WEBVTT 00:00:00.000 --> 00:00:02.919 You know, there's a very specific kind of fantasy 00:00:02.919 --> 00:00:05.440 that I think lives in the back of a lot of people's 00:00:05.440 --> 00:00:08.820 minds. It's the apocalypse portfolio, right? 00:00:09.160 --> 00:00:12.080 The idea that when the stock market breaks and 00:00:12.080 --> 00:00:14.820 inflation eats your savings and the whole digital 00:00:14.820 --> 00:00:17.440 world just goes dark. You'll be okay. You'll 00:00:17.440 --> 00:00:20.160 be the one person who is absolutely fine because 00:00:20.160 --> 00:00:23.609 you have that. heavy, iron -clad safe, full of 00:00:23.609 --> 00:00:26.410 precious metals. It's a really primal financial 00:00:26.410 --> 00:00:29.609 instinct, that flight to tangible assets. When 00:00:29.609 --> 00:00:32.170 the numbers on a screen stop making sense, we 00:00:32.170 --> 00:00:35.049 want something we can actually hold. Right. And 00:00:35.049 --> 00:00:37.590 gold usually gets all the glory there. It's the 00:00:37.590 --> 00:00:39.810 king. But then people, you know, they look at 00:00:39.810 --> 00:00:42.130 the price of gold per ounce. They wince a little. 00:00:42.450 --> 00:00:45.329 And they look at its cheaper cousin, silver. 00:00:45.369 --> 00:00:47.909 Yeah. And the assumption is, well, it's just 00:00:47.909 --> 00:00:51.659 gold on a budget. A safe haven. more affordable. 00:00:51.869 --> 00:00:54.350 That's the impression, yeah, that they're basically 00:00:54.350 --> 00:00:56.469 the same asset class, just at different price 00:00:56.469 --> 00:00:58.789 points. But that's the traditional narrative. 00:00:58.789 --> 00:01:01.829 And if you really dig into the data and specifically 00:01:01.829 --> 00:01:04.430 the research we're covering today, that narrative 00:01:04.430 --> 00:01:07.129 is, well, it's actually quite dangerous. How 00:01:07.129 --> 00:01:11.010 so? Because treating silver like gold light is 00:01:11.010 --> 00:01:14.030 a really great way to lose a lot of money very, 00:01:14.129 --> 00:01:16.450 very quickly. And that is exactly why we are 00:01:16.450 --> 00:01:18.390 doing this deep dive. We're looking at a report 00:01:18.390 --> 00:01:21.819 titled Assessing Volatility and Hazard in silver 00:01:21.819 --> 00:01:24.659 markets. Right. It's by a researcher named Doug 00:01:24.659 --> 00:01:27.060 Young. So before we get into all the scary stuff, 00:01:27.299 --> 00:01:29.180 we should probably establish who this guy is. 00:01:29.579 --> 00:01:31.480 Like, why are we listening to him? Credibility 00:01:31.480 --> 00:01:34.480 is so key here. The precious metals market is, 00:01:34.519 --> 00:01:37.659 frankly, it's full of hype men and, you know. 00:01:38.010 --> 00:01:40.670 do -mongers. Oh, for sure. Doug Young is the 00:01:40.670 --> 00:01:42.890 opposite. He's a financial markets researcher 00:01:42.890 --> 00:01:45.790 with over two decades of experience. He's a former 00:01:45.790 --> 00:01:48.310 financial director written over 500 articles. 00:01:48.530 --> 00:01:50.810 He isn't trying to sell you coins. He's analyzing 00:01:50.810 --> 00:01:52.969 the market mechanics. OK, so he's a technician, 00:01:53.109 --> 00:01:55.310 not a salesman. That's a really important distinction. 00:01:55.450 --> 00:01:57.370 Exactly. He's just looking at the gears turning 00:01:57.370 --> 00:01:59.930 behind the price. So the vision for this deep 00:01:59.930 --> 00:02:03.310 dive isn't to tell you to buy or sell. We are 00:02:03.310 --> 00:02:05.689 not financial advisors. And neither is the source. 00:02:05.689 --> 00:02:08.039 Not in this context. Right. The goal is to look 00:02:08.039 --> 00:02:10.080 at the fine print that usually gets glossed over. 00:02:10.500 --> 00:02:12.199 We're going to talk about why silver is kind 00:02:12.199 --> 00:02:14.960 of bipolar, why a recession might actually crush 00:02:14.960 --> 00:02:17.259 your silver holdings, which is totally counterintuitive, 00:02:17.259 --> 00:02:21.099 and the absolute nightmare of trying to turn 00:02:21.099 --> 00:02:23.879 a bar of silver back into cash. It's all about 00:02:23.879 --> 00:02:26.580 understanding that silver has a completely different 00:02:26.580 --> 00:02:29.139 risk profile than gold. It's not just a store 00:02:29.139 --> 00:02:32.020 of value. It's an industrial commodity. And that 00:02:32.020 --> 00:02:34.840 one fact changes everything. OK, let's start 00:02:34.840 --> 00:02:38.840 right there. with that personality disorder. 