00:00 So, let me ask you this, Rick. How much of this value enhancement, right, these crazy efficiencies that we're talking about here that will only get better as AI gets smarter, how much do you think is priced into these companies right now? >> Zero. >> Zero. >> Welcome to Thoughtful Money. I am Thoughtful Money founder and your host, Adam Taggart, welcoming you for a discussion I'm very much looking forward to.
00:36 It's with the great natural resource investor, Rick Rule. Rick, how you doing, my friend? >> I'm doing very, very, very well, Adam. Not least of which for re-engaging in conversation with you, which I enjoy. >> Thank you. Right back at you. You're so kind. And so silver tongued. And yes, folks, we are going to talk about silver soon with Rick Rule.
00:57 Rick, you've got your hands in a lot of different endeavors at the moment and they all seem to be going great. You and I were catching up a little bit before we turn the camera on here. And one of which I just want to quickly highlight for the audience here, which is your annual symposium, which you do every July.
01:14 So, it's actually coming up quite soon here. You do it in Boca Raton, Florida. And it's a hot time of year to be there, but that doesn't discourage folks from going. And the in-person part of the event is already sold out as far as I understand. But you do offer an online experience where for much reduced price people can basically watch all the content from the symposium from the comfort of their own homes.
01:42 So we'll talk a little bit more in detail about the symposium near the end of this. But two things, one folks, if you want to learn more about that and sign up and reserve your online seat, just go to thoughtfulmoney.com/rulesymposium. And knowing that I'm going to give you a little bit more time near the end to really flush it out, just this 30 second version.
02:01 What should folks know about the upcoming conference, Rick? >> Well, first of all, as you know, Adam, I've been participating in investment conferences for about 50 years, and I'm a highly competitive person. And I want to put on the very most useful conference of its type. And I think I do that. I think we make it better every year.
02:27 If you make something better every year for 30 years and if your orientation is to be the best I think we can and we will deliver. When people think about the conference and we'll talk more about it later as you suggest remember this to begin with. We are confident enough in our content that we tell every exhibitor whether they attend live or via live stream that if they are not 100% satisfied with the value we delivered, we'll give them their money back.
03:04 It's the only investment conference I know of in the world that has enough confidence in the content that the consumer at his or her sole discretion has the ability to say, "Rick, you didn't deliver. Give me my money back." Now, I also need to say in 30 years of making that guarantee, our content has been good enough that we've had to refund less than one-tenth of 1% of the tuitions charged.
03:34 But that guarantee is pretty profound. >> That's a great guarantee. And I know that for the the very small fraction that you have refunded, it has been less because they didn't find value in it. It's because they felt kind of overwhelmed that there was just so much value there. So, fantastic. Well, look, folks, like I said, we'll talk a little bit more about it near the end here.
03:52 I just want to note one of the things that really differentiates this conference for me is, Rick's the hardest working man in retirement. He's chuckling as I'm saying this. We can't even call you retired anymore, Rick. But he goes to lots of conferences, and what's great about this one is to be in the conference as a presenter, you can only be there unless Rick has handpicked you.
04:15 And so it really is the best of the best when you go. So if you're interested in the hard-asset space and you only want the cream, you get it at Rick's event. Okay? And again, folks, if you want to sign up for it, go to thoughtfulmoney.com/rulesymposium. The link will also be right in the description below the video here, too.
04:31 All right, Rick. Lots to talk about. I will give you a chance near the end, too, as well to give a quick update on Battle Bank, which is going great from what I hear from you. But let's get to the meat of the sandwich early if we can. All right. So, I'm going to talk with you about commodities.
04:46 If there's anything else that's burning brightly on your radar, you just go there and I'll follow. But let me ask you this. I had a couple conversations recently about the ongoing AI boom. And had a really interesting conversation the other day with Jesse Felder. And I want to bring up a couple of things that I talked about with Jesse to get you to react to.
05:07 But one of them is if you love the AI boom, let's just say you're true believer in it, you think the sky's the limit, it's going to transform the world, we're going to build out these gazillions of data centers at the rate that we all think we're going to. Then shouldn't you be a huge fan of commodities as well? Because that's not going to be able to happen in the digital world without all this stuff from the real world building out all the infrastructure.
05:39 >> Let's start by saying that we don't have the physical capacity to build what will need to be built if you're a true believer. We have principally around both metals and around energy. If all of the data centers that are currently slated to be developed are developed, we will not have the ability to power them, we will not in certain circumstances have enough water for them.
06:12 And we won't have enough critical materials, but particularly copper to build them. So let's start off by saying that the most bullish case will not happen because there isn't the physical capacity to cause it to occur. Or if it does occur, it'll occur 20 or 30 years late after we have built the physical capacity to enable it. >> And let me just interject for one second only because I said I was going to bring up two points Jesse made.
06:35 This was the second point. But it sounds like you're saying there will be constraints. I'll let you flush that out as much as you want, but that doesn't mean even though there may not be enough physical stuff to let the buildout happen on the expected timeline, it still means overwhelming demand for commodities in the relatively near term.
06:56 Correct. >> Absolutely. Robert Friedland has pointed out that the world will need to build without data centers or the world will need to mine without data centers more copper in the period 2026 to 2050 than has been mined in all recorded history. >> All right. So all the data center demand is on top of that.
07:18 >> So think about putting the data center demand on top of that. Now we can do this, we can do it. We have underinvested in copper for 30 years. There's lots of copper around the world that we can go find. The difficulty is that if we begin the search for it today, you and I, Adam, in some prospective terrain, it's likely that we encounter our first real exploration success, statistically 10 years from now.
07:45 It takes three years after 10 years to drill that deposit off. So now we're at 13. It takes three more years unless you're in California, in which case it takes forever to permit it. >> Yeah. Which is to say that if you and I begin to try to change copper supply today, we begin to change copper supply 16 or 17 years from today.
