Gold Is Sending a Warning

Andrew Sleigh (00:00)
Good afternoon or good morning, wherever you are. We are here for another episode of Ask Andrew, but in this case it's Andrew interviewing in the Ask the Expert series here at Sprott Money. Today I'm pleased to have Kai Hoffman back after he's been globetrotting around for a bit, is my my understanding is. And Kai, welcome back to Sprott Money. Glad, glad to have you back.

Kai Hoffmann (00:24)
Yeah, Andrew, thanks for inviting me back. It's much appreciated. Thank you.

Andrew Sleigh (00:27)
Most welcome. So today we've had a few questions that were posed for your interview, and I just got them a few minutes ago, so I haven't committed them to memory, so please forgive me for reading them off a sheet. But we'll go through those and see where our conversation goes. And I'm really keen to see the latest news in in Europe. so let's see where these questions take us because I haven't even read them yet. So

Kai Hoffmann (00:54)
Mm-hmm.

Andrew Sleigh (00:54)
So first off the ECB recently raised interest rates while in while inflation remains above its target. What does Europe's situation tell you about where gold and silver could be headed?

Kai Hoffmann (01:10)
Well, we have massive inflation pressures in in Europe in general. I think we're even more exposed than maybe other parts like the US, for example, because our supply chains are completely disrupted. We're closer to the Strait of Hormuz, we're closer to Iran, we're closer to Ukraine and Russia, of course, and we have issues. Like our gas storage reserves are only at fifty seven percent. France, like just reported, I think, inflation earlier this week, way above target, over three percent again.

And nowhere near where it should be. So the ECB raised; I think we'll see a couple more raises here in general as well. We'll see if it has an impact, because a lot of the inflation that we're seeing, of course, is headline driven. We'll have to see how it sort of like trickles through and how it manifests itself. but overall, like we we can't escape it. And right right now, raise like the interest rate hike cycle that the US is also in, same as us in Europe, like is of course negative for gold.

Like based on the simple fact that gold doesn't pay a dividend. It's the same old saying, and I'm really tired of mentioning it. But of course it goes against gold. And it was interesting to see that gold caught up late, that it was a very long fuse, because even after the FOMC meeting, gold didn't really react. It actually went up the two days after the FOMC meeting, which I thought was interesting.

Andrew Sleigh (02:23)
Yeah.

I was just gonna actually bring that up when you when you pause is that even if the E C B turns around and raises rates, it could be very similar to what happened in the States. You know, gold was up the morning of, silver was up the morning of, and gold and silver were down the afternoon of the rate hike. And then I think most of the industry expected the rate the metals to go down for a couple of days and it just roared up. And I I in in my opinion, I think that's a sign of

Gold telling us that gold knows his system is broken. You know, and and even when there's more rates to come, you know, raises, I think we're gonna be in that same boat where we'll have a very minute reaction by the metals and then they'll start going up. And that tells us we're in that end game scenario, or very, very, very near, in my opinion.

Kai Hoffmann (03:14)
I would agree. I would absolutely agree. Cause like why why did gold go up? And even now, like even you know, with a dead delayed fuse here, gold is still trading above forty one fifty. So we're still at very high levels. Yes, we've broken some technical levels here, but we're really like at a decent level still. Don't get me wrong, we're not at fifty six hundred, which we can all agree was probably an exaggeration in the market for the time being. But even at forty one fifty, this this feels a bit like, and I hate that term almost like a Goldilocks.

It's not too hot, not too cold. I was travelling, you mentioned it in the intro, I was travelling quite a bit, and I was at a conference in Beaver Creek in Colorado last week with a bunch of mining companies, about 240 of them; 30 I had a chance to meet. And none of them, not a single of these companies, brought up a discussion of the gold price. Right? They all pitched their

Andrew Sleigh (04:00)
Hm. Ha huh.

Kai Hoffmann (04:01)
story. Nobody really cared where gold was. Of course it's higher. Don't like everybody was happy about that, but it wasn't discussed. It's like, I wish we had 5,000 again.

