Being Short Your Government: The Real Case for Gold & Silver
6/23/202657 min
Wilf is joined by Ned Naylor-Leyland, newly crowned Investment Week Precious Metals Fund Manager of the Year and manager of the nearly $3 billion Jupiter Gold & Silver Fund. Known for his characteristically contrarian, deeply analytical perspective, Ned breaks down why the true narrative surrounding gold and silver is heavily misunderstood by the investing public.
Instead of viewing gold and silver through the lens of traditional commodities, Ned explains why they are fundamentally foreign exchange instruments and why gold is the true risk-free asset of the global financial system.
“This is about being short the behaviour of your government.” Ned makes the case for physical gold as the ultimate safeguard against the long-term erosion of purchasing power caused by the inevitable debasement of paper currencies. But he disagrees with many fellow gold bulls when explaining the surge in price in 2025, and thinks that momentum and macro trend-following from leveraged investors, as well as changing real interest rate expectations, fueled the recent explosive rally, rather than central bank buying or a broader acceptance of the monetary debasement argument by most investors.
He explains why silver operates as a "dual-nature" asset – acting as money while simultaneously being in critically short supply for the industries of the future from AI to green-tech to military hardware. “Silver is like gold in that you are short politicians, but you're also long the future.” But Ned has exposure to just gold and silver, and explains why other precious or industrial metals have no place in his fund.
While he has personally owned Bitcoin himself historically, he doesn’t own it anymore as he likes to be a first mover and contrarian and sees no place for $BTC in light of that.
He believes gold and silver producers are cheaper than they’ve ever been, with free cash flow margins that are double or triple that of the tech sector, while trading on a fraction of the multiple. The reason being the lack of long-only institutional capital in the space, which he thinks could flood in if tech stocks peak.
Ned and Wilf also discuss a wildcard factor – ‘Where Is the Gold?’ – a fascinating deep dive into fractional reserve bullion banking, central bank balance sheet expansions, and the systemic risks surrounding where physical gold actually resides.
Clips
Transcript preview
First 90 secondsNed Naylor-Leyland· Guest0:00
This is about being short the behavior of your, of your government. I mean, if you think they're going to be disciplined, and they're gonna look after you, and they're going to raise rates above inflation and give you a real return on your cash, then don't do it. But if you, like me, are less confident that that's the case, the, the history of money tends to suggest one thing, which is you're better off owning [laughs] gold and/or silver versus your local currency. And by the way, the producers have never been cheaper than they are today ever. So while they have gone up, um, there has been actually been negative flow to the space over that timeframe, as amazing as that may seem to you. So these are the most profitable companies in the world, 50% free cash flow margins, making, making probably double, and in some cases triple, the free cash that tech is making. I think the Trump Fort Knox thing is, is related.
Wilfred Frost· Host0:52
So, so ex- expand on that for me.
Ned Naylor-Leyland· Guest0:55
Well, I mean, those of us in the gold community think, think that quite a long time ago, the gold was moved elsewhere anyway, um, and that Fort Knox is a bit of a shell game. There's not much going on there, hasn't been for a long time. So should he go there and open it up and be proven right, which I'm sure President Trump would quite like to be proven right, um, seems to be one of his favorite things, then you would have the condition that the ECB warned about in their research note, and, and I've been inferring, which is people go, "But wait a minute, where's my gold?" And if you're a, a rich oligarch and you ring up your Swiss banker and go, "Where's my gold?" And they go, "What do you mean?"