Gold & Silver Are Revving Up as Turmoil, Inflation Continue

Mike Maharrey: Greetings. I'm Mike Maharrey, a reporter and analyst here at Money Metals, and I'm here today with Greg Weldon. He's the founder and CEO of Weldon Financial, among many other things. I'm going to read from his old Twitter profile, "Speculator, author, dad, poker player, philosopher, astronomer, golfer, body surfer, and former b-baller." That's a man of many talents.

Greg Weldon: I’m not so much of a body surfer anymore. There are too many sharks, man. So it's actually become pretty dangerous to body surf.

Mike Maharrey: Is there really?

Greg Weldon: Got to be careful.

Mike Maharrey: I don't think about sharks much when I'm in the water. My wife does, on the other hand. I'm not so concerned about it.

Greg Weldon: Well, you never do until you see several attacks. Down here in South Florida, the water's so warm, the sharks are looking for food and it's been unprecedented. And normally you don't worry about it, but now you kind of do. I'd never worried it about until this year.

Mike Maharrey: Yeah, yeah. Well, and see now I'm going to worry about it next time I'm in the Gulf, so thanks.

Greg Weldon: Great positive note to start with.

Mike Maharrey:[Laughter] Right. So I wanted to start off just with the most recent news on the radar and that's the CPI report for August that came out today, and it seems like it was pretty much in the ballpark. Definitely, the headline number was in the ballpark, but we did have a little bit of an uptick in the core month-on-month going up 0.3%. I think they were expecting 0.2%. First off, I'm just skeptical of this CPI data to begin with. So it's hard for me to really make any analysis of it, but how are you looking at it and the market reaction to it and maybe dovetailing that into... I think we can pretty much mark down some type of rate cut here in September, but what do you see as this plays out over the next months?

Greg Weldon: Yeah, I think the report actually was really interesting. When you dissect it, there's a dichotomy right down the middle that is a little disturbing, that we have in our conversations thought inflation would come down. It was a face-effect thing with energy. Maybe energy would come up and you'd have a rebound, but it hasn't happened and energy is making a new low-

Mike Maharrey: Right.

Greg Weldon: Despite inventories of crude oil being near the five-year low. They are at a five-year low because you're using that crude oil to build gasoline inventories, which are back from a five-year low to the midpoint of the five-year range. So it's interesting to see as this progresses, now you get another monthly decline in energy prices, which was unexpected if you were forecasting this kind of thing, especially with what's going on in the Middle East.

Holy mackerel. But in that context, you have food, many of which are the components, and there are 114 of them. I broke this data down line by line, page by page, 114 food items, and there was one point where there was 78% of them above 5% year over year. You know there was going to be some deflation there and there was meat, cattle, hogs. These kinds of things came down. The grains and the oil seeds have had huge crops. They've come way down, but they've bottomed. And the margin for error, even with all these supplies, isn't that great because a lot of demand for these commodities remains very strong.

Having said all that, when you look at the TPI data itself, you have a downward draft in energy. You have food that is bottom, comes back to 2%, and services are anywhere from 3% to 5% to almost 6%. When you look at shelters, all the things that are X energy services are 4.9%. Shelter is still above 5%, and it's interesting because a big downward pressure on this number came from a double-digit decline in vehicle prices.

Well, we talked three months ago about the 21% increase in the inventories of unsold vehicles in this country. So of course, the price has come down. But what's funny about it, and this is just the perfect example, the polarization was yeah, okay, you might buy that car for a little bit less expensive price, but the cost to insure it, to service it, and to maintain it is in double-digit inflation.

So you're screwed any which way you turn around. I think that this dynamic remains very simple, man. You can break this down into a 40-year downtrend in inflation from the 1970s episode that this looks very much like in a lot of ways, different in a lot of ways, that is over. You've got inflation and interest rates, lower lows, lower lows, all the way down to zero. Europe's proved the experiment failed. You can't go below zero. It sends the wrong psychological message to people that everything is so dour that you want to pay the government to hold your money. That's ridiculous. Right?

