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Grant Williams – Oil: Peak demand – Gold: Peak Supply


By GoldSwitzerland

THE MATTERHORN INTERVIEW – June 2016: Grant Williams

“Oil Market: Peak Demand, Gold Market: Peak Supply”

One of the most engaging and bright analysts of our industry, Grant Williams, joins Lars in this podcast. Grant speaks about Oil, Gold and about ‘The Donald’, inter alia. Grant of course, together with his partner Raoul Pal, also initiated the RealVision TV channel producing high quality in-depth financial market interviews.

[Video/Podcast] 37 mins


Lars Schall: Howdy, ladies and gentlemen, I’m now connected in Singapore with Fund Manager and Financial Commentator, Grant Williams. Let us talk about your current activities first, Grant; what are you doing these days? Some people may be under the impression that you are no longer active as a provider of relevant financial insights?

Grant Williams: Well, it’s good to be on again, Lars. It’s always a pleasure to chat with you. I’ve got a couple of things that are taking up a lot of my time at the moment. One is my letter ‘Things that make you go hmmm’, which I’ve been writing for six years now. That takes up a fair amount of my time. The other one is a project very dear to my heart called ’Real Vision TV’, which is an online, on-demand financial information service where we go around the world and we interview the smartest financial minds we can find. Many of them are household names, but a lot of them aren’t. I think there’s a tremendous amount of valuable information buried in the thoughts and experiences of financial professionals all around the world. So, we’re trying to bring as much of that thinking, as much of that insight to as wide an audience as we can. It’s been a great success and the audience is positively evangelical about it, which is great for all of us, so we’re really enjoying that.

LS: What is your experience; are people open to pay for content like you are producing on the internet, or is it difficult?

GW: Everything’s difficult, but I think if you’re providing people with something they can’t get anywhere else and you’re providing people with unbiased, unfiltered information – whether it’s the stuff I write myself or it’s the thinking of a group of incredibly smart, very successful financial thinkers –, I think if you have some integrity, and there is, as I said, unbiased, unfiltered, natured information, then I think it has tremendous value to people because everywhere you look these days, there is a filter between you and the people that drive financial markets. So, I think by removing that, the information direct from the source becomes very valuable indeed.

LS: Now, talking about economics and finance, as you will know, cheap energy is essential for industrial societies. One way to talk about the oil price is to talk about the US Dollar since there is an inverse relation between both. Therefore, let me ask you first; how will the US Dollar perform going forward according to your expectation, and will this trend have an impact on the price of oil?

GW: To answer the second part of that question first, yes. I mean, if you look at the chart of oil and the dollar, it’s about as perfect a correlation as you’re ever going to get. When the dollar is weak, oil is strong and vice versa. But I think the dollar is arguably the most important thing to get right at the moment. It’s also at a point where it could go either way so battle lines have been drawn. There’s a lot of very smart people who believe that the dollar is going to get much stronger and we are in the middle of a bull run like we saw in the 80’s leading up to the Plaza Accord and again in the late 90’s, and there are other very smart people who believe that the dollar is going to be exposed as just another fiat currency that needs to be debased.

Now, I haven’t really picked sides, yet. I think I probably lean towards the latter, simply because I know that nobody wants a strong currency now. It’s a very dangerous thing to have, and I suspect if the dollar continues to get too strong, the Fed will actively move to lower it. We’ve seen what just the removal or the lowering of the prospects of a series of brake lights has done to the dollar – it’s paused it in its tracks and it’s at a point where technically it looks like it’s about to break down. I can see how it could go higher and it may well do that but I think ultimately the dollar will go lower because it’s just another fiat currency. Yes, it’s the cleanest dirty shirt of all the other examples we use to describe it, but ultimately it is a fiat currency, and I think we are still in the middle of a currency war and no one is going to tolerate a strong currency including the Federal Reserve.

LS: Do you expect that the outcome of the current energy prices will be much higher costs in the future, or to put it differently, is it time to buy a long-term call option on the oil price?

