Sunday, June 26, 2022

Bill Holter: Ruble has dramatic rebound vs dollar since beginning of Ukraine war

You saw the ruble trading in the 72-73-4 level for quite a while leading up to the operation and you're right it was a total blowout you had the ruble basically lose 50 of its value in about i don't know a.

Week's time it got down to 140 to one and it turned immediately and here we are now now i'm you're showing that it's 54 to 1. well hello there my friends and welcome on into arcadia chris marcus here with you.

Along with bill holter of js mindset as today we're going to ask bill what's going on with this ruble that got hit with these sanctions from u.s after the war in ukraine began the ruble got blown out initially yet has actually been rallying in the face of the sanctions so quite an interesting situation and certainly if.

There is anyone who's qualified to comment on such a thing as rocky iv appears to be breaking out it would be cowboy bill holter bill it's great to have you back here digging into this because it's uh quite an interesting blow back i guess that's what happens with sanctions we haven't seen this reflected in gold and.

Silver yet but looking forward to digging in with you today and real quick before we get started today's show is brought to you by kuya silver one of the companies actually going to be bringing silver in this high inflationary environment we'll have a note about them at the end although with.

All that said welcome on in bill how are you today and how's everything going with you i'm well thanks for having me chris well it's a pleasure to have you back on here we talked about the war breakout several times a couple months back and i think there was a degree to which.

The markets were figuring out how to price these things again it's the situation is changing and we'll get into some of the latest updates but why don't you take it from there with the action we've seen with the ruble against the dollar in these past six months yeah you saw the ruble trading uh.

Roughly 70 to 1 or slightly lower than 71 in the 72-734 level for quite a while uh leading up to the operation and you're right it was a total blowout uh you had the ruble basically lose 50 of its value in about i don't know.

A week's time it got up to 140 or got down to 140 to one uh and it turned immediately and here we are now uh last i had seen it was 57 58 now i'm you're showing that it's 54 to 1. uh it it's not surprising uh given what.

Russia is saying that in order to procure their reefs well to procure oil and gas at this point but i suspect it's going to be the rest of their natural resources everything is going to be uh priced and settled in rubles and of.

Course when they announced that they put a little addendum on to it or gold if you wish in other words they're saying if you want our our resources you've got to pay in rubles or we'll accept gold but nothing else and you've gotten probably 25 or 30.

Countries already that have gotten on board with that and that's what you're seeing in that chart is that the ruble is strengthening because trading partners with russia in order to uh to get their oil to get their gas they're having to sell whatever currency.

They have uh more than likely or actually probably the largest port they're having to sell dollars because that had been a settlement in the past you're selling their currency or dollars to buy rubles and their that chart is showing you right there that.

There's been tremendous strength the ruble has literally doubled in value since the first or second week of the operation yeah it's incredible again strengthening even further than where it was before all of this began and bill you mentioned that somewhere.

Throughout this at the same time we've seen the dollar rally which on one hand okay i get it they're raising interest rates yet seems like they're a bit away from really strengthening the dollar what do you see going on there okay let me get to that in a second i just want to make one more comment on.

The ruble understand that russia the way the way their their uh credit situation is they're basically call it 15 debt to gdp they are a pristine credit even though we're uh the u.s is in the.

West is probably going to force them into a a default doesn't mean they're insolvent it just means that we we are making it impossible for them to pay uh debt service on that debt so compare that to the us what are we hundred and fifteen hundred and twenty percent debt.

To gdp compare it to japan they're over three hundred percent debt to gdp russia is a pristine credit and i think that's going to matter as the world begins to bankrupt collectively russia is going to be one of the countries left standing from a a paper or credit standpoint if you will.

Specifically because they don't have much debt they're only 14 15 debt to gdp as far as the dollar is concerned yeah the the dollar has strengthened uh on the usdx but understand what the usdx is it compares the dollar to a basket of currencies uh the euro the yen.

Uh the yuan has been included understand that the currencies that the dollar that the dollar on the usdx are being compared to are dog crap so you're looking at you're comparing two piles of crap is what you're doing you can't tell me that the dollar is strengthening because if it were.

Strengthening we would have lower prices across the board on all kinds of products and instead what are you saying you're seeing massive inflation or massive price hikes in oil gas food you name it the dollar is weakening so.