Mike Maharrey: Right.

Greg Weldon: And in the context of debt, when you're looking into the debt abyss, a debt deflation is a bigger risk than a reflation. Central bankers will reflate at any cost every time, and you're in that mode now, shifting as we see even with the Fed, and the bottom line is, Michael when you talk about this CPI number, yeah, it seemed benign. It was 2.5% on the headline, 3.2%, and it's like you're headed towards at some point, I'm not saying it's going to happen soon, an inflation range of 2% to 3%, and then you're in the zone, and then the Fed could rationalize better. The fact is they have to get to neutral, which is maybe 3.5% to 3.75% based on this lower inflation. So this is a problem for the Fed going forward. We can talk a lot more about how that works in a lot of different markets, but this inflation number reminded us inflation is not dead, that the trend remains higher and you're seeing the formation here of a higher low.

And when the Fed moves aggressively, which they will have to do to protect the economy, to protect growth, to protect the debt, and to produce that credit to protect the consumer, they'll acquiesce in higher inflation. That's what we're going to get.

Mike Maharrey: And we've seen this, it's almost a ratchet effect, to reminisce about economist Robert Higgs in his ratchet effect theory that anytime the government does something, he gets to this level and it might come down a little bit, but then the next crisis, it ups and ups and ups. And with interest rates, it's the opposite. We're having this downward ratchet effect and every time they go lower, faster and higher, slower, and then it ends at a lower level every time. So that's where we are, and it's interesting because we're at what, 5.5%? There's not a whole lot of room for the next crisis when you really get down to it.

Greg Weldon: Well, you hit on a good point because the best example of what you just said is the debt. You have to keep creating more and more debt, more and more money, more and more Fed assets held on the books every time because it gets exponentially higher. It's a mathematical simple equation. When you have to print 10% on $1 trillion, it's a lot different than printing 10% on $100 billion back in 1987. Right?

Mike Maharrey: Right.

Greg Weldon: So this extrapolates out the town now where you're not Reagan in the 80s where he could reflate out of this by spending. This is so different and that's what I don't think people fully grasp yet it's, "Hey, no problem. We'll inflate our way out of it." And it's like what if they try it really doesn't work or it works so well? And I think the bottom line, and it's funny because finally, some people are starting to use this word a little more. I've been using this for the better part of six months, if not maybe a little bit longer. We've seen it in Europe. We're seeing it in the US, and that is the biggest trend that's evolving. It's like the storm that's starting to form in the Atlantic, stagflation, because then what's the Fed going to do? Acquiesce to higher inflation and this is where they put more money, the dollar gets whacked and you have a bull market in metals again.

Mike Maharrey: Yeah, it's interesting too, you're talking about the debt and the spending, and that always has been the prescription. We're going to have some fiscal stimulus when there's a problem. And yet when you look at the actual trajectory of spending right now with the Biden administration, they're spending over half a trillion dollars every single month. They're running very large deficits. We're going to definitely be over $2 trillion for this year. That's the kind of stuff that you used to expect in a massive economic downturn, and now they're spending like this just to basically maintain the status quo. It's one of those things that again, I think playing out overall longer term, people aren't paying as much attention to as maybe they should.

Greg Weldon: And playing out the longer term is the right way to look at it because they're spending as if this is Venezuela or Argentina or Turkey or some of these other countries where they just keep playing the currency. Now, we have not reached that stage yet, but man, we are on the precipice and you have this international story, the geopolitical story that puts away the politics in the US as meaningless really, in the sense of what's going on with China Russia and OPEC and India and the new axis of power on the other side of the world. And we're in a world war already around resources.

