Financial Sense Newshour Guest Expert Interviews
Mexico Is Becoming the “New China” for the US Market
Jim is pleased to welcome back Jeffrey Saut, Managing Director of Research at Raymond James Financial. Jeff believes we have started a new secular bull market, but calls the stock market advance the “most hated rally in half a century”. Jeff notes that the support for the rally comes from a number of factors including central bank stimulus, low interest rates, strength in housing and autos, and improvement in the employment picture. He also mentions that the world is currently underinvested in US equities. Jeff makes an interesting observation about Mexico, both in terms of its labor situation and railroad transportation to the US, calling it the “New China” for US markets.
As Long As Central Banks Are Printing Money, You Have to Be in Stocks
Jim welcomes Puru Saxena, Editor and Founder of Money Matters and Puru Saxena Limited in Hong Kong. Puru believes that the Chinese real estate bubble is on the verge of a major bust, which will not bode well for China, or Asia. He believes the thirteen year bear market in stocks is over, and a multiple year bull market in equities has begun, especially in the US. Puru sees the dollar as the most liquid and secure currency in the world and does not foresee a dollar crisis. Due to supply and demand factors, he does not favor commodities, as prices will be under pressure in the near to medium term.
Available Global Net Oil Exports Continue to Decline, Outpacing Gains in US Oil Production
Jim welcomes Jeffrey Brown, Independent Petroleum Geologist, creator of the Export Land Model, and ASPO-USA Board Member. Jeffrey explains his Export Land Model, and reviews the major trends regarding availability of oil exports on the world market. Jeffrey also looks at the growing tension between oil production and the rising internal demand of oil-producing nations as well as China, India, and other emerging economies. His overall thesis is that the US oil industry continues to make a serious mistake by providing, in his opinion, wildly unrealistic scenarios for future US and global crude oil production.
Global QE Makes the Dollar Look Relatively More Attractive
Jim welcomes back Douglas Noland, Senior Portfolio Manager at Federated Investors Inc. Doug sees the global government finance bubble as the next crisis epicenter. He believes the US has exported the finance bubble and today QE by central banks around the world make the dollar more attractive by comparison. Doug also sees the German people taking a harder line against bailouts in Europe, leaving their government in a bind. He believes that US bank depositors are also at risk of confiscation, by inflation.
“A Film That Could Save Your Life”
Jim welcomes Pamela Popper PhD, N.D. who appeared in the recent film “Forks Over Knives” and is one of the co-authors of the companion book, which reached the New York Times bestseller list. Despite the most advanced medical technology in the world, we are sicker than ever by nearly every measure. Forks Over Knives examines the claim that most, if not all, of the degenerative diseases that afflict us can be controlled, or even reversed, by rejecting animal-based and processed foods. The film looks at groundbreaking studies that conclude that our animal-based diet is primarily responsible for America’s three biggest killers: heart disease, cancer and diabetes. Despite the profound implications of their findings, the work by Dr. Colin Campbell and Dr. Caldwell Esselstyn has remained relatively unknown to the public.
Regulators Turning a Blind Eye to Fraud
Jim welcomes William Black PhD, Professor of Economics and Law at University of Missouri-Kansas City School of Law. Professor Black sees an increasing trend of crony capitalism in world markets. He sees two primary reasons for the mess; regulatory neglect and competition from overseas exchanges with less stringent regulations. In terms of corruption, Black believes the current credit crisis is 70 times larger than the Savings & Loan Crisis. In the S&L crisis, Black notes that there were 30,000 criminal referrals, and 2,000 white collar criminals went to prison. In the current credit crisis, stemming from 2008, there have been zero criminal referrals and zero prosecutions. He sees the FBI as the only agency with any effectiveness in white collar crime, but they are woefully understaffed.
Many Shale Oil Plays Are Already Peaking
Jim welcomes energy expert Bill Powers back to the program. Bill notes that energy stocks are now getting a bid, and he and Jim discuss the significance of Freeport McMoRan getting back into the oil business. They also discuss the risks of extrapolating energy discoveries into the future, as many recent shale oil plays are already peaking. They also look at Daniel Yergin’s “Undulating Plateau” and how it may be taking place now, instead of decades from now.
Preparedness Is Key- No Early Warning System Yet to Protect You From A Major Earthquake
Jim welcomes back Dr. Patrick Abbott, Professor Emeritus, Department of Geological Sciences at San Diego State University. Dr. Abbott is an expert on earthquakes and is a veteran of many media appearances in California after significant quakes. He talks with Jim about the probability of “The Big One”; how to prepare yourself and know what to do if a major earthquake should strike. California is known for its tremors, but the potential exists for earthquakes in many other states as well. Dr. Abbott also notes that there are many earthquake faults that scientists have only recently discovered, and there are likely many more yet to be discovered.
China’s Growth Rate Will Likely Be Under 5% This Year
Jim is pleased to welcome back Dr. Jim Walker, Founder and Managing Director at Asianomics Limited in Hong Kong. He expects slower growth in China this year, likely under 5%. Dr. Jim believes Japan’s new policy of weakening the Yen only benefits the government in inflating away its enormous debt load. He sees many governments adopting the failed policies of the 1970’s and believes there will be failed outcomes this time as well. As to his investment outlook, Dr. Jim believes as long as central banks are printing money with abandon, investors should be in equities.
