but it depends on the client’s expectations.
Unknown Speaker 21:30
Can you maybe unpack the term counterparty risk to people that aren’t familiar with the concept?
Unknown Speaker 21:38
Yeah, I mean, like the world is, in some ways has never been more connected. And when you have the the the central bankers printing money, and doing so unbelievably so for the last one since 2008. What they do is they smooth out the economic cycle. So an economic cycle is really important. It finds out those companies that are poorly capitalized, are inefficient, and it favors new new inventions kind of creative destruction. But when you smooth that out, you know, you don’t have a bond default, the market loses its institutional memory for what a bond default is. They don’t know what you know what it looks like when you know a company loses its way. And so what we’ve had is this kind of nanny state in the capital markets where everything has been smoothed out the plunge Protection Team, whatever you want to call them, they come in, they protect the market, they protect the bond yields, everyone gets bailed out and you have a terrible situation where institutional memory is lost and robustness is lost. So I think when whenever the next cycle down cycle happens, I do I don’t think there’ll be able to control it. You could find that there could be real systemic damage done, and your high street bank or even a sovereign could come under serious pressure. Even currencies could come under serious pressure. The Euro could could collapse. I mean, I’m not saying it’s gonna happen. We don’t know how these things get out of hand. We’ve been protected and pampered for so long. I think there’s so much dead wood on the forest floor, a small fire could could do serious damage and grow into Firestorm financially. So I do think that people have to be aware how do these things link up? Like what happens if it’s a bond crisis in Europe has that affect the American investor? What happens to the Florida Florida property market? You know, these type of things are all connected, the cash flows are all connected. And I think a lot of banks and a lot of financial institutions, a lot of hedge funds, they don’t have it’s hard to see the asset and the liability side of their balance sheets because they use complex arrangements to hide one from the other. So they might look great on paper from as a portfolio, but they have these unknown liabilities that could be come from the form of derivative contracts or other other type of liabilities that were just don’t see. So I do think that if the economic cycle being being deprived from the market means that these kinds of risks are very, very real, and I think you got to look at it as financial sovereignty type of play. What can you do to disconnect or unplug yourself from that in some way? And I think 10 20% allocations of physical gold, sitting on a shelf in Zurich, with no liabilities and instantly available for sale. It’s physically there. You know, I don’t think it gets any better than that.
Unknown Speaker 24:32
So let’s continue the conversation that I cut you off early on. Why possession of physical gold, why not some of these you know, like I said earlier, proxy ETFs or indices. And then, you know, what are your thoughts about getting exposure to this space through mining stocks, mining companies, be there public or private?
Unknown Speaker 24:57
Yeah, I mean, like, I think we kind of, say investors or people who look at gold from a kind of a structural point of view. They’re looking to diversify they’re looking at that scenario risk that uh, that that that hedging and it brings the table. Those people tend to the ones that have thought about it, tend to value the physical metal because they want that gold that in extremis, as as as who said that central banker from the IRS back in extreme times, it’s always going to be there it’s never questioned. Those who are looking for a speculative play more short term, who want to own it as cheaply as possible because ETF is really cheap. You can own it for like, you know, anywhere from you know, 20 to 30 basis points, then that’s a great way to own it. So the ETF is a great way to do that for a short term basis, but you’re kind of sitting you’re not really looking at the, the the underlying risks that might be there. If you look at the prospectus of the ETFs that are out there, the big popular ones, basically all of the promoters of them are completely indemnified should anything go wrong, or anything gets stolen or removed or the vault breaks down. Whatever happens. The investor is left holding the bag basically, empty bag, where he’s even have physical in a vault. There’s no bank anywhere near those assets. There’s no liabilities unknown to you. There’s nothing it’s just pure gold sitting there. So mining, absolutely, look at that. There’s some there’s some great experts in the mining sector, who might give you an idea, but really what you’re playing there is an equity play with a management team and the ability to extract alpha from some sort of play. Some sort of physical resource, and that’s, that’s, that’s a bet on that team and their ability to do that extraction of value for you as a shareholder. There’s an awful lot of mining companies that spend more time promoting their stocks than they do actually extracting the the asset and I do think it’s a little bit more risky. But there are some really good good companies out there. We ourselves don’t specialize in that. But we do know some really good advisors who are absolutely brilliant and we think very highly of
Unknown Speaker 27:03
so how does this work? You know, if I want to buy physical gold, so I’m gonna put it at 10% of my overall portfolio, I call you up. What happens next?