It's so obvious to me and I think that it's just a bad situation for the US, and for Canada even to whatever extent, that we're in this position now where we're vulnerable. When terms of financial weapons, we used to hold all the cards in financial and the economy and they need the consumer and so on and so forth. The tables have turned. When you talk about the BRICS currency unit, which potentially is starting to become much more serious, all of a sudden... I've been one that's poo-pooed this. Even though I know something's going to happen, I hadn't seen what it was going to be yet because the Renminbi wasn't ready. And I thought maybe they're going to try and push the Renminbi even because they played the dollar card, they win. It's over in terms of what our economy's going to do and it gives them a big edge.

And I think that's something they could use to hold this hostage on Taiwan and even the Philippines, and even Vietnam, and even Malaysia because that's the whole quarter. That's what they want is the shipping quarters to go all the way to the Middle East for oil. And again, we've talked about this before. That's why Biden pulled out of Afghanistan. It's a complete nightmare. It's a S show, for lack of a better phrase.

Mike Maharrey: Right.

Greg Weldon: And literally the next week, they're negotiating tougher negotiations with Pakistan to get their super highway built, to bring all these resources up from Africa all the way through Pakistan, Afghanistan, Iran, all the way down into Africa. And that's under construction right now. They're ahead of the game. They're playing above the rim, and we're on our knees right now, looking at each other, trying to figure out, "Can anyone jump?" I don't see anyone jumping right now.

Mike Maharrey: No. I think there's a perception with Americans -- let's be honest, we tend to be myopic people, but there's this sense that "Hey, we're the big stick. We're the world power. It's not really anything challenging us." And I've been watching this evolution of BRICS for a while and you just mentioned it. Do you think that BRICS really has the potential to be a legitimate force in opposition to what has been Western dominance in both the military and the economic sphere? Do you think BRICS is a legitimate threat if you want to call it a threat, or is it being overblown?

Greg Weldon: No, it's absolutely for real. And I'm not one that's really pushed this thought process in any kind of specific way until recent events. This is evolving this year. What's interesting in my year ahead forecast this year for 2024, just to get myself an unabashed pat on the back here, I said one of the three tenets of what would happen this year was the US would realize or understand, and I put it in a couple of different phrases as to how this might evolve, we're not the military police to the world anymore. They don't want us, we can't afford it. We're a broke country and not just broke financially, but broke internally in terms of the violence we see here in our own country. This is where you talk about China, where it used to be you criticize China for making sneakers into this ridiculous slave wage labor type of dynamic. And they'd be like, "We promise to do better. You're right. We promise to do better."

Since Biden got elected, certainly, Xi has said, "Look, you get your house in order. Don't tell us how to live. Look at your own nightmare over there. We do it our way. We don't really care what you have to say anymore." This was a huge shift that preceded all of this movement. And when you talk about is it real? It's real because of how it is developing, where you are going to do this on the blockchain, where you already have the clearing mechanism being developed in Moscow for this, where now where originally it was going to be 40% gold, 30% renminbi, 10%, I think Indian rupee, Brazil and Russia currency were involved, and then a little basket of others. This has evolved so fast now that they can actually... You have so many countries that want to join. Just last week, Turkey, a NATO member, and EU member, wants to join.

Mike Maharrey: I saw that.

Greg Weldon: This is huge news. I'm surprised it's not making more headlines in the sense of, "NATO, EU member wants to join the BRICS." And why is this going to happen? Because in this blockchain, with this technology, what you can do is have each currency that wants to participate, and it's a different basket of currencies in each trade. If trade is going to be between Vietnam and Thailand, it's a whole thing that's just between them. And the way they're going to now mechanize this is that each currency will have fractal backship backing of gold. So this is why all these central banks, not just China's, bought over 4,000 tons in the last 28 months, sold billions, hundreds of billions of dollars, about 800 billion of dollars in US Treasury securities, used those dollar proceeds to buy gold. All these other countries now want the gold, they want it delivered because it has to be stored domestically to make all of this work.