GW: I think if you can buy a call option on anything like oil, we live in an inflationary world. We may be going through a bout of deflationary pressure right now, or disinflationary pressure, depending on where you stand, but ultimately the world is inflationary by nature, and central banks have proven the last few years that they will stop at nothing to generate inflation, and as goes inflation, so goes oil. So, whilst we might be in the middle of a weak patch for oil, and it may well stay down here in the 40’s or it may go back down into the low 30’s, it’s really quite possible if this bear market resumes; over the longer term, there’s only really one direction for the oil price to go and that is higher. So I think depending on the length of exposure you can get and the pricing of that option, I think having a long term call option on is worth having.

LS: With respect to the forces at work in the oil market, in your newsletter, ‘Things that make you go hmmm’, you’ve wrote recently under the headline of ‘Reservoir Dogs’ about the ongoing battle between the oil producing nations. What is this battle all about?

GW: Well, the Saudi’s learned a valuable lesson several decades ago when they cut production and lost market share. So, what we’re seeing now is a refusal of any of the major oil producing countries to cut production for fear that someone steps into that void and takes over their market share. It happens every now and then. It’s happening right now. it’s dangerous, but ultimately I don’t see anybody blinking. I think we’re going to see more pumping for longer. We’ve got the US Shale industry, which is causing all kinds of headaches for the traditional oil producers in the Gulf, and so nobody wants to really blink, yet. They all want to drive the others out of business and they figure they can do that through increasing supply.
The problem with this is nobody’s really looking at the demand situation, and what we’re seeing in addition to this glut of supply is a genuine slow down globally in demand, and that’s not as easy to address because you can cut your production big – if trade is slowing down, growth is anaemic then the demand for oil really isn’t there. So while people look at the supply side, I think there’s far too little attention being placed on the demand side and I think it’s important that people understand just how poor the level of growth is in the world after some ten trillion dollars of printed money has been thrown at it by the world’s central banks.

LS: Grant, you know about the US American Energy Analyst, Michael T. Klare, right?

GW: Yes.

LS: He wrote recently that we might see peak demand, not peak oil, but peak demand. (1) Do you think he’s right?

GW: Well, as I said when we chatted about the previous question, yes, I think it’s a very real possibility and I think it’s something that far too few people are thinking about and talking about. This isn’t necessarily purely a supply-side problem. If you look at growth around the world, you’ll see that it is stuttering at best, and so we are seeing for the first time in several decades a genuine slowdown in demand for oil, and it’s something people have gotten used to since the 70’s that demand would be constant and we increase every year. When you throw those two things together, a massive supply glut and a fall in demand, which has caught a lot of people by surprise, the path for oil to stay much lower than people think for much longer is very, very clear. I don’t think enough people are thinking about the demand-side of this. I think Michael’s writing is very important.

LS: We’ve mentioned the inverse relation between the US Dollar and the price for crude oil. There’s also this relation between the US Dollar and the price of gold. One simple question; why has gold performed very well so far in 2016? Has this anything to do with the mighty dollar?

GW: I think, this time around, probably not. The dollar is stopping, pausing and looking a little weak. It hasn’t hurt gold by any means but, again, people forget that gold and the dollar can both go up at the same time; the relationship isn’t always completely inverse.

I think what’s happening in gold is that the penny is dropping amongst a lot more people, certainly in the institutional side, that’s the Federal Reserve, the central banks will continue to try and debase currencies. When Kuroda at the Bank of Japan took rates negative at the end of January, I think that shocked a lot of people, as he’d said literally eight days previously that he was not even considering negative rates. I think that was the first sign for people that central banks maybe aren’t quite in control of this and are starting to get a little bit desperate. When you start to erode people’s faith in central banks, it erodes people’s faith in fiat currency, and the only real alternative to that is gold. So, I think what you’re seeing is a natural reversal of a four-year cyclical bear market amongst a structural bull market, and I think the tail winds for gold look really, really good right now.
You’re starting to see a lot more mainstream commentators talk positively about it. There was a big article by PIMCO, which was put out recently – and articles like that don’t just happen in a vacuum; that’s the product of some serious thinking of a major institutional investment shop. I think that’s happening across the board. I put a presentation out in December last year called ‘Nobody Cares’, which listeners can Google and find on YouTube, talking about what would happen to the gold price if we did see exactly this; some institutions start to allocate a small amount of their portfolios to gold, which makes all the sense in the world to me, and what that would do to the gold price. We’re seeing that. We’re seeing hedge funds and we’re starting to see institutional pension fund type money start to really seriously assess the thought of looking at gold, and having negative interest rates and therefore positive carry for gold is a tremendous advantage. So I think this is going to continue. I think the gold market may be about due for a pullback, but I think given what’s happened in the last four years, I think a lot of the brush has been cleared out and I expect the gold price to go significantly higher again then.

