Gold's Next Big Move? Frank Holmes Weighs In -

Welcome to this week’s market wrap podcast, I’m Mike Gleason.
Coming up don’t miss another wonderful interview with Frank Holmes, CEO of U.S. Global Investors and the Executive Chairman of Hive Blockchain Technologies. After the precious metals have traded mostly sideways throughout much of July, Frank believes we’re about to see some real movement in the gold market and you’ll certainly want to hear which direction he believes it’ll be heading next over the upcoming couple of months.
Frank also weighs in on the new Fed chairman and what he’s expecting there with monetary policy and why he’s warning investors to take the rhetoric they’re spewing about fighting inflation with a grain of salt, and why he expects to see a return to money printing in the very near future from our friends at the Fed.
So, stick around and hear that and a whole lot more during this week’s exclusive Money Metals interview between Mike Maharrey and Frank Holmes of U.S. Global Investors, coming up after this week’s market update. And if you enjoy this material, please do us a favor and like and subscribe to this podcast wherever you consume this content.
The Federal Reserve wrapped up its latest policy meeting this week by doing… well… nothing. At least on the surface.
Officials voted to leave their benchmark interest rate unchanged, keeping it in a range of 3.5% to 3.75%. But if you look beyond the headline, this meeting may have been one of the most revealing we've seen in quite some time.
Three members of the Federal Open Market Committee broke ranks and voted for another rate hike. That's a remarkably public display of disagreement inside an institution that traditionally tries to project unity. Fed Chairman Kevin Warsh even described the debate as "a good family fight."
So why does that matter?
Because it tells us the Fed itself isn't convinced inflation has been beaten. If everyone believed inflation was under control, there wouldn't be a serious push for higher rates.
And that's the contradiction investors are wrestling with today.
The Fed continues to say it's committed to restoring price stability. But after months of elevated inflation, rising energy costs, and stubborn price pressures, policymakers once again chose to wait rather than act. The central bank is talking tough – but its actions remain cautious.
Meanwhile, everyday Americans continue paying the price. Housing remains expensive. Credit card rates are still painfully high. And one’s savings loses purchasing power every year inflation stays above target. Whether the Fed raises rates or not, consumers are already feeling the effects of years of loose monetary policy.
Markets are now looking ahead to the September meeting, where pressure for another rate hike appears to be building. But whether the Fed ultimately pulls the trigger may be less important than the larger issue.
The real question is whether central bankers still have the tools – and the political willingness – to preserve the purchasing power of the dollar after years of unprecedented money creation and ballooning federal debt.
That's exactly why precious metals continue to attract attention. Gold and silver don't depend on central bank promises. They don't require confidence in policymakers. Their value isn't based on faith in fiat currencies or political decisions made in Washington.
Turning to the price action this week in the metals, gold was in positive territory through Thursday but is off close to $60 here today, meaning the yellow metal is now down a slight 0.2% on the week to trade at $4,056 an ounce.
Same story with silver. The white metal was in the green as of yesterday’s close but is now off about 75 cents for the week or 1.3%, checking in at $58.18 as of this Friday late morning recording.
Turning to platinum, the industrial metal is showing a nice 3.3% gain this week to come in at $1,651. And finally, palladium – despite a near 3% drop today alone – is also in positive territory for the week, coming in at $1,295 an ounce and registering a 2.8% gain.
Bigger picture, many folks may not realize that gold has already delivered one of the strongest bull markets in modern history. Prices have climbed to record territory, central banks around the world continue buying at historic rates, and investors everywhere are asking the same question:
Has the move already happened… or is there still room to run?
One legendary investor believes we're only getting started.
John Paulson – the hedge fund manager who became famous for correctly predicting the collapse of the U.S. housing market before the 2008 financial crisis – says today's gold rally is still in its early stages.
That's a remarkable statement coming from someone who has built his career identifying major turning points in financial markets.
Paulson argues that the driving force behind gold isn't simply inflation or geopolitical uncertainty. It's something much bigger: a gradual loss of confidence in paper currencies.