Peak Gold- It’s now much more difficult to find large gold deposits
Jim is pleased to welcome noted geologist Keith Barron PhD, Director, Founder and Exploration Geologist at U308 Corp. Keith and Jim discuss the recently completed PDAC Convention from Toronto, the world's premier event for the mineral industry. Keith notes that the junior miners have been killed and offer opportunities at rock bottom prices. He notes that the majors have also disappointed, and have too often diluted their shareholders. Keith sees an emphasis going forward on economic projects that make sense, rather than large deposits that have a lesser ore grade. Keith also looked at the issue of “peak gold” and how it is now much more difficult to find large gold deposits anywhere on the globe.
All Markets are Manipulated, But Precious Metals Markets Most of All
Jim welcomes back David Morgan of The Morgan Report. David believes the fundamentals are still strong for the precious metals markets, but investor sentiment is at or near rock bottom. He also sees the metals markets as the most manipulated of all markets. From his long experience, David knows that picking a bottom in the metals markets is extremely difficult. Accordingly, his advice in taking a position in either stocks or physical metal is to build your position gradually, and never buy all at once.
The Bankruptcy System Is Broken and The Lawyers Are Making A Fortune
Jim is pleased to welcome James Koutoulas of Typhon Capital Management. James has been a leading advocate in fighting to recover $1 billion for customers from the MF Global bankruptcy. James tells Jim that the bankruptcy system is broken, and the regulators are outmanned, out-lobbied and afraid of large financial entities. Furthermore, the media is woefully ignorant on financial matters and lacks true investigative journalists. James notes that by its lack of action, the government has stated, loud and clear, that it will not prosecute “well-connected” criminals.
Government Water Subsidies Distort Supply and Demand Issues
Jim welcomes Scott Rickards, founder and CEO of Waterfund LLC. Waterfund is pioneering a pricing benchmark for fresh water for actuarial purposes. The index will reflect the actual cost of producing and delivering water. The index will also allow for a hedge against the cost of water. Scott believes the index will unlock private capital to invest in water scarcity. Scott sees the users of the index as institutional investors, water retailers (such as water companies, miners and beverage firms) and governments and municipalities.
The Federal Reserve has enabled the Government’s runaway spending, wars and political favors
Jim welcomes back Bud Conrad, Chief Economist at Casey Research. Bud lays out his case that federal government policies have distorted the economy, impoverished the middle class and greatly expanded the size of the federal bureaucracy. Bud also discusses how much longer the government can continue these policies, and what is the most likely endgame for a country with way too much debt.
The Sequester “Crisis” Is All Manufactured
Jim welcomes back Brian Pretti CFA, Managing Editor at ContraryInvestor.com. Brian and Jim discuss the Fed’s current policy of pumping trillions of dollars into the markets. There are legitimate reasons to be pessimistic, but Brian believes you can’t sit on the sidelines when the Fed is aggressively printing money. He sees stocks as not cheap, but not expensive either. They also discuss the Sequester “crisis” which is seen as a phony and manufactured political exercise.
Who Caused It – Who Called It – What’s Next
Jim welcomes the creators of the new documentary film, “The Bubble”. Thomas Woods and Jimmy Morrison discuss the causes of the financial crisis, look at past financial crises, and touch on governmental responses to the current situation. They also look at a future that must deal with unsustainable debt, unfunded liabilities and inflation. Among those interviewed for this film: James Grant, Dr. Ron Paul, Marc Faber, Joseph Salerno, Jim Rogers and Doug Casey. Jim also plays selected clips from “The Bubble”, which is scheduled to be released later this spring.
A Few Simple Fixes To Break The HFT Web of Structural Flaws and Conflicts of Interest
Jim is pleased to welcome back Joseph Saluzzi, Co-Founder of Themis Trading LLC. As a vocal critic of the current High Frequency Trading structure, Joe discusses how the regulators are totally outmatched by the highly complex HFT firms on Wall Street. Joe mentions that there are “mini flash crashes” every day in individual stocks in the exchanges. He also adds that the addition of so many exchanges today now allow for arbitrage opportunities that disadvantage the individual investor. Joe offers a few simple fixes: 1) Take away the profit incentive of the exchanges, 2) Ban payment for order-flow and 3) Re-institute the Up-Tick Rule. Joe adds that these fixes are not likely to take place until investors contact their Congresspersons, in large numbers, demanding change. Otherwise the politicians will continue to answer to industry lobbyists.
Rotation Out of Safe-Haven Assets into Equities
Jim welcomes back Greg Weldon, Founder and CEO of Weldon Financial. Greg and Jim discuss a variety of topics, starting with currency wars and gold’s recent breakdown. Greg says there’s a global perception that things are improving, leading to a rotation out of safe-haven assets into equities. Greg is bearish on gold in the short term, but bullish on gold longer term. As to the currency wars, Greg sees every major country in a race to the bottom in debasing their currencies, with Japan using “rocket fuel” to weaken the Yen. The problem for central banks is they are not able to reflate their “real” economies.
Energy, Efficiency and Financial Stress
Jim welcomes back Gail Tverberg to speak on energy, and they discuss her views on limits to oil supply limiting long-term economic growth. Gail believes the key issue is that global oil supply is not rising very quickly, no matter how much investment is made. Because of this “sinkhole” phenomenon, we are getting less and less back for every dollar invested; or declining energy return on energy invested. Gail argues that the ultimate impact for developed (OECD) countries will be a long-term contraction of their economies. The problem is that our current global financial system depends on long-term growth.
