Central Banks Are Loading Up On Gold. What Happens If They Stop?
Most investors think they’re making decisions based on facts — but as David Lin explains in this interview, the majority are reacting to headlines, hype, and narratives that completely distort reality.
David breaks down the biggest blind spots he sees in investing audiences: why people cling to dramatic stories, why markets don’t behave the way headlines suggest, and how gold, the dollar, and diversification are often misunderstood.
If you want to make better decisions, avoid common traps, and think clearly in a world full of misleading claims, this episode is for you.
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Transcript
Monetary Metals:
Welcome back to the Gold Exchange podcast. My name is Ben Nadelstein of Monetary Metals. I’m joined by David Lin. David is the host of the wildly popular David Lin Report. He’s done thousands of interviews, and he’s been following the gold and silver markets for years. David also has a background in economics and finance, and today, he joins us to talk all things markets. David, welcome to the show.
David Lin:
Thank you very much, Ben. Thank you for having me.
Monetary Metals:
David, you’ve traveled widely. You’ve spoken to experts across all different topics and geographies all around the world. What’s global sentiment looking like right now, whether it’s gold and silver or the stock market in general? What are you seeing from investors? Are they excited? Are they cautious? What’s global sentiment looking like right now?
David Lin:
I don’t think there’s one global sentiment. I think it’s very varied, depending on who you talk to. For a while now, the more bearish people I’ve talked to have turned more neutral, and some bearish economists have turned more bullish outright following certain data developments over the summer. For example, Anna Wong, Chief US Economist at Bloomberg Economics, who I’ve had on several times in the show. She was more bearish last year, and now she’s more bullish now, and that’s just as a result of changing data and economic dynamics in the US. And if you talk to some… I know you want to talk about gold. So if you talk to some gold analysts, interestingly, the more bullish ones are now a little more cautious with gold around 4,000. So there is no one global sentiment. Then it’s just depending on who you talk to, people are varied in their outlooks. But I do think that a common theme across investors I’ve spoken to, at least on my show, is that sentiment is shifting. Again, it’s varied. People who are previously more bearish on the economy have turned a little more bullish, and people who are previously, some people who are previously more bullish on precious metals, who’ve been correct, by the way, calling for this rally, are now a little bit more cautious.
So now we’re reaching an inflection point in sentiment.
Monetary Metals:
And what are some data points that people are sighting in terms of this change in sentiment? Obviously, the AI narrative has been quite big. Ai is going to change the economy. It’s going to be bullish for the stock market because all these companies are going to basically rehaul their entire company with the power of AI. On the other hand, AI could have this labor participation question in the air. What are some other sentiment indicators that have changed what people are seeing, whether it’s for gold and silver or for the market in general?
David Lin:
The labor market continues to grow, even though it’s slowing down, but growth is still there. We don’t have any government data right now, but from the last piece of data that we do have, non-farm payroll numbers continue to grow.
The unemployment rate, the last government data number we had is 4. 3%, which is It’s slightly higher than before, but it’s still at historical low numbers.
Jerome Powell, Fed share, has even commented on this. It’s still at regular lows. And so if you just take a look at how the labor market is progressing, yes, certain sectors are doing worse than others, but overall, the economy is growing. And what we’re seeing right now is a K-shaped recovery. Not recovery. I keep seeing recovery. We’re not in the pandemic anymore. It’s a K-shaped growth vector where the wealthy are getting wealthier and the people at the lower end of the income, tersile, is stagnating in terms of growth. This was mirrored by… Well, this is exactly what happened during the pandemic as well, by the way. And this makes sense because stock markets continue to grow and people who are wealthy own Assets and people who are on the lower end of the income distribution don’t.
So there’s more of a correlation between consumption of the higher end of the income distribution with actual capital markets performance. If you look at consumer sentiment is given by the conference board and the University of Michigan, you can see this divergence between the wealthy and the less wealthy. Sentiment is really much correlated with stock market performance right now.
Actually, it’s those people at the upper end of the income that are carrying consumer spending and discretionary spending. So right now, people have been anticipating a recession, especially following tariffs. That really didn’t happen. For the most part, people were anticipating really high inflation to get out of control. Certain sectors and imported goods, of course, have seen higher prices, but overall, the CPIs didn’t reflect that. And so it’s just I think a lot of expectations for how the economy would run, those expectations were beaten. And so that’s why people turned a little bit more bullish.
Monetary Metals:
David, a lot of experts in the past two or three years, if looking at today’s macroeconomic would not have predicted stocks at all time highs and gold at all time highs. The argument being, well, we have higher interest rates than we’ve had in the past. There’s going to be tariffs, there’s going to be economic uncertainty. And with all of those things, you might not expect gold to hit all time highs as treasury bills or T bills are paying near 5%, and the stock market also maybe with this higher barrier to returns not being at all time highs as well. So what do you think experts missed when they were predicting doom and gloom or recession or tailwind wins or headwinds? And what do you think they’re talking about now that has changed that whole narrative where gold is at all time highs and stocks are at all time highs?
David Lin:
I think it’s very simply, they didn’t take into account that AI stocks will continue to grow to this extent. Let’s be real here. The entire stock market is up because of AI stocks. There is no other reason. Data centers, I was just talking to some economists about this Jason Furman, who’s at Harvard, previous chief economist under Obama. He was doing a calculation that more than 50% of the GDP from quarter one was from data center growth, a construction.
Actually, if you look at From other numbers, from other sources, that number is actually as high as 92%. Most of, if not all the economic growth we’ve seen this year from GDP, it’s from data centers, hyperscalers, and AI. Almost all the growth in the S&P 500 comes from the MAAC-7 stocks. Almost all the growth in valuations, again, come from a few stocks. You’re probably aware there’s circular financing going on where NVIDIA is investing, let’s say, billions of dollars to open AI, open AI is buying chips from AMD, and AMD is competitive to NVIDIA. And by the way, they’re run by the same family. And so if one company goes down, everything else is going down, which is the case this week, by the way.
