India's Demonetization & Global Effects and the Role of Gold (w/ David Fergusson & Grant Williams)
Grant Williams: Great to see you again. David Fergusson: Hello, and you too. Happy Christmas. Yes, exactly right. And you know, we're filing this after Christmas, we've missed Christmas. Happy New Year, that'll have to do. So much going on and so much I want to talk to you about. Something you said the last time we sat and chatted really stuck in my head. And you were talking about what was happening in terms of the big hole in real money on balance sheets all around the world, the people that are staring at the hole and wondering how to fill it, and the powers they have in order to try and do that. Perhaps you can just refresh people's memory because, I mean, it's happening. Yeah. Yeah I guess the point I made last time was something of the order of, they're bust, you've got some money still, just, and they're trying to work out ways to relieve you of yours to solve some of their debt problems. They being governments, by and large. I think as we roll forward-- it's been about a year, right? Yeah. As we roll forward a year, you've seen a lot of really interesting policies introduced that have been aimed at doing just that. So I mean we talked the other day about India canceling some of the large denomination notes. That's not certainly going to be restricted to India. The Aussie's have done it. The Brits haven't printed a 50 pound note this year, and that's kind of a strange concept. I mean these are fairly nefarious-- I mean, you can't view this as having anything other than a fairly nefarious intent, I think. How on Earth Modi thought, oh yes, well, we get rid of this large denomination note-- which is by the way, worth about $10-- GB 15, yeah. $15, yeah. Yeah. GB 10. You get rid of that and you somehow or other, relieve India of its crime and corruption issues. That's kind of ridiculous. And if you think about how practically that's worked, well all he's done is, he's ensured that people in the mafia have made an absolute killing. Right. You know, absolutely fantastic for them, because they're the only ones who've been able to get money back into the system fast enough, because they're the only ones who have a process for doing that. I mean, it's not-- But this, I mean-- you laid out a very clear set of steps. One, they're going to find out where the money is. Two, they are going to ring fence it. And three, they're going to take it. And you know, we're not quite at three yet. But we're headed that way. I mean, the India thing-- I was really surpri-- I was interested. They buried it the night of the U.S. election. So a lot of people were finding out who-- really I had people two weeks later say to me, hey, have you seen this thing in India? Like, yeah, two weeks ago, when it happened. It was a big, big deal that got lost in the Trump victory. But what surprised me the most, is the reaction I saw on Twitter from ex-pat offshore Indians, versus onshore Indians. One group, which was saying this a great idea. Modi is taking it to corruption. He's going to weed out all the money laundering. If you actually lived in India, had any skin in the game, you were screwed. Yeah, but I mean, if you think of the sort of process of, find out where your money is, come and take it, the first thing you've got to do is get rid of the other options. Cash is obviously another option than having money in the banking system, where you can just sort of say, oh, we'll take a zero off. Oh, by the way the Indonesians are thinking about doing something not too dissimilar by the way. They think about stripping a zero off the currency. Which always works out well for everybody when they do that. The sort of Indian sort of experiment there, I think has just been one of the more ridiculous things one's frankly ever come across. I mean the whole country ground to a halt, essentially. Like something like 60% of all the trucks were parked the next day because they couldn't pay for gas. I haven't looked at the monetary numbers, but those denomination notes that they got rid of accounted for something like 60% of-- 86. 86%-- 86%. --of base money. And it's an enormous proportion. So what happens to an economy when you get rid of 86% of your base money? I mean it just cannot be good under any circumstances. It cannot be good. If you took 86% of the oil out of your car, and then wanted to see how the engine would function, I daresay, not very well and not for very long. Yeah, yeah. Well exactly so. Exactly so. But I mean, I think to your point there, I think what's happening in India is very much being looked at as a trial balloon by a lot of people around the world. There are a lot of people, as you said, you talked about other countries doing this. The idea of purely electronic money, whilst it sits very nicely with the millennial generation, they think this is great, I just why can't I just carry cash? Governments, it's the answer to a lot of their problems, let's face it. Yeah. Look, I mean, if you can get young people to accept things, then that's great. But as we all know, young people are kind of young and inexperienced and frankly pretty stupid when it comes to these sorts of things, with