Expect Record High Gas Prices By May
Jim welcomes back Michael Kantrowitz CFA, Director, Portfolio Strategy & Quantitative Research at Wolfe Trahan in New York. Michael sees the inflationary set-up as the big difference between 2012 and 2013. He expects record high gas prices by May, and sees Chinese economic growth leading to more inflation for US consumers. He mentions a steady stream of early signs of inflation. Michael discusses investing in areas that will benefit from massive central bank stimulation: energy, materials, industrials and technology.
How to develop your own royalty trust ETF earning 8%
Jim welcomes back Kurt Wulff CFA, Independent Energy Analyst at McDep LLC. Kurt discusses how Canadian energy stocks are at attractive valuations currently. Kurt and Jim also discuss the “war” between rail and pipelines in the transportation of oil and gas, and how pipelines are the much cheaper alternative. Kurt sees natural gas as a long term growth story and, also discusses how he would diversify an energy portfolio.
A Disfunctional and Politicized Economy - The New Status Quo?
Jim welcomes Daniel Amerman CFA. Daniel discusses what he terms a false dichotomy between those in the “Mainstream” camp, and “Gloom and Doomers”. He sees a future investing reality where neither the old economy will repeat itself, nor will there be an economic collapse. Dan sees a future economy under the increasing control of the government. He believes there will be a “third path” of a blended economy that shifts a little more each year from being dominated by free markets, to being dominated by the State. Daniel notes this pattern has played out in many nations over many centuries. If his vison of the new status quo plays out, future investment results are unlikely to be what either Mainstreamers or Doomers expect.
Government Keeping Real (GAAP) Spending Off The Books
Jim welcomes Laurence Kotlikoff, Professor of Economics at Boston University. Professor Kotlikoff notes that 10,000 citizens a day are joining Social Security and Medicare. He believes deficits will explode, as a majority of politicians will never vote to reduce benefits. To become solvent, Professor Kotlikoff calculates retirement benefits need to be cut by 22% today, or taxes must be raised by 31% across the board. He also calculates the true fiscal gap today at a staggering $220 trillion.
Pullbacks in Gold Usually Last 18-20 Months
Jim welcomes John Doody PhD, Editor of The Gold Stock Analyst. This week John discusses the gold ETF’s and their impact on gold stocks. John notes that many gold companies are more shareholder-friendly today, and stressing disciplined growth. This also reflects a change in management at some of the larger gold mining companies. John also discusses Japan’s coming yen devaluation, and how it may affect the gold market.
Stocks are cheap compared to zero interest rate alternatives
Jim welcomes back Martin Armstrong of ArmstrongEconomics.com. On the topic of a dollar collapse, Martin doesn’t see it happening, as there are no strong alternatives to the dollar. He sees Japan as the next currency trouble spot, and believes a single global currency is coming down the road. Martin sees the time-frame of a global currency crisis as 2017-2018. He also discussed gold, and said it should be owned as a personal hedge, but that no government will ever adopt a gold standard, which would limit its power to spend money.
Wall Street is too excited about fertilizer stocks
Jim welcomes back Ned Schmidt CFA, Publisher of The Value View Gold & The Agri-Food Value View Reports. Ned discusses the random weather patterns this year and their effects on the agriculture sector. He notes Brazil and Argentina have record corps, but low soil moisture in the US Midwest could be a problem for planting this year. Ned doesn’t see any major price spikes in the grains this year, but he sees rising prices ahead for oats, hogs and cotton.
Tax Vampires Squandering Tax Revenues- Taxes Out Of Control
Jim is pleased to welcome back James Dines, Editor & Publisher of The Dines Letter. Jim and Mr. Dines discuss a wide range of topics, including a coming new social order, the coming age of robots, debt deleveraging, the pension funding crisis and the specter of tax vampires, squandering tax revenues. Mr. Dines also touches on the likelihood of hyperinflation in our future, and how US debt levels are un-payable, and will ultimately be inflated away by the Fed. The legendary James Dines has been publishing The Dines Letter since 1960.
A Rebirth In American Manufacturing
Jim is pleased to welcome economist Jeff Rubin, and author of “Why Your World Is About To Get A Whole Lot Smaller”. Jeff discusses lower economic growth as the “New Normal”, along with high energy prices. He sees rising oil prices in the future making tar sands and shale oil plays economic to produce. Jeff believes OPEC countries will be a less important source of supply in the future as they consume more of their own oil. He sees the North American manufacturing sector as the best investment play, as a rebirth in manufacturing gets underway, reconnecting production to its consumer markets.
Means Testing For Social Security Is Coming
Jim welcomes back John Williams from Shadow Government Statistics. John lays out his reasons why he believes hyperinflation is inevitable, and notes the clock is ticking. John believes the trigger point for a hyperinflationary scenario will be massive selling in the US dollar. He sees means-testing coming for Social Security, but doesn’t believe it will a solution to our debt problems. John also sees the gold market as rigged by the government, and notes that is one of the reasons gold has not risen more.
Why the white metals are outperforming gold
Jim welcomes back Nick Barisheff, CEO at Bullion Management Group Inc. Nick looks at the issue of how much gold should be in one’s overall portfolio, as well as the role of gold as a hedge. Nick also discusses why diversification among metals is important, and why the white metals are currently outperforming gold. He also mentions that increasing the gold allocation is important in times of rising inflation.
