Title: "The U.S. Just Had Its Suez Moment" — John Polomny on Gold, Oil, Uranium & the Coming Reset (EP 123)
Show: The Royalty King Report (TheRoyaltyKing / Mina Capital, YouTube)
Guest: John Polomny (Actionable Intelligence Alert)
Date: 2026-07-10
URL: https://youtu.be/yviSbhJmmf0
Length: 59:20
Note: Auto-transcript cleaned — fillers (um/uh/you know/I mean/like as a tic) and stutters/false starts removed; wording, numbers, names and hedges otherwise verbatim. Auto-transcript name garbles corrected in the analysis prose, not here (e.g. "John Palomi"=Polomny, "Americo Resources"=Amerigo Resources, "One Oak"=ONEOK, "Kelshi"=Kalshi, "Alakote"=Alico, "Vladivvastto"=Vladivostok, "Usbekiststan"=Uzbekistan, "kion effect"=Cantillon effect, "capernic"=Kopernik).

(00:00) Welcome back to the Royalty King Report. You're listening to the Royalty King and John Polomny joins me again today. John, quite a bit's happened since we last caught up about six or seven months ago. I think it's fair to say. Here's a question for you. If in December last year when we were talking, I had said to you, look, next year we're going to have the removal of Nicholas Maduro.
(00:24) We're going to have the Strait of Hormuz closed but not closed but double closed but traffic reduced and oil would go up and then it would come down to the precise point at which we were talking at the time. So mid-60s. What would you have said? Would you have been polite or would you have said that I'm an idiot that doesn't know what the hell I'm talking about? No, actually not. Not the specific outcomes that you just told, but one of the things that I've been adamant about for several years now is
(00:57) I believe that the West is in decline and that's going to lead to political, economic, social, and economic volatility. And so I expect volatility all across the board. And then you put in, which is kind of fun. Sounds like reading Gibbon. You have a wild card like Mr.
(01:16) Trump as president and all the shenanigans that go on there. You don't know what's going to happen from day to day. And so, no, nobody, I think, could accurately anticipate specifically that Nicholas Maduro would be removed or that we'd have this situation in the Middle East. But I think we're expecting and we'll continue to expect all kinds of wild things to happen because we're in a situation now like I said where we're in the endgame I think of post-World-War-II liberal disorder I call it now and this debt
(01:50) regime that's just forcing people's hand. I think it's interesting. They have a saying. I was in the military for many years. Generals are accused of fighting the last battles and this is you could go read books about biases and stuff like that and how people are so biased in the United States and in the West to basically of the stories and the legends of their ancestors who they hate so much that created everything that they are now squandering. It's just amazing to me to
(02:20) watch this. So yes, I expect all kinds of weird things to happen and strange things. And I think it will continue and I think things will continue to astonish us. I think it creates opportunity though, right? That's my view. Some of these things you can try to game out and think, I think everybody thinks, if you're a serious person, there's always going to be some situation going on in the Middle East.
(02:48) But I don't think anything to my mind, without getting too far into this, this is a Suez moment for the United States. The United States has now been strategically defeated by Iran. The vaunted US Navy cannot keep the sea lanes open and that's the whole basis of it.
(03:09) I get in arguments with people all the time. Oh, you don't know what you're talking about. Hey buddy, if you could you would. I was in the Navy during the first Gulf War and we had destroyers inside the Gulf, we were escorting Kuwaiti tankers because they didn't have drone and missile technology like they have now.
(03:26) It's interesting to watch. You have to be I think a little bit cognizant of history, right? I played a lot of video games, historical video games and one of the ones is the carrier task force commander, it's called, for the Pacific and that's when the carrier battle groups came into their own and they basically that technology, that standoff ability to attack a surface fleet hundreds of miles away obsoleted the battleship and now drone and missile technology have obsoleted our power
(03:56) projection devices which are these multi-billion-dollar aircraft carriers. So I think it's interesting but I think if I say that most people disagree with me, okay they can disagree, but I would suggest that if the Strait of Hormuz could be controlled by the United States it would be controlled by the United States.
(04:16) It can't be at this point. So that opens up all kinds of other things to happen. And then it speaks to also my — people think that I'm against the West or against the US. No, I'm a big advocate. I just don't like to see things squandered. And we have all this — this is all fake.
(04:34) This is all D. I know you're New Zealander or Australian, I forget. But I don't know if you have professional wrestling there. Come on, mate. You can't be insulting me like that. That's like me calling you Canadian or Mexican, your neighbors. We do have professional wrestling and — Okay, so it's fake, right? Yeah, we all know that and we call — We got it from you guys though.
(04:56) You guys are the entertainment geniuses that — we infected you with that. But anyways, it's the same thing, right? And so that's how I take all this. These people are not serious people. They're not real. So I think it's all fun to talk about, but in the end, it does create opportunities.
(05:13) So that's what I look at it for. Nobody's going to make me king for a day or ask my opinion. And so I sit at the table. I understand the rules and I'm in the game. And so I play accordingly. That's how I look at it. Okay, guys. If you want to make John King for a day, if you want to ask him a question or get his opinion, you need to subscribe to the channel.
(05:33) And 70% of you guys out there watch the content, but you don't subscribe. And my people tell me that that's bad and that you should subscribe. So, mate, this looks like technology has changed warfare. We've had a technological revolution as much as we're having a simultaneous cultural revolution for better or for worse particularly in the West.
(05:57) This type of technology allows more of an equalizing of the playing field from what I gather in terms of — you look at Ukraine and everyone thought that the Ukraine scenario would be wrapped up fairly quickly just given the discrepancies in the relative strengths of the two militaries but it's still going on today.