apologies to your young viewers that I'm sure-- Well, they haven't had the experience there. Why should they? They think of things a different way. Yeah. Look, I think once money becomes entirely electronic, the facility with which a government can essentially expropriate massive amounts of wealth is enormous, and can be done without any defense whatsoever. I mean, it's-- what is the old quote from when-- like, Nathan, Nathan Mayer Rothschild said, you know, I don't care about your laws. You give me control of the money system, and, I think that's what he said. I care not for the laws, something or other, give me control of the money system. Laws don't matter sort of, whatever. Bastardized quote, but I mean that's sort of roughly what he said. Couldn't be clearer, right? I mean that's what's happening today. I think he was talking about, one set of circumstances. We're talking about a need to do it today. This isn't necessarily someone sitting there going, hey, I've got a great idea. But there's always a-- there was always a need, right? Because there's always been, in those times, wars. So you pay for a war that way. And that's how constantly you've paid for wars throughout the generations. I mean, what is it Agincourt was paid for by pawnbrokers and debt to pawnbrokers. I mean that was how war's been funded. Now fortunately in this generation, we have not had a major war to fund. Except for perhaps the war on poverty, or the war on, whatever. Christmas? Oh, yeah. Some other war. But you know, what we've had is frankly a massive bloated state to pay for. And then in trying to solve the state's financing problems, they've over time, you know, we've had the approach to currency again, and try and deport that way. Now that's the tradition. That's worked very well. But it hasn't worked lately. Well, I mean, it's worked in the sense that-- it depends on what perspective you take to say as working. They've certainly managed to hold on to their sort of policy remit, of spending more than they can-- Yes, that's true. --spending more than they can afford. As a result, you got to say, well, that's been successful. I mean they haven't had to make any policy changes at all. If you go back and you look at the-- even some of the-- I think I referred to this guy last time we spoke. Some of the more statist people around, people like Mervyn King. He said at the time, he said when he was governor of Bank of England when he was giving interviews. In his book, he said the same thing. He said look, we can buy you time, but you have to have some form of structural reform. Have to, right? And we can buy you time so that you can introduce the structural reform. Alan Greenspan said something not too remotely different. And what happened? Nothing. Well, because at the end of the day, the central bank is-- this has been my point for a while-- they have willingly accepted responsibility for the outcome now. The outcome is now them, not the politicians. So they've kind of said, look, we'll do this for you, but you need to fix it. They've become so important to the whole thing in the process, that now if it all goes down, the blame is going to be on their shoulders. Which I think is a big reason why they're going to keep this thing going. I mean, yeah. Look, I mean, I agree with you. I think one of the most specious things that I've heard in the last 30 years is the concept of an independent central banker. Central bankers may be independent before they become the central banker, and after they are the central banker. But while they are the central banker, they do what they're told, you know. Otherwise they don't get the job. All of these guys are put in their job-- put in their jobs by a parliamentary committee, or a congressional committee, or they're approved in some way, shape, or form. And they don't get their job by saying, you lot have to take the disgusting and very painful, extremely dangerous medicine. They don't get the job that way. So the extension to this, and what I want to talk to you about today, is Modi's now moved on to gold. Because it's another leak in the system. And I read a story this morning talking about the EU, talking about banning the use of gold in the settling of transactions. You have a business that-- You get rid of that, you get rid of something that is fundamental to the freedoms of human life. It is the freedom of contract. Yeah. Yeah. No, I completely agree. But that's not going to stop them from trying to do it, unfortunately. No. So you know, since this has happened, since we've seen this demonetization in India, and we've seen the talk about drug dealers and money launderers, the only people that ever use high denomination bills, that trial balloon is out there. What have you seen in the gold market? Because there has been a move in India, and you know that's the place that hasn't been talked about yet, they're going to start talking about it soon, because that great idea is going to off. Are you seeing any changes in the gold market? Well, I mean remember we deal in a very specific part of the gold market. I mean I would say in-- what we've seen from the sidelines in India have been slightly weird, in the sense that in India, gold traded at a discount