That that chart you're showing the usdx basically camouflages or masks the fact that the dollar is inflating it is losing purchasing power versus goods and services yeah i appreciate you mentioning that bill because as you quite rightly point out i mean let's take a look at what the.

They're comparing the dollar against in this dxy i mean that's 71 percent euro and shinzo abe yen then tack on another another 12 for pound sterling i mean the only thing they left out was the zimbabwe dollar right interesting as you say that russia seems to be the only one that puts anything.

Behind it and here ronan manley was reporting that after the initial we're going to back the ruble with a fixed rate then went to a negotiated rate you can comment if you have any thoughts on what that actually means there were some comments from uh russian officials shall we call them that i hear we're walked back hard to.

Know what's actually supposed to take seriously these days yet seemed like they were working on a plan to more permanently going forward back with gold and other commodities any thoughts on any of that well i think what you're going to see.

Uh at this point it's just oil and gas but i think you're going to see other uh products that russia produces platinum palladium uh even food stocks it's even weak stuff like that i think they are going to require rubles in payment.

For trade with them and they do have the luxury and they have the luxury of not trading they basically have said we will weather this storm and they they really do not i mean obviously they want to trade because there's products that they need but from the standpoint of.

Of real goods they're requiring what they believe is a a real trade settlement and that real trade settlement is either rubles or gold they're not going to take dollars they're not going to take euros they're done and and a matter of fact if you go back.

To even putin's original speech just before the operation started if you read that whole thing he is basically saying they want something they're they're done of dealing with the empire of lies they want something real for something real they don't want something fake something false for real products.

Yeah they they've made that clear there was last year when putin was talking about how he was done dealing with the rothschild dollar so it doesn't seem like they're thrilled with the current arrangement meanwhile we also have china.

Who has financial nuclear bombs if the west levies russia style sanctions beijing horns and of course the headlines a couple days ago were that now if china goes into taiwan the u.s is going to get a presence in there a lot happening bill what would you say about china and gee that seems like a lot for joe biden.

To juggle i would think but what do you say uh what i say is we are living in an extremely dangerous time uh from the standpoint of war slash potential nuclear war there's there's really nothing that the us can do if if.

They'll do this we will do the same thing with taiwan that we did with ukraine nothing we can throw money at it and that's really all we've done is throw money at it the problem is that money is is depreciating on a on a daily basis but you're right china does.

Know that they hold a financial nuclear bomb a financial nuclear bomb over the head of the u.s treasury because they own what roughly three trillion dollars of uh treasury debt and that and we are by the way i think right now at the lowest point uh or door china has is holding the.

Lowest amount because they have been bleeding off their treasuries over the last year or two so that number of three trillion is lower than what it was but who is going to step up and buy all that treasury debt if china just pushed a red button that said sell everything if they were to do.

That you'd see interest rates 10 or higher or you you'd see that the treasury or the you'd see the fed's balance sheet increase immediately by 3 trillion because they would be the only buyer so truly.

Uh they do hold a club over the head of the us treasury oh come on bill you know darn well who's going to come by and buy those treasuries when the u.s market's tapped out silver chopper there you go we'll get to these comments shortly but.

Maybe someone who does know the plan in a world that seemingly especially after the last two years seems well orchestrated at times here's old croaky himself henry kissinger who is out giving a speech and had a bit of a warning for china so bill i knew i told you i was gonna sucker punch you.

With a little bit you weren't expecting to hear kissinger at age 95 or whatever today but let's take a listen i mean you've met xi jinping many times too and his predecessors you uh you know china well um what lessons is china drawing from this any chinese leader now all chinese leaders.

Would be reflecting how to avoid getting into the situation into which putin got himself so there bill i'm sure you're going to invite kissinger to your barbecue this summer but kind of warning from someone who seems pretty connected to the davos crowd saying watch out or else they'll find themselves in a situation similar.

To putin how do you think that would play out if you see that happen next uh well we were just talking about a moment ago i think immediately you would see china liquidating our treasuries and you see interest rates going higher i think that's an empty threat i mean.

I i don't want to really get into this but i mean here we have generals now that wear skirts so i mean he's talking from a military standpoint does does does kissinger really believe that if taiwan was invaded that we're going to go over there save the day and win the war i mean we haven't won a war.

