CW 605 - Joshua Crumb - Inflation, Deflation or Stagnation, BitGold and GoldMoney

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Greetings from Boca Raton, Florida, and welcome to the Creating Wealth Show. This is your host, Jason hartman, episode number 605. Yes, I am traveling again today. Imagine that. I'm attending Tony Robbins Date with Destiny event and I want to give a shout out to two of our wonderful clients. One is Elizabeth for introducing me to Deborah. And Deborah is very involved with the Tony Robbins organization and she got me a room here in the Boca Raton Resort, which was sold out. You know, it's funny how hotels always seem to have another room. Is a hotel ever really sold out? I sure know airplanes are. Those are full. They'd pack people in the aisleways and the bathrooms if they were allowed to on those planes. It's ridiculous. It's a sardine can, you know that? Anyway, hey, let's talk about some good economic and investing stuff today. Our guest will be Josh CR and he is going to talk about inflation, deflation, stagnation, bitcoin, bitgold, and gold as the yardstick for all of these things. And I got to tell you, of course, we all know that the gold bugs have been so, so wrong. My God, they've been so wrong. And doesn't this just go to show you how in life you can have a very correct premise and still reach an incredibly wrong conclusion? Now, granted, to be fair, maybe they won't be wrong forever. Maybe at some point in the future gold will surge and it will be $5,000 per ounce, like Peter Schiff predicted it would be at the end of Obama's first term. That didn't come true at all, did it? It was the complete opposite. It was a disaster. Because, you know, people don't look at the whole picture doing the Math does not answer every question. It definitely does not answer every question. There's a lot more to it than math. There are geopolitical considerations and all sorts of other things. So we know we've talked about that many times before. We don't need to dive into it today. And today you'll be glad to know I'm not going to play you any poor sound quality Voxer messages, but we are going to fix that because I think that's a valuable tool and I've love your feedback on it, by the way. And I'd love you to contact me on Voxer so that I can answer your questions on the show. Just download the free Voxer app Voxer in your app store for your very smartphone and then look me up. Jason Hartman or jhart88 love to take your questions on the show through Voxer because we can have a dialogue. You know, isn't it interesting how there are two medias in the world? Years ago, this is, gosh, this is probably 11 years ago now. I remember writing an article for a magazine on what I call. And I totally made this up myself, you know, I just dubbed it the monologue media and the dialogue media. Now, the monologue media, that's the old media, you know, that's the media controlled by the book publishing industry, the movie industry, the TV industry, the newspaper industry. You know, this is a one way thing. They get to produce a message and send it out to the masses. And they are controlled largely by the political left. Then you have the dialogue media. And that really became very big with talk radio. And who was the guy that sort of reinvented talk radio? Hey, love him or hate them, but you gotta give him credit in the radio business because that medium wasn't doing well until Mr. Rush Limbaugh, who lives right near me, I think in Florida here, right near where I'm visiting. I'm not, I don't live here, obviously. He really reinvented that. And the dialogue media is where, you know, on talk radio people call in and they argue with the host and they have dissenting viewpoints. And for that medium to survive, it also includes, of course, the newer media, the blogosphere, you know, blogs, and even podcast. And so what I'm saying is, have a dialogue with me on the air. And the great thing about podcasting is it's asynchronous, right? So I can produce the message when it's convenient for me to produce and you can listen when it's convenient for you. That is a true win win, not to mention that it's free and not to mention that you don't have to listen to 22 minutes of commercials for every hour of content. Another beautiful thing for the listener, it's a dialogue. So Voxer is another tool that goes in this direction. And if you look at it, just a slight little political comment, don't