(06:16) A lot of that's due to, from my understanding, drone warfare and technological changes. Same kind of deal with Iran. There's no doubt the US is the stronger military might overall. But a lot of these muscles that the US has are not able to be exercised or flexed given the factors that you mentioned. So to me, does that mean we're going to have a withdrawing of extraterritorial patrolling? I'll be coming back — let's just say, all right, speaking crudely, you're going to have the West as defined by the Americas, then you're
(06:48) going to have Europe and then you're going to have which will probably be Eurasia by that stage or Urussia and then you're going to have Asia. Is that how you see things or do you see a new upcoming power that will eventually supplant the incumbent? No, I think that's exactly how I'm thinking about things.
(07:09) I think you're going to see this go down to three areas of influence, if you will. I think that the United States is going to dominate the Western Hemisphere. It's already flexing its muscles. Next on the agenda is Cuba. You've already seen a lot of movement in South America towards center-right or right-wing governments.
(07:31) It's amazing what we've seen in the past couple years in elections. A lot of them have been supported by this administration. That provides a lot of opportunity. Now that Trump kind of lost, he's back on the Greenland thing. He was at the NATO meeting. So I think that these people do have a plan and agenda.
(07:52) It seems a little chaotic. I don't think there was a three-way meeting, but I think that Xi and the Chinese will dominate Asia. That's just how it's going to shake out. They continue to flex their muscles. I've been waiting for Kyle Bass's prediction for the last 20 years of the Chinese collapse that's going to happen.
(08:12) Doesn't seem to be happening. But not withstanding the fact that every country goes through periods of it, it's just how it is, but I think that's going to end up being the dominant power in Asia and then I actually believe that Europe is going to bifurcate over the next generation as Western Europe turns into an Islamic caliphate and Eastern Europe kind of recognizes that and is going to actually pull closer to Russia.
(08:43) And Putin gave an actually good speech about a year ago where he said he was in Vladivostok and he said maybe in 50 years Vladivostok will be the capital of the Russian Federation because they understand that there's such this desperation among ethnic Russians and people in European Russia to be part of Europe.
(09:06) They're never going to be part of Europe. Europeans are never going to accept them. And so the focus is shifting to like you said a Eurasia type thing. People have no conception of the investment opportunities and the things that are happening in Central Asia. Or in the Caucasus or some of these other places where the Russians are. I've been talking for years about Uzbekistan.
(09:30) It's like this silent thing that's happening that most people don't know about and it's finally I think the bloom is coming on. So there's a lot of opportunities in these areas and I think that's where it's going to go. I don't see any kind of — I see a big debt problem, an Islamic problem in Western Europe, debt.
(09:48) The United States is eventually going to run into a debt problem. You talk about a monetary reordering. That's why I think gold's being accumulated by central banks but that's another story. But I think that's where we're going to end up, where we're going to have these zones.
(10:06) And that's not that they're going to control everything, but that's going to be the dominant parties in these different zones. And I just think Africa will be an afterthought. It's just a place that's going to be exploited by the Chinese and everybody else for resources. People don't understand how Africa works.
(10:22) They should go there or watch Empire of Dust. It's a documentary on YouTube you can watch. It'll explain it all. It's never going to really emerge. Maybe a few countries here and there, but yeah, I think that's what's going to end up. But that is how I'm looking at it and how I'm looking at possible opportunities.
(10:41) Okay, let's talk about, before the opportunities, navigating this, let's call it rezoning, and how to fall between the cracks in one place and thrive in another. So let's talk about where you see the most opportunity in terms of maybe a young person who's starting out and do you believe then that that not requires but that might encourage a changing of jurisdiction for a lot of people that are fed up with whatever's happening in their current place of residence and they want to change.
(11:17) Where would you look to in terms of physically basing yourself before we talk about the investment side of things? Well, I have as a virtual mentor — I don't really know the man, I've met him a couple times at conferences — but I'm a big fan of Doug Casey. He's kind of fell out of fashion as he's gotten older, but he wrote a book several decades ago called The International Man.
(11:37) And one of the things he said in there was, a person — and it's kind of a cliche type thing, but if you think about it, it makes sense — you should bank in one country, live in another country, and have your investments in a third country. He wrote that in the 70s. Okay? And it was more difficult to do things.
(11:56) This is now an era of the internet and communications and being able to get on an easyJet flight and go somewhere economy class. You can go anywhere in the world for two grand. And so to not avail yourself of other brokerage opportunities, business opportunities, banking opportunities, if you want to go all the way, if you're wealthy enough and you feel citizenship opportunities and arbitrage these things, that's really what you're going to be the most successful.
(12:25) The person that wants to be — I don't know if you're into sports, but here in the US we have — people are big into sports and somebody that always talks about their home team no matter what. We call them a homer. If you want to be a homer and you live in Germany — and I have subscribers, they're Germans, they just invest in Germany.
(12:42) They don't invest outside of Germany. People in the US, they don't invest outside the US. This is not going to be a good deal going forward. As these countries become more and more desperate for revenue because they want to keep the game going — if you're in the EU, the project is what matters. Nothing else matters except for the project.
(13:04) And so whatever they have to do to keep it going, they will do it. Including, you see what's happening in the UK where they're trying to pass legislation to read everybody's text messages and all this. We can go down the rabbit hole, but you have to be — you can still put yourself in a situation where you can, I believe, arbitrage different things.
(13:25) Perfect example is a friend of mine, that guy that runs the Wandering Investor. He's kind of like the archetype for this if somebody wants to understand how this is done. I don't know how he manages all these properties he has all over the world, but he does. No, he's in a different country every day.