Or complaining that it might be going the other direction right now. So I thought that was interesting. it just feels gold. It just feels right. Forty one hundred, forty one fifty, where wherever we're at right now is a is a sensible price 'cause the miners even produce a ton of free cash flow at these levels.

Andrew Sleigh (04:24)
Yeah. I'm I'm working on a little bit of a theory on that. with with where the price of metals are right now, with a maybe even a little bit of a descending you know, slow crawl downward is with with what they're doing with metals right now, there's so much non interest in it, except for the the the savvy long term bigger money or sometimes not big money that

understand the p the basics and are buying anyway, but the masses have all been lulled to sleep. That with this up and down, sideways, very low, you know, descending downward, it's not getting much attention right now. And they've lulled everyone, you know, off the metals. And to me I think they're doing that to A bring the try and get their shorts positions covered, that they they took out more shorts,

in that recent pullback than they had apparently in January. And so I think that's part of it. And then also if we have a real reckoning here in the coming weeks, month, whatever it is, with you know, there's a diesel crisis, which we'll get into I'm sure. But then all of a sudden, maybe there's problems on acquiring metal and but everyone's lulled in the sleep, so, you know

No one's buying it and it's all going towards the the big companies and countries that are buying this stuff hand over fist. But anyway, w we'll see if my theory of if if it works out in the next in the next month. question number two was the Netherlands recently moved part of its gold reserves out of North America. What do you think is driving countries to reconsider where their gold is physically held? And could this signal

A broader shift toward greater control over national gold reserves.

Kai Hoffmann (06:26)
It's a it's a very good question because you try to figure out, okay, what why is that happening? Why is it happening now? There there's probably a factor of motivations, because one, of course, a lot of Europeans cannot agree or do not like the person sitting in the White House right now in Pennsylvania Avenue. So that could be some virtual signaling. Cause back in the day we shipped our gold to the US to protect it from the communists, meaning the Russians, right? So if we're on the brink of war with Russia again, which a lot of people want us to believe, then why bring the gold back?

They might like some of the Dutch gold is going to be stored, of course, in the UK. So a little further away than maybe here in Frankfurt or so where I'm sitting. But like what what what's the motivation? I think a lot of it again is virtual signaling. of course, the Netherlands is a sovereign country. They can do whatever they want with their gold, right? I'm not trying to tell them what to do here, but I'm trying to figure out the motivation. Like why? Like of course, Germany tried the same thing and everybody s has their own right to own their own gold. I want Germany to have all its gold, but it doesn't really fit the overall narrative that they're trying to

make us believe here. So what are they preparing for? Is the EU falling apart? And I'm speculating. I'm just making theses up here, right?

Andrew Sleigh (07:29)
Yeah. Yeah.

Kai Hoffmann (07:29)
is the EU falling apart? Like do we have not that case anywhere that where we stick together and everybody wants their own gold? But then why why store it in the UK? So like I'm I'm trying to understand that motivation. I think gold is a very essential role and if you control your gold, you can probably control the currency. And the Netherlands of course is a stronger part of the the EU in general right now. And to

So for them having some leverage it probably is quite beneficial and having it physical is the extra the next step there.

Andrew Sleigh (07:58)
I have to agree. I also good question for me to throw in a couple of thoughts on as well. I think the the world is distrusting the United States more and more every month, every week. And you know, you start not trusting you know, y if you don't trust the bank where your cash is, you go get it, right? And so the countries aren't trusting the US anymore. and so they go get their gold and bring it home and they'll deal with something a little bit closer to home, whether it's in their country or your England or wherever.

So I think that's unfolding as well and and part of that. and I had something to to yeah, that's what I want to say is with regards to Netherlands. I just found this out the other week and I'd be curious if you heard this before or not. the Netherlands, when Nixon took the closed the gold window in nineteen seventy one, you know, of course the famous statement was we're temporarily suspending the gold backing of the US dollar to

defend against the speculators, whatever the heck that r really means. And we know that temporary what that means in this day and age. But I only found out about a week and a half ago that the Netherlands approached the the US July nineteen seventy one and wanted to exchange two hundred and fifty million American dollars back to gold and

The the American government said like they didn't want to do that. And so they sent at that time a young Paul Volker, flew him over to the Netherlands to basically beg them not to do that. And he said to the whoever it was in the Netherlands that was doing this, he said to them, that would be rocking the boat.