to the international market price for a short period of time, because of the way they treated VAT there. And how the refiners would essentially import scrap gold into India, in order to refine it there. There was a sort of-- there was an arbitrage there for a while. And obviously now, gold trades at a --scarcity value, because people want it. Especially relative to these notes that are rapidly losing their value. So yeah, look, I think India is now a very strange market which is almost disconnected from the global gold market. You could-- difficult to say disconnected, but in some way, shape, or form, it has to be viewed as different, because of, one, it's size, to start with. And two, because of the monetary shenanigans that are going on there. And that has to be the way that you look at it. And I think perhaps if we see the Indian trend roll around the world, then perhaps we don't have a global gold industry anymore. We have various perhaps a global macro trend, but with very large micro markets that trade differently for very specific reasons. But it's hard for me to fathom how you can try and legislate or tax away, to your point about basic human freedoms, something that has been money to human beings for thousands of years. Are we at that point where we really have pushed the situation to those issues? I mean, the world has been in similar situations-- you and I have spoken about this over dinner previous times-- where they generally end up in conflict of some sort. There's normally some kind of momentous event that happens when the pendulum gets to this kind of extreme. We should perhaps hope that the answer this time is not conflict, but it is the removal of some form of anchor. Not you and I as gold investors, but as human beings. Well, yeah. I mean I there's a very-- yeah, I mean, conflict is an interesting word to use because there's obviously conflict between countries, but there's also conflict within countries. Now, frankly I think if you start-- I mean, this one sounds-- I mean, I have to catch myself here, because I end up sounding like this sort of massive conspiracy theorist. Which I'm reluctant to do because it makes me-- my wife already thinks I'm crazy, so you know. But, if you start dispossessing large tracts of the population of their wealth that they've spent many, many years accumulating, if not violent conflict, there is at least some form of conflict. Albeit in the politest of ways perhaps, but people don't accept that. There's a reason why that there's a large expatriate community in Singapore. It's not just because Singapore is a nice place to live, it's because frankly, people are fed up with turning around every day to find out that frankly, they're not paying their fair share, despite the fact they pay sort of 30 or 40 times the tax that the next guy pays. And that the government's invented, through its massive innovations, some new tax by which they're going to rid you of some of your ill gotten gains. Because they view them as an ill gotten gains. But that conflict, I mean we've seen that just playing everywhere. People don't think of it in those terms, but Brexit was a conflict. Trump is a conflict. What's going on in Austria is a conflict. With Netherlands, France, there is this conflict between government and the people that's happening everywhere you look. And it's viewed through the prism of establishment as some kind of revolutionary act. People don't think of it the other way around, and look at the level of oppression that we're seeing right around the world now. It's everywhere. No I agree. But I don't really know what to say to that, to be honest. I mean that's kind of-- I've never known you speechless before. I just find the whole thing fascinating and frankly quite alarming, because as we've had this debate after the U.S. Elections about the media and fake news and all these other kind of problems in a world where clickbait is the way and writing anything that will get people to click on the site to look at the adverts counts as news. It's alarming to me, the ease with which the establishment has managed to spin this particular narrative. I mean, it really troubles me that the idea that only money launderers and drug dealers use GB 50 notes, or $100 notes in America, or $100 bills in Australia. When the cost of taking you two kids and your wife to the cinema is $100. A taxi driver into central London cost you GB 60. Yeah I mean, there's not an awful lot of logic to this. But when you're relying on a very specific segment of the community for whom a GB 50 note is a sort of rarity, and you think well, what does it matter? I don't have oodles of GB 50 notes in my wallet, so why should I care about someone else? It's a sort of, someone else's problem therefore not mine. Most people frankly aren't particularly sensitive to the concept of personal freedom and where these things lead. So it's pretty easy for a policymaker to say well, of course, drug dealers use these. I'm not a drug dealer. So what do I care? It's the way the narrative is framed. And you know it's terrifying because frankly you can get away with an awful lot by doing that. The war on terror. OK, well, of course I'm against terrorism! I don't like them at