Hello, and welcome to The Australian's Money Puzzle podcast. I'm James Kirkby. Welcome aboard everybody. Now, the outstanding investment in recent times has been gold, gold in any form, gold bars, gold bullion, gold coins. For most of our listeners it would be gold based exchange traded funds and listed gold miners. Even this year to date, gold is up at about twenty three percent so far. This is over the year to date the ASX is up by about two percent.
It's moving ten times faster. My guest today, appropriately enough, is oh a man I called mister Gold. We've known each other for a long time. I used to talk to him at the Perth Mint at various other jobs over the years. He is now the general manager of ABC Bullion. That is the place where there was recently queues outside the front door at Martian Place in Sydney, which gives you some idea of what's going on in this area.
How are you, Jordan Lovely to love it to be here, James, thanks for the invitation.
You're welcome.
And Jordan Alicia Folks as I see, he's a deep specialist in gold and he's stuck with it all his career to the listener who's just starting to find out about good just tell us, first of all, what's been happening. They qualify if you with the price change that we've seen.
Certainly so.
If you look in Australian dollars through to the end of April, the price returned for gold was around forty five percent for the year, so it had gone from around three thousand, five hundred dollars an ounce to about five two hundred dollars an ounce in that one year period, about double the return of silver. Silver had done pretty well as well, but it was only up about twenty percent. Obviously, prices have pulled back a little bit in the last two weeks, so we've seen a correction that was very
much expected given just how fast gold had run. But the strong performance of gold isn't just isolated to the last the last twelve months. If you look at sort of three year, five year or ten year returns, you're talking around over three years about twenty four percent per annum annualized, which is about ninety percent in total, and the ten year number is about thirteen percent annualized, which if you compound for ten years, comes out at almost two hundred and fifty percent.
The price is rallied.
Wow, we're talking strictly good billion here, that's right in Australian dollars, are in US dollars.
Yeah, no, that's the Australian dollar return in the last twelve months. The return in US dollars has basically been the same. So whilst the currency moves up and down on a daily basis, actually over the last twelve months it's been relatively stables.
As a whole.
If you take the ten year window, the Australian dollar gold price has outperformed the US dollar goal price, and that's largely a function of the fact that obviously the Aussie has been under pressure really since it peaked back in twenty eleven, when you know, back then you could get a I think it was almost at a dollar ten versus the American dollar, and now it's closer to sixty five cents.
So the weakness of the Australian dollar against the US is actually propelling this even faster. But for people who are listening and for you the investor at home, when you see gold prices mentioned in the press or wherever, it's actually US, isn't it. It's the that's the one that everyone uses.
More often than not that that is correct, and you know that's why, you know, bullion dealers like us will show whilst we transact in Australian dollars with our clients, will show the US dollars bot price as a reference point, because that's what people are used to seeing or seeing
on the news. Interestingly, from a portfolio point of view or from an investment point of you because the Australian dollar is a commodity currency, in part driven by the fact that we're such a huge gold mining nation, but also you know, iron ore and coal and other things.
What you tend to find is that gold is potentially an even more useful asset for Australian investors than it is for people in other countries for the very reason that during periods where equity markets are a little bit weak and there's more uncertainty in the economy, not only does gold in US dollars tend to do well, but the Australian dollar often falls, So you sort of get this double benefit as an Australian dollar gold investor in those times of uncertainty.
So you know, it doesn't happen all day every day.
But it's an interesting sort of factoid that helps drive Australian investors towards gold, be it in bullion form metfs or sometimes through gold miners as well.
I mean, I played Devil's advocate here. If I didn't know anything about gold, well, I'd say, well, you know you're from a gold bullying company, you're going to see gold is always going to go. But as would you say if I said to a really said agent when it's a good time to buy property, they've got to say They're always got to say. Now, sure, I think that's only reasonable to put on the table.
But for someone who doesn't know anything.
About gold, what are the key drivers? Okay, but we know at the moment there's a driver in particular of late being uncertainty because of the tariffs and the whole Trump regime over the US markets. But what drives the price and what has driven that long period of gains that we've seen that you explained at the start of the show.