We’re talking in the midst of a big tech sell-off. That’s, I think, second or third day in a row. Anyway, the only reason people have missed this bull rally in the stock market is because they didn’t take into account that the AI boom that started in 2022 would have continued into 2025. Some of their underlying hypotheses or theories about how the economy would progress actually turned out to be correct, but the underlying economy is not being reflected by the growth of the S&P, which, by the way, has outperformed the Russell 2000, which doesn’t include these tech companies. If you just look at the 10 sectors within the S&P 500, tech has been the best outperforming sector of all. There’s a few others that have beaten the S&P overall. Utilities, for example. But on the whole, tech beat every single other sector by a wide margin.
Monetary Metals:
Before we get to gold, what do you think about this AI idea? Is this a narrative where later in a few years, we’re going to look back and say, Wow, that was a bubble just like. Com? Or is AI the real thing? It’s not hype. This will actually help the economy and the numbers, the prices, the PE ratios we’re seeing These are actually reflective of the power of AI.
David Lin:
Nobody knows that there’s a bubble until it’s popped. The bubble always happen in retrospect. We don’t know that there’s the bubble now. Ask me again in a few years. Right now, these companies are printing cash. I mean, these big tech companies are generating real earnings. They’re generating real revenues and cash flows. In fact, Qualcomm today actually beat earnings expectations, but still fell 4 %. So the sell-off has nothing to do with their actual earnings anymore. I think that these companies are legitimate businesses. We’re not looking at pets. Com, which collapsed in 2000, that had no earnings. This isn’t the dot-com bubble like that all over again. These are real companies with real businesses. On the other hand, you’ve got people commenting that AI in itself isn’t generating the ROI for businesses that adopt them to the same extent that they would have wanted to. There’s a lot of what’s called work slack, which is another topic I’ve explored with a guest of mine this week on my show. And work slack is really like, let’s say you implement ChatGPT for your business. You ask AI to do something, and then it does a bad job, and then you have to spend more man hours to redo the work.
And that’s what’s boggling down productivity at a lot of companies adopting AI right now. And that’s why a lot of companies aren’t seeing the ROI that they want to after adopting AI. So it still has some room to grow. This is why people have been asking, while AI isn’t really profitable in a lot of use cases, therefore it must be a bubble. Well, that logic doesn’t hold for the big tech companies, which, like I mentioned, have real earnings. Look, I’m not an equities analyst. I haven’t looked at the financial statements of the individual Mag7 companies themselves, so I’d have to do that to answer your question in full. The economists I’ve talked to have have have commented that the sentiment is mixed on whether or not there’s a valuations bubble, but this sentiment is not mixed on whether or not there’s a concentration bubble. I think, universally, people agree that there’s concentration bubble risk within the stock market, which is to say that the stock market is now more and more just a few stocks popping up the entire market or dragging down the entire market. And so whenever you’re investing in an S&P 500 Index, you’re really just investing in the tech sector.
That’s becoming more and more impaired. I think it was roughly around 26 %. Now, it’s closer to 40 % of the total market cap of the S&P is just tech stocks. So the concentration risk is there, whether or not there is a valuations bubble. People have various opinions about that. What is a little bit more clear, like I mentioned earlier, is that some companies that have adopted AI technology aren’t generating the returns that they want yet. And so that’s why people are commenting on, Well, is AI even Is AI even profitable? Is it even monetizable? That still has some room to develop, I think.
Monetary Metals:
This idea of concentration risk, that when someone says, Oh, I’m in the stock market, really, you’re in seven companies. Do you think that’s another reason why gold prices as a hedge against the stock market have been rising to all-time highs? Do you think people see this euphoria in the stock market, which maybe they’re a part of, but are, on the other hand, also a bit worried because this level of concentration in the stock market is concerning?
David Lin:
No, I think there’s different investor groups. I don’t think people are… No, I don’t think so. We can talk about what people have told me on my show about why gold has gone up, but think about it just objectively here. If the stock market overall is climbing, that means stock market allocators aren’t moving to gold. Because if that were the case, then the stocks wouldn’t climb. Gold would just be climbing independently. So no, I don’t think that’s related. I do think that gold is climbing for a variety of other reasons, including central bank buying, as you know, mostly from Eastern central banks. Poland is probably, I think from the World Gold Council, correct me if I’m wrong, you’ll look it up later. Poland, I believe, is the biggest buyer of gold, followed by China and a few others. We’ve got that. The dollar has been declining all year. It’s now stabilized around, just look at my chart, it’s now stabilized around just under 100. It’s fallen sharply after the liberation day terrace of April. Gold has traditionally been an anti-dollar hedge, and so declining dollar It would have seen gold go up, although it’s interesting to note that the DxY has stabilized ever since May while gold has continued to go up.
So there is a bit of a divergence there. And inflation expectations have climbed up a little bit, but it has not climbed up to the same extent as the gold price performance. So there is a little bit of everything going on. Higher inflation expectations, hedging against a dollar decline, hedging against a loss of trust of the dollar, perhaps, and hedging against geo-political uncertainty around trade. There’s still two wars going on, by the way, that are unresolved. And those, I think, are bigger contributors to the rally of gold than perhaps the stock market itself. Gold has historically been very much uncorrelated with the stock market. If you just take a look at gold’s performance versus the S&P 500 over a 5 or 10-year or even 15-year rolling period, the R² is close to zero. There is no relationship between gold and the stock market. The notion that the gold hedges against stock market volatility is a complete myth. It’s just not true. Even on a short term, medium term, and long term basis, there’s no relationship. You can’t just say, Well, the stock market’s up one day and the gold market’s down, or vice versa on a single intraday basis, therefore gold is a hedge.