And the gentleman in charge in the Netherlands said if that's the case, then the boat has already sunk.

Anyway, they they proceeded with demanding because that was the exchange of dollars to gold back in those days. They exchanged for for the gold, and one month later, august nineteen seventy one, Nixon went to the airwaves and suspended the gold back in or shut down the gold window so no more other countries could come and get it.

Kai Hoffmann (10:25)
Interesting. I wasn't aware of that. So

Andrew Sleigh (10:26)
I

I I was stunned when I heard that. and I thought, well that's the reason they did it. It wasn't just I mean, they were the backing of the US dollar was disintegrating slowly but surely anyway because of money printing. But they didn't want any more countries coming to get gold because it was going to become a a massive problem. And so I find it interesting that Netherlands caused this back in nineteen seventy one and now again they're they go and they take more metal from the US and

we'll see. that story was actually broken by Felix Preen. Ex banker. He has his own website and investment banker, and he he digs into some pretty good articles and and pulls that out. So kudos to Felix Preen on that.

Kai Hoffmann (11:17)
Nice. Interesting.

Andrew Sleigh (11:19)
looking ahead to the rest of twenty six and twenty twenty seven.

What are the three biggest developments you're watching for gold and silver?

Kai Hoffmann (11:28)
Good good good question. I don't even really dare forecasting, you know, for three months out. It's really really strange to do that because we don't know really what is going on. It's it's so much more difficult. The world is such a complex place these days. But I think the biggest one is probably the midterm elections in the US, because it has a lot of ramifications also for geopolitics. We'll have to see what happens in the Middle East after the midterms. We're about, what is it now, five weeks away from the midterm elections. I don't think we'll see another Fed rate hike, but of course the Fed hiking cycle

Is going to be an important one. And then we'll have to see what happens between Trump and Chi as well. So maybe on that geopolitical like scale, I was like, I I think it is quite interesting to see what these two counterparties are going to agree upon. I hear there's two more meetings about to happen. We've just seen one in Washington, DC, which was pretty uneventful. although they see seem to be showing two very chummy friends here in in the White House laughing about the auto pen. So I thought that was pretty funny. But

Andrew Sleigh (12:27)
Let me jump into l

Kai Hoffmann (12:27)
We'll we'll we'll have to

Andrew Sleigh (12:28)
let me jump in on the Trump and the Xi Jinping for a sec while you're in that topic. Scuttlebutt has it that the two of them have agreed that Trump would control the price of oil and Xi Ping would control the price of gold. Like keep them but keep both

Kai Hoffmann (12:43)
Really?

Andrew Sleigh (12:44)
low. Now there's no verification of this. I have no proof of it. Scuttlebutt is just this considerate rumor, but ever since that meeting gold has been you know under pressure.

And and oil seems to be under pressure. So we'll just see if there's any truth to it or not. I don't know. sorry to interrupt you. Keep going.

Kai Hoffmann (13:02)
Interesting. Yeah, no, no,

no worries. I hadn't heard that. So that was interesting. of course we'll have to watch. There were a few like bilateral trade agreements where certain like tariffs were lowered on certain products, but it wasn't the impactful meeting that we might all have hoped for. maybe end of a tariff war, whatever is going on there between the two countries. But they they seem to be on friendlier terms, which is always a good thing because overall, like it is US against China, right? So just to summarize, like what are the three biggest market movers for gold, in my opinion?

Fed right rate hike cycle. We have the midterms in November. And then China versus USA. What what is happening there? Two more meetings planned here in very short order. So we'll we'll see where that takes us. And that could have huge implications because the US China relationship I think is is is huge because part of the attack on Iran, I think, was geared towards China and trying to cut off their energy supplies.

Andrew Sleigh (13:51)
Mm, interesting. Yeah. I agree. I'm gonna chime in with my three biggest things I'm watching.

Number one for me is diesel.

Kai Hoffmann (14:05)
Mm-hmm.