Yeah, it's a great question.
So I think, you know, if we go back to I suppose economics who are investing one O one, you know, what drives the prompts of anything? It's a combination of supply demand. So let's quickly address the supply side for investors with gold, there is an absolutely mammoth supply of gold that already exists in the market, a couple hundred thousand tons of gold that have been mined across the course of human history and that are still owned by investors.
Supply is pretty static.
It grows a little bit every year based on the mind output, as it were. When it comes to demand, you've really got three let's call it primary buckets of buying or of demand. You've got jewelry buyers, which we can deal with quickly in the sense that that is an important long term part of the gold market.
People buy jewelry because it looks.
Beautiful, and gold is obviously a timeless asset, But actually there's very little correlation between jewelry demand and movements in the goal price. The two other elements one you touched on before, it's central bank buying, and then you've got private investors. Now why do central banks buy gold. They buy for a handful of reasons. First and foremost, because the gold market is big enough, it's liquid enough, it's of substantial enough size that central banks can play in it.
So when central banks are investing, they're investing obviously huge sums of money.
Big licks of money. They're not put ten grand worth of gold, that's right.
But also by definition they can't really go and buy private equity.
They're not going to buy small cap stocks.
Like there's a suite of investments as it were, that are just not appropriate due to their size, due to their liquidity, due to their risk profile. Gold like the US treasury market, like the eurobond market, the Japanese government bond market, it's one of the few asset classes that is big enough, deep enough and liquid enough that central banks can play in the gold market.
And so they do. And it has this.
Added advantage obviously, or advantage that is increasingly favorable to central banks, that it has no credit risk. Over the long run, it has demonstrated that it doesn't really have inflation risk as well. It's kept up with or outpaced inflation, and I think increasingly importantly now there's this question around ownership, which has only been exacerbated since the the invasion of the Ukraine by Russia, where Russian central bank assets.
And the like have been frozen.
You know, if you own gold and you've got it on shore, then really that can't be done. And so what we have seen not only since the invasion of Ukraine, but really going back to the global financial crisis fifteen years ago, is central banks have been buying gold in vast quantities every single year, and the speed at which they're buying has been accelerating. So that's the central bank
part of the market. And then the last bit is your private investors that are either buying ETFs, are buying coins, or are buying bars, and fundamentally they're buying is driven by two things. The desire to increase the value of their portfolio. And obviously, in periods like what we've seen in the last year, gold has been a terrific asset from a pure return perspective. But more importantly, and you sort of alluded to yourself, gold has always been that
trusted safe haven asset. So in periods of uncertainty, heightened volatility in the share market, you know, question marks over the outlook for growth, investors gravitate towards gold as a safe haven because they feel comfortable that it will preserve their wealth, and that's driven by the fact that it has preserved wealth for so long.
Well when we talked during the week, I went back and looked at gold and how it performed, and yes.
What you see, of course is true through the ages.
And the last time that was really I'm going to exclude COVID, the last time there was really deep uncertainty in the market. That is uncertainty about how the markets actually work, the order in financial system and how it's ordered and how it functions, which is what we have now with this issue about the US in particular and the US dollar system, which we've known on our lives, etc. So there's uncertainty about that. The last time there was
uncertainty of parallel was the GFC. And yes, gold really did lift after the GFC, very substantially. When the fear passed, Gold fell by thirty percent roughly in two eleven, at which stage most people were pretty convinced it's over. I mean, it ended in two or nine, but we weren't to know, were we. It took at least a year and a half before people said, oh my god, that whole crisis
is over. So there is that passion that if it goes up in times of uncertainty, it does drop in times of how we say a peacetime in the markets.
One hundred percent agree.
So you know, gold in the short term has similar volatility to equities, and so you know it's sort of almost only natural that after periods where it's raced ahead quite a bit, it's going to consolidate fall back. In the case of twenty eleven in US dollar terms, you're right, it sort of fell into a cyclical bear market that lasted a couple of years before I came onto the
show today. I actually was looking at some of the charts and the tables of returns from back in that era, and to put it in, to put it in context.