Unknown Speaker 27:17
Yeah, so people go on our website. It’s gold corp.com. And they can open up an account in about three minutes. They can document themselves in about five and then they’re welcomed with the bank details. If they want to wire money across to us. Everything’s held in a segregated client account. It’s not mixed up with our own funds, and it stays there as their asset until they say otherwise. They can then what’s money clears. They can log in place an order, choose where they want to store it, and we’ve got 11 vaults around the world, all of them segregated allocators. And and they can buy their bullion. I’d advise though they haven’t done it before, get on the phone. We have an amazing customer service team. And this is really important. None of them are incentivized to make a sale. We will not allow that in our company. Sometimes it’s not a fit that a customer buys gold. They might they are silver, they might be doing so without thinking through exactly what they’re doing. And so we’ll step them through it, but there’s no hard sale. No one’s paid a commission. We want customers for the long term and we want them on the right terms that fits them and us. We have a 4.8 out of five ranking with our customers over 12 years, about two and a half 1000 views, all of them legitimate. And we’re really, really proud of those comments and they’re on they’re on our website as well. But it’s really easy to buy through us. We’re plugged in with all the major refiners and all the major mints, we get really good pricing. We don’t try to push what I call kind of these high premium products like rare coins or any of this nonsense. We don’t do any tricks. there’s love there’s love people out there anyone who see advertising on TV, typically I would stay away from they they’re they’re typically going to bring in a lot kind of a bait and switch tactic and put you into high premium products. And they’re great talkers. So we don’t operate that way. We’re very, very ethical. And so yeah, we’ll figure out what’s best for the customer. What motivates them will go to a strategy session. We also because we were in for 18 years, I mean it’s a quite a while and we have a lot of customers, a lot of a lot of transactions under our belt. And what we did was we opened up an office, we have an office in California, in Irvine, and we also have an office in Naples, Florida. We’ve just opened about a week ago, which is really exciting. And so we have people on the ground ready to take your call. And you can also speak to myself and Ireland if you want to ask them myself, Stephen flood, and it doesn’t matter how big or small you are, I’ll definitely take the call. And what we did was we put it back we put all of our most, I think the best lessons that you need to know if you’re going to get into the gold market. And we put them on a guide and it’s called gold in the usa.com. If you put a link into your show notes would be great. Golden the usa.com and you download that it’s no cheesy sales material. Just a few really, really good things to watch out for when you’re buying gold and questions to ask.
Unknown Speaker 30:11
Yeah, so you already front ran. I was going to ask like, what are red flags? No, no, it’s perfect because I was going to ask what are red flags? What are the questions that people do need to be asking? When they’re talking to a group like yours and you covered most of that? Can you maybe what’s it been like? We’re recording this in August 2022. Inflation is all anyone can talk about for the last three plus months. speculation that you know the Fed is going to continue in the US be very aggressive raising rates. What are your thoughts about how the value of gold will behave in today’s current environment?