08:09 Markets work over time. We ration by price. If the price of copper gets very very high, people will find a way to build data centers and other things more efficiently using less copper. And the increased price for copper will over time 15 years or so lead to increased supply. But the period between now and 10 years from now suggests that the amount of copper demand that is going to be expressed in the market will not be able to be satisfied at a price that the market is willing to pay.
08:45 It just isn't possible. >> Okay. So before AI, in the years I've known you, Rick, you've been ringing the bell that we're going to be paying for the sins of the past going forward, right? Just too much underinvestment in exploration and production. That's an issue in and of itself, right? Now on top of that, we've got the additional demands of the future, right? There was going to be demands anyways from growth and pulling up the poorest of the world to being able to
09:27 afford a higher lifestyle. But now we have all the AI demands on top of that. So to me, this really does seem like a collision of higher prices that were going to come anyways from general scarcity because of the sins of the past and now higher prices because of the greater intensity of demand of the future.
09:49 What do you call that? A super boom and ultra boom in commodities. >> By the way, you forgot one other sin. Which is to say that commodities are priced nominally in US dollars. Mhm. >> A dollar that has lower purchasing power generates higher nominal prices for commodities. We saw that in the decade of the 70s.
10:09 >> It isn't merely that demand for commodities increased during the decade of the 70s. It also happened that the unit of measurement the US dollar declined 75% in real terms over the course of the decade. So you need to add to the sins of the past and increasing demand in the future the fact that the unit of measurement the US dollar is at least from my point of view in inexorable decline.
10:41 >> Fine. >> And that will manifest itself in nominal commodity pricing. >> Okay. And again that that's pushing nominal prices up in and of itself even in a static environment just due to the currency depreciation alone. But then you have the additional tug up on prices from scarcity and the tug up on prices from hey we need these things to build out the infrastructure of the future.
11:07 So it does sort of seem again super boom, ultra boom, perfect storm, whatever you want to say, but it seems like this all just means higher and likely substantially higher prices in commodities of all sorts and kinds going forward from here and over what period of time. I mean are we talking decades because of the scope of the demand? Markets work.
11:29 And I believe that the challenges of resource scarcity will 15 years from now or 20 years from now be solved by price. You'll recall that the consequence of the oil boom of the 1970s was the oil bust of the 1980s. The very high prices that we experienced in the late 1970s destroyed demand at the same time that the very high prices incented supply.
12:01 When the supply and demand curves cross the price moves up or down are precipitous. So over time the market will cure the sin. It's just that the answer to that is over time. There is nothing that you can do. Adam, nothing whatsoever that you can do short of a synchronized global depression that will cause, as an example, the copper price not to have to rise over five years.
12:34 I say depression because there is zero doubt that copper supplies will fall over five years. You needed to work 15 years ago to increase supply now. >> Right. Right. So copper supplies will fall. You can have supply fall if you have demand fall, which is to say a depression, and you still don't affect the price. Remember that the pricing mechanism is the market's way of balancing supply with demand absent a global recession or depression.
13:06 And I'll leave it with your audience to decide which is possible. >> How is possible. >> There is zero doubt that we're going to have lower supplies. We made this argument Adam, you and I at the end of 2025 around oil. >> Mhm. >> I pointed out to you that the world was underinvesting in sustaining capital in terms of oil and gas production to the extent of about a billion US dollars a day.
13:36 And that that would have a consequence that it would impair our ability to produce and we would begin to ration oil by price in 2029 or 2030. I didn't have the foresense to talk about a war and what happened is that the supply shortage happened a bit sooner and for different reasons than I had expected.
14:02 But the price, the move in the oil price from $55 to $100 or $95 is what happens when you begin to ration a commodity by price. >> Mhm. >> I say this for a couple of reasons. It is not unlikely if they solve the conflict in the Straits of Hormuz that these very high prices will destroy some demand particularly in countries like India and Sri Lanka where they can't afford to pay for it.
14:26 >> Right. And a resumption of supply likely brings down the price from its triple-digit level to some number like $65. But the systemic problem didn't go away. It isn't like we're deferring sustaining capital to the tune of a billion dollars today. It's much higher. The Iranians aren't making sustaining capital investments because we'll blow them up if they do.
14:52 We don't have any money anyway, >> right? And they aren't making sustaining capital investments in Kuwait, Saudi, and the UAE because they can't sell the stuff. Meanwhile, the Russians aren't making sustaining capital investments because they need money for something else called a war, >> right? >> And in addition to all of that, in addition to sustaining capital investments, when this war finally ends, we're going to have to replace all the stuff we blew up.
15:17 So the circumstance even assuming that you have a price decline from the triple digit level back to 60 that price decline is temporary that price decline doesn't take into account the declining purchasing power of the medium of exchange which is to say the US dollar or the cumulative impact of deferred sustaining capital investments.
15:39 So people who are oil and gas investors need to think about that. They need to think about the price today being a manifestation of what the price will be like in the future as a consequence of underinvestment. >> All right. I do have some more questions for you about oil, but I want to get there through a planned route and I want to finish up on the AI part here because you just raised some really important questions.
16:08 So let's grant that you're correct that the limiter on the global AI buildout is going to be the availability of resources in the physical world. And to be clear too, I don't think it's just mineral resources. I think it's also human resources. I mean you need to have skilled technicians, engineers to build out these things.
16:32 And there's only so many that you can have in any one geography at any one time, right? So right now the market is pricing as if the resources are going to show up along with the dollars, right? And so earnings analysts are basically saying, okay, company, collectively the hyperscalers say they're going to spend 800 billion this year, 1.
16:55 1 trillion next year, more than that the year after that. And they're assuming the resources will just show up. So if the resources don't show up on the scale that analysts are currently expecting, they're going to have to bring down their earnings forecasts and that is going to bring down the price of the AI complex stocks.
