After the Midterms the Fed Starts Printing and Gold Will Grind Higher, Clem Chambers Warns

All right, the AI boom has a problem money can't fix overnight. A survey out just this morning from the Institute of Supply Management shows American companies can't get enough of something called switch gear. Now, most people have never heard of it. It's the heavy electrical gear that carries power from the grid into factories and data centers. I mean, you want a big transformer. Take a look at this graphic. I mean, the the energy firm called Wood McKenzie says you can wait for more than 2 years. You want a gas turbine to build a power plant. Uh G Vernova is America's largest and biggest turbine maker and its CEO expects to be nearly sold out through 2030. So the AI race has turned into a race for electricity and the copper to carry it. My guest says Washington will print whatever it takes to win that race. And if he's right, you're helping pay for it with every dollar you've saved. Clem Chamber joins me next. All right, Clem. Welcome back. I'm Jeremy Saffra. Plenty of people are living through their first tech boom right now. My guess is he's on his third. Not to age you, Clem. He's making video games in the early 80s. He helped launch that market site, ADVFN, back in 99, months before that.com. I guess we could call it a dot crash. Now, he'll buy gold, he'll sell it. He goes where the charts and the money take him. And right now, he says that the money is chasing electricity. Clen, always good to see you. Welcome back. >> Great to be back on. Yep. Energy is destiny and electricity is destiny. >> You know, let's start with kind of this third boom we're talking about right now. I mean, we all hear AI bubble, but you've been inside two tech booms before this one, and it looks like this one in particular can't get the power it needs fast enough. I mean, what does that tell you? >> Well, it tells you that it's just begun. I mean, if you were around in the com boom, it didn't just start and end in 1999 2000. It was really kicking off in '95. Remember when when Windows 95 came along and then Netscape came along and there was lots of bumps in the road and this feels very much like an early bump. I mean maybe not too early, maybe 98, but it could actually be earlier than that. Now you're talking about turbines. Well, I was reading that that Musk was complaining about turbines. He was going to build his own. So I went, "Ah, right. UK turbine blade builders. I need to buy into them." So I looked them all up and they've been bought out by American companies six weeks earlier. >> Yeah. >> No kidding. No kidding. >> So Musk is actually building his own gas turbine blades cuz that's the bottleneck. And this is all about bottlenecks. Yeah. So and something happened today which is which is really sad and kind of mind-blowing. The the in the UK they're going to build this supercomputer and they got the backing of Nvidia and all sorts of people to make it happen. Yeah. and they found out today they won't have enough electricity to make it real until 2035. >> Now, you've kind of talked a little bit about this. I mean, you've said AI is electricity. I mean, what does that what you know, what does that mean for somebody who's never been inside a data center? I mean, who pays for it? >> Well, it's actually long term, it's going to be pretty good for the normal guy because they're going to have to make so much electricity. there's just going to be so much of it out there and that will bring the price down because that I mean there's many ways to make electricity, expensive electricity, cheap electricity, you know, electricity that you can have tomorrow, electricity that will take you 10 years to put into place. I mean nuclear is going to be a big thing and the Democrats and the Republicans have agreed that that's going to be a thing. And you imagine 5 years ago saying to the Democrats, oh, nuclear power, they would have strung you up. Yeah. Because energy, which in this case is electricity, is destiny. Russia has 250% more electricity than America. They're building, I think, 35 nuclear power stations right now. So, you know, that's the foot race. That's the not quite the base of the pyramid, but it's pretty near the base of the pyramid of value when it comes to this. In the past, all that old stuff as, oh, anybody can make gas turbines. We got enough of them. Who cares? Right? Well, now that's the pinch point. So all of a sudden everybody is looking at the whole pyramid of value and seeing that maybe being the top of the pyramid isn't such a great idea if you've handed out the rest of the pyramid to somewhere else who can then just pull the legs and sticks out from underneath you. So this is a completely big change. This is a new epoch where America's got to rebuild the whole economic pyramid on shore. And that's going to require vast amounts of money. Anybody who's building that right the way down to the guys sweeping the floor is going to be in great shape because they're going to be massively in demand cuz they are the cure to this bottleneck. And this value chain is ex is existential. >> Now listen, I mean you were talking about Musk there. I I hadn't seen that report, but I mean it brings me to a deeper point. I mean if the if the richest man in the world can't get turbines, who can? I mean what happens to everybody else in that line? And and I mean, you know, Clim, you said >> it will make money. >> Yeah. Yeah. >> Everybody makes money. >> You said early, right? You said this is still a little early. So if this is the beginning, well, I mean, what does the middle look like? >> Well, even more. And then the end is even more. You see, we're in a bubble. Okay, we're at the beginning of a bubble. And people would normally be scared by that. They go, "Oh, bubble. Terrible things are going to happen." Well, not really. Wonderful things are going to happen. And then you get the bust. Yeah. Now people say, "Oh, it's the railroads. It's the railroads." Well, if you had land where the railroad stopped and picked people up, you made a fortune. >> Yeah. So, it's not just about the trains and the tracks. It's about everything around it. Yeah. And anybody I mean, imagine if you right now are an HVAC expert on maintenance. I mean, you're going to be making so much money in the next 5 years. >> There's just not going to be enough of you. There's not going to be enough of a lot of blue collar people. >> It's the white collar people that are scared by AI, not the blue collar. When everybody talks about jobs going away, it's not the jobs of the not rich or even the not middle class. It's it's your as as they would say back in in Marxist time, the proletariat are going to make like bandits with this because they're going to be needed. All the thing about robots, that's 15 20 years away, right? There'll be people shinning up drain pipes to nail stuff on roofs for for years to come at fabulous rates. So, it's great news for the people that make, for the people that build, for all those parts of the value chain. And you know, at the very top is that box that you plug in that's got Nvidia on it. But when you have to pull that out and throw it away and put the next generation in, all that superructure underneath is going to still be in great demand. Right? There's no second place in AI. I mean, Trump said it recently. I was I said that for years now for like two years. No second place in AI. >> Whoever wins AI wins, right? Well, you know, America's got a choice. Either go allin or surrender. So, what do you think America's going to do? It's going to go all in, isn't it? Now, you talked about Britain there for a moment. I need to go back there because I mean, you're talking about how they built that supercomputer, can't power it. Is that is that a warning for America or is America the one buying up all these turbines? >> Well, America has got the warning, knows what it's doing, kind of semi-aggreed that that's what's going to happen. There's a lot