For decades, investors largely accepted that central banks could manage economies while preserving the purchasing power of their paper-based money. But after years of quantitative easing, massive government deficits, repeated financial crises, and persistent inflation, more people are beginning to question that assumption.
If confidence in fiat money continues to erode, Paulson believes demand for gold has the potential to grow for years – not just months.
And he's hardly alone.
Central banks continue adding gold to their reserves. Nations are looking to diversify away from the U.S. dollar. Individual investors are increasingly viewing physical bullion not simply as a speculative investment, but as financial insurance.
Of course, no market moves in a straight line. Gold has experienced corrections before, and it almost certainly will again. But long-term bull markets are often interrupted by periods of consolidation that shake out impatient investors before the next leg higher.
The key question isn't whether gold will experience volatility. Every asset does.
The question is whether the underlying reasons people own gold are becoming stronger or weaker.
According to Paulson, they're becoming stronger.
Well now, without further delay, let’s get right to this week’s exclusive interview.
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Mike Maharrey: Greetings. I'm Mike Maharrey, and I'm joined today by Frank Holmes. Frank is the executive chairman of Hive Digital Technologies and the CEO and Chief Investment Officer at US Global Investors. He's a fine analyst to boot. How are you doing today, Frank?
Frank Holmes: Outstanding. Time to be buying these big corrections we've experienced.
Mike Maharrey: Well, you just kind of almost answered my very first question. The last time we actually spoke was in January, so it was right after the big correction, but before the war started. And of course, as people know, gold has basically been trading sideways for the last several months, kind of in a range between 4,000 and 4,500. And I've heard some people say, "Oh, the bull market's over. It's done." I've heard other people say no, we're just in the beginning. And so I'm curious as to where are you on the gold market right now? Bearish, bullish, in between?
Frank Holmes: Well, there's two things that drive gold, which I've characterized as being the love trade and the fear trade.
North Americans are focused on the fear element of money printing, wars, all this stuff. Interest rates, that impacts the fear trade. But really what's important this century, in particular this century, has been the rising GDP per capita by Asia to Middle East countries, and it's highly correlated to gold prices rising. And that is more important because 60% of gold demand is for love. Love for your family, protective portable wealth. I can wear the jewelry and if a crisis happens, I take off my 24-karat gold and I get out of the country. And this is not going away culturally throughout Asia. And I think that we have to really appreciate, and if you've not been to Asia, it's hard to really grasp this emotional attachment to protecting your family. They don't have normal insurance that we would have for our houses, et cetera, that we all think we take for granted.
And same thing with car insurance. It's always a big risk in a car accident when you're in many of these emerging countries. But what they do all have is insurance is gold. So now what does that put us? It means that every time we've had a big correction in gold, the real big sweeping demand that comes in is the love trade. It's 60%. The fear trade is going to continue to ratchet higher because of the money printing. And I guess the most important policy that I see for that is called MMT, modern monetary theory. The world's over $350 trillion now in money printing. Who gets victimized the most is the US. And that's been really well orchestrated by China trying to create a parallel funding system and their attack. And they've been brilliantly successful because of what they've done with their one belt, one road of lending to 75% of the UN countries.
So, 75% are somehow indebted to China. So, China comes along and says, "We want things done like Saudi Arabia, we're buying so much oil, we want to do it in our one currency." And they're accepting that, and then they immediately convert to US dollars. Prior to that, it was always traded off of US dollars. And that assault by Xi Jinping's infrastructure and the BRICS nations, that's impacted a sentiment negative on the dollar. And I've not seen any movement back from that. And I think that there's some other things in the digital space that investors have to be really aware of. And one of them that it impacts a Bitcoin short-term, but long-term more important is what's called the Clarity Act. And the Clarity Act was really to help usher in earning a yield on a money market fund, but earning a yield on a stable coin.
And it's not a security. As banks have deposits, they pay you interest, but it's not deemed to be a security, your savings and checking account. If you have a money market fund with a mutual fund that it is. So these are nuances, and banks have pushed back for that Clarity Act to go through by going with Elizabeth Warren and to do this attack. So, it's created this doubt and Bitcoin knocks down, but I think it's just temporary story because more significant is Japan. And Japan's significance is because they've had, prior to COVID, a zero cost of capital for 30 years and they've had nothing but deflation. And ever since COVID and supply lines being disrupted in the war in Iran, they're starting to see inflation. So they've been raising interest rates. Well, how does that relate to us in North America? There's been several times over the past 30 years that we've witnessed our stocks falling here.