That’s just a complete coincidence. Over the long term, there’s no relationship, well, not ironically, but it makes sense that hedge fund managers often use gold as a diversifier asset because exactly there’s no relationship between gold and the S&P. Therefore, it actually smooths out the returns in boost or sharp ratio. I think those are the reasons.
Monetary Metals:
Can we also talk a little bit about gold versus silver? Obviously, lots of gold investors are also interested in silver as a monetary metal, but there’s been an interesting divergence emergence, whether it’s the gold and silver ratio or just gold prices being in a bull run, while silver prices also had their run up towards $50 but it fell back. Do you think that gold and silver are still monetary metals really running together Or do you think that silver is going to soon have a different story where it’s more of an industrial metal with some monetary aspects?
David Lin:
Silver has been tracking gold, if that’s your question, pretty much religiously this year. It’s interesting how silver has started to catch up with gold really following June. I’ve been trying to, on my show as well, and probably yours as well, I’ve been trying to hone the exact reason for why that has happened, because typically gold and silver moving in the same direction, but silver starts to outperform gold really early on in the bull cycle. That hasn’t happened this year. There’s been a mix of opinions as to why. I don’t believe industrial demand is one of them, because we would have seen the news already, and we would be having a different conversation. I really don’t know why Silver lagged Gold to that extent this year is my answer, because I’ve been trying to get that answer from my guests, and they don’t know either. I haven’t gotten one single definitive answer. It is interesting to note that Silver didn’t just start outperforming Gold at the very beginning of this bull rally, which was 2023, early 2024. It really started this year. And probably on your show as well, we’ve been asking, why has Silver lagged Gold for the remainder for most of this year, last year?
And the answer is nobody knew at the time, and nobody knows now. There remains a controversial debate as to whether or not there even is an above ground deficit of silver to begin with. The Silver Institute reporting that there is, other sources are reporting that there isn’t. I know you’ve spoken to Jeff Christian, CPM Group. They’ve got a different calculation to the Silver Institute. So I think people have different ways to view this. It is not disputable, however, there’s very little dispute around the next topic, which is that silver will be very much in demand for the foreseeable future for a variety of industrial uses, including the production of solar panels and the production of a battery. Silver still is used in electric batteries. Now, we do know that demand will rise. The question is whether or not supply can keep up. And again, that will vary depending on who you talk to.
Monetary Metals:
And now I want to ask you a little bit about this idea of psychological barriers to certain prices. Clearly, gold prices blew through $3,000 with little barrier and came up to $4,000, which is where we’re testing the prices now. But silver this $50 mark, which was obviously quite big, and yet has been unable to run through $50 in the same way that gold ran through $3,000. Do you think $50 silver is some psychological or maybe even a structural ceiling? For silver?
David Lin:
It’s definitely psychological. I wouldn’t know how to evaluate a structural ceiling, but definitely psychological. There was a tremendous pressure, tremendous resistance even before $50, around $49. Let me just check my chart right now. And I know it’s fallen, but it’s interesting because it hasn’t collapsed like it did in 2011. See, silver stayed around $50 for a very short period of time in 2011, I think only a few days before it went all the way back down. And now that’s consolidated around 40, 8, 49, which tells me that people have a lot more confidence in this particular bull market than the last two. So that’s good for silver investors. The psychological go resistance of $50 that needs to be breached for a longer period of time. We need to see at least 54 to 55 for several days, if not weeks, for people to really gain confidence and buy above 50 because there seems to be a lot of selling pressure right at 50 because people don’t think it’ll stay beyond 50 for quite some time, just like how people didn’t think it’ll stay beyond 4,400 for a sustainable period of time. Right now, again, There’s a lot of support around $48, which tells me this bull rally is probably not over yet.
Monetary Metals:
Now, I want to ask you, what’s the most convincing case for a bullish gold market that you’ve heard, and what’s the most realistic bear case that you’ve heard? Just so our investors can hear on the bullish side what you think is most realistic, but also bearish as well.
David Lin:
Realistic bull and bear case for gold? Again, I wouldn’t know what’s realistic until it’s happened. Let me comment on what may be convincing for myself. So for the bull side, I think the fundamentals for why gold may have reality, first of all, you can construct a narrative around anything you want. But the story around why gold has rallied this year, those macro forces haven’t gone away, which is continuing uncertainty about the dollar’s performance into next year, especially with the Fed lowering rates and interest rate differentials of other central banks potentially widening. That could drive capital away from the US dollar. That’s number one. The long end of the curve has risen.
But depending on where inflation expectations go and where interest rates go, if that falls again, that’s bullish for gold. Structural uncertainty around the growth of the economy and geopolitical concerns, none of that has gone away. The Ukraine war is still there. There’s a war going on in the Middle East that hasn’t been resolved yet despite You know, recent news around hostages being traded. But anyway, the structural problems that have propelled people to buy gold to begin with are still there.
Central bank buying hasn’t stopped yet. We’ll have to see a few more quarters of data to see if central bank demand has stalled or wained. That could be a big indicator for why gold may be falling. So the biggest bullish case for me is simply that nothing has changed. On the bear side, I think it’s pretty simple that it’s way overbought. It’s now more than two standard deviations above the last… Well, depending on what the time frame is, but I think the last 52 week rolling average, it’s now two standard deviations above that. Over Overbot signals are just flaring up from everybody. I’ve talked to miners personally, and people are a little concerned just in private conversation about whether or not this rally could stay. Nobody knows. Nobody knows in the future. It’s interesting how the mining sector is not doing a lot of deals now as they were in 2011 when the last bull market happened. That could be interpreted in one of two ways. Either now, they’re a lot more disciplined because they’ve learned the lesson, because as you recall back then, 14, 15 years ago, there was a lot of overspending and buying projects over high valuations, and a lot of good deals were not made.