of push back, right? Because ultimately, you know, the the the frenommy is China, right? And that's the foot race. That is the the conflict, the struggle is between China, which is already 250% ahead in energy. Yeah. which is the the base of that pyramid. America's got to catch up with that. Oh, what's that going to take? It's going to take vast amounts of capital. Where's that capital going to come from? It's going to come from the printing press. But rather than it going straight into people's pockets and through the supermarket and into inflation, it's going to go into building out productive assets and the people building it, people driving, you know, um, forklift trucks and and mixing cement and wiring stuff and fix putting the air con in and making all the switch gear and installing the switch gear and building the power plants and building all this stuff. they're they're going to be in high demand and they're going to get a massive massive lift from that. So, it's great news for those people. If you work in an office and all you do is jab it to your mates about what was on on the game last night, you're going to have a problem. >> You know, let's put some numbers under this too, Cliff, just for the audience, cuz Amazon, Microsoft, Google, Meta, they all plan to spend more than $700 billion this year on data centers and AI. That's their own guidance, by the way. And I saw this latest study from Lawrence Berkeley National Laboratory. It found data centers used about 4.4 of America's electricity in 2023. It says that it could reach as much as 12% by 2028. So I mean somebody can kind of write new code over the weekend. A power plant takes years as you know. So I mean where does the power come from? And I bring this up because you talked about mosque and I know that that AI company's running about 69 uh 69 of its gas turbines. Um, it told investors it'll buy another 2.8 billion worth. So, I mean, he's not waiting for the grid. Is that where this goes with every big AI player building its own power plant? Yeah. As well, all possible ways. Coal there. Well, they already are burning wood. Yeah. Oil, gas, nuclear, um, geothermal. Um, launch that stuff into space cuz the, you know, the sun's up there. You name it. It's going to be all possible channels. The same way in China, it's all possible channels. People have been taking um you know the Mickey out of um uh green energy because China doesn't do it. Yes, they bloom and do absolutely do. And energy storage, you name it. It's going to have to be on all possible channels. Otherwise, you lose, right? If you haven't got, say, solar and windmills and nuclear and gas and coal and and and and and burning your rubbish, you you're you're just going to lose to the ones that do, aren't you? Because it translates almost directly electricity into AI. Yeah. Not enough electricity. No AI. The UK does not have the electricity to run this fabulous supercomput they were going to build with AI and quantum and all that stuff. They're dead in the water. They can't build it for a decade. They haven't got the electricity. It's They can't do it. They haven't got it. They cannot They don't have the political will to build nuclear or enough nuclear. They haven't got the political will to burn coal. They just That's it. That's They're toast. Unless they have a massive change in political will, which actually Europe is starting to develop. They will, you know, that's it. They're gone. They're dead. >> Now, let's go back to China because it's interesting. We'll get to that green energy after, but I mean, China used more than twice as much electricity as America last year. That's from the energy think tank uh Ember, but Beijing also closed a record 670 banks last year. About a quarter of all of the banks in the country. Fitch ratings counted those and and says that the trouble uh probably won't spread. Now, China's own figures show its economy grew 4.3% in the second quarter, the slowest pace since 2022. China has twice the power. It's shutting banks by the hundreds. I mean, who's really ahead in this race? >> Well, right. It h I would say clearly China, but a lot of people will say clearly America, and some people say neck and neck, right? I look at that stuff they're doing with robots cuz that is Oh, dear. Oh, dear. You know, that that is a head start. America's got SpaceX. Yeah. China's got robots neck and neck in AI, neck and neck in in chips. Although America's got a little bit of a head start um not head start, a lead that's probably not going to last more than a couple of years. >> Yeah. So you've got America's got space which is very very important. China's got robots which is very very important. China will catch up on space or try to at least America will catch up on robot. It's it's a it's a race. It's a race and it's a race to dominance. Yeah, which you know in a sense they if I wish they wouldn't make it something like that but that's what it is right now and and if it if they can keep it up at economic activity if they can keep it at AI they can keep it at technology it'd be brilliant and if they one party gets vicious about it and it all starts to descend into the lower layers of economic activity it will be very very bad but I think it it will pan out. I I think there are still enough sensible people out there to, you know, keep the train on the tracks. >> I was just thinking about that comment you you made about, you know, green energy in China, cuz you're right. I mean, that same that same document from Ember. It said China made more solar panels or power last year than every rich country combined and more wind power than the whole G7. So, is China's green energy, you know, kind of the real weapon in the AI race? And I mean, you could look at the counter. It's still the world's biggest coal burner and it gets more than half of its power from coal. So, is it just building everything at once? Green and dirty. The yes is the answer. But the real weapon is one that the West is only just waking up to. And in fact, the UK only just woke up to it. The real weapon is to work out your strategy and then tell your competitor they should absolutely not do that. >> Yeah. So, China's been busy building all this energy and and getting propaganda out into the West to not have energy. Yeah. So, if you look at what China does and then follow the propaganda that says you shouldn't do that, it all comes out of China. And that's the real weapon that people haven't woken up to yet properly is that America, the West is being absolutely saturated with negative propaganda. And that's where the real battle is for minds, right? And China and Russia have been brilliant at that for 150 years of actually, you know, fighting with information. So if you look at all the all the memes out there which are driving Americans mad, I mean literally mad, trace them back, you'll find they come from the adversary. >> Yeah. All the divide and conquer stuff. How much of that are you seeing? Oh, oh, you don't want that. No, no, no. You don't want energy. No, no, no. You want to Oh, no. You don't want to build an airport. Oh, no. Oh, you don't want to build power stations. No, no, no. Oh, you don't want fossil fuels. No, no, no. You know, and the adversary is doing exactly the opposite. It's not a coincidence. And that is where people should spend their time reverse engineering the information flow because once you control the information flow, it's it's almost as good as in you control the minds of the receiver, don't you? Yeah. America's been good at that over the years. It's had Hollywood to do that and John Wayne, but it seems to have lost its magic touch. and the other people who've been focusing on asymmetric warfare have actually surpassed Europe and America on that front and only you know literally um the British prime minister who's not from a party I appreciate but he's got this one right yeah stood up and was talking about that talking about the information asymmetrical information war that's