Andrew Sleigh (14:06)
And right now coming out of of the US, there's been a lot of predictions that diesel is under a huge threat and will be in a real problem as in non-available in the coming weeks, months, etc. the CEO of Shell USA said back in July that the US would run out of diesel by or before the end of this year. And

It seems that the trend is it's it's been much earlier than that. They're they're talking about like that could occur in the month of October. And they're also talking about banning exports if they already haven't done it, of diesel. So what I learned in the last week is US makes thirty percent of the world's diesel and they're the largest exporter.

Russia is number two at twelve percent of the world's diesel, and China is number three at roughly ten or eleven percent of the world's diesel manufacturing, and the three largest, you know, those are the three largest exporters of diesel. China and Russia have suspended exports of diesel. And the US is now talking about it. Canada, to my to my knowledge, I have to check on one refinery, but

For the most part we don't make that much diesel, if any, in Canada. I have to check to see if Irving and in in the eastern part of Canada makes any diesel or not. I I'm not sure. But on the r in the West they don't. And all the oil that goes down to the US, you know, comes back as gas and diesel. So if if America is going to suspend diesel shipments, then where does that put Canada? And where does it put the rest of the world? And so

I'm seeing some reports going on around the world that like Australia is virtually out this week or next. There'll be no diesel in the country. And that's one of the biggest things I'm looking at right now. Because that's going to be a hard stop for the economy if this really plays out the way that it seems to be being discussed. third second for me is

Kai Hoffmann (16:23)
If I can jump in here real quick, it'll be hugely interesting because Can Australia has a ton of gold mines. Like we we know that the supply of gold is not really an issue, but it'd be curious and have to look into some of the numbers, what what happens if some of those gold mines go offline because they don't have enough diesel?

Andrew Sleigh (16:40)
Well, you know, I've been I've been reluctant to say too much because I've been following this for a while, but there's been very little talk on all the different interviews from analysts, you know, around the world that I've sort of scan, follow here and there. Nobody's been saying anything about it. You know, whether they know or not, I have no idea. But there's been very little discussion and I just really didn't want to jump out too far ahead of the pack on this one. And

But I've now seen enough and heard enough from a a number of you know very qualified people to be talking about this stuff that I have no problem defending any of these types of of things I say because it's it's out there now quite quite a bit more. but I agree if this plays out the way that I think it might, you know, how does everything get like the entire economy and and manufacturing and

processing all gets done by diesel. And if that's offline to any degree,

Kai Hoffmann (17:40)
Yeah, it's a lot of gen sets and everything, right? So

Andrew Sleigh (17:42)
you know, it's mining, delivery, how does how does this just for gold, how does it get delivered and resupplied to the to the retail side of things? How does it get delivered anywhere around? So I think that's that's a huge one for me that I'm following right now.

The next one would be midterms like you. I've been discussing with clients for a couple of months that I didn't think I was suspicious I don't think the midterms are gonna happen. And everyone I've said that to says, What? Why that can't be possible? Like, yeah, yeah, it's gonna happen. I'm like, you know, I'm not saying they're not gonna happen. I'm saying I'm suspicious that I think it's a possibility it's not gonna happen. Well, I saw my first analyst on Friday say the same thing.

And that was Doomberg. And he said that this diesel crisis is gonna get really bad in the States and is gonna cause and when diesel becomes, you know, ran out running out everywhere, then right after that gas runs out because diesel d delivers the gas to the gas stations. So he thinks there's gonna be social unrest, you know, crisis like crazy in the States.

And somewhere in the middle of October, he thinks that the administration will will declare martial law because of emergencies and social unrest and all that. And even if even if the the martial law is not declared, you know, if the emergencies are enough that there's no diesel and there's a lot of society issues, he will declare or postpone the midterm elections to a further date because of the emergency that's going on.

And and so you know, I've been I've been saying that for a couple of months and it s seems like there's a few more people that are coming on board with my theory, but but let's see who you know what happens on the midterms. I also think the the Republicans have nothing but losses waiting for them there. So they'll use any excuse to to postpone. and and I guess third for me would be the the rates as well.

looking at how the market's gonna reflect on rate increases and that's gonna really start to throw an anchor overboard and and help turn the market over and encapsize it and when they do then they'll do the money printing and we're into the end game and all that kind of stuff.

