BUYING GOLD ON THE BLOCKCHAIN Without Using Cryptocurrencies – Rick Rule Interview

greetings our thank you for joining us at one of the biggest opportunities I see in 2019 and 2020 is the physical gold market and the mining shares so I wanted to stop by the Sprott USA office here in Carlsbad California Rick rule he's probably created more wealth for other people than any person I know so I literally consider this man to be the most reputable and honest man in the resource sector if you don't have a Sprott account I highly recommend you get one because this is the most dangerous market you can enter in the resource sector but it's also one of the most profitable so we're going to talk a little about physical gold a way that Rick believes is a disruptive new way to purchase gold and a better way for you to purchase gold and perhaps touch a little bit on the resource stocks and perhaps a relationship you can have with a Sprott and Rick rule Rick's thank you for joining me thanks for dropping by and welcome to neighborhoods yeah a great day thanks for having me appreciate it well Rick gold is starting to pick up more and more investor interest and a lot of inbound emails a lot of people are interested in owning some gold but they kind of don't know what to do in the meantime you guys have been busy for years creating something that is a disruptive way to buy gold it's a it's a cheaper safer way to own gold for retail investors and I really just want introduce them to that today so if somebody wants to purchase gold how do you recommend buying the physical gold I know there's multiple ways or looting the new way oh of course it depends on the investor there are some investors who want to have and hold their own gold I understand that I respect it I was frankly one of them myself I'm leery now about customers doing what I call midnight gardening buying gold and storing it at home it exposes you to a whole series of risks that are different than the ones you were trying to avoid so I would recommend not doing that if you buy it find some form of storage that isn't at your house without going into detail that could invite company that you normally invite to lunch for many US investors products like this brought physical gold trust or the Sprott physical silver trust are appropriate given that when you buy physical gold or physical silver if you sell it for a capital gain that gain is taxed at the collectibles or ordinary income rate whereas if you buy the trusts the gain is taxed at the capital gains rate for many people however we think the most efficient form of gold ownership and gold trading is now on the blockchain the distributed ledger Sprott is a shareholder in something called trade winds which began as a joint venture between ourselves and IEX the famous exchange operators yeah and now includes the shareholders Agni CO Eagle wheat and precious I am gold Gold Corp you know the biggest mining companies in the world what this what this product allows investors to do is very simply buy gold evidenced on the blockchain as a distributed ledger or warehouse receipt this gold is stored along with all of the other gold that's brought controls at the Royal Canadian Mint we joke that our security is provided by NATO and you are able very cheaply to buy gold sell gold and store gold this is the cheapest form of gold ownership over time that we know and more importantly the cheapest way that we know to transact gold and silver avoiding fees over time is of course a wonderful part of investment success and we set this up precisely as a way to facilitate people's ability to buy sell and store gold very cheaply we look forward in the future as the volume associated with the Tradewinds distributed ledger product becomes larger to the point in time where it becomes liquid and cheap enough that people can pay for ordinary transactions with fractions of the live of distributed ledger receipts and to the day in particular when mining companies can pay dividends to their shareholders in gold and silver which we know from 30 years experience that many shareholders favor so while this is currently a product which is best accessed by investors who are seeking to buy sell and store gold and silver we see the efficiencies of this mechanism ultimately restoring gold and silver to their historic status as money absolutely so just for the consumers experience aside from having physical gold at your house which the midnight Guardian thing I laughed because when we moved well four five years ago we my wife and I have always wondered like was there one under that tree because we did like paya trees I like so anyway who knows but would be aside from having physically your house if you're going to store the gold in your opinion this is this is the best and cheapest way to store it absolutely okay absolutely now if somebody wants to do it what is is there anything different in their overall experience if I if I called Prada to purchase s PSLV versus going through trade winds and buying some silver and storing at the Royal Canadian Mint back with the blockchain is there any difference in my experience aside from I'll be saving money but is there any difference in the actual experience the downside probably is that to buy and sell the vault chain which is what we call the product offered up by by trade winds you have to buy it and sell it through an authorized agent there are about a hundred of them the Sprott physical products trade on the new york stock exchange and you can buy and sell them through any licensed broker dealer anywhere in the world the advantage I suspect that the certificated product has the physical the physical gold trust or the physical silver trust is a tax advantage the advantage that the blockchain the distributed legend product has is that purchase sale and storage charges are less now just so people don't freak out when they hear blockchain this is not tokenized goal this is not something where its back it's this is gold it just happens to be tracked by the blockchain this is not a cryptocurrency this is not something where its value is ephemeral this is merely a receipt that's stored on a distributed ledger representing your gold stored at the Royal Canadian Mint okay so safe super cheap great way obviously backed by some of those reputable business in the world Sprott Gold Corp weak and precious metals it's a disruptive technology to sort a way to transact in gold how is it going to work for the actual producers is this you know what's already working for the producers one of the first things that happened was the