being inflicted on Great Britain and that is real he's not hallucinating that is real and people need to realize that because things like propaganda will will ruin your investments. Absolutely ruin your investments. >> Hey, to your point, uh I mean some people are are getting very rich from this making very boring things. I mean, the founder, I was reading this report this morning, the founder of a Taiwanese company that makes the metal rail server slide into is now worth more than $9.5 billion. I mean, uh he started the company four decades ago. What else is getting rich making the boring stuff? Well, if you look at the AI value chain, Yeah. and you go, "Oh, well, it's Nvidia there, and then it's uh oh, it's them there, and oh, above them is is uh Anthropic and Open AI." It goes a lot further down. Before you know it, it's people that make cables, and it's people that make routters, and people make optic fibers. Go look at Corning's value. Corning's gone wham. Yeah. Look at Look at um Caterpillar. Where do you think Caterpillar's through the roof? Oh, I want to build a service center. Oh, I need a bulldozer or 10. Yeah. Yeah. All those people underneath the the AI are that are needed to build this out. And and the question goes, well, when do you stop? What when's what's enough? When's enough? Is there a natural limit to the amount of intelligence you want? Uh no. Yeah. So everybody below that is going to be it's being pulled up by this fast investment. It's like if you made um I don't know bolts, screws and bolts during the Second World War. You're going to sell a lot of screws and bolts, aren't you? >> You know, I wonder I mean that same index we talked about Michael Dell. I mean his fortune is up 81% this year on data center sales. Is is the money in the chips or is it in everything around them? Because chips, you know, obviously they get more efficient every generation. Couldn't AI end up needing less power than everyone fears? >> Okay, I don't think there's a limit. Now, first of all, people are going to say, "Oh, the tokens get cheaper and oh, yeah, it's going to get cheaper and cheaper and cheaper. Look at what's happening. They're getting cheaper and cheaper cheaper." >> Now, for example, I've been um writing all sorts of AI code all day today. Yeah. While and I have to go do this, return. I have to wait 5 minutes or 10 minutes or 20 minutes or 30 minutes and he comes back and says, "I've done it." And I go, "Oh, that's really good. Thank you very much. Do some more. And I come back in half an hour. So I can run two of these jobs at once. And I'm still sat around waiting. >> And to the day that AI can do that instantaneously. Yeah. There'll be a desire and a need for more because until you go real time with the AI's ability to produce what you want it to produce, Yeah. there'll be more demand for it. The slowness is not because computers are slow. is because the demand overwhelms the supply. Yeah. So prices will be supported indefinitely because I tell you when I say to it, oh, you know, make me a website that will make me a millionaire in the next 10 days. AI, will you? And it does it like that. That will be the day when there's enough AI and that is forever away. So there's no end to that. And there's no end to the build out. And even with Moore's law havinging the cost and doubling the power every two years or whatever that law is now, you know, even Moore's law. Yeah. It it think about Mo's law since 1975. It's been doing it since then. >> And there's still not enough computing. You're still looking at your computer going, "Oh, it's I wish it go faster. Oh, I wish I had more memory." So, the demand is infinite. The supply is very finite. There's bottlenecks all the way down the chain, right down to the bottom. And I I bring up an example that I know most people think I'm start raving bonkers. So this is this is one of the things near the bottom of the AI value chain. It's Goldman Sachs because they're going to have to print so much money and then someone's going to have to hand it out and it's going to be the investment banks and they're going to take 5 to 7% of it as it passes through. So, they're going to make incredible sums because there's going to be incredible reflation and they're going to be the ATM of all this new money to build out this existential conflict. >> Yeah. And so they're in the chain, too. And like the guy who's building racks that, you know, it's going to take two years for someone else to build those racks. Yeah. You know, he's making a lot of money. or somebody that's got a refrigerating unit for computers and supercomputer or whatever they're called, making tons of money making refrigerators. Yeah. Well, no one's going to make an investment bank to take over the job of distributing all that capital in the next two or three years either. So, they're going to make a ton of money and their share price is going to rocket. >> I guess we could ask you then on that front. I mean, so the real winner of this AI boom is is Wall Street taking its cot as the money goes through. But bring that home for me. I mean, someone watching with a 401k, what does the power race mean to them? >> Well, the power race is just part of this chain. And if they could magically go boom, yeah, here it is, right? There'd be other things below and above that bottleneck, which would block and and be a bottleneck instead. Yeah, that's the thing about bottlenecks is you you remove one in the pipeline and get another. You've got to plum the whole thing. And when something like this is going to have such a dramatic effect on this long chain of of economic causality, it's everywhere you you care to look. It's just a matter of timing. It's just a matter when people wake up to the fact that there isn't enough copper. >> Yeah. And they wake up to the fact there isn't enough copper. Then they wake up to the fact there's not enough explorers exploring and then they wake up to the fact there's not enough drill bits to drill bit. you know, it's it it's a whole cascade and it's just a matter of finding the areas which people are going to wake up to in the next 90 days so you don't have to hang around for two years waiting for the penny to drop. Yeah. So, you know, if you look at it, I mean, I I I bought um a few months ago people like Cisco and HP enterprises who were smack bang in the middle of the dropdown. Oh, we need servers now. Oh, we need somebody to come in and do good example, right? So, the government's going to say, "Oh, we need lots of AI." Big companies going to say, "Oh, we need lots of AI." Oh, dear. Who are we going to ring up to um tell us what we need to do? Well, it's going to be the consultants, isn't it? And who's that going to be then? IBM. You know, they're not going to trust anybody but IBM to come in and tell them how to implement all this AI. Not big huge companies that, you know, they don't want to run away AI hacking into the pentagon, do they? I mean, they're going to call call in Ghostbusters, aren't they? And get them to sort them out. And that is companies like IBM, who are about as popular as a stink bomb. You know, IBM, what do you, you know, anything to do with a company like IBM? Oh, how rubbish they are. Well, you know, who's going to be doing all that consultancy? It's the big computing consultancy company. Well, you don't think McDonald's is going to put AI in without some consultants holding their hands and covering their ears. It's going they're going to be in great demand at some point and at some point the penny will drop and at some point they'll go from dog to hero, won't they? >> Now later, if you're just joining me, I'm going to ask Clem about his uh costliest mistake he's ever talked himself into. But first, copper. You brought it up there. I mean, every every data center, every new power line obviously needs copper. Uh the S&P Global expects the world to need about 50% more copper by 2040 without major new mines as you just talked about. I mean, it says we