Pemo: Welcome, Andy. Such a pleasure to have you on the show today. I was wondering if you could tell me a little bit about your business, Miles Franklin Precious Metals.
Andy Schectman: Well, it’s good to be here. I appreciate the invitation. Geez, Miles Franklin. Well, we started the company, my father and I, kind of on a wing and a prayer, together almost 34 years ago. 33 years ago for me.
Andy Schectman: Almost 34 for the company. I came on about six months after he had started it in a one-room office. My father’s middle name is Miles. His best friend who lent us $60,000 at the time, in combination with my parents selling their life insurance policies, again, on a wing and a prayer, is the foundation of this company.
And here we are nearly 34 years later, we’ve done over 8 billion dollars in transactions without a customer complaint or a regulatory complaint. We are one of only 27 companies in the world that have ever been approved by the United States Mint as an authorized reseller of their product, which is an honor that I am supremely proud of. We’ve never had a complaint ever in the history of our A+ Better Business Bureau rating, and we have worldwide exclusives with Brink’s that make us the envy of the storage industry throughout North America.
Now, all of these accolades and accomplishments I’m very proud of. I started doing this when I was 19 years old and I’m 52 now. And so I’m very proud of what we’ve achieved, the most unlikely cast of characters to do so. But the state of Minnesota doesn’t care about that. Now, we’ve been domiciled, our corporate entity, in the state of Minnesota all 34 years. And I moved to Florida two years ago during the George Floyd debacle. Things got a little bit hairy in Minnesota. But I left my corporate office in Florida, I mean, excuse me, in Minneapolis.
Now we’ve had a satellite office in Delray Beach for 12 years for various reasons, but I left my corporate entity in Minneapolis for one reason. It’s the only state in America, that being Minnesota, that regulates what is a federally non-regulated precious metals industry. And we are licensed, bonded, and background-checked. Every year we have to do background checks, and if anyone had a felony throughout the year related to financial services, they are forever disqualified from being able to sell metals in the state of Minnesota. We have continuing education in compliance in accordance with our license that is really attributed only to those entities doing business in the state of Minnesota. And we have a 2 million dollars 30 bond backing all of our transactions.
This type of licensing and accreditation, which holds us to a far higher standard than just about anyone in the industry, has made almost every company in America boycott the state of Minnesota because it’s the only state where this is mandated. So most companies out there figure, “Nuts to Minnesota, we’ll work everywhere else.” That licensing and the bonding in and of itself is onerous enough to make companies work in all of the other states. So on top of what I believe is the best reputation in the industry, United States Mint accreditation, A+ rating, worldwide exclusives with Brink’s, the state of Minnesota puts an exclamation point making our business, I would say, the safest company in America to do business with in the precious metal space.
Pemo: Wow. And tell me, is business booming? Because really the state of the situation in the US is a bit dicey with the Fed balancing recession and inflation for so long and changing the interest rates all the time. How’s that affecting your business? Are people turning to invest in precious metals more so, have you noticed? And also with the COVID crisis, all the lockdowns for a couple of years, has that also increased your business? Because the crypto space is definitely not a place that we would call safe at the moment.
Andy Schectman: Yeah. Our business over the last three years has increased exponentially each year.
Andy Schectman: The demand for precious metals has experienced, I would say, a renaissance yet I really believe we haven’t seen anything yet. And I know you’ve listened to some of my interviews over the last couple of years, you understand where I believe we are heading. But in that vein, even though we have seen an expansion of interest into the mainstream, we still represent but the pimple on the elephant’s rear end, in the respect that it is estimated that if you take the entire financial matrix of the United States, measuring it from Joe Six-Pack to the Harvard Endowment Fund and everything in between, the average allocation across the entire US financial matrix to precious metals is one half of 1%. Now, if you go back to 1980, that would’ve been 8% and the average or the mean over the last 40 years is 2.5%.
So we’re very, very far away from what I believe is an understanding by the mainstream of just what precious metals are. And I guess I would like to take this opportunity to let you and your listeners know what I believe precious metals are.
Andy Schectman: Besides the obvious. As I mentioned, I started this company as a young man, 19 years old, barely out being a teenager and… Well, I was almost 20 when we started, so I guess in theory I was a teenager or in practice. Anyway, my father said to me, “Look, I’m not going to let you make the same mistakes that I made in my life. And so here’s the deal. There’s going to be one rule and only one rule as we start this company together. And as long as you follow it, I won’t fire you.” I said, “Well, geez, dad, if there’s only one rule, I think I can probably deal with that. What’s that one rule?” And he says, “Well, you’re going to buy something every two weeks when you get paid, period. Never will you miss a two-week period.” I said, “Well, geez, if that’s the only rule, Dad, I can deal with that.”