You know, if you look at you know, back.
In two thousand and nine twenty ten, you could buy an ounce of gold this is in Australian dollars at around fifteen hundred dollars an ounce.
Now, over the next year or so, you.
Probably wouldn't have been thrilled with your investment because a bit of heat came out of the gold market as investors rotated back towards equities.
And the like.
But again I'll just use that price point as an anchor, around fifteen hundred dollars an ounce back, then the price is closer to five thousand today.
So whilst in the short term, you know, had you bought.
In during that period of let's call it heightened uncertainty and heightened froth in the gold market over the next three, six, twelve months, you might have felt great about yourself as a long term holding, though you've done pretty well having that allocation to gold. So and I think we're probably in a similar period now. Bit of froth coming out of the market quite a healthy thing, but I believe the fundamentals driving gold are still very much in place.
Okay, what we might do is in the next part of the show we should talk about where you think gold is going. But also I think the biggest change is what in terms of the choices people have, which has changed so much. In terms of gold, it was a very specialist, refined area once upon a time, refined excuse upon Now it's something that you can buy quite easily.
You can buy a thousand dollars worth of gold, five hundred worth if you wish, through exchange traded funds, which have really sort of blossomed in the market.
So we'll talk about that in a moment. We take a break.
Hello and welcome back. To the Australian's money puzzle. I'm James Kirby talking to Jordan Elisio, general manager of ABC Bullion in Sydney. Mister Gold, Now, mister Gold, tell us about the cues that were forming outside your office at once day. That's arkable, really, had that ever happened before? That happened in April right at the depth of the tariff of scare.
Yes, it has happened before, So it happens. So we've been in our global flagship store in Martin Place for just over two years now. We opened in March of twenty twenty three, and as coincidence, it was almost like it was written in the stars. The day that we opened in Martin Place was the day that the Australian dollar gold price first touched three thousand dollars an ounce, right, and there was huge demand for gold back then.
I think it would still be in a lot of people's minds.
But that was around the period where Silicon Valley Bank fell over in the United States. Remember that was always almost two years ago to the day, or sorry, two years and a month or so, given we're now in mayhere, and so what we found then was obviously gold was performing quite well, but particularly whenever there's any fears around sort of the safety and security of the banking system, you see physical gold demands and it wasn't just us at ABC Bully and this was a global phenomena at
the time. Physical gold demands surged in that period. And so yeah, we had days where we were having cues with a.
Norm rather than the exception.
There are also then cultural buying periods, particularly when Dwali and Dan Terras for the Indian community ques of people down Martin Place buying gold of the norm over that period, right, But.
Yeah, no, it's not an all day, every day phenomenon.
Yes, yes, but of what was explort I suppose extraordinary was this site of people actually quing for God. The last time I saw people cuing for gold. Well, you would see the course all the time in Hong Kong and I lived there because they used to have gold accounts and people used to just use them like current accounts.
It was amazing. Was that's very much a thing. Similarly, I can remember being in Zurich and seeing people sort of going in and out of the gold vaart there, which you would get under banhaf Strass where all the big Swiss banks were famous and all the gold was in the basement.
So this is people's image of gold.
But it is not much easier to buy gold now because you have, apart from the traditional area which you represent to some degree the gold bars held in the vold, you can buy ETFs, which are similarly they are backed by goldy repp, so you're buying a paper certificate over an amount of gold. And that actually has been I mean ETFs have been growing, but it's really been a boom area for the local market and we have seen
a lot of investors go into gold ETFs. Similarly, gold miners so good of course this year, like the entire sector is of thirty three percent. Some of the favorites in the market, Regius Resources is up about seventy percent, Evolution Mining is up. I think it's let me see sixty percent. This is so far this year. These are remarkable figures. Now the thing is Jordan. Where is it going to.
Go from here? Gold hit a record a few months ago at three five was it? What was the record hit?