could come up about 10 million tons a year short. And then again, this morning's ISM survey company said copper prices have gone up 10 months in a row. So, I mean, if you own a mining stock, obviously this is the part you've been kind of waiting for, but you've called this mining boom uh kind of a a juggernaut. So, why? Let's talk about it. >> Well, if you think about what this is, it's not an incremental economic growth story. Yeah. G America's GDP growth doubled over the last year because of AI. Yeah. Not because people are using AI. What's that going to do? It was because of all the buildout to make AI. So America's GDP doubles. That's a big hairy deal. Now, if you look at the um NASDAQ, if you look at the American stock market, everyone goes, "Oh, scary. The top seven companies are 40% of the value of the whole thing. Oh, I'm scared." Well, they're all software companies, give or take. Very, very reliant on software. And all of a sudden, they can generate 10 times as much. What does that do to their valuation? That all of a sudden, what's made them so valuable? They've got a 10x uplift on that. >> What's that going to do to their valuation? What's that going to do to their productivity? What's that going to do to what they actually managed to produce? That's fast, isn't it? And that's before the rest of the world gets it. When old crumblers like me who haven't programmed in 50 years can be sat knocking out products while I'm talking to you. I mean literally my AI is writing stuff right now. Yeah. Crumbers like me. I can now make a productive asset. What does that do to your economy? Yeah. So when you follow through the logic, massive economic growth. >> Well, you know, that is a big hairy deal. And then it just drags up everything because the the the economy is geared towards the slow incremental growth curves that we've got ourselves into. Oh, you know, maybe we need another power station in the next 10 years. Well, now we need 20 in the next year. Yeah. So that is the situation we find ourselves in which will generate really huge volatility, generate opportunities galore for people that want to dig them out and you know so so the game is on and people that are stood there reading all this propaganda saying be very scared be like the rabbit in the headlights. Well, you know ah don't don't be that person. Be the person that says this AI I'm not going to get fired. I'm going to get really good at it. Yeah. Oh, all of a sudden I've I've I've made all these things. All of a sudden I've got all this. It's got to proactivity, engagement, positive mental attitude. That is the key to do really really well. And I tell you the the enemy is trying to take away your positive mental attit attitude. All that stuff that makes you feel sad, depressed, angry, go trace it back. I mean, literally become a Sherlock Holmes. Trace it back. see where you get >> ISM this morning. I'm looking at it and I bring it up because it's actually uh it's actually interesting for the metals too. I mean, even this morning on the Kicko board, I'm looking down. Gold a little bit lower. Silver, platinum, uh both up. I mean, where does gold fit in? A boom that's hungry for copper here. >> Well, it it's a economy hungry for cash and it's a reflationary situation is an inflationary situation. So gold will be great because what's the point in in making a load of cash if it then gets gnawled away at 7% a year. Yeah. 10 years, you know, you've I don't know what it's done in 10 years. It's probably worse than hved it. Yeah. So you've got to take the cash and put it into hard assets. And gold's a great place, very convenient place to stash cash, but obviously as a diversified portfolio. Now it's on the back foot because it had its run. And I I think the the short-term acute price of gold, which is what everyone's interested in, they're interested in the acute price, not the chronic. I I'm more interested in the chronic price, the long-term price of gold. But in the short term, that gold price is set by countries at war selling because they have to they have to buy when you go towards war, but when you're in war, you have to sell it. So gold is for war because it's the currency of war. And the big, you know, oh my god issue is back to America versus China. And of course, I think you'll find that that she and Trump had a little bit of a hugathon in the last few weeks, the gold's going to be weak. And then when they have to pull the the plunger on money printing in a few weeks time because either the Fed steps in or you know they get beyond the the midterms and therefore they can pull it without people accusing them of fixing the election then you know you'll find that there will be an inflationary rush or a money supply rush and gold will go flip and then probably and then probably down again. But long term it's only going to go one way and that's it's going to grind up. at worst grind sideways and then grind up. Yeah, because you know money is going to be there's going to be such a reflation because there's not enough money. You see, okay, another way of looking at it, go and have a look at the Fed's balance sheet, right? And you'll see that it went up like a rocket at COVID and then across and it's been coming down ever since. It's halfway back to where it was before CO. But if you actually look at it closely and you go, "Hold on a minute. How much um real GDP growth has there been?" Oh, yo much. Oh, how much inflation has there been? Yo, much. Oh, actually the balance sheet is back in real terms to where it was before COVID. So, there's actually quite a lot of room to pull that print lever and suffer a bit of higher inflation because, you know, there's ain't enough money in the system for the AI buildout. There ain't enough money in the system for the onshoring American industry. So, that's 2x ain't enough money around. So, what are they going to do? sit there like Britain and say, "Oh, haven't got enough energy for 10 years." Oh, we better wait then. Or are they going to pull the lever? Well, of course they're going to pull the lever and then we're going to get higher inflation and then gold's going to go that way. >> I mean, to your point, Clem, somebody's got to pay for all of this. America's debt just passed that $40 trillion mark in August. That's the Treasury number. It's roughly double what it was in 2017. I mean, Bloomberg's data this morning, I mean, the interest rate on 30-year government bonds hit its highest level since 2002 last week, above 5.6%. It's pushing higher again today. So, when long-term rates climb, so does the cost of your mortgage. Obviously, the Treasury has been buying, you talked about it there. I mean, they stepped in to support the Japanese yen in July, the first time the US has done so in about 30 years. It's also been buying back its own long-term bond. So, I mean, who is really running the money in America right now, the Fed or the Treasury? Well, the Treasury stepped in because the Fed won't do it. And I would imagine, I'm only guessing here. I would imagine, you see, last time the Fed stepped in and pulled the lever, everybody blamed them that they were supporting Biden. Well, they're not going to put their their neck on the block for that again with Trump, are they? They're just going to wait for that to get get passed and then they're going to step in if there isn't enough money according to their their their system, you know? And meantime, I mean, if the wheels came off tomorrow, they will step in, pull the lever. Yeah. And if it kind of wobbles around here, stays under 6%. They just wait till the midterms are over, and then they'll go, "Yeah, I think we want it back under five, clunk, and they go back to five." I mean, just look at the history of American interest rates. When the government wants to take them down to as low as they want them to take them down, it goes straight there. >> Don't go, "Oh my god, it's co. Oh, we can't get interest rates down. Oh no, they just go clunk down they