So this is a grand plan, the specifics of which have never developed before. And when you talk about people tired of US seigniorage and this whole military police to the world, they don't want it to the extent that that side of the world is more aligned than ever. And you have India. Come on, you have Xi and Putin both visiting North Korea. Why? Because South Korea is right across the straits from Beijing and the major port cities and everything. Come on. It doesn't take a rocket scientist to figure out. Xi, his dad was in the Mao regime and that's what he was indoctrinated with, brought up with, and sent to the US to become educated. He's the perfect kind of face of all of this, but at the end of the day, it's a Maoism manifest destiny and it's a big deal.

And the first step will be to take the dollar out of the equation, and when that happens, the dollar gets wasted and all of a sudden, we see the dollar gold in dollar terms move the way it has in all these other currencies where it's up 400% in the last three years and stuff like that. In the end, it's doubled since 2021, for example. So I think that's the future, and it is real, and I think it's happening more quickly than I would've envisioned it. The question is how do they bring it over the goal line? And we'll see how that plays out. Nobody's ready for this. People will be chasing gold higher. There's no open interest here. People have dumped their ETFs. This is the kind of thing where it could really be explosive, more so than I ever would've imagined.

Mike Maharrey: Yeah, it's interesting too. You think about the BRICS countries, those are the ones that are buying the gold. Those are the central banks that are gold buying. India was the largest buyer in the first half of the year. You've got China, although they say they're not buying right now, but I'm skeptical of that.

Greg Weldon: They're not buying because prices went up. So they're various traders too.

Mike Maharrey: For sure.

Greg Weldon: They were the big buyers. If you remember when gold made its 2011 high, then it backed off and then it came down, it was like trading around somewhere between 10.50 and 11.30 for a while, and it was the 50% retracement the entire move from 99' to 2011, bang on 50%. And every time it tipped below that level, it snapped right back. And we later learned that China was important. Tons of gold back then.

Mike Maharrey: Right.

Greg Weldon: They were buyers. They're very smart traders, man. I remember working on the Florida Commodities Exchange back in the 80s, and they weren't as big back then, but they were still... When the Chinese phone rang, you made sure that somebody was answering that phone before it rang a second time, or you're going to think of their woodshed. So yeah, I think that this is part of their grand plan too. Either use it to put us in a hostage position as they make a move in the Asian South China Sea, or in terms of destroying our economy. That's a good way to play it. So it's going to be interesting to see how it works.

And the other thing I might throw in there is there was a move in Canada recently to prohibit China from buying more land in Canada. What is it? Number third owner of farmland in the US is who? Chinese government. What the hell?

Mike Maharrey: Well, I guess that's what happens when you export so many dollars, right? They got to put them somewhere.

Greg Weldon: Yep. Got to pay the piper somewhere. Hope the piper's not playing the tune as he's leading it right off the cliff.

Mike Maharrey: Well, and again, I think there's a little bit of... I don't even know what the word is necessarily, just this false sense of security that the United States and the West have that, "Oh, we're so big and bad that nobody can ever topple us from this position." And I think I'm a history buff and every empire has collapsed, and I think it's wise to recognize that. I'm curious as to talking about the dichotomy between the West and the East. We've seen gold demand very strong in Asia and China, not just central bank gold buying, but investor buying. And I think that that was one of the biggest factors in the first leg up in this recent gold bull market.

The West still doesn't seem to have caught up though. Why do you think that Westerners tend to just turn the other way as far as gold goes? Even with it being one of the best-performing assets this year, I still don't hear a lot of buzz if I go on CNBC or Fox Business. Why do you think that is?

Greg Weldon: Well, it's a vested self-interest of the media. For one thing, you talk about the pop media, I call them the pop media talking heads, so on and so forth because almost every guest has invested interest in seeing stocks go up, so they're all bullish and they all spin the same bullish story. And frankly, I know some of these people, I used to be on there for years and it's like, I know some of them, they actually come on and they're saying things that I know they don't believe because this is the narrative. And you can see on a day to day this CPI number and this whole string of evidence. Part of the CPI number was actually a collapse in demand for some things that brought CPI down. So that's not necessarily a good sign economically, say, "Oh, it's great the CPI is coming down, but it's covered down because there's no demand for some of these things because the consumer is so choking and huge consumer credit in the last month, by the way, again, choking.