Now, this time around, they’re doing things a bit differently. The other way to look at it is potentially people in the gold mining industry are not confident that this rally is sustainable. Therefore, they’re holding off on making deals until maybe prices are a little more favorable. So the bear case is that it’s overbought. There’s a lot more uncertainty around where gold gets headed, and there’s a bubble. If you believe that there’s an AI bubble, you could also, in theory, believe that there’s a bubble in everything right now, including the precious metals.
Monetary Metals:
What are some biases that you think are most dangerous to precious metals investors that you see most often?
David Lin:
I think the misconception that it hedges against inflation, data has shown that’s not true. It does move according to inflation expectations, although I believe it tracks mostly longer term yields more and has a closer correlation to the US dollar. At certain points, it does track with an inverse relationship, real yields, although this year, real yields in gold have both risen. So this is an example of that correlation breaking. So I think hedging against inflation is one. The notion that gold only goes up when the entire world falls apart I think that’s just false. Coal can go up when people want to get rich from gold. When people want to buy gold, it goes up. The world is not falling apart right now in most places, and we’re at 4,000. I started in this interviewing business a few years ago when gold was at $1,500. And back then, if you made a $5,000 gold call, you were considered crazy. That was only a few years ago. And now, $5,000 is less than, well, just about 25% away from its current levels. No one’s saying it’s crazy now. But it’s also very interesting to note, Ben, that people at this particular cycle are a lot more conservative overall with their long-term forecast.
A few years ago, when gold was just surging to 2,000, people were coming on the show saying, 5,000, $10,000, and then assigning some math behind why it could go even higher than that. I’m just seeing a bit more caution around giving extremely bullish forecast now, and people are a little bit more conservative. But back to your original question. I think the gold market is behaving like a risk on play right now, which has broken a lot of people’s expectations. The other misconception is that gold only goes up when the dollar collapses. And I don’t know how this started, but the whole notion that the dollar is going to collapse is not a new narrative. It’s been around for more than 40 years. The dollar has not collapsed in the last 40 years. The DxY has had its ups and downs. Right now, China is pushing for more de-dollarization. Russia has pushed for more de-dollarization. All that means is that other countries are using the dollar less as a cross-border payment currency. It does not mean that Americans are going to end up like Argentina or Venezuela, where the dollar loses its value by the order of 1,500 % in a year.
That’s not going to happen. And so all these gold promoters, I’m not saying you, I’m saying other people who have been wrong about the dollar collapsing, that they really need to do a reality check and just take some accountability. You’ve been wrong for 40 years. You’re not going to be right now. The dollar is not falling out of the sky, guys. It’s maybe weaker than it was for a couple of months ago, but we’re still good, Ben. Those are the misconceptions I think we need to be addressing.
Monetary Metals:
David, perfect answer. Okay, next, I want to ask you a bit about central banks. So obviously, central banks and gold are are the biggest narrative right now, which is that central banks are buying gold like crazy. They’re buying it like hotcakes. Obviously, that has to, in some way, help the bidding on gold. That’s maybe why we’ve seen such robust high prices. What do you think is the danger of central banks buying gold? Is it that they can sell it and that could hurt gold prices? Is it that they might start using it for cross-border payments? What is the gold narrative with central banks? Why are central banks buying gold? And is that a good or bad thing for gold investors?
David Lin:
Central bank buying is obviously good because it pushes the price up. You asked a few questions, so let me just stress them in reverse order. So yes, central bank buying is good. There usually is no risk of selling. To my knowledge, most central banks don’t sell gold like they’re a hedge fund. Some exceptions are prominent. Canada, for example, has sold all its central bank holdings of gold over several years in the 2000s and late ’90s, but But again, they don’t just dump gold on the open market like a hedge fund. That was a multi-year, decade-long process of slowly, gradually unwinding gold. I don’t think we need to worry about central bank dumping gold. Gold is not… It’s not Bitcoin. It’s not that easy to unload. It’s heavy, by the way. You got to ship it. Anyway, the notion that central banks will slow buying, I think That could be a headwind. We’ve talked about that earlier. Let’s see how central bank buying and demand continues into 2026. Stalling or slowing down, which signals are slowing down for risk, for appetite for gold overall, may carry through to other aspects of buying from other institutional and perhaps retail investors.
So I think they’re all interrelated. Overall, you’re right to point out that central bank buying should be a risk. That’s a very good way to look at it then, because if people are making the narrative that central bank buying has been a boon for gold, then nothing stopping the narrative that central bank selling or a stalling of buying gold could be a headwind for gold prices. To my knowledge, again, we’re looking at data from a quarter ago. So let’s see what… You know what we should do? We should follow up in a couple of months and just see what central bank buying is now, because we don’t have live data now. But next quarter, the World Gold Council We’ll report on what central bank buying has been in Q3 of 2024. Let’s see if there’s been a correlation between the stalling of prices going up beyond $4,000 at dollars an ounce and central bank buying activity. Now, I suspect there probably isn’t much relationship, but let’s see.
Monetary Metals:
David, now I want to ask you about these BRICS Alliance, which a lot of people in the gold world tout saying, Well, Brazil, Russia, Iran, China, Saudi, they’re all going to, South Africa, they’re all going to form an alliance. They’re going to start ditching the dollar. They’re going to de-dollarize. And instead of doing cross-border payments in the Taiwan or the Rupee or any other currency, they’re actually going to settle their net payments in gold. So gold is going to become this new international currency. The dollar is going to go the way of the dodo bird because people are using gold. Why have so far we seen so few actual empirical evidence of people using gold cross-border payments. Do you think that this is just a narrative or a hype around the BRICS countries threatening to de-dollarize, but really no teeth in the tiger? Or do you think that this is actually a phenomenon that will begin to happen where Where BRICs countries begin to use gold as a cross-border currency?