all. I must be for the war on terror, therefore. I mean it's a very facile way to approach it. I mean, war on terror, therefore pro-torture, well, no, not a protorture person. It's difficult to say. It's the way the narrative is always consistently reinforcing of a way to get rid of-- get hold of your money. I mean, that's-- That's what this comes down to. This is, as you said, there are the haves and the have nots. The have nots are essentially now the governments. And the haves are a very small percentage of the population. And it doesn't really work unless the one can get hold of the assets of the other. Yeah. Which is what I find troubling, because they're coming for it. I mean, this was your point in the last interview. It's why I want to talk to you today. They are coming for it. And what do people do to try and protect themselves from that? Well, I mean, it's very difficult. You don't really want to be in cash, but the-- you want to get rid of your fiat currency in some way, shape, or form. But frankly every other asset class looks pretty expensive. So how do you sit and wait now? You used to be able to buy property. Well, you know, property. I mean, that's not great. You want to buy an apartment here in Singapore, you'll get a running yield of about 1.8%, 2% if you're lucky. So not much of a yield on that. London property, property in most places, same sort of same sort of deal. The bond market. Well I think we can all appreciate that the bond market has now probably reached-- it's reached its absolute peak in terms of valuation. And it is now probably going to come off for now structurally for a generation, I would say. And frankly that's an argument against property as well, because property prices actually follow the bond market. Equities? Well, you know, they're pretty expensive too. You could buy the U.S. Market at what 22, 23, 24. I don't even know what they are now. 24 times-- I know that I'm not going to buy them. I look at value there. When I started work, we used to think of, well OK, 20 times earnings. You could justify that with 20% growth. It was sort of the rule of thumb. But really, above 15 and you have to start to look for reasons why the market was there or companies were there. Not now. I mean, with money flowing into the U.S. stock market, it is comfortably above 20, and the only way you're seeing economic or earnings growth that remotely justifies that is by-- it would be with a huge slew of inflation through the economy. I mean it just doesn't work. I mean, you look at the numbers, they don't add up. So, do you put money into equities? No is the answer. Emerging market equities. Well frankly if the U.S. interest rate cycle has turned now, then frankly the dollar will continue to strengthen, and that is going to cause dollar tightness across emerging markets, which is going to remain bad for certainly this part of the world. So where do you sit and wait? I mean, where do you sit and wait? And I always tell people, you should have a certain allocation to gold. We have, within our funds, probably 12, 13% allocation to gold at the moment. But even that doesn't sound particularly high to me. No, it's not. It's not. I'm just not sure I've got the courage to hold an awful lot more, because frankly I realize that I'm at the behest of the policymakers in some respects. I mean, you know, I am-- five years ago, 10 years ago, if you'd asked me, do I think that I think the gold market was manipulated, I would have been, well, maybe, a little bit, because there are some monetary reasons in order to have some form of active engagement in the gold market. Three years ago, four years ago, I've moved very much to the cap of, for certain. You know there is certainly some manipulation going on here. Just because, the way the market moves just doesn't make sense at all. And now I'm of the view that well, frankly-- I might, you know, maybe I'm the last holdout, which is always the bad side. But I'm now concerned that I'm thinking, well, we've got a whole load of gold. I can't really afford to have more because what happens if policymakers succeed? It's the battle royale now between free markets and you know, the ‘registe’ to use a pleasant word for what is happening. Markets, right? I mean it's-- I could be wrong. We could end up with a 30, 40 year sort of French style system of government across the Anglo-Saxon world, which would be very, very bad for someone like me. Yeah. And probably bad for gold. I don't have an awful lot. Well, I have relative to most people an enormous amount of gold. Yeah, most people don't-- that's right. This actually the point that I think-- a critical point. Fortunately not amongst your listeners, audience. But if you go into a room today, any room in the country, any room in the world, amongst the investing class of people, and ask them how many people have gold? You'll have, I don't know, 5%, 10% of the people in the room have any form of gold at all. And these cameramen here? Gold? No? No one. Wedding ring. Wedding ring, there we go. I mean you've got-- there's no ownership of it. We're getting back to this whole idea of, they're coming for your money. And this idea of-- But where can you save it? Yeah, what you do with it? But