Even though delinquencies are going up, people telling us they feel less financially secure 12 months from now. The statistics are very clear to me, and I think the complacency is shocking. But we see this, I've seen this movie. You've seen this movie many times, '87, 1990, 2000 and even '97, then '98 again, then 2000, and certainly 2007. So it's very similar to me in that context of the dissociation. Why? Because US investors are focused on stocks. This is the way everything's built up. It's a passive investment. Everyone's thrown all this money into either indexing or to money. Managers are going to buy the same stocks. They have to keep the performance up with their peers, and so on and so forth. Very competitive business. Right?

Mike Maharrey: Right.

Greg Weldon: They buy the high-tech, right? Why? Because this is really bullish for corporations. So for sure, the stock market now has this bid to it that has nothing to do with Ma and Pa Kettle out in the middle of the country. This is not about Main Street or the real economy or consumers who still make up 70% of consumption, which you need to grow to support the debt. And if you don't have, it's a problem. In the meantime, the stocks soar because margins need some relief. They're going to get it from this kind of dynamic, but at the same time, it's going to destroy way more jobs than the internet did in terms of creating jobs versus destroying jobs. It's a big negative to me.

And I think that too, I don't know if we've had this discussion, but I like to say this because it's just thought-provoking. I like to be thought-provoking. Think of 900 scenarios. This way, when you see one develop, you've thought it out a little bit. If AI is what it's supposed to be, which is self-learning, right?

Mike Maharrey: Right.

Greg Weldon: It will learn very quickly that our entire financial house of cards can't be sustained. Collapse the whole system and start over again because that's the intelligent thing to do with no emotion, right? No care for people or how they live or their standard of living, or the people who would be bankrupt and poor, you're going to have a major depression. So think about that from AI. It's a little Terminator-like, but hey, you can envision a future that's Terminator and Mad Max combined and people are killing each other for gasoline because there's no gasoline left. Come on, you can script this a little bit.

Mike Maharrey: Right.

Greg Weldon: But anyway.

Mike Maharrey: Well, you mentioned the debt side of the equation and the consumer debt numbers are astronomical. They're breaking records every single month. I think it was something like a 9% increase in revolving credit on the last data, which was for I think July. So people are still putting money on these credit cards despite the fact that some of them are as high as 28%, 29%, and 30% percentage rate interest. How long can this go on? Because I keep thinking, well, at some point, the credit cards are going to max out, but it seems to be plugging along. How do you see this debt bubble? How is it maintaining itself?

Greg Weldon: Yeah, it's a problem. It really is a bigger picture problem too, because you have multiple tentacles here, squeezing the consumer. First of all, you have savings that were over $6 trillion on an annualized running basis, which is now $800 billion. It's lower than it was in 2019.

Mike Maharrey: Gone.

Greg Weldon: So savings have been drained. All right? Number two, you have wage growth that nominally is 3.5% put, compare it to the 3.2 x energy and food, the CPI, that's 0.3. That's not enough. So the real wage gains are still virtually nothing. And if you want, the Fed has done many surveys on the Chicago Fed in particular, but Cleveland Atlanta too, they were targeting a 3.5% to 4% wage zone where they get wage growth in that zone to be consistent with a 2% PCE inflation target.

Mike Maharrey: Right.

Greg Weldon: Why? Because it gives you 2% real wage growth, which allows growth and consumption. You don't have it. So the only way is to borrow on your credit cards. So when you consider this, borrowing the most money ever in this cumulative set of months since the pandemic at the highest cost to do so, ever, number one, those two things are probably mutually exclusive at some point in time.