Yeah, close to that and in Australian dollar terms that went above five four hundred in mid April. Basically so about a month ago.
Which cordcides with the peak fear I suppose to around this tariff, I said, scare, but who knows how it's going to play out? But tariff incident, yes, okay, and then it has retriced a bit since then. What's pushing it higher and what's what could be pushing against it in the months ahead.
Let's start with what's pushing against it first and foremost. What we're seeing now is really a textbook correction after such a period of elevated games. You know, a forty annual return for gold is not something that people should expect to see repeated year on year. That is an exception, Ferniger. You need to see some froth coming out. So you know, in US and Aussie dollar terms, it's down roughly ten percent from its peak there or thereabouts, which is you know, again,
whether we're looking at gold, equities, you name it. Those are sort of textbook corrections that you see in markets. What's pushing against it right now is also, for one of a better term, the short term calm that appears to be in play regarding tariffs that sort of China US sort of appear to have for one of a better term, lowered their guns for ninety days, and that's given people a little bit of confidence.
So that's obviously helped.
I mean, I think the SMP's now almost recovered all of its losses, so obviously investors do feel more confident going back into.
Two equities, and that's taking away some of golds.
Let's call it risk off bid that you'd expect to see as people gravitate out of equities into gold. The other one, as well, is that markets appear to have ever so slightly priced out a couple of rate cuts, so everyone still thinks rates are coming down, but maybe not as fast as what they thought they would a month or so ago.
So those are the things that are weighing against gold.
The theory is, and it's it's more than a theory, it's a it's a key aspect of gold that as rates go down, that's good for gold. Could you explain why.
Yeah, it's it's probably a fraction more nuanced than that, And I can get out that it's not just about where interest rates are. It's the interplay between interest rates and inflation. So you know, if rates are going up but inflation's going up by more, then all other things being equal, the money you're earning in a bank account is worse off, if that makes sense, right.
A world of.
Zero percent interest rates and zero percent inflation is almost better for someone with money in a bank account than a world of three percent interest rates but five percent inflation, if that makes sense. So, but the general rule has been that as interest rates in real terms come down, gold tends to do better because you've got less of an opportunity cost in holding this physical asset that doesn't
give you an income. So, you know, it sort of stands to reason that if I can make five percent after inflation putting my money in the bank, then that's kind of what I'm giving up by buying gold, Whereas if I can only earn one percent after inflation, it's not so much to be giving away key. And so I think if you look at the outlook for both rates and inflation combined, it feels like we're through the worst. Well, very clearly, we're through the worst of that inflationary spike
that we saw after COVID. However, we're now seeing rates start to come down and they're likely to go go further down, and so investors are starting to think, well, hang on, I'm not going to earn much leaving my money in a bank account or tying it up in its term deposit. I'm better to go and look for other investments. And that's not just gold. It's residential real estate, it's equities, it's crypto, it's other things as well. But gold is one of the assets that's likely to benefit from that.
But the thing about goold, of course, if you go to financial advisor and you see I'm convincedchoolers good, I'm convincedchoolers on the way up, I'm convinced that gold has been good for you and will continue to be. The infinancial advisor will say the problem with gold is there's no income, and almost every other serious asset class has income.
And then there's this sort of residual notion that it was okay, if you're very wealthy, that you can have gold in whatever form you wish, including in bullion, which you obviously have and involves, but there's no income, so you are totally dependent on the price going up. Finally, if you have property, you actually have income.
Yeah, So I mean, look, that's true.
The way I would look at it, having been in bullion for a long time, but also having worked in other markets, the way I look at things is every single asset class has at least one drawback, right there is you know, if I look at cash, well, cash is stable, right, but it offers no potential for capital growth, and you are exposed on the inflation front, and you hope the interest you earn is enough to compensate for the inflation and hopefully a little.
Bit more above.
So every asset has some kind of drawback. You know, with gold, the criticism for one of a better term, that it doesn't pay an income is one hundred percent true. At the same time, it has always been true. It has not stopped gold from going up about nine percent perannum annualized over the long run.
