Transcript for Paul Tustain
Below is the transcript for Paul Tustain: Be Wary of Balance Sheet Risk
Chris Martenson: Welcome to another ChrisMartenson.com podcast. I am your host, of course, Chris Martenson and today we have the pleasure of welcoming back to our program Paul Tustain, founder of BullionVault and editor of Galmarley.com. Paul is one of the foremost experts on precious metals and I have invited him to share his latest perspective with us at a confusing time for investors. Gold and silver remain volatile and they have been largely range bound over the past year.
The evidence for price manipulation appears to grow each month but results in no real action on the behalf of regulators. No surprise there, of course. Add to this the more hawkish statements released by the Fed yesterday plus Bernanke’s recent trash talk to or against the Gold Standard. What is a precious metals investor to think? Paul, I am glad you are joining us again to help make sense of all this.
Paul Tustain: It is my pleasure. Thank you very much for asking me Chris.
Chris Martenson: Well, let’s get right to it, then. What is happening with precious metals right now? Are we in a prolonged consolidation phase? I am looking at my screen. I am seeing a lot of red today for both gold and silver at this exact moment. Has there been a change in the fundamentals that we need to be aware of here? Or is something else going on? Your views?
Paul Tustain: No, I do not think there has been a great change in the fundamentals. I think we know pretty much what is going on. We have ongoing quantitative easing. It may or may not come again. The markets get bored of doom and gloom. People get bored of it. We had a bellyful of it over the back end of last year. Certainly the economic data out of the US is better than it was. That is happening again at a backdrop of an extremely loose monetary policy. So, we are in a world where the Europeans have given an almighty kick of the Can down the road. One trillion Euro reflation effect of the European banking system. That will come back to haunt us in a big way before long.
They are already starting to worry again about Spain and certainly in a year or 18 months we will have to have a long, hard look at Italy again. By then it will only be 18 months until all that money has to be paid back again. In the meantime, we are looking at a banking sector. But it has got all the same problems as before. But markets do this. They have a certain rhythm. I do not think the fundamentals have changed. I certainly do not think anything has been fixed. Sometimes you have to be patient. I am probably of that school. I am not looking at the charts every five minutes or worrying about whether the price is going up or down. For example, yesterday, I mean they are certainly quite thin markets. Ben Bernanke, it is the publication of the Minutes from the US Fed, which took the market sharply lower. That is a symptom of a thin market more than anything else. It is not an exciting story right now.
Chris Martenson: Yeah I noticed that the Globex sessions seem to be a popular place. That thinly traded session in between when New York Comex closes and we are waiting for other things to open up. You have just got that, the E-mini market open for business. It is relatively thin. That seems to be a good place to see sharp moves like we saw yesterday after the Fed mins were published there. And I will note, one thing I do have to raise here is that the US is in relatively better shape but only because the US is deficit spending at a rate that we would excoriate Greece for attempting. And certainly Spain’s feet are being held to the fire for running a rate of deficit that is far lower than the US. So, yes, the US is showing some positive signs here and there. But I was expecting all of that, and more to be honest. Given the absolutely astonishing amount of deficit spending.
Paul Tustain: Yeah, I think that is absolutely right. And that is what I mean. The fundamentals have not changed. We are in a very loose monetary environment. And that does not mean anything has been fixed. It just looks better for a while and in sharp contrast with, as I said, with the European situation of the back end of last year.
Chris Martenson: Well, we also have negative real interest rates. I know that Ben Bernanke is on record as saying the hope of those putting interest rates down so low is to change the risk profile and push people back out into the risk assets because for whatever reason, that is where they want us all to hang out over there in stocks and what not. So, mission accomplished. We have extra risk but we also have extra derivatives out there. Extra deficit spending. Negative real interest rates. These are all tailwinds to the price of gold to me and one reason I, too, do not spend every five minutes checking the price of gold. I used to. But I have since sort of settled into a view of acceptance, of saying, this will play out at some point. And I think the appropriate levels will be found sooner or later.
Now, do you believe that gold and silver prices are being manipulated, influenced, coerced, nudged, whatever terms we prefer? I have an article I wrote recently where I put out some very qualitative indirect evidence, of course, direct evidence is lacking, but it seems to me that there are some oddities in the market that are difficult to explain. And, of course we have Bart Chilton on record, one of the CFTC council members, talking openly about silver manipulation and he has certainly got an insider’s view. What is your take here?