LS: Talking in general terms, couldn’t we say that it’s rather the opposite compared to oil? We are nowhere near peak demand, but we are near peak supply.

GW: Yes. The supply for gold has been fairly consistent for many, many years now. It’s getting much harder to find gold and when people do find it, the cost of getting it out of the ground is only getting higher. There are all kinds of natural reasons for the gold price to want to go higher, but the main reason, I think, or will be the resolution of this split between the paper markets and the physical markets, which is probably the most important thing for people to understand.
Anybody who’s casually looking at gold or is looking to trade gold, they probably will do so via ETFs that they can buy and sell at the click of a mouse. What we’re seeing now though are people who actually want to own the metal – and this has been something I’ve talked about for a couple of years now; the difference between the gold price and the price of gold. (3)

The gold price, as people understand it when they look at the newspaper, look at the internet, is the price of a piece of paper, it’s the price of a futures contract generally traded at COMEX of the US, whereas the price of gold is what it actually costs you to get an ounce of physical gold in your hand. While there hasn’t been an enormous demand for that physical asset, that split between paper pricing and physical pricing hasn’t really mattered. It doesn’t take much in the way of inflows to the people who actually want to allocate to physical metal and, again, referring to the last question, the cost of holding or storing that metal now with negative interest rates is not the problem it once was – so, suddenly when people want to buy physical gold, you are going to start to see this unwind of the number of paper claims per physical ounce as people want to perfect their asset. And I think that is going to be a major driver of higher gold prices as people look to secure the metal itself. As I said, I think it’s just one more very positive situation in the gold market. It’s been waiting to resolve itself for a while and really all it needed was an increase in physical demand and I think we’re seeing that.

LS: What is your thinking on negative interest rates, and do you think that the hesitation of the Federal Reserve regarding the interest rates hike will benefit gold?

GW: Look, there are two things that have been at odds with each other for a number of years now. One is the economic reality that the world faces, and the other is the narrative being spun by central banks. The narrative has very much been 2008 is over, we saved the world, everything is fine, so just go about your business. The reality is much, much different. 2008 was nothing more than a shot across the bowel of a much larger financial crisis that has still yet to hit us.
It’s unfortunate and it sounds like doom mongering, but I think it’s the truth. When you look at the amount of debt in the world which was the root-cause of 2008, the amount of leverage and credit build up in the global financial system not only has that not been addressed, it’s actually got worse since 2008. So, I think the move by central bankers to negative interest rates was them crossing the Rubicon, and I think that’s the first sign that market participants and even members of the public have had these guys really a) don’t know what they’re doing and b) are making some very, very dangerous short-term decisions that will have all kinds of unintended consequences. I think the move to negative rates, particularly by the Bank of Japan, is very important. And the follow-up from the Fed who are now making excuse after excuse not to hike having said they were on a hiking course (but after the retail sales number last week, they may be forced to try and hike again), but I think if they do, you’re going to see equity markets handle that very, very badly. The biggest problem the Fed faces right now is being forced to back track and take any hikes they made back. So I can completely understand why they’re trying to delay these and why they’re trying to talk themselves out of having a hike in the market into believing they are right to do so, but ultimately they’ve backed themselves into a really, really bad corner here, not just the Fed but all the central banks. I’m afraid there’s only one way out and it’s going to be extremely painful.