hate me. I know a lot of you listen, disagree with my politics, and a lot of you agree with them, but even the ones who disagree, I appreciate and love you and appreciate you listening to the show. So I just want to say one thing about that. I believe that the dialogue media is controlled by the right, or not even the right, but the libertarian. See, I don't consider myself a righty in the political world or a, you know, or really a conservative that much anymore. I kind of used to be more of one, but they've alienated me a bit in more recent years with some of their, you know, sort of old fashioned belief systems. But, you know, whatever. I think a lot of those systems should be respected, not hated. But, you know, just for me. I believe in freedom. I think people ought to be free to pretty much do what they want. And so I'm, I'm a libertarian, you know, I think small government is good government. We need government. But let's keep it, let's keep it under control, keep it small, because it just ends up invading us. But if you look at the one appearance on the dialogue media, the one appearance from the left, what was it? Do you remember? Well, I don't. I think I know they. I think I know. I'm pretty sure. Well, I don't want to say. I know. I do think I'm pretty sure I'll say that much. I'm 95% sure that they went bankrupt and I don't know if they ever reemerged. I don't think so because I certainly haven't heard about them. Do you know what I'm talking about? Hmm? Who is it? It's Air America. Yeah, they were all over, syndicated all over AM talk radio for a while, and they were the one voice on that medium of the left, the political left, and they didn't make it. So my theory about this is that if you have an idea that will withstand debate and dissent like I hope my ideas do about investing and so forth on the show, you know, you'll do well in the dialogue media, but if you don't, you won't do well in the dialogue media and you'll, you'll be stuck in the monologue media, the old media where it's a one way conversation. Well I can't even say say it's a conversation. It's a monologue. A conversation implies that it's a two way thing. Right? So little interesting tidbit there for you. Now last week I spoke at a real estate conference about rental housing. It's called the IMN Conference and a few of you asked for a recording of my talk, which I don't have yet, but they're supposed to provide it. Maybe I'll put it on the podcast. And many of you asked for my slides. So guess what? You can have the slides. Just go to. It's super easy. Just go to jasonhartman.com IMN let me see what would be the Whiskey Tango Foxtrot. You know those like pilots talk. And you know I do have 33 hours toward my pilot's license. I can fly a plane. Well, I know enough to be dangerous but I have flown a plane several times. But IMN that would be India. Yes, it would be India. India Mary Nancy. I don't know. Those other two I think are wrong but India Mary Nancy I m n jasonhartman.com IMN you can get the slides for free there. And we're going to be doing a lot more of this, by the way, a lot more material that we provide to you all free of charge, no charge for this stuff. And those slides that I mentioned several episodes ago when we talked about how various investment class sets act different economic environments and why that's important. I'm going to also create a page where you can go and download those slides as well. Anyway, those will be there for you. I noticed that the IMN link was not immediately working when I tested it today, but I think by the time you listen to it, it will work. So Jason hartman.comimn get those slides from my talk. I think you'll find those to be valuable. Meet the Masters of Income Property is coming up. It's just about sold out. I honestly haven't checked but we are going to cap it. We don't want to be overcrowded. It always seems like we are at these events. So you got to get your tickets like literally right now. Okay. If you want to go because it is just about sold out. There were eight tickets available last time I looked. Literally eight tickets. Before we get to our guest, a quick thing on Tony Robbins, I want to remind you it's great to be exposed to this. I discovered him so long ago when he was very early in his career And I remember the first time I met Tony Robbins and shook his hand. I mean, his hand was ginormous, huge. The guy is like 6 foot 8. He's a big person.