17:14 And since they're such a huge percentage of the market, that's going to bring down the markets. I'm just curious, what do you project to be the scope of the correction that we're going to see in the financial markets in general when they wake up to this reality? I hate to duck questions, but I have no earthly idea.
17:34 To me, Adam, the market isn't a subject. It's a facility. >> Mhm. >> For buying and selling fractional ownership of businesses. The consequence of that is that I'm not a student of the market. And while I think that your question is a very valid one, I'm afraid to say that you're asking a rockhound.
17:59 And I haven't answered. >> Well, let me explain why I'm asking it of a rockhound. So everybody watching can make their own assessment of if and how big an adjustment this will be. Personally, especially from all the people I talked to, I think it's going to be quite large.
18:19 And it's just because the AI complex has been driving the markets so vastly over the past bunch of years. It is the tail that now wags the dog. It's the tail that has become larger than the dog at this point in time practically. So if we can't deliver on the expectations the market has there's going to have to be some pretty sizable correction.
18:38 The question I have for you as a rockhound is okay we have a big market correction. Well, does that mean that everything goes down with that or do commodities still perform well in that environment? So, even if there's a big general market downdraft, can commodities do pretty well? And I can certainly make the argument in my head that even if we don't manifest the current buildout schedule that Wall Street thinks is going to happen, there's still basically going to be overwhelming demand for the commodities.
19:12 They're going to build as fast as they can build, even if it's not as fast as they want. And so there's still going to be a lot of demand propping up the commodity side of the market. So I guess my question for you is can the commodity complex still outperform or do well, I'll say, if the general markets are selling off, in a secular sell-off because the AI outlook is disappointing.
19:34 History teaches us that a liquidity squeeze, a sell-off >> affects everything. >> Sure. In the near term. Yeah. >> Remember the 1987 collapse? Gold stocks held up for 24 hours. >> Yeah. But that's the selling vortex. That's why I use the word secular. Like if this is something that happens over a year. >> I guess that's the point I'm trying to make.
19:58 Many of your listeners if there was to be a liquidity event would look immediately at their resource stocks particularly their gold stocks which is supposed to save them in times of catastrophe. >> Mhm. >> And they would be heartbroken and probably thunderstruck to see what will happen to those market caps in the immediate aftermath of a collapse.
20:21 That's because a sell decision, the collapse isn't made by speculators. It's made by margin clerks. Exactly. >> And they sell whatever has a bid and gold famously has a bid so it will be sold. The second part however is a bit trickier to the extent that a market collapse presages as it is alleged to have done in 1929, a more general economic collapse that is a liquidity squeeze that affects all industries.
20:55 >> Then what you do is you systematically lower demand for resources not for all time but you postpone it and on a net present value basis a three or a four or five year postponement at an 8% discount is difficult. >> Sure. The other scenario is one where as a consequence of illiquidity the government decides to inject liquidity.
21:27 They engineer lower interest rates. They engineer easier credit conditions and they engage in what they call quantitative easing. Something that you would describe as counterfeiting. In that circumstance, the policy response to as an example an AI generated crash is artificially but extremely bullish for natural resources.
21:55 Well, and I wonder if it's not even particularly so above and beyond what you just talked about, but rather than trying to just reliquify the system and get it working better, I think, I'm no expert here, but I think in AI, the government has to the extent it's willing to put its thumb on the scale for certain parts of the economy, it's going to lean hard into AI even if it's going to starve other parts of the economy because it sees the AI race as an essential one versus its major geopolitical competition, not
22:29 too dissimilar to the nuclear arms race, right? So, it seems like if something's going to get fed, even in hard times, they're going to feed this because it's just like we just have to beat China in this, right? Do you feel that that could add even more weight to what you're talking about? >> I honestly don't know.
22:52 It has been very rare in my lifetime to see the government make either a wise or a considered decision. I'm not merely being anti-government. I think the government to a fairly substantial sense expresses the will of the voters. They need every now and then to be in the mainstream enough that they get to oppress you for another term.
23:21 And to the extent that AI is popular among voters maybe not Robert Reich or AOC but voters who would like to rely on AI or hope to profit from AI it continues then to enjoy popularity in Washington. I also think that I agree with you in the sense that the big thinkers those who think in terms of geopolitical blocks rather than humankind as a whole >> believe that they need to have dominance in AI.
24:04 To them AI is existential in terms of retaining hegemonistic control of power. >> Right. Right. All right. So you know, I take from your answer probably, but I got to say, Rick, one of the things I really appreciate about talking with you is you're one of the smarter guys I talk with.
24:27 I mean, you downplay it, but you're definitely one of the bigger brains out there, but you don't hesitate to say, I don't know. And there's a lot of guys on camera who don't feel comfortable admitting that. And I love it when you're just honest. Adam, sadly I have too many opportunities. >> No, not at all. Not at all.
24:46 No, we all should emulate you more. All right. So, one last question about AI and then we'll get to a couple of other categories of the hard assets. Actually two more questions for you. One is, and this is kind of an interesting question with you being a quote unquote self-described rockhound, will AI be a transformative catalyst to the mining industry? Will it actually, so much of mining is collecting data and then making projections and assumptions based off of that. Okay, these are the
25:21 drill results. So, where do we think the deposit is? How rich is it? Where is it located? What's in it? To me, that seems like what AI is excellent at, right? Is finding patterns better than humans can, right? And so helping us determine which properties to buy and where to place the drill bits and just be much more efficient at identifying and extracting minerals.
25:51 How big of a transformation do you think it will eventually bring to the industry? >> Enormous. And is happening today. There's certain things that AI can't do. AI can't limp across the surface in Kazakhstan yet >> until we have the smart robots. But yes, >> and see surface anomalies. It can't do that.
