Wall Street is pushing towards new record highs on peace hopes, but the bond market is not buying it. The 30-year Treasury is above 5%, a post-2007 high, and the 10-year is near 4.50%. Gold is around $4,500, silver $76. Consumer confidence is low, with two-thirds of Americans cutting back on spending. A new Fed chair, Kevin Warsh, was sworn in, and traders are pricing in a rate hike.

Bond traders are also walking past the gravity of the threat. The US government is getting off cheap borrowing at 5% for 30 years. Yields are going much higher on the long end. The stock market will eventually notice and weaken. Gold will break out of consolidation because real interest rates are falling as inflation accelerates faster than yields rise. The Fed not hiking amounts to a rate cut, which is bullish for gold.

Scott Bessent called the yield spike 'transient'. Is this sound debt management or a warning that the long end no longer wants the paper?

The only thing transient is the rate at which rates are going up, because they will go up much faster. The new Fed chair has a big problem. We are looking at a sovereign debt crisis and a US dollar crisis before the end of the Trump term.

Former NY Fed President Bill Dudley said the case for cutting rates is very weak. Traders are pricing an 8.5% chance of a July rate hike. Is Dudley catching up to you, and does a hawkish Warsh help the Fed's credibility?

Hawks are extinct at the Fed; it's a question of degrees of dovishness. Inflation expectations broke off their mooring long ago. Consumers expect 4% inflation over the next 10 years, double the Fed's target. The government's inflation numbers capture maybe half the actual increase. Inflation is a big problem that will get much worse. Trump's second term will deliver a bigger increase in the cost of living than Biden's, potentially into double digits.

If the real hawks are gone, is the Fed's credibility about fighting inflation or just preventing the Treasury market from breaking?

The Fed's credibility is going. That's why gold went to $5,500. The rally from $2,000 to over $5,000 was driven by central banks buying, indicating a loss of confidence in the US dollar, the Fed, and the Treasury. Retail investors were selling. The big story going forward is that retail and institutions will become significant buyers as they appreciate the risk to the dollar and realize Bitcoin is not digital gold.

The Fed can't raise rates aggressively because it crushes the cost of servicing $38 trillion in debt, but it can't cut without fueling inflation. Is that the trap, and what is the exit?

There is no exit. The Fed and Congress put us in a situation with two doors: hyperinflation or a depression/financial crisis. There is no soft landing. Former Treasury Secretary Hank Paulson said the US needs a 'break the glass' emergency plan for when foreigners stop buying our bonds. The national debt will hit $50 trillion before Trump finishes his term because the Fed will be back in QE mode, monetizing debt. That's where the inflation will come from.

The defeat of Thomas Massie sends a message that fiscal responsibility is dead. Walk me through what that math does to the timeline.

Getting Massie kicked out sends the wrong message to our creditors. He was the lone voice for fiscal responsibility. The 'big beautiful bill' was a tax increase because it made government bigger. The message is that fiscal responsibility is dead. Central banks don't want to own our currency or bonds. Soon, no one will, and they will rush into gold, silver, and hard assets.

Silver was approaching $90 when you were last on. It's now $76. Did the silver squeeze fail, get delayed, or is the paper market suppressing the physical market?

After that interview, silver went on to top $125. The significant thing is that we blew through $50 resistance and never went back below it. We are now consolidating in the $70s. This is a beautiful breakout and consolidation that will resolve with another big up move. The $125 peak is just the first stop.

Are you seeing any capital show up in the physical market, or is it still going through paper?

There's not a lot of demand yet. Retail demand picked up earlier this year when we saw big moves up, which coincided with a short-term top. I think private investors, hedge funds, pensions, and endowments will start moving into gold, with money coming out of fixed income. I think we will get a big decline in the stock market, and when money leaves, it's more likely to go to gold than US dollars or Treasuries.

How do ordinary investors avoid becoming exit liquidity in a silver or gold spike?

If you bought at $120 silver or $5,600 gold, you weren't late because the party isn't over. I've advised clients for over 20 years to steadily buy gold and silver. Try to buy the pullbacks more than the rallies. These are long-term trends. The dollar has lost 99% of its purchasing power and will likely lose another 99% from here, and it could happen a lot faster.

Michael Burry warned of an aggressive fall in Nvidia. If the AI trade unwinds violently, does that capital come into hard assets or go to 'money heaven'?

Most of it goes to money heaven because you need buyers for sellers to have anything to invest. Some money will come out and go into precious metals. Eventually, the people who got into the AI bubble will get into gold and silver mining stocks, which will become a bubble too. But we are nowhere near that yet.

Is M&A starting to move in the mining sector? Where are we in the mining cycle?

It's starting. We've had a few names in our portfolio bought out. Gold mining companies need to replace reserves, and buying junior companies is a smarter, less risky play than pure exploration. Our fund is about a third in juniors. Even if gold stays at $4,000-$5,000, mining companies will make a fortune and use that cash to buy juniors. Junior mining stocks could go up dramatically even if gold doesn't move.

Is the entry point for miners today better or worse than six months ago? Where should someone with $50,000 put it?

This pullback is a great entry point. Many mining stocks are still trading lower than they were at the 2011 peak when gold was at $2,000. They are cheaper now in many respects. You are still getting a good deal.

Walk me through the sequence: price controls first, then what? How does this unfold?

The government redefined inflation from money supply expansion to rising prices so they can blame it on whoever is raising prices. They will implement price controls, which don't work and create shortages and black markets. They may also implement exchange controls, making it harder to turn dollars into foreign currency or precious metals. You want to act now, before the government makes it harder.

What would force Washington to cross the line into capital controls?

A crisis. When you get a run on the dollar and money is fleeing the country, capital controls are the easier way to stop it. The harder way would be to slash spending, let interest rates go up, and let stocks, real estate, and banks fail. They will choose the path that postpones the pain, even if it makes it worse.

What is the equivalent of September 15, 2008, for the sovereign debt crisis you're describing?

It already started with the big accumulation of gold and the bond market breakdown. Bond yields are at a 19-year high despite the Fed's efforts. The catalyst will be something like the 'Emperor's New Clothes' moment, where everyone suddenly realizes the US government is broke and can never repay its debt. When that happens, it will be too late.

Build a portfolio for new money coming in today. Give percentages for physical gold, silver, miners, foreign equities, cash, and tokenized gold.

Have a lot of money in productive, income-generating assets like foreign stocks and emerging markets with good dividend yields. Mining stocks represent one of the best asymmetric bets, with potential for 5-10-20x upside. I've had more than half my portfolio in mining stocks. People should have at least 5-10% in physical gold and silver. I look at gold as cash, not as an alternative to stocks. Your liquidity should be mostly in gold.

Where are you with T-Gold?

T-Gold allows you to buy gold and silver in any amount. I am likely to launch my own token. The goal is to allow people to use gold as a medium of exchange. Tokenized gold is a great medium of exchange and a store of value, doing everything Bitcoin promises but can't. It's the perfect money for the internet age.