Unknown Speaker 30:55
Well, it’s kind of been going sideways and you’re in dollar terms coming off a little bit, you know from its all time high. But in other currencies, it’s done really well in other currencies around the world. It’s well up, you know, over the last year, whereas with dollars, it’s flat, but the the really interesting thing is inflation is here, but most people instantly institutional memory of what inflation actually means in that household household balance sheet. They’re not aware of it yet they haven’t felt. So it’s conceptual. For still going on holidays. They’re still traveling, they’re still buying things if they can. We have a supply side issues, which is driving a lot of inflation. But the biggest driver inflation has printed money and helicopter money that’s been hitting people’s bank accounts over COVID and because they they opened up Pandora’s box, because it was a special situation when they had to, you know, issue checks with the president’s name on it politically. I mean, it’s totally political. From the Treasury. The minute they’ve inflation starts to hurt and the consumer does it goes downturn, what they’ll do is they’ll print money again, in order to protect the consumer in order to win the next election cycle. And that’s going to drive more inflation. So we knew they were doing they were printing money for the institutions over the last crisis and have done for many years. That money is there. It’s all hitting, hitting the ground at the same time. And now the consumer is going to get in on the act and the party is going to keep going and inflation will go and go and go and then people will print they’ll print more and more money. And what happens ultimately is people lose faith in the money. It’ll be like the Confederate dollars of old back back in the in the American Civil War, that you’re going to find that the dollar will lose more and more value. It’s already lost a bit 98 99% of its value over the last 100 years. When they print money. They’re taxing the buying power of your after tax earnings and your pension and your savings accounts. They’re taxing you again and these people who are printing money, which is the Fed and in with the Treasury are unelected they’re not elected. And that’s taxation without representation, a concept that is not lost on the majority of Americans who work really, really hard. And so I think eventually the faith in the dollar will be we’ll be eroded further, and people look for alternatives. If you told me gold was gonna be $10,000 An ounce in two or three years. I would not be surprised when we set up we were selling gold at $300 Nice back in 2003. You know, it’s now at 1700 $1,800 an ounce, so it’s multiples higher. I think it’s gonna be multiple hires again, and I don’t think necessarily gold is going up in price, but dollars are going down in value. And I think that’s actually a really interesting way of looking at
Unknown Speaker 33:41
it. Yeah, it’s almost it’s almost like relative purchasing power right. It’s it’s to your point the US dollar losing purchasing power of gold maintaining but on a relative basis to one another. That’s a that’s a win. That’s that’s that’s up into the right and it’s always interesting to speak to folks who are positioned outside the US to hear their commentary on domestic politics because I think they do have better perspective than we do in the US because it’s so hard to get true information any longer. It seems like and I agree with you. Personally, I think once you’ve given people, the universal basic income or whatever term you want to throw at it, you know, giving people less quality of life never turns out well, and you can look at Europe as an example of when people are given something and then you take it away. They don’t react well to that. And so I think regardless of whatever political parties in power we’ve seen that this works in the near term, in terms of giving people money for free, and I don’t think we can go back, in my opinion.
Unknown Speaker 34:49
It’s very hard. It’s really, really hard takes huge political courage to do so. It’s not a popular thing to say. But if you go back to the founding fathers what they’re all about was individual empowerment and liberty and freedom and small government and representation. And what you have now is a ballooning government and and promises they have controlled the currency and the original Constitution actually prohibited them from doing that, and tied it to gold and silver, which sounds crazy, but the reason why is because it becomes politicized. And that’s where we are now. I think we’re in the endgame of this, this, this, this cycle. I don’t know what is to come. I’m really, really concerned about the political rhetoric. We hear from the Republicans and the Democrats. They’re diametrically opposed. And the commonality that they used to share that maybe 25% of both camps that actually overlapped and that’s where the business of business got done, is now completely polarized. And they’re not even talking. There’s hatred there. And we’re very worried. I mean, we have clients who are moving from, you know, mixed states to red states and other ones are moving to blue states. What the hell is going on? I mean, like, this is really, really dangerous times. And it’s, I think it’s exasperated by this social media experiment that we’ve never seen. Before. Because biases are being exploded out and been reinforced in order to keep attention on again, advertising dollars. I think the if we could somehow turn the clock back on those algorithms, and bring back that social commentary, to to reason and empathy, compromise. You know, there might be a chance to turn this thing around, but right now it’s on it’s on a really bad trajectory. And, and the monetary system is really important in this because you don’t know what value is you don’t know where to invest. You don’t know where to protect yourself. Yeah, and it’s and it’s such a wonderful country. I mean, my my wife’s American, like three boys are American. She’s from Buffalo. And I spent many years over there and I’m absolutely in love with the country. And it’s it’s sad to see the, the what’s happening there between those two camps. I just think it’s, it needs to change.
Unknown Speaker 37:06
Yeah, I’m actually from Albany myself, so so it’s good to have another upstate New York connection and a conversation for another day, probably offline, but I did look into you know, how to gain Irish long term visa status or citizenship. So you know, it’s not lost on me. Ireland’s got a lot of positives when you think about the the physical location, the isolation, it’s got really good agricultural base, obviously it doesn’t have a lot of exposure or doesn’t lean on a lot of other countries in terms of its production in a lot of ways. So it’s got a lot of things going for it. It’s a fairly unified political community as well. So anyways, I’ve done a little bit homework there. Fall follow up question to this larger inflation, macro economics geopolitical. You talk about experiments to social media. What about this experiment with digital currency? You know, many people pitch it as digital gold, which I’m sure you push back against that definition. But it’s an experiment that’s gone awry, at least in terms of where it stands today. The market has been crushed. It’s gained a little bit but it’s still really, really down. And there seem to be some little very significant political forces that are going to be attacking it as well. What are your thoughts about that, as you know, a version of gold or something that that people should educate themselves about?