But he's got some big ideas, and they're really good. You know, he talks about this target, the forces that drive every human being, the six human needs. And I know when I was at his Unleash the Power within weekend a couple of months ago, I believe I talked about this a little bit. But I'll just give you a quick reminder because I'm at the Date with Destiny conference today, and again, they're coming up. So the first one is the need for certainty. We like certainty. And then some of us and you know, these needs. We all have all of these needs, but it depends how we order them as to what's most important and least important to us. And the next one is the need for variety. So those are contrary needs, right? You can't have certainty and variety at the same time. That's a paradoxical situation. So the next one, significance, and then the one after that, connection and love. And Tony says that's a paradox too, because if we are constantly seeking significance, then that's about us, right? It's about our being and what we're contributing and what we're doing in the world and maybe the type of recognition we're getting in the world. But the next need is connection and love. And he says those two are paradoxical as well, because connection and love means we're focusing more on the other person, and significance means we're focusing more on ourself. Now, admittedly, of course, significance, if we're going to be, certainly people like, look at Mother Teresa, right? The late Mother Teresa. She was very significant and she had a lot of significance, but she was outwardly focused in her significance. Tony didn't give that example. I just thought of that myself. So I hope that makes sense. But there are multiple ways to gain that significance, obviously. Okay. And then growth and contribution, those are the six, okay. He defines the last two as the needs of the spirit, growth and contribution. And one thing he said interesting today that I hadn't heard before, I hadn't heard him say this before, is he says progress equals happiness. Progress equals happiness. So even if we don't get what we want, as long as we're moving in the direction of what we want, that will provide us with happiness. In fact, we all know a lot of times we get what we want and it doesn't make us happy. Maybe temporarily it does Certainly, you know, we get that new car, that new home, that new relationship. You know, it's great in the beginning, but then we start to take it for granted and it becomes old. And, you know, it's just the way we are. You know, it's the way we're all wired. This is not. This is not any one person is that way. We're all this way. One of the great things about understanding the human animal is that we're all basically wired the same way. That's just interesting. You know, it's the same basic wiring. Of course, we prioritize things differently, but we all have these same basic ideas and needs and so forth. And so I'll share with you a couple of the questions he asked us to write out the answers to this morning. The first one was, why did you come here? Why did you attend? And so, you know, maybe if you haven't been to this event or you haven't been to any of these types of events, why would you go? What would be the reason? You know, Would it be growth? Would it be social experiences? Motivation, taking things to the next level? Fulfillment, Whatever it is? Right. Well, those were some of mine. Okay. I'm just reading what I wrote. And then number two, what would an extraordinary quality of life look like for you? And one of the things I think is a great exercise, and I remember doing this many, many years ago. I can't remember who even gave me the idea. It might have been Tony Robbins, it might have been Earl Nightingale, Jim Rohn. I am not even sure. And he didn't have us do this today, but I just think it really aligns with what he was talking about, is design your perfect day. Write it out. What is your perfect day? What do you do first thing when you get up? How do you feel? What do you do and what do you do throughout that day? I think that's a great idea. Design your perfect day, okay? And describe what your environment is like during that day and what your thoughts are like and who you're meeting and who you're hanging out with and all that kind of stuff. And then the third and final question before we talk about how progress equals happiness, what's prevented you in the past? What belief system has prevented you from getting there, okay? And what I wrote down is an improper focus, not focusing on the right things, and then allowing myself to be distracted by things that don't get to that. Question number two, that extraordinary quality of life. I can't wait to dive in. We've got six days of this and if you know Tony, they are long days, they're like 10 hours, maybe 12 hours long. It's crazy. We've got a lot more of it. So I will share with you some more next week after the whole event is done. Let's go ahead and get to our guest, Josh Crumb. Let's talk about inflation, deflation and stuff stagnation. We've got some awesome shows coming up, some awesome events coming up, of course. Jason hartman.com Click on events to register for the upcoming Meet the Masters. Just a few tickets left. Literally it's almost over. We cannot get a bigger room. Unfortunately, we are capped at this event. There's no bigger room available. So when it's done, it's done. And also the Venture Alliance Mastermind trip, our phenomenal trip coming up to Dubai. We've got some great speakers, one that we're working on that I can't. I so wish I could announce, but I just don't want to say it unless we actually get them confirmed. Go to venturealliancemastermind.com to check that out. That's venturealliancemastermind.com and let's dive in and talk to our guest, Josh Grum.