00:02:39.300 --> 00:02:42.139 Doug Young flags market volatility as the number 00:02:42.139 --> 00:02:44.680 one hazard. Right at the top. Now, I think most 00:02:44.680 --> 00:02:46.840 people get that crypto is volatile or tech stocks 00:02:46.840 --> 00:02:48.800 are volatile, but isn't the whole point of a 00:02:48.800 --> 00:02:50.639 metal that it just sits there and is stable? 00:02:51.020 --> 00:02:53.180 It's a rock. It shouldn't move that much. In 00:02:53.180 --> 00:02:56.400 theory, yes, but Young introduces this concept 00:02:56.400 --> 00:02:59.240 of the dual role. If you want to understand silver, 00:02:59.379 --> 00:03:01.789 you have to understand this. The dual role. Gold 00:03:01.789 --> 00:03:04.830 is almost purely a monetary metal. It sits in 00:03:04.830 --> 00:03:07.509 vaults. It hangs around people's necks as jewelry. 00:03:07.770 --> 00:03:10.909 It isn't consumed. Once gold is mined, it stays 00:03:10.909 --> 00:03:13.009 in the world. Right. We don't build bridges out 00:03:13.009 --> 00:03:15.930 of it. We don't put it in disposable items. Exactly. 00:03:16.110 --> 00:03:20.849 But silver. Silver has a day job. It is a critical 00:03:20.849 --> 00:03:23.169 industrial component. They day job. It's in your 00:03:23.169 --> 00:03:26.229 iPhone. It's in solar panels. It's in batteries, 00:03:26.530 --> 00:03:29.590 medical devices. It is consumed by industry. 00:03:29.710 --> 00:03:33.210 So it's a commodity. like oil or copper or wheat. 00:03:33.449 --> 00:03:35.770 It's both, and that's the problem. It's trying 00:03:35.770 --> 00:03:38.710 to serve two masters. On one hand, you have investors 00:03:38.710 --> 00:03:41.330 buying it as a hedge against inflation. Treating 00:03:41.330 --> 00:03:43.250 it like money. Treating it like money. On the 00:03:43.250 --> 00:03:45.330 other hand, you have these massive manufacturing 00:03:45.330 --> 00:03:47.629 sectors buying it to melt it down and put it 00:03:47.629 --> 00:03:49.689 into products. But hang on, why does that create 00:03:49.689 --> 00:03:51.870 volatility? Shouldn't that double demand make 00:03:51.870 --> 00:03:54.889 it more stable? You know, if investors stop buying, 00:03:55.050 --> 00:03:56.990 the factories are still buying. Shouldn't that 00:03:56.990 --> 00:03:59.590 create a price floor? You would think so, and 00:03:59.590 --> 00:04:02.189 that's a logical assumption. But the source argues 00:04:02.189 --> 00:04:05.569 that it exposes silver to double the variable. 00:04:05.949 --> 00:04:09.430 Gold mostly reacts to currency strength and fear. 00:04:10.270 --> 00:04:12.569 Silver reacts to those things plus the entire 00:04:12.569 --> 00:04:14.689 industrial cycle. Can you give me an example 00:04:14.689 --> 00:04:17.829 of how that plays out? Sure. Imagine a scenario 00:04:17.829 --> 00:04:20.889 where inflation is high. Theoretically, silver 00:04:20.889 --> 00:04:23.149 prices should go up. People want that hedge. 00:04:24.410 --> 00:04:27.970 But at the exact same time, let's say a major 00:04:27.970 --> 00:04:32.110 manufacturing sector like electronics slows down. 00:04:32.430 --> 00:04:35.490 Now you have a massive drop in industrial orders. 00:04:35.870 --> 00:04:37.670 So the investors are pushing the price up, but 00:04:37.670 --> 00:04:39.610 the factories are pulling the price down. Precisely. 