Unknown Speaker 38:42
Well, it’s not a version of gold. I wouldn’t be I would never be in that camp. But I am a big fan of blockchain technology itself. As an efficiency that is, I think, is like the wheel. It’s like a one and 1000 year technology that’s going to transform every facet of of service and industry right across the board. And it could, it could bring so much benefit to society in terms of reducing waste, and disintermediating, the the countless white collar middlemen that take rent from all parts of our economy and an increased costs to the consumer. So I think there’s a huge efficiency there blockchain all the way big farm crypto is a experiment in blockchain in the use of currencies, that’s all it is. But then it has attracted huge amounts of promoters who have who are who are selling their books. And they’re doing that in a in a backdrop where we have negative interest rates, negative real interest rates, and so if cash and money is a liability in your account, anything that’s not that or has potential upside is going to be sold. So that’s where the move to blockchain Where are sorry, Bitcoin, and Aetherium. And all these different times is like 15,000 of them now, you know, you and I could create a blockchain now in the next half hour if we wished. So I do think there’s an awful lot of promoters most people are new well can be quite naive. I’m particularly worried about Africa actually, in this in this context, because they the in a lot of African countries have very, very poor systems, poor currencies, and have desperate need. People are putting their money into Bitcoin and other things in this kind of like, you know, gambling method. perspective, they were going to lose, they have lost their shirts, and they can’t afford that as an economy so I’m really worried about them. I think the West we can afford to lose the billions that have been lost so far, but they can’t. So I do you think blockchain is brilliant? Crypto is very, very dubious central bank digital currencies will be coming out very shortly. And when they do, I do think that their friends in the press will attack every everything that’s every private big blockchain blockchain currency and associated with you know, murderers and terrorists and everybody else they need to be on the front page of the Wall Street Journal. And they’ll kill those markets as quick as they possibly can. Libertarians love the idea of of Bitcoin, because it has this kind of like the people’s currency, which goes back to what we said before about the founding fathers and your liberty, it is currency should be in the hands of the people. It shouldn’t be in the hands of the Feds or the government. It should be something that’s traded amongst people. So I’m a big fan of that concept. I don’t think in a million years is going to happen not until the system resets itself. And and I do think money and the control of money is power and power. is political. They’re not going to give up control over the dollar or the printing presses until they have to. So it’s it’s it’s a fascinating time. Really interesting time what’s happening.
Unknown Speaker 41:46
All right, that was my next question is going to be this concept of personal sovereignty that we discussed earlier. Is there a parallel to be drawn are an extrapolation that you could make where Bitcoin or cryptocurrency blockchain technology could eventually threaten the concept of the modern nation state in many ways, and is that why they’re going to regulate the hell out of it? Yeah,
Unknown Speaker 42:09
yeah. Yeah. I mean, like, you know, possibly, you know, these these empires, they tend to run their course the the US the American economy, the may have run its course. I don’t know what the future holds for us. A lot of us strength comes from the dollar. And that’s something that people don’t actually realize. It’s not the military, it’s the dollar. And that’s how they, they they project power globally. But I do think that if you look at the if you look at the the amount of globalization that’s happened, if you look around your office there, if you might have items and where they’ve been sourced today versus 15 years ago. You know, in terms of production, we are very global. And I do think city states like Singapore, and places like that, have shown what how powerful and wealthy they can become on the back of commerce. I don’t know. It’s really interesting. Maybe Maybe Britain, the UK might might come out of this Brexit cycle and become a huge firepower again in the world, commercially. I mean, I don’t see it right now with the type of leaders they have because they’re awful, but unshackled city states may be and crypto possibly leads into that because those currencies then compete as well. I do think this is my total wildcard. I do think the Chinese will make a play for for reserve currency status in some way. And I would not be surprised if they did so on the back of some sort of gold allocation. In part, you know, it’s some sort of trade weighted commodity backed where gold plays a really important part. And I think if you look at that as a currency and it’s it’s, it’s anchored to gold, or silver or some combination and then you look at the dollar, which has been printed and the Treasury options which are very likely covered. Yeah, maybe people might start you know, issuing debt in those currencies or migrating across, which would be kind of crazy give because given the way China’s run, but yeah, so it’s, it’s it’s all up to, it’s all to play for.