So you sort of have.
To ask yourself, well, if from nineteen seventy one to twenty and twenty five gold was able to go up by nine percent perannum even though it didn't pay an income and has no possibility of paying an income, why would that trajectory change. What is it that would make you think, oh, that's no longer going to continue into
the long run. You know read you mentioned before real estate as the alternative, whether it's real estate, whether it's money in the bank, whether it's in shares, whether it's bonds. For that entire fifty year period, they've all been paying income or offered the opportunity for income. Still hasn't stopped gold from going up nine percent paranum, if that makes sense.
And naprosp is the long term, really long term, like century long average. And then you were seeing at the start of the show that in more recent terms it's been twenty percent or so per anum.
In the last few years.
Yes, if you look at gold's returns, what you tend to find is yes, so that nine ish mark is the long run figure. What you tend to find is in periods where inflation is higher than average, so like three percent or higher, then the average return of gold's closer to fifteen percent perannum.
And again that makes sense.
You know, if we're in a higher inflation world, all other things being equal, things like bonds, things like cash in the bank are less attractive. So it's only natural that you're going to see more people gravitate towards gold in those environments, and that's going to.
Push the return up a little bit.
Yeah, there's no guarantees that's what happens in the future, but at least that is what the past has shown.
No, there's no guarantees. We know that if buying gold in the traditional form of bullion, well, how much does the standard world bar? Now, let's see how match of culture and I don't know anything. How much is the standard gold bar?
Well?
You know, obviously one of the beauties of gold is that it can be fabricated into multiple shapes and sizes. But okay, for a one ounce bar, I mean the price, the spot price of gold right now is almost bang on five thousand dollars an ounce, So you're going to pay about five one hundred dollars to buy a one ounce bar right now?
Which is about to say, is a little chocolate.
Yeah kind of yeah, like a tiny easter egg, the kind of easter egg. Yeah, the kind of easter egged kid and grandkid will be unhappy you gave him because it's not big enough.
And if you if I, if I then say I don't want to bring this helm, I've never where to put it. You and you want to keep it in a vault yep, you pay a holding cost obviously, and insurance costs for that.
Yeah, so you can put you know, you can use private vaults and to maybe put some numbers around this. And again let's give a practical example. Let's say a self managed super fund who's put fifteen percent of their portfolio in gold, a million dollar portfolio.
Which would be on the high side. The advisors will generally see if you've got to do it somewhere between five five to ten. So let's but that's all right, I'm just putting in some perspective here.
Yeah, yeah, that's fair. So let's say it's one.
Hundred to one hundred and fifty thousand dollars investment into billion. You could put that into a small vault that would cost you about three hundred dollars a year to store it basically, which in percentage terms is.
About point three ofer percent. Is not a huge number. So that is one way of buying gold.
You mentioned ets before, which I think have been really beneficial for the gold market. That ETFs exist, even though a lot of people would say, well they compete with the core business that I'm in.
That's okay.
There are lots of different ways to buy shares or have exposure to the equity market.
No reason that goal shouldn't be the same.
You've got the ETFs, you also have what are called pooled accounts that organizations like ours offer, So you are buying effectively a share of a pool of gold that that we're storing. Yeah, you can take it out in physical gold at any time. That's another way, very popular,
particularly with SMSs. And then increasingly what you're seeing, and you know, we've been at the forefront of this is things like gold savings accounts as well, where people can sign up to a direct debit plan and put fifty or one hundred dollars a week or a month away into gold. That's really popular for people that are saving lots of actually lots of people that use it then for.
Their kids or grandkids.
So a little bit like you know, I think if you look at investing full stop, as technology has moved forward, the way people can access various markets has only gotten better, right, which I think is a good thing.
What's the argument you put forward if I say I just got to buy an ETF because it's just so easy. Yeah, I have a brooking account to just click and there's the amount I want. Is there any price advantage that billion has over paper certificate?