Paul Tustain: Well, there are a whole load of questions built out of it, because there are different flavors of the manipulation story. I think it is probably well known that I am not really strongly in the manipulation camp but I do agree that market manipulation tends to happen in futures contracts. This is not anything to do with gold or silver specifically, it is to do with the way futures contracts work. It is to do with the fact that they have an expiry date. As you approach that expiry date, if, for example, in the metals you tend to find there are lots of relatively small volume longs and the bigger banks will be short. The bigger banks have a huge tactical advantage over the longs here. Because as a short, if you have got physical metal at the futures depositories, then you can just run your short to expiry and push some metal across the floor to the buyer. If you do not have those settlement facilities, you cannot do that. And of course, the longs, which are mostly private retail longs, they do not have those settlement facilities. They do not have those depository accounts. They have to settle. So they have to close. So they will have to sell out the old contract of the debt and is likely as not they will end up buying the new contract reopened.
Generally speaking, the banks are taking probably something like a dollar an ounce out of that trade. It is not really a huge manipulation. What they are doing is they are sitting there, just as anybody would, knowing that they can settle, they will sit there with their price bid in the market on the old contract and they will leave it somewhere around 50 or 60 cents an ounce below the forward curve. They do not care if they get hit or not. If they get hit, they close off and they bought their gold back at 60 cents below the forward curve and if they are going to settlement, then they will just shunt the gold off and buy another stock in the forward markets to reload. So they are completely ambivalent about it and they have got the whip hand because they can settle. So I agree and I think that is what Bart Chilton is talking about.
You will tend to find that the short term manipulation that runs in the last week of the future, in the first week of the following future, when there is a tendency for the banks to hold the old one low and to offer the new contract at a higher price. So that is where I think there is a degree of manipulation. And, as I say, that is a problem with futures markets. It does not exist in the forward markets because they settle every day. So the forward curve tends to be smooth all the way forward and, of course, the banks can very easily if they are taking stock on in the futures markets, then they will offload it in the forward market right on the curve. The both markets are very deep and very liquid so you end up with these positions on one side and on the other. They sort of balance each other out. And in any event, and this is what people do not sort of very often get, you cannot manipulate a market for more than about a week or so by holding, for example, a short position on a futures contract. Again, I am probably getting into dangerous territory and I did not really mean to be controversial. It is just that it looks to me that futures markets are capable of being manipulated.
Let’s move on, then, to the next bit, which is where I think you have written a very interesting article and funny enough, my head of research agent actually noted the same phenomenon a couple of years ago. I know it has been discussed in various places and there certainly is a basic phenomenon that needs explaining and you drew attention to that. It is absolutely right. If I can summarize the phenomenon, it is that there are two daily auctions done in London. They are called the gold fix. One is done at 10:30 a.m. London time; one is done at 3 p.m. London time. What you have drawn attention to is the fact that the morning fix is frequently to a statistically very significant degree, is at a higher level than the afternoon fix and this could not happen by statistical accident. It is far too consistent a pattern and I completely agree with you. There is a pattern there which needs an explanation. But I think there is a rational market explanation and I do not think that market manipulation by governments is in fact it. I think it is much simpler than that.
To understand what is going on, you need to have a basic understanding of how the fix works. And it is not a perfect market. But then what market is? You have five banks sitting around what amounts to a digital table in London. They have behind them many hundreds of clients who will have placed limit orders into the dealing books. And those five banks are going to try to come up with an auction price, which clears all the purchases and all the sellers at the same price. And that will be the fixed price. But what you often find is the clients out there in the investment world are taken as a group. They are going to be buyers. In which case, to get the market into balance, the banks themselves will be sellers. And it could be the other way around. The clients ask the bank to be sellers, in which case bringing the market into balance. The banks would be buyers.
Now, the way it is done, is they declare a price, which is then dumped into the computer and each of the five banks will declare whether they are buyers or sellers at that price. When it gets very close to bidding and balance and somebody picks up the difference and they will be just a little smidgen there and then the fix is declared. And then all the buyers and all the sellers have agreed at the same price. But if you have got, let’s say, 200 customers at the back, who are on average buyers, then you have a pretty good idea that the other five banks are also going to have a lot of buyers out there in the market because you have got a big statistical sample.
If that is the case, it is very likely that today, taken as a group, those five banks who are trading this market on their own book, they are going to be acting as sellers because there is no other supply to come from. So the client demand is pushing the price up. And those five banks, when they declare their own position as sellers, they are not going to be dumb enough to declare themselves as sellers before the price has gone up a bit. Because they want to set a price for themselves for their own gold, which is slightly above the spot price of three minutes ago. I hope this is making some sense.