Unknown Speaker 44:18
So we’ve had a pretty far ranging conversation going from the fall of the nation state to the American forefathers to inflation, geopolitical risk volatility. What are some things that you do in your everyday life to bring yourself you know, financial peace, emotional peace?
Unknown Speaker 44:41
I am a big fan of Ray Dalio, the hedge fund manager I just think he’s absolutely fantastic. And I read his I read his book. I think it’s principles, which I gotta tell you, a lot of it was, you know, above my paygrade because you have to read it a few times to really get in to what he’s saying, because it’s really fascinating. It’s something that you have to read, read over and over again, but he did talk about meditation, which I’ve always dismissed all that stuff as being kind of just oddball activities. But when he said it, I listened. And I started doing meditation about two years ago. Trends. It’s called TM, transcendental meditation. And I did a course in it. And oh, my God, it was absolutely life changing for me. In that it had this calming effect. It allowed me to kind of, I don’t know what it was, it was like having the best sleep of your life. You just felt really refreshed, but in a much deeper way, and you could turn on that kind of focus, and it takes a few weeks of doing it before you actually get benefits. So you have to keep doing it. So I would say anyone who’s like got an awful lot coming at them and is enjoying life but also is acknowledging the stresses of life. Do a transcendental meditation course. It’s not as hokey pokey as and weird as you might think. It’s actually really, really smart. And that’s the one thing I would I would suggest that people do.
Unknown Speaker 46:07
Yeah, it reminds me of, there’s an old there’s still a number of Quaker schools in America remaining and they have every day mandatory 12 minutes of silence but in a community setting so they all get together in a chapel or a room. And it’s not really a religious experience, but it is something that they do as a daily exercise. Yeah. And so it’s interesting, I asked this question to a number of people that I get the meditation response very often so. Seem to be on to something. Steven, I want to thank you for joining us today. It’s been super interesting. If people are interested in learning more about the firm, they want to connect with you to learn more about accessing physical gold, what’s the best way for them to get in touch?
Unknown Speaker 46:50
So the website is gold corp.com We have a really cool educational video series on YouTube. Called the M three, report, which we just started. And we’re getting huge, huge, positive feedback from our clients. So I’d go there for just educational purposes. Put Jack go on to gold corp.com open an account or contact us through there. I’d love to call. If anyone’s interested we can do a strategy session. Talk about what the best fit for them might be and and come see us in Naples or come see us in Irvine, California as well.
Unknown Speaker 47:24
Yeah, absolutely. And we’ll include include the contact information in the show notes. Steven, I hope you have a wonderful weekend. Thank you so much for joining us,
Unknown Speaker 47:31
YouTube, Brian. Thank you so much. recording stopped. That’s great.
Unknown Speaker 47:37
That was good fun. So the one thing I need from you is your address so I can send you a token of thanks for coming on the show. Oh, you
Unknown Speaker 47:44
have a physical address, your physical address
Unknown Speaker 47:47
and I need a phone number. I don’t need your cell phone number but in order to ship internationally for the US I do need a phone number so I’ll shoot you a reminder email. But we’d love to just get the address and a number I don’t think they call it or anything but it’s a weird FedEx UPS thing.
Unknown Speaker 48:04
And probably if you send me an email to my email address, when would it be ah
Unknown Speaker 48:09
I will I’ll shoot your note and thanks again for doing this. I really appreciate it and I hope you have a great weekend.
Unknown Speaker 48:16
And Brian, invitation to you to come to Ireland I’m deadly serious.
