Unsound Monetary System | David Morgan

Hello again from Sprott Money, Sprottmoney.com. We've come to the end of November and the first part of December 2024. My goodness, where has the year gone? But it is the end of November, first part of December, and it is time for your monthly wrap up. I'm your host Craig Hemke and joining us is my old friend, Eric Sprott's old friend, David Morgan. David, nice to see you and thank you for joining me.

David Morgan (00:34)
Mm-hmm.

Greg, always a pleasure to be with you and thank you.

Dope With A MacBook (00:41)
Yeah, before we get started, it's the holiday season, David, and you got a little of that Santa Claus look to you, my friend. Hey, just to remind everybody, give the gift of sound money this year, not just a gift card. mean, gift cards just get thrown in a drawer someplace. How about some silver? How about, you know, some grams of gold? Whatever it is, give the gift of sound money. You can find all sorts of excellent gift ideas on the SprottMoney.com home page.

David Morgan (00:46)
Yeah.

Dope With A MacBook (01:11)
look for their holiday catalog, click the link and you'll see all kinds of special items, special prices. Again, give the gift of sound money. Everything insured, if you buy over $500, free delivery as well. One stop shopping, spropmoney.com. David, before we get started, I've known you for a long time, but maybe there's some folks watching that don't know much about David Morgan and the Morgan Report. You're an analyst and author and you've got...

pretty interesting new project you're working on. Tell everybody a little bit about what you do.

David Morgan (01:44)
Sure, think the easiest thing to do, Craig, is send everybody to the website and get them to sign up for the free newsletter. It's just a little box on the right-hand side. TheMorganReport.com, so get the word the in there, TheMorganReport.com. If you hit the About tab, it's got my bio, it's got my CV, the Australians call it, your resume. And on that page, if you scroll down, there is a link to a free movie called The Four Horsemen Film.

And that movie goes into really the big problem. And the big problem is an unsound monetary system and it attacks it from many vectors. it's worth watching for someone that's new, especially for someone that's sort of like questioning, you know, just doesn't feel right like the matrix, you know, you're here because you feel it. You felt it your whole life. Something isn't right. You don't know what it is.

Well, it kind of answers that question for a lot of people or it revivifies it for people that do know and it kind of simplifies it. know, we're stories always being distracted by this left, right, up, down, you know, one side or the other side instead of that neutralizing force that brings both sides together because a lot more in common than we have that are opposites. It's just, we're always taught to look at the opposite instead of that neutralizing force. So that's,

That's something to look at. I'll leave it there.

Dope With A MacBook (03:12)
And this new project you're working on, is that something you can?

David Morgan (03:15)
It's back to the neutralizing force. It's about, it's called Silver Sunrise is the name that was our working title. And I decided not to do another book, Craig, as you know, I've written three books and had some pretty good success with them. But one of my friends said, why don't you do a movie? And I'm, man, I don't know anything about it. And you know, when you're in, I think this is my belief system, but when you're in the right place.

things kind of work for you, kind of work in your favor. It's almost like the universe is saying, yeah, that's your purpose, we're gonna help you out. That's my take on it. So I just happened to find the right guy at the right time to help me with the movie that's done several. His name is James Yeager, he's done 10 documentaries. They're almost all on the, let's say the more freedom oriented, patriotic side of the equation. So we came up with the idea of Silver Sunrise and the synopsises.

We'll take a little bit different look at the monetary question and it delves into the stress, fear and control that money exerts over our lives. Despite its essential role in society, many feel enslaved by money. Silver Sunrise explores the emotional and mental toll questioning why money drives everything from love affairs to conflicts. Take it's not a trip of love and hate, Silver Sunrise traces the evolution of money sharing from tribal sharing to gold and silver from paper debt and electrons to central bank digital currencies.

sheds light on the manipulation of money and.