just listening to you, realize that you're really kind of out of options except to chuck it into passive index tracking funds. Hide in the crowd thinking, well, if I do bad everyone's going to bad so it's not such a big deal. You can't hold it in cash. It's got to be in a market somewhere. It's really hard. Yeah. I mean honestly, the sort of-- I mean I'm at that point now. I mean we are-- we flatter ourselves to say we're relatively thinking investors. We like to consider what we do with things, and we've been holdouts when it comes to passive funds. But I'm now getting to the point where frankly, you know what? I can't beat them. I may as well join them. But it isn't dangerous? Yes, It's dangerous. Especially because I tend to-- if I give up, I'm ringing the bell at the end of it. Exactly. So I'm really interested to understand the inner dialogue you must be having around this. Because I know you're a thoughtful investor. That's why I'm sitting here talking to you. And the conversations you and I have had over the years, I understand that. So when I hear you having this-- I'll tell you right now, you'll never do it. I'm telling you right now, you won't. I want to understand the dialogue. You know, honestly, I just find it so painful. It's so painful holding on to conviction these days. Yes, absolutely. Because the money that we have, we've had to earn, right? Period. No one's given it to us. The money that's sloshing around the financial system at the moment, hasn't been earned, it's been printed. Now it may have arrived in the financial markets via a few people who have worked, but that money has entered the system by some guy going, there we go. Here's x whatever we now call it, trillion, $20 trillion of central bank created money, are we around there? Something close to that now? I think we're nudging it. It's an enormous number. By the time this airs, we would have been up to it. Exactly. Or by the repeat, yeah. Well, anyway it's-- yeah, so it's incredibly painful. And, you know, if one goes back to when we first started work, or got interested in markets, the bond market was powerful. People would always say, well, you know, I want to-- I think it was Clinton's Treasury Secretary, or Clinton himself said, if I want to come back, you want to come back as a bond. Most powerful thing in the world, right? These days, the bond market is just a bunch of-- I mean, it's cowed completely by this central bank involvement in it now. There's no-- Well, for now it has. I don't see that as an endless state of affairs. Sense I just have this feeling that the easy money to be made in the bond market has been in backing these guys. The central banks are going to win. They're going to do their stuff. The closer you get to the limits of their ability to do that, I suspect a turn in the bond market is coming. And we may be seeing it now. Personally, I'm on the record, I still think there's going to be one last panic into treasuries. I don't think we've seen the lows yet. And I certainly don't think this is a one way reversal now, we're going back 35 years. But I think the bond market is just biding time. I think the bond vigilantes are still there. I certainly hope they are. I'm waiting for that time when-- Well, I hope they are, too, because if they're not, then I don't-- then the economic system that we're going to live in is not going to be one of free choice. It will essentially be some form of state directed capitalism which is not what I want to see. But you know, if the bond vigilantes are there, they've certainly taken their sweet-- Come out, come out wherever you are. --Bloody merry time waiting to act in this. And I can understand why that would be, because you're frankly facing a central bank hegemony now where they can bet against you, all the way. And they're printing while you're earning, right? It's a very different dynamic. And the only thing that will force some form of discipline on the central bankers, is a massive slew of inflation, which we haven't got. Well, people will argue about how much inflation there is. I mean, there's certainly more than the stated amount. But I mean, it's certainly not runaway inflation yet. It's ironic, that they are trying to create the means of their own destruction and failing miserably at it. I don't know what that says. I go around so many times. But I just want to get back to this-- I can tell you my inflation, right, of our basket of goods at home is not 1% or 2%, it's more like 7 or 8. Because when you take the school fees, once you take the medical insurance, that's a comfortable 10% a year. And that's a good 25% of expenditure. Just as a-- I just want to get back to this inner dialogue that you're having. I should have set you on a couch for this, maybe. Because I think there's some lessons here for the people watching, in how to handle that, because I mean everybody must be going through this. I know I have. I'm surprised, I'm perhaps a little further away from throwing in the towel than you are, but that's just maybe because I'm an ornery old sod. But how do you-- how do you go backwards and forwards with that? Because for the people that don't know, you're managing family money from generations. I mean, you're