It's my pleasure to welcome Josh Crumb to the show. He is co founder and chief strategy officer of bitgold. He also has a background, as I believe he'll probably correct me on the title, as a precious metals strategist for Goldman Sachs. And it's a pleasure to have him here today coming from Vancouver, Canada. Beautiful place. Josh, welcome. How are you?

Hi Jason. Good, thank you. Thanks for having me. I think your timing was, you know, I know we scheduled this about a, you know, a month or so ago. So I think you had very prescient timing given everything that's happening in the, in gold and money.

Well, talk about that. Correct your resume for me, Goldman Sachs. Tell us about your background real quick.

Yeah, that's correct. I was an economist and head of metal strategy for Goldman Sachs in the Global Economics and Macroeconomic Strategy division out of, out of London. So worked with well known economists like Jim o', Neill, creator of the BRICS Term, and Jeff Curry who's been very prescient in many commodity calls.

Excellent. Fantastic. What, what do you see going on right now in the metals markets which are a great yardstick for, you know, what's going on in the overall economy? I mean gold has really done nothing in years. I'm honestly not a gold bug. I'm not really a fan of the metals much at all. Although I own some. You know, I, I think as an insurance policy, yeah, they're fine, but I just don't think people should really treat them as investments. Feel free to argue with me and debate with me on that. That makes the show more interesting. But, you know, if gold, if gold produced income, I would like it, and if it had tax advantages, I would like it even more. But, you know, what do you see going on out there? I mean, you know, I'll just maybe give you a little more ammunition here. You know, with, with this massive amount of money creation that we've had under Obama, everybody's wondering, why don't we have more inflation? I mean, inflation's been really tame. Of course, the government's always understating the numbers. So if they tell you 2%, it's probably 4, you know, it's still relatively low either way. What are your thoughts?

Sure, thank you. Yeah, no, I think there's a lot to work with there. You know, first off, I, you know, I agree with one comment you made that gold really isn't an investment. And I think it's actually, you know, starting with that point, it's very important to kind of work backwards. That's where I totally agree. Gold is not something that creates income and creates, you know, additional return and prosperity. What is, It's a savings asset. It's something that retains value and it holds value. And that's happened, you know, for thousands of years. But even if you look at, you know, recently, you know, even over the last 10 years, there's actually not a bank account, you know, that exists where you could have just put, you know, savings without doing anything, without investing. Just put it in a bank, let it earn interest and, you know, what do you have in 10 years?

Gold is actually, you have less.

Because inflation and taxes are destroying your wealth.

That's exactly it.

No one except a fool.

So gold over time is not an investment. It's not about picking stocks like competing with Apple or Google. What it is, is it's something very low risk that you can just buy, hold and it'll maintain its value over time. And that's what gold's role has always been. It's not to make you rich, it's protect you from, from, you know, from being poor through inflation.

Okay, so certainly, you know, you, you can say that. And you know, I've heard all the arguments and believed many of them myself actually. That's why I own a little bit of these metals. All the metals, basically. But Look, I mean, 5,000 years ago, you could Buy a toga and a pair of sandals with an ounce of gold. Now you can buy a man suit and a pair of shoes. We all know that, and that's good. But you know, if you, you bought gold at what, 18, 1900 dollars an ounce, and now you're having to sell it for 1,200 or whatever the current price is. I don't know. Is it really a store of value?

That's exactly the problem that we often get trapped into thinking you don't build savings all at one time. I'm going to rotate all of my savings into something at once. It's something you accumulate over time. So it just depends on when you pick your starting point. If you pick your starting point at 1800, sure. But let's just go back three years before that and pick the starting point at 700. So that's really the point is if you vwap or you average into gold saving a dollar a day or $40 a month, that's where gold unequivocally outperforms any bank account that's ever existed. And so it's just another savings medium. But there's. And now I'll get back to your other question about inflation, and this is the most important part. You mentioned a toga and a suit. That's all fine. We think about consumer goods. But the far more important thing is gold holds its energy store value over time.

If you measured it against a basket of food or energy or utility bills, measure that over 10 years, 20 years, 1000 years irrelevant of currency. Gold holds its commodity value. And so that's very important.

And does it just hold it, Josh, in your eyes, is it just holding? Is it even or is it actually improving? You're not improving, but you're holding your own. You're treading water, which is better than you're gonna do in a bank account. We know that.

Exactly. And that's exactly what it's supposed to be. And I also argue that it depends on really what is your cost of living. If your cost of living is 30% commodities, your utility bills, your gasoline bills, your food bills, which is even in the Western world, it's probably 30% or more is directly related to energy or commodities. So in that case, you should be trying to hold somewhere around as much as 30% for those that are far more well off. That level can be much, much lower as a proportion of their income. But that's the important metric that I always use, and it doesn't appreciate.

You mine gold from the earth with the same Amounts of energies and with the same cost structure as you pull anything else out of the earth. So that's really where it gets its mathematical equivalence. It's not growing, it's just holding its value.

Okay, all right, well, let's settle for that. That's not bad. I mean, it's certainly better than just a good old savings account. How does it compare to Wall Street? I mean, you're a Wall street guy. I like to tease Wall street and give them a hard time and call them the modern version of organized crime. You might agree with that, that most Wall street people do, even if they're part of it.