Unknown Speaker 48:22
So my brother my brother studied abroad at Galway Oh wow. And my my mother’s side of the family is from that part of the world from Cork originally. And so I’ve been to Ireland four or five times. And so it’s funny like putting on my tin hat. I’m a little worried about the world in general. The way things are going and you look around though and like everywhere is going to hell in a handbasket. But you you start looking at like okay, island nations that have pretty stable social structures. Be they economic be the governmental that have good agrarian bases, right so they don’t rely on exports or imports rather. Like Ireland checks a lot of these boxes, honestly. And so it’s about a million bucks is what they require for citizenship. But I mean, it’s certainly something that kind of started looking into a little bit for sure. So I’m curious, how did you decide to take your kids and raise them there as opposed to the states was there that was a lengthy conversation or none of
Unknown Speaker 49:39
them were born here. Got by if we move back when I left New York after 911 and then I traveled around the world with my new wife Paula. And and then we set up home here in Ireland. It was kind of tough for a few years. And then we had our three babies three boys under three and a half. Raising just crazy. lunatics. Yeah, but they’re big now. My oldest is 18. Oh, wow. Yeah. So they’re great. They’re great guys. They work in the local pub, that local Irish Pub up the road and then they all speak Gaelic in school. That’s really cool. Yeah, they’re great. them and I think they’ll probably make the real states just for to explore the world and
Unknown Speaker 50:19
they go to university in Ireland. Say again, they went to school in Ireland, they didn’t go to
Unknown Speaker 50:24
the States. The oldest is going into college and September. Got it. I don’t know. We don’t know where he’s gonna go because it based it’s based on the points he gets from his final exams. That determines on a competitive basis, which course he gets into. But yeah, he’ll go locally, and hopefully he’ll do well. But it’s, it’s a great it’s a great country. It really is. We actually have an office in Galway as well. Near Your brother is in spiddal which is in the Gaofeng they all speak Gaelic.
Unknown Speaker 50:52
Yeah. So yeah, we went to the one of those islands off the coast of Galway where they still Yeah, the Aran Islands. Super, I mean, beautiful, really interesting place. And it’s cool the fact that they tried to bring back Irish culture, Irish language. It’s really fun to see I went there pre COVID I guess was right, but it was a summer for COVID. Yeah, but I need to get back for sure. So
Unknown Speaker 51:27
well, you gotta look me up. Okay. Um,
Unknown Speaker 51:29
well, that’s very, very kind of you. Yeah, very kind of you. And so I’ll I’ll send you a follow up email on the address. And then I’ll also introduce you to Louis O’Connor and you all can get a drink and talk about rivers and everything else. And
Unknown Speaker 51:42
what was it I was actually on the phone to go to Aran Islands today my head of trading actually, he works in this middle office, but we let people work remotely too. And they go on holidays and they work wherever they are. And, and he just told me yesterday, so I’m going out to the islands. And then he worked from the islands today. And he was you know, we did a zoom call. We were planning at our, you know, all sorts of stuff trading all over the world. He was from the Iron Islands.
Unknown Speaker 52:07
It’s wild. I mean, it is. They were telling me that when I was there, you know, we did like a local guy showed us around you saying they didn’t get electricity until the 70s. I don’t think Yeah, yeah, wild.
Unknown Speaker 52:20
That’s brilliant. I love that. Don’t Angus, that Air Force. They have the circle on the cliff. Yeah. Yeah, we’re very lucky. We’re very lucky. And yeah, you’re more than welcome.
Unknown Speaker 52:32
Okay, awesome. Well, have a great weekend. Steven, I appreciate it. And I’ll follow up over email. Okay, thank
Unknown Speaker 52:36
you for your time.
Unknown Speaker 52:38
Oh, when’s it going here? I don’t know. That’s above my paygrade but you’ll get a heads up before it goes. Probably a few weeks. We got a lot of content. So we’ll let you know. Okay. Bye.
Derren Burrell is a professional money manager with 28 years of experience in both the public and private sectors. Highlights of his active-duty service as an Air Force Financial Manager include managing $15 billion at the Pentagon…
Jason McCann is the CEO of Vari. It is his mission to help companies create environments that elevate people. He co-founded VariDesk in 2013, and the brand quickly became synonymous with sit-stand desks.
Liam Bailey is the global head of research at Knight Frank, based in London. Liam runs a team providing insight on the world’s key property markets.
Jeff Hays has 27 years of experience in the financial industry and was the co-founder of the institutional asset management company Hays Advisory and ran the company until 2019.
A real estate private equity firm that owns and operates high quality multi-tenant office assets in emerging secondary markets.
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