I’ve owned the company outright for two decades. He’s still in many respects my partner, albeit he won’t fire me any longer, but I have honored my promise to my father that I made over 33 years ago, and that is that I will buy something every two weeks. And I have. I have never missed a two-week period ever. Ever.
Andy Schectman: Whether it be one ounce of silver or a hundred ounces of gold or anything in between, I have always paid myself first and it is the best gift my father has ever given me, ever. And-
Pemo: So impressive!
Andy Schectman: When I hire people… Yeah. Well, he taught me how to save. And when I hire people at Miles Franklin, that is always a prerequisite for me, as silly as it sounds. I say, “Look, you want a job here? You’ll buy something for yourself every two weeks. I don’t care what it is, you can buy the cost, but this is what you are going to do.” Because it is honestly the greatest gift I’ve ever been given. The ability and the understanding of letting the laws of compounding interest work for you instead of against you. Now, that is somewhat of a misnomer in that there is no interest-bearing component to owning physical precious metals. But let’s just say compounding of time in this case, I have always wanted to teach my children and people I care about how compounding of time and of interest is something that we all need to understand and get on the right side of.
So when we talk about precious metals moving forward in this discussion, I would say it’s important for people to understand that to me, it’s wealth. It’s not an investment. It’s wealth that has outlived two world wars and German hyperinflation, Great Depression, every pandemic, and it’s still immutable wealth. And we’ll be in the year 3000 long after the bills in both of our wallets are hanging from a frame in the Smithsonian as an example of what used to be. Gold and silver have been revered and sought after and almost in our DNA for over 5,000 years. And you go back through time, none of these influential people of nobility, kings and queens and pharaohs and emperors, none of them called their gold broker to make an investment. They owned gold and silver as a form of immutable, lasting wealth that they pass on throughout the generations. And that is exactly how I look at it.
And there are plenty of ways to invest your money, maybe not as many that are appealing these days, and you could argue gold and silver act as an investment. And I’d be lying if I said I wasn’t completely cognizant of the value, but I do believe it is wealth, and if you own enough of it, you’ll be wealthy. But that is not the reason I have ever accumulated it. I have accumulated it not to become wealthy, but because it is wealth. And that’s the way I look at it. And I hope to be able to pass it on to my children someday, because I’ll be thankful that it’s there if there’s an opportunity or an emergency.
But if not, I know that I’m leaving a legacy to my children and my grandchildren, God willing, that has already stood the test of time and everything that civilization has thrown at it and is still revered. So much so that the central banks of the world bought more gold in 2022 than at any time since 1967, the second most on record. When the people who are closest to the information and the most well-funded and well-informed traders on the globe find it important enough to go on a massive accumulation spree, I think it underscores just how the most influential people in this world view gold and silver as wealth and not so much as an investment. So that’s the springboard from which I think we should begin our conversation.
Pemo: And many years ago when I was 21, I traveled overland by myself from London back to Australia. And of course a lot of those countries like Afghanistan and Iran, Turkey, all of those countries had not gone through the agony that they’ve since gone through. And everyone that showed me their wealth, it was gold. And I’d never, as a young person, ever been exposed to that to see that that’s how they were storing their wealth then. And obviously we have troubled times again with war and other challenges to the world economies. And I was wondering if… I know it’s a lot of information you have and your theory about the Great Reset, but I was wondering if you could just give us a brief summary of that, your overview of what you think might be coming for us.
Andy Schectman: Well, I don’t know how easy it is to make a brief summary of this, but… Excuse me. Pardon me. I’m getting over a cold. I had a friend from Minnesota last week and he thought it would be fun to bring a present for me in the form of a cold.
Pemo: Cold? I’m sorry.
Andy Schectman: Which I’m almost over with, but I apologize for the-
Pemo: No problems.
Andy Schectman: Congestion. Anyways. So I often ask people, what makes the dollar the world reserve currency? And so few people really know the answer to this, and it used to be backed by gold. At the end of World War II, dollars were redeemable by foreign governments for gold at a fixed rate of $35 an ounce. And it was that way all the way until nearly the end of the Vietnam War when President De Gaulle realized that we were printing more money to fund the war than we had backing it at Fort Knox in gold, and called the bluff and sent war ships over to New York Harbor filled with dollar bills demanding gold. And he got it. And then President Nixon closed the gold window.