go. Right. Well, they're not going to do that before the midterms and then get blamed by all and sundry for supporting Donald Trump or whatever people want to blame. They'll wait till afterwards, weren't they? That they they don't want to put themselves in harm's way by by stepping in before the election. And you know, everybody influences the election these days. Somebody will tell tell me I'm influencing the election. Everybody's influencing it. every election is getting influenced by everybody, right? Which is probably how it's meant to be. But so they're not going to um do anything where they can be accused to influence the midterms. And when they're out of the way, I think you'll see interest rates falling pretty sharply. And they will print that. Well, I mean, if they don't, it's going to be it's going to be an economic catastrophe because the AI people can suck up all the money. They can absolutely do that because they're they're the giants of the American industry. Well, what what's the smaller guys going to do? What's the rest of the um S&P 500 going to do for cash? There won't be any for them, will there? So, they'll all go bust. Well, that can't happen. Can or it can happen, but then that would not be allowed to happen. And and they know it's not they know absolutely what they have to do and when they have to do it, but unfortunately politics is now at the central bank layer in spades. So, you know, they they can't just do the right thing at the right time anymore. And and they will do it though. >> So, I mean, if you're right about the timing, what does somebody watching need to know before November? I mean, after the election, if if the money starts flowing, what happens to the nurse with 20 grand in the bank? >> Well, I mean, they won't really notice much difference. What are they going to do in a higher inflation situation? That's that's very tough. very very very tough. But economic growth should mean better economic better real wages. I mean that's why America had great wages in the past because it had massive economic growth and it had a fantastic economy etc etc. If you if you have a a weak economy or a lopsided economy or you've locked your economy up for best part of a year because of some disease or other, you can have setbacks, aren't you? You've got to get growth. But you know, the trouble is with growth is that government is a dead hand on growth as we know. And the bigger the government gets, the slower growth you get. Yeah. or maybe you get things more organized in certain parts. But you know the the the problem you have with Europe and the UK and to a lesser extent America is these ever growing governments that are detached from enterprise. I mean most people in government have never been in enterprise. I mean they don't know how it works. It it's a completely different world to them and therefore they're not really very good as being kind at encouraging growth. In fact, they spend half their time making rules that stop you doing anything. And at some point, it all just stops. And you know, that's the situation that Europe has been in and they're trying to get out of. And I think even the UK is trying to get out of it. I mean, if you listen to what the people in power are trying to say is they're trying to say they're trying to get out of that. Whether they are able to because of the actual um political dynamic they're in is another matter, but we will see. I mean, you know, it's a major blow for a country's whose government released a press release saying they were going to be number one in quantum computing, which is relatively ridiculous when they did it, but they did it nonetheless. To now not even be able to build out their computer facility because they haven't got the energy for 10 years, 10 years. I mean, I'll probably be dead by then anyway. I mean, the whole country will probably be dead by then if they can't build out AI and supercomputing in a decade. So, you know, there there's there are major major hurdles, blockages, challenges. This is not a small thing. We're we're going into to a new epoch, which is hell forever. And I think it will be brilliant for most people. >> Hey, Europe is in a rough spot. There's no doubt. I mean, the euro is at its weakest since May of last year. Spain just called that snap election. A former ECB board member warned last week that the shadows of the 2011 debt crisis are coming back. Uh what does it look like when a country stops encouraging growth? I mean, what did Europe get wrong? >> Well, it it it took all this socialist clap trap about energy is evil. Okay. I mean, it's it's this should be a finance show, but I mean, I don't want it to be political, but at the end of the day, in the good old days, um you know, money was the root of all evil. Yeah. And that comes out of the socialistic idea of you money is bad, everybody should share and be fair and all that kids, right? So if you if you then lose the argument about money, what's the next best thing? The next best thing is energy because money is energy. So if you starve out energy, you starve money, right? So if you can't sell money being evil, you can sell energy being evil. So they sold energy is evil and people believe them and they ain't got enough of it. But energy is life. So they've said life is evil, which there's a theme in socialism where life is evil. And we've all heard that one, you know, but you know, oh, you shouldn't have kids. It's a terrible world. All that all that all that toffee, right? So the idea that energy was evil, not energy was life. People bought that and you know, now there's not enough energy and that's a problem and it's going to take a long time to turn it around. But they are trying to turn it around. It is being turned around, >> but it's a super tanker. Don't turn around like a like a rowboat. So, it's going to take a long time. But everybody now is starting to all the smart people, a lot of the people in power have got the message and you know, they they've got a choice. They can be a colony of China or they can get their skates on. I mean to your point, Germany shut its last nuclear plants in 2023. Now I mean Bloomberg data shows its gas storage is about 59% full, the lowest for this time of year since records began in 2009. I mean what does that winter look like Clem? And I guess more importantly too I mean is America making the same mistake or is it learning from Europe's? >> Well um America has turned that corner now. Whether the political process turns it back around again is the question that America needs to ask. Will a change in government um mean that they go right okay we're going to go back to how it was before which would mean you know bending the knee to China and in the short term that will seem fine in the long term it'd be catastrophic but politicians can think short term after all so we'll see if if they don't bend the knee if they still go for competing with China >> as opposed to just letting China take it then then that'll be fine and just have to carry on this course. Europe has to turn the corner. Now, on energy, I from what I can make out, there's a lot of very, very worried people in Europe at the highest level about there being a shortage of electricity this winter. Now, I've got a feeling they'll be okay, >> but let's just say I bought generators and I bought battery storage. >> Yeah. >> So, that's that that tells you what I think and what I've done. >> You know, it's not just Europe. Washington is is working on fuel prices, too. Just this morning, the White House is expected to announce today that more Americans can use red diesel. That's the tax-free, you know, normally meant for farm equipment, right? It skips that federal. >> Yeah. Pink. It's It's the diesel. But, I mean, you know, you if you put that in your car. >> What do you think about this whole thing? I mean, Iran is Sorry. I mean, Washington is obviously pulling every lever it can to bring those prices down. You talked about the midterms. I mean, what does it