But

Kai Hoffmann (20:21)
Mm-hmm.

Andrew Sleigh (20:22)
I think this next few weeks and the whole month of October is going to be probably the most important things happening that we've seen in years, I think. So

next question. if the US moves to a C B D C or in this case stablecoin, how will that affect gold and silver?

Kai Hoffmann (20:45)
It's a very good question, because the US just sort of stalled on the Clarity Act, meaning it's gonna be delayed for a little bit. I'm not an expert on the Clarity Act. what what is interesting though,

Andrew Sleigh (20:53)
Yeah, I'm the mic.

Kai Hoffmann (20:54)
bank bank lobbies and lobbyists have been trying to push the the Clarity Act into a direction where it's clear that those stable coins don't pay any dividends and yields. 'cause I know Tether has a stable coin out that is backed by US government bonds and treasuries, and they're not paying or dividending out those yields.

that they're they're generating. They're reinvesting into gold and silver. gold in particular, sorry. they're probably bigger than many of the central banks out there, buying even China to a degree, on in certain weeks and months. So I think that has a direct impact on on on gold. it it is tough to say 'cause like the stable coins, it's a slippery slope to full to full control. So if if people wake up or start to wake up to the true maybe intention of what stable coins are and could be, then

Yes, it'll have a positive impact, but that's drifting off into conspiracy theories. But I think it's really important to be awake and be aware of what is happening. I'd say fortunately it has been stalled. Europe is still on track. I think public rollout is scheduled for 2029 here in Europe. I just looked it up actually the other day, see where we stand on that. I haven't seen a vote in the European Parliament on it. That doesn't mean it hasn't happened. They're always good at keeping it shush shush. And honestly, I don't follow those EU meeting minutes.

To the T here, and honestly, I couldn't care less. I should care more, but it's politics and it just like bores the crap out of me, to be honest. So pardon my French.

Andrew Sleigh (22:12)
Yeah, yeah. Yeah. Yeah. Yeah. Yeah.

Kai Hoffmann (22:18)
so I'm just trying to catch up on what's happening there. But all in all, like if you if you wake up and understand, okay, C B D C C B D Cs can be used to control you, then gold is the only solution, really. Not even Bitcoin, because it's electronic, which is tricky. Gold and silver you can store at home and you can, you know, you're your own.

It hasn't it it i it comes down to the same old saying, it doesn't have any counterparty risk. Stablecoin

Andrew Sleigh (22:39)
Yeah, that's right.

Kai Hoffmann (22:40)
has massive counterparty risk, doesn't even matter if it's your power provider or the government, that's the counterparty risk that you take.

Andrew Sleigh (22:45)
The yeah, that's right.

A hundred percent. Let me give you a couple of updates since you've been on the road for however many weeks. last week I broke news that Tether has just entered into buying silver.

Kai Hoffmann (23:01)
okay. See I didn't see I didn't hear. I know they were big into gold, le real estate,

Andrew Sleigh (23:04)
Yep, hundred and f hundred

and forty six tons of gold as of June. And so so they've just started to buy silver, so there's one more big player coming in to buy massive amounts of quantity of that. and then also last Monday Vanderlei from the ECB announced that Pontus was launched in Europe, and that's the C B D C Bank to Bank.

is effective September twenty first. It's running. And I thought,

Kai Hoffmann (23:37)
Interesting. Interesting.

Andrew Sleigh (23:39)
you know, when she last time I saw her speak and she was talking about, you know, well, we're gonna do a a 2029 rollout, likely of CBDC, whatever. I'm like, man, that's that's so far away, I just can't see it. And so anyway, I'm like, well, whatever, okay. and then, you know, September twenty first, they launch out Pontus.

for bank to bank and I think that's testing. And it's about four months before January, three and a half months. And then and I say this because it just they correlate and I I'm always suspicious of correlations because there's no coincidences in my in my opinion. twenty one of the largest US banks announced a week and a half ago roughly they formed a company that was going to launch a stable coin in the US in the first six months of next year.

Okay, now

Kai Hoffmann (24:35)
It's happening.