So the banks in a market full of buying clients, will want a higher price. Now the way those buyers, they are playing basic here at a good game of spoof because any one of those five banks can declare as the seller at that price. And it is likely to be the bank that has got a little bit more gold if they go into the fix. It will declare first. But they all have this interest if they have got this big statistical pile of client buyers, all those sellers, those five banks have an interest in not declaring too early. So the question is, when you look at the differential between the a.m. and the p.m. fix is, who is making money out of this? And, of course, someone who is making money is somebody who is buying at the p.m. fix and who is selling at the a.m. fix. So, obviously, you have make money because you are buying at a depressed afternoon price, selling at an elevated morning price.
Now, next question which I hope will make all this explanation clear as to what is going on. The reason the fix happens in London apart from being historical is because London is in touch with the Eastern markets and the Western markets. Eastern hemisphere and the Western hemisphere. If I ask you which has been the general direction of the drift of gold over the last ten years, you would I am sure guess right, that the drift of gold has been from west to east. The Indians have been by far the boatload consistently to be the world’s biggest buyers and the Chinese, of course, have joined them over the last four or five years.
So, what that means is the banks want to sell. The banks are going to be selling on the thinner market, which is the a.m. fix before the USA is even opened up. And because they are selling to the Far Eastern markets on a consistent basis because the gold is moving east, the banks want higher fixes. So when they play their elegant game of spoof, presented with a whole load of buyers from their client sides, they are going to spoof for a higher price, a higher dollar or whatever it is everyday and when it gets back into sync in the afternoon, which is where the mines will be selling, where the supply of gold is coming from, the banks are now buying. There is a supply there. The world gets into balance in the 24-hour period every time but the drift goes from west to east. And the people that are in the powerful position, the market-making banks, they want to buy cheap in the afternoon and sell dear in the mornings. That I think is what is going on.
It is interesting if you look at some data there because there are a couple of things that back this up. India was a very consistent importer of gold for a long time, but had a very, very quiet year in 2008. If you look at the data for the difference between the a.m. and p.m. fix in 2008, you will see it was not an awful lot of difference between the a.m. and p.m. fixes. Similarly, if you go all the way back to 1975, now that was when the US people were allowed to buy gold again. And there was a big flow of gold into America in the mid-seventies as the private ownership of gold was allowed again. Now if you look at the data of the a.m.-p.m. fix in that period, you see it switched around the other way. And the a.m. fix is then lower than the p.m. fix and to a much greater degree than you see it now.
Chris Martenson: So, this is a physical market for gold we are talking about and these Asian buyers, or Eastern buyers, including India in that statement, of course are purchases are physical. So what you are talking about here is a fairly sustained multi-year flow of gold from west to east. Is that right?
Paul Tustain: That is right. I mean, last year, I am not sure I am going to get things right off the top of my head but I have a feeling that India and China in 2011 were acquirers of 700 tons and 900 tons of gold respectively. You typically see that the Shanghai market is running at a one or two dollar premium over the a.m. fix. So it runs over. That is a spot market and it runs at a premium. They are acquiring physical gold. The a.m. and p.m. fixes are both the over-the-counter London market that is being dealt so they can be and frequently will be settled with the delivery bars which have been shipped out of London. A lot of them now are going London to Zurich and then being shipped off in kilo bars to the Far East. The kilo bars are more popular form of gold in the Far East. So, yes, the going rate for India, taking it as a ten-year average is about 800 tons a year and 2008 was the flat year when they just suddenly stopped buying. And the Chinese have been as you know steadily acquiring gold, not only the state, but also in the last five years private gold ownership has been deregulated and is now possible as well. Not only are they the biggest producers but they are also the biggest consumers. They are big net importer of gold in spite of the fact that they are the biggest producers of gold as well.
Chris Martenson: Well, you know, Paul, something that confuses me is this makes sense. This story makes sense. What confuses me is that the people from China and India that I know are extraordinarily good business people, why would they not just buy at the p.m. fix then?
Paul Tustain: Well, interesting question. I mean, I think many of them do. I just do not think it is all of them. Why are there two fixes? I think that is quite a good question. I think probably what does happen is that a lot of them do buy at the p.m. fix. The p.m. fix is the much more liquid market because basically there is not much happening in the morning. In the morning it is a small peripheral, nobody gets very excited in the London market about the a.m. fix. The one they look at is the p.m. fix. And it is specifically bigger because the US is a much, much bigger market.