Base school basically, look in a lot of cases, it would be your transaction costs will be cheaper buying the ETA, There's no doubt about that. One thing to keep in mind, though, is that when you buy an ETF, like, not only are you not buying gold, you're buying an instrument that's linked to gold. But obviously there's a management expense that effectively gets eaten out of the gold that you are exposed to every single day, Right, So that management expense
needs to be factored in as well. So again, if I use an example, one hundred thousand dollars in physical bullion put in a vault for three hundred dollars a year, or I buy one hundred thousand dollars in a gold ETF that charges point four of a percent, Well, my point four of a percent fee is four hundred bucks.
Not only that, if the goal price.
Goes up and let's say doubles over ten years, I'm still paying point four percent. Now I'm paying eight hundred bucks a year for the ETF. Now I don't see that fee because I'm not getting sent a bill, but I am.
You are paying it.
It's built in.
It's built in, So there's the cost element.
And look again there's no one hundred percent right way or one hundred percent wrong way of doing this.
But the other thing, James, that's worth.
Mentioning is, and again we're at the forefront of this, We see this every day, is that when people buy gold, and this isn't everyone, but it's an increasingly large number of people, they don't just want the price exposure. In many cases, they also want the comfort that comes with holding the physical asset.
Yeah, it's like bricks and mortar and property. There is a tangible aspect. You haven't mentioned, an argument put forward which sometimes flares up a lot of the ETFs. You know, the promises they're back to one hundred percent by golds held somewhere, invariably in London. I understand. Is there a danger that ETFs couldn't cover the amount of gold they say they have?
Ah, Look, I can't really comment on that in any great detail because the reason I say that is that globally there's more than one hundred gold ETFs listed now across various exchanges. The legal structure of those investments where that gold stores, it's not like they're all exactly the same and you can just make one sort of cast all observation. So I don't want to sort of sit here and for one of a better term, talk down a potentially competitive way of accessing bullion in a portfolio.
What I would say is that you know, if you buy the physical gold, you have the economic exposure and you own the real thing. If you buy an ETF, you just have the economic exposure and hopefully you can get your hands on the real thing if you decide you want it, right, I think that's that's probably as you knows, as much as I can say on that.
Okay, No, I thought it was both bringing up and I think you were very I think you were very fair and balanced in your explanation of that issue, which does flare up at times, and it flares up of course when.
There is a crisis absolutely.
And then there's always this theory about ETFs. Would they be able to if everyone's certainly the ETF they promised the convertibility of gold, could they actually all produce the gold to back the ETF? So if I had one hundred thousands, can I get that one hundred thousand gold? It's yet to be proved they can't, and it hasn't been an issue, but as they get bigger, of course the issue becomes a larger issue in itself. Okay, really really interesting. I think I hope that listeners have got
a good grasp on that. I imagine if you're thinking of gold as a part of the portfolio, the numbers so far are terribly convincing. You have to say, then the issue for you is whether you do it, and the extent to do it and the method by which you do it. And we see some of the funds now, some of the private funds making a lot of play about gold. It's definitely a period that is very has been extremely good for them. The issue is can that continue?
But some of the drivers I think that Jordan explained are their perennial They're not just to do with Trump. Trump has just basically put an extra spice I think, on the gold price in recent times because of that and uncertainty. A lot of that uncertainty obviously is not going to go away overnight. Okay, Now, we have some really good questions which have arisen from recent shows, and I want to get to them in a moment, particularly to clarify a few things about SMSFS which came up
and also some off budget items. And I just want to give a little shout out to James Gerard on Monday show. We got a lot of questions. Actually, I didn't realize so many of you were so interested in home batteries and solar panels and saving money.
But why wouldn't you be? And it was a very good show.
Okay, back in a moment, Hello, Welcome back to The Australian's Money Positive podcast. James Kirby talking to Jordan Licio of ABC Bullion the Gold Company.
Now.
Marian Emmy Ion says, I listened to your podcast, find it very relevant. A couple of times on recent shows you said around the new government of what was going on. I heard you comment that that unlike the transfer balance cap and super the concession and contribution caps are not indexed.