And you go, "What happened?" And there's nothing in the news that says that. And then a week later you find out, oh, China, not China, but Japan reversed its lending. That is, it's called the carry trade. So we had many hedge funds institutions borrow zero cost, 10 basis points cost of capital, then convert it to US dollars to get US dollars paying 4% or dividend paying stocks or Bitcoin, whatever you want, they would speculate. And the greatest crisis of that happened in 97 when Japan don't want their money back. And all the Asian countries had put it in buildings. So they couldn't put an 80-story building on a barge from Kuala Lumpur and send it back for collateral to Japan. And so they all basically devalued their country's currencies to pay back to Japan. And so we had that. It took four years for a normal credit country credit crisis.
It takes four years to repair that damage. And that bought them in 2001. Russia defaulted in 98, and you can see how that impacted 2002. They sort of bottomed in their economy. And we've had these runs, and then we get these big credit crisis. Same thing with 2009. It took four years later before the global economy rebuilt its balance sheet and income statement. Japan has, of the G7 countries, if you look at the debt to GDP, it's the highest. It's the scariest. But it's also the most unique because of 30 years of zero money, what people don't realize is that the most of the debt in Japan is actually owned by their own federal reserve, something like almost 50%. And then their super pension fund and their insurance companies also were borrowing at zero cost of money and investing in US treasuries. And so they're one of the biggest owners of US Treasury because they're making three and a half to four and a half percent free carry.
Well, as rates are now rising in Japan, that's triggering that that spread is not so great and there's a repatriation going on of money unwinding. So, we are in that cycle. And the real first sign to see that is not just so we feel gold, as gold investors, but let's forget to put gold over on the side over here, has been AI and all the digital technology stocks, anything related really got crushed here. And you have to sit back and say, "Well, why is that?" Well, a lot of people here did not invest in Korea. Korea is dominated with companies like Samsung. Samsung makes chips. Samsung is very much cognizant of the AI boom that their stock market went up at the end of March. It was up 100% basically over the year. Now can you imagine the S&P up 100% in a year?
Mike Maharrey: Wow.
Frank Holmes: It's an incredible event. Now it's fallen 30%. So one has to ask what happened? Well, a lot of South Koreans were borrowing at zero cost of capital and then leveraging and buying technology stocks in Korea. All of a sudden there's a margin call and Japan wants that money back and you see those stocks get hit 30%. That impacts over here. But the story is, oh no, there's too much debt levels. Oracle's got debt problems, CoreWeave's got debt problems. And so this whole negative leveraged banking, they'll tell you the other part of the story is what Japan is doing. And I know from doing funding, we had a worry when Hive was doing a recent 200 and some odd million. We've raised this past quarter 250 million in zero coupon bonds. Well, we did them in two tranches. And each time you buy this derivative, well, the Japanese banks bid on that, but you have to worry over that weekend and that bidding process, because if the Japanese yen goes up and the currency yields go up at the same time, then all of a sudden you have to pay more for that structure you're creating.
And it's a big number because there's $500 billion in convertible debt hedge funds in New York and Chicago, and they're all boring at zero cost doing all these sort of arbitrage trading and it has an impact. Well, it also impacts gold. And gold was being leveraged. When gold and silver went through the roof earlier this year, some of these hedge funds were leveraged eight and 10 to one. And that margin call started with Japan. They're the ones that get unwound first and you could feel that pain. And so I think as investors, you have to be aware that the interest rates are rising here in the US, not because of the Federal Reserve, because of concern on China trying to hurt the dollar, creates a more expensive way for the US dollar, but Japan taking their money back. Now, if you go back to Japan, Mike, and you had any other country that was in Africa and Latin America that 200% of their GDP leveraged, you would say they're going to go bankrupt.