I'll still be a little bit careful because of my background, but I'd say directionally I do agree with that, but I don't think it's. I don't necessarily believe it's intent. You know, at least, you know, at least the economists that I worked with at Goldman actually were very good people and really, you know, believed in the work they were doing. But the, you know, it's really more. The system is designed, you know, we have a policy that. And again, I'm not even want to debate it. I just want to say what it is. We have a policy that's trying to design maximum growth and increase aggregate demand by every dollar of wage out of your labor. They wanted to depreciate it as fast as possible. So you're in Venice. You're incentivized to maximize growth by spending it. So we're on this treadmill all the time where we can't just spend our time working, be productive, and then save that until when we need it. We're forced onto this treadmill to always be investing more or spending more. And that is the problem.

That's why all of Wall street exists, because they're the ones constantly creating new products so you can keep up with this hamster wheel of just maintaining your value. Does that make some sense?

Yeah. Yeah. Okay, so where are we going? It's interesting to hear your perspective and I like your balance. You seem to have a very balanced view of this. I'm glad you didn't come on and tell me silver's going to $75 an ounce. And you know, gold is going to be 5,000. It's interesting that Peter Schiff, who's been on the show in 2007, he predicted, or in 2008 maybe, I think it was then President Obama, not candidate Obama, he said that gold would be $5,000 an ounce by the end of Obama's first term. And the complete opposite happened. So I like that, you know, you seem to have a reasonable view of that. But, but where are we going? I mean, look, we've got all this money sloshing around. Or I shouldn't call it money, I should call it currency, which you, you'd agree with me. It's not. Certainly not money. Yeah, yeah, exactly.

No, I appreciate the differentiation, that that's important for us too. I completely agree. And, and, and yeah, and that's, that's the important part. Currency is just this Ferris wheel that you have to get in and off between the things you actually need or want. Correct. So the reason I say things with all that sort of balance, I can't predict what currency is going to do. Currency is the system that's floating systems of debt and speculation and trust and confidence. Gold is just this piece of metal that has an energy cost that is equivalent to other things you need. So what I can say unequivocally is in 10 years, 15 years, your amount of gold purchasing, your gasoline or your food bills will be relatively flat. I have no idea what happens to the price of gold measured in a floating currency between now and then.

So that's the first part that's quite important. So addressing the comments from Peter Schiff, I don't want to live in a world that gold goes to 10,000 because that means that my food costs went up 10x as well and my wages probably didn't match that, just given the nature of the system. So again, for me, it's all really about math and these fundamentals of physics and economics. It's not about scaring people or trying to push them into a certain ideology.

Okay, so where are we going? Tell us more about where we're going. Because, you know, I've been buying real estate with a, you know, a philosophy that inflation just has to come. And one of the core things I love, you know, with income property, you're going to hit a home run in an inflationary environment that's pretty obvious. You're going to do okay in a deflationary or stagnationary environment, because in those environments you're just looking for yield. And if you can get the yield from the cash flow, regardless of what the capital price of the investment does, you know, you're okay. It's not a home run though. But in an inflationary environment, especially because of what I call inflation induced debt destruction, where not only does the price, you know, which is, we can argue real and nominal dollars for sure. Josh, all day, which would be Valid. But not only does the price of the asset increase the price of the commodity, but the debt is debased by inflation. And that is the hidden wealth creator. That's the home run. That's just beautiful.

Yeah. And look, you've got a almost 40 year track record of constantly increasing debt to show that, yes, a leveraged asset like real estate, particularly if the income can keep up with paying the service on the debt, that it will appreciate faster than an asset without leverage. So, you know, I don't think there's anything fundamentally, fundamentally wrong with your rationale. I guess I just, you know, it really depends on, you know, one, the timeframe and also the nature of your audience, you know, us millennials. And I am right on that, that borderline. But my, you know, business partner and all my employees and team, you know, are all millennials. We don't really have that. Like, you know, we don't have, you know, between student loans and everything else, how do you actually get into that system where you can have that first property to leverage into the next one? And that's the problem is for someone that just wants to keep up, buying $10 of gold at a time on BitGold is much easier than saving a depreciating dollar to get that first mortgage or that first down payment, right?

