Keep Some Powder Dry
The market still has the feel of a party where the music is playing, everyone is drunk, and nobody wants to be the first guy to admit the building is on fire.
Gold & silver stocks got hit hard this today. First Majestic was down about 13% in a single day while we were recording. That’s the kind of move that reminds you why keeping some powder dry matters.
Yes, cash is trash. Yes, the dollar is being destroyed in real terms. But there’s a big difference between losing 5% or 10% a year to inflation and losing 13% in one afternoon because you were fully loaded with no room to move.
Doug’s point was not that he has turned bearish on gold stocks. Quite the opposite. He still thinks the small mining stocks are one of the cheapest corners of the market. The producers are minting money at today’s gold prices. Some of the developers are moving toward production. And sooner or later, the public is likely to notice.
But that does not mean they can’t get hit first.
As we reminded readers last month - It’s important to have dry powder. If the broad market rolls over — and Doug thinks we may be on the edge of that precipice — the little mining stocks will probably get dragged down with everything else. They always do. At least temporarily.
That’s why dry powder matters. It gives you the ability to act when everyone else is being forced to sell.
We also talked about what may be the bell ringing at the top of this market: the coming wave of giant AI and tech IPOs.
SpaceX. Anthropic. OpenAI.
These may be great companies. They may also be the exact kind of offerings you see near the end of a speculative mania, when insiders and venture capitalists need a public market exit. Once these companies are floated at absurd valuations, they’ll get shoved into index funds and ETFs, and ordinary investors will end up owning them whether they understand the risk or not.
That has a very dot-com feel to it.
The market is already unhealthy. Too much debt. Too much leverage. Too much passive money. Too many Robinhood traders buying one-day options. Too much faith that the authorities can always keep the casino open.
They probably can’t.
We also got into a darker subject: war crimes and nuclear weapons.
A listener asked whether nuclear weapons can ever be used without violating the laws of war, given that everyone knows civilians would be killed.
Doug’s answer was broader than nukes. The real moral break came when war stopped being mostly armies fighting armies and became the deliberate destruction of cities, infrastructure, and civilians.
That was not how wars were generally fought in the 18th and 19th centuries. It was not even the norm in World War I.
Then came World War II: Rotterdam, Coventry, Hamburg, Dresden, Tokyo.
Then Korea.
Then Iraq.
And now we see the same logic in Gaza, Lebanon, and elsewhere. Blow up infrastructure. Destroy cities. Drive people out. Call it strategy.
Doug’s point was blunt: you don’t need a nuclear weapon to commit mass destruction. A fleet of bombers can do it. So can modern armies with conventional weapons. The moral rot is not in the weapon alone. It’s in the idea that civilians and civilization itself are legitimate targets.
We also touched on eVTOLs — electric vertical takeoff and landing aircraft.
The dream is real enough: flying vehicles, drone technology, better batteries, and eventually a Blade Runner-style world where aircraft move around cities without internal combustion engines.
There are already public companies in the space: Joby, Archer, EHang, Vertical Aerospace, Eve Air Mobility.
But Doug made the right comparison. Investing in this sector today may be like investing in automobile companies in the early 1900s. There were hundreds of them. Almost all disappeared.
The winners may be huge. Most of the companies will probably go to zero.
And as usual, the real bottleneck may not be engineering. It may be regulation. The lawyers, lobbyists, and fixers may matter more than the engineers. That’s true in aviation. It’s true in mining. It’s true almost everywhere in the modern economy.
Finally, we got into inheritance.
Most people think the problem is taxes. And yes, the state is always the enemy. It wants a piece of everything, including your estate after you die.
But Doug thinks the bigger problem is what wealth does to children who were not raised properly.
If your kids are weak, entitled, badly educated, and filled with stupid ideas, a large inheritance may destroy them. Money does not create character. It reveals it. And then it magnifies it.
The alternative many rich people choose is not much better: foundations.
That may be even worse.
Look at what happened to the great American fortunes. Carnegie. Ford. Rockefeller. The people who created those fortunes would probably be horrified by the bureaucrats, leftists, and professional do-gooders who eventually took over their foundations.
So the question is not simply, “How much money should I leave my children?”
The question is:
Have I raised children worthy of receiving it?
That’s the part most people avoid.
The real inheritance is not the money. It is the judgment, habits, values, courage, education, and competence you build into your children before the money ever shows up.
Get that wrong, and the money becomes poison.
Get it right, and the money becomes fuel.
00:00 June Holiday Banter
01:12 Pride Flags and Virginia
02:08 Trump Meme Calendar
05:08 Gold Stocks and Dry Powder
08:52 Nukes and War Crimes
13:01 Gaza and Lebanon Fallout
15:22 eVTOL Investing Outlook
18:43 Japan Yen Carry and IPO Top
21:16 Corn vs Soybeans Trade
23:18 Do Souls Exist
27:09 Sprott Cover Top Signal
29:47 Broker for Canadian Stocks
30:13 Inheritance and Raising Kids
35:39 Wrap Up and Next Week