And the banking cartels hell bent on exploring, excuse me, exploiting civilizations with endless debt by better understanding monetary systems and how they are corrupted. Silver sunrise enables one to postulate a new brighter future, one without the overwhelming stress, fear and control associated with money. So that's sort of my life's goal. As know, Craig, really, the more, the older I've gotten, the more I've thought about this over and over.

It's, really think that the sound money system is required and absolutely necessary. But I also think it's a stepping stone to the next level. I think there could be, you know, that Star Trek thing. I mean, I am an optimist. I am an idealist. Do we even need money? I wrote about that in the silver manifesto in my last chapter in that book, beyond silver questioning. I'm not saying we do or we don't. What we need is honesty and integrity in the system, which we don't have. It's corrupt as hell.

And so getting back to something everyone trusts and believes in again, I think is absolutely the foundational starting point. But if we can get on the right place, where can we move to rather than seeing the system corrupt again and again and again?

Dope With A MacBook (06:02)
Yeah, that movie, The Silver Sunrise, something we might expect in 2025?

David Morgan (06:09)
Yeah, it's done being filmed. I'll talk more about some of the interesting situations we had trying to get certain people on board that would say yes, but couldn't make it and all that. And I'll do it in a very gentlemanly way. But like any project, especially a big one, there are struggles here and there and things don't always go the way you want. But nonetheless, we have a lot of different interviewees and it's the editing now and that's

way out of my domain. That's the editor's job, the producer's job, and we're gonna, you well, and he thinks he might have it by Christmas, but I won't guarantee it.

Dope With A MacBook (06:48)
Okay, all right. Well, that gives there is something to look forward to.

David Morgan (06:52)
Well, sorry to interrupt, but I definitely want to send it to you and Eric and now everybody at SPY, everybody that I can, but I'd like to interview you or you interview back on what did you get out of it and what would you change? If you were in the film, what would you say? What did I leave out? Because if it hits, which I'm hoping it will, of course, then maybe we can do a sequel to it, but I'd have to fund it differently. But anyway, that's for another time.

Dope With A MacBook (07:06)
would be great.

Well, I look forward to seeing it and I'm sure everybody that's been watching is Googling the silver sunrise and we'll be looking forward to seeing what comes out either later this month or early in 2025. David, you mentioned the unsound monetary system that we're currently in. I want to get your thoughts on what happened in November because gold fell almost exactly 10 % from its highs.

And silver obviously, as it always does, a little bit more than that. And it all seemed to kind of start ramping down after the election of Trump. You mentioned being an optimist. I can't claim that title for myself. I mean, I see a system that, you know, you get to this end of this debt-based system that it's expanding so rapidly and exponentially at this point that it's really hard to turn it around.

But there's been this optimism that maybe Trump would and that was part of the reason why the metal sold off and the dollar rallied. How do you feel about this? Was this a one, just kind of a one-off in the month of November and proofs in the pudding next year? Or do you actually, do you think that there is a way to reverse all of this monetary madness?

David Morgan (08:37)
No, I agree with the former, not the latter. It's a one-off knee-jerk reaction. We were pretty much overbought on the commitment of traders. Trump got in for whatever reason. There was more selling pressure than buying pressure. Trump probably had something to do with it. And away we went, and we got a pretty good move down. And these are to be expected. The bull market really does shake off the bullish people.

If you're leverage, you know, 10 % moves, that's a killer. You know, I mean, it's wonderful if you're on the right side and you get a 10 % move because in leverage, you're getting more like a 50 % move. You got a five to one leverage. So, you know, think you're going to lose half your money on your margin account or gain half of it. I mean, that's a big move one way or other. So I think that's it. If you look back into past history, there was a bigger gain under the Trump administration in gold than there was under the Biden.

Dope With A MacBook (09:16)
Yeah.