Oh, yeah, because it's far more divisible. So that's great. Okay, so. So just let me ask you the question. Let's hear about BitGold.

Sorry, I don't think I've answered your question on inflation.

Yeah, yeah. What's coming? Are we going into an inflationary environment, a deflationary environment, just general stagnation or God forbid, stagflation, which is really ugly.

So there's two pieces to the trends that are very, very important, and they're actually somewhat independent. What's happening in monetary policy is really driven by wage inflation. And then that's something we really haven't had in probably 20 or 30 years, real wage inflation. The second part of it is commodity price inflation, which is very much driven by technology. And what's happening in energy and resources, which is global in nature and not specific to any country. So whether it's the price of gold or just generally prices stabilizing over the last few years, you know, like grocery bills, most of that has been because of technology. Nothing that the Fed is doing, it's the shale oil boom has really changed the game globally in energy. So that's a positive tailwind for people and consumers. However, what the Fed is doing and has stated Very, very strongly over the last month or so is that they're going to wait till they see any real sign of wage inflation until they raise rates. So basically they're not going to be preemptive, they're going to be reactive. So in my mind, I think the energy deflation has played out. Short term oil prices might keep falling, but the real anchor point, the cost of producing new oil is going to start flattening out and we will start seeing inflation because that's their, you know, they're telling us they want inflation and we will see it. They won't fail at that.

Right, right. Yeah, they, they can create inflation if they want to. There's just, I mean, I have never understood the argument from the deflationists that say, well, they just can't create enough money to reverse these. Of course they can. The amount they can create is unlimited and it's ridiculous.

And so, you know, their basket, and I don't want to get too far into the CPI basket issues, but let me ask you this, anything that matters, health care, education, food prices, are any of these going down?

And so this argument, and it's almost 99% accepted that we have no inflation. Except if you look talking about a micro industry, that matters.

And when you say no, you mean very low. Right. You mean within like the 2% target. Right. So you don't really mean no inflation. That's a figure of speech.

Exactly. Everything I've been talking about, we're talking about 5 to 10% compound inflation over long, long cycles. This isn't anything that's short term education prices or health care prices. These aren't going up by 1 or 2% a year.

That's the importance of having a savings medium where you can actually hold your wages. And my co founder's a former portfolio manager and he made a very interesting point in today's environment just to keep up with the. Since gold was demonetized in the 70s, protein prices, meat protein prices have compounded by 5 to 6% a year over decades. So in this environment, you've got to be Warren Buffett just to keep up with the price of food. That's how out of whack our financial system is, is, you know, forget the, you know, 0.25% you get at your bank, you now have to get the returns of Warren Buffett to keep up with food prices.

Yeah, that's, that's really interesting and sad too. Definitely. Okay, so would it be fair to say that your, your basic prediction is that inflation is coming or not? Or is that not right?

I believe so, yeah. I mean, I think inflation has always been here and it's, and it's going to increase. I mean, you had QE1 and then you had QE2 and you had, at some point, just like the European Central bank, they're going to do whatever it takes to create inflation. They're pushing so far into their theoretical toolbox that they will make something happen.

And the government has a real, very legitimate incentive to have inflation. I mean, there's not only the Phillips curve argument, but there's also just the fact that they get to debase their own debt to foreign countries. And it's a great deal for the government. It's an awesome deal.

Yeah. But again, we started this business on the mathematical properties of gold for savings. And I really, I actually am probably more left when it comes to those things. I don't think there's any grand conspiracy. I think they've been very, very fooled by the academic central planners, you know, that this is somehow good for everybody. And so I don't think there's any government reason why they're trying to deflate their debt. I think they honestly are trying to get wage growth, but the fact that they can't get wage growth means that they have to create social programs to a social safety net which is getting more and more expensive. So I don't see it as any grand conspiracy. I just think it's, you know, a flawed policy that, you know, we need to have a more open debate and not a, you know, an absolute monopoly on academic thought when it comes to economics.

Yeah, right, right. And, you know, that's, of course, one man's opinion. You know, nobody knows if it's a conspiracy or not except the conspirators, if they exist.

Having worked at Goldman Sachs, I heard my fair share of conspiracies that I sat in the room and I can honestly say that we were just trying to figure it out just as much as the next guy.