So if you like, the market which is out of whack, the market which is a statistical aberration, is the a.m. fix. Because it is, if you like, a small unnatural premium to what it would be and there is not that much happens at it anyway. So, that is the way I look at it. I do not know if it is true. It just makes sense to me and I would always rather look for a rational explanation than to jump on the conspiracy thing, which, I mean, apart from anything else, if this were a way of trying to manipulate a market, it is singularly unsuccessful because anybody who has been selling gold in the afternoon is going to buy it back at some stage. And one of the things that gets me about the market manipulation stories, and the thing I find most irritating about them, is a sort of taking them as a genre, is that if you buy gold, if BullionVault buys gold, we buy physical gold and we always take delivery. We ship it off to the vaults. We do not buy futures. We buy physical gold. Now anyone who sells gold to us, they have got to deliver us physical gold. Now that is the same wherever you go. If somebody wants to buy real gold, the seller has got to provide them with physical gold. Otherwise they start complaining about a settlement fail and they get paid big settlement failure fees if the seller does not deliver, the buyer gets a settlement failure fee.
Now, you do not hear about settlement fails. So what is really going on, what you always hear is that the conspiracy theorists are always saying, yes, but this is paper gold that is being sold. Look, you cannot have it both ways. If it is paper gold that is being sold, then it is paper gold that is being bought. And there is a big double standard operating. If the people who sell the paper gold are of the wicked evil cartel, then the people who buy it are somehow some sort of saints. And what is really going on here is a lot of the buyers are buying paper gold on futures markets. They do not have the money to pay for their gold. They think it is the fair price discovery mechanism but futures markets taken as a whole if you look at them in this country. Futures brokers now have to warn their clients that 90 percent of people who participate in futures markets lose their money. And they lose it because the biggest problem they have is that every three months they are forced to liquidate and reopen by the nature of the futures market and then particularly in gold, they are forced to exit at this depressed price because of…there is the this thing I was talking about earlier. About the way a Bullion bank will hold its futures prices down because it is in no hurry to buy back the contracts that it is short because it is perfectly happy to settle physical.
So, I just think the short answer is for any real gold that gets sold, real gold gets bought and delivered and the only paper gold that can be sold must be bought by people who want to buy paper gold. They are playing the same game. I do not think it is right or fair for the people who buy paper gold to think it is unfair that there are people who sell it to them.
Chris Martenson: Well, you know, the futures market is something I have dissected quite a few times because we noticed, and it is very well known that, certain ETFs that are meant to track certain physical substances like oil. Like the USO ETF badly lags the actual price of oil during a bull run and the reason for that is because the pros front run the ETF. And when the ETF has to roll over its contracts, there are all the pros bidding up the price, making sure that the ETF has to pay a slightly higher price on the front end of that. Right?
Paul Tustain: Well, it is the same thing. There you are.
Chris Martenson: Yep.
Paul Tustain: It is exactly the same thing.
Chris Martenson: So my belief in this is that anything that people can do to make a buck, they will as long as they will not get thrown in jail for it. And even then, they might take the risk. So there is something.
Paul Tustain: Okay. But there is not something inherently. Again, that is another asymmetry that you are describing, if you can run a short to settlement. So if you are big professional, you can go short the futures contract. If you have got the settlement facilities, whether it is in potatoes, or pork bellies, or oil, or gold, if you are able to settle, you are able to see your position running to its expiry. The problem is for all the people at the small brokers, payment discounted brokerage fees, whose terms of business say you cannot take delivery of this gold that you have bought. You have to settle for cash or you have to roll forward to the next period.
Chris Martenson: Right. So then if we go back to Bart Chilton’s statement, he is basically saying there is a structural issue in this market which allows certain players to have what we might call an unfair advantage.
Paul Tustain: Well, I do not know the chapter and verse of what Bart Chilton has said but it does not surprise me that somebody who has very good knowledge of the futures market would see this potential for an, is it an abuse? What has happened is somebody, the person who is sitting there bidding, is bidding better than anybody else. Because nobody else is bidding for a contract of the debt. Should it be? Is it against the rules? What has happened is that private longs who are forced to sell out have got themselves into a hole by running to expiry. There is no liquidity in what they are doing. And in any event, the bigger plan who can do the settlement, as I say, has got the whip hand. It just means it is something that does not happen in a forward market. Or in a spot settled market, which settles every day. And that I think is one of the big advantages of the way the non-futures market, like for example, the London market. I think it is a big advantage of the way it is structured, because by and large, I mean, the players do not all settle. Let’s be clear. We know that. What many of them will do will close their trades before they reach settlement day. And they are perfectly entitled to do that. And that is happening in financial markets all over the world. But anybody who runs their trade to settlement day on the London market will settle in bars.