David Morgan (09:35)
Administration with percentage basis. So I think going forward is the math probably all know that it really doesn't matter which administration is in power as far as What the problem is with the monetary system might they mitigate it? Yeah, and might it Dampen the enthusiasm for ceremony it could I mean we'll have to see how this DOG works out, but I did the math on that Craig and

If you basically got rid of every bureaucracy in the federal government that wasn't absolutely necessary, that's about 20 % of the budget. So you still have the guaranteed military, social security, Medicare, and all these guarantees. That 80 % of the budget that doesn't go away breaks you even. In other words, all tax receipts will just cover the needs of the federal government on an ongoing basis.

And that's if and only if interest rates don't go any higher. So the best absolute perfect world, we're breakeven. We're not, and to get rid of the federal budget, you've got to be able to pay it down. Well, if you get rid of everything and you can't start paying it down, how does that work? It doesn't.

Dope With A MacBook (10:37)
Yeah.

It does seem I've called it an almost hysterical reaction because it seems so over the top kind of pie in the sky again. Maybe I don't look I'm all for anything they can do to fix things. The last I heard though there was no line item veto in Musk and Vivek aren't just going to sit there and just start slashing stuff. That's all got to go through Congress and and everything else. So I seem a little overcooked but here we are David Silver has.

David Morgan (10:55)
Thank

Dope With A MacBook (11:23)
Found some support at its 200 day moving average like it did last summer And is holding above $30. What do you make of that now as we head into December and? Turn the corner to 25 you like that price you think that that we've got some upside

David Morgan (11:39)
I really like it a lot, technically. mean, the breakout from, you know, it's more of, it's an art and science. It's not really a science, but 2950 was actually the breakout, but you know, round numbers are very important in commodities, whether you're trading, you know, wheat or corn, it doesn't matter. These round numbers have significance. So 30 is really important psychologically in 2950. I was surprised in a way that it didn't test that level harder than it did. And so I think we're definitely.

going to continue to move up. But I also think we're going to be in a trading range for a while. So we could go 30 to 35 again, another time or two before we break through that 35, which is the most recent high. And that's what I think will happen. I think we're in at least a two month trading range for both gold and silver. also was at the New Orleans conferences. We talked about before we started the camera and

Second speaker up is a big Elliott guy and he's very good at it. And he was actually suggesting we might be like halfway through 2025 before we get through a trading range. I don't think it'll take that long, but no one knows the market. He doesn't, I don't. We know markets, but we can't predict the future with precision every time.

Dope With A MacBook (12:57)
But it has been a good year. Unless we get a really sharp pull back in December, some of the best, I mean, might be the best year Gold's ever had, at least since, maybe since we've been keeping track.

David Morgan (13:08)
Well, that's a point I want to further. We're talking about the commodities markets. mean, they have to consolidate the gains. So if it made a nice move and fairly rapidly, and it kind of has to digest those gains. then, you know, these markets, as I coined the phrase, wear you out or scare you out. You know, you get those big down moves that scare you out or that wears you out. It keeps going sideways. Well, wait a minute. I bought in January, you know, I two goals to get financially fit and to get my health better, to get more fit myself.

Dope With A MacBook (13:11)
Yeah, please.

David Morgan (13:38)
and it's been six months and silver is still the same place I bought it. That wears people out because believe it or not, most people, especially amateurs, think that the day they buy a stock or a commodity or a futures contract or an option or whatever it is, it's gotta go up the next day. Heck, they bought it. It's gotta work in their favor the very next day. And it does nothing other than move sideways for six months. A lot of especially new people just get discouraged.

Dope With A MacBook (13:58)
Hey, that's how I do it.

Well, and so David, let me ask you this, because you've you've almost devoted your whole life to silver. There's a lot of talk, I even saw it again last week, about numbers out of the Silver Institute, this physical supply shortfall that we've seen. This will now be the third year in a row and we're up

Well, by their numbers, over 600 million ounces of a supply deficit accumulated, cumulative over the last three years. So for all the people out there that are like, well, how come that doesn't ever seem to really impact price? will that eventually impact price? I mean, what would you say to folks that are kind of new to silver that are kind of scratching their heads looking at that?