One thing you said though that is important is that the available... If you look at the New York Fed survey, they tell you all these data points and the amount of credit is reaching $1.4 trillion now for consumer credit. But the amount in terms of the potential balances that could be tapped from the banks, it's like $4 trillion. So you could say there's like a $2.6 trillion cushion there if you wanted to look at it that way. I don't because delinquency charges are up and the banks won't be able to sustain that. So lending standards, they already told us in the Senior Loan Officer Survey, continue to tighten for auto loans and credit cards. And in that sense, we see the delinquency rates rising like we haven't seen since 2007. So you're reaching an uncle point.

I'll give you another perspective on this because people say, "Well, we've sustained this to this point. Why all of a sudden is this going to happen?" It's like, well, it is all of a sudden. But what you're forgetting is the Fed didn't get all of a sudden restrictive. They were hugely stimulative when the policy was still less than 1% and inflation was 9%. So it took them over 12 months just to get to neutral, and then inflation fell, which left them restrictive. All right? So it was really only 2023 May, June, we started to see that you had inflation falling below the Fed funds rate to a level that became restrictive. As inflation kept falling, it became punitively restrictive into this year, and you started, there's always the 12-month lag that all these economists talk about, right?

Mike Maharrey: Right.

Greg Weldon: Well, the 12-month lag didn't start in 2022. The 12-month lag started in 2023 and extended to this spring, and early summer, and is just now hitting... This is why these numbers stay. This is why the labor market's turning over because it's fresh. The Fed can't get to neutral because that's priced in for the end of next year. So we need neutral now, and that's not going to happen.

So the data's going to get worse. This is what we're going to see now because the next lag time is worsening data until the data bottoms 12 months from this past June. So that's a bigger problem too. And how the Fed is going to become more aggressive because again, if they're aggressive here, they probably should be, but probably may not be, it would be seen by those that are in the know and have the most amount of money to invest that they're acquiescing to higher inflation. Again, that's the key.

Mike Maharrey: Well, I think the right is walking a tightrope, right? Because the policy is inflation. They want inflation, let's be honest. They just don't want so much inflation that we notice. So they're trying to walk that tightrope and say, "Okay, we're getting close to that 2%. So people think that's okay." And I don't know, I'd say they're not very good at walking a tightrope because I don't think their balance is all that good. But I guess we'll see how [inaudible 00:26:21].

Greg Weldon: Let me tell you though. I'm going to give away a trade secret because when I do public speaking or do presentations at conferences, many times one of the slides I use is... What was that guy? Nick Wallenda? Walking across Niagara Falls with one of the bounce bars. Right?

Mike Maharrey: Oh, yeah.

Greg Weldon: And I'm like, this is Chairman Powell here. They put the slide up and people like, "Ah," because that really is. They're walking a tightrope. And what's amazing is if by any stretch of a miracle they get to the other side, it's just going to be like, "Oh my God, I made it." It's like, "No, you got to turn around and walk back."

Mike Maharrey: Go back, yeah.

Greg Weldon: Because this is an omnipresent task and it's some point they're going to slip one way or the other. I think they waited too long to ease. We talked about that very loudly, and now they're behind the curve on the other side. And we'll see. That's going to be more damaging to the economy as that will persist for some time even when they're cutting rates. And that's going to be a reality check for the stock market too.

Mike Maharrey: So let me get you out on this one. What is something that is on your radar in terms of markets, economy, something in the realm of what we're talking about today, that is-

Greg Weldon: Really, currencies.

Mike Maharrey: Okay.

Greg Weldon: Sorry, if you want to extend that question.

Mike Maharrey: No. That was basically the question. What do you see that maybe most people, a lot of people are missing that they need to pay attention to?

Greg Weldon: Yeah, I'm seeing this divergence in the currency market, which also plays into everything we're talking about because what we're seeing is currencies that are more linked to Russia or China are strengthened against the dollar. And those linked to more US are weakening against the dollar. I'm not making this up, pull up the charts.

When you look at the Polish zloty for example, it's strengthened against the Euro and the US because hey, you talk about Hungary already in the foreign, but Hungary owns the EU presidency right now, and that's Orban as the PM there. He's decidedly a pro-Putin guy because these countries are relying on Russia for energy. This is a resource war. And he's talked about backing out of NATO, backing out in the EU, and he's now the president of the EU.