It was three years later that a deal was struck with the Saudi Kingdom to price oil globally in dollars. Now everyone in the world had owned dollars because it had been the world reserve currency since the end of World War II when it took over for the pound sterling. And it just made sense. And it’s been that way for 50 years or since 1974, that the dollar has been the sole settlement currency for oil through OPEC and Saudi Arabia. And so much so that nearly 90% of all oil that has been sold throughout the globe has been valued in dollars.
And so every country on the planet has had to own dollars in order to buy oil. This has created a synthetic demand for the dollar and has given us the extraordinary benefit and privilege of being able to print money to finance what is the greatest military and, for many years, the greatest economy and a great country. Certainly one that I’m very proud to have grown up in. It afforded me amazing opportunities. But what is frightening is that we have squandered this privilege, and I think the world is waking up to it.
And really this is the crux of what I have been talking about because we are beginning to see, and it really would entail a much lengthier conversation in terms of how we got here, but the crux of it is Saudi Arabia and OPEC. And the day that we left Afghanistan in a very humiliating fashion with Freedom Fighters, that they just told today on Fox News, it would take 18 years to get all of these people out of Afghanistan. I don’t know how they came to that number. 80,000 Freedom Fighters on top of our servicemen and women.
If you grew up in the United States when I did, it was every movie, every TV show that had anything to do with the military, it was we never leave anyone behind, ever. And yet we did, and it was humiliating. And there was no coincidence to the timing of the announcement by Saudi Arabia. The day after that, they signed a joint military cooperation agreement with Russia. Now, I don’t care about Russia’s ability to fight a conventional war. Russia has hypersonic ICBMs, and if it came down to it and it became a very frightening war, they would not be someone we’d want to go to war with. The day after they signed it with Saudi Arabia, they signed the same thing with Nigeria. Both OPEC producing countries obviously, but it has been in the protection of the Saudi Kingdom since 1974, militarily. Call it a joint military cooperation agreement that has priced oil globally in dollars.
Saudi Arabia has also subsequently applied to join the BRICS nations, Brazil, Russia, China, India, South Africa, and the 60 plus countries that want to sign up to it, including Saudi Arabia, an ally of an ally of ours, Turkey, Egypt, Iran, Afghanistan, Argentina, Venezuela. The list goes on and on and on, representing north of 80% of the human population. When you combine the Belt and Road Initiative, the largest infrastructure project in human history, which has all 13 OPEC-producing countries on it, China’s effort to connect Africa, South Africa, Asia, parts of South America, and parts of Europe. It’s the old Silk Road. That in and of itself is nearly 70% of the human population, 45% of global GDP before industrialization.
When you combine the Belt and Road Initiative, the Shanghai Cooperation Organization, the Eurasian Economic Union and the Belt Road… Or excuse me, and the BRICS nations, and all of the BRICS Plus nations, which again, 60 plus countries have already applied or expressed interest in applying, you are talking, on top of the 150 countries on the Belt Road and all of the others within the other organizations, almost 90% of human population.
And they’re not going green the way that the West is destroying the Saudis’ and OPEC’s way of life. And put together in a coalesced fashion, have a stronger military and a larger GDP. It’s the real deal. And when you see Saudi Arabia come out and say, we have applied to BRICS. When you see BRICS tell us that they’re going to issue a commodity-backed currency. When you see Saudi Arabia in Davos three weeks ago saying, “We’re open to taking other currencies for oil.”
Andy Schectman: The beginning of the end of the petrodollar is here. Not only are Saudi Arabia being protected by another country, who is partnered with other countries, making it a very strong union, but they are now joining the BRICS. They are part of the Shanghai Cooperation Organization and the Belt Road Initiative, as are the other 13 OPEC-producing countries. Or the other 12, 13 in total. All it would take would be for Saudi Arabia and OPEC to say, “Thank you for the memories to the West. It’s been great. Yeah, we appreciate it. But we are now going to accept oil in other currencies,” such as the Chinese Yuan.
This is a bond that they have been buying oil from countries like Iran and Saudi Arabia and Russia, and selling or buying their oil in exchange for the Chinese petroyuan bond, which is immediately convertible into gold on the Shanghai Gold Exchange. This is why the Shanghai Gold Exchange keeps delivering so much more metal than the Commax market does here in the West or the London Metals Exchange, because countries like Iran find it very easy to sell their energy to China, receive the petroyuan bond, and then immediately convert it into gold and take possession of that gold.
