s global investors and the chairman of hive blockchain frank. Welcome back the show exciting program, you have a new etf on the way now youre involved with a lot of different industries. Already youve got the gold side. Youve got the crypto side youre in the jets, and now youve got a new etf launching soon called c s e a tell us about this very exciting. Well, what we learned from jets, uh and wheels up because november the 8th was yesterday, and this is a very significant day for global travelers wanting getting in inbound into the us driving across the border from canada and the us are flying in particular from europe. Theyve had a two week holiday, they basically got stuck in mexico city or they got stuck in canada before they could come in now. Skies are open and what weve seen is a couple hundred million dollars flow into jets and its appreciated ten percent this month and its a talk of the town yesterday on cnbc, but in that whole experience of of jets and watching it grow. What we recognized during covet is that the cargo airlines were incredibly resilient. They had that what we call the aq. You know the high adversity quotient we talked about earlier. They were just robust in how they conduct stuff and the turnaround, and then we saw with cargo cargo moving, basically chips. I know this from high blockchain, getting new chips and moving equipment from asia over to sweden, into iceland and to quebec into new brunswick.

Its had lots of we had lots of learning experiences here, because it was great difficulty and why? Because of climate change and some of the thought process of europe and the u.n all of a sudden, disrupted theres, not enough ships with low carbon quality oil that they want to move products around you have the covet shut down. Then you have this huge pent up demand and bingo. We have this huge price inflation and i believe, based on the logistics and building new ships and be able to move the global economy and the amount of money being printed. These shipping companies from cargo to the sea have tremendous pricing power, such as 10 kilograms a year ago to move uh equipment. Ships from asia was 10 a kilogram, and now its over a hundred so thats just give you an idea for flying and the same thing for shipping, so theres a big boom going on and also david. It correlates with the purchasing manufacturers index, which i always talk about its a great leading indicator about economic activity yeah if the chips are unraveling well, why that must be something wrong with with economic activity. Okay, so lets talk about shipping, so you told me offline that your etfs 80 cargo ships and 20 um uh shipping by air uh now uh well get into the composition in a little more detail just a minute. But i want to talk about shipping. Obviously, youre aware that there is a global supply chain issue thats been ongoing for a while ships are backed up in the port of los angeles, for example.

I read recently this uh this report. If you lined up all the containers back to back from all the ships that are backed up in the port of valet, and you line up all these containers side by side, you can stretch from la all the way to the east coast, so whats, causing this Uh, this blockade so to speak, well, its its something like i mentioned earlier, climate change and some of the policies related to that that came out of the u.n um. They had unintended consequences and all of a sudden, a lot of the ships. They say you can. No longer go into seaports if you have this quality of oil from from its like venezuela. So all of a sudden you take out 25 of all the ships, but the world is booming. Again, you know the money supply is, exploding were seeing real assets, explode were seeing so many different assets go through the roof here, uh and – and so i believe that these logistics issues, theyre theyre, not going away theyre theyre gon na continue and and the so you Have to go to who has pricing power, so theres a lack of supply, but demand is big. That means that commodity goes up or that service price goes up and thats. What we see, though, its so simple. We talk about bitcoin cap to 21 million coins, more people believe its going to grow exponentially. You cap the supply of shipping, and you turn around and print trillions and trillions of dollars by the g7 countries.

It has to turn around and create a huge boom in this this industry yeah. I want to show you this chart here. If you take a look at my screen here, this is the baltic dry index. It measures the average cost of shipping. As you know, spiked up dramatically this year, um as a result of a covet and other supply chain, uh logistical problems. Recently in the last month, its uh dropped dramatically uh. We know why its run up. Why? But why does dramatic drop? Do you have any idea? Yeah, a lot of this has to do with the battle between australia and china uh on on coal and iron ore, particularly iron ore uh, and so its its more of that that commodity shipment and its a small sliver of really the overall shipping. If you look to sort of increase the universe and you started adding uh other your samsung refrigerators, etc, uh, its a complete different ship to move across the pacific and their pricing powers remain very robust and strong. Okay, now frank: do you think that shipping costs will continue to normalize downward? Do you think thats a possibility? Where do you think itll remain elevated for the uh foreseeable future? I think its going to be elevated for the perceivable future. I i i just dont, see the number of ships coming on stream, the number of airplanes that move just the cargo to get a big discount and then youre going to have inflation embedded in because the price of oil is up.

