<p><a href="https://g.co/kgs/LyKVQVL" rel="noopener noreferrer" target="_blank"><span style="font-weight: 400;">Frank E. Holmes</span></a><span style="font-weight: 400;">, CEO and Chief Investment Officer at </span><a href="https://www.usfunds.com/" rel="noopener noreferrer" target="_blank"><span style="font-weight: 400;">U.S. Global Investors</span></a><span style="font-weight: 400;"> and Executive Chairman of </span><a href="https://www.hivedigitaltechnologies.com/" rel="noopener noreferrer" target="_blank"><span style="font-weight: 400;">Hive Blockchain Technologies</span></a><span style="font-weight: 400;">, recently joined Mike Maharrey on the Money Metals podcast to discuss pressing economic trends, the Federal Reserve's actions, and how technology and geopolitics are reshaping the investment landscape.</span></p>
<p style="text-align: center;"><strong>(Interview Begins Around 3:30 Mark)</strong></p>
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<h2><b>Fed Policy and Economic Dynamics</b></h2>
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<p><span style="font-weight: 400;">Holmes critiqued the </span><a href="https://goldseek.com/article/fed-keeps-party-going-rate-cut-threatens-cool-shindig-down"><span style="font-weight: 400;">Federal Reserve’s recent 25-basis-point rate cut</span></a><span style="font-weight: 400;">, noting that while inflation remains stubborn, the Fed reduced the number of projected rate cuts for the coming year from four to two. He highlighted the dual challenges of managing debt costs and stimulating economic growth amid negative real interest rates, which he believes will favor gold. Holmes pointed to a </span><a href="https://www.mercatus.org/research/policy-briefs/how-reliable-modern-monetary-theory-guide-policy" rel="noopener noreferrer" target="_blank"><span style="font-weight: 400;">growing reliance on Modern Monetary Theory (MMT)</span></a><span style="font-weight: 400;"> and predicted this trend will continue to drive up gold prices.</span></p>
<h2><b>The Role of AI in Streamlining Regulations</b></h2>
<p><span style="font-weight: 400;">Holmes emphasized the transformative potential of artificial intelligence (AI) in addressing regulatory inefficiencies. Drawing from his experience taking GoldSpot, an AI-driven gold mining exploration company, public, he noted how AI could reduce wasted expenditures in exploration and streamline redundant government regulations. Holmes sees AI as pivotal in tackling the inefficiencies that burden sectors like healthcare and energy.</span></p>
<h2><b>Gold’s Stellar Performance</b></h2>
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<p><span style="font-weight: 400;">Holmes underscored </span><a href="https://www.moneymetals.com/gold-price" rel="noreferrer"><span style="font-weight: 400;">gold’s impressive track record</span></a><span style="font-weight: 400;"> this century, noting that it has delivered positive returns 80% of the time and even outperformed the S&P 500. Despite this, he acknowledged that gold stocks have lagged bullion due to weaker free cash flow metrics. However, companies focusing on robust free cash flow are starting to attract attention from diversified investors and quantitative funds.</span></p>
<h2><b>New ETF: U.S. Global Technology and Aerospace Defense</b></h2>
<p><span style="font-weight: 400;">Holmes unveiled the upcoming launch of the </span><a href="https://www.bloomberg.com/quote/WAR:US" rel="noopener noreferrer" target="_blank"><span style="font-weight: 400;">U.S. Global Technology and Aerospace Defense ETF</span></a><span style="font-weight: 400;">, with the ticker symbol “WAR.” The ETF focuses on companies at the forefront of AI, cybersecurity, and aerospace technologies, including Nvidia and Palantir. Holmes positioned this ETF as a hedge against crises and a reflection of the growing demand for cybersecurity and defense technologies in a volatile geopolitical climate.</span></p>
<h2><b>Global Geopolitical Landscape</b></h2>
<p><span style="font-weight: 400;">Holmes explored the geopolitical ramifications of open borders, regulatory shifts, and energy dependencies. He highlighted Europe’s struggles with socialist-driven regulatory burdens, noting that 88 major companies left the London Stock Exchange last year due to ESG and DEI-driven mandates. Holmes contrasted this with the U.S., where technology and deregulation efforts under the Trump administration are fostering a more business-friendly environment.</span></p>
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<p><span style="font-weight: 400;">Holmes also pointed out </span><a href="https://www.moneymetals.com/news/2024/06/28/as-war-rages-next-door-poles-seek-safety-in-gold-003285" rel="noreferrer"><span style="font-weight: 400;">significant geopolitical tensions</span></a><span style="font-weight: 400;">, including the Russian invasion of Ukraine, Poland’s increased defense spending (nearing 5% of GDP), and the broader implications for NATO and global stability. He voiced cautious optimism that AI and deregulation could usher in greater efficiency and economic resilience, though he warned of lingering cultural and political divides in regions like Europe and the Middle East.</span></p>
<h2><strong>A Message of Hope</strong></h2>
<p><span style="font-weight: 400;">As the conversation wrapped up, Holmes expressed hope for greater technological and economic innovation to address global challenges. He encouraged listeners to explore his insights further via his </span><a href="https://www.usfunds.com/frank-talk-subscribe/" rel="noopener noreferrer" target="_blank"><span style="font-weight: 400;">"Frank Talk" blog</span></a><span style="font-weight: 400;"> and the </span><a href="https://www.usfunds.com/investor-alert-subscribe/" rel="noopener noreferrer" target="_blank"><span style="font-weight: 400;">Investor Alert newsletter</span></a><span style="font-weight: 400;">, which reaches over 100,000 subscribers worldwide.</span></p>