Gold Corp one of our shareholders delivered three thousand ounces of gold to the Royal Canadian Mint and received in exchange delivery receipts which were then sold through our existing Network and even for a seller as sophisticated as Gold Corp they found out that they said they saved a substantial amount of money transacting in the gold this is a way that you disintermediate or get rid of all of the middlemen the gold as this system evolves or I should say as it has evolved is efficient enough that there is nobody between the mine and the owners of the gold other than the distributed ledger you literally can buy the gold from the refiners door and have it stored at the Royal Canadian Mint without the historic inefficiencies you know if one of your readers that uses the old technology were decide that he or she wanted to buy 10 ounces of gold traditionally they would call a bullion dealer and the bullion dealer on buying tasks as the gold would charge them spot plus three and a half percent commission plus shipping plus shipping insurance if a week later that investors circumstance has changed and he or she wanted to sell the ten ounces of gold they would call the dealer and the dealer would buy it back at spot three and a half percent restocking fee less shipping and less insurance meaning that round trip the investor would probably lose eight percent in this circumstance the round trip is fifty or sixty basis points it is really really really cheap and really really really efficient you will notice too that Sprott is already with our physical trusts the largest private tenant of the Royal Canadian Mint they store in Canadian dollar terms in excess of six billion dollars worth of metal for us so our storage charge is relative to other people's the rich charges are extremely small and it's a good deal for the Royal Canadian Mint the costs that they bear storing a little bit of extra gold keeping the gold that we already have company sure extremely small okay now so for investors who are looking to purchase gold they call up Sprott set up an account and they're like I want to use the vault chain application to purchase the gold it's pretty much done in a five minute phone call as far as the purchase or maybe even an email could I just email one of your brokers and say no we we need to we need to physically verify who the customer is so we need to federal regulations require no your customer just like any other bullion dealer okay so what what you suggest it's probably a five-minute process there's a form that needs to be filled out our people will actually fill the form out for you over the phone okay well you're there because that's good for you because they're like when they hear blockchain like is this gonna be too tech-savvy for me look at me I'm sixty six-year-old male brought up on old technology I did it yeah I can do it Daniel I guarantee that any of your readers can do it awesome okay and then look you have helped many investors make a fortune in the natural resource space specifically copper and gold and silver what is what is your opinion right now of the gold market the physical gold market as well as the mining shares right now are they are they both of devaluations I feel pretty optimistic about it and I'll give you a couple reasons why the first is that gold is way way way under owned gold and gold related well precious metals and precious metals related securities enjoy if that's the right phrase a market share among investable assets in the United States of between one third of 1% and one-half of 1% which is a different way of saying nobody owns them yeah in 1981 precious metals and precious metals related assets had 8% of the investable market in the United States the three decade mean is between one and a half and 2% so I'm not suggesting as some people do that gold will supplant the US dollar as a store of value I'm not saying it's gonna win the war I'm saying it's gonna lose less badly it's gonna revert to mean if it reverted to mean the demand for precious metals and precious metals related assets in the biggest market in the world would triple or quadruple and I think that's what's going to happen in the three to five year time frame gold in the last 40 years has moved up or down for a variety of reasons but the most important reason is US and foreign investors belief in the continued purchasing power of the US dollar the US dollar has been in a bull market since 1981 the way that that impression is expressed is through the US Treasury securities the largest and most liquid US dollar market in the world and in particular the US 10-year Treasury which is the world's benchmark security that security has been in a 35-year bull market the interest rate has fallen meaning the bond has risen from a 15.6 percent interest rate in 1981 all the way down to a 2% interest rate today I would suggest to you that that 35 year bull market is either over or close to the end if you agree that gold moves based on the strength of the US dollar in the US 10-year Treasury the fact that the US 10-year Treasury bull market is either over or almost over suggests to me that the gold bull market is just beginning okay we had blimp into 2016 gold rallied and the mining shares ripped and they cashed up good which is good and they also just came off the severe downturn so they probably didn't blow the money like they would have if it would have happened in 2011 so how do you feel about the mining shares or is it something right now where you can still get a great deal I think it is but I think you have to be extremely selective there are probably 1200 listed companies worldwide that either are or purport to be in the mining business and there's probably a hundred and fifty that are worth looking at so you need to be extremely selective but within that universe we find them to be attractively priced and we also believe that several catalysts are in place in the first instance we believe that the gold price goes higher we believe that silver moves later than gold but moves further than gold so if you're a speculator look maybe even towards shading silver a little more than gold but importantly the catalysts different than value the thing that makes it timely really has to do with the fact that we are seeing the very beginnings of the mergers and acquisition cycle in the mining business we saw the Newmont Gold Corp merger we saw the barek Rand Gold merger these are important larger companies can cut their GA and larger companies have greater liquidity which means they have higher share prices which means they have lower