That is not correct.
And then Marian goes to the trouble of showing me part of the ATO website where it's all proved. Yes, Marian absolutely maya culpa. I should never have said they're not indexed. I should have said they are not being indexed this time around, believe it or not, in our crazy supersystem, the indexing on how much you can have tax free and Super is linked to the CPI. The indexing on how much you can put into super pre tax or as they say, concessional is linked with the.
Industrial wage. Can you believe this?
So they go on different indices, and that's that's why the cap went up. It's going off to two million on July one, but the amount you can put in each year at thirty thousand is not going up.
Absolutely silly, But.
I should have been careful to clarify that.
Okay, there's a.
Question here that and I know you you're an economist by training, aren't you, Jordan, And that was your original I think you were the economists at ABC billion.
What's upon a time when you started.
Yeah, my background was in was in funds management originally, so you know, I sort of came to gold as a diversified investor originally.
That was my original interest in bullion.
So I'll tell you what that first question from Mariyan, I was glad that didn't come to me. I was just thinking I'd need to be a financial advisor to have any idea about how to answer that.
Oh, look, you know it's I can answer them for the simple reason that I do this every week.
And it's like learning a language.
You know, if you if you didn't speak it for a while, you'd forget a lot of it because it is not necessarily intuitive or indeed logical. But I that that is how it goes now. Andrew asks, this is about we were talking about X and we mentioned on the show when the new government was elected that there was various sort of goodies that they had handed out in during the election. One of them which our list
is very interested in, was hex. Your hex bill would be cut by twenty percent straight up if ALP were elected, and they have been re elected with an improved majority, consequently, your hex bill, whatever it may be.
Is going to go down by twenty percent. Now.
The point I was making on the show was that this isn't even in the budget. It's what they call off budget. And Andrew asks, thank you for touching on off budget items.
What a joke that is.
I challenge any of our leaders political leaders to go to the shops to purchase groceries and when they are asked for their credit card for payment, that they instead asked the cashier that they would like to pay for the groceries off the credit card. It's true though, isn't it this after do you remember this whole thing about off budget items. I mean it used to be a small thing that they used to put a couple of
things through. But it's like they're both both sides are doing it at nauseam now idea so that the budget is it's kind of well, we cover the budget.
It's incomplete, really, isn't it.
Yes?
I would think that it's amazing that that that, for one of a better term, the rules are written in such a way that that can be done. It's probably doesn't encourage the most discipline, I think. Look, and it feeds into, frankly, this concern that more and more people have around the trajectory of public finances, you know. And that's not a red versus blue comment, either in Australia or overseas. It's a reality that we're going to have
to deal with one way or the other. And I think it's why a lot of people think that over the next few years inflation is going to have to be higher, because it's really the only way to deal with some of the debt that's been accumulated to date and the debt that is going to be accumulated given the size of budget deficits been run.
Specifically, you're talking about the debt that we see that we talk about being the budget deficit, but the debt's much bigger than that because the all these off budget items that are not visible in the budget that don't get mentioned, and they are literally like throwaway lines in economic articles that many people would struggle to understand in the first place. Yeah, it's very interesting. It's definitely an issue.
Thanks for that, Andrew. Okay, and thank you very much Jordan Elicio, ABC bully in General manager for being on the show today.
That was great.
I think you were very balanced about gold considering that's your full time job all your life.
Pleasure.
Great to have you, thank you and really informative and thanks everyone for the questions we've got. I've definitely got quite an upticking questions. As I say off James Gerard's show Monday. If you've missed that, make sure you hear it. It was all about talking about the government's goodies. Another one was, of course that they're cutting the discount on the battery on the home batteries for powering your solar panels.
Most people thought they were too dear, but James made the point that in fact, coupled with stake Ground still now be literally cutting half. The price will be cut in half and I think it will bring a lot more people into UH into green energy. I keep the emails rolling the money puzzle at the Australian dot com dot au dot you soon m