Volcanic eruptions launching climate-changing debris into the stratosphere
Jim welcomes back Evelyn Browning Garriss, Editor of the Browning Newsletter. Evelyn sees a new normal in the Pacific Ocean, with cooling on the North America side and warming on the Asian side. She expects average rainfall in the Midwest, which will not be enough to break the drought. Evelyn sees good weather for the planting season, but the problem will be a summer heat wave. She expects the rest of winter to be “bi-polar”, with cold-on, cold-off periods coming in quick succession. The Atlantic gulf stream is flowing hotter and faster, so expect more hurricanes later in the year.
Choose Your Risk Wisely; The Fed Wants Everyone in the “Risk Trade”
Jim is pleased to welcome back Rick Santelli, On-Air Editor at CNBC. As usual, Rick is pulling no punches with his refreshingly honest and informed perspective. Rick discusses why the Senate hasn’t passed a budget since April 2009. A budget requires that logic and discipline be applied to government spending. Rick sees no “end game” in sight to the negative interest rate cycle that has penalized savers and those on fixed incomes. As a champion of free markets, Rick admits that markets are no longer truly free; they are all managed markets today.
Best outlook for growth since 2007; the financial system repairing itself
Jim is pleased to welcome Don Coxe, Chairman of Coxe Advisors LLP and an economic historian of broad perspective. Don is the most bullish he has been since 2007, and sees growth picking up around the globe. He doesn’t see a recession in the US, and believes the only reason to be bearish on the US is due to political dis-function in Washington. Don believes the bond market has been driven to excess and the public is making a big mistake by going into bonds. He sees a strong rotation out of bonds and into stocks ahead. Don sees the global economy improving and thinks commodity stocks are the best way to play the global recovery.
Japan has been reluctant to print money in excess since 1998- until now
Jim welcomes Axel Merk, Founder and Portfolio Manager at Merk Investments LLC. Axel sees fireworks ahead this year in the currency markets, originating out of Japan. He notes that the Japanese have been reluctant to print money since the late 1990’s, but that has changed under the new government of Prime Minister Abe. Axel thinks this could have a positive impact on China, as Japan’s money-printing could be a stimulus for all of Asia. Ironically, the biggest risk could be sustained economic growth, which could cause interest rates to rise and create bond market instability in Japan, and elsewhere.
Jordan could be the next area of instability
Jim welcomes back JKC de Courcy, Chief Executive at Courcy’s Intelligence Service in London, and publisher of Courcy’s Intelligence Brief. Mr. de Courcy sees three big threats in 2013: the continued fragmentation of the Middle East, a growing arms race between China and Japan, and an Israeli/Iranian confrontation. He sees continued bloodletting in the Middle East among religious factions, and notes that Jordan may be the next area of instability. Mr. de Courcy also sees growing tension between China and Japan, as the new government in Japan decides to re-arm. He also believes that Israel is planning for the worst, and may strike against Iran’s nuclear capability.
Welcome Back to the Return of Dividend Investing
Jim welcomes back Jeffrey Saut, Managing Director of Research at Raymond James Financial. Jeff sees the main problem for most investors is never having learned to manage risk, as they took big losses in both 2000 and 2007. Jeff notes that both individual investors and institutions are currently underinvested in equities, and the biggest mistake now is being too bearish. He also believes if we get a correction caused by the upcoming debt-ceiling debate in Washington, it will be a buying opportunity. Jeff also sees the trend in dividend investing continuing and growing.
The “Dollar Collapse” Camp Has Been Wrong- And Will Be Wrong Again This Year
Jim welcomes back Eoin Treacy, Global Strategist at Fullermoney in London. Eoin sees the new Japanese government aggressively attempting to create more inflation, and improve exports by cheapening the Yen through massive money printing. He also believes the US industrial sector looks extremely attractive, and believes investors should be buying equities at these levels. Eoin also notes that the “dollar collapse” camp has been wrong in the past, and he believes they will be wrong again this year, as he expects the dollar to strengthen.
The cheapest place to find oil reserves is now on Wall Street
Jim welcomes back energy expert Joseph Dancy. Joe notes that Saudi Arabia is cutting back oil production, and the US is one of the few areas in the world where oil production is growing. Joe also sees more merger and acquisition activity ahead, as he believes the cheapest place to find oil reserves is now on Wall Street.
The Big Issue Not Being Addressed: Unsustainable Health Care Costs
Jim is pleased to welcome back former US Senator Alan Simpson. Senator Simpson blasts politicians of all stripes for not addressing the main issue: unsustainable health care costs. He feels the debt ceiling debate will be pure political theater, and the US is not in danger of defaulting on its debt. Despite the coming media and political theatrics, Mr. Simpson believes the issue will pass without a crisis. He advises turning off your television. He also notes the reason that politicians continue to “kick the can down the road” and never seriously confront the serious debt issues, is simply because they don’t want to anger the special interest groups and risk losing their privileged positions at the center of power.
Why Central Banks Are Accumulating Gold
Jim is pleased to welcome back John Butler, Chief Investment Officer at Amphora Commodities Alpha Fund in London. John discusses that more countries are moving out of dollars, and eventually the dollar will become less important as a reserve currency. But he cautions there is danger in predicting an eminent dollar collapse, and those who did in 2010 have paid the price. John also notes that because of the special privilege of having the reserve currency, the US will likely win a major currency war. He also discusses why the world’s central banks are buying gold, and why the bond market is not a store of value. It is an inflation wolf in sheep’s clothing.