Andy Schectman: And if we go back to 2019, we see gold was reclassified by the BIS, the Bank of International Settlements, as the world’s only other tier one reserve asset. So let that sink in for a second. The end of World War II, the dollar was anointed the world reserve. We know that. But it was called the only tier one reserve asset, a riskless asset. Now the BIS, the most sophisticated bank in the world, the central bank of central bank, in 2019 reclassified it as the world’s only other tier one reserve. And when you see the amount of gold the central banks are buying, it makes sense, but it makes even more sense when you see a central bank like Turkey.
Now, we’ve been told by the finance ministers of these countries that they are going to issue a commodity-backed currency for the BRICS nations. And what’s interesting about that is that, the way that I infer it, to me would be gold, mostly. Just as the Shanghai Cooperation Organization said they want a gold-backed settlement currency for the entire Eurasian continent. Well, gold is the only other tier one reserve asset. The banks have been massively buying it and accumulating it. Look at Turkey, our ally who just formally applied to BRICS, bought more gold than anyone in the world last year and is accumulating it here again this year with over 60 tons just purchased in January, more than any country on the planet again.
So these countries are coalescing together, I believe under the idea of breaking free of the Western hegemony and the weaponization of the dollar by kicking Russia out of SWIFT. I think it opened the eyes of a lot of countries who realize that they’re not on the right side of the US, that they, too, can have their assets frozen, sanctioned. And in the case of the European Union, not only did they freeze and sanction the Russian assets, they have confiscated them and have pledged them to the rebuilding of Ukraine. When you are the world reserve currency, it is not your prerogative to say who can and can’t use it. All that will do will lead to an exodus from accepting the world reserve currency. And-
Pemo: Yeah. It’s hubris really, isn’t it?
Andy Schectman: I think a lot of these countries are planning, they’re out. And it’s exactly what I think you’re seeing. So imagine a situation where for the last four years, more money was created than in the history of the United States before it. Where asset prices because of low interest rates and easy money have gone parabolic. Stocks, bonds, real estate cryptocurrencies. Imagine an environment where the United States has a 31 trillion dollar debt on top of over 120 trillion in unfunded liabilities.
We were just told last week on the 2022 balance sheet of the United States that they have a 76 trillion dollar shortfall, I want to say-
Andy Schectman: In social security. So the Social Security trust fund is filled with 76 trillion in IOUs. That’s on top of Medicare, Medicaid, social security, as I mentioned, government and military pensions, and all of these are off balance sheet. You’re talking 130 to 150 trillion dollars in debt. Most of this debt accumulated at the lowest interest rates in human history. Imagine what would happen if Saudi Arabia said, “Thanks for the memories. We’re now going to take other currencies.” And every country on the planet dumps dollars simultaneously. If that happens-
Pemo: They obviously know something we don’t.
Andy Schectman: Well, that’s exactly right.
Andy Schectman: And why else would the BIS reclassify gold as the only other tier one reserve asset, and why have the central banks been copiously buying it using this price suppression of the West to cover their tracks? And if that happens and you see a tsunami of dollars flood home, because there’s many, many times more dollars around the world than there are in the United States, because every country has had to hold them and accumulate them for over 50 years to buy oil. So those dollars come flooding home creating a tsunami of inflation that hits our shores.
The byproduct of that is massively spiked interest rates, and that is directly inversely correlated to stocks, bonds and real estate. As rates rise, those three assets collapse. It’s a Great Reset. Not only would the dollar be dumped and collapse, but the byproduct of that and the massive amount of inflation would spike interest rates to the moon, which would eviscerate the valuations of stocks, bonds and real estate, not this pussyfooting of 50 basis points well under the rate of inflation that Fed Chairman Powell keeps talking about. And whether or not you believe the CPI at 7% or look at it the way that John Williams measures it, shadow stats at 15%, and all he does is measure it the way that it used to be measured prior to all the changes in the metrics.
Andy Schectman: Fact of the matter is they haven’t even raised the rates above the level of inflation. So there’s a long way to go and you raise rates, spike them, it’s a religious experience for many people and almost everyone in this country.
Pemo: Yeah. We’re going to have to wind it up unfortunately. I’m always fascinated to hear you talk about this and yeah, what I’m hearing is that precious metals are definitely the way to go if any of this occurs, which obviously is already happening in the background.
Thank you so much, Andy. Always appreciate hearing your perspective and all the best with Miles Franklin. Not that you even need that. It sounds like you’ve been booming for a long time. Thank you so much.
Andy Schectman: I appreciate it. Hope to come back again soon.