You're going to get Lebanon, you're going to have Zimbabwe, you're going to have basically Argentina. It's interesting to observe, but why not Japan? Because 50% of that debt is owned by them.
And most of that debt has been into US securities. So borrowed by Americans and the British in their hedge fund world and South Korea. So, this is going through, we've witnessed this first step of the unwind with Japan rates rising. I don't think it's over yet. And I think that that's another key factor we have to appreciate the inner market relationships that are around the world. And people only become silo thinking it's only in America. I go to Canada, it's only Canada. You go to the UK, it's only UK. No, they're all interrelated and there's a contagion that can be taking place and you don't know until it's too late.
That's what we're living through. What does it mean? I can tell you the AI boom is not over. It's got a lot legs to it. I've seen such creativity in funding the AI boom. Like last week or earlier this week, Meta, which is Facebook, was building a giga data facility in El Paso, Texas. A $14 billion spend, gigawatt of electricity, which is going to use 50,000 tons of copper. That's why copper's making new highs because of demand for data centers. Well, if the data centers and AI is in a bubble and it's all collapsing, then copper prices should be collapsing. It's not happening. Copper prices remain robust and strong are going to trade higher because this demand is not going away. Well, people attack Meta. There's too much leverage. What are you doing? And out of nowhere comes BlackRock. And BlackRock, people don't realize they get a lot of funding from sovereign funds.
Well, the biggest sovereign fund in the world is Norway, and they put money into their AI data center fund. And United Emirates and Saudi Arabia, they all put money into BlackRock. BlackRock then buys 80% of that data center, giga data center for $10 billion. It is incredible. Oh, you got a stress problem, Mike? Don't worry. I'll give you an asp for it. I'll just give you $10 billion and take away the bank debt problems you could have because we see something that's very much a super cycle. Gold is the same way. We are in a super cycle. We did go up unbelievable. I have not seen over this when I look at this rolling 20-day rotation and it's called an oscillator. And mathematically, something will only move X percent over 20 days and fall 20% before they revert back to the mean. So, things go over, bought, oversold.
And usually, it's only one standard deviation up and one standard deviation down. One standard deviation up, one standard deviation down. So you can have a chart looking like this long-term, but in it's all these moves.
So, then you have the 60-day rate of change, which is a longer horizon. And that's also very important for me as a fund manager because I rebalance every quarter. It has a bigger dollar move for gold or silver. So, what happened earlier this year, silver went up like six standard deviations, and it leveraged 10-to-one. Well, immediately the futures market comes in and says no more margin. We got to get the prices down. This is happening in every cycle. So they do everything and knock it down. But then gold all of a sudden starts going through its difficulty because rates were starting to rise in America. In the free market system, rates were rising. Japan rates are rising. And that combination will have also a correction in gold. So, gold went from up three standard deviations over 60-days rolling down to two. That's a five standard deviation move.
Frank Holmes: That's huge. And now it looks like it's coming off that bottom and it's down 1.6 standard deviations. Well, what does that mean to me as a money manager? It means that there's a 85% probability over the next 60 trading days gold will be up. That's just math. Nothing personal, no geopolitical commentary, just the math of how markets breathe. 20 days, they've bounced back to the mean, fallen again, bounce back, falling again. So, for the short-term trader, the 20-day is such an important indicator of sentiment as a sentiment so bearish. So anytime it falls two standard deviations, it means everyone is so fearful and margin calls and people are being forced out and blow your positions. And same thing as the opposite. Everyone's so bullish and excited, and then gold goes up. So, we are in a good sweet spot. And I was doing a sentiment analysis of the overall market this morning, and I run a quant model for that.
And basically I'll take a look at all these reports that are out there to read the headlines. And then I ask you to do from one to a hundred from greed to extreme fear. Where is the market? So it's something like it's 75% constructively bullish, 25% cautious. There's no fearfulness. You may read a few headlines and say it's all over and there's that fear. But when you look at it in a bigger picture, this has been a great buying opportunity.