00:04:39.970 --> 00:04:42.470 And that tug -of -war is what creates these violent 00:04:42.470 --> 00:04:45.170 price swings. Young notes that silver prices 00:04:45.170 --> 00:04:47.410 can swing significantly within a single trading 00:04:47.410 --> 00:04:49.980 day. It's much more spiky than gold. If you're 00:04:49.980 --> 00:04:52.259 looking for a calm asset to preserve wealth, 00:04:52.819 --> 00:04:55.420 silver's industrial tether makes it a much, much 00:04:55.420 --> 00:04:57.220 bumpier ride. That sounds like it's suffering 00:04:57.220 --> 00:04:59.660 from an identity crisis. It doesn't know if it's 00:04:59.660 --> 00:05:01.519 money or if it's a toaster part. That's actually 00:05:01.519 --> 00:05:03.459 a perfect way to put it. And that identity crisis 00:05:03.459 --> 00:05:05.839 leads directly to the second major hazard, which 00:05:05.839 --> 00:05:08.019 I think is the most misunderstood part of this 00:05:08.019 --> 00:05:10.740 entire report. And you're talking about the recession 00:05:10.740 --> 00:05:13.939 paradox. Yes. This is where most casual investors 00:05:13.939 --> 00:05:16.300 get completely caught out. This was the part 00:05:16.300 --> 00:05:18.740 that made me stop and re -read the notes. Yeah. 00:05:18.779 --> 00:05:20.860 Because the standard advice, the stuff your uncle 00:05:20.860 --> 00:05:24.600 tells you at Thanksgiving, is always, economy 00:05:24.600 --> 00:05:27.660 bad, metals good. Right. If we hit a recession, 00:05:28.139 --> 00:05:31.019 stocks crash, the dollar gets shaky, so everyone 00:05:31.019 --> 00:05:32.980 will flee to silver and the price will skyrocket. 00:05:33.459 --> 00:05:36.459 That's the playbook. That is the safe haven theory. 00:05:36.680 --> 00:05:40.160 And for gold, it often holds true. But Doug Young's 00:05:40.160 --> 00:05:44.129 analysis says, Not so fast for silver. In fact, 00:05:44.449 --> 00:05:46.569 a recession could be the worst thing for your 00:05:46.569 --> 00:05:48.569 silver investment. Yeah, walk me through the 00:05:48.569 --> 00:05:50.430 mechanics of that. Why would a recession hurt 00:05:50.430 --> 00:05:53.129 silver? It all goes back to that day job. Think 00:05:53.129 --> 00:05:54.850 about what defines a recession, what happens 00:05:54.850 --> 00:05:57.709 in the real economy. People stop spending, businesses 00:05:57.709 --> 00:06:00.470 start making stuff, construction slows way down. 00:06:00.649 --> 00:06:03.110 Correct. Industrial production contracts, factories 00:06:03.110 --> 00:06:05.870 shut down lines, solar projects get put on hold 00:06:05.870 --> 00:06:08.250 because financing is too expensive. And when 00:06:08.250 --> 00:06:11.149 that happens, the industrial demand for silver 00:06:11.420 --> 00:06:13.879 which is a huge chunk of the market, roughly 00:06:13.879 --> 00:06:16.439 half of all demand, it just falls off a cliff. 00:06:16.720 --> 00:06:19.060 So even if investors are scared and buying up 00:06:19.060 --> 00:06:22.040 silver coins, the factories stopping their orders 00:06:22.040 --> 00:06:24.560 might actually outweigh all of that. It often 00:06:24.560 --> 00:06:26.699 does, or at the very least it creates a massive 00:06:26.699 --> 00:06:30.019 drag on the price. Young explicitly highlights 00:06:30.019 --> 00:06:32.800 that reduced industrial demand during recessions 00:06:32.800 --> 00:06:35.740 can lower silver prices. So you're buying silver 00:06:35.740 --> 00:06:37.800 to hedge against a recession, but the recession 00:06:37.800 --> 00:06:40.500 itself is the very thing killing the value of 00:06:40.500 --> 00:06:43.540 the asset. That is wild. You're betting on the 00:06:43.540 --> 00:06:45.800 lifeboat, but the lifeboat has a hole in it that 00:06:45.800 --> 00:06:48.680 only opens up when the ship starts to sink. That's 00:06:48.680 --> 00:06:51.199 a vivid image, but it's pretty accurate. It explains 00:06:51.199 --> 00:06:53.540 why silver often dips initially during a market 00:06:53.540 --> 00:06:56.100 crash, unlike gold, which might spike immediately. 