Gold & Silver Warning! Is the US Government Secretly Buying Gold? | Andy Schectman

Mark (0:00)

Brought to you by the Ore Group, connecting people, projects and capital to fund the next generation of mines. My name is Mark, and you're watching Resource Talks weekly news roundup for the week ending October the 18th, 2026

This week, gold and silver fell after US inflation came in hotter than expected.

A new popper forecast points to a bigger global surplus next year.

And China's rare earth exports over the first nine months are nearly 10 percent lower than a year ago. And joining us to make sense of it all is Andy Schectman, founder and CEO of precious metals dealer Miles Franklin, which he launched with his father in 1989 And at the end of the show, I'll ask Andy what change he'd make to our $1 million model portfolio. So Andy, thanks for joining us.

Andy Schectman (0:54)

Good to be here, my man. I appreciate it.

Mark (0:58)

So let's start off with the US inflation release from Wednesday, which showed that the US CPI rose 0.6% in September and 3.7% over the year. And in response, gold fell as the dollar and treasury yields rose.

So what does that reaction tell you about what's driving gold at the moment?

Andy Schectman (1:26)

I mean, that reaction tells me that that makes no sense.

Typically, war and inflation are very good for gold. A country that the fiscal year 2026 just ended, the last day of September, I think the 30th, we added another $2.3 trillion to the debt in a single year. And, you know, that's obviously runaway debt growth, because the entire national debt didn't reach $2.3 trillion until 1987, when the country was 211 years old. And it had been through civil war and two world wars and the Great Depression, and now our Congress adds that much in a single year. We took in $5.4 trillion last year in tax revenues. Somehow that wasn't enough. We're paying $1.1 trillion a year in interest on our national debt. We're not paying down the debt, we're just paying the interest on it. $1.1 trillion. A trillion seconds ago was 31,688 years ago. Mark, we're literally borrowing money to pay interest on money we've already borrowed. It's ridiculous.

I guess to me, as an aside, speaking of rising interest rates, at what point does the world say we've had enough of this? We're not lending you money unless you pay us a lot more for the risk. And when you realize the treasury is at the foundation of the entire financial system, it was a game forever of suppressing interest rates, inflating bubbles in stocks and in bonds and real estate and everything. And now those yields are rising and those bubbles are being forced to reprice. And when bond prices fall, interest rates rise. That's what we're seeing, which makes our debt even more expensive. So Washington borrows more. Investors worry about inflation and they demand higher interest rates, which means more debt, which means higher rates, which means more borrowing. This is a doom loop. See, the problem eventually we are faced with two really horrible decisions you could argue are pretty much there. Defend the dollar with higher interest rates and risk bankruptcies in a blowing up economy, or keep creating money and watch the purchasing power of the dollar be destroyed. They lie about inflation and they call it the CP lie. It should be called because they exclude food and energy and housing.

You know, I wonder at what point does the world lose confidence in our currency? And to the point where Washington and the Fed don't decide what interest rates should be anymore, but the bond market does. And so when you talk about all of this stuff, it makes no sense to me. Just the fact that there is going to be higher inflation expectations. Does that mean that the only way gold goes higher is if interest rates go lower? Now, that would imply, really, that we have a really strong economy, and inflation is going higher, and interest rate expectations of going higher are due to a robust economy. And you got to raise rates to cool down this robust economy, which is a bunch of crap. What we have is runaway fiscal irresponsibility and a lack of trust, a lack of trust in the West, a West who confiscated or froze 400 billion in Russian Forex reserves.

Much of the world finds that to be hypocritical. We've been in Iraq for 24 years. We're still there.

We went there under pretenses. Much of the world says, how can you do that and face no consequences, but Russia does this and does. Now, I'm not making any statement on the war. You have to look how half the world looks at this. So to me, what we see is lack of confidence and fiscal irresponsibility that is leading to treasuries being sold off. And I think that it's silly to believe that much, much higher inflation expectations are bad for gold. It's just what my dear friend Jim Sinclair, my dear departed friend, God bless his soul, used to say is Mope, M-O-P-E, management of perception economics. They're managing the game. Now, look, what allows me to say that, really, and mean it sincerely?