Right, yeah, very interesting. Well, good. Okay, so tell us about bit gold. What is it and what does it do and why is it important?

No, I appreciate it. You know, we spent a lot of time on the macro and you know, it's for all the reasons I just said, you know, because I, you know, we believe, we believe in this so passionately. We just wanted to make it as easy as possible for anyone around the world to buy gold, you know, buy it, you know, a dollar at a time, right from their mobile phone while they're standing in line for you know, a coffee and not have to think twice about it. You know, so just like any other great technology, we're democratizing access, lowering friction, you know, offering a better user experience, you know, all of the things that the technology is doing. And so we just want to, if you will, you know, disrupt the consumer gold market in a way that we don't have to, you know, you don't have to go to a coin dealer and pay 5 or 6% to buy gold and you have to buy it at a minimum of 1000 bucks at a time. Now you can buy it a minute at a time over a cell phone. And that's really what BitGold's all about, is just making it easy.

Okay. So it's basically a way to buy gold. Now where is this gold stored and how do people get gold access to it?

Yeah, so that's what we really thought long and hard about is what's the best way to manage this. So it lowers the risk and we are publicly traded. So for us that's also a way to increase transparency and trust.

In our business. But you get to choose. Right now we've got I think seven vaults open, Brinks vaults. Brinks manages the gold gold and it's insured by Lloyd's of London. But you can store your gold in Toronto, New York, Hong Kong, Singapore, Dubai, Zurich. And we're going to, you know, open more, more vaults to come. But, but it's essentially an online bank Account or even PayPal account and I'll get into the payments piece in a second. But it's a way for you to own gold. Just like you don't have a savings account or bank account, but also be able to use it, spend it and have a debit card with it and that sort of thing. So it's, it's really a gold, a gold backed bank account.

Okay, so they then people would never actually access real gold. Right. They would only trade in the, basically the symbol of the gold, which is the, you know, the stuff attached to the account, like the ability to buy and sell like PayPal. They don't actually ever see any gold or, or do they, if they want to?

Well, they do, yeah. We actually mint 10 gram cubes, so that's much less than, you know, it's about a third of an ounce or you know, three, 400 bucks. And you know, because it's like a bank account with your address information, you press a couple buttons and we actually ship your gold right to your house, you know, so yeah, so it's fully redeemable it's, you know, the ethos of the business is fully redeemable, fully allocated. We're not relending it.

Oh, that's really interesting. So they can be just basically buying the gold through you, and then at some point, when they've got a third of an ounce, they can say, well, ship me that third of an ounce. And they. You can. They can stick it in their. Their safe.

Exactly. That's. That's exactly it.

But how can you do that? Because they must have to pay some handling fees or, you know, premium above spot price or, you know, and what do you do? Like, how do you dollar cost average in. I mean, that's got be to be just incredibly complicated.

So all of our business was designed and it is complicated. We built a lot of partnerships.

But we didn't want to reinvent the wheel like all of these great technology companies. We just want to be the software that aligns and makes everything efficient in between services that already exist. Brinks is already out there. The big bullion banks are all already buying and selling gold in a large, deep, liquid market. And so what we did is, you know, we actually make it very, very simple. Don't have to think about it. 1% to get in, 1% to get out. That's it. You can buy gold for 1%, you can redeem gold for 1%. And we're getting, you know, wholesale or spot prices from the big bullion banks. And as far as shipping, we're just passing through the, you know, Brinks ships metals and secure goods and all that. So there is a fee. I mean, you know, there is a physical cost for shipping, but our company's not capturing any of that. We want to lower the friction and lower the costs as much as possible. So it's just very simple to think about 1% in, 1% out. That's it.

Okay, and then pay Brinks to bring it to your door. What happens? A Brink's truck shows up. A Brink's truck shows up at your door?

Yeah, it's $25. And.

There may be a variable shipping rate, and it just shows up.

You know, that's interesting. Maybe tell me about this. I mean, you know, I've purchased metals, you know, from places they just send them US Mail. I can't believe it. It blows my mind.