00:06:56.759 --> 00:06:58.680 Silver gets dragged down by the deflationary 00:06:58.680 --> 00:07:00.920 pressure of the collapsing economy. So if I'm 00:07:00.920 --> 00:07:03.420 holding silver or thinking about it, what should 00:07:03.420 --> 00:07:06.019 I be watching? Because just checking the stock 00:07:06.019 --> 00:07:08.319 market clearly isn't enough. If I just look at 00:07:08.319 --> 00:07:11.259 the Dow, I'm missing half the story. Young suggests 00:07:11.259 --> 00:07:14.579 looking at leading economic indicators specifically 00:07:14.579 --> 00:07:17.379 tied to output. Don't just look at the S &P 500. 00:07:17.480 --> 00:07:20.779 Look at GDP growth. OK. Look at industrial production 00:07:20.779 --> 00:07:23.620 rates. So if I see a headline that says manufacturing 00:07:23.620 --> 00:07:26.779 output down for third quarter, that is a big 00:07:26.779 --> 00:07:29.800 red flag for silver. Huge red flag. It means 00:07:29.800 --> 00:07:31.899 the commodity side of silver is about to take 00:07:31.899 --> 00:07:34.980 a beating. Even if the precious metal side is 00:07:34.980 --> 00:07:37.100 trying to hold up, you have to watch the factories, 00:07:37.180 --> 00:07:39.300 not just the banks. OK. So we've established 00:07:39.300 --> 00:07:41.480 the price is a roller coaster. And it might tank 00:07:41.480 --> 00:07:44.000 when the economy tanks. But let's say I'm stubborn. 00:07:44.279 --> 00:07:46.459 I accept the volatility. I go out and buy a silver. 00:07:46.879 --> 00:07:50.480 I now own, what, 500 ounces of silver bars? Congratulations. 00:07:50.579 --> 00:07:52.860 Now you have a logistics problem. This is the 00:07:52.860 --> 00:07:55.519 heavy metal segment of our dive. Yeah. Because 00:07:55.519 --> 00:07:58.339 in the digital age, we forget that wealth usually 00:07:58.339 --> 00:08:00.040 doesn't have a physical footprint. I can own 00:08:00.040 --> 00:08:02.819 a million dollars in Apple stock, and it just 00:08:02.819 --> 00:08:04.959 fits in my pocket. It's just pixels. Right. But 00:08:04.959 --> 00:08:09.660 $50 ,000 of silver is heavy. It's bulky. It physically 00:08:09.660 --> 00:08:12.420 takes up space. And Doug highlights this as a 00:08:12.420 --> 00:08:15.360 genuine investment hazard. He does, specifically 00:08:15.360 --> 00:08:17.920 regarding physical storage. Because once you 00:08:17.920 --> 00:08:20.379 take possession, you have two main options, and 00:08:20.379 --> 00:08:23.500 neither one is perfect. Option A, you store it 00:08:23.500 --> 00:08:25.740 at home. Which is the classic move, right? You 00:08:25.740 --> 00:08:28.180 get a safe, or you bury it in the backyard like 00:08:28.180 --> 00:08:30.240 a pirate. Which brings up the security risk. 00:08:30.430 --> 00:08:32.450 If you store it at home, you have to keep it 00:08:32.450 --> 00:08:34.830 a secret. If people know you have it, you immediately 00:08:34.830 --> 00:08:36.850 become a target. Right. And let's talk about 00:08:36.850 --> 00:08:38.990 insurance. If your house burns down or you get 00:08:38.990 --> 00:08:41.970 robbed, standard homeowners insurance often has 00:08:41.970 --> 00:08:44.850 really strict caps on precious metals. We're 00:08:44.850 --> 00:08:47.690 talking maybe $1 ,000 or $2 ,000 of coverage. 00:08:47.809 --> 00:08:51.029 Oh, wow. So if I have $20 ,000 in silver in a 00:08:51.029 --> 00:08:53.590 sock drawer and it gets stolen, I'm just at $18 00:08:53.590 --> 00:08:56.970 ,000. Likely, yes. Unless you buy a specific 00:08:56.970 --> 00:08:59.730 rider or a whole separate policy, which, of course, 00:08:59.830 --> 00:09:02.169 costs money. OK, so home storage is risky. So 00:09:02.169 --> 00:09:06.529 I go with option B. I pay a professional, a depository 00:09:06.529 --> 00:09:09.090 or a bank safety deposit box. Which is safer, 00:09:09.350 --> 00:09:11.330 obviously. You've got armed guards and thick 00:09:11.330 --> 00:09:14.809 vaults, but it's expensive. And this brings us 00:09:14.809 --> 00:09:17.970 to a concept called negative yield. Negative 00:09:17.970 --> 00:09:21.649 yield. That sounds like bankers speak for losing 00:09:21.649 --> 00:09:25.029 money. Essentially. See, stocks might pay dividends. 00:09:25.549 --> 00:09:28.450 Bonds pay interest. Real estate can pay rent. 00:09:29.110 --> 00:09:30.950 Gold and silver do not pay you anything. They 00:09:30.950 --> 00:09:33.370 just sit there. It's a rock. It's lazy. Exactly. 