Chris Martenson: Okay. So this has been well known for a couple of years. This a.m.-p.m. fix difference. There is a large statistically relevant difference between those two moments. Does that still exist today?
Paul Tustain: Well, no. I do not think there is any evidence of it. I think we looked at that quite recently and there is no real evidence of a difference between the two this year. Interestingly, the Indians, they have a balance of payments problem. which is there is so much gold going into India. There is currency exiting. So what they do pretty much the same as I think we did in this country 30-odd years ago, they have put a special duty on gold imports to suppress the rate at which they are sending all their dollars overseas. Well, since they did that, there is very little evidence of an a.m.-p.m. differential in the gold fix. So, I think, all these things are circumstantial. I do not think anything; I am not saying it gives a very clear picture. I am just trying to say let’s not all jump on the conspiracy or the manipulation bandwagon without at least considering some of the mechanics of the market and that there could be alternatives and fairly innocent explanations.
Chris Martenson: Well, perhaps. I will note that I was actually shocked myself to discover that a number of bankers had been colluding to influence, manipulate, the Libor of all things. I mean, my goodness, there are trillions of dollars of contracts hinged upon that rate and they had managed to maneuver that around for a personal and private, institutional advantage.
Paul Tustain: Yeah, I know. There is an example, as you say, of people will stretch the rule book to the limit where there is a buck to be made. I did see some headlines on Libor and I know that there is a scandal on it and it does not sound right at all.
Chris Martenson: Alright, Paul. We just got disconnected but to pick up the conversation then, we were talking about how there are these structural advantages and disadvantages in the market. We were talking about Libor and how even that particular, it is a fairly, fairly significant and large, an important number in the world of finance. And in that case, the price manipulation had been happening. Of course, that is a sample survey, right? It may even be telephone calls for all I know. Go around to a number of member banks. A limited number, and they say, “What are you paying?” They average those out. That becomes Libor. Well the numbers they have been reporting have been placed in certain directions which gave advantages to those institutions. So here is an example, again, of just anything that can be done to create an advantage that people can use in the market to make a few more bucks for their institution. That is often attempted and tried. We were looking at the futures market before noting that there are some structural advantages that might exist in that for the participants particularly on the short side. If you have the ability to deliver and it was Bart Chilton who said I think, he says two sentences here. “I believe that there have been repeated attempts to influence prices in the silver markets.” So he is not saying which direction there. “There have been fraudulent efforts to persuade and deviously control that price.” So, to me, if people can control the price to an advantage that works in their benefit, they will do that. And I take that as an article of faith because I have seen it again and again and again.
Now, in the futures market, people have another reason to be very concerned. When MF Global went down in flames doing things that frankly shocked me. I did not know that you could comingle client accounts and ship them out with the single e-mail confirmation saying send a hundred million to these people. I did not know you could do that. There were farmers in there who had futures accounts on all sorts of grains. There were miners in there. There were people who actually had physical numbered allocated bars held for them with a warehouse receipt in their account that discovered that when MF Global went down and the trustee came in and said okay, we are going to try and figure out how to give everybody 72 cents on the dollar back for their troubles here, they took those numbered bars and sold them for cash. Put the cash into a pool and then the former owners of those bars got their 72 cents on the dollar for their troubles around that.
What I am speaking to here is that there is a lack of faith now among a lot of people I talk to that the markets are free or fair. That there is symmetry of information that we are all playing by the same sets of rules. These are the things that I think are legitimate concerns given the couple of anecdotes I just reeled off there. Talking to this, how is it that BullionVault is different from this crowd? Or, do you think these concerns are overblown?
Paul Tustain: I do not think those concerns are overblown at all. They are absolutely right. I do not know the detail that you clearly know about MF Global. I have not looked at it in any great depth. It is one of the reasons BullionVault exists. When I started buying gold ten years ago, I wanted a long-term holding. I did not want to own some through a business, which existed primarily to extend balance sheet risk. Futures broking. You are inherently exposed to counterparty risk.