So, therefore, your cargo flying things around has to go up, and – and this is the reality, were living in a very understated inflationary world. You know, if you go to the gas pump, you know if you buy eggs and bread. Inflation is much more than four percent thats a bit of a joke, but what really? The real estate is showing you, because real estate in the u.s is up 19 yeah. They always because its cheap money well lets just tell you theres inflation. Here uh we saw the price of lumber, go up a hundred percent correct, but still theres still shortages, so i dont think its all all of a sudden, as a powell says its going to go away quickly. I doubt it yeah, okay, so shipping, how important is uh the shipping cost or the average shipping cost to determining broader inflation, because, presumably if the cost of shipping is high, that the cost of raw materials is going to be higher and everybody is if thats the Base point right: everything else is going to just build on top of that and its going to get passed on to the consumer and thats. Why youre getting big pricing power like in san antonio uh, pretty the covet uh? You were paying dishwashers at 12 an hour now its 20. yeah yeah youre, talking about in eight dollars as a percentage of 12, is a big big move. Theres a 40 move in in salaries so were seeing that not just only professionals uh.

It goes right down to dishwashers everywhere in san antonio and im, not sure montreal, but i know in austin i know in san antonio uh theres signs and posts everywhere looking for workers and you have to pay a higher price, because the shipment of everything has gone Up so we had this embedded inflationary sort of consumed by the python and is moving down and its going to take several years as this pricing continues. So who has the pricing power when i created jets? It was because it was, after all, the bankruptcies and the airlines, all of a sudden cut, a third of their flights and double the prices, and they had pricing power and they continue with ancillary fees they kept, raising them and raising them and all of a sudden They just took off. This is the same thing here: theres a theres, a pent up wind at the sale in cargo shipping thats got, i think, another three years of a great run: okay, interesting uh, final point about shipping and well move on now. Uh. Take a look at my screen one more time. I have a headline to show this came in from cnbc just today, jp morgan says supply chain pressures are easing time to buy s p 500 mv stock. So forget the second part supply chain pressures are easing. Do you agree with that statement? No, okay, straight to the point thats. Why we, like you frank you you you, i im gon na, give you my anecdotal.

I go to uh target and target. You know. They told me at target, buy what you can buy now. Youre buying uh lights for christmas, you buy them now do not wait till thanksgiving because you wont have any more theres, no more of the backup supply. We will not have any more shipped in. So i, when i hear that i bought the new nike shoes, uh uh kimchobee, for running the the guy that ran the uh marathon in in two hours. Well, you cant get them here in the u.s. I got them in dubai at a at an alternative asset management conference. It was predominately bitcoin uh, which really impressed me that i could get all these shoes, but theyre all sold out here. Yeah luxury items rolexs you cant, get them anywhere and by the way luxury items i have a luxury fund, u.s lux and – and i created that in june i read the bottom of 2020 and its crushed. The s p 500.. Yes, luxury goods forget walmart, go to costco. You know that thats how the paradigm is shifted. Okay, now lets go back to c uh. So can you give us just a few examples of the components of your etf? Well, its 80 percent cargo plane of cargo uh ships and then its 20 percent cargo jets yeah. So cargo from the canada has a car well known: cargo airline uh and its based on a quant model. It rebalances once a quarter uh and its based on who is demonstrating the strongest growth and revenue per share and cash flow per share, and then, who has the least amount of debt on a relative basis? A lot of shipping companies have a lot of debt, its something thats always been highly leveraged the debt capital in the world for financing this is singapore, so its important to follow whats happening in singapore and logistics and its very highly correlated to commodity demand and global Trade, so it really relates to my global resource funds and my world of gold and purchasing manufacturers index.

So i think this is just one of those great products. If i see the pmis turning like i said a year ago, theyre gon na theyre taking off this is one of those products. Will all of a sudden give you this massive 100 percent moves on the upside, and what does a pmi tell you right now? Are we uh in an economic period of economic expansion? Still no weve, weve talked weve talked uh theres, no big contraction, but weve talked, and i think people are trying to digest the price inflation of oil into their pricing account. And what can they pass on uh and and whats happening in the u.s? A lot of people will not go back to work unless youre going to pay them much more money because they know its just so much more expensive to live. Yeah im just looking at the um ism pmi, its still youre right, its uh. It has topped its um slowed down a little bit its above 60s, its above 50. Still so still, you know above 50 still means its. The economy is somewhat expanding, but uh its not uh, whats important is that you have now look at the global pmi and then the china pmi is 50 of all commodity demand is china, so the china pmi is much more strongly correlated with with gold and base Metals uh, where, whereas, when you look at america, its boeing jets uh, we export uh ge, mri machines, uh its so its a its a different uh sort of foreign currency movement.