the latest steward of that capital. Yeah. Also I'm not sure I'm doing a very good job. No, but you have to invest in the environment you've been handed. The guy that had it before you, happy days. You know, he's managing it at exactly the right time in the cycle. So it's a real lesson for people who are sitting there with their own money at home, trying to work out how to manage it. How do you—the more you think about it not go around giving up, how do you talk yourself down from the ledge? With difficulty. I look longingly at open windows when I'm in tall buildings. Look, I mean, we have two sides of what we do. We have market based investments and we have some very high risk private equity investments. And essentially I think we're at the point with the sort of markets based investments where frankly we're almost surrendering to capital repression now. I mean, I think when the first two years of QE and capital repression, the governments weren't necessarily that good at it, we could still make a bit of a return. But now all assets have been pushed to a level where frankly, there's not a lot of value there. So we-- literally, we're at the point of surrender there. We're either going to continue what we're doing and either go over a cliff or look like heroes, or just give up and go with the rest. And we're sort of tossing that one up, and it's a-- you're right, it's a sort of psychological dilemma. That's with the sort of liquid pool of capital. With our private equity investments, where we take a fairly active involvement in what we do, what we're looking for is productivity. And even under the worst extremes of capital repression, productivity will have a place in an economic system, God, one hopes. And so, we have some businesses that we've started from scratch, and we're gradually building up. And there is productivity there. And that productivity gain creates wealth in some way, shape, or form. So yes, we take a hell of a lot of risk by doing that. And in some way we have been pushed into risk taking that we wouldn't ordinarily have done by policy. But in so far as we can hold out here from not taking a risk with major amounts of capital, we take small risks-- well, smaller capital risks. You're looking for productivity, and take outsized risks from a likelihood of success perspective. But I mean the beauty of it is, on those risks, they're assuming you pick the right people, which is always, to me, that's the crucial decision. If you get the right people in the right places. We always stay quite involved, which means we're almost certainly picking the wrong people. Well look, but you can turn them from wrong to right with the right kind of involvement. --yourself. But you're basically taking execution risk. The risk you're actually stripping out of the equation, which I think is so important is, wild market, unpredictable wild market risk. I.e. Yonkers says something at lunch, and the market falls 3%. And you take a 3% mark on your holdings for no re-- literally, no reason whatsoever. And you look at what happened with the Trump election. And you went to bed with a long Dow futures position on November the 8th, you were down 6% in a few hours. Sure. Then up 6 1/2% a few hours later. For nothing. Markets moving like that on the same news, it's nonsense. Yeah. Is that what you're looking to do? When you say you're on the verge of giving up, are you just looking at being out of markets? Because that, I understand. I understand that getting out with markets-- I think-- That sort of, Yonkers says something crazy, and then all markets move in response to that. We've given up trying to pick the best-- well, not given up, but we are despairing at the idea of being able to pick the best widget manufacturer in a sector, that will see structural growth for the-- we've given up trying to do that. We've despaired of trying to do that, because frankly they can produce the best widget in the world, but when markets move on the basis of what some idiot policy maker says, well I mean we're wasting our time. Now, doing things in the private sector is not necessarily a panacea for this, because frankly you are taking very significant risk, because starting businesses is hard. Well, and there's no out. You can't get out at the push of a button. I mean, you are waiting for cash flow in order to pay you. And that can take a very long time. It can take a short period of time. It can evaporate in a puff of smoke. I mean, there's a lot of things that can go wrong while looking for productivity. Or early stage bits, whatever one wants to describe it as. So yeah, it's a very un-ideal, very suboptimal position to be in. So I want to come-- When our friend said it's never good to be poor, right? But it's-- It's a really bad time to be rich. And that's exactly right. And that comes back to this whole idea of confiscation. But I want to get back to the gold market, if I can. As an investor and as someone that started a business in that world, what are you looking at for 2017? When you look out, what are you expecting? What are you kind of trying to position yourselves for? Not physically, but-- We started this business largely because one side of us could not invest in gold the way we