LS: A few days ago, Harvard Economist Kenneth Rogoff gave advice to the emerging market countries, and that was to buy gold. (4) What is your comment, like for example, did Mr Rogoff miss something? I mean, the emerging market countries have been buying gold for years now, right?

GW: Yes. It’s a great example of what we were talking about a short time ago. Ken Rogoff is a brilliant man, but he is very much an establishment figure and that’s just another example of establishment figures coming around to buy gold. I mean, his rationale behind advising the developing markets to buy gold is very, very sound indeed. They have been buying it at the margin, but I think if you look at the percentage of reserves held in the developing markets, I mean, 50%, 60%, 70%, 80% some of these central banks hold their assets in gold, whereas the developing markets are holding less than 10%, a lot of them less than 10%, because it hasn’t really been until the last 25 years that Asia has really started to build up a significant amount of reserves.
So, what he’s advising them to do instead of buying treasuries, which are at all-time highs and are an instrument that there’s going to be a lot more of, particularly if the US has to fund greater deficits, he’s advising them very sensibly to buy an asset that’s not at an all-time high and has actually been in a structural bear market for four years, and they can swap very high price treasury notes for an asset which is nobody’s liability, and they can own free and clear, and there’s no leverage involved. I think the advice is very sound, but it’s another one of these very, very significant tail winds that can push the gold market higher, because there is no more price insensitive buyer in the world in a central bank. If they decide they’re going to allocate 3%, 4%, 5% of their reserves to gold or an additional 3%, 4%, 5% of their reserves in some cases, they are not going to start trying to pick the market entirely – they’re going to buy that gold like the Russian central bank do every single month regardless of the price. So that just puts a demand flaw underneath the metal and, again, it’s a very tight market, and we are going to see the price go significantly higher.

LS: When it comes to gold, we already see an increase in cooperation between two emerging market countries, and that is China and Russia. Is this of interest to you?

GW: Yes, very much so. It’s very interesting, but I think this is more a coordinated action against the US Dollar than towards gold. I think the move to try and settle trade between countries in local currencies as opposed to going through the dollar is a perfectly natural one to take by the likes of China and Russia, cutting the US out in a lot of these bilateral trade agreements makes perfect sense. I think you’re only going to see that cooperation tightening, I think you’re going to see the pressure on the US increase, and it’s not just China and Russia; it’s Turkey, it’s the Philippines, it’s India, it’s Indonesia. There are a lot of people, a significant percentage of the world’s population, in Asia who are coming together in ways that they haven’t come together ever before, and that coalition is only going to get stronger and they are not ultimately going to want to do trade in US Dollars. They’re used to trading for oil, they’re used to trading for gold with each other. These are mercantilist economies that have traded with each other for thousands of years, so they understand how that whole thing works. It didn’t used to involve the dollar, and I certainly see a time in the future where it won’t involve the dollar again.

LS: So, do you think that, for example, the Russians could sell the oil to China in exchange for gold?

GW: Yes. I don’t see why not. That’s a very easy step for them to make. We’ve already seen the launch of a Yuan quoted futures contract in Shanghai which, to me, is the first step on exactly that road. I think the path towards that is very clear, I think the reasons for going there are very clear, and there’s really nothing to stop them doing that and it would be in both of their best interests, I suspect.

LS: Would you think that the Russians are open for it, to receive gold payment for oil? When you have fiat money, you have a paper claim. When you have gold bullion, there is no counterparty risk.

GW: You only have to look at the activity of the Russian central bank in the gold markets for the last almost 10 years and you will see there have been a mere handful of months where they haven’t added to their gold reserves. So there is absolutely no question at all that the Russians are extremely happy to swap dollars for gold, and I have no doubt that they will have no problem in swapping what is, in effect at the moment, a double proxy in the shape of oil for more gold. I don’t think there’s any question about that whatsoever.

LS: What’s your comment on Deutsche Bank’s recent agreement in New York City to settle gold and silver rigging claims? In particular, I would be interested in your comment on the fact that the Western financial mainstream press does not comment on this.