26:14 You have to have a human being that does that. But AI can assimilate and compare very large databases. A lot of exploration is looking for what we call coincident anomalies. Mhm. >> Alteration, structure, geochemistry. And AI can not only analyze large databases but can then synthesize for coincident anomalies.
26:43 And when I say can I should change that. It does it now. Now >> AI, even in the hands of a rockhound, a luddite named Rick Rule, >> if I constrain AI to the right databases, it's worthy to note if you don't know the questions to ask AI, it absolutely stands for artificial ignorance. If you don't understand the question that you're asking AI and you're not constraining the database the results that you get back are worse than useless.
27:23 >> Sure. But I think about myself as a young analyst looking back over traditionally we would take five years of quarterly income statements and balance sheets and look for correlations, look for trends, look for the interplay between investment and return. We would literally take 20 of these things, pull the staples out, lay them on a conference table, and with different color magic markers draw continuous lines.
27:57 It would take me as a young analyst about six weeks to make the case on one company, including reading the notes to the financials. I now, me a 73 year old who barely knows how to turn his computer on, I basically can cause Claude to do that for me in two minutes and then I can ask Claude in my voice to compile the results in a memo.
28:31 And Claude writes better than Rick. It will amuse you, Adam. I was talking to Albert Lu, who, as you know, is my partner in the classroom and a great engineer >> and just a great guy in general, too. >> And I was teasing Albert saying, with AI, you've become redundant. And he said, that's funny.
28:55 I was thinking the same about you. I can create your image. I can create your voice. I can do your research. I could have the Rule Classroom without Rule. The personal economic impact of AI and the impact of AI on industries that are composed of people who know how to extract value from it are amazing. I mean really truly amazing.
29:20 >> Amazing. And you're seeing that now. And of course where we are now it's a fraction of where we'll be in three years, five years, seven years, right? It gets better at almost an accelerating scale. All right so my question for you is this to me this means additional optionality for mining companies right so as good as the company is now and its prospects look from a deposit standpoint and a management standpoint and the human talent standpoint it's only going to get more efficient given the AI
29:52 overlay right so it's almost right now like a warrant I mean it's not really priced into the stocks I don't think and so you're getting that future value for free. But I also wondered too in a world where it gets easier to find deposits. Then possession is everything. Meaning who owns those deposits? That's where the real value lies.
30:16 And so a lot of these companies, they own the deposits. I mean, yes, there will be some more to be found, but it just means that the guys that actually have control of this stuff, if it becomes easier in general to get the stuff out of the ground, well, then the value of what you have is automatically enhanced because you don't need to expend as much energy to pull it out of the ground.
30:41 So to me we have all these debates about gosh the mining companies just seem so undervalued in general certainly especially versus a lot of the high-flying tech industries but I feel like this is yet another reason why these companies are trading at discounts to their true value >> and I think that's much truer in the oil and gas business where there's more data, AI at both Exxon and Shell the only two that I know about but probably others too has advanced to the extent that Exxon can
31:17 throw data like drilling data and producing data from 10,000 wells in a certain horizon in West Texas and not have to ask AI a question say what are you seeing in terms of this data that we need to know >> what are the obvious correlations between the well logs, the completions that we made relative to the seismic data and the producing profile.
31:48 What could we be doing better? >> In other words, increasingly AI is teaching itself how to answer questions that we're not yet smart enough to know how to answer because it can process so much goddamn data. Assuming that I was a geophysicist, in my time on Earth, I wouldn't have the ability to calculate 10,000 well logs. I couldn't do it.
32:16 And assuming that I could, I couldn't remember the data from hole number three and make that appropriate to hole number 7,000. >> AI doesn't get tired. And it's infinitely curious. >> So, let me ask you this, Rick. How much of this value enhancement, right, these crazy efficiencies that we're talking about here that will only get better as AI gets smarter, how much do you think is priced into these companies right now? >> Zero. Zero. They are selling mostly at a discount to the net present value of their ore bodies at today's commodity
33:04 prices applying an 8% discount rate. Remember, Adam, and this is an important part about natural resource investing, these companies are valued on a net present value basis. You do a net present value calculation by taking your best guess at what future cash flows from proven resources are today using current and forecast commodity prices and then applying a discount to it.
33:38 At an 8% discount, any cash flow that occurs after years 11 or 12 has no net present value. >> Right. Right. >> A deposit with a 30-year reserve life, you're getting the last 18 years for free. If you run the same net present value calculation five years from now, you get the same answer having enjoyed five years of cash flow for nothing.
34:00 Mhm. >> In other words, it's a time game. So, it isn't just that you're buying companies at a discount to their net present value today. It's that you're getting the exploration upside, the commodity price upside, and the time value of money for free. If you add on top of that and I don't know how to do it yet the overlay of more efficient exploration or more efficient production both of which are not likely but rather certain to improve.
34:33 It's difficult to know how big a warrant value you assign to it. >> Difficult to know what does your gut tell you in terms of little moderate amount or a lot. 10 years from now a lot. It'll take us a while to learn the tools and it will be expensive to employ the tools. If you are currently deferring a billion dollars in sustaining capital investment, it will take a response in the oil market to cause the owners of oil companies to say cut my dividend a little bit and put it into AI generated improvements
35:15 in technology. Mhm. >> In other words, the application, the courage that directors will have to employ the application will be really a function of a changing paradigm among investors to enable the investment. >> Okay. So, I just want to underscore for viewers here right now how big will this warrant that we're talking about, this future AI enhancement value that you're getting for free right now in the stocks going to be, you as the viewer you make up your own assessment, but the key
35:49 thing to understand is what Rick is saying is however large it is you're getting it for free right now and as Rick said he thinks it could be quite prodigious a decade out or whatever, right? So you know if you agree with that, if you've got more than a decade left in your investment horizon, and I'm guessing, Rick, you think there's probably some great companies here and probably the safe ones, the big guys who are probably going to have the most money to invest in this stuff anyways and get the
36:17 biggest initial lead. If you've got somewhat of a set it, forget it part of your portfolio, these may be great candidates because you'll get all the benefits of the compelling reasons to buy in these things anyways that Rick can talk about all day long, not even thinking about AI.