wanted to. So that's how we started the business. We wanted a custody and brokerage business that would provide us the solution that we frankly weren't getting anywhere else. And it-- you know, it was successful. And it's built up to be a relatively sizable entity now. As we go forward, there are-- we're now trying to expand geographically, so up in North Asia we are seeing increasing demand from clients up there. There's also increasing demand from our clients for leverage against their gold position, which is an interesting thing because it's difficult to borrow against gold these days. Because banks are frankly unwilling to lend against because BIS rules have changed and they've made it too onerous to do. So there's demand for service from us there. It's just gradually expanding. Gradually is the wrong word, it's just expanding, and we think will be significant, frankly, in next few years. So we're hiring people. We're changing the internal structure of the business. We're just preparing for growth, I guess. But is that what you're-- when you think about positioning the business to move forward, is that leveraging up of gold? Because you kind of keep hearing this stuff, leverage, like there's not enough of it in the system. And now we get to see people leveraging up their gold. And I understand that push to try and generate returns, and if you have got an asset that just sits there, I get it all. But if that's where the growth is going to be in the gold business, that's perhaps not the most bullish. Well I think there's a big transplanting of the gold business. So we've seen the move from Europe out to Asia. I mean, that's-- European gold business is significantly smaller now than it is out here. And North America, I'm not particularly familiar with it to be honest. The banks have essentially all left, wholesale that business. There are a few left here and there, but realistically they're leaving that business. And so that leaves the-- leaves the role for firms like ours, who are well-positioned, have the skill sets to operate in that market arena, to get into it. And that's sort of what we're seeing. So you think of-- I mean it's a sort of bad example because I don't necessarily want to use these guys as this great example of we want to be, because we don't want to be like them, but firms like Glencore, Trafigura, in some respects, have done particularly well because they've been able to operate in a commodity supply chain much like a bank. Because you know the banks, the Citibank's of the world, the HSBC stand shops, for whom trade finance was their-- was the meat and grist of their business for-- well, since they started, have essentially been getting out of that business because they view it as too hard. They'd rather be selling mortgage loans to retailers, or retail mortgage loans, or something like that. But those and-- frankly, they-- hold on a second. This Indonesian trading firm that needs a $30 million revolving letter of credit facility, it's too difficult. There's too much risk. We don't want to be involved in that. So they've gotten out. And as a result, that trading firm's been unable to finance itself. So it's decided that it's going to work with someone like Trafigura or Glencore in order to help fund their trade flow. And so Trafigura, Glencore, the large, large trading firms have essentially blossomed into these enormously profitable businesses. That trade finance business was actually a good one that banks chose to get out of. And the same is-- I think the same will hold true of gold, though obviously significantly smaller business by comparison to oil, or coal, or iron, or whatever. But we certainly see a role for that sort of financial intermediary within the gold industry as banks get out of it. Be it to fund jewelers or pawnbrokers or-- there's a role there. And that's what we see, what we will end up doing. Are you seeing that from individual investors, or are they still looking to just buy the gold and put it away somewhere, and just keep it safe? Look, I mean, we see-- within our business, we see the sort of trading custody business as very, very separate from some of these sort of financing things, and massively segregate or separated between the two. What we see from a an individuals perspective, we just see more demand for gold. And more people having more demand for gold, because people who have gold, they face the same dilemmas that we've discussed the last half an hour. And the conclusion they come to is, if I to sit by the sidelines and wait, where do I wait? And you know, OK, well, I've got 12% in gold, 13%, 15% in gold. Well, I'm going to sit and wait for another- - with another 5%. So they're buying. And increasingly, the message is getting out to people who want to sit on the sidelines in some way, shape, or form. They realize that putting money into U.S. Treasuries is not necessarily the way to do it. It's all sitting, leaving it in a sterling bank, Eurobank, is not the way to do it. So they are looking and finding-- looking for and finding gold as an alternative. And you are seeing that. So I mean, I can say from our business's perspective-- and like I say, I'm still a non-executive for this business, so I don't spend an