00:09:33.889 --> 00:09:37.009 But if you are paying storage fees and insurance 00:09:37.009 --> 00:09:40.169 premiums to a depository, the asset actually 00:09:40.169 --> 00:09:44.429 has a negative yield. You are bleeding cash every 00:09:44.429 --> 00:09:48.240 single month just to hold it. Young notes that 00:09:48.240 --> 00:09:51.000 these costs eat into your investment returns. 00:09:51.379 --> 00:09:52.919 Can we put some numbers on that? Well, think 00:09:52.919 --> 00:09:55.980 about it. If silver goes up 3 % this year, which 00:09:55.980 --> 00:09:58.899 is a decent year, but you paid 1 .5 % of the 00:09:58.899 --> 00:10:01.299 value in storage fees and insurance, well, you 00:10:01.299 --> 00:10:03.500 didn't make 3%. You barely beat inflation. You 00:10:03.500 --> 00:10:05.820 barely beat inflation. You have to subtract the 00:10:05.820 --> 00:10:07.879 rent you pay for the metal from your profits. 00:10:08.200 --> 00:10:10.860 That changes the math significantly. Yeah. It's 00:10:10.860 --> 00:10:12.740 like buying a stock that charges you a rental 00:10:12.740 --> 00:10:15.019 fee every month just to keep it in your portfolio. 00:10:15.200 --> 00:10:17.440 And that friction is something a lot of first 00:10:17.440 --> 00:10:19.759 -time buyers just ignore until they get that 00:10:19.759 --> 00:10:22.200 first monthly bill. They see the spot price go 00:10:22.200 --> 00:10:24.340 up and think they're rich, completely ignoring 00:10:24.340 --> 00:10:26.919 the overhead. OK, speaking of seeing the price 00:10:26.919 --> 00:10:29.639 go up and thinking you're rich. Yeah. Let's look 00:10:29.639 --> 00:10:32.120 at the exit strategy. Because this is the part 00:10:32.120 --> 00:10:33.879 of the report that gave me the most anxiety, 00:10:34.559 --> 00:10:37.980 the liquidity trap. Yes. This is a term that 00:10:37.980 --> 00:10:40.200 gets thrown around a lot in finance. But in the 00:10:40.200 --> 00:10:44.259 context of physical silver, it's visceral. It's 00:10:44.259 --> 00:10:46.710 painful. Define it for us in this context. What 00:10:46.710 --> 00:10:48.929 does Doug Young mean by liquidity challenges? 00:10:49.460 --> 00:10:52.379 Liquidity is simply the speed and ease with which 00:10:52.379 --> 00:10:55.159 you can convert an asset into cash without losing 00:10:55.159 --> 00:10:58.379 value. Cash is the ultimate liquid asset. Right. 00:10:58.500 --> 00:11:00.960 Stocks are highly liquid. You click sell on your 00:11:00.960 --> 00:11:03.000 app and seconds later the transaction is done 00:11:03.000 --> 00:11:05.399 and the money is yours. And silver. Silver is 00:11:05.399 --> 00:11:08.519 sluggish. It has friction. Young flags this as 00:11:08.519 --> 00:11:11.019 a major risk factor. Think about the process. 00:11:11.299 --> 00:11:13.340 You have those bars and you're safe. You need 00:11:13.340 --> 00:11:15.779 cash for an emergency. What do you actually do? 00:11:16.019 --> 00:11:18.539 I guess I drive them to a coin shop. Or a pawn 00:11:18.539 --> 00:11:20.960 shop. or maybe I mail them to an online dealer. 00:11:21.379 --> 00:11:23.320 Okay, so first you have to physically transport 00:11:23.320 --> 00:11:25.720 them. That's risked in time right there. Then 00:11:25.720 --> 00:11:28.039 you have to find a buyer who is actually buying. 00:11:28.320 --> 00:11:31.580 And here is the real kicker, the spread. The 00:11:31.580 --> 00:11:33.720 spread. I've heard this term. Explain it like 00:11:33.720 --> 00:11:36.419 I'm five. Okay. When you look up the price of 00:11:36.419 --> 00:11:39.279 silver on the news, that is the spot price. That's 00:11:39.279 --> 00:11:42.679 the global wholesale price. But you, the regular 00:11:42.679 --> 00:11:46.120 person, You can't buy at spot price. You pay 00:11:46.120 --> 00:11:48.879 spot plus a premium to the dealer so they can 00:11:48.879 --> 00:11:51.860 make a profit. OK, so if spot is $25, I might 00:11:51.860 --> 00:11:54.720 pay $28. Right. But when you turn around to sell 00:11:54.720 --> 