tell you about where prices are at least heading? >> Well, I I think that, you know, the the situation in the Middle East will take longer to blow over, but it will blow over. And in another I don't know what what happens in these situations. Everyone goes, "Oh my goodness, there isn't there aren't enough eggs, and we have to ration eggs, we have to do this and the other." But normally, capitalism finds a way. Governments find a way. So they build pipelines and they build them really fast, not at the same speed they would have built them 5 years before the trouble. So all of a sudden the pipeline that would take six years takes 9 months. And that's the sort of thing that takes the oh it's all over. It's terrible. The zombies are going to attack and telescop telescopes that down to a crisis that lasts a year. And now how far are we into this crisis now? at least, you know, four or five months past the point where everyone went, "Oh, this is not going to be um ending quickly." >> So, I should think you're going to be um looking at I don't know. I you're going to get a big punch up in in Yemen, I think. So, the Saudis are going to go in there and America is going to bomb everything flat, that kind of thing. And that will come after the midterms. And it it will go on and on and on and on. And then, who knows? I mean, you might even get something going on in Cuba. So, all those people that like to trade gold, you got to watch out for what could happen in Cuba. You got to watch out what could happen in in Ukraine and Russia. You got to watch out what could happen in Yemen and etc., etc. So, there's all those short-term um gamles that you can take, but long-term it will pan out. Okay? Okay. So, that situation will pan out. But the big long-term upending is the AI um so-called bubble boom conflict. Yeah. And that is I think all things being equal as long as these the the clever sound people have a good say in it will be a fantastic transition into another economic paradigm which will generate huge amounts of growth. And I mean, you know, Musk doesn't want to um launch his AI into space because that's not where it's all ending up. I mean, just think about that. Just think about server farms in space. What what book of science fiction is that out of? What goes on in that book of science fiction when that's the sort of thing that's going on? You know, it's it's another level and we're going into that other level. And and that is a very very prosperous reality. It's very chaotic. It'll be massive amounts of change. A lot of people who can't adapt will have a terrible time. People are inflexible will have a terrible time. People that that are mesmerized and frozen with fear will have a terrible time. But everybody else will be will do really well. I mean, particularly the young, of course, cuz they'll be the ones doing it mainly. >> Now, an AI boom and a war at the same time. And obviously, Wall Street has kind of put almost all of its money on one side of that. Uh we can show a graphic. Let's look at the index funds. US tech stocks are up 34% this year. Strip out tech. The S&P 500 is up about 4% and the bar keeps rising. I mean, Faxet put out uh says that Wall Street expects S&P 500 profits to jump another 29 a.5% this quarter. Same data shows about 60% of analyst ratings on the S&P 500 are buys. I mean, that's a new record. When almost everyone says buy, what happens next? >> Well, it crashes, doesn't it? But I don't think that's what we're seeing. If you look at the media, it's doom. Wall toward doom. I mean, I'm sure if I came on here and said there's going to be a Clem Chambers says crash on t next Tuesday, guaranteed. You get a lot of views. And you know, I'm not saying that by the way. Don't you dare put that on the thumbnail. But nonetheless, if you look at what people are saying, I mean, if you say Fact Set or or Bloomberg or Reuters, you know, that's a niche of of of the vibe out there. And the vibe has never been more negative. I mean, people are absolutely losing their minds with with, you know, fear and worry and and anxiety. Absolutely losing their minds. And and that is a very very bad thing. And and it's not real. It's not real. They're just being saturated with terrifying um headlines everywhere you look because you know terrifying headlines gets the views and it's awful. I mean I'm telling everybody just step away from that. Step away from that. I mean not from this of course but you know that is will hurt you badly. Imagine if you believed all the media since two 2009 2010. It's always been it's going to crash soon. Oh no it's going to be another crash. Oh, for the for the next 16 years and you would have sat there terrified if you believed a word of it and you would have not got this fabulous bull market. So I think until I'm reading the news and everybody's saying what if AI is fantastic and it's going to go up forever. Please build a server farm next to my house and you know we're all going to be rich and we're all going to be floating in space with Elon. Until I read that, we've got a long way to go. >> Yeah. Yeah. And you know, not all that money is sitting in US tech. Let's look at Brazil today. Uh the son of former president uh Balssonro finished first in Sunday's election, edging out Lula by less than two points. I mean, the runoff is October 25th. Investors think he'd be friendlier to business and tougher on spending. So, Brazil's stock market, I mean, it shot up as much as 8% today to a new record high. So, I mean, I saw this with Argentina and Malay. I guess the question is here, Clem. I mean, is is money voting Sure. I mean there's one man one vote or there's $1, one vote and there's there's a dialogue between those two and you know I don't think anybody would like the idea of of $1,1 vote particularly with people with billions and billions and trillions but nonetheless money has that influence and you know we see that everywhere but I mean if you look at South America they've got major systemic problems that a new leader cannot fix. If you look at MLE, they've still got 25% inflation there and he's had two years to fix it and he hasn't, right? Because the central bank has a bit of a whip hand there and he hasn't been well, he could have got rid of that 25% inflation, but it would have caused such devastation that he hasn't kept his promise. And you know, the road of South America to redemption is a very, very long one. I mean, Greece, they're redeemed. And how many years is that now? Uh quite a few. But it's a booming fixed economy now. But they were within a structure where Europe could come in and slap them about a bit and say, "Stop that. Be sensible. We'll bail you out. Just be sensible." No, no, no, no. And that put them on the right path. So whenever that crisis or when was the US was it eight years ago? You can tell me, Jeremy, >> I think it was eight. Yeah, maybe nine. >> Yeah, there you go. Eight years ago. So it's taken them six or seven years to go from a basket case >> to a you know a winning economy. So but there's no one in South America to put them through that course. there's no one to make them jump through loops because they have systemically got these issues and they always tend to fall back on the easy route which is you know I I I think it's quite interesting because if you look at what America's doing today and then you look at what Argentina did to get in the pickle that it's in America is doing exactly the same behavior but it's at the beginning of that road to pedition rather than at the end of it so there's still a long way for America to travel down until it gets into the sort of trouble that you would get with a Greece or even more so um trouble with a Turkey or you know with a problem that you have in South America but it's on that road but it's it's not it's not destiny that it's going to go all the way down there but they're making a good stab at making it look like there's no return yeah I guess eight years ago that's hard to believe 2018 is what I