David Lin:
Okay, so you brought up cross-border currency and common currency backed by gold. Those are two separate issues. Let me just address the cross-border thing first. You You physically can’t use gold as cross-border payment, can you? I mean, that’s just hugely inefficient. I suppose you could put it on a stablecoin and use digitized gold. That’s the thing now. But why would anyone use gold? You have to ship large volumes, and it would be very costly. We don’t live in the 1800s anymore. No, I haven’t heard that. I think going back to your original point about a gold-backed bricks currency, I have heard that. There’s very little evidence of that actually even being accepted. India has been very vocal about not wanting a common currency for bricks. India is the largest country, second largest country in BRICS. No, largest now. I think the population has surpassed China. Yeah, largest member of the BRICS Alliance. They don’t want it. It’s not happening. I’m not really sure where this narrative started, where how it started. Maybe it was some Russians saying that this might be a good idea and it caught fire within the gold community, but it’s not happening.
Monetary Metals:
David, now I want to ask you about some information or how you consume information, because obviously you consume huge amounts of financial information. How do you personally filter it? How can you tell fact from fiction or hype from reality? David Lin, how do you consume all this information and then filter it to get accurate data for your reporting?
David Lin:
I just ask a variety of people. I don’t consider myself I’m an expert, so I’m learning as I go. If somebody is making a statement like what you just said, for example, are the BRICS countries creating a gold-backed common currency? Let’s investigate this. I’ll ask a variety of people, and then the viewpoint with the most data or the most rational support would probably went out in my opinion. It really comes down to presenting evidence for your claims and backing up what you’re saying with actual facts, like you mentioned earlier. There’s a lot of misinformation online, as you know. I think it’s difficult in the digital age to know what’s true and what isn’t. Several layers of checking across multiple sources is really needed before you come to a conclusion. I think it’s really as simple as that. Just look it up, see what other people are saying. If there is a consensus view around something, it doesn’t necessarily mean it’s right. Cross-reference it with opposing views to see which one makes more sense to you, and then make an evaluation on your own. Sometimes Information is just outright wrong, and it spreads like wildfire on social media because it’s, I don’t know, catchy.
So many times, and I fall into this trap myself, I see a title, Oh, that’s interesting, and it’s just completely false, and no one bothers verifying this. Some example stand. I remember when the Bitcoin ETFs were being launched, there was a wide speculation as to when that would happen. Before it did, there were several cases of, again, I don’t know which Twitter account started this, but people would post on Twitter, breaking news, the Bitcoin ETF was just approved by the SEC. I think someone was truly, and no one bothers to just Google it and check, and that became a viral tweet. Bitcoin spiked immediately by a considerable margin. Actually, it wasn’t just like half %. It was like several percentage points because everybody on the Internet, people were making YouTube videos about it, too. And then several hours later, people were like, Wait a minute, where is the actual SEC press release about this? There isn’t one because it never happened. And then Bitcoin went right back down. Yeah, Yeah, just 99% of misinformation can just be removed if you just took two minutes to double check yourself, which a lot of people don’t do.
So what I like to do is just, before I report anything, do a thorough check, ask multiple sources, and then talk about it. I like to present different views on my show as well, so people can just gage which makes more sense when making predictions, especially. I’m not talking I’m not talking about factual things. How I consume information, generally speaking, I wake up every day, I look at the prices, the prices make the news. So right now, today, for example, we’re speaking on the sixth of November. Everything’s read, and it seems like, going back to our earlier discussion, AI stocks have been pulling down the entire market. And so now I’m curious why our stocks are falling several days in a row despite some companies making or beating earnings expectations. Is this the beginning of an AI bubble burst? That’s the narrative I’m following for today’s show. That’s how I look at today’s prices. And then I go on mainstream news, CNBC for market activity, FT for global news, Bloomberg for everything in between. Twitter. Twitter is like the tabloids. You look at a really catchy title. Aliens Have Invaded Earth. That’s really cool. Let’s verify this.
But it’s always a good starting point, and then you realize Aliens Haven’t Invaded Earth, and you move on from that. But Twitter is always a good starting point to see anything sensational that people are talking about. Then you just cross-check to see if it’s actually happening. That’s my process.
Monetary Metals:
What do you think about this idea of following people or publications for negative alpha? You can basically consistently follow them, whether it’s Jim Kramer or someone else. Maybe people are following me for negative alpha. They go, Whatever Ben says about gold is probably the opposite. What do you think about this idea of negative alpha?
David Lin:
Have people said that until you peed.
Monetary Metals:
Well, I’m being made that publicly.
David Lin:
Okay, I’m being made a fall over neck. Well, first of all, if it is anything true that people are saying you’re negative alpha, that’s alpha in itself, because if you or anybody is consistently wrong, I’m not saying you are, but if somebody is consistently on the opposite side of what’s actually going to happen, that has tremendous value, because I’m just going to bet on the opposite side of whatever you or anybody else, I’m not saying you, but just somebody is doing, and then I’ll make a lot of money. It’s when you become inconsistent that you’re not valuable. So sometimes you’re right, sometimes you’re wrong. But if you’re always wrong, that’s a huge opportunity to make a lot of money. I don’t. I watch Jim Kramer sometimes because I like the way he talks about things. I think he’s a good presenter. I think he has a lot of good qualities about the way he talks, and I think he looks at things in a good way. He looks at stocks. I mean, obviously, he’s not always right. People have built a reverse Jim Kramer index, and people have made a lot of money there, but I don’t know.
I don’t have any comment. The other popular example is the cover of The Economist. By the time news reaches the Editorial Board of The Economist, and it gets reviewed, and then finally put in next month’s issue, it’s already a month behind. So they’re a good lacking indicator, or probably even a contra indicator in that sense. I don’t pay that much attention. I don’t think there is one consistent negative alpha indicator. If so, I would encourage everybody to check that out and then bet against it, and everybody would be very rich. But enough. Unfortunately not.