Investors Can Now Buy Physical Gold and Silver In Their IRA’s
Jim welcomes Jonathan Potts, Managing Director of FideliTrade Inc at Delaware Depository Services Company LLC. Jonathan covers a wide range of issues on bullion storage, including the difference between allocated and non-allocated storage. He notes that bullion storage offers liquidity as well, as investors can buy or sell their bullion at any time. Jonathan also notes that one of the biggest changes in the bullion storage industry is that investors can now buy physical precious metals in their IRA’s. He also sees most gold bullion investors as long-term holders of the metal, while silver bullion investors tend to trade and speculate more.
Rapid Nuclear Energy Development in China and India Will Also Drive Uranium Price Higher
Jim welcomes back Bill Powers, Editor of Powers Energy Investor. Bill believes the price of uranium has bottomed due to fundamental factors. This is the last year of the Megatons to Megawatts Program between the US and Russia, which provided a large supply of uranium into the market. Bill also notes rapid development of nuclear energy plants in both China and India, as well as plans in Japan to re-start the Fukushima nuclear facilities. Bill also sees tremendous value in small and mid-tier energy companies, and believes we will experience higher oil prices later this year.
Simon Mikhailovich: Bonds Are Not A Safe Haven – Today’s Population Hasn’t Experienced a Bond Debacle
Gold Investors Should Ignore Short-Term Volatility
Jim welcomes back Simon Mikhailvoich, Co-Founder of Eidesis Capital LLC in New York City. Simon discusses the current debt issues in the US and notes that our deficit spending is being financed by the Federal Reserve printing money, enabling politicians to spend even more money. Simon also looks at the bond market, which he believes many investors perceive as a safe haven. He notes that most of today’s population has never experienced a true bond debacle, such as happened in Greece, and most expect the current situation to continue indefinitely. That is not likely, as interest rates have been falling for 30 years, and are now near historic lows. As to gold, Simon advises investors to ignore the short-term volatility in gold, and focus on the long-term fundamentals.
Industrial Demand The Biggest Driver Of Silver – 80% Of Silver Is Consumed
Jim welcomes First Majestic Silver Corp. President & CEO Keith Neumeyer this week. Keith sees the company moving from 9 to 16 million ounces of production by 2014, and on the way to becoming a major silver producer. Keith also emphasized that 80-85% of silver is consumed, and industrial demand is now the biggest driver of silver, not monetary demand. He noted that the technology sector alone is now a major driver of silver demand. Looking ahead, Keith believes that a squeeze is coming in the silver market, where demand will outstrip available supply.
Bond Vigilantes May Begin Testing the Resolve of Central Banks in 2013
Brian Pretti CFA of ContraryInvestor.com joins Jim again this week. Brian sees 2013 as an inflection point for Quantitative Easing (QE), noting that if you stretch a rubber band long enough, it eventually breaks. Brian believes the final end-game of the Debt Super Cycle is nearly at hand, when governments will be forced to deleverage. He thinks the bond market may begin to show some vulnerability as the “bond vigilantes” begin to test the resolve of the major central banks.
The metals need “money velocity” for ignition
Jim welcomes back David Morgan of The Morgan Report. David mentions that both gold and silver prices got “ahead of themselves” in 2011, hence the long consolidation period since. He believes that this “scare you out, wear you out” phase is coming to an end, and higher prices are ahead. David acknowledges that QE takes time to work its way through markets, and for significantly higher prices, the velocity of money in the system must pick up. David sees a volatile year for the metals, and expects silver to re-test $50 at some point, and gold to hit $2,000, as a new group of buyers come into the metals market.
We’ve gone beyond the tipping point, and there is no way out
Jim welcomes Ross Hansen, founder of the Northwest Territorial Mint, now the largest private mint in the US. Ross and Jim discuss the debt issues facing the US, and Ross notes that a debt crisis will arrive suddenly, as it did in Greece. Regrettably, he believes that there is no way out, and that the US has gone beyond the tipping point for fixing its debt and unfunded liability issues. Ross also believes people are worn out by government-driven crises, and are suffering from crisis-fatigue. As to the physical precious metals, Ross see the best value in silver rounds and junk silver at present.
Also, Ryan Puplava with the Market Wrap-up, Erik Townsend on Commodities, and Rob Bernard with the Fixed Income Report
Jim welcomes back noted technician Charles Nenner this week. Charles sees a short-term buy signal in the stock market which should last into February. He also expects a rally by mid-January in the bond market, which should be used to get out of all bond funds. Charles believes the long term bull market in bonds is over and investors can expect rising yields in the future. Also this week, Ryan Puplava has this week’s Market Wrap-up, Erik Townsend discusses commodities, and Rob Bernard stops by with the Fixed Income Report.
Big Money buys on downturns, the public buys on upturns
Jim welcomes back geologist Keith Barron PhD. He thinks January could be a big month in the metals, and looks for a positive start to the year. Keith also notes that gold discoveries are becoming smaller in size, as “elephant” discoveries are now very rare. Mining CEO’s are now looking for quality ounces, not quantity ounces. Keith sees gold production declining dramatically in South Africa. Keith believes there will be a significant shift in acquisitions, as large cap miners focus on grade, infrastructure and low capital costs in the future, as well as geopolitical considerations.