36:39 But then you add the AI benefit in again that you're getting for free right now. My point is I don't think the world gives you a lot of opportunities like this. Would you agree in your investment? You've had a long investing track record, Rick. Would you agree? >> You know, a lot of my speculative success has been free warrants.
36:56 >> There you go. This free warrant that you describe, if you get that on top of the warrant, the reserve life warrant, the outyear commodity price >> warrant, there's a whole collection of free warrants in the space. In order to collect one's warrant, one must be fairly patient.
37:25 And to my benefit, despite my advanced years, I've become quite patient. It isn't something that's going to manifest itself as an example in calendar year 2026. That's not going to happen. In order to get the benefits of ownership that you describe, the ability to apply artificial intelligence to already owned assets,
37:50 this isn't anything that is going to be able to be measured in months. In fact, the anticipation of it won't be measured in months. >> I would agree with that. >> But it will be material >> and of course you want to be positioned before the world wakes up to all this, right? And the repricing happens.
38:09 Okay, last AI question, then I want to get to precious metals. All right. So, what we're talking about here is potentially prodigious future value that is going to materialize at some point in the future, but likely measured in years from here. In terms of the global scramble to build out compute, the data center buildout wave, are there commodities that are at the top of your list that you think will benefit the most from that? Like copper seems to be one that comes to mind.
38:39 I'm going to guess maybe natural gas to be used as the bridge fuel for a lot of these things that need their own power. Maybe nuclear, with the SMRs and stuff like that. But what would you think would be benefiting in the near term from this huge demand to build out the data centers? >> I mean, pick one, but from an investment theme, you need to pick a big one.
38:59 You need to pick a big one because you could look at something like titanium or vanadium and you have one big new deposit that comes on and it cracks the market. >> Mhm. >> We found that you make a lot of money if you're on the right side of a commodity boom around a small commodity and then you get your ass kicked if the market and technology works and supply suddenly increases.
39:28 Well, to play the game successfully, you need big markets. You need energy markets or copper markets. The truth is if the AI circumstance that you describe, and the demographics that we believe occur over the next 20 years, occurs, copper, which is a great big market, will do extraordinarily well.
39:51 There's nothing we can do, nothing we can do to alter copper supply in a reasonable time frame. We can alter price by having a depression and listeners of yours who are afraid of a depression should avoid until a depression occurs the copper market. But to the extent that there are people who believe that we'll muddle through with or without AI, but particularly with AI, that's a no-brainer.
40:20 The surprise winner in a lot of discussions, Adam, I think has to be uranium. It isn't merely that AI will require prodigious amounts of uninterruptible power, which is to say not wind or solar, >> but rather 24/7 power. Uranium does that. And the AI elite also requires non-carbon generating power.
40:55 >> Mhm. >> Which uranium offers. On top of that, the unsung beneficiary of the conflict in the Straits of Hormuz is truly uranium. You will recall, Adam, maybe you're not as old as I, but you're a student of history. >> I got some gray. Don't worry. >> You will recall or you may recall that the Arab oil embargo of 1973, was the impetus for the beginning of the greatest buildout in nuclear history.
41:30 Mhm. >> The French nuclear fleet, now the world's fourth largest, was built as a direct consequence to France's insecurity with regards to the importation of energy >> of foreign oil. Yeah. Yeah. >> The Japanese fleet, the third largest was born of the same circumstance. It was stated in the Japanese diet, their parliament, that uranium is the only fuel in the world that has sufficient energy density that Japan could in one warehouse store enough energy to power Japan Inc. for 5 years.
42:07 >> Mhm. >> The concept of energy security, geopolitical energy security has returned to our consciousness after a 50-year absence. And the only material that gives us sufficient energy density that a nation that is insufficient in energy resources, which is most nations in the world, the only way that you deal with that is uranium.
42:34 You cannot store that much coal. You can't store that much oil or liquefied natural gas. You sure can't store that much wind or that much sunshine. It's only uranium. Now, does this manifest itself in 2026? Probably not. Does it manifest itself over the five or 10 years absent a Chernobyl or a Fukushima, absent a catastrophe? >> Yeah.
43:03 >> The probability that uranium is the fuel of the AI business is 100%. And when you say that how much of that future fuel demand is going to be existing conventional nuclear power plants versus a brand new fleet of smaller reactors that have a different technologies, smaller footprints and so a lot of the safety risks are much more moderated but they also let you have on-site power generation at these places.
43:46 You don't need to have grid dependency. You can put these things pretty much anywhere in the world. >> I disgraced myself at a conference a couple years ago talking about the fact that SMRs were the technology of the future and a gentleman in the audience raised his hand and said, "Mr.
44:06 Rule, the future has been operated by the US Navy, >> right? >> 25 years." >> Exactly. Yeah. I mean, that's what a submarine is. But the truth is that it's going to be driven by all kinds of technology. The conventional technology employed in the United States basically stopped >> after Three Mile Island. Anything that we build to that scale, we learn to build cheaper over time.
44:30 >> Mhm. A nuclear power plant that with regulation delays and the cost of capital in the United States takes 26 or 27 years and 20 billion to build can be built in China for $5 billion >> right and within what a year and a half time frame >> three >> as we build more we get better >> right >> that's what we do so it isn't merely that the SMR technology will increase note that we're actually building a commercial scale SMR in the United States right now at Kemmerer Wyoming.