Since what 1945 so i i think that's a a hollow threat that's my opinion or is senile well it could be both and it seems like they just tried to do the financial war these days although in terms of the inflation that you mentioned someone who's been quite well.

Associated with that and bill here you go some ben bernanke he had some interesting comments he's got a new book out which i'm sure you've already been reading but let's i'd love to hear your thoughts on a few of these wild comments that ben had we also talked with bernanke about the chances of a.

Recession here's what we had to say the more the fed has to tighten in order to get inflation down the bigger the chance of a recession and the more severe it will be the more they have to tighten the bigger the chance and the more severe it's going to be and they're talking about going 75 basis points so where does that leave us.

Well chris i'm already on the record that i don't think we can have more than three rate hikes i think the markets will implode uh after the second rate hike going into the third rate hike i mean you you're already seeing markets that are extremely illiquid across the board.

So you've also got the federal reserve saying that they're going to shrink their balance sheet starting in june well my first question is who are they going to sell it to my second question is and what prices i don't see any way that they really can.

Shrink their balance sheet and i don't see any way that they can tighten more than three times they will create a financial implosion and i think china knows this and and russia knows this we are uh an over leveraged debt monster if you.

Will and they fully know this this is not it's not a surprise i mean anybody with with half a brain can understand that the west has levered up beyond all belief and i was going to mention in the when you asked me about uh kissinger's uh.

Comments on china yeah china has borrowed an awful lot of money but china doesn't care because who do they owe it to they'll they owe a lot of that to the west so if they default on it they're defaulting on the west and guess what they did with that money they built airports they built uh.

Railways they built all kinds of infrastructure they built cities so they default they're left with infrastructure we built up a huge amount of debt way way more and what did we do with that we ate it we ate all our seed corn there's none left so when this thing goes down you're.

Going to see the west collapse and china will be left with uh the infrastructure that they've already built and rushes actually not that indebted so it's the west that's got the problem it's not the east well it sure does seem like that and.

Throw on top of that we've been hearing increased reports of food shortages there was a warning from joe biden then certainly a lot of the guests i have on a lot of the articles i read it's hard sometimes to know what's real but what have you seen in terms of the food supply issue.

Oh you're hearing all kinds of of issues a matter of fact i went to the uh grocery store uh thursday or friday last week and there was no cheese there was no cold cuts i mean the whole back wall was completely empty i mean.

Think about this the united states for however many years i mean you go back you know 50 70 years or more the united states if you had money you could buy anything you wanted from anywhere in the world because it was available now it doesn't matter how much money you have you weren't getting cheese or cold.

Cuts out of that grocery store how about if you have a baby and you need baby formula i mean i said probably back in 2000 i think it was 2007 89 in that era that the the plans that were being put in place.

Were too stupid to be stupid there's no way that anybody could come up with the programs that they they have and have ever since it has to be a plan it has to be the plant demolition of the us which means the plant demolition of the west i mean.

What else how else are you going to think about it i hear you it's unfortunate and i think it's shocking for people to imagine that this is how corrupt it could actually be yet i do fully agree and appreciate you pointing that out not trying to get people alarmed but.

Certainly things happening i mean we i think the fact that we just lived through covid recent data points oh but now we have monkey pox i hear i hear that's coming now that's that's the next one so so now we got monkey pox so everybody's gonna have to wear a mask again.

Everything's gonna go into lockdown and don't forget we'll have to have mail-in ballots that's that's another part of it well bill you're saying and and hey chris hang on one second and monkey pox was talked about this came out yesterday or the day before.

Monkey pox was projected to come out in mid-may over a year ago really so this is no haphazard thing it's it's part of the plan certainly a lot going on out there and bill before we wrap up i know that you have a mining stock that you're involved with and you had a note that you wanted.

To share with people so uh why don't you tell people what you're looking for you know yeah i've been involved uh for the last seven years or so since i uh partnered with uh jim sinclair um i'm a property guy uh and i looked at this from a property standpoint they had tried to get into production.

For four five six years uh the the capital window had been shot they had raided they got new management uh the company by the way is uh trx gold corp i am a paid consultant to them um but they're they're really at an exciting juncture at this point.