The Fed has become an enabler of government spending spree, now funding half the deficit
Jim welcomes back Bud Conrad, Chief Economist with Casey Research. Bud sees the US passing the “tipping point” with US debt levels moving from 100% of GDP to 120% of GDP in President Obama’s second term. Bud believes that future inflation is now “baked in the cake” and this could possibly lead to hyperinflation. Bud’s investment thesis is to own resource stocks and real estate to mitigate the effects of future inflation.
Gold stocks are astoundingly cheap
Jim is pleased to welcome James Grant from Grant’s Interest Rate Observer this week. James discusses a variety of topics, including the return of a gold standard, deflation, how the central banks went astray, what he would do if appointed Chairman of the Federal Reserve, and why gold stocks are astoundingly cheap.
The Road to Serfdom – Federal Reserve policy is destroying the middle class
Jim welcomes back Bill Fleckenstein, president of Fleckenstein Capital in Seattle, and author of Contrarian Chronicles for MSN Money. Bill believes the deflation fears are fading as the country enters a period of stagflation. He also sees the bond market ultimately taking away the printing press from central bankers, as the US moves closer to a funding crisis. According to Bill, the big story in 2013 will be the long-awaited beginning of the bond bear market. He also believes that Fed policy and the accompanying asset bubbles are effectively destroying the middle class, and leading us down the road to serfdom. As to gold, the underperformance of the gold stocks offers investors real value in quality gold miners. Bill also favors dividend-paying blue chip stocks in this market environment.
Zulauf: We are in the late stages of the fiat money system; get into gold while you still can
Jim welcomes back legendary asset manager Felix Zulauf from Switzerland. In a very timely and powerful interview, Felix covers many important issues, foremost among them the European debt crisis. He believes politicians will not solve the crisis, leaving the European Central Bank (ECB) to begin massive money-printing and devaluing the Euro. Felix sees the ECB balance sheet expanding even more dramatically than the Fed’s next year. He also sees Greece exiting the Euro, possibly even late this year, and next in line would be Spain and Portugal. Felix also forecasts the end of the great bond bull market, and advises selling all bonds over 5-6 years in maturity. He sees a big move out of bonds and into real estate and stocks. In the US, the economy only appears to be healing because of its 9% deficits of GDP. Subtract the deficit spending, and the US is in recession. As to gold, Felix sees decisive new highs for gold in 2013.
Trillions flowing into bond funds at major risk
Jim is pleased to welcome back Douglas Noland, Senior Portfolio Manager at Federated Investors Inc. in Boston. In Europe, Doug believes the ECB will continue to do whatever it takes to bring down the credit spreads among EU member countries, which is helping to create a global credit bubble. Doug sees a major battle in the credit markets between the central banks and the bond vigilantes. The central bankers now have the upper hand, but Doug believes this will not last. Trillions are flowing into bond funds, which he sees as a major risk for investors. He believes that we are entering into a critical “end game” in the inflationary cycle, as central bankers continue to take desperate measures to prop up slowing economies around the globe.
“Best of 2012” Re-Broadcast
Jim is pleased to welcome back Dr. Marc Faber, publisher of the "Gloom, Boom & Doom Report." Marc notes that without current US government deficits, the economy would be in recession. He also expects the Fed to initiate QE3, but believes its main impact will be on investment markets, not the economy. Marc is still bearish on bonds, but admits to have been too early with his bearish call. If he had to choose one investment for the next ten years, it would be gold, with stocks next in line. Marc also makes the case that we are no longer living in a free-market environment, and one has to re-think what is considered a "safe" investment. His greatest concern is the US might confiscate gold again, as FDR did in 1933.
In “risk-off” environment, large-cap energy stocks will outperform
Jim welcomes back Kurt Wulff CFA, independent energy analyst at McDep LLC. Kurt sees real value for investors in energy stocks at current prices. As to the beaten down royalty trusts, Kurt believes they now offer a tremendous value. He notes that if we see more of a “risk off” trading environment in 2013, then the big cap energy stocks will outperform all others. Kurt’s current energy allocation is divided between the big cap energy stocks and the large independent energy companies.
“Best of 2012” Re-Broadcast
Jim welcomes back Greg Weldon, CEO of Weldon Financial. Greg sees the European debt problems growing from a brushfire into a raging forest fire. He also notes the lessons from the Argentine devaluation won’t work in Greece. Greg also believes the next problem area few are paying attention to will be Japan.
Weekly COT Reports are often misinterpreted
Erik Townsend, sitting in for Jim Puplava, welcomes Jeffrey Christian, founder of the CPM Group in New York. Jeff believes that the gold price has hit a cyclical peak, within the longer term secular bull market. He also explains why he thinks the Federal Reserve’s money printing policies do not guarantee higher gold prices going forward. Jeff discusses his impressions of the 2012 Shanghai Gold Show, and if the Chinese public is still enthusiastic about buying precious metals. Jeff also explains why the weekly COT Reports are often misinterpreted, and what this means for the price of gold.
Also, Ryan Puplava with the Market Wrap-up and Erik Townsend on Commodities
Jim welcomes back Bert Dohmen from Dohmen Capital and The Wellington Letter. Bert has just returned from China and believes its economy is still in some trouble. He also sees further inflation ahead, with unlimited money printing from all the world’s major central banks. Also in this segment, Ryan Puplava has his Market Wrap-up for the week, and Erik Townsend has the Commodity Report. Last, but certainly not least, Jim answers your Q-Calls in this segment.