(13:42) Yeah, he's got — I'm buying this condo in Kenya, next day he's over here — but that's the archetype. That's the idea. And you can still do these things even as an American. And so I encourage people to do that. If you have $5,000 in a Robinhood account, this probably doesn't apply to you.
(14:00) For people that build up a serious bankroll, I don't believe you could just be a homer. You have to think about where this is going. And I think as these countries become more desperate for revenue and for keeping the status quo, a failing status quo, they're going to get more and more intrusive.
(14:21) I don't think we go to a full Soviet-type system, but it's just going to get — your future in the West is more taxes, more inflation, more regulation. So everything you can do to avoid that is probably beneficial. Doug Casey talks about it. He has a place down in Salta or these other places, Uruguay.
(14:41) You're a tourist. The government in Buenos Aires doesn't bother you. They just want you to spend money. Okay? And so you stay within the law. You do your thing and you're not abused. You're not being treated like a milker or beef cow like the local population. I'm using a lot of his terms because he was actually right about this.
(14:58) Absolutely. No argument here, mate. Good place down. Shout out to Grace Resorts in Cafayate, Salta. If you're passing through there, that's Doug's place and it's amazing. You should definitely do it. Yeah. So, you mentioned a lot of things about how you don't want to be a homer. 100%.
(15:16) That makes you fragile. You've got all your eggs in the one basket, whether you realize it or not. So an individual game plan is necessary because everyone starts with a different starting position. So for me, I'm not a US citizen but I have a lot of investments in the US and since 2020 I've been stacking up the passports and the residencies and as soon as the borders were opened I was off and ready to rock and roll.
(15:44) So maybe that will be superfluous to my needs, but just talking through the taxation part — calculating different exits and we've just had some recent changes to capital gains down here and literally calculating out the difference between me leaving Australia or Oceania in 2027 versus 2028.
(16:09) The taxation made it such that it was not worth me staying another year in terms of the business income because the changes to the taxes were that grave and literally there was like less than $10,000 difference and we're not talking an insubstantial amount of income here. So this perverse incentive I think is going to be one of the final waves to really accelerate this change that we've already seen in terms of a lot of different places around the world.
(16:39) You've been studying family or legacy wealth, let's call it — how a family office, or back in the day I suppose they were just called high-net-worth families or not even just noble families. Talk to me about what realization or what lessons you've learned from studying wealth that has lasted for more than one or two generations because that's the key.
(17:01) A lot of people can get there in one generation and then it is gone within two to three. Well, let me preface it by saying that I am of the belief that — I see so much, even in some families where nothing's passed on. These ridiculous boomers here in the US. I see these huge RVs on the thing.
(17:23) The sticker on the back says — bumper sticker — we're spending our children's inheritance. I think this is a Travis criminal. So I believe that we should leave things better. Family to me — yes, you have ne'er-do-wells and the goofball cousin that wears this jacket from one suit and the pants from the other one that talks all kinds of smack, but family to me is the most important thing.
(17:50) It's the only thing that you can really rely on hopefully. And so I believe in — I think it's interesting watching how old money families were able to first of all build wealth and how they maintain it through generations and they are different in the way that they think about wealth.
(18:09) The average person that I deal with or talk with chases shiny objects. They have no perception of time, compounding, patience, responsibility, these things. And so if your only goal to build wealth is I want to get this hot car and I want to have this big house in Boca Raton and have the cigarette racing boat, you're not my guy.
(18:36) I believe in doing these things. And so what I have found from studying these people, first of all, they're very hard. They don't advertise. They're not Instagram. Most people don't know who these people are. They don't want you to know who they are. Exactly. And so you can find out some examples and I've been studying, and it's like that's one of the main things I had.
(18:59) First of all, they understand the responsibility they have. They look at things long term. This is the difference. Long term — not long-term, which — what's the average holding period now for an average stock? Now people have a couple months. We're talking decades here. Okay? So this is why they do things like buy timber assets because they're not looking to harvest the timber in a year.
(19:24) They understand that stumpage increases by 6 to 8% a year and that they don't have to harvest this or they can put it in a program where it is managed properly and it's perpetual income to their family all through the ups and downs. Is it going to be that 10-bagger? No. But what it is is 6 to 8%, 10% in a good year, maybe low double digits and it's perpetual and it's compounding.
(19:51) And what else does it do? This ties in to something I think that you're big on and I'm also pretty big on now, is your greatest threat to your wealth and to building wealth and maintaining wealth is your debauchery of your central banks in the West and the governments and inflation, ultimately inflation, and so you have to buy things that are going to protect you from this and this is what they understand — they take a long-term view and the other thing they do is they kind of inculcate their children, their whole family.
(20:26) Everybody's on board with this. There's things put into place. They hire the best attorneys. They hire the best accountants. They have relationships with these people. They work with them. They make sure that they stay within the law and maximize their tax advantage. Do things like we were talking about, multiple citizenships, different structures, whatever is appropriate for their level of wealth.
(20:49) Okay. Does that mean they don't make mistakes? Yes, they make mistakes. Does that mean that they don't get affected by bear markets? They get affected by bear markets. But if the Indians would have taken the $64 worth of beads and mirrors that the Dutch gave them for Manhattan and let it compound at 4%, they would be trillions of dollars today. This is the point.
(21:09) Okay. And so I use like the Mulliez family in Northern France. It's worth about 70 billion dollars in France. A lot of their businesses are in Europe. They do a lot of retail and some other things. They're a conglomerate now, but I like what they say.