Within two or three months they should be completely built out uh for the oxide side of it and producing fifteen twenty thousand ounces per year already at a smaller you know much smaller uh about a third of that they're already cash flow positive.

Because their their uh cash cost of production is under 800 an ounce so obviously there's leverage to uh as the price goes higher your profit margin expands and what's really exciting as i mentioned i'm a property guy is the main zone buck reef is a uh it's roughly a 2 million ounce resource.

But they've they've discovered in the last 18 months two additional zones which uh the the cash flow from the the production of fifteen twenty thousand hours pick a pick a number i'm guessing somewhere in the neighborhood they'll.

Probably make about 15 million in free cash their their primary goal with that cash is to drill um and that was one of the things when management came on my first suggestion was if you you get this thing cash flow positive use it to drill because though resources don't.

Uh they're not bid right now i think they will be bid in bid in the future uh and as far as the future is concerned right now they're only mining oxide and that's only 10 of the project uh the rest of the project is sulfide and they.

Are at this point uh revamping plans for sulfide and that would make them over a hundred thousand ounce per year producer so take a look at it just i would urge anybody uh to read the press releases the progression of the press releases management has.

Has really turned this thing around and done some some fabulous things in the last 18 months and i look forward to to what what they'll be doing in the future well i appreciate that bill and i'm sure it's good for them to have your insight.

And folks can find out more about tanzanian gold at tan gold court hey chris yeah chris one other thing uh just as disclosure because people are gonna say oh you're talking your book and you're absolutely right i am talking my book um i'm one of the largest shareholders.

In the company and it is my largest single holding well i appreciate that disclosure and there you go folks if you want to invest like bill by all means is not legal financial advice but one of the stocks uh to take a look at and i think that's a good approach bill where there's a lot of stocks that.

Especially you would think if gold and silver prices ever have any sort of reflection to the debasement of the currency that has been printed massively would see some good projects do well again please do so responsibly and just go and learn more about them and bill for uh folks who want to learn more.

About you and the writing and interviews you do can you give your website out one more time before you wrap up yeah you can go to jsmindset.com that's jsminesct.com if you do want to reach me directly you can contact me at b halter hotmail.com well i appreciate that bill always great to catch up with you especially now.

Where it's hard to know what news to trust and what's actually happening and i know a lot of people have been hearing you for a long time so great to get your perspective and we'll look forward to it it's pretty easy to know what news it's pretty easy to know what news to trust.

If it's on mainstream media it's well that that sounds like a great bumper sticker and i appreciate you checking in we'll do this again soon buddy all right thanks for having me chris well thank you bill and thanks to everyone at home watching a few last notes before we wrap up did want to pass.

This along came out earlier this week where you see home listings suddenly jump as sellers worry they may miss out on the red hot housing market not sure if it's the red hot housing market they're worried they're going to miss out on or the lower interest rates uh but you can see the supply of homes for sale jumped nine percent last week.

Compared with the same week one year ago and real estate brokerage redfin also reported that new listings rose nearly twice as fast in the four weeks ending may 15th as during a period the same period a year ago i would suggest that these mortgage rates have something to do with it and certainly you can see that over this chart that covers the.

Last year big spike in yields earlier this year has come in a little bit over the last month although with more fed hikes on the way we'll see how that goes lastly david stein of cuya silver was on the key report with corey fleck talking about his project and david had some interesting comments in terms of the approach he's taking on getting cuya's.

Bethanya project into production and we'll play a little snippet of that now for us we felt like getting into production you know even if it's a little on the smaller side it's going to be far more creative for shareholders and then we can start allocating that cash flow into things like expanding exploration the next bithania expansion.

To make it even bigger etc etc and i think the pa bottom line is that it kind of confirms much of what we had already been you know talking about and and expecting ourselves you know for example the the costs the both topics and opex are very very low that's what what we always you know have.

Been have been thinking and so it's it's nice to have some more firm numbers around that you know then the other thing that i think kind of sticks out you and the pea is is how is the huge return and quick payback that this project has so once it's once it's financed and once.

It's in production the cash flows that it should that it generates you know should basically pay back the capex in less than a year well certainly good to hear on behalf of kuya and thank you david and kuya for bringing us tonight's episode and to hear the rest of that interview.

15-minute call with corey fleck on the ke report well that is coming your way now you

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