Competitive currency devaluations great for the price of gold
Jim is pleased to welcome back Grant Williams, Portfolio & Strategy Advisor at Vulpes Investment Management in Singapore, and author of the popular investment letter, “Things That Make You Go Hmmm…”. Grant and Jim cover a wide range of issues, including wealth taxes and capital controls, a California “exit tax”, the problems facing Japan, and global competitive currency devaluations. Grant also notes that central banks are now big buyers of gold, and discusses why gold stocks, especially dividend-payers, are now a great buy for the patient investor.
Why has the gold market been so slow to respond to QE3?
Erik Townsend sits in for Jim and welcomes John Doody PhD, editor of the Gold Stock Analyst. John believes that when you step back and look at the long-term fundamentals, the recent volatility in the gold miners is just noise, and gold stocks remain very attractive at current valuations. John also discusses the questions of silver vs. gold, and where he sees most value. Erik and John also explore the issue of why the price of gold has been so slow to respond to the monetary stimulus of QE3.
Germany, the Netherlands, and Austria are bringing home their gold reserves
Jim welcomes back Ronald Stoeferle CMT, author of the popular “In Gold We Trust” research reports, to discuss the gold markets. Ronald notes that central banks in Germany, the Netherlands and Austria are starting to repatriate their gold reserves held outside their borders. He also states that many central banks are moving beyond central banking activities into central planning. As to the gold markets, Ronald is short-term bearish on the price of gold, but sees great value in the gold miners, especially quality mid-cap and junior producers.
Start differentiating now among the best gold stocks
Jim welcomes Ned Schmidt CFA, Publisher of The Value View Gold & The Agri-Food Value View Reports. Ned is extremely optimistic about the gold stocks, particularly the best quality gold stocks. He believes investors should stop thinking about gold stock indexes and look for the best individual stocks. Gold stocks are way down, and valuations are low, making this the best time to buy the best gold stocks. Ned also advises investors to sell their bond funds, and the sooner the better.
Also, Ryan Puplava with the Market Wrap-up, Erik Townsend on Commodities, and Rob Bernard with the Fixed Income Report
Jim welcomes back renowned technician Ralph Acampora this week. Ralph is currently quite bullish, and believes investors should never fight “Papa Dow”. He notes that 50% of Dow stocks are close to new highs and sees plenty of upside coming in the Dow next year. If there is a correction in the near term, he strongly advises to buy the dip. Also in this segment of the program, Ryan Puplava has this week’s Market Wrap-up, Erik Townsend discusses the commodities markets, and Rob Bernard discusses bonds and interest rates in the Fixed Income Report. Jim also answers some of your Q-Calls in this segment.
American food is different today than 40 to 50 years ago
Jim is pleased to welcome back Joel Salatin of Polyface Farm in Virginia. Joel is a farmer, an author and a strong advocate for creating sustainable agriculture without government subsidies. Joel notes that in the last 50 years, Americans have doubled their consumption of wheat. Joel believes the obesity and diabetes epidemics, gluten intolerance and celiac disease are all the direct result of the government wading into the food arena. Salatin’s books include Everything I Want to Do is Illegal and Folks, This Ain’t Normal.
The Tax Consequences of Expatriation
Jim welcomes Mark Nestmann, from the Nestmann Group LLC to discuss second passports, international tax planning, and expatriation. Mark looks at offshore tax and reporting obligations for U.S. citizens and permanent residents, as well as what you must consider before you give up US citizenship. Mark also discusses the “exit tax” and the advantages of off-shore accounts. He feels the best option right now, for those who wish to remain US citizens, is to own foreign real estate.
Raising taxes will damage the economy, create more unemployment and lower growth
Jim welcomes back John Williams, Executive Editor at Shadow Government Statistics. John looks at what’s coming ahead, and he sees a bleak situation. John believes there are simply too many unfunded liabilities to tax our way out of this situation. The only path leads to higher inflation, and none of the proposed political solutions will fix the problem. The only realistic way out is to drastically reduce entitlements, which John sees as politically impossible. He sees higher tax rates leading to slower growth, higher unemployment, and economic recession, or worse.
With Obama victory, avoid coal producers
Jim welcomes Marin Katusa, Senior Market Strategist at Casey Research to discuss a potential carbon tax in the US. Marin believes it will happen because the government, the large oil companies and environmental groups all want it to happen. The oil giants such as Exxon will benefit because of their involvement in natural gas production, which will become more attractive to utilities as a carbon tax pushes up the cost of coal as an energy source. Marin advises investors to avoid coal producers and focus on the oil majors, natural gas production companies, and natural gas pipeline transportation companies.
Also, Ryan Puplava with this week’s Market Wrap-up, Erik Townsend on Commodities, and Rob Bernard with the Fixed Income Report
Jim welcomes Richard Dickson, Chief Market Analyst at Lowry Research to the program. Richard believes we’ve hit a significant bottom in the market (click here for chart), and we’re going up from here. He sees strong indications of another new market high coming next year. He advises looking at interest rates and TIP yields as a clue to future Federal Reserve policy. Also on the program, Ryan Puplava wraps up activity in the market this week, Erik Townsend has an update on commodities, and Rob Bernard has the Fixed Income Report.
The end of American Capitalism and the move toward Central Planning
Jim welcomes Ron Hera from Hera Research LLC to discuss his views on financial repression. Ron believes the current version is going to fail, and is very different from the period of financial repression following World War II. Today, the debt levels are higher, savings are lower, and GDP growth is slower. Ron believes economic growth will remain anemic for decades due to debt levels growing faster than GDP. He sees a gradual fading of American capitalism as the country moves toward central planning. Ron believes the last line of defense against this is to accumulate hard assets.