When you place property with a custodian, so you place it with a custodian, it is not a deposit. You sign a document which says this property remains yours and you pay a fee to the custodian, which is very strong evidence that the property was never transferred. That is how we do it. So, anyone, if we went bust, we are incredibly financially strong but if we went bust, or even if the custodian itself went bust, the documentation and the evidence of the payment for the fee of safekeeping makes it very clear that no liquidator could get anywhere near those gold bars. They are the property of BullionVault clients. That is different from a bank. That is different from putting security with a futures business. In both of those circumstances, you are placing something into the care of a futures broker or a bank for the purposes of enabling transactions. And that is a transfer to the banks or the futures broker’s balance sheet. And that is probably why, I do not know the chapter and verse of the case with MF Global, but that is probably why the liquidator regarded that as the property of the company and the client who had placed that property there as a creditor of the business to be treated much the same as any other creditor. Nobody who owns BullionVault gold is a creditor of either BullionVault or VMF. They are owners of gold outright.
Chris Martenson: Fantastic. I think in the case of the MF Global, I was referring to a Barron’s article where they did note that certain traders had already paid full price for the delivery of bars of gold or silver and they held warehouse receipts to prove it. And the one quote is, “That has investor’s fuming.” “Warehouse receipts like gold bars are our property. Hundred percent, contends John Roe, a partner in BTR Trading in Chicago’s futures trading firm.” So, here is a company that had warehouse receipts. They were waiting for delivery of those and those all got seized and tossed in. It is again, I do not know if that was right or possible, or what. It just speaks to a little bit of lawlessness that seems to happen.
Paul Tustain: It is. Yeah. And it is an ugly way that some things can work out. The question is, you could pay for something in full and leave it there in support of your account, in which case you have transferred ownership to the futures company. But, of course, nobody knows that when they do it, and how the law will treat that. If the law does not find a clear document which says this property is under the safekeeping of the custodian and a fee is being paid, then there is a risk that that property will be grabbed by a liquidator in a liquidation. That is what you have to avoid. So you need to look at the documentation that makes it absolutely clear it is the property of you, the person who placed it under the care of the company involved and you want to make sure you pay that fee as well. It does not have to be a very big one and if it is a BullionVault, it is about a third of the price of an ETF. We charge 12 base points a year. But you have to have that fee because it is very important in the courts, showing that this was not a transfer of property to another organization, in the nature of a business transaction. What it shows is that the transaction such as it was, was placing into the custody of a safekeeper your own property.
Chris Martenson: Now without naming names, but if you can please do, do these ETFs, you mention they do have a custodial fee, does that mean that they are free and clear of this particular dynamic?
Paul Tustain: No. I do not think it does. You have got to look at the trustees in each case. What happens is the trust, as I understand most of these, is the trust owns the gold. You do not own gold. Nobody who owns an ETF owns gold. They own a security which is backed by physical gold. Now the major ETFs I am not going to mention any names because I do not know them well enough and I have not studied the 300 pages of trustee that would leave me comfortable.
Chris Martenson: [Chuckling] Yep.
Paul Tustain: But the major ETFs I pretty strongly believe are backed to in excess of 99 percent by the gold that they say they have. When I say in excess of 99 percent, I think that in one or two of the trustees that I have seen, there is an ability for them, so that they do not have to send a truck to and from the depositories every day, they can float a small amount of unallocated, but it is irrelevantly small. So, my belief is that the major ETFs are, you have a debt instrument. You do not own gold but you own a debt instrument which is reliability backed by physical gold, which in the case of the major ones, the ones that people have studied in depth, that gold I believe is there.
Chris Martenson: Alright. Well, fantastic. Thank you so much for your time today. I guess in summary you still see the same basic tailwinds or structural supports for the price of gold and silver going forward. We have got Italy and Spain, have not gone away, just been kicked down the road a bit, still to be dealt with. That overall the markets do find their appropriate levels that if there is certain price influencing that is going on in the markets, it is really around the margins by the participants who get to play a little bit of intraday games and that overall yes, you have to be very careful these days. Unfortunately, really digging into some of the details around the precise holdings and legal framework in which your assets are held because this whole formerly quaint notion of what is on the piece of paper is mine has been proven false. Is that about right?
Paul Tustain: That’s about right. But what is on that piece of paper, I always tell people when they look at their bank account, they think they have got maybe $50,000 in the bank. It says $50,000 CR. Credit. You are a creditor. It is the bank’s property, that $50,000. And they recognize in that document that they owe it to you. So, you have to watch out for that word creditor. When you see CR, you are on the balance sheet. You are at risk.
Chris Martenson: Very well said. Paul, thank you so much for your time.
Paul Tustain: Okay. It is my pleasure. Bye.