Monetary Metals:
Well, you guys can follow me and David on Twitter if you want to see if we have any negative alpha. Obviously not investing advice. All right, David, on to our next question. Which guest has changed your mind the most? You came in thinking, Wow, I really disagree with this person. And at the end of the interview, you went, Wow, you know what? My view has been changed.
David Lin:
Yeah, that’s a great question. I think it happens in every space, crypto, stocks, and gold. Which guest has changed my mind? The most about, let’s say, gold? Or just overall, I think… Okay, let me comment on this more broadly, and then I can focus back on gold. For the longest time, I was uneducated about Bitcoin and the crypto space overall. I’ve admitted this several times in public. I missed the original rally 10 years ago, mainly just because I didn’t understand it and I didn’t want to get into something I don’t understand. Just talking to a lot of people in that community has helped educate myself, and hopefully other people watching the show, on what the asset is and made me more comfortable in exploring it as an investment on my own. So I think for that particular sector, it was just exposure to people who are knowledgeable or more knowledgeable than me that have completely changed the way I looked at asset class. I thought it was a Ponzi. I thought it was just digits that people brandily assign value to. I now have learned that it has a lot more properties than simply that.
And so that, I think, was the biggest change for me, and not just in terms of understanding Bitcoin, but my entire thought process overall. My biggest mistake there was dismissing the asset class altogether without spending time to learn it. And I think a lot of other people make that same mistake. Before you say, I don’t understand something, I’m not going to touch it. Before you say, I’m going to short this thing because it doesn’t make any sense to me, go and learn about it, try to understand it. And after understanding it, if you still think it’s a bad investment, where if you think it’s overhyped, then short it. And maybe you’re wrong, but at least you’ve taken the time to make an investment decision based on knowledge rather than a lack of knowledge, which is the ultimate core of fear, by the way. That was something that really changed the way I looked at things. On gold itself, I think whenever… There isn’t one person that had a radically different view than somebody else. I think the fact that if everybody is bullish on gold at any given one time, that’s when you start to have some doubts as to whether or not the rally is sustainable.
I have the fortune of being able to talk to a lot of people in any given month, and so I get a consensus view. So if everybody is really bullish at any given one time, it probably, in my experience, that has usually signaled the tail end of a really strong bull rally. And now, like I told you earlier, those same gold bulls have been a little bit more cautious given where things are going. I think people are just waiting to see where the price is going to go. Anybody that really drastically changed my mind on how I saw the gold market? I don’t think so. I really liked Elaine Corbani. I know he’s not featured a lot on media. He used to be a gold portfolio manager at a firm called Finance SA. Can’t remember what his firm is called now, but he was the first person who really just outlined the drivers of gold in a very clear mathematical form, easy to understand way. The core drivers being the dollar, real interest rates, inflation expectations, to varying degrees at different times. Jeff Christian from CPM Group, I know you’ve talked to, has also looked at correlations in history and seen and analyze which drivers are stronger at any one time.
And what you’ve noticed is that there isn’t any one dominant driver that is predominantly behind a gold move at any one given time. It oscillates between the dollar, real interest rates, and inflation expectations, but it’s really just those three. I think those two gentlemen, more than anybody else, have really helped me understand gold from a fundamental macro perspective, and they’ve mostly been correct, by the way, in their calls for gold. The people who have constructed narratives around hyperinflation and the collapse of the dollar, and there’s a lot of them out there, they have been slightly less influential for how I view the gold market simply because of the inconsistency of some of the narratives around their thesis.
Monetary Metals:
I want to ask you now, what do you think is the most misunderstood aspect of interviewing a guest, whether it’s being neutral when maybe you disagree, whether it’s doing follow-up questions when you think maybe other guests, other hosts don’t. What do you think is the most misunderstood part about hosting and trying to get the most information out of a guest that maybe the audience doesn’t understand?
David Lin:
Oh, yeah. Okay, so I see this in the comments. So I just look at the comments and see what people say. At any given time, people say, David, you hate gold, or David, Why are you such a gold bug? And I sleep between being a gold bug and a gold hater, depending on who I interview. Guys, it’s just my job to ask tough questions to whatever the viewer is saying. If the viewer is pro Trump, my job is to ask him anti-Trump policy questions. It doesn’t mean I’m a Trump hater. If the guest is a Democrat, and I’ve had several Democrat very high-profile Democrat economist in my show who have been previous Economists, Chief Economists under Obama and Biden, I have to ask them pro-mega questions to challenge them. I’m not pro-mega all of a sudden by 6: 00 and then pro Biden by 7: 00. So the most misunderstood aspect of our interview, at least for my show, is that I don’t really inject my own opinion. I just play the devil’s advocate to whatever information is being presented to me. And it’s just one of the tools I use to bring out the best information possible from the guests, because people really start defending their own thesis when they need to defend them, and they need to defend them when they’re being challenged.
So that’s it. I try not to inject my own opinion. I think it’s very obvious when hosts are trying to inject their own opinions and their biases come out because their questions are very one-sided, they’re very loaded, and they’re very leading. I try not to do that. Your questions, for example, are not leading at all. Guys, watch Ben, great interviewer. But I think it’s very clear if somebody’s asking a leading question, or you can somehow see their facial expressions or body language change when the guest is saying something they don’t like. I think a common misconception is that people are… Hosts are neutral by design, they’re not, and we can never remove our own bias. Although that’s not really a misconception, that’s pretty well known. I would say the only misconception that I can think of is what I mentioned earlier, is that people think I have my own opinion just because I’m arguing with the guests. No, I’m just doing that because it’s my job to play devil’s advocate.
Monetary Metals:
David, now I want to get to a rapid fire section. I’ll ask you questions about all different types of topics you can answer as briefly or as long as you’d like. Let’s start with who is a guest, a star guest or a wish guest that you could get on your show who is living? Who’s someone that you could say, Oh, my gosh, if I can interview this person, I’ll retire happy?