GW: Well, the stories of rigging in the gold and silver markets are legendary. There are so many of them. Some of them are wackier than others, but if the last three or four years has taught us anything, it’s that all financial markets are rigged and I truly believe they are. I’ve been involved in financial markets for 30 years, and so if you want to tell me that they can rig Libor, one of the key rates in the entire world, but no one wants to rig the gold and silver market, I think you’re out of your mind. I’m absolutely certain that the gold and silver markets are rigged in some way, shape or form. How deep that rigging goes and the actual mechanics of it, I don’t know. But you can see all kinds of strange behaviour in the wee small hours overnight. You can see trades being done which are clearly not done by any kind of full profit organization. So I think there is definitely manipulation of the gold and silver claims. I think the Deutsche Bank agreement is just the tip of the iceberg. Part of that agreement was that they were going to share information a) about how the markets were rigged and b) who else was involved, so I fully suspect to see a lot more news on that coming out.
Now, whether it makes the mainstream media or not, I don’t know. I’m continually confused as to why they don’t report these stories because they are so interesting, but unlike the rigging of Libor or foreign exchange markets or the treasury market or any of the other rigged markets, when people rig the gold market, they are rigging a claim on a physical asset that’s been money for 6,000 years. It’s not a paper contract, and so if this becomes mainstream, if people understand what’s going on in the gold markets and they believe that some gold they believe they’ve bought is subject to rigging, again, people are going to want to get their own gold, they’re going to want it allocated, they’re going to want it in their own safety deposit box outside the system, and it really just takes a few people; the numbers are extraordinarily small for people to say, “Okay, I’m going to take my gold out of the banking system and I’m going to put it in a safety deposit box”. You don’t need too many people doing that to really let the tide go out, and as Warren Buffet is famed for saying, “We will then see who’s swimming naked”, and I suspect there’ll be quite a few people in that predicament.

LS: Yes. Let’s take a quick look at gold mining stocks. Do you think they are still an excellent investment?

GW: Yes. As I said earlier, I expect the gold price to go higher which I am certain will propel the gold mining stocks significantly higher; but with the gold mining stocks you always have to be careful because the pull backs can be vicious. Anyone that tries to trade those things needs to be very, very careful because you can get whipsawed around and lose an awful lot of money. If you believe gold is going higher, if you think gold is going to get back to $1900 or above, then owning the gold mining stocks here, I suspect with the additional leverage you get thrown in, will be a significant money spinner. But between now and then, there will, as always, be some really nasty periods where people get shaken out of these gold stocks. With a lot of them being up 100% from the bottom, you’d need to be very, very careful and you need to understand the company very well. You need to understand the technical side and you need to have a tremendous amount of nerves because these things are really, really tough to buy and hold, particularly if you’re buying them now because you’re a late believer in the fact that the gold price is going to go higher. Know why you want to own them, know what you think the gold price is going to do, and make sure you understand the companies, how well they’re run and the balance sheet situation, and above all the quality of the management. I think by doing that and picking the right stocks and mapping them around a strategy for the actual price of the metal itself, people will do very well in gold stocks over the next couple of months.

LS: My last question on precious metals would be the following; the gold/silver ratio is currently around 1/73. If I would have 73 ounces of silver, I could buy one ounce of gold. If my inclination in the long run was to do so, and that is to exchange a portion of my silver for gold, at what level should I do this?

GW: Well, look, there is no absolute level. If you look at what’s happening to the two metals, silver is a far more volatile little brother for gold, and if you believe the gold price is going up and you are a precious metals investor as opposed to a gold investor, or you’re a trader which a lot of people do like to trade these things – they look at stops, they look at technical levels, and they like to get in and get out –, I think if you believe the gold price is going to go higher, then silver will certainly outperform gold. There are many reasons why. It’s a much lower price, it’s much more volatile, and so there are periods where you look on the chart where it makes all the sense in the world to switch gold for silver. Generally, though you want to do that when you think you’re at the beginning of a really strong run. Silver has out-performed gold quite significantly this year and so I would just pay very, very careful attention to the technical levels on the charts before you started trading them around. Some people have made an awful lot of money doing that, but the casual investor who tries to do this can just generate an awful lot of pain for themselves. It’s not something that you want to be just playing around in and you want to really understand the technical levels, you want to really understand the ratios, and you want to have a very clear conviction about what you think the price is going to do before you start doing things like that.