Andrew Sleigh (24:35)
that could be June or it could be January. If it's January, it's three and a half months away. If Pontus is t being tested right now to make sure it's running properly by the time we get to December, you know, whenever early in the new year, it may not be January, maybe it's February, March, April, maybe it's June. Who knows? But you have these announcements. In Canada, of course, we had the March twenty sixth Bill C fifteen and

The whole stablecoin legal framework was rolled out and passed into law March of this year. Two days later, stable coin stablecorp and Deloitte and Touche, which is the backer of it, announced Canada's first national recognized stablecoin called QCAT. So, you know, they're not doing this because it's f two years away, in my opinion. So

I'm suspicious by nature on all this stuff, but I think we're we're headed there sooner than what they want us to believe, which is also part of the MO of of their direction. But anyway, basically I wanted to tell you about Pontus and Tether doing their stuff.

Kai Hoffmann (25:50)
Interesting. No, I appreciate you sharing that.

Like I wasn't aware, like tether just a week old, but I I heard Christine Lagarde outfund, I can't remember post something on X about the stable coins there. So but I didn't investigate. Yeah.

Andrew Sleigh (25:59)
Yeah, well that's it, the pontus. So

the rate hike is a real indication that credit debit is being increased. What are your thoughts on this? The rate hike is a real indication that credit and debit is being increased. What are your thoughts?

Kai Hoffmann (26:15)
It's a good question. I'm trying to understand like how it fits with the MO of Kevin Walsh and what what the idea behind the the Fed hikes is because like coming from the gold side, Fed hikes don't make a whole lot of sense because the inflation, some of the underlying inflation is is fine. so the question is like what what is spiraling out of control here? So I looked at the reverse repo facility just the this morning actually, and it's exploded the last twenty-four hours.

Andrew Sleigh (26:40)
Yeah. Yeah.

Kai Hoffmann (26:41)
all of September

it was flat and all of a sudden it's eleven twelve million or I think it was eleven and a half billion dollars. So who's tapping into this? Like who's struggling? Who needs to tap into that facility? Right. so that that's what I'm trying to understand. And also 25 basis points at at this juncture, it doesn't really affect a whole lot of things. Of of course we need to take a look at the private credit market in general, because a lot of the AI hyperscalers and all those companies, of course, are built on massive amounts or just all debt pretty much.

But does twenty five basis points affect anything? I think it was more the language and maybe the the announcement of a Fed rate hike cycle also with the SCP, the s I obvious what is it, the the socioecono the economic projections there.

Andrew Sleigh (27:23)
okay.

Kai Hoffmann (27:24)
right that that the Fed puts out. So I think the direction is quite interesting, but will it break the system? I think that's a question I've been d debating on my channel over the last, you know, seven days as well. Like what will break the system?

Because if the companies that are borrowing in in the private credit market grow at, let's say, seventy-five percent a year and that won't last forever, they don't really care about twenty-five basis points. So who so who does? Well, the mortgage market, the housing market, at some point, seven percent mortgage rates are unobtainable and just don't make any sense. Right? So at some point the water is starting to boil.

we'll have to figure out okay, when does the kettle start to toot or whatever the sayings are? I'm just making stuff up now. But the

Andrew Sleigh (28:03)
Yeah yeah yeah.

Kai Hoffmann (28:03)
point is though, is like, okay, the the lid will fly off at some point in the housing market. We're already seeing like big air areas like shedding houses like out Zillow. You could just click on a certain area and there's just a gazillion listing. So I think the trend is is visible. it will be slowing down. will it break the hyperscalers and the AI space? Not yet. I don't think it's high enough. And if I look at

you know, history, we're still like h in a historical context at fairly low levels when it comes to interest rates and b yields. but that can spiral out of control quickly as well, especially if the bond vigilantes say, well, this is still not enough. And if rumors of a southern debt default make the rounds, then of course the southern debt holders will will start selling like crazy. Japan has surprisingly been in the market of the last few months, selling over a hundred billion dollars worth of US treasuries.

the question is why are they doing that and why are they doing that now? So th that that's my two cents on that part. I hope it answers the question there.