So what does that mean for commodities then? And im going to include gold and silver into the commodities basket, so youve got. I think the great trade this quarter is gold. I i just think its mathematically. When you look at any time, weve had such big negative real interest rates, uh that youve gold has a surge and when it happens, itll be everyone will be shocked by it. And when you look at the gold mining companies, i always wish they would adopt. What what a lot of the crypto mining companies do? We hodl h, o d l hold on for dear life, hold on take 10 of your free cash flow and dont sell the gold own it. If you really believe it, and the issue is that a lot of crypto mining executives believe in bitcoin and ethereum, especially the bitcoin audience, but gold guys cant wait to sell their gold because they really dont believe the last guy. That really believed was rob mcewen uh when he was building gold court uh, and i believe that today grand colombia is the only one thats huddling, five or ten percent of their gold production, but so many other companies just bank it away. Gold should be at four thousand dollars an ounce today, based on the g7 money printing and the negative real interest interest rate spread with the ten year government bond. So back it up be long, gold, yeah, look i mean what the crypto people are doing are quite smart.

If i were, if i were a crypto uh a company, i would hold two. I mean im isnt that just taking supply off the uh off the equation and, of course, with lower supply, youre gon na have to uh see a price increase down the line isnt it well. If you really love that andy warhol painting, you dont flip it really quickly so thats the difference its like kitko has incredible: uh, smart gold coin collectors and yeah they buy some just of the normal coin production, but the collectors. They know that if theres a limited supply of any stamp or any gold that over time it appreciates and now whats happening, is that theyre getting the digitization of baseball cards with nfts and mba and nhl so were, were seeing the crypto space that were using blockchain And ethereum all of a sudden coming to other parts of the sort of monetization by digitizing uh collectible assets. So the fact that the or theyre monetizing, these other assets means that the blockchain itself and the limited supply bitcoin ethereum theyre, going to appreciate okay. So lets talk about ethereum then, as we speak today, just today, ethereum and bitcoin on tuesday have both reached new all time highs. Can you give us some uh reasons for this push in the last couple of weeks? Well, i think its historically going in the last quarter. We do get the big uh a pop here in in the bitcoin ethereum enthusiasts um and – and i so i do believe, theres much more adoption.

Just like you start off with jp morgan, uh and bank of america, they love ethereum, but the crypto ecosystem is really maximus or ardent gold bugs for me because they believe they read from the same uh old, the bible of printing money. They basically look at the pentateuch and – and they give you a history case – study after history case of governments destroying their paper, money and whats great to own. During is gold, and now all of a sudden, we have a new audience that are more current in all government, destroying paper money and its bitcoin. So theyre, much more captivated on the preservation of capital and the value of bitcoin is going to grow exponentially ethereum. They believe it, but really the ecosystem is money. More scientists theyre many more sort of like a socialist mindset, scientist uh, and they want everything to try to be free and its really fascinating to me to watch. It has more of a hierarchy who dictates where theyre going in the direction, whereas, as bitcoin is much more horizontal and diversified and non centralized around the world thats interesting, do you think d5 is becoming more c5 more centralized, so to speak? No! No! No! No! I dont, i think, its just very creative. If you know how to code and and you think you can digitize something uh, we made an investment high in d5 uh we listed on the neo exchange in toronto and its done spectacular world.

They have almost 400 million dollars in their etf equivalent in the nordic place in the nordic countries alone in sweden, so theres something there its very profitable, and now we talk about nte, dot, v uh. I i think that this is a company that makes money the businesses turn because of covets behind them, making documentaries of icons. They have done muhammad ali. They have done bruce lee. They have done many great icons, theyre going to start the plan to digitize all those films, so think of andy warhol having a thousand prints of mao and those plants came out at a thousand dollars and he had five colors and all of a sudden. They go to a quarter million, each of them as chinas economic boom took place. They all wanted to have the colorful original one, the prince of mao, i its because its a collectors item. What happens when you have bruce lee and you have the footage and you have the ip haha frank breakup last question: what are you gon na? What are you gon na make your own nfts frank? When can we buy a frank holmes? Nft? No, not for me. I like to invest in young minds, like you, young guys, like you, thats thats, my vision to see you prosper and and see other people use their creative juices to create wealth and joy and and prosperity and health for other people all right. Well, uh. Thank you for that and uh.

Well, i i still. I still would like to see a friend comes in ft. I think that would be very popular. I think that would sell, sell well on the first day, but well see maybe maybe down the line, will change your mind. Uh frank. Thank you uh. Thank you again for your analysis. Good luck with the launch of the c etf thats s e a ticker! Well be watching off then well follow up next time. Thank you, wheels up and thank you for watching kikko news. Im david lynn, dont forget to subscribe to our youtube channel and next week on wednesday tune in on the 17th of november to our live interactive debate between alex mashinsky, ceo of celsius network and peter schiff, ceo of euro pacific capital. The event will be moderated alive by michelle mccrory editor in chief of kikko news and audience.

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