45:05 >> Bill Gates is doing it. >> We're building several >> ironically on top of an old coal mine. So it isn't merely that SMR will supply increasing amounts of power over the next seven or eight years, the lead whatever lead SMR might have with regards to conventional technology, I shouldn't say conventional technology but rather technology at scale, either by way of cost or by way of safety is going away when you do things at scale which we've learned you bring down the unit costs
45:47 >> well it's funny you said we, which we've learned, we've learned in other industries we have not learned in nuclear until now, right? I mean, pretty much almost every, my understanding is almost every conventional nuclear plant in America, which are now old, right? Was a one-off project.
46:02 We never got economies of scale. We never got standardization, right? We never got the cost structure down. >> And I know the people at China General Nuclear very well. They build like Ford used to build. You can have any color you want as long as it's black, >> right? This is the model we sell, >> right? And I think the US is finally getting the memo on that and we got a lot of ground to make up, but it's exciting for this future, right? Yeah, >> I think that's right.
46:31 And by the way, the company that seems to be progressing the fastest in terms of nuclear technology is Canadian. It's Cameco having bought Westinghouse. >> Okay. Once we start building plants, I don't think we'll ever have as efficient, if that's the right phrase, as lenient a regulatory regime as the Chinese have, >> right? >> But I also don't think that we're going to be able to be as inefficient as we are today.
47:08 If we continue with our current level of regulatory efficiency in the United States, the lights will go out and I don't think that'll happen. >> Yeah. And it does seem I've been following this somewhat. It does seem the new administration is doing an awful lot to try to slash a lot of the regulations and really let innovation start to drive in here.
47:27 And I don't want to spend time on this because I got a few other things I got to squeeze in before we're done here. One of the interesting things about the future of nuclear here is a lot of people, a lot of safety reasons around nuclear and I've talked with nuclear experts on this program that a lot of those are really misunderstood and a lot of these new technologies really reduce the risks that are there.
47:55 But one of the exciting things about the future of nuclear energy in this country is that a lot of these new reactors look like they're going to be able to use the existing nuclear waste we have as a feeder input. So in other words, this problem we have of nuclear waste may actually go away as that nuclear waste gets reused in the fuel cycle going forward with those newer fleets. That's kind of exciting.
48:16 And you're smiling and nodding as I'm saying this. I was smiling because 15 years ago or so I was talking to a fuel supply guy with a major American utility and I said, "So what do I really need to know about waste disposal?" He said you need to know that you need to dispose of the waste at a place where you can get it back >> because there will be a point in time, I mean the amount of energy that we extract from a pound of enriched fuel is
48:54 pathetically small >> and the ability to reutilize that fuel even conventionally never mind with the new technologies is astonishing. There is so little utilization of a pound of uranium. And as technology improves, I mean frankly the future viability of the industry is around that, the demand for cheap power is such that there would otherwise be a deficit in new mine supply that frankly threatens the nuclear power industry.
49:41 All right, I got to move on from this topic, but just a concluding question for you, Rick, and I'll take a super quick answer, but do you think as the historians of the 21st and 22nd century look back on the 20th century, will one of the biggest blunders of the 20th century be not utilizing nuclear energy to the true extent that we could have? >> I don't know.
50:09 We've made a lot of mistakes. So it would be difficult to say which will be the largest >> we have. But think about how much of the world's geopolitics have revolved around the availability and supply of energy and things like that if we could have just become energy self-sufficient earlier and all countries could have, it would have been hugely different.
50:27 >> No I grant you that. I absolutely grant you that. I'm just thinking of it in the context of all the other mistakes we've made. >> Yeah I know. And look, there's a lot of contenders for that. But yeah, >> I guess the point is that for your audience, although they probably don't think about nuclear energy very much either in the context of the way they live or the way they're going to live or their portfolio that they need to think about it more.
50:57 This is well maybe not a certainty so highly probable that it's a portfolio mistake not to pay attention >> to it and I realize too that we haven't even mentioned the word fusion and as far as I understand there's nothing on the doorstep that says we're going to have a fusion alternative in the market anytime soon but that's another, I mean as exciting as everything we're talking about here.
51:27 It could get even way more exciting if fusion were ever commercialized. Correct. >> If you were ever able to toggle depleted fuel between fission and fusion and back, that would be a wonderful circumstance for humankind. I'm not enough of a technophile to tell you that that will occur or when it's going to occur, but I would love to be alive then.
51:56 >> Yeah. Yeah. I'm not sure if either of us will be, but I certainly hope so. All right. So, I hate to do this, Rick, but I got two other big topics we're going to have to just cram into a couple of minutes each, given our time constraints here. But let's do the best we can. All right.
52:13 I know a lot of people probably would have wanted me to have started with this question, but is the bottom in for precious metals? They've definitely had a pretty rough time recently. And before you answer, I just want to give you public props for your wisdom in getting out when you did on the way up with the precious metals.
52:33 You took a lot of slings and arrows when you sold your silver at $75 an ounce. And it's interesting, Rick. Just the other day, somebody recirculated a tweet I made when I was at the Vancouver Resource Investment Conference earlier this year, and it was a tweet of you on stage with Quartermain and one other gentleman, but basically the old Vanguard.
52:56 >> And you guys were saying, "Look, we've seen this movie before. The price action's gotten crazy here, folks. So, I hate to tell you, but this is kind of a mania that's going to end soon and we're stepping back. We're reducing our exposure." And you guys got so much guff for that from the folks that just didn't want to hear any bad news and thought, "Hey, this is the repricing we've all been waiting for.
53:19 " And you're once again, your wisdom and experience proved out over time. So, I want to give you full kudos for sticking your neck out when you knew it wasn't the popular message. Well, I've noticed that whenever I do something that's immediately unpopular, I'm invariably right. When you see a hyperbolic chart, that chart almost always resolves.
53:42 >> Sure, vertical moves don't end by going sideways. >> Yeah. The Canadians call that a hockey stick chart. The back side of a hockey stick is just as steep as the front side, but it's a lot less fun if you're long. I'm not a trader, but when I see a hyperbolic chart, up or down, I bet against it.