inord-- I don't monitor numbers all the time. But I mean, the numbers of people opening up accounts just continues to increase and increase and increase and increase. It's just not stopping. There's structural growth in that business. I'm just curious. The people opening accounts, are you just seeing, is this individual retail level? Is it corporate? Is it family offices? What kind of demand are you seeing? I mean, we do-- there is a retail business in the-- a sort of gold retail business that is all over the world. We don't-- we're not involved in that frankly, it's a very difficult business to make money out of. It is a little bit like retailing. It's just very, very hard. And we don't flatter ourselves to know how to do it. So what we sort of - typical clients that we service are people who will put somewhere between a quarter of a million and $20 million into gold, in some way, shape, or form. Which necessarily, in Singapore, makes them an accredited investor, or sophisticated investor, in most jurisdictions. Now those people tend to be high net worth individuals, ultra high net worth individuals, family offices, and some of the fund type businesses. Increasingly, we are working with some of the banks because, while headquarters is saying, no, we want to get out of gold, it's a bad business, front line relationship managers say in the private banks are going, well, hold on a second. Our clients actually want this. Yeah. So well, if you're going to get rid of this solution, we're going to have to find a different solution. So we end up working with either individual relationship managers, or with the institution itself, to provide them a service that equates to what they were historically offering anyway. So we're increasingly doing that. So, if you think about the socioeconomic hierarchy of customer base, you get very retail at the top, and central bank at the bottom, and retail at the bottom and central bank at the top, I mean. We start at the high net worths, and we go up to the smaller institutions. And increasingly we're seeing demand to work with those larger institutions. I mean, we've been around for a while. We've got a better track record. I mean it's the usual things that you would expect from a growing business. So we see that, within that sort of core custody and trading business. Obviously the stuff on the financing side is a sort of separate business. And within that core custody and trading business, we're seeing demand to expand geographically. So like I said, up into North Asia, Middle East, I mean there are-- there's just demand for this service. And maybe that's because we're doing a good job, or maybe it's because frankly, a lot of people have been getting out of this business. A lot of our customers have historically been private banking customers, or customers of large financial institutions. And they're increasingly uncomfortable with either the service not being provided at all, or with the service that they're receiving. Yeah, and again, I mean having this business, gradually transitioned away from the banks and into private businesses. Personally I think it's one of the best things that could happen to that market. The idea of buying your gold through a bank and storing it in the bank, to me, is a layer of risk that you want to mitigate if you can. Look, I mean-- it's almost ironic that we're getting to this point with the banking system, because the solution to the banking systems problems was not greater mergers and acquisitions and larger banks that are now even way too big to fail, kind of thing. Which is what we've ended up as a result of the financial crisis. The solution was, OK, break these entities down by competition, right? Get banking licenses out there. Issue them to anybody who wants them. And they will compete away the position of these large financial institutions. And that was a conscious choice by banking regulators, no. No more banking licenses. So, OK. That they made a conscious-- and maybe that's because they want to save the balance sheets of those large financial institutions. They realize that if there's a whole slew of new banks coming in to compete with the bust big banks, then you're ultimately going to end up with a balance sheet problem anyway. But the irony of them saying, OK, we're not going to issue banking licenses, therefore there'll be no competition, has been wrong. Because ultimately people have chipped away at the edges anyway, but without-- or by using different licenses, right? And that that's sort of what's happening. Yeah. And the banks frankly haven't helped themselves, because I mean you go into any of these large institutions, places that we used to work. I mean they have massively bloated staff bases that are four or five times what they were when we entered the industry. And probably twice what they need to be still, despite the enormous amounts of layoffs. Which is not going to be popular for-- No. But look, it's a fact. I mean, it's something we all have to deal with. It's always fun to talk. You and I get together far too rarely these days. But I'm glad we could actually get this one on camera. David, thanks very much for your time. Thank you very much. And let's do this again soon.