(21:27) Their motto basically is "everything for all, all for everything." So the structure there — shareholders in this private company are all relations, people are expected to contribute, expected to work in the different companies and everybody benefits and it's for the long term, and if you think like that you are planting trees that you'll never sit under. I understand this but it just depends what people's — some people have no interest in this. They're just, hey, I want to make a buck, I want to
(22:02) have a good time. Okay, everybody's different, but I look at it — even the approach of investing is more appropriate and better long-term even for an individual that doesn't have any interest in doing what I'm talking about because you're not necessarily conservative, but you're taking that long-term mindset.
(22:22) I tell so many young people, please do not listen to the Edward Jones guy — 60/40, put your money in the low-cost Vanguard S&P. John Bogle when he started that situation at Vanguard, it was a good idea. Now it's so polluted with all this. The US I think is what, 25% of the world's GDP, 22%, and stock market is 65% of the world's market cap.
(22:50) That's stupid. You should be selling that down and buying — with an earnings yield of less than 2%. So things have changed since Jack put — Exactly. But if you go down to the strip mall Edward Jones financial advisor, well, you're 30 years old. You should put your money in a Target 2060 fund and it's all invested in Google and Meta and Nvidia.
(23:15) Everything's there because you're in the index. So I try to encourage people that there is a world outside of the index if you spend a little time and effort and you can — I don't like to use the word beat the market but I think that you can outperform these indexes and I think it's going to be imperative going forward — we've had this big swing over the last 20 years into passive.
(23:41) I think that's going to shift to active. You're going to have to be more active or you're simply going to underperform. Indeed. Long-term thinking even past your own lifespan. John, I'm in Italy next month and I'm spending a lot of time in Florence where the original the OG Giovanni de' Medici went from a millina to most powerful banker in the world in one generation, put plans together for the construction of so many famous structures and artworks which he knew he was never going to see.
(24:16) Keeping things — luckily there was an Instagram back in the 1400s — but he said, I guess the equivalent to his son of stay off Instagram. He said to Cosimo, "When you come into town, don't come in on a horse, on a fine steed. Don't wear flashy clothes. Just come in on an ordinary mule and go about your business without making too much of a fuss."
(24:39) And I guess that translates roughly to today in terms of, for the love of God, get off X and Instagram and all this sort of thing and focus on what means more to you, a status symbol or gaining or becoming the owner of your own time again. And that I think is a really big deal. But I won't say no to the house in Boca. I was there last year.
(25:00) It's pretty good. But you know what I'm talking about. I know exactly what you're talking about. And I think that's such an important mindset to get into and it might take a little bit of practice to get there. Here's something that I've noticed speaking a lot about quality — over the last few years I moved a lot into the royalty and streaming space and people just continue to harp the same superficial idea.
(25:30) It's not even an argument. It doesn't withstand one or two counterfactual questions, that they are expensive or that I don't have the net worth to invest the way that you do. And I think that that needs to be flipped on the other way around. The best advances in my life came from thinking, hang on a minute, you're still in this mindset of trying to hit a moonshot. Let that go.
(25:54) It's almost never going to happen for you. Focus on 5 to 7 years out and building 200 to 300% very very likely investment outcomes by focusing on quality. And I think from my perspective this idea that I can't invest the way you do, I don't have the net worth — I think that's wrong.
(26:16) I think you'll have the net worth when you invest in this kind of tried-and-true fashion. I don't know what you think about that. I absolutely agree. I think that what you're doing, especially if you're younger and you have all this time, which is your greatest resource — look, you look at Buffett or even Munger's net worth, how it grew, some of these other people, it doesn't really inflect until you get to the super inflect. But you get to a point like — I'll
(26:48) give you an example. I'll give one of the portfolios. There's this company down in Chile. It trades in the Canadian exchange. It's called Amerigo Resources. Okay. It's existed for many years. Okay. Rick Rule, Uncle Rick, is a shareholder. What does it do? It does not mine copper.
(27:04) They take the tailings from the Codelco mine that have been piling up for 80 years and they reprocess them and extract the remaining copper and molybdenum. Okay. The business, when copper prices are real low, when they were down around three bucks, it was like breaking even.
(27:25) And so copper prices have moved higher. And so what does this thing do? It just creates cash. They're not going to invest in a mine. So what do they do with the cash? Well, they follow the Walter Schloss model. Pay down debt. They don't have any more debt. Okay? Over the last three years, they've paid down debt.
(27:44) What now? The cash keeps building up, what do we do? Well, we're going to pay a dividend. So they were paying a dividend. Okay? And then cash keeps piling up. We're going to give a special dividend. Cash keeps piling up. We're going to buy back shares. And so, if you bought — you could have bought it like when we had this, I think I bought a bunch of sluggish shares during the COVID situation.
(28:07) I think it was selling for under maybe 50 cents. Okay. I think it pays multiples of that on dividends now. When you look back on that time — okay, cured that. This is what I'm talking about. You've got to wait for your spot, okay? I hate to use all these cliches, but these cliches are actually how you're successful.
(28:28) You stand in the batter's box and have an unlimited amount of pitches. No balls or strikes. Perfect example. We were talking about before we came on. I was bragging to you about how — I know you love exchanges. They're great businesses. I like being a rentier, that's why I call myself — I like that Marxist term, I like to call myself that, I collect checks — in European heritage, mate, that's what it — don't do anything and collect money for nothing. Okay? I love it. So anyways, you
(28:55) know, I like the exchanges but, as you know, because of this bull market a lot of them became pricey recently over the last year or so. And so I kept looking at them, looked at them. Okay, bang, had this recent legislation that opened up these perpetual futures for Kalshi and that, and these things dropped massively. Okay.
(29:14) Did anything really change with the business? Did anything really affect their moat? No. They just corrected drastically. So this is your chance to buy a quality asset. And so this is what you do. I don't have to get on Twitter and like who's got the hot thing that I can buy something that's going to go up.