Mike Maharrey: I love that you mentioned the dichotomy between the fear trade and the love trade. And it's interesting. I noticed something a couple of weeks ago when the World Gold Council put out its half-one data analysis. And the interesting thing is that if you just bought during the Asian trading hours, you would actually be up like 15%. And that kind of shows what you're saying, that the Asian markets are buying these dips, right?
Frank Holmes: Yes. Yeah. It comes on sale. And the most important indicator for you and I in that space is rising GDP per capita. It is the most predictive. If you look this century, China was first torque the most, and then India sort of catching up. But both countries have been a 45 degree angle. And if you have 40% of the world's population with a 45% degree angle of GDP per capita rising, that's a cultural affinity towards gold. That's pretty powerful.
Mike Maharrey: Yeah, very powerful. I've got kind of a question for you. This is a thing that I run through my head quite often. The mentality right now seems to be we have a federal reserve that at least in rhetoric is very hawkish on inflation, talking about holding interest rates higher. There's still speculation about interest rate hikes. I question whether that will come through when rubber meets the road given the propensity of central bankers, but let's just leave it at that for now. So, therefore we're talking about higher interest rates. We're seeing a bear market in bonds, which also seems to be pushing the long end of the yield curve higher. That is all typically understood to be bearish for gold. So, why shouldn't I be, if we're talking about a long-term bear market in bonds, if we're talking about longer rates over the long-term, why shouldn't I be bearish gold? What is the bull sentiment that we can find in what's going on with the monetary policy?
Frank Holmes: Well, the stress of China pushing 75% of the central banks to be long gold. And you've seen dollar used to be the most significant foreign reserve in those countries, and now it's being pushed to gold. So that's bullish for gold. It's bearish for the dollar. And so when I look at that, I come back to modern monetary theory that anytime a country has problems, they just will print the money. And the bigger that imbalance is, the more gold has gone up in that country's currency. So I think the wise thing is to have at least 10%, the golden rule in gold and silver. It's just wise. You buy car insurance, if you're going to drive a car, you have home insurance in case something goes wrong at home. Your portfolio should have some gold. But what happens a lot of time, Michael, is that I find you get these gold fanatics, but they don't own any gold.
They just hate the government. They use it as a proxy to be anti-the government. And I found the same thing in my journey into the Bitcoin crypto ecosystem, that those are the most ardent about Bitcoin really are much ardent against the governments. And so they're really not about investing in the innovation, investing in technology. I asked some of these time gold bugs, how much gold do you own? They own none. And what about gold jewelry? Don't you go buy gold jewelry, 24-karat gold jewelry? No. So, you have to separate and take those outlier people that are very vocal and dismiss that as who realizes the supply demand factors of gold coupled with what that demand is. And it's just a big asymmetric trade means there's a big imbalance between monitoring fiscal policies, the solutions, and we're not going to see that go away.
Mike Maharrey: Yeah, that's a really good point. I know some of those people who talk a lot about gold and don't have any. It's an interesting phenomenon. What do you make of Kevin Warsh? Do you think he's a different animal? Because the impression that he's trying to project is that I'm tough on inflation. I'm going to take down inflation no matter what. And he keeps saying that, he keeps emphasizing that. But I'm curious what you think. And obviously we're just speculating here. We can't really get into the man's head, but -
Frank Holmes: It's a good question. Yesterday I did an analysis of his notes and it's very streamlined. He's a lot less speculation in the nuances of how they use words. The master of all is green span. But when it comes to himself, he's much more matter of fact. You threw the ball and you got seven yards, that's all. You didn't get even seven. And you get no analysis beyond that.
And there's none of this opinions. Well, if you could have done this, you could have done that. You could have got 10 yards. There's not a could have. You got seven yards, and that's what it is. So I think when you look at how the editing of what's been done, he's much more matter of fact. And I like to look at the S&P two ways to look at the S&P. One is the equally weighted S&P is a much stronger indicator of the overall economy. And market cap weighted is really the stocks that have the biggest market cap are the strongest industries. That's why those industries and stocks are rising more than the rest of the market. So what we've seen is the Magnificent Seven taking on the chin from this whole thing of Japan. And we've seen the collateral technology out of South Korea. And it's just going through that sell-off process and the narrative is so often something that relates to our economy.