David Morgan (14:50)
Well, Craig, what most people don't know is we had a silver deficit from 1990 to 2005. In 1990, we had 2 billion ounces of silver above ground. And after those 15 years of continuous nonstop deficit, we were down to 500 million. We ate up the above ground stockpile by 1.5 billion ounces. And if you look at our price chart versus those years, you'll find out silver barely moved. But this time I think it's different. And here's the reason.

Dope With A MacBook (15:15)
Yeah.

David Morgan (15:20)
We're doubling the amount of silver deficit. The average then was 100 million ounces per year on an average basis. Now it's over 200 million ounces, but there's a lot more awareness about it. So markets move on psychology more than math. mean, supply and demand do mean something, but when people worry about their future, what the dollar is going to be worth, these things really play in, especially the precious metals. So I think it will have more effect this time.

But as far as the deficit moving, and I mean, when I saw that and I knew that deficit was going to continue, I mean, I thought it was just a matter time before we got a rocket ship. It was a delayed reaction. If you look at what happened in 2005, we started to replenish the above ground supply from 2006 onward. So above ground stockpiles built from 2006 all the way up until three years ago was starting to deplete again.

And when did silver peak the last day of April, 2011. So that was six years on. So there's kind of a delayed reaction. You know, if you do a sine wave and you overlap it, I'm not trying to get a tentacle. Anyway, the point being is that yes, it has an effect, more or less a delayed effect.

Dope With A MacBook (16:37)
How much silver do you think there is now? You gotta guess?

David Morgan (16:41)
Yeah, it's tough, know, really to know. mean, I know what there is in the above ground warehouses, the ETFs, you know, and all that. So we're looking, I think at about three billion, maybe four at the most. And when I say silver, I'm talking about, you know, commercial bars. So maybe three, I'd say it's actually less than the amount of gold that's in inventory. And I'm talking about monetary silver. The silver market is commercial bar.

Yes, there's a retail market. Yes, it's a very big market. And yes, it affects the price dramatically, but it's the silver squeeze when you start taking these thousand ounce bars and stacking them like Warren Buffett did. It's when the institutions come in and start moving into the PSLV. It's when the institutions come in and start buying it for their pension funds. And it's when the industry says, I got to stack some silver too, because we need this inventory. We're out of business.

and our supply line is short and we had a hard time. We had a six week delay last time we put an order in. We're not gonna let that happen this time. I'm gonna order early. When those two forces come together, Craig, I think we're off to the races, especially on top of, hey, wait a minute, our deficit is 250 million ounces a year. What if it's greater than that?

Dope With A MacBook (17:57)
Exactly. So as we look ahead then, David, let me add, you mentioned sentiment. Let's give everybody something to watch as we go through December and end the year and move into January. December typically pretty good seasonal time for the precious metals. I'll remind everybody listening, the last seven Decembers have been positive for gold. On average about 3%.

So, okay, that'd be all right. You know, silver would play along if that happens. So, David, if that does happen, let's say silver ends up 31, 32 on the spot market. That would mark the highest yearly close of all time. Do you think that would be something that would be significant, more than just, hey, look at this, that it would actually get some additional attention from some of those big money investors you mentioned?

David Morgan (18:52)
Absolutely. And in two ways, not to get too esoteric, but it's right in your face consciously and it's subconscious as well. Because in the back of the minds of a lot of money managers, pension fund managers, hedge funds and all these types, there's, they know that this stock market situation and the bond market are both areas and even commercial real estate. And they got to look for something else. And where are going to go, Craig? There's not many places to go.

and the metals markets are so small. And then you look at the crypto market and all of a sudden, you know, it's taken off again. Where are you going to stick those games? If you use, you know, some common sense, you want to what? You want to put it into something. If you really want decentralized finance, there's no better decentralized finance than gold and silver coins. I mean, that's as decentralized, anonymous, real wealth for, you know, for eons, whereas the crypto market's what? Not even 20 years old.