I saw there Argentina's obviously currency lost about half of its Valley uh value the IMF came in the largest bailout ever last October. The US Treasury gave it another $20 billion lifeline on currency. Now MLE is backing Bolsinero. Brazil's obviously surging. I mean is South America turning into the comeback trade here. You and I have talked about these emerging markets. Um I no >> no no no I I I you know that somebody like a MLE or or unpronouncable Bosano can can get them on the right road but it's a very very long road and it's a very thin road and very easy for them to fall off it because all it takes is you know everybody to go you see remember in countries like this yeah inflation's not necessarily such a big deal because the poor don't have any savings they just live hand-to-mouth. Yeah. So all that confetti flows around and and that their their savings don't get crushed cuz they don't have any. Yeah. So there's it's not like you have a whole society of people who have savings that are going, "Oh, I want to wait a minute. What are you doing?" Yeah. They aren't in that position. Everybody hates it, but it's not like there's as many people as there would be say in Europe who are losing their money to inflation because they have this huge huge swave of poor with no savings at all. So they don't get mashed up by, you know, 100% inflation because they it's not inflating anything for them. You know, I want to move on to Bitcoin because I only got about 10 minutes with with you, Cle, but before we do that, because you were just bringing it up. I mean, you've been talking about the US Treasury. Um, you've been talking about the Fed, right? I mean, the Treasury gave it about Argentina about $20 billion in that currency lifeline. That Treasury lifeline, let's stick on it. I mean, is that another example of the Treasury acting like a central bank? The thing that you're talking about there with the printer? >> Yeah, sure. Sure. I mean, they've taken up the inertia of the Fed. who haven't been so keen that they would have appeared to have said, "Well, if you're not going to do it, we're going to do it." Now, that is high risk, but not that the Trump administration is known for high risks because I don't think they've necessarily got the strength in depth of the Fed. >> Yeah. But they've got lots of levers to push and pull and and you know, at the end of the day, politicians do what they like, which is, you know, why they get the job and why they want the job because ultimately they can do what they want. And the the impact of what they do doing what they want is it comes due later. Yeah. So but today tomorrow they pretty much have cart blanch and you know that's a one of the downsides. Um and one of the upsides of democracy that people can behave like that and they have they've they've got you know they they get the bill at the end of it and they don't get to carry on ruling their country forever and ever and and wrecking it like so many dictators do. But that aside, the Fed has kept the American economy on the rails for a very long time with lots of very nasty bumps in the road. And if the Treasury is operating it, it must be because they think they have to, right, >> for political reasons. But the Fed will take the helm at some point in not too distant future. Whether it's after the Republicans don't control the houses or whatever house they don't control or whether it's after, you know, the the new administration comes in at the end of um Trump's um period is another matter. But they will take the helm and they've been pretty good. I know they're very hated upon. But then, you know, when they do something, a group of people are helped and a group of people are hurt. You know, they they make somebody's trade and they break somebody's trade. So, it's not surprising that loads of people don't like the medicine. That was that was well said. I might use that one. Uh, Clem. So, listen, speaking of money, looking for somewhere to go. Uh, we got to talk Bitcoin just for a minute. I mean, it rose 43% last quarter. It's still down about 30% from a year ago. I looked today strategy. The biggest corporate holder says it now owns about $848 mill uh $848,000 Bitcoin and its filings show 21 billion gain on paper at least in the last quarter. I don't know if you saw this uh today the CFTC proposed bringing leveraged crypto trading under its rules. I mean you run a blockchain company so you've got skin in this. I mean people bought Bitcoin to kind of get away in the system. What happens if that system kind of owns it or is this good for them for that volatility? >> Bitcoin was all about sticking it to the man and anarchco capitalism and all that good malarkey. Not anymore. It's it's purely being absorbed by by the man by Wall Street. It's now just another asset. And when somebody like the Treasury goes have some cash system, it goes straight into Bitcoin. Not all of it, but it's the kind of asset where that infusion of money hits first and then it dribbles out of it and it trickles down. Everybody hates trickle down because they don't understand what the word trickle means. But anyway, so you you have this flood of money and then it diffuses through the economy, but the first thing it hits is the high beta stuff, >> right? >> And you know, Bitcoin is the high beta stuff. So when the Treasury pulled that lever, it went straight into Bitcoin. Up it went. Well, now it's and gold and now it's, you know, dribbling down into the rest of the economy, which is what it's meant to do. I mean, trouble with um QE and the cleverness of it and and the dark side of it is QE pumps money into the rich and then it trickles down. Oh, I don't like trickle down. Oh, I don't It doesn't work. You mean it doesn't trickle enough to you? No, it trickles down for sure. But of course, it goes straight into Wall Street. Good. Goes straight into real estate. Well, I've got some of that, so I quite like that. But it's still not fair. I'm not getting it directly. Yeah. So that money goes into rich man's assets, real estate and equities and it tends to stick there. So it has a very slow effect on inflation but it keeps everything running. Yeah. So that is what happens when you print if you print money like but I mean if Trump gives five grand to everybody it would be like massive inflation over. >> Is that the printing? Is that the printing you're talking about? I mean that is what we're looking at. >> Well, that's the helicopter money printing. That's the other end of it. Yeah. And and if you do that, if you print money and give it to the needy, it goes straight down the supermarket and up goes the price of tomatoes. Yeah. That's the South American way. That's exactly how it works in South America because they get voted in by handing out, you know, um, confetti to the to the people that need it or the non-rich, the non- middle classes just to to to the bottom of the of the pyramid and it goes straight into the supermarket and up goes your prices. So that is what happens if you hand out if you do STEMI checks, right? And the stimi checks of COVID were one of the big reasons for inflation. And yeah, everybody likes them, likes the stim checks. They don't like the inflation that comes next. And they don't think because they got a stim check that they caused it. But if you do the QE way, which is you pump it into equities or through piping that puts it into equities and it's a real estate, the trickle down means that supply can catch up with demand. And if you hand it out in cash, everyone goes down the Walmarts and buys up all the Jack Daniels and the price of Jack Daniels goes through the roof. >> I I I don't have to say anything. I think there's a lot of people that agree with you here. And to your point, I mean, I'm looking at the numbers. That's 260 million adults in America. 