But I think there's a bigger picture that's going on, and that's where gold comes in. And I think that any investor that doesn't use these opportunities when things go down two star deviations to buy, then they really don't want to own gold. They just want to talk about it. I like to talk about it and own it.
Mike Maharrey: Yeah, same. Me too. But talking about Warsh, again, he kind of tries to project this tough guy image. Let's say we have another, let's not even go as far as a financial crisis of 2008, but let's say we have a pretty significant stock market crash and we start spiraling to a recession. Do you think that Warsh is going to basically revert to typical central bank thinking we've got to save the economy, we need the stimulus, we need the money printing? Or do you think he'll really try to hold the line on inflation as he seems to be wanting to project?
Frank Holmes: I think he will print the money to help the economy grow. I think that's some form of the modern monetary theory is going to stay. When a guy like he comes in, he doesn't fire everyone.
Mike Maharrey: True.
Frank Holmes: And he doesn't really bring that many singular lieutenants with him. He's given this tremendous respect to what he can and can't do, but he doesn't have this spirit. So when you deal with government agencies, there are so many entrenched long-term government executives and they feel safer jumping back on modern monetary theory for this past century. And you can see as modern monetary theory has been implemented, gold has been rising. Now the big story is what is China trying to push for more gold reserves, et cetera. I did this visual and it was showing you where gold would be based on the total credit out there of the US. What does it compare to other countries? And then I went and looked at what would happen if they had to make a better gold ratio. So, we have this largest gold holdings that if we went mark to market and the value of those to offset the sort of debt gold ratio, gold goes to almost 40-grand.
Mike Maharrey: Wow. Yeah.
Frank Holmes: So 40,000. So if you think it got a problem, okay, well you buy the US dollar, you're buying it at a discount because it has this gold. So if you don't want to believe me, then I'm going to go mark to market every quarter. And I think that that's something that the Chinese and what they've done now in their policies have taken away paper money because they're worried that banks would say, I sold you this IOU that I have to have the gold, but the bank never owned the gold. Then it goes bankrupt and there's crisis. So they say they only want physical gold. Well, I also think it's because Xi Jinping wants to be able to take away anyone's private property rights.
Mike Maharrey: Yeah. Yeah. I don't doubt that a bit. I really appreciate the fact that you have brought into the mix this more of a global view as opposed to the focus so we can get tunnel vision to. As you said, we're here in the United States and that's all that matters. So, I really appreciate that broader perspective. If folks want to follow Frank Holmes and avail themselves more of your knowledge, where can they do that? And if you'd like, you can also plug your companies and just give a quick overview of what you're doing there.
Frank Holmes: Well, I'm a quant originally, and I still have the discipline. So I came out with a thematic investment philosophy and process called Smart Beta 2.0. And it involves portfolio construction as much as stock picking. And it focuses on momentum in revenue and cashflow for gold mining companies to airlines companies, whatever the thematic product is. And Go Gold, GoAU, it's focused on 30% always in gold royalty companies because they have a superior model. But the other names have to have this top line and bottom line growth and momentum to show up in the portfolio. And that process is really interesting because you can look at this past quarter and the gold is down 14%. So what gold stocks are coming up with announcements that they're not down 14% because you would think their revenue should be aligned. If their production fell, their revenue would fall. If the production went up, then the revenue would rise.
And so the magic number for me always each quarter is, well, how much did gold and silver due? And therefore if gold went up 10% of a company's revenue didn't go up by 10%, there's something wrong.
If it went up 12% in revenue, that's good news. Gold fell 14%, but your revenue actually grew, that's phenomenal news because once gold turns on a quarterly basis, you will see money pile into it. That's a smart beta 2.0 thought process, and that's what we function with. And I've really enjoyed in these thematic products like I have. I wear many hats. So one of the things that hats I wear is, and it helps me, is called Sea. And it's an ETF, the New York Stock Exchange. And what I found was that 80% of all commodities are carried by cargo ships.