LS: This year, we have an election year in the United States. And you think the chances of a presidency of Donald Trump are quite high?

GW: People have underestimated Donald Trump all the way along. I mean so far, he’s got rid of about 15 opponents. He’s got one more to get rid of, whether it’s Hilary Clinton or Bernie Sanders. Now, this is by no means an endorsement of Donald Trump. I think, he is the embodiment of a lot of the issues that are going on and people are incredibly disenchanted, disillusioned with the political class. Trump says a lot of things that a lot of people want to hear. He’s potentially a very dangerous president, but frankly so is Hilary Clinton and so is Bernie Sanders in different ways.
America has ended up with three candidates who will, one way or the other, be the catalyst for hopefully a great change there. Whoever we wake up with in the middle of November as the next year’s president, I suspect the American public will sit back and say, “We can’t let this happen again. We need to do something about this”. They need to address an awful lot of problems not just with politics, but this whole construct of the central banks and the current administration of how the economy is getting much better. You can see with the rise of Bernie Sanders and the rise of Donald Trump that that is not the case, that the economy is struggling, the man on the street is struggling, and Donald Trump and to a perhaps lesser extent, Bernie Sanders, or both are the living embodiment of that. Trump’s chance of getting into the White House is a lot higher than people think it is. It depends what he does between now and November, but I suspect Hilary Clinton will not be relishing going up against the man who doesn’t play by the same rules as the other politicians do that she’ll be used to facing off against. This is a guy who doesn’t mind getting his hands dirty, and Lord knows there’s enough dirt floating around the Clinton’s that Trump can get his teeth into, and he won’t play nice; he will bring up things that other politicians wouldn’t because they’re very cozy with Hilary.
So I think it’s going to be important to watch. I think if you add the Brexit debate in the UK, you add some of the radical politicians who are making great strides in France, in Austria, in Holland – we’re seeing a movement right across the world where disenchantment with the status quo in a political class, and a lot of that comes from everybody’s economic situation. It’s being manifested in the candidates that are being chosen, so people have to be paying attention because there are some very, very important shifts happening right now, and if you’re not watching them and you’re not trying to understand what’s happening here, you’re going to wake up one morning in a world you really don’t recognize, I suspect.

LS: What do you expect if Mr Trump would become president when it comes to the State and money?

GW: Well, look, Donald Trump is the self-professed king of debt, which is very apropos for the United States right now. It’s a country in so much debt, it’s hard to even get your head around the numbers. The danger is that, I think, we’ve had a lot of talk recently with Trump talking about buying the debt back at a lower price and making a deal, etc. etc. and let’s raise the spectre of US default. He’s come out and said, “No, no, no. We’ll never have to default because we’ll just print the money”. This, to me, is something I’ve been waiting for, for quite some time now, and this is the fact that central banks have been able to print an extraordinary amount of money over the last eight years with optically no bad side effects. The inflation hasn’t shown up that people were warning about price in the money printing game going. And my fear was always that that would embolden politicians who didn’t really understand any of the nuance of this; they heard there was money printing going on, they were waiting for the bad effects to happen, they haven’t seen them, so they think that this money printing thing works.
We saw it a little while ago in the UK with Jeremy Corbyn’s idea for people’s QE which was based upon the fact that QE so far hadn’t done any damage, and so we should do more of it and this time basically helicopter drop money to people. Politicians don’t understand these things for the most part. They’re complicated ideas and they don’t have demonstrable outcomes, the wheels that get set in motion when you do things like go to negative interest rates and print money start spinning very slowly and you don’t really see what comes out of the machine for an indeterminate amount of time. We haven’t seen it yet, but we will. There are no free lunches, but the very fact that the political class has seen this happen without any obvious ill effects has emboldened them and Trump, I suspect, is someone who likes debt. He thinks he understands debt and he will have no qualms about going deeper into debt.
At some point, however, the question of faith in the finances of the US Government, faith in the quality of the dollar are going to be raised again by the market in general, and when that time comes, it’s very hard to see how there is a solution to calm any nervousness that people have around the dollar without some significant pain being felt. There is a storm coming. There is no two ways about it, and I think if people pay attention, you will have heard recently some really significant names starting to express the fears they have. Guys like Carl Icahn, guys like Stan Druckenmiller have been very outspoken about how concerned they are for what’s happening. And if you listen to those things carefully and you understand that these guys are some of the smartest investors in the world, if guys like that are getting out of equities, getting into gold, getting into cash, there are very good reasons for that, and the average investor in the street should be listening to that and trying to understand why the smartest investors in the world are thinking that way because it’s extremely important to try and understand.