This is interesting, but if you look at the Polish zloty in particular is breaking out right now, basically breaking a 20-year downtrend against the US dollar.

Mike Maharrey: Wow.

Greg Weldon: That's not a coincidence. And the Indonesian rupiah is the exact same image, linked to trade with China.

So when you start looking at something like the Canadian dollar or the Mexican peso or something, these currencies are under pressure. The Canadian dollar looks like it should and wants to break out, but it just can't pull it off. And the Mexican peso, which had been really strong, certainly affected by other things politically here in the US has really gotten whacked too, but this is a bigger picture story. So I'm watching some of the currencies like the African rand, the Brazilian real, the Turkish lira, and even currencies that really seem far out, but everything matters and I want tells from everything that's stacked up to create... It's like putting a puzzle together, right?

Mike Maharrey: Right.

Greg Weldon: And in the context of a place like Pakistan, Angola. Angola particularly used to produce a lot of oil. Now, not so much because their currency has gotten smoked and against gold has gotten smoked. But this same thing with Nigeria. You're talking 4,000,000 barrels a day of oil capacity and they're producing in less than 2,000,000. So why? Because the currencies have gotten wasted. I want to see those currencies too. Also watching Argentina just because that's been one of the worst currencies, and now there's just an instantaneous flash of light somewhere out there down the end of the tunnel with some of the new data and some of the policies starting to come to work. That's a different story, but I really am watching the currencies that are linked to this BRICs story to see how they're acting. And right now, the currencies that are close to that... Currencies on that side of the world close to those places are rallying against the dollar and threatening major long-term breakouts. And you can't ignore that and what it means for the dollar and what it means for gold.

Mike Maharrey: I think the takeaway from our conversation today really is the importance of also not just looking at the financials and the economic, but it's very much a geopolitical issue. Right? It's not just economics. We're talking about a wide range of geopolitics and really, almost a struggle for geopolitical dominance is what's playing out.

Greg Weldon: Yeah, it is. And that's what makes it difficult to be a passive investor right here. And I'm not one that just says, "Throw all your money in gold," either. It could be out gold, it could be short gold, it could be long gold. I'm not a scalper or a trader either.

Mike Maharrey: Right.

Greg Weldon: I'm a hybrid, for lack of a better phrase, because I want to hold position for months or over a year. We want the big trends and the goal is to catch the big trends every year because there are only four or five, six of them, and you need to catch them if you want to put into performance that outperforms the competition and the stock indexes, which is what we were successfully doing, knock on wood, knocking on my head as I say that. But you really have to be involved in these other things.

You see in stock markets, like all the places I just mentioned, Pakistan, Turkey, Angola, and Argentina, stock markets make new highs all the time. They're at record highs all the time, but it doesn't make the same percentage gain as the debasement of the currency in terms of purchasing power. So you could say that stocks are going to go up here in the US and I think after a deep and maybe ugly correction, they will go much higher. But at the same time, you're not going to keep pace by being passively invested.

So I think it really behooves investors to start to think outside the box where you can trade currencies. There are ETFs on these current [inaudible 00:32:03] currencies. I'm a futures market guy, which I think is the easiest way because I can get in. And the only way I'm in and out in the same day is if I'm wrong and I don't like getting something that sounds fishy to me and all of a sudden I'm not comfortable and I get out. I'm a very low-risk guy. I've done this for a long time, and I understand that people don't get the math of the futures markets, if you can harness and understand the math, these are great tools and great instruments because you have instant access, to long and short bond markets around the world, stock markets around the world, currencies around the world, in every commodity around the world. Instantly, long, short, 24-hour turnaround liquidity.