54:00 I just can't help myself. In this case, I had fundamentals on my side. I'm not sure that the low is in for precious metals. I suspect that nominal interest rates will continue until this administration loses its courage and forces them down. And a higher US interest rate leads to a higher US dollar.
54:23 Gold is denominated in dollars. So it wouldn't surprise me given that you need to consider both the numerator and the denominator that the gold price falters in the face of higher interest rates. Make no mistake, we can't afford real interest rates. The interest on the US debt and the fact that higher interest rates if they continue higher will decimate the long bond market when the US government needs to refinance and ultimately equity markets and consumer durable markets and the housing market means that eventually like 1975 the
54:57 political class and the voters will lose their nerve and they will sacrifice the sanctity of the US dollar to domestic politics when that happens like at the end of 1975 gold will be a beneficiary. Will that occur in 2026? I have no earthly idea. Will it occur? Absolutely. Okay.
55:23 So if you don't mind sharing, what is Rick Rule doing right now in terms of investments in the precious metals industry, are you just holding what you got? Are you nibbling on stuff? Are you just staying away until you start to see signs of what you just talked about? >> I'm a saver in gold. And I save whenever I have a liquidity event.
55:42 I'll make a fair bit of money on this conference and I'll put some of it in gold. That's just what I do. I save systematically in gold. And I'm fairly price insensitive. On the gold stocks, I'm starting to take more risk. We're in a risk-off environment. Gold is down. The gold stocks are down. The ones that are down the most are the ones that are perceived as being riskiest.
56:03 At the same time that after two and a half years of increased exploration spend, I'm starting to see some great exploration results. >> So, I see some drill holes that give me spectacular data. And while the market moves, it doesn't move anywhere near the way it used to move. So, I'm increasing rather dramatically my risk appetite.
56:24 I'm not increasing the amount of money I have exposed too much, albeit I have a lot exposed, but I'm changing the risk. I'm doing the opposite of what I told your listeners to do a year ago when I said emphasize the biggest and the best. I personally >> You're lightening up on the majors and putting more.
56:41 >> I'm not lightening up on the majors. I'm right now making a fair bit of money and I'm deploying new money. And I'm deploying new money in the riskiest part of the sector. >> Okay. All right. And in terms of where Rick thinks the riskier part of the sector is, where he sees the most opportunity, the best way to find that out, folks, is to attend the Rule Symposium coming up in a couple weeks.
57:07 So, we'll talk about that in a minute. That's why I'm not digging in with him now. >> All right. Last topic. Again, we could talk an hour about it, but let's just need to do a couple minutes. So this video is going to release at some point in the next couple of days, Rick.
57:27 And I have no idea what the world's going to look like that then versus now. We just have every day we've got different news about peace deals and going back to war and all that type of stuff. So, who knows what it's going to be like? But just getting back to oil briefly, I'm trying to think where to go about this.
57:52 I guess I want to get your general outlook, but one of the things you were talking about earlier was about how the world underinvested in exploration and was going to have to get religion about, if we want to power the future, we're going to have to really explore and produce a lot more. And nobody thought, nobody expected the war.
58:17 The war happened, 20% of the world's oil flow got cut off overnight. And one of the things I've been talking a lot about recently, and this is where I really want to hear your expertise, is the global economy is reflexive, right? So yes, 20% of what we were getting worldwide got caught up in the Gulf, but the countries that are net net exporters went into overdrive, right? And so I'm curious like is that pulling ahead some of the work we needed to do to realize hey we got to get
58:55 more aggressive here like are we already kickstarting that process here because we actually have both an economic opportunity, the net exporters do, and the world needs alternative sources. And say, "Hey, look, you know what? We maybe underestimated the geopolitical risk here.
59:15 " And so in some ways, could this be a benefit to the world because we are starting to accelerate that process of finding ways to produce more around the world? >> We need to accelerate investment. The United States has a temporary surplus of natural gas produced as a byproduct of oil. >> Right? >> You and I have talked about this in the past.
59:37 We right now can export that natural gas as liquefied natural gas. When US oil exports are totaled, they aren't oil. They're mostly natural gas. We had some spare capacity. The Venezuelans had some spare capacity which they're now starting to pull, but they haven't made the sustaining capital investments. Nor have we. >> Start to interject but I just want you to include this in your answer but are we headed in the
1:00:01 right direction and Venezuela is a great example of that. It was a field that was really poorly tapped up until Maduro was launched and I realize we can't change it overnight. But are we creating the conditions to start making those sustainable investments there? >> Not yet. Not yet.
1:00:20 In the United States. Now, to be sure, $90 oil makes a whole bunch of our tier 2 locations >> economic >> locations, and you are now starting to see in the Permian Basin and the Delaware Basin, a lot of stacked rigs that are turning, and they're turning in response to today's prices, and they're turning in response to the fact that they can sell their gas.
1:00:46 So that's happening and that's very very very beneficial. You will know the world's gotten their message when analysts say to companies reduce your share buybacks, reduce the percentage of free cash flow that's going to dividends and increase the amount of your free cash flow that's going to increase your oil production three years from now, four years from now, five years from now.
1:01:12 In other words, stop cannibalizing to subsidize shareholders today >> and think about shareholder returns three, four, and five years from now. When you see that occur, it's not occurring except at places like Exxon. Then you'll know that we've got the message. >> Is it not occurring because the shareholders are demanding getting paid now or is it not occurring because the management is >> shareholders are always rearview.