Dope With A MacBook (19:51)
So let's keep an eye on what $32 something like that.

David Morgan (19:52)
So let's look at 32. like that.

Dope With A MacBook (19:58)
something to root for as we go through the month. It's going to be an interesting month. That's for sure. know, thing we didn't even talk about is if the economic data now suddenly won't look quite as rosy now that the election is over. Hmm. I wonder if that might play into things. How rare. Yeah. How surprising would that be, David? Jeez. All right. Tell everybody you mentioned as we began, the Morgan report is something you've been doing for years. How do they contact you if they want to know more? There's a

David Morgan (20:10)
Yeah, how rare.

Dope With A MacBook (20:27)
newsletter or free email they can sign up for.

David Morgan (20:31)
Yeah, just go themorganreport.com, get in the free letter. There's a contact us. I mean, we have a phone number. Get a hold of us that way. The documentary's at silversunrise.tv. And I'm on Twitter a lot. So if you go to at silverguru22, almost all those feeds are from me and my webmaster has access to the accounts, just he and I. So almost everything that's posted or commented on. lot of stuff I put up there, Craig, is not that I agree with it. It's to make people think. I mean, this thing about

Trump saying, you know, you got to use the dollar and if anyone doesn't want to, I'm going to put a hundred percent, you know, tariff on it. I mean, come on, Mr. Trump. And people thought I was agreeing with them. wasn't. I put another tweet, I think last night from Judy Sheldon that wrote the book, Good as Gold. I interviewed her recently on going to a gold back bond and trying to get the United States government to acknowledge gold as a monetary asset.

Basically as the late great Jim Dines used to say, gold is the monetary hitching post of the universe.

Dope With A MacBook (21:36)
Where you interviewed Judy Shelton. Is that a public interview? Is that something people?

David Morgan (21:36)
I did.

Yeah, go to the blog, go to the Morgan Report, go down the blog tab. It'll be on the front page and you'll be able to see it. I asked a lot of questions no one else asked. I asked about my bi-metalism, I asked Silver in the monetary system. I asked what you thought about being a mono standard and why that isn't as good as a two metal standard. And, you know, I drilled pretty deep. got, you know, some pretty good feedback on that.

Dope With A MacBook (22:07)
Well, I know what I'm going to go do next and I encourage everybody watching. the more what's the website? Is it just the Morgan reports their little hat and hyphens and.

David Morgan (22:17)
No, no, no, that's long gone. It's the Morgan report.

Dope With A MacBook (22:19)
which is The Morgan Report. All right, that's easy enough. David, thank you so much for your time. It's always so refreshing to visit with you and for all you do for the Silver community for Crying Out Loud. I can't wait to see that movie again, The Silver Sunrise, coming out later this month or early next. David, hey, Merry Christmas and a Happy New Year.

David Morgan (22:41)
Same to you, Craig, same to everyone, all the viewers. Wish you the best. Let's make this world happy, joyous, and free again. Forget the make America great. Let's make America the leader to happy, joyous, and free worldwide. Remember, there's nothing more important than freedom, and all we have to do is speak truth to power and be able to grow a spine and resist what's wrong. It's easy to say, it can be hard to do, but that's what we...

Dope With A MacBook (23:05)
Hard to shorten that one into an acronym.

David Morgan (23:10)
I have to do that. I have to think about the acronym.

Dope With A MacBook (23:12)
But, but very accurate and good advice for all. And again, thank you for everything, David. And thank you everybody for watching. Again, hey, it's still early. There's still time to shop the Sprott Money Holiday Gift Catalog and get delivery of sound money for your stockings before Christmas. So please go to Sprottmoney.com, check it all out and then keep an eye on this channel. We've still got another 30 days or so to go before the end of the year there's going to be more content to come.

Before we get to the holidays, but for now, thank you David. Thanks everybody for watching and we'll have more information for you from Sprott Money as we get deeper into December