David Lin:
I don’t ever want to retire. There’s always more interesting people to talk to. I’ll keep doing this until I can’t talk anymore. Then I’ll design an AI agent with exactly my voice to continue talking on my behalf. I don’t ever want to retire. I’ve always wanted to interview the really great athletes and musicians just to see how their brain works. Michael Jordan is really cool, not just because he’s a great athlete, but he also runs very successful businesses. Really high I follow A-list of celebrities in the music space. I’m a musician, so I love to get musicians on the show. I think former Fed shares as well is also on my target list. I’ve had a lot of former Fed governors on. I have not yet had a Fed share, a former Fed share on the show. Just doing a debrief on some of the things they’ve done during their time in government versus what they think should be done now, I think would be a very interesting discussion. I think, yeah, those are the kinds of I’m aspiring to work on.
Monetary Metals:
If anyone is listening who’s a former Fed chair, just send your email to me. We’ll make sure this gets to you.
David Lin:
Okay, I appreciate it.
Monetary Metals:
David, what motivates you personally to keep asking questions about money, policy markets? You said You never want to retire. What motivates you with this desire, this energy to keep asking questions?
David Lin:
It’s a lifelong learning process for me as well. Even if I wasn’t doing this professionally for work, I would still want to interview people just privately to understand more about the world and how markets work. It’s just something that I’m personally interested and passionate about. I’m fortunate to have built a community around people who share similar passions for me. My channel is almost at 300,000 subs. So thank you all for supporting the channel. It just speaks to the fact that there’s a lot of people out there in the world who may not be professional or even retail investors, but they just want to understand how the economy and/or markets work. I can’t really explain it. It just feels good to be able to connect with other people who have similar interests as you and continue building this community. I just want to continue presenting information to people, and hopefully, they can be more educated as a result. It’s good business, too. Pays the bills. I can’t really think of any other skill sets that I have that would apply to the workforce. It’s either I do this or I’m homeless, really, at this point. I I can’t.
I don’t have any idea. I don’t know. I can’t imagine myself working for any other company at any other job than building my own at this point in my life.
Monetary Metals:
Well, guys, make sure to subscribe to the David Lin Report, so David isn’t homeless. All right, David, next question for you. What do you think is the most underrated risk that investors aren’t thinking about? Obviously, people watch the show to try to learn about what are some of the risks to their portfolio, to their life, whether it’s AI and unemployment or central banks and selling gold. What do you think is an underrated risk, something that people don’t think about often enough that they should?
David Lin:
I think people talk about diversification a lot, and diversification being a risk mitigating factor, and it is for most people, some really great investors have come out and actually said that the reason that they’re not… The reason that they have succeeded as an investor is the exact opposite of being diversified because they’ve been concentrated and they’ve been right. I know that’s very difficult to do for the majority of people. These guys are superstars. I can’t remember who said this, but they made a case to point out that the great entrepreneurs of our time did not get rich or successful by being diversified across several different fields and disciplines and investments. All the tech founders that we know, the great tech founders and the really well-known ones, started off building their own thing. I believe, correct me if I’m wrong, Steve Jobs never held investments or significant amounts of investments outside of Apple. Bill Gates has half his wealth and other things outside of Microsoft, probably more now, but that wasn’t until he’s made a fortune with Microsoft. The notion that you have to be diversified is in itself a risk because if you’re concentrated, it forces you to really, really, really learn about one particular topic or company or security, whatever the case may be.
If you’re just a gold investor, it really forces you to watch shows like the Monetary Metals Show, which covers gold in detail and really learn about that one particular asset class. If you’re Diversified across 20, 30, 40 securities, nobody has time to really fully understand the securities across an entire portfolio of 40 things. That’s like a hedge fund with different divisions of analysts, each focusing on one thing. The way that these firms operate is that you have analysts focusing and specializing on one specific sector. Nobody is an expert on everything. As we tell investors, we don’t have the time with a luxury of having several analysts working for us. Most of us don’t. And so we have to just be specialized in a few things. Diversification in itself is a risk because you’re not forced to be in a position to be very knowledgeable about one specific thing. And you really just need to know one or two or three things and know those things very well to know when to trade in and out of those particular things, whatever those things are. And I think the biggest risk out there is the myth of having to be diversified at all times.
And by the way, like we talked about earlier, even if you buy the S&P 500 Index, by definition, you’re diversified. But are you really? If NVIDIA goes down, just one stock, the entire market goes down. You’re not diversified at all. So Just pick things that you know well and that you like and stick to them is, I think, the best advice I’ve gotten.
Monetary Metals:
All right, next one for you. What’s one conspiracy theory, whether about markets or life, that you’d like to debunk and one that you think might actually be true?
David Lin:
Oh, this is fun. I’m a sci-fi nerd. I like to think that there are aliens living amongst us already. I’m not saying Mark Zuckerberg is an alien. I’m sorry, meta people. I don’t mean to offend anybody who is working on meta. No, Look, it’s mathematically improbable that we are the only sentient beings in the universe. I like to think that maybe aliens have already landed on Earth and the government’s covering it up. There’s no way for me to actually prove that. But if I could wave a magic wand and explore every single area 51 on the planet, I would. That would be something I’d be very interested in digging deeper. For markets, more related to markets, the notion that certain assets are manipulated, I don’t know if it’s a conspiracy theory, but you certainly heard that silver and gold are manipulated, and they are. Banks have been charged for outright manipulating the futures markets for silver, as you know. The notion that short-term manipulation leads to long-term price action, I like to explore that a little bit more from an academic point of view, whether or not there’s actually a relationship between either short-selling and/or buying and a long-term signaling of a particular asset.
I think that would be very interesting to explore.
Monetary Metals:
Yeah, I know. There was at least one J. P. Morgan case where they were convicted of spoofing, but that was on both the bid and the ask side, so not necessarily pushing up or down.