(29:32) I get a lot — I don't get it so much anymore because I think I've established myself enough where people don't bother because they know what I'm going to say. Tell me something that's going to double in a year. What are you talking about? And no one can do this. This is not investing.
(29:46) Why don't you just go play the lotto or fly to Vegas, put a thousand bucks on Red and Black. You'll either double your money or you're zero. Okay? Have a nice meal and come back. I don't know what else to tell you. So this is how I think — Buffett and Munger talked about it at one of the meetings. They talked about Coca-Cola.
(30:05) The dividends they were getting far exceeded their initial investment after 10 or 15 years but people don't want to utilize time, they want to get rich quick. I think it was — who was it, something, not Upton, I can't remember his name — it was a guy in England in the late 1800s. This is the problem with most investors. They just want to get rich quick. This is the bottom line and that's not how you get rich. It's very possible to use these markets as a tool to get rich, but you're not going to get rich quick.
(30:36) And the way you do it, if you — this is what changed my whole mentality many years ago. I got sick of having mediocre returns. And I said, why am I trying to figure this out? We know who the best investors are. They actually publish, they give you the secret sauce. All you've got to do is go read it and you'll start finding what's the common denominator, right? Okay.
(30:59) Time and consistency and buying good businesses, whether you want to say good returns on capital, whatever, however you want to measure it, and just let that time work on it. Absolutely. It's not hard. No, it's not hard conceptually, but not easy. Exactly. Especially when you think about reading some of the books I have, this prefrontal cortex, which governs our decision making over various time horizons.
(31:27) So the thinking brain, not the animalistic survival day-to-day brain. It's the latest edition evolutionarily speaking to our brain. So that's why it's hard for us to understand compounding and the geometric returns available over time because that part of our brain we haven't used as much as we have the other parts of our brain.
(31:50) And it takes a little bit of practice. And by the way, people listening, I was the worst offender of this in my early 20s. I didn't understand time horizons and things like that. So it is — I believe it is a learnable skill and it is something you can practice and improve. Obviously some people are naturally better than others.
(32:09) But in terms of our audience that will be listening to this conversation, it is an absolute must. You must at least have a part of your portfolio that is dedicated to this sort of thing. Uninterrupted returns, intelligent inactivity. It flies in the face of everything that is the modern world with — we're just inundated.
(32:33) This is why I'm not on Twitter anymore other than just to share interviews and things like that because the attention theft is unbelievable and it just drags you back. No matter how disciplined a mind you have, it drags you into the short term. So exchanges are still reasonably good value in my opinion.
(32:56) You've got fairly high to mid single-digit free cash flow yields. And I read — I've written a white paper about it. So if you want to check it out, guys, go and have a look at the Substack. It's not behind a paywall and I think that it makes a fairly strong case. Let's talk commodities, mates. What do you think of the commodities sector at the moment? Gold's about 4K, silver 60 bucks-ish, nat gas less than $3 at Henry Hub, and WTI just over $70.
(33:26) What say you in the commodity complex? Well, we had a big runup in commodities. They did very well. Everybody piled in and it's like — you've got to differentiate between these different commodities because different things affect them. But like gold and silver, it was so obvious that it was overpriced when people are lining up to sell.
(33:51) Or buy or whatever. I was interested because I got a couple dealers. I actually, like two days before Rick Rule came out and said he was selling a lot of his silver physical or selling a bunch of it, I had just dumped a bunch myself and it was just interesting watching the people while I was there and doing this deal with the guy — people coming in and just selling all kinds of junk, silver and gold, and they were buying it of course and it got so bad, the selling, that a couple of them had to stop buying
(34:21) it because the refiners were overwhelmed with material. They weren't taking any more. They didn't want to take any more silver. So I was able to blow it out. So look, these things are going higher over time because — I think eventually we're going to — it's not really actionable, but I believe that we're going to have a monetary reset at some point.
(34:44) This isn't going to continue. The debts are just going to consume and there's absolutely zero constituency in the West for cutting spending. It's never going to be cut. We have a saying here and people joke here in the US, no matter who you vote for, you get John McCain. So you're going to have more spending and more war whether you like it or not.
(35:01) It's just that simple. And that's inflationary. They don't have the money for this. And so what I find interesting — and Tavi Costa turned me on to this with his great charts, I think he's off on his own now, but he started showing that chart where central banks were really starting.
(35:19) It was a chart that showed the juxtaposition of central bank treasury holdings and gold holdings. And I think it was about five years ago, right around — China had already been doing that because if you're going to continue to tell them that you want to declare them an enemy and have a war with them at some point in the future, why would they hold treasuries? But especially after the Russian invasion of Ukraine when we put all those sanctions, basically tried to throw Russia out of the world's financial system, unprecedented
(35:51) even during World War II — and how evil that particular regime was in World War II, we never sanctioned them. Okay, like that took them out of the banking system. And so what I think you're seeing here is the beginnings of I think a remonetization of gold.
(36:12) Do I think we get back to 70% like in the — no, probably not. But at some point they're going to have to do something because — and then I think gold's going to be a basis for that even in our technological society. Gold's going to — many people like to argue and disagree, then tell me why these central banks are all buying gold.
(36:30) Okay. Nobody's going to hold your — who in their right mind would buy a 10- or 30-year Treasury bond and think that they're going to hold it for that duration? You'd have to be out of your mind. Okay. They're nothing but trading sardines at this point. Only the Fed might do that.