cost of capital but we think that this merger and acquisition cycle is just getting started we see this as a three or four year trend and we see it as beneficial to everybody in the near term the people who own the shares of the companies that get acquired get a premium in the long term the people who own the shares of the companies that do the acquisition if the acquisition is intelligent benefit from the accretion of those assets to their existing share structures so we see gold as underpriced we see the gold shares as having leverage to the gold price and we see the catalyst in place with regards to mergers and acquisitions in public crickets that will make the benefits available to investors sooner rather than later are you seeing the signs you just talked about how one-third of gold assets right and it was what was it 8% historically one-third of one percent okay isn't what we have is the current market share between a third and a half are you starting to see that it's brought I mean you would obviously see it I mean is are more people coming in as we just in the last three months have begun to experience a real upsurge in interest increasing client accounts increasing assets under management we're just now beginning to see the revival of US interest we began to see an increase in investor interest among non-us persons three years ago it's worthy to note that gold in over 70 currencies around the world is in at all-time high what's useful is that in the last two years gold and the US dollar have risen simultaneously this happens very rarely the last time was 2000 and I'm not saying that past is prologue but you'll recall after 2000 when the US dollar rolled over the gold price went from a low of 260 dollars an ounce to a high of 1,900 dollars an ounce the circumstance where both gold in the US dollar rise st. Aeneas Lee and then the dollar rolls over can be extremely bullish for gold sure okay so if somebody wants to invest in physical gold or if they want to perhaps buy some mining shares which are very risky but you guys would be obviously giving them only the pics that you guys actually back with your own money are you invested in every single stock the clients invest in or how does it work and specifically to the junior mining stocks well one thing that happens is that we have a lot of clients here who subscribe to various investment newsletters the service we offer there is what we call adult supervision if you read about a stock in a newsletter or something like that and hear about it we will discuss it from our point of view we have a broad depth of geological engineering and financial talents abroad so we are happy to review selections that other people think of and we perform that service for our customers we will only recommend gold stocks that we own as individuals or ones that are owned in Sprott performance fee generating accounts in other words for us to recommend a gold stock we have to have reviewed it from a technical or geological perspective from an engineering perspective which is different from the geological perspective yeah and also from a commercial and financial perspective that doesn't guarantee unfortunately that every stock that we own goes up but it does guarantee that we'll know the company very well before we talk to our customers about it sure and for me it's like if somebody has their email account at Google you're getting this billion dollar security company with a Gmail with Sprott it's more than just getting a broker you're getting this company that has the gos the engineers and you yourself with the experience let's say your whole thing that's an important point many brokerage firms purport to be experts throughout the investing world they purport that they can know every industry in the world we do Natural Resources and particularly we do mining our brand name while we are capable across a broad range of mining related technologies our brand name is associated with gold and silver importantly we're a public company so unlike many of our competitors our balance sheet and our income statement are available yeah and in addition to the fact that we're transparent our balance sheet and our income statement are both very good last question since you brought up publicly traded company do you consider sprach as a stock a good play on gold if somebody said you know what I don't want to own a venue a mining stock I don't want to speculate with the GD XJ or any of these things I just want a professional team is Sprott enough to have gold exposure just owning sprach well I would urge your listeners to consult independent financial advice I will tell you that Sprott manages precious metals related investments on behalf of 200,000 people worldwide if the precious metals market does well one would expect that 200,000 people to probably increase their engagement with Sprott which would be of course good Sprott has a very strong balance sheet and Sprott generates a lot of free cash even at the bottom of a bear market in addition Sprott pays I think it's a 4.6 or 4.7 percent dividend my friend Doug Casey wants to describe dividends as outward manifestations of inward grace a phrase that I like now I should tell you too I believe that I'm the largest individual shareholder of Sprott owning I think 11 percent of the shares outstanding so it would be disingenuous for me to say you need to go out you need to run out to buy Sprott because of course that would benefit me but it would be equally disingenuous for me to say I didn't believe it was a good investment because I have a substantial existing investment in the company okay if somebody wants to open a brokerage account with you guys to buy physical gold or to speculate in mining stocks with you where's the best place for them to go what can they do right now two ways to do it call us 800 4 7 7 7 8 5 3 express an interest in opening an account or email me personally our rule our AR ùl e @ Sprott global comm as an inducement and we've done this before Daniel anybody who calls us I personally will rank their resource stock portfolio I won't give them investment advice but I'll rank the existing companies on a 1 by 1 by 10 basis all you need to do is email me at our rule that's our ru le at Sprott global comm in the text of the email not as an attachment remember I'm an old guy not technically astute have the name of the company and the symbol of the company and I will buy return email no obligation rank every resource stock that you give me mm-hmm can't even say that's like beyond million-dollar advice so thank you so much Rick thank you