00:11:56.840 it back to them, they aren't going to give you 00:11:56.840 --> 00:11:58.879 $28. They might not even give you $25. They need 00:11:58.879 --> 00:12:01.259 to resell it so they might offer you $24. So 00:12:01.259 --> 00:12:03.399 I lose money on the buy and I lose money on the 00:12:03.399 --> 00:12:06.720 sell. That gap is the spread. And in physical 00:12:06.720 --> 00:12:09.850 silver, that spread can be really wide. You might 00:12:09.850 --> 00:12:12.269 need the price to go up 10 % just to break even 00:12:12.269 --> 00:12:14.830 on the transaction costs. That is brutal. So 00:12:14.830 --> 00:12:18.669 it's not just buy low, sell high. It's buy low, 00:12:18.769 --> 00:12:21.210 wait for it to go really high to cover the dealer's 00:12:21.210 --> 00:12:25.529 profit, and then sell. Exactly. And it gets worse. 00:12:25.870 --> 00:12:28.509 Young points out what he calls a contextual risk. 00:12:29.190 --> 00:12:31.350 When are you most likely to need to sell your 00:12:31.350 --> 00:12:33.850 emergency stash? When the economy tanks. When 00:12:33.850 --> 00:12:37.370 I lose my job. When there's a crisis. Exactly. 00:12:37.890 --> 00:12:41.009 But in a crisis, liquidity can dry up. Imagine 00:12:41.009 --> 00:12:43.690 it's 2008 again. Everyone is scared. Everyone 00:12:43.690 --> 00:12:46.649 is trying to sell things to raise cash. If you 00:12:46.649 --> 00:12:49.029 walk into a coin shop and 10 other people are 00:12:49.029 --> 00:12:51.049 also trying to sell silver, the dealer is going 00:12:51.049 --> 00:12:52.929 to be overstocked. So he might just say, I'm 00:12:52.929 --> 00:12:55.269 not buying today. Or he might say, I'll take 00:12:55.269 --> 00:12:57.970 it, but only at 20 % below spot price because 00:12:57.970 --> 00:12:59.929 he knows you're desperate and he knows he can't 00:12:59.929 --> 00:13:02.230 resell it quickly. So the asset that was supposed 00:13:02.230 --> 00:13:05.950 to save me in a crisis. becomes an anchor I can't 00:13:05.950 --> 00:13:08.389 get rid of without taking a massive loss. That 00:13:08.389 --> 00:13:10.769 is the trap. You have wealth, technically, but 00:13:10.769 --> 00:13:13.409 you can't access it efficiently. It's locked 00:13:13.409 --> 00:13:15.909 in the metal. So does Young offer a solution? 00:13:16.430 --> 00:13:20.049 Or are we just doomed to have safes full of heavy, 00:13:20.470 --> 00:13:23.169 unsellable metal? No. This solution is sensible, 00:13:23.429 --> 00:13:25.590 even if it's a little boring. It's diversification. 00:13:26.090 --> 00:13:28.710 Young emphasizes that you just cannot hold all 00:13:28.710 --> 00:13:31.289 your wealth in illiquid assets. You need a mix. 00:13:31.509 --> 00:13:35.029 Right. You need cash. You need stocks. Things 00:13:35.029 --> 00:13:37.470 you can liquidate in five minutes so that you 00:13:37.470 --> 00:13:40.509 are never forced to sell your silver at a bad 00:13:40.509 --> 00:13:44.519 price. So silver is the break in case of a purgency 00:13:44.519 --> 00:13:46.340 glass, but you better have a different emergency 00:13:46.340 --> 00:13:48.720 fund for all the small fires. Precisely. Silver 00:13:48.720 --> 00:13:51.799 is a long game asset. If you try to use it for 00:13:51.799 --> 00:13:54.200 short term liquidity, the fees and the spread 00:13:54.200 --> 00:13:56.679 will just eat you alive. You need to be able 00:13:56.679 --> 00:13:59.220 to hold it through the bad times, not sell it 00:13:59.220 --> 00:14:01.590 during them. That makes sense. Don't back yourself 00:14:01.590 --> 00:14:03.529 into a corner where you have to sell the family 00:14:03.529 --> 00:14:06.029 silver to pay the rent. Exactly. Let's pivot 00:14:06.029 --> 00:14:08.450 to the future for a minute. Because despite all 00:14:08.450 --> 00:14:10.629 these headaches, the storage, the volatility, 00:14:10.789 --> 00:14:13.909 the spreads, people are still buying. And a big 00:14:13.909 --> 00:14:16.429 reason is the narrative around technology. The 00:14:16.429 --> 00:14:19.629 green energy boom. The tech factor. This is a 00:14:19.629 --> 00:14:22.129 huge driver of the current market psychology. 