(36:47) Yeah. Well, eventually I think they're going to pass — what's his name — Russell Napier has written about the fact that eventually he anticipates the governments will just force you to buy them with your 401k and they'll call it some program. But anyways and then you'll get all kinds of financial repression so they just steal your wealth through inflation.
(37:11) But this is beyond the scope of this conversation. And so I think it goes to your example of the average adviser down in your Midtown strip mall that is going to put you in the Vanguard this and the ETF that. What do you think's going to be made up of that ETF? Exactly. In there.
(37:29) And so just to get back on point, I think these things go through cycles. I tell people it's very easy to figure this out. I'm not a CTA, but when I see gold two or three standard deviations above its 200-day moving average and going vertical, you probably can anticipate a pullback.
(37:51) These things go through these — it's very volatile. And so we're pulling back, four grand. That's close to — I think the moving averages are starting to converge now. I don't like to call bottoms. I don't know. Could go to 3,000 for all I know. I have no idea where it will go. We're in a situation, these are intermarket relationships.
(38:09) The dollar looks like it's broken out. Interest rates are going up in the US. People sell gold. Real rates ultimately a lot of times drive the gold price. And so real rates are going up. It's not necessarily the rate has to be positive. It's usually, if you look at a long-term chart, the direction.
(38:26) So if you get a change in direction, that can affect. So I look at it this way. This I think it's going higher. It'll eventually bottom and turn higher, eventually. Wars, I don't care. Look, all roads lead to inflation. That's why the central banks exist.
(38:46) And so at some point they'll be printing and then — I know Lawrence Lepard, a lot of people think he's kind of a big mouth, but he calls it — I think his book's called The Big Print. That's what will happen. I don't know what will be the catalyst for that, if it's a recession or some financial train wreck, God only knows, but it will come and then they'll just keep printing.
(39:06) And I've been amazed. I've had these conversations with many people that have been in the markets for decades and it's like, I never thought they would get the balance sheet that high. I said, you haven't seen anything yet. You're going to see the balance sheet at some point, 20, 30, 40, 50 trillion.
(39:23) What, gold's not $3,000 in that environment? They will do whatever they have to do to avoid a deflationary cleanout. It'll wreck society. It will be a revolution. So they know how to control this Golem that they've created to a certain extent. It hasn't gotten away from them yet like hyperinflation.
(39:46) I'm using these metaphors. So they can control it. They can generally turn the knobs and move the levers to not let it get too far out of control. But you see the volatility that can be — you have to understand first of all you have to understand what's really going on.
(40:05) A lot of people don't want to accept this. Okay. But you have to accept it for what it is, that these people are not your friends. They're not here to solve your problems. They're here to maintain the establishment. They're here to maintain the structure that benefits them and their associates and the people they go to school with.
(40:21) I did not believe this at first. Okay. Then I became part of an organization that met weekly with all these people that went to elite universities. I was shocked that they allowed me into this, but they did. And I realized that it's true that people of wealth and power conspired to get more wealth and power. Nothing nefarious or illegal, but they all hook each other up on deals.
(40:41) They're all part of the same thing. It's amazing and so that's what this exists for and I think that David Iben did a good — at Kopernik Global Investors — he wrote about what he calls the — he brought up the Cantillon effect. French economist in the late 1700s talked about, he who is closest to the king and the gold is who gets wealth. That's modified now to he who is closest to the money printer, the printing press, is who wins. And so people should invest.
(41:17) I wrote about it a couple years ago also and I have found it to be interesting. So is it actionable tomorrow? No. But at some point there's these clues you come up with. If they're in a process of rate neutral or moving rates higher — I don't predict these rates but it's probably going to be negative for gold for some period until there's a catalyst to get the printing press cranked back up again.
(41:40) And so I don't know when that comes. So that's gold and silver. Oil. Well, look, this is blatant manipulation going on. You close a Strait, four moves. Bessent, it's in there shorting. They had the greatest short position on in the history of the world till recently. We're draining the SPR.
(42:02) The Chinese were not taking imports. This is all stuff that can work. These are all band-aids on top of band-aids. And anybody that thought this was going to hold — this is Minsk, this is the Minsk agreement. Iran, US — this is to get the oil out of the Gulf, the 100 million barrels that was stuck in there, and then give a chance to rearm and refurbish for round two. Okay.
(42:25) So this is not going to end. This is existential at this point between Israel and Iran about who's going to be the dominant power in the Middle East. Eventually, this is going to end up in a nuclear exchange. It might be Iranians have a nuclear weapon. Okay? If I was there, I would demonstrate it, but they haven't demonstrated it yet, but that's another conversation.
(42:47) And so oil is so political. It's the most politicized economy. So it's very hard to predict. But I believe — look at the crack spread today. I know people follow that. It's three barrels of crude equals two barrels of diesel. Exactly. It's $75. Okay.
(43:09) That means you're making a $75 profit on every barrel of crude being refined because the Chinese are not refining any crude. Okay. They shut down their imports and so you've had these — so I think that when you manipulate markets, if you hold them down, if you ban short selling, if you do these things, can they work in the short term? Yes, they can.
(43:31) And I think that they're on a big — they're on a gutshot straight draw. Bessent's calling all the shots. He's a smart guy. He knows he's on a gutshot straight and he's got a draw to it. And the idea is, well, we'll buy some time until we get that last card and we need that last card to come or we're going to have probably much higher oil prices at some point because people don't seem to understand something.
(43:59) 100 tankers left, only one tanker came back. Who's going to send a tanker in there? And so you have all of these oil producers who have not resumed their full production because their storage is full and there's no takeaway. Yes, Saudis have a pipe. So we're down to only doing five, six, seven million barrels a day. Still, we're short.