1:01:37 That's the way it works. Your opinion of the future is set by your experience in the immediate past. >> All right, Rick, last question for you in oil, then we'll wrap up. I've been trying to set up an interview with Jeff Curry, who I believe you know, commodity specialist, and he's been in the media a lot recently, ringing a pretty loud warning bell about global inventories that they've been brought down so low that even if the strait of Hormuz opens quickly and oil starts flowing again
1:02:04 through the Gulf that the shock waves of having brought oil supplies down this low could keep oil prices a lot higher for a lot longer than currently the market's expecting. Do you have an opinion on that? >> I'm gonna have to defer to Mr. Curry. Okay. He's been a market student at Goldman Sachs for a very long time and I'm a rockhound.
1:02:29 >> So I think we have different areas of expertise and I suspect that he's a better pundit. I will tell you that the cure for high prices is high prices. Mhm. >> And at these oil prices, while it doesn't do much to deter in the near-term US demand, it obliterates demand in markets that can't afford it. >> Yeah >> and my suspicion is that the marginal buyer, which is the one who sets the prices, will need to boycott energy.
1:02:59 If the price of oil in Reno, if the price of gasoline in Reno goes up, you curse and then you start your car and drive somewhere. If the price of gasoline in Colombo, Sri Lanka goes up, the taxi driver parks his cab, >> right? >> It's a very different response. >> Okay. All right. Well, once I talk to Jeff, I'll let you know what he thinks and you can integrate it into your point of view there.
1:03:26 Sounds like he might be actually a great person to have at one of your future symposiums. So, speaking of which, let's use that as the segue to wrap up here. So, we talked a little bit about it at the beginning, but what else would you want folks to know about this year's symposium? And if someone's sitting here on the fence thinking about, well, should I go or not go or attend virtually or not? Why would you say, yeah, you really should do it this year? >> No other conference in the world does a
1:03:54 few things that we do. The first is that no other conference in the world interviews every exhibitor before the conference and posts those interviews on YouTube so that you can arrive at the conference better prepared to allocate your time and resources. Nobody else does. >> There's 70 interviews posted on YouTube, Rule Investment Media YouTube channel.
1:04:14 Nobody prepares the audience as well as we do. Simple fact. The second thing is that nobody in the investment business that I know of offers attendees a money back guarantee. If your listener at his or her sole discretion thinks that I didn't give them their money's worth, they email me and I give them their money back.
1:04:36 That means that the financial part of the transaction is riskless. We have in 30 years of giving unconditional money back guarantees had to refund one-tenth of 1% of the tuitions that we've charged. Our content is good enough that despite unconditional money back guarantees very few people have taken us up on that offer.
1:05:03 Finally, don't come if you're not prepared to work. If you're the type of person who buys the newspaper for the funnies or the crossword puzzle, don't come. We're going to work you very, very, very hard for 4 days. In fact, we're going to work you before the conference, watching some of the videos, and we're going to allow you to use the recordings for the balance of the year, and you're going to need it.
1:05:28 If you are not the kind of person who cares enough about their portfolio to do the work, don't give me any money. Stay home, play with your kids, do something else. But if you're serious about improving your investment performance in natural resources, I've done everything I can. I make the conference a 12-month experience.
1:05:47 I interview everybody ahead of time. I interview many of them after. I give you the recordings of the conference. And I give you an ironclad money back guarantee. This is probably the only riskless transaction in finance. >> All right. Well, that's great. And I'm very glad that you mentioned the replay videos because that's always the number one question I get, Rick, which is, "Well, what if I can't watch the day of or for the full conference?" And basically, you're making all of the content
1:06:20 available to the person for the rest of the year. So, they >> Adam, I put on the conference and I have to play the tapes. There's more content in 46 hours than the brain can absorb in four days. >> Yeah. And so four days. So specifically it's July 6th through 10th, right? And so will people be able to watch live and then get the replay if they're doing it all virtually? >> Yeah. Yes. And yes.
1:06:46 You will have access of course to the live stream and we've invested a lot of time and treasure in the live stream experience. And then after that, you'll have access to the recordings for the balance of 2026. >> Okay, fantastic. And folks, I'm speaking quickly because I got to get Rick out of here.
1:07:01 He's got another meeting after this. So again, folks, if this interests you, go to thoughtfulmoney.com/rulesymposium and you can learn all about the conference and sign up for it if you want to go. And again, the in-person, I believe, is already sold out, but you can buy the online version, which again is priced much less. All right.
1:07:20 So Rick, oh, and also the link will be right below the video, too, if you just want to click that. I know you get to go, Rick, 30 seconds, just cuz I said I'd give it to you. You're wearing the Battle Bank shirt. Sounds like things are going great there. Did you tell me you're bringing in some amazing amount of deposits a day now? >> I'd rather not disclose that number, but that's fine. That's fine.
1:07:39 But yes, we're very successful. You know, we were delayed in opening the bank as you know for regulatory reasons before we went and bought a bank. But we used the time well. We had 20,000, 23,000 people on our wait list. To put that in context, when we opened EverBank in the year 2000, we had nobody on our wait list and over 14 years we grew a 28 billion bank.
1:08:03 We have 23,000 people on our wait list. When we opened this bank, we didn't access all 23,000 because we had to access people relative to our ability to service them. >> One chance to make a good first impression. But I'm delighted to say that by every metric, the bank is growing very very very well.
1:08:23 Most importantly, our human resources continue to grow well so that we can service our existing and our new customers to the standard which we believe is essential. >> All right. Well, congratulations on getting the baby birthed and having such great initial success. Folks, if you want to learn more about Battle Bank, just go to thoughtfulmoney.
1:08:42 com/bank and there's a short form you can fill out and then the team at Battle Bank will follow up with you right away. Rick, it's been fantastic. I'm sorry we went long. But it's just so hard to keep it short with you because there's just so many rich veins in the discussion. Thanks so much and I look forward to seeing you in Florida in what, three weeks.
1:08:59 >> My pleasure. I'm absolutely delighted with the prospect of being your host in Boca Raton. >> All right, my friend. Well, look, thanks so much again. Everybody else, thanks so much for watching. >> Thank you, sir. </content> </invoke>