25 thoughts on “BUYING GOLD ON THE BLOCKCHAIN Without Using Cryptocurrencies – Rick Rule Interview”

  1. I like gold and bitcoin for obvious reasons but putting a physical assets on a blockchain is kind numbingly stupid. Lost a lot of respect for you and Rick

  2. i keep my gold in a safety deposit box at a bank, you joke it is guarded by nato well i do not trust governments so i would never do business whit you, and when we keep it at home its in a wall or somewhere no one can find.

  3. It doesn't matter that the blockchain (ledger) is legit, someone is still holding custody of your PMs this way.  It doesn't matter the "receipt" is legit you're still putting all your faith into a counterparty.  It's so annoying to hear this, it may have a slight edge over GLD SLV due to accountability, but is still light years behind securing your own.  Such bullshit.

  4. bullshit, why would Rule push this product when Sprott already offers the etfs, or trusts or whatever they call them, and the tax rates are better? It´s a competing product and pulls money away from Sprott Inc, dosen´t make sense, I smell bullshit.

  5. ..ya, on the blockchain so 'they' can track exactly who holds gold….wake up
    …ya, they will store it for u and that's the first place the corporate fascist government will go to seize gold….duhhh

  6. Or just use Goldmoney which has been doing this for years, minus the completely unnecessary blockchain, and you have your choice of Brinks vaults on multiple continents.

  7. Lots of suspicious activity on this channel.

    Does the channel owner use bots or pay people to post positive comments here?

  8. Comparing Google to Sprott probably not a good idea as Google is a known spy mechanism. But your point is taken. Excellent interview skills. Loved it.

  9. Outstanding interview! Thank you for sharing this important alternative for holding gold! Everyone needs to look into this! Great work!

  10. Daniel has terrific guests on his shows at Wealth Research Group, along with the free financial reports that I always download every time there is an opportunity for a new one. I have been watching and learning for a long time. Just want to say thank you for another fantastic interview. It would be amazing to have access to investment advice directly from Rick Rule!

  11. Such a knowledgeable guest. These details are so important to understand the past to see the patterns and note when something is highly unusual. Fantastic interview!

  12. Love it! Rick Rule is always amazing to listen to! Thank you so much for this information! Incredibly interesting stuff for a numbers person like me and he is SO right about the US dollar.

  13. I am seriously blown away by this interview! So much vital info packed into this interview! Blockchain combined with precious metals! Gold is such a necessary investment. And at 7:50 when they go into the fact that this concept eliminates the middlemen fees is valuable beyond words! The fees are the killers in buying and selling precious metals!

  14. Why would anyone TRUST a GOVERNMENT entity to store their Gold!?!?!?!?!?!?!?!?!
    That is just RETARDED advice from someone who should know better. DON'T TRUST the Government!!!!

  15. WOW! What a fantastic concept! Using the blockchain to invest in precious metals! Thank you so much for sharing this amazing information!

Leave a Reply

Your email address will not be published. Required fields are marked *