David Lin:
I think that’s another narrative we forgot to discuss. I don’t know if you want to go there, but the notion that the silver market is not higher because it’s manipulated. There’s There’s so many conflating ideas in that statement. First of all, we do know that the silver markets are manipulated on a short-term basis through spoofing and/or perhaps other measures. Those have been proven in court, and J. B. Morgan has lost and have settled. So we know that’s happening. Whether or not the silver price should be higher and/or perhaps even lower because of spoofing, that’s a bigger debate that nobody has the answer to. I’d like to explore that, something like that a little bit more.
Monetary Metals:
Okay, David, next rapid fire question for you. What has been the biggest change from when you’ve started investing and interviewing experts to today? What’s the biggest change? Looking back at previous David Lin, that you would say, Wow, I’ve really either changed my opinion or changed my mind. What’s the biggest change you’ve gone through?
David Lin:
I don’t know how to answer that because I don’t… It’s like looking yourself in the mirror every single day. You don’t notice changes on a daily basis until maybe you looked five years ago. Oh, gee, I was a lot thinner back then. I had better hair. But these big changes happen in little steps every day. I would say, going back to what I said earlier about trying to understand something before I act on it, keeping an open mind to certain opinions. I think I’m a lot more open-minded now than I am, than I was previously in the sense that if somebody, let’s say, going back to Bitcoin, if a new asset were to be presented to the markets today, instead of dismissing it, I would probably take more time to learn about it. If somebody presents to me a certain point of view, no matter how impossible or improbable it may seem, I would be more open to airing it instead of cutting it out because it sounds quote, unquote crazy. Maybe investigate it further and talk to somebody else about it just to see. I’ll give you an example. As a professor on the show, Shujun Chen, who runs a very popular YouTube channel called Predictive History.
He was writing, calling for the presidential… He was right for calling for Trump to win the presidential election. And he’s been saying that Trump may run for a third term. Obama may run for VP. But people have been talking about that online, and some people think, Well, that’s just unfounded, and you can’t even do that legally. I keep an open mind about that, and I eventually looked into this. I think there’s ways to circumvent that. I think so it’s… Anything people say is now entirely impossible. The only thing I will not probably air is outright conspiracy theories that have no basis whatsoever, because it’s one It’s not a thing to make a prediction, but it’s another thing to make a claim on why something has happened based on incorrect facts. But more or less, I’m more open to new ideas about predictions in the future.
Monetary Metals:
David, last rapid fire question. What’s a skill that separates good interviewers from great ones?
David Lin:
I watch a lot of the interviewers from a few decades ago as an example. Rael’s, Walter Cronkite, I’ve watched a lot. Larry King, I’ve liked a lot. They all have different styles. I think what is unique about some of the older, or not older, but interviewers from decades prior is that they’re not as combative on air, and they always listen first before making a making a remark. It seems like mainstream hosts, and I don’t know if this is because they have a time constraint or maybe because ratings are higher, they just constantly argue. They’re not really hosting anymore. I don’t know to what extent they’re just putting on a show. Maybe that’s it. But it’s not really my style. You have a mainstream host on Fox, or CNN, or whoever, and they just bring people on and just constantly argue with them and debate them. Why don’t you just get somebody else to debate your guest? Wouldn’t that just be easier. But anyway, I think that what makes a good host good is their ability to listen to what the other person is saying before saying something else. I think that’s just generally a good conversational to have in your personal life as well.
Monetary Metals:
David, last question for you. What’s a question I should be asking all future guests of the Gold Exchange podcast?
David Lin:
What’s a question? You’re asking some pretty deep questions that I can actually be thinking about myself. What is one question that you should be asking? Okay, so I will give you an answer. I don’t want to dodge this, but before I do, I encourage you and any the other host to not only watch as many other YouTube channels as possible, but also collaborate with other people. Then you pick up in their style. Because part of my style was always asking markets-related questions and their views and analyzing current events. Getting to the more personal side of why people have done things is not something that I was used to until I started collaborating with other channels and watching how other people have done things. Sometimes you’re getting even more powerful answer. And so for me, I’ve tried to get the more personal side of the story as to how or why they’ve come about doing certain things, as opposed to just, Where do you think gold is going to go? That thing. So that’s one change for me. Going back to your… So if I were to answer that question for myself, it would be ask everybody what they would do with whatever asset that they’re focusing on when they were 20 years old and I knew a lot less.
If you could go back in time, would you have done things any differently? For you, for the Gold Exchange podcast, let’s keep it relevant to gold. I think it’s very interesting to get anybody who is analyzing gold, whether you’re bullish or bearish, to ask yourself, would you really want to use gold as a medium of exchange if the world collapses? Because that’s the heart of the gold thesis is that it’s still money. It was money. Is it still going to be money in 2026 and beyond? There was a time when coinage was the only medium of exchange that was, I guess, efficient. First of all, if the society collapsed, I think we go back to barter. But it really This is the question because people ask, Leo, what happens to Bitcoin and where the Internet goes out? Well, I challenge people to ask, what happens to gold when the Internet goes out? It’s the same story. So ask people, what would you do In a scenario where you have no electricity, you can’t get your money out of the banks, and everybody is just out for themselves, would you default to gold coins, or would you use seashells, or would you use barter, or anything else?
If people make a strong case for why gold and/or silver coins will remain the default medium of exchange in such a scenario, then I think you have a case to be made that gold is being boosted because people see it as money. Not because people see it as speculation like Bitcoin, for example.
Monetary Metals:
David, it’s been so great interviewing you. People are obviously going to be obsessed with you and your work. Where can people find more David Lin?
David Lin:
Well, it’s been a great pleasure talking to you as well. It’s good questions. It’s making me think, and I’m not a morning person, so it’s waking me up now. David Lin Report on YouTube. Got a channel there, so happy to see you there.
Monetary Metals:
David, we’ll have to have you back on soon. Thanks so much for the interview.
David Lin:
Yeah, that was fun, Ben. Thank you for hosting me.
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