LS: But the people who read newspapers, watch television and so on, do you think they are made aware of this?

GW: No, absolutely not because we live in a 24-hour news cycle, we live in a culture of celebrity and soundbite. To really understand this, you’re not going to find it in the New York Post or you’re not going to find it in the Daily Mail in the UK, or you’re not going to find it in Der Spiegel in Germany; you need to go and read Hayek, you need to read a ton of books which are hard to understand and require time and effort, and unfortunately that’s not the culture we live in. So people are going to be blindsided by this.
I would recommend anybody that really wants to understand this, you have to be proactive. You have to go and seek out the information and seek out the people who can help you understand what’s going on because it’s never been more important to understand what’s happening right now. If you don’t understand, you can’t prepare yourself for what’s going to come and it’s important that everybody tries to do that.

LS: Since you’ve mentioned books, can you give us your three favourite economics books?

GW: There are different types of economics books. I think, three that are fairly easy to read and are enjoyable to read and will give people a lot of really good information; Market Wizards by Jack Schwager is a very famous book. It’s a great read and Jack is a phenomenally nice guy, I’ve been fortunate enough to sit and chat with him before and the book is excellent. I think, The Lords of Finance by Liaquat Ahamed, which talks about the period right before the First World War, is incredibly important to read now because the echoes which you’ll see when you read that book are extraordinary, so I would recommend that. Another one that comes to mind is, Devil Take the Hindmost by Ed Chancellor, which is a fabulous book and, again, there’s plenty of lessons in there.
Look, I could list a few hundred books. There are so many brilliant people writing about finance in an accessible way. This is one of the reasons we set up our business is to try and give guys who can explain finance a voice and people who are interested in finding out more a means to access them. I cannot stress enough how important it is for everybody to really take it upon themselves to read as much as they can and try and understand what’s going on. Don’t rely on the mainstream media, don’t rely on short soundbite information, really dig into this and seek out the people who can help you understand it because it’s incredibly important right now.

LS: Well, I will for sure get some copies of the three books that you’ve recommended. Thank you for this and thank you for this conversation.

GW: Lars, you’re welcome. Any time. It’s always a pleasure.

LS: Thank you.

(1) Michael T. Klare: “The Coming World of ’Peak Oil Demand,’ Not ’Peak Oil’”, published April 28, 2016 under:,_the_coming_world_of_%22peak_oil_demand,%22_not_%22peak_oil%22/
(2) See for example Doug Pollitt: “Pimco Goes Full Goldbug”, published May 18, 2016 under:
(3) Compare “The Gold price is not the price of Gold”, Matterhorn Interview from November 2014 with Grant Williams under:
(4) Kenneth Rogoff: “Emerging Markets Should Go for the Gold”, published May 3, 2016 under:
Grant Williams, a regular speaker at investment conferences across the globe, is the portfolio and strategy advisor to the Vulpes Investment Management hedge fund in Singapore. Grant has more than 30 years of experience in finance on the Asian, Australian, European and US markets and has held senior positions at several international investment houses. Since 2009 he writes the popular blog “Things That Make You Go Hmmm…” ( In 2014 Grant Williams and Raoul Pal launched “RealVision TV” (, a totally unique web-based channel which contains several exceptionally thought-provoking interviews with intelligent, free-thinking individuals.


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