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gold – be adopted by the crypto crowd, to the extent that in order to be able to induce people to look at crypto in the first place, people refer to it as gold 2.0. Now for some people, that may be enough to be able to have exposure to crypto as being a currency that has limited ability to be reproduced. But there will always be enough people who are interested in gold, and
I think personally that the acceptance of that “gold 2.0”
Now, I don’t need people to have as much exposure to gold as to crypto. If we even had a fraction of the market cap of Bitcoin, going into gold, gold would be at $20,000 per ounce. But do I think that there’s going to be some spillover effect onto gold, as people say? Well, maybe gold is undervalued.
Relative to...
Yeah, we’ve bought the argument for gold, but maybe it is actually undervalued. And it does cost something to produce
– that we can quantify – so we just need some of that to rub
off on a scarce asset and gold will be like a bat out of hell. And one of the things that we’ve seen is that in today’s world, when something’s going up, that’s when people really want it the most. So, if gold goes through $2,000, it can also go to $2,100, $2,200, $2,500.... People will start saying I’ll buy it on a pullback and then it will pull back and then they’ll be afraid to buy it because they don’t want to be the sucker who bought it at all- time highs. And then it can go to $3,000, $4,000, $5,000.
We see that, by the way, in cryptocurrencies. We see that in assets when they’re in a bull market and they have momentum, and especially now where there’s so much capital. So, I think when you do see that $2,000 breakthrough, it’s going to
be enduring and the uptrend will be violent, which is just wonderful for us and it’s especially wonderful if you’ve got assets with great leverage to that in places that are not going to nationalize you because now you’re viewed as a strategic asset that should be in their portfolio. You want to be in a place where private property is enshrined constitutionally – and there aren’t that many.
Right. It’s a short list.
And getting shorter by the day. You know, they say that they don’t ring a bell, but as we were discussing earlier, the
“Go where the gold is” mentality really began in the early 1990s when Newmont went to Yanacocha. I think that they rang the bell when Newmont and its partner Buenaventura weren’t
able to continue with Mina Conga in Peru. There was almost
an unfortunate but poetic symmetry to the entire arc of the scramble for gold, regardless of jurisdictional risk. But we see
it now across the board. In fact, in Peru, you know, they just devastated a silver miner stock on the London stock exchange.
“If you don’t have great relationships with the communities, if you don’t have great relationships at the provincial level so
that people...see that what you are doing
is going to have a direct impact on their lives and, most important, the prospects for their children, then you’re going to go nowhere fast — or even worse, you’re going to build something and find that you have challenges. We don’t have those issues.”
narrative is going to create a lot of arbitrage between gold
2.0 and gold 1.0. You know the Chinese, the Indians, many countries around the world are still buying a lot of gold. Central banks are buying a lot of gold. Singapore, which is a bellwether central bank, bought gold for the first time in decades. That was made public in December. Now to me, central banks are like insiders. They know the value of the assets that they hold.
Most of which are dollars.
Most of which are dollars, are now subpar financial assets that they’ve had to hoover up in order to sustain the global economy since 2008, 2009. So when they’re buying gold, it’s like when a museum buys a work of art. They’re voting with their feet to be able to have some exposure to it.
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