So to me, you can manage the risk so precisely, and really, you want true diversification. You want to be long, the Swiss Franc right now. Right now we're actually short the Nasdaq. Our biggest winner in the second quarter was the bond market. Here we were along the two in the five-year node, playing the curve steepening as well overseas in Sweden and Germany. Huge trades. So to do things like this because the opportunities are going to be fabulous in this scenario where they could be necessary, especially in places like the US and Canada, just to keep pace with the devastation that could be going on in the currencies here locally. So what I think is that investors would benefit from beginning to look at all of these markets as opportunities because that just expands your potential to be successful.

Mike Maharrey: Yeah, absolutely. Well, where can folks find you if they want to get more information on the Weldon way? That's a good thing [inaudible 00:33:40].

Greg Weldon: Sure. The Weldon way. What's funny is I was driving through North Carolina when I used to drive back and forth from Florida to New Jersey when I still had my kids, before they came back from college. And it's funny because I just was stopping to get gas one day and I drove, and there's the sign, "Weldon Way," and it was one of those weird old things. But anyway, I think only Weldon could do the real Weldon way. I think every investor needs to do their own way, and I think that's an important lesson too-

Mike Maharrey: Well, that's a good point.

Greg Weldon: Is understanding your own psychology and what are your emotions and traumas and pitfalls and shortcomings? And really being honest with yourself and then harnessing all that with some kind of discipline and methodology, whatever it might be. For me, it's blending all of the bottom-up technicals and quantitative and psychological positions and taking all the top-down, macroeconomic, throwing all that together and coming up in the middle and having a theme, like a broad theme globally. And then applying the best strategies in the futures market. So we have hedge fund clients, we have pension funds, sovereign wealth funds, we got big hitters, some of the biggest hedge funds. We also have retired individuals who do this themselves as our clients. Our global macro strategy report is the main product. We give specific recommendations in all of these markets with stop loss levels. It's like becoming your own CTA, becoming your own hedge fund is really what our clients are. The DIY types, let alone the institutional clients that we have. Then we also do the portfolio playbook, which is US stock market-based, trying to do the same thing.

It's like right now instead of owning the XLK InfoTech, we're owning the FXF, the Swiss Frank ETF. So again, using the stock market to even the playing field here to some degree. That's more of an individual investor, although we have a couple of global wealth managers that love it as well. And then we also do the gold guru, which is gold-specific, and also covers crypto, uranium, platinum, PGMs and base metals. So it's a pretty broad coverage. And I am a registered Series III CTA, and we are right now accepting new money. It's a pretty high minimum, but again, understanding the math in the futures markets, it's really simple. I'm like a guy that wants to risk less than one half of 1% on any particular trade, at least to begin with. And when you're talking about a gold at 2,500, the standard futures contract, 100 ounces is now $250,000. 10 years ago it was $100,000.

Mike Maharrey: Right.

Greg Weldon: So that 0.4, 0.5 was a lot easier to manage when these contracts were half their size. When now, the latest trade I went to put on with gold, it was like it's a $60 risk, which on $1 million is six-tenths. Right? So I think the problem with futures traders is they're undercapitalized for the most part, because the risk of ruin is very high if you don't have enough money to manage that risk in a very precise way because that's how it needs to be done. But we are accepting from accredited investors only. We are looking to help them and it's about taking care of family, taking care of other people's families, and then at the same time, helping my kids out for the future-

Mike Maharrey: Nice.

Greg Weldon: In the money management business. So you can find me at sales@weldononline.com or shoot me an email directly, Greg Weldon, G-R-E-G Weldon W-A-L-D-O-N@weldononline.com.

Mike Maharrey: Excellent. Well, I really appreciate you coming on the show, taking a little time out of your day. I know you're a busy man and also appreciate your energy and enthusiasm, that makes for a good conversation. So I appreciate that and we'll definitely have you back here in the weeks ahead as we watch the craziness unfold, so appreciate you.

Greg Weldon: A lot of that's because of the host, and so I give you kudos too. You do good interviews. So that definitely helps lift the energy.

Mike Maharrey: Well, thank you so much and we'll talk to you again next time.

Greg Weldon: Okay, Michael.