LNG, cargo chips basically. Then you ship the stuff over to Asia and you buy a Samsung refrigerator. Well, that big appliance comes back on a cargo ship. Cargo ship rates reprice every day based on weather, wool, More ships that are available. They've put new rules for what type of ships can go into what ports. There's less ships that can do that, so it gives pricing power. What I've found is that the cargo shipping is the best way for an investor to put their hands on the pulse. So, I've always recommended, I said put $1,000 into it. Robinhood, you can buy and you're going to know the global economy every day. So a year ago, Trump comes out with Liberation Day, the whole world falls five trillion and it comes right back and the S&P goes up 15% and sea goes up 30. Oh, what about the tariffs?
The whole world's coming to an end. The global economy's falling. It doesn't. This is telling you that they immediately reprice a mechanism. So, it gives you a global perspective. And I think things like that. And then the other one I talk about all the time is jets. So, if you're worried about what's happening in the retail consumer economy around the world, it's unbelievably robust. Airports are full, flight tickets aren't going down. You book a year out, there's no discount like there used to be. America used to, before COVID, clear two million people a day. It fell down to 85,000 in 2020, and then it came right back up to now three million.
So, when I was in Europe and you go to Asia, they're all packed wherever you are. So the global economy is not falling apart. And there's this negative narrative looking for a problem. And so they could take a hammer and hit that nail. There is no problem that way. Yes, there's imbalances, et cetera. So I find these two really help me understand the dynamics that it comes back to gold. And these two will help me understand consumer spending, consumer sentiment, and then take a look at where the appliances are going back and forth. So I remain really bullish. I share with you that the jets, even with prices are going up, oil prices that went down, then rate back up. Any drop again in the price of oil and settlement in Iran, it trades much higher. And the airlines trade at one-third of the S&P PE ratios.
The other part is that we've seen a big correction in the S&P market cap stocks because the Magnificent Seven overweight the valuation, so the technology's fallen. But S&P weighted is the economy is making new highs. So the world's not coming to an end. And the military spending is where the money's being raised now. So the deficit spending in Japan, the deficit in Germany, America, it's not going into just social welfare programs now. It's going into re-arming all of our military with AI.
And so when you look at those numbers, you're talking about $2.5 trillion is going to be going into that space. So that immediately gives me, I was trying to look for my other hat here for you to just get a chuckle over. Let me see here. And it's called War.
Yep. War ETF.
So, what is war? Well, they're going to print money and now it's going to go into technology and AI. And you can see those stocks, this stock is above its 50-day. It's been on a tear on the industry, cybersecurity because the Chinese keep trying to hack into our systems and steal any engineering they can. So I look at this doing well. I look at these other factors, and the reality is it's hot in Texas, cold in Alaska, and the government's going to print money. So make sure if you go to Alaska, you have a parka on. And if you're in Texas, put on your shorts and flip-flops. It's recognizing in a portfolio that you're pragmatic, that the money print is going to go on. And your job is to be ahead of that money printing, not to sit there and complain about it all the time.
Go and stay ahead of it with good smart solutions.
Mike Maharrey: Solutions. I love it. I love the optimism and I love the solution-oriented thinking. That's fantastic. Thank you. I appreciate you taking a little bit of time out of your day. It's always a pleasure to have you on. And like I said, I really do appreciate that global perspective that you bring to the table. So thank you so much for that. And I'm sure we'll have you back on again soon, and I hope you have a fantastic rest of your day.
Frank Holmes: All right. Have a wonderful summer.
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Good stuff once again from Frank Holmes and we certainly appreciate his time as always. And that will do it for this week.
Be sure to check back next Friday for our next Weekly Market Wrap Podcast. Check out the Money Metals Midweek Memo podcast as well. To listen to any of our audio programs just go to <a href="https://www.moneymetals.com/podcasts">MoneyMetals.com/podcasts</a> or find them on places like Apple Podcasts, Google Podcasts, Spotify or wherever you listen to your favorite podcasts. And as a big help to us we would ask you to please like, subscribe, download and rate our podcasts. Doing so helps us extend the reach of this material.
Until next time, this has been Mike Gleason with <a href="https://www.moneymetals.com/">Money Metals Exchange</a>, thanks for listening and have a wonderful weekend everybody.

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