Andrew Sleigh (29:05)
it's a it's a i it's a big question, so it's very hard to answer that. the last couple of weeks what I've been seeing is bond markets all over the world have been, you know, the rates have been accelerating upward. And that's really, you know, a bad sign. And I think the rate hikes you know, with the Fed have you know, the governments around the world have painted themselves into a corner.

A they did low interest rates for a long, long time, expanded the debt like crazy to encourage everyone to get into debt. And of course they told us, you know, years ago that they're not even thinking about thinking about thinking about raising rates. And now look where we are. And they're you know, the trap was set, everyone jumped into the free money, and now everyone's paying the piper and and you know, people are really struggling. so I I think the rate hikes are are

slowly inching. They're trying to buy time on the bond markets, in my humble opinion, while trying to keep the market under control to any degree without spilling over. So I think whatever they do, they're they're sweating on every time they have to do something. They're like, what do we do now? And they're trying to vent whatever. And if they do anything like a half point or a three quarter of a point change upward, let's say, that's gonna be

a huge indication that they've they're in trouble. and if they do nothing, then the dollar is disintegrated more and and and the system starts and gold and silver course explode and whatever. So I would not want to be in their positions. They have really

Kai Hoffmann (30:49)
Mm-hmm.

Andrew Sleigh (30:50)
got themselves in a bad way.

What else am I seeing for indication?

one thing I wanna well it occurs to me back to our previous question about the s stable coins. I also wanted to say there was a story out in Bloomberg last week, I believe it was, that the six Canadian banks are now cooperating with each other to come out with a stable coin. And that's the first I've heard of anything from the Canadian banks and it's been, you know, passed in law

four or five months ago, six months ago, whatever. So now they're getting on board. Now interestingly enough, I I think they have to do it to show face and be involved in the game, otherwise they're done sooner. But in Bill C fifteen, it was updated to the Canadian Bank Act twenty one dash one that there will be no banks in Canada in operation past June thirtieth, twenty thirty three period.

So now that means any time before that, it could be a problem for the banks and they could be shut down. But it won't be past that. They won't exist. Nobody's talking about that. The banks don't want to talk about that. The bank employees don't know anything about that. most people in the country don't know anything about that. But you can just Google Canada Bank Act twenty one dash one. Read it for yourself. Read it carefully and it says, you know, no banks domestic or foreign will be allowed to operate past June thirtieth.

twenty thirty three.

Kai Hoffmann (32:29)
When

when's that bank act from? I'm I'm curious. I don't know I'm not too familiar with it or not familiar at all with it. So is it a hundred year old bank act that is just needs to get renewed, or is that a a bank act from like last week? Okay, it's like we're done in twenty thirty three here.

Andrew Sleigh (32:42)
Well, they updated it the last May last Wednesday of May. they finally updated the the website for the Canada Bank Act and the legislation of the update was passed March twenty sixth of this year. Now typically

Kai Hoffmann (32:58)
Interesting.

Andrew Sleigh (32:59)
what they've been doing is however old the Bank Act is, I'm not sure. The provision used to be, to my memory, it was

June 30th, 2025, where the banks weren't allowed to operate past, and they could be delayed up to a year. So January of last year, they delayed it to June 30th, 2026. And they didn't change anything until the last Wednesday of May, right before June. And I thought that the banks were going to go on, like they were going to close because there's no update. And then finally there was. And and so it was all postponed to 2033. And I guess they must have had to pass.

some legislative in the bill to be able to sort of not do it year by year but do it seven years out. And then they don't have to, you know, worry about changing it again for a few years or whenever they plan to play their their games. that's that's the that's the end of the questions we had there. so I guess we can freelance. What else what else are are you seeing in your travels? Not much being talked about gold.

What's happening in Europe with regards to fuel pricing? is there shortages rationing? I saw something UK was gonna ration diesel here soon. I know you're just back from travel, so it's a little bit unfair to ask too much there, but but w to summarize, what are you seeing in Europe? A are flights all still normal? Is there cancellations? What give us a a five minute snapshot of is life still actively

Relatively normal or not where where you are.