<h3><b>Key Takeaways for Investors</b></h3>
<p><span style="font-weight: 400;">Holmes’ analysis provides a comprehensive roadmap for investors navigating today’s complex landscape:</span></p>
<ul>
<li style="font-weight: 400;" aria-level="1"><b>Gold as a Safe Haven</b><span style="font-weight: 400;">: With negative real rates and persistent economic uncertainty, <a href="https://www.moneymetals.com/buy/gold" rel="noreferrer">gold remains a vital asset</a>.</span><span style="font-weight: 400;"><br /><br /></span></li>
<li style="font-weight: 400;" aria-level="1"><b>AI's Game-Changing Role</b><span style="font-weight: 400;">: Innovations in AI are poised to revolutionize industries and government processes.</span><span style="font-weight: 400;"><br /><br /></span></li>
<li style="font-weight: 400;" aria-level="1"><b>Defense and Cybersecurity</b><span style="font-weight: 400;">: Growing geopolitical risks are driving demand for technologies that bolster national security.</span><span style="font-weight: 400;"><br /><br /></span></li>
<li style="font-weight: 400;" aria-level="1"><b>Geopolitical Awareness</b><span style="font-weight: 400;">: Investors must stay attuned to broader geopolitical developments that can influence markets.</span></li>
</ul>
<p><span style="font-weight: 400;">As Holmes aptly summarized, “We don’t want war, but it’s important to protect ourselves from the realities of the world.” This balanced perspective encapsulates the dual need for optimism and caution in today’s investment climate.</span></p>
<h2><b>Key Questions & Answers </b></h2>
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<p><span style="font-weight: 400;">The following are the key questions and answers from the Money Metals podcast with host Mike Maharrey's interview with Frank Holmes, CEO and Chief Investment Officer at U.S. Global Investors and Executive Chairman of Hive Blockchain Technologies: </span></p>
<h3><b>What is Frank Holmes’ view on the Federal Reserve’s recent policy moves?</b></h3>
<p><span style="font-weight: 400;">Frank Holmes described the Federal Reserve’s recent 25-basis-point rate cut as a response to the conundrum of managing high debt costs and the need for economic stimulation. He noted the reduction in projected rate cuts for the upcoming year from four to two as a sign of the Fed’s hawkish stance. Holmes emphasized that negative real interest rates, which occur when inflation outpaces nominal interest rates, are favorable for gold, predicting a continued rise in its value as the Fed struggles to control inflation while sustaining growth.</span></p>
<h3><b>How does Holmes see AI impacting the economy and government regulation?</b></h3>
<p><span style="font-weight: 400;">Holmes highlighted the transformative power of artificial intelligence (AI) in reducing inefficiencies across industries and government. He shared examples from his experience with GoldSpot, an AI-driven gold exploration company, which reduced exploration costs significantly. He believes AI can similarly streamline the U.S. regulatory framework by eliminating redundancies, enabling a more efficient economy. AI’s role in sectors like healthcare and energy is also set to expand, identifying issues with unprecedented accuracy and precision.</span></p>
<h3><b>Why does Holmes believe gold remains a strong investment?</b></h3>
<p><span style="font-weight: 400;"><a href="https://www.moneymetals.com/news/2024/01/09/gold-has-outperformed-the-sp500-in-the-21st-century-002919" rel="noreferrer">Gold has delivered positive returns 80% of the time this century and outperformed the S&P 500</a>, according to Holmes. He attributes this to its dual role as a hedge against inflation and a store of value during times of economic uncertainty. While gold stocks have lagged bullion due to weaker cash flow metrics, companies focusing on free cash flow are becoming attractive to diversified investors. Holmes foresees continued demand for gold as Modern Monetary Theory and negative real rates persist.</span></p>
<h3><b>What is the focus of the new U.S. Global Technology and Aerospace Defense ETF?</b></h3>
<p><span style="font-weight: 400;">The new ETF, with the ticker “WAR,” focuses on companies involved in AI, cybersecurity, and defense technologies. Holmes explained that firms like Nvidia and Palantir are crucial in addressing modern challenges, including drone technology, satellite recognition, and cybersecurity threats. The ETF is designed as a hedge against crises, reflecting the rising demand for technologies that ensure national and digital security in an increasingly volatile world.</span></p>
<h3><b>What are Holmes’ insights on global geopolitical dynamics?</b></h3>
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<p><span style="font-weight: 400;">Holmes provided a detailed analysis of global geopolitical tensions, including Russia’s invasion of Ukraine, NATO’s response, and Europe’s economic struggles. He highlighted Poland’s defense spending, which now exceeds 5% of GDP, and emphasized how countries are rethinking open border policies. Holmes criticized excessive regulations in Europe, which have driven major companies away from markets like the London Stock Exchange. In contrast, he sees the U.S. leveraging deregulation and technology to maintain its economic edge.</span></p>
<h3><b>What optimism does Holmes see for the future?</b></h3>
<p><span style="font-weight: 400;">Despite challenges, Holmes expressed cautious optimism about the potential of AI and deregulation to address inefficiencies and promote economic growth. He highlighted the U.S.’s technological advancements and productivity gains as critical advantages over Europe. Holmes also emphasized the importance of geopolitical stability, particularly in regions like Ukraine, and encouraged a focus on innovation and strategic defense to navigate future uncertainties effectively.</span></p>