(44:20) So at some point, this will matter. And the economy is not rolling over. The world economy is doing fine. Relatively speaking, it's going to grow 3% according to the IMF. PMIs pushing more demand for oil, by the way. Exactly. Demand is high. When you have a crack spread at 75, it's telling the market, give us more crude so we can refine it.
(44:43) So if the Chinese come back to the market and start letting their tinpot refiners, other refineries start, they have to call for crude. So where's it come from? So I think that there's a potential there. Natural gas, I don't even try to predict that. What I like, how I invest in natural gas is very simple.
(45:02) Royalties and pipeline companies when they get cheap. ONEOK, for example, got shelled about a year and a half ago and they made an acquisition. Stock got cut in half. They took on a lot of debt. Just buy stuff like that when it gets cheap and they just keep raising the dividend.
(45:17) So that's how I play. I'm kind of interested in this because I live by it. They're getting ready to turn on this Rio Grande LNG which trades — I forget the symbol. NextDecade or NextEra — I can't remember. Anyways, that's interesting, things like that.
(45:37) FPSOs, companies that supply FPSOs, but the actual commodity is just too hard. It is called the widowmaker for a reason. And of course, something that's been left out and forgotten — we're talking about energy — is uranium. Uranium just made an all-time high last month in the term price. And everybody just forgot about uranium.
(45:56) And that's most of you that bought spot price at 85. Yeah. And term price is 95 now, or 95-50 something like that. So it's the highest it's ever been and it will continue higher. And it's now amazing for me to watch. I like to do this little victory dance because I've been talking about this for like 10 years. Show us, come on man.
(46:18) Well, but anyways, it's a growth industry now, 3 to 5% a year. Okay. And this reactor turns on. They just poured the foundation for that one. Blah blah blah. Ordered the heat exchanger for that one. This one went critical. And all this great positive demand news. This just recently, this reactor in Idaho on July 4th at this entrepreneurial company got to go critical. All this stuff is happening.
(46:49) Where are the new mines? Nobody's investing. I thought by this time Rio or BHP or somebody would say, you know what, we're going to create a nuclear division because this is going somewhere. We still don't have the billions of dollars in serious engineering and geology coming in to supply us with what we need.
(47:09) Yes, we're seeing investments in enrichment and in conversion which have been bottlenecks, but ultimately that's just going to call for more regular yellowcake. So where is that coming from? So I still think that that's a very good area to look at. The problem is how do you express that with a position instead of some shitco junior that — in Africa somewhere? Yeah, just ask the shareholders of Lotus and many others, Peninsula, and I don't even remember them all at this point, but anyways. Well, even in Australia, Boss, if
(47:42) you remember last year, they had a very disappointing result and they just went down the elevator 40% in a day. So, exactly, mining's hard. Indeed. So I think copper — I'm very bullish on copper but I'm curious of how much of the recent copper price increase in demand is wedded to the buildout of this AI infrastructure.
(48:12) And what happens when that eventually blows up, which I think we're getting into the seventh or eighth inning of that, when Meta and all these companies are devoting all of their free cash flow to it and now taking out loans and issuing equity, we're getting near the end of the money stream. So maybe we got another year of that.
(48:30) I don't know how long that's going to go, but when that blows up, it'll be like — everybody that's young that looks at me and their eyes glaze over, you're going to see what I saw in 1999 and 2000. Yeah, the NASDAQ could go down 80% like it did then because these companies are all overvalued and eventually all bubbles burst.
(48:47) So that's not a prediction. I'm just saying it's going to be interesting when the 2x4 goes upside the head. Everybody goes, well, how did this happen? Nobody saw this. So I think that I'm kind of curious about copper, how that — I am becoming more interested in agriculturals, but that's kind of a hard thing to — very difficult.
(49:05) There's a good company I'll just mention. I'm looking at — it's a Danish company. It's another old money family. They control these huge palm oil investments. I think it's in Malaysia on the western side of Malaysia. I forget the name of the company. It begins with a D. It trades in Denmark.
(49:22) Nobody pays attention to it and it just does its thing year after year and the family pretty much controls it and kicks out a nice dividend. I look for things like that in agriculture. The best way to do it is maybe go to Argentina and just get a cattle farm going. I don't know what the best way to express it is, but that's a lot of work.
(49:42) So that's a market I know well. That's not for beginners, guys. Exactly. So you mentioned the AI thing. We need to talk about that because people think that this will be the extension of how Apple came onto the scene with the iPhone and all this sort of thing. That was all well and good, but that was built on existing infrastructure.
(50:04) This is not the same thing. The infrastructure needs to be built. And if you're looking at the quarterly filings of these, call it the Mag 7 or 8 or whatever, that the Googles, the Microsofts, all these guys — that by force they have to spend the capex on this thing or they will be left behind. Google's business without an AI division will be obsolete in 6, 18 months, something like that.
(50:30) So they're hamstrung there. This is going to start to show up as negative cash flow. They can only use creative accounting reporting for so long before the market realizes these things are cash flow negative now. And you have to have a multiple rerating, unless passive funds are just going to keep buying it at any price, then these things have a good — like you said, it's potentially a 70, 80% correction. So I would prefer — but that's one of many possible futures and that's the
(51:09) thing. So you have to position yourself as best you can to be a beneficiary of as many potential futures as possible. There are always going to be more potential futures than actual futures but you don't know which is going to prevail. So again coming back to land, and minerals, but through a — rather than owning the mineral directly or a miner, for the reasons that we just mentioned, trying to get exposure in an intelligent wrapper.