Kai Hoffmann (34:41)
It is relatively normal, besides that you're paying now was it two euros forty cents a liter per per gas for gas. So that's four bucks a liter here in in in Germany, and that's just regular gas. it it has jumped up. But as of tomorrow, we're getting a 17 cent rebate thanks to the government. So we can talk about government intervention and figuring out okay, why there's so why is there so much tax on our gasoline here? Cause quite honestly, we're being pillaged as the consumer. So

The life is pretty normal. So no flight cancellations or anything in that regard. I know Lufthansa early in the year was quite alarmist and reactionist to the the crisis in the Middle East and like called one of its subsidiaries, Lufthansa City Line. I think that was in the works anyway. And what we've seen in the Middle East sort of was there just a trigger, okay. Let's just use that as an excuse and call that airline, and and get rid of it. But other than that, it is fairly normal. Of course, energy costs are quite

Are are on the rise. And I'm really curious what we're going to do with our gas reserves here over the winter. We're only 57% full right now. but I've been hearing like the like the likes of Equinour, a Norwegian oil and gas company, say we have enough resources. Apparently, Germany's now diversified enough in terms of like where we get our energy products from, mainly gas, that we don't have to worry about it. But it's the end of September, and fortunately it's been a fairly warm like start to the fall here.

it is actually twenty four, twenty-five degrees today and it doesn't get too cold at night right now, but winter is coming to quote a famous TV show, right?

Andrew Sleigh (36:13)
Hmm. Hmm.

Kai Hoffmann (36:16)
does fifty-seven percent really equate to what we need? And there was another like subline in that statement by Equinor that price will and I'm I'm paraphrasing a little bit and I'm not quoting from that statement, but price can also help us, you know, stay afloat. So coming back to the inflation question, I think

that will have huge impact as well on our energy cost over the winter, our heating cost. I'm not too concerned. It's being downplayed right now. but it'll be interesting to to to to witness and how c how are we going to come out of this winter. And if it's a cold or stiff one, then we might be in trouble.

Andrew Sleigh (36:55)
Where does Germany get most of its natural gas from right now?

Kai Hoffmann (36:59)
I read it only this morning. So Norway definitely. it used to be Qatar, because we ran out of Russian gas due to various, you know, explosions in the Baltic. But and we don't I think there's still a pipeline running, but it's not operating, if that makes sense. there still exists in existence. so we got some from Qatar, but that's sort of been cut off. We're not getting anything from there. we're really schmoozing up to Canada, if you've noticed. so I'm curious if there's anything we can do this winter, but maybe next.

The Netherlands has some gas fields and we we've built a few offshore LNG terminals, so there is a possibility to receive, but I'm not sure if we're already getting anything from Canada. so Norway, Netherlands right now. I honestly have to look up the third one. There were three bigger ones that we're getting our gas from.

Andrew Sleigh (37:43)
Right. Right.

Well, that's that's I guess that's that's not a bad report for it could be far worse than that, you know. I'm glad that you guys are getting natural gas from or liquid natural gas, I guess it's the same thing. from Norway and you're having some other support other than the the Russia field or or you know, wherever else is is been not suspended. I'm seeing some reports out of Austria that you know there there seem to be in a

seem to be worse off than you guys are for being your neighbors. all right. Well I think that's a wrap for today. Kai, thank you so much for taking the time today to to come on and with your busy schedule and and give us some thoughts on what's going on with with the globe and in your area of Europe. So thank you so much for that. And yeah. And I look forward to

Kai Hoffmann (38:31)
Mm much appreciated, Andrew. Thanks so much for having me back on.

Andrew Sleigh (38:36)
our reverse interview in the future when you have a chance to have me back on we'll

We'll chinweg about some stuff there with your audience. So thanks again. And for everyone in the audience, thank you so much for watching Sprott Money. Hope that you enjoyed this episode. Please like and subscribe and and all those things in YouTube land. also any comments or questions, put them in the comments below and we appreciate all that. If you have any questions, concerns, you can reach me at one triple eight eight six one zero seven seven five. My extension is two thirty.

Or email me at death of the dollar. That's brought mine dot com. Again, Kai, thank you. Welcome back. Good to see you again. We'll see you again soon.

Kai Hoffmann (39:19)
Thanks so much.