00:14:22.230 --> 00:14:25.090 Right. We touched on this. Solar panels use silver. 00:14:25.370 --> 00:14:27.909 We are building solar farms everywhere. EVs use 00:14:27.909 --> 00:14:30.730 silver. Therefore, silver demand must go up forever. 00:14:30.889 --> 00:14:33.309 It feels like a guaranteed bet. If you believe 00:14:33.309 --> 00:14:35.970 in the future, you buy silver. It's a strong 00:14:35.970 --> 00:14:38.809 tailwind. Absolutely. The photovoltaic sector 00:14:38.809 --> 00:14:42.070 is a massive consumer of silver. But Doug Young 00:14:42.070 --> 00:14:44.610 warns us not to get complacent here. He brings 00:14:44.610 --> 00:14:47.330 up the risk of technological substitution. Meaning 00:14:47.330 --> 00:14:50.549 what? We stop using solar? No, meaning we stop 00:14:50.549 --> 00:14:52.350 using silver and solar. You have to remember, 00:14:52.590 --> 00:14:55.250 silver is expensive. Industrial engineers are 00:14:55.250 --> 00:14:58.409 paid to lower costs. Every single time the price 00:14:58.409 --> 00:15:01.090 of silver spikes, there is massive pressure on 00:15:01.090 --> 00:15:03.769 engineers to find a cheaper alternative. So if 00:15:03.769 --> 00:15:06.610 silver gets too valuable, the industry will actually 00:15:06.610 --> 00:15:09.129 try to engineer it out of existence. Exactly. 00:15:09.370 --> 00:15:11.429 Young notes that technological advancements could 00:15:11.429 --> 00:15:13.830 move away from silver. We've seen this with other 00:15:13.830 --> 00:15:16.370 metals. If they can swap silver for copper or 00:15:16.370 --> 00:15:19.330 a new carbon -based conductor, or use nanotechnology 00:15:19.330 --> 00:15:23.100 to use 90 % less silver per panel, They will. 00:15:23.299 --> 00:15:25.820 So the higher the price goes, the more incentive 00:15:25.820 --> 00:15:28.200 there is to destroy the demand. It's a paradox. 00:15:28.580 --> 00:15:30.980 High prices kill demand. So banking entirely 00:15:30.980 --> 00:15:34.120 on solar will save us is risky because the technology 00:15:34.120 --> 00:15:36.620 is evolving faster than the mines. You can't 00:15:36.620 --> 00:15:39.039 assume a solar panel in 2030 will look anything 00:15:39.039 --> 00:15:41.960 like one from 2024. That's a really important 00:15:41.960 --> 00:15:44.379 check on the hype. Just because an industry uses 00:15:44.379 --> 00:15:46.600 it now doesn't mean they're married to it. Industry 00:15:46.600 --> 00:15:49.139 is ruthless. They will cut costs wherever they 00:15:49.139 --> 00:15:52.000 possibly can. So taking all of this into account. 00:15:52.159 --> 00:15:55.259 The Jekyll and Hyde volatility. The storage costs. 00:15:55.820 --> 00:15:58.320 The liquidity trap. The risk that engineers might 00:15:58.320 --> 00:16:01.460 just stop using it. What's the verdict? How does 00:16:01.460 --> 00:16:03.679 the source suggest we actually use this metal? 00:16:03.899 --> 00:16:06.740 It really comes down to your time frame. Young 00:16:06.740 --> 00:16:10.000 frames it as long -term versus short -term. Break 00:16:10.000 --> 00:16:12.269 that down for me. Long -term, and we're talking 00:16:12.269 --> 00:16:15.450 decades, silver does tend to hold its value against 00:16:15.450 --> 00:16:18.049 inflation. It preserves purchasing power. If 00:16:18.049 --> 00:16:19.730 you want to leave something for your grandkids 00:16:19.730 --> 00:16:22.669 that isn't paper money, it works. It survives. 