(51:41) US agriculture — you mentioned Argentina agriculture. I like US agriculture in terms of the land and there are a few — they purport to be avocado growers, but really the big deal there is they're going to utilize their land. They're going to sell it for residential development and their water rights. Do you own any of these types of companies or are you looking outside the US for this sort of stuff? I own these companies.
(52:08) I know exactly what you're talking about. That's in Ventura County. You can see it on the Google map, where that grove is and they want to develop it. But great management, an activist investor I think is running it now. What I thought was interesting, the water — we haven't talked about, we don't have all day to talk about this, but I'm becoming more and more interested as I started doing the research into some of these companies, how many of them, a lot of them in the West are tied to these assets around these water rights that aren't
(52:37) even valued properly at all. These legacy things that they're entitled to and it's just amazing how much this is worth and you have a big family in California, I forget the name, Boswell something like that, the big cotton farmers in the central valley, or they grow — they have — I mean that's — they wrote a whole book about that family and how they got those water rights and so I started investigating that and yeah I think that's — yeah, that's it. And so this is very interesting. I did
(53:10) a little venture into like Alico just because I grew up in southern Florida. When I was in western Florida they're kind of doing a development. They kind of popped about 60% in the last year. So I think land is good. There's ways to express it. What I think is interesting is — most of the ones that are publicly traded, they seem to have been sitting around basically a lot of them doing nothing. Okay.
(53:36) Like the particular one we're talking about, you got the activists in there and they're actually like you always talk about in these companies, they have optionality. Well, you see that expressed with like LandBridge and TPL. They kind of know how to exploit the optionality of there's huge land. Now these other companies I think the bulbs turned on.
(53:54) So I kind of like — but that's what happens. You don't have to sell the land if you own it. You just sit there. It's valued. It was acquired as some railroad rights, right-of-ways, or some crazy back in the 20s or 30s when it was cheap. So it's like you're not forced to do anything as long as you don't completely run the thing off the rails.
(54:15) And then as things change, there's one that I like. It's fairly thinly traded. It trades in Arizona, north of Phoenix. They have about 400,000 acres. They don't have any mineral rights per se, but they do have a lot of land. As Phoenix expands, they have water rights and they also have a big coal plant that was in and around their land and they have access to this substation that's no longer in use by the coal plant.
(54:40) And so what are they doing? They're allowing solar and wind farms to be built. Everything's routed through this existing infrastructure. And it's just an example of what you can find out there. And very very tightly held illiquids. A lot of these things are illiquid and you kind of got to search them out. But they always seem to have these hidden assets like these water rights or things like that. It's interesting.
(55:01) The one we're talking about in California, the other one, the guy that wrote the law, I believe, for the California water rights is on their management team or on their board, I can't remember. So that's interesting when you see things like that. And that I think is going to ultimately help them to maximize their value over time.
(55:24) They ain't making any more of it. That's what they say about land. That's the attraction. And this is exactly what we're talking about. What old money wealthy Gilded Age old money families do. They don't — somebody asked me — I put it on my Discord, the one I was buying in Arizona.
(55:42) And they're like, well, what's the catalyst? I have no idea. I'm just going to buy it. It seems cheap. And I don't know what happens in 20 or 30 years, but we'll see. Phoenix isn't going to stop expanding. Yeah. And the thing, I suppose a little insight into this type of idea, is these types of companies are often bleeding cash in the near term.
(56:04) And so this is why they're unpopular. The old-school successful money always paired these types of large asset value with streams of cash-flow positives. Okay? So you don't have to be all in one basket or all in the other. There's quite a nice little pairing that you can do in your portfolio.
(56:27) You can supplement that with a slightly different type of company that has large free cash flow yields and can provide a steady dividend over that time. Just as one general example, we've covered a fair bit today. We've covered operating companies, special situations, energy, precious metals, and land. Anything else on your mind? No sir. Yeah.
(56:51) I mean, we didn't even get into some other things, but like the options and stuff, my whole call-writing, cash-covered put-writing strategy that keeps snowballing. Maybe that's another discussion we get into because if you do have a wad, if you do have a bankroll, as Munger said, put that first 200 grand together, you can really — it's amazing.
(57:15) It's amazing what you can actually do. Once I retired from my real W2 job, my real job, I then said, well, I'm just going to do this full-time and it's like, okay, this actually is a flywheel and a snowball, so it's amazing what you can do if you take it seriously and it's not that hard to understand or to do. Yep. Absolutely.
(57:37) I'm going to be writing a piece this afternoon in terms of how — the most common question I get around this is how much capital do I really need to make it worth. So I'm going to write a piece about that, calculating your expenses, what kind of return you might expect to generate, and that's just based off my experience and therefore obviously the mathematical function is the amount of capital you need.
(57:59) Guys, if you want to be a part of that conversation, head over to the Royalty King — no, sorry, Mina Capital Substack. And John, tell people where they can find you and what they can expect from your work. So, Actionable Intelligence Alert on Substack. I write a monthly newsletter, if you call it. I usually have pretty good commentary hidden on a subject and then deep-dive it behind the paywall and talk about specific opportunities like we've been talking here.
(58:29) But I get more specific and I have two model portfolios people might be interested in. One's more of a dripping-roast income dual-function dividend. The other one's basically full capital appreciation looking for those multibaggers. So yeah, and I'm going to get in more talking about some of the things we've been talking about here more in depth because I think for certain people they'd be interested in those things.
(58:56) Absolutely. Guys, if you want to be a part of that, head over to John's Substack. And if you want us to continue this conversation at a future date delving into generating borderless cash flow, be sure to like and subscribe. But if we get a certain amount of subscribers, John will do his victory dance on the camera for us all.
(59:13) Thanks for joining us, guys. I look forward to catching you in another episode of the Royalty King Report. Take care for now.