And actually, it brings up a good point about the real value of gold. And if you think about it, you know, shipping an iPhone is, you know, 700 bucks too. So it's really no different. But people intuitively know that that gold is permanent and something, something beyond the value of an iPhone, even though they're nominally the same price. But yeah, I mean, again, insured shipments, no matter what it is, is an insured shipment. So you just have to pay the cost for those logistics.

Interesting. Okay, what else should people know?

Yes. So after the first part, the savings part, the second piece is being able to access and spend your gold. And so that's where we issue a MasterCard prepaid card where you're actually able to load from your gold account and spend at traditional points of sale or online, anywhere that MasterCard is accepted. So this is the first time you've been able to actually spend gold from a gold savings account. In the future, we're actually working on partnerships to make it more like a PayPal where merchants will actually start accepting gold directly. And the main advantage of that is, if you think about overseas markets, is there's so much friction going. You know, typically the consumer pays 2.5% or more in an exchange rate even going say across Canada, you know, buying something in Canada. And then also on the merchant side, they're paying 2 or 3% to process a cross border transaction. However, if you're just sending the value of gold, it's not moving, it's just sitting there in a brink's fault. But if you're sending the value, the title of that gold back and forth across the border, it's much, much cheaper. And so in the future we will start getting into things like remittance markets and spending money around the world by using your gold account. So step one that's available now is really the gold savings account and the gold MasterCard. But step two is building out a global merchant network where you can start using gold like you use your PayPal account.

Yeah, very interesting. So the gold bugs, and I know you're not a gold bug and I appreciate that, or, or maybe you're not. You know, they always say, well, you know, the dollar and every currency on earth is fiat currency. Fiat of course means by authority or by decree. And you know, it's, it's, it, it has nothing real backing it, it's just a symbol. It's fiat money. Well, things like bit gold, isn't that just fiat money too? I mean, you know, it's, it's a symbol of something that a company says is there. Nobody really knows until they have it shipped to them. You know, a lot of people have stated that they think Comex is a Ponzi scheme. You know, how do they know what's Going on with Bitgold.

Yeah. So the important thing is, you know, let's compare the risks and compare those trust issues. The banks tell you that they're lending out, you know, 90% of your money, so you already know it's not there. And I don't want to get into all of that.

And that's through fractional reserve banking.

Exactly. So to our ledger, though, what we can assure is we're a publicly traded company with quarterly financials, quarterly audits, all of the systems and controls. Every quarter.

Our gold balances. And this is not in our company accounts, but this is segregated accounts on behalf of the customer. Our whole legal framework is called bailment law, where it's always your gold, it's always your title. We just manage the instructions with that gold. So every time you buy gold on our platform, it has to physically exist and it doesn't actually confirm until Brinks says that that gold is sitting in our cage and allocated to you. So there's checks and balances all the way through the system and our whole legal structure is designed that way to assure that you always have physical backed gold in your account.

Is there anything I didn't ask you, Josh, that you should just talk about? Maybe something I just didn't think of. What do you want our listeners to know other than what you've said?

No, I think just some of the growth metrics of the company. We only launched about four and a half months ago. We've already signed up over 350,000 people, making us one of the fastest growing fintech or financial technology technology companies out there. And, you know, this message is really resonating with people that, you know, this, this is not about being a gold bug. This is, this is about, you know, just having a stable bank account that's got thousands years of math behind it where it's never not held, you know, the value of commodities. And so, yeah, so, you know, I think, I think, you know, the easiest thing to do is to, you know, open an account and try it. It's free. There's no observation obligations. You just, you know, you sign up. And we've designed it very much like the tech companies where it's easy to sign up. Very, very smooth user experience and, you know, just, just, you know, give it a try and watch, you know, watch how gold holds value over time.

Yeah, good. Good stuff. Well, hey, Josh, thank you so much for joining us today. And is the website just bitgold.com?

That'S correct. Bitgold.com and the public company is actually called Gold Money. You know, for us, it's really.

Oh, it's James Turk's company.

Exactly. Actually, after Roy and I founded Bitgold, very shortly after actually, we ended up acquiring James Turk's company. So the parent company is now called Bitgold, but it's managed by Roy and I and James is still on the board.

Okay, and who's Roy?

Sorry. Roy is my co founder and the CEO of Gold Money.

Good stuff. Well, Josh Grum, thank you so much for joining us.

Thank you very much for having me.

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