5,000. I mean, that's more than a trillion dollars. Um, okay. Listen, Clem, let's get personal for a moment. I mean, you grew up the son of a commodities trader. On Saturday, you wrote that the most expensive mistake in trading happens inside your head. Well, what's the poison? >> Well, I spoke about it earlier. It is the poison is now the propaganda that's out there now. Whether it's private sector propaganda or whe you know or whether it's state level propaganda that is poisoning people, absolutely poisoning people. I mean, people really are losing their mental health by following the media. Yeah. I mean, I remember back when I was a kid, I my aunt was a little old lady. She'd watch the news and she'd burst out crying. >> Yeah. Well, that's now happening at an unbelievable scale. Yeah. People I don't think many people watching the show can can tell me they don't go through all this stuff and come out angry and anxious and fearful. Well, that's not a good state to invest with. You're not going to make good investments if you're in an agitated state. I mean, you might as well try tra trading on half a bottle of of that Jack Daniels and see how far you get. Yeah. You've got to be calm and you've got to be balanced and you've got to be generally in a good frame of mind to succeed. There's not many nervous wrecks doing well. I mean, you can't, you know, it's not a a way of becoming successful by being agitated and stressed and depressed and angry and anxious. Now, that's not a business model. A business model is to be optimistic a little bit at least and be forwardinking and being, you know, anticipating the sort of stuff that's going to be great for you. Yeah. I mean, how many people do you know that make money shorting? Very few, right? And so if you want to be in a frame of mind where everything's going to come go belly up and it's all going to be terrible, then I mean where's the profit in that? Where how could you be scared, anxious, depressed, and angry in the last 15 years and make a profit? I very few places. So I say to people, don't let all this filth get you down. It's a pretty good world out there and it's going to be getting better. And if you don't think that, then probably you won't be in a frame of mind to make any money, I say. >> All right. What's the costliest mistake you've ever talked yourself into? >> I've been very fortunate. Very, very fortunate. So, the only used to call it um in the UK stewer that I ever made was when I made approximately 100 million back in the com. I didn't hedge myself out. >> That's that's it. So I've got a good 25 years without making any big because I'm see as a diversified portfolio of risk. If I buy a stock it goes to zero. I don't care. I really don't care. And to give you an example of how that works if you do it properly. I had this um company called Poly Metal which was Russian gold and all that crazy stuff. And when the Ukraine thing broke out, um it fell really heavily and I thought, "Oh, there's a chance that will go up and that'll all be sorted out and everyone will say sorry and go back to normal and then it'll go away." So, I I bought quite a bit of it. But anyway, it didn't, you know, it got worse and their price hdved and then it got it got and suspended and then it vanished. Well, it didn't quite vanish. It was there. It was in my portfolio saying, but anyway, so write it off. Don't care. Makes no difference to me because I've got a diversified portfolio of risk. So f years later, I get an email today saying, "Oh, that company, they're offering you $11 a share. I only paid $4 for it when it before it went to zero and now it came back. So I've just got a windfall out of nowhere." >> Right. So, and it makes no difference to my portfolio. Not even a fraction of a percent even though it's a big chunk of change. Yeah. Because I've got a diversified portfolio of risk. And everybody should have one. And everybody should work to have a diversified portfolio of risk. And then you don't make Well, you could say that one went to zero. I could say that was my worst choice I ever made. I bought this polymetal thing and then there was a war and it went to zero. Oh wo, it's me. No, I don't care. I don't care if if one of my companies went to zero. I don't care. It makes no difference to me because overall they do as a group really well. And that's all I care about. I care about the overall outcome, not oh, it's going to go up tomorrow. Gold's going to go through the roof, blah blah blah blah. I mean, I did very well with gold, but I I even at the highest level, I don't think I had more than 15% exposure to it. Now, the people that don't know what they're talking about would say, you how ridiculous. You should have gone all in if you knew. Well, that that is the way that you die because one time in 10, you do make an error and then you do get hurt. But, you know, if if gold goes to the roof, happy days. I'll buy a Reno one. >> So, you know, I But it's still I have a diversified portfolio of risk. So, nothing really ever bothers me that much. >> So, I mean, 35year-old watching this. >> Yeah. No, it does. It does. And I wanted to I was going to wrap it up and and do a quick outro, but I think we could kind of bring it back because if you know there's somebody 35 years old, they've been sitting on cash all year, too scared to move. I mean, what would you tell them? Well, that's a you just lost 5%, didn't you? >> Yeah. Now, what I would say to them is there's a level of risk that you take on. So, if I've probably got higher up my risk um curve than I would normally do because I think, yeah, I think it's going to be brilliant. But if you were scared to death, you go around and pick boring stocks, very, very boring stocks, and you build a diversified portfolio of risk in really boring stuff. And the more you get excited, you shift the risk up the scale. So you take a little bit more risk. So that's the way you do it. Now, I thought you was going to say there's a guy, he's 35 years old. He can't have a diversified portfolio of risk because he hasn't got the capital. Well, >> right. >> This is what you do. You work out how many stocks you should have. Call it 30. That's a nice number. Yeah. and how much of any stock you can buy, which means that your costs aren't stupid. So, so call it two grand. So, you've got two grand. So, you buy a stock. Well, because the next two grand you get is going to go into a different stock, you are diversified out there in the same way a card counter is making money when he the odds are in his favor. It's not in front of him, but it will be. Yeah. So, you buy another one and then a couple of years later, you buy another one. Couple you buy another one, you buy another. You keep going until you got 30. You'll be fine. You'll be absolutely fine. The moment you just keep putting it in the same old stock is the moment you're going to get a nasty day. >> Yeah, I keep teaching. I mean, my son's pretty young, but he knows all about uh all about compound interest already. Clem. Uh listen, Clem Chambers, you can read him on his own Substack, Clem Chambers Alpha. Follow him on X at Clem Chambers. Uh you got your own show right now that you've been doing. It's been fun. Uh thanks for this switch gear lesson. And hopefully the audience doesn't look at a power line in the same way. Thanks. >> I tell you, there's going to be a lot more power lines. And I wish someone would come up with a great way of burying those things and stop making them so ugly. But, you know, there we are. There's an opportunity. If you ever read about someone that's got a way of burying the cables like they do in Iceland, they'll probably do real well. >> Yeah. Yeah. I have a feeling you're you could run some code on that AI, come up with a new business. All right. Appreciate it, Cle. >> See you later. >> All right. All right, if you're new here, hit subscribe. Every week we sit down with people who move money for a living and ask what it means for yours. Tell me in the comments, uh, have you bought copper or mining stock this year? Yes. No. I'm Jeremy Sapper. Thanks for watching Kitco News for all of us. We'll see you next time. Heat. Heat.