00:16:22.750 --> 00:16:25.610 It's the legacy asset. Right. But short -term, 00:16:25.889 --> 00:16:28.289 it's a speculative play. Young suggests that 00:16:28.289 --> 00:16:30.370 if you have the stomach for it, the volatility 00:16:30.370 --> 00:16:33.190 is actually an opportunity. Since it swings so 00:16:33.190 --> 00:16:35.750 wildly, you can make money buying the dips and 00:16:35.750 --> 00:16:37.710 selling the spikes. But that requires active 00:16:37.710 --> 00:16:39.730 management. You can't just buy it and forget 00:16:39.730 --> 00:16:42.269 it. No, you have to watch those industrial indicators 00:16:42.269 --> 00:16:44.429 we talked about. You have to be a trader, not 00:16:44.429 --> 00:16:46.970 just a saver. You have to time the market, which 00:16:46.970 --> 00:16:49.590 is notoriously difficult. And again, it comes 00:16:49.590 --> 00:16:51.929 back to the portfolio approach. Always. It should 00:16:51.929 --> 00:16:54.350 be a seasoning in the portfolio, not the main 00:16:54.350 --> 00:16:58.570 course. If you go 100 % into silver, you are 00:16:58.570 --> 00:17:01.309 exposing yourself to all these hazards with no 00:17:01.309 --> 00:17:04.410 buffer. You need liquid assets to balance out 00:17:04.410 --> 00:17:07.049 the... illiquid ones. It's funny, we've spent 00:17:07.049 --> 00:17:10.069 almost this entire time deconstructing the myth 00:17:10.069 --> 00:17:13.190 of silver, taking away the romance of the pirate 00:17:13.190 --> 00:17:15.789 treasure chest. We've exposed the costs, the 00:17:15.789 --> 00:17:19.329 risks, the headaches, but... there was one little 00:17:19.329 --> 00:17:21.410 detail in the source material tucked away in 00:17:21.410 --> 00:17:24.309 the headers that I think we have to mention because 00:17:24.309 --> 00:17:26.730 it is essentially the why we do it anyway factor. 00:17:27.230 --> 00:17:29.470 Ah, yes, the triple digit forecast. Yeah. Despite 00:17:29.470 --> 00:17:32.069 every single risk we just listed, Young mentions 00:17:32.069 --> 00:17:34.309 that some analysts are looking at triple digits 00:17:34.309 --> 00:17:38.289 over prices. And for context, right now, historically 00:17:38.289 --> 00:17:41.549 speaking, silver usually trades in the 20 to 00:17:41.549 --> 00:17:44.589 30 dollar range. Sometimes it dips lower, sometimes 00:17:44.589 --> 00:17:48.930 it spikes to 50. So triple digits $100 an ounce 00:17:48.930 --> 00:17:51.869 or more would be a massive paradigm shift. That 00:17:51.869 --> 00:17:55.069 would be a 300, 400 % return. That is the lottery 00:17:55.069 --> 00:17:57.809 ticket. It is. And that potential for explosive 00:17:57.809 --> 00:17:59.789 growth, specifically because the market is so 00:17:59.789 --> 00:18:02.150 much smaller than gold's, is what keeps people 00:18:02.150 --> 00:18:04.789 coming back. When silver moves, it moves fast 00:18:04.789 --> 00:18:07.309 and it moves hard. Because it's so volatile, 00:18:07.750 --> 00:18:10.329 the upside can be just as violent as the downside. 00:18:10.640 --> 00:18:12.480 But that brings us back to the central question 00:18:12.480 --> 00:18:14.400 I want to leave you, the listener, with today, 00:18:14.440 --> 00:18:17.660 is that potential upside worth the friction. 00:18:18.480 --> 00:18:21.220 We've outlined the tax you pay on silver, the 00:18:21.220 --> 00:18:23.579 storage fees, the insurance, the widespread when 00:18:23.579 --> 00:18:26.220 you sell, the sleepless nights watching industrial 00:18:26.220 --> 00:18:28.680 production reports. It's the classic risk -reward 00:18:28.680 --> 00:18:31.640 calculation. But hopefully now you understand 00:18:31.640 --> 00:18:33.859 that the risk isn't just that the price goes 00:18:33.859 --> 00:18:36.480 down. The risk is that you can't sell it. or 00:18:36.480 --> 00:18:38.420 that the economy turns against you in a way you 00:18:38.420 --> 00:18:40.759 didn't expect, or that you just bleed money holding 00:18:40.759 --> 00:18:44.940 it. Exactly. Knowledge is the best head. Don't 00:18:44.940 --> 00:18:47.160 buy the shiny thing just because it's shiny. 00:18:47.660 --> 00:18:49.359 Buy it because you understand the mechanics, 00:18:49.640 --> 00:18:51.880 the industrial drag, and the liquidity trap. 00:18:52.259 --> 00:18:53.660 Couldn't have said it better. If you're going 00:18:53.660 --> 00:18:55.119 to play the game, you've got to know the rules. 00:18:55.440 --> 00:18:57.799 Thanks for diving deep with us today. Keep an 00:18:57.799 --> 00:19:00.279 eye on those charts. Watch out for the premiums. 00:19:00.440 --> 00:19:03.220 And we'll see you on the next one. Goodbye, everyone.