Shale Oil Will Not Make The US Energy Independent
Jim welcomes energy expert Gail Tverberg to the program. Gail believes there are flaws in the recent IEA energy forecast, and sees diminishing returns on Energy Return on Energy Invested (EROEI). She doesn’t see the US becoming the world’s largest oil producer by 2020, and doesn’t believe that shale oil will make the US energy independent in the future. She believes we could find ourselves reaching “peak oil” because of an economic dilemma: while there seems to be plenty of oil available, the cost of extracting it may be reaching a point where it is more expensive than consumers can afford, and will be left in the ground.
We are seeing El Niño-type conditions without El Niño
Jim welcomes back Evelyn Browning Garriss of the The Browning Newsletter this week. Evelyn discusses the “new normal” in weather, which is a repeat of the weather patterns seen in the 1930’s-1950’s. She also believes that the east coast will be hit with more major “Nor’easter” storms this winter. As to food prices, Evelyn sees them heading higher due to problems with the wheat crop in Africa, Russia and China. Also, if the El Nino conditions strengthen, they could bring more moisture to drought areas in the US.
Bill’s new book (2013): Cold, Hungry and in the Dark: Exploding the Natural Gas Supply Myth
Jim welcomes back Bill Powers, editor of Powers Energy Investor. Bill sees the recent IEA oil forecast as unrealistic, and doesn’t see the US becoming the world’s largest energy producer by 2020. Bill is bullish on the prospects for natural gas pricing, and discusses the different ways to play energy stocks. He believes the best energy investment comes with a dividend yield. In addition, Bill has a new book coming out in 2013 with co-author Art Berman titled “Cold, Hungry and in the Dark: Exploding the Natural Gas Supply Myth”. The book argues that declining productivity combined with increasing demand will trigger a crisis that will cause natural gas prices to skyrocket, damage the economy, and have a profound impact on the lives of nearly every North American.
Also, Erik Townsend with this week’s Market Wrap-up, Commodities Report and Fixed Income Report
Jim welcomes back technician Alan Newman, editor of Stock Market Crosscurrents. Alan is currently as bearish as he’s ever been. He notes that there have been mutual fund outflows in 16 out of 17 months, as individual investors flee the stock market. Alan expects the price of gold to head higher. He sees gold heading to a 5:1 ratio with the Dow Jones index, at a minimum. Also in this segment, Erik Townsend steps in and covers this week’s Market Wrap-up, Commodities Report and the Fixed Income Report.
The Fed only knows one thing: print money to enable government deficits
Jim welcomes back legendary investor Jim Rogers this week. Jim sees China as successfully cooling its economy and avoiding a hard landing. Globally, he is concerned about both Europe and the US. He believes there is no true austerity in Europe, as deficits continue to rise. Jim sees the Federal Reserve as enabling government deficits, and continuing to massively print money. While Jim doesn’t see the precious metals markets as manipulated, he believes both gold and silver are headed higher. Jim owns both gold and silver and is not selling. If the price goes lower, he will buy more. His three favorite investments: agriculture, metals, and currencies. Jim is short US bonds and stocks globally. Jim’s latest book, “Street Smarts”, will be available in February 2013.
Royal Canadian Mint and Sprott Silver to buy 10 million ounces of silver
Jim welcomes back silver expert David Morgan, founder of The Morgan Report. David sees silver as confirming the recent move in gold, and believes that the gold and silver consolidation period is now over. David notes that the individual investor is out of the precious metals stocks, and won’t likely come back until gold hits $2,000 oz. He also notes a potentially market-moving development, as the Royal Canadian Mint and Sprott Silver have plans to buy 10 million ounces of silver in the near future.
Dubai is now the Singapore of the Middle East
Jim welcomes back Bert Dohmen, President & Founder at Dohmen Capital Research Institute. Bert has just returned from Dubai and sees this dynamic country as the Singapore of the Middle East. Bert also sees the recent market sell-off as triggered by early tax selling. He doesn’t see economic conditions improving in the US, Europe of Japan, and believes there could be another financial crisis like 2008 if government spending is not controlled. Bert notes that 21 trillion dollars in fiscal and monetary stimulus in the US can’t produce more than a 1-2 % growth rate. His current outlook for investors is buy gold, and avoid (or short) the market.
Gold will be a good investment for the next decade
Axel Merk of Merk Investments LLC joins Jim to look at the “fiscal cliff” and other issues facing Washington. Axel believes the bond vigilantes will eventually show up and the fireworks will begin in the bond market. He thinks you don’t need the Chinese to sell Treasury bonds to see a crisis in the bond market. With the massive federal debt load, the problem will begin when the market begins to price in inflation, and interest rates begin to rise. Axel sees gold reacting favorably to the Fed’s monetary policies, and believes gold will be a good investment for the next decade.
Also, Ryan Puplava with the Market Wrap-up, Erik Townsend on Commodities, and Rob Bernard with the Fixed Income Report
Jim is pleased to welcome technician Craig Johnson CMT CFA from Piper Jaffray this week. Craig believes the long-term bull market is still intact in stocks, and sees investors as very fearful and “fighting the last war”. He also sees mutual fund managers as fearful as well, and unwilling to buy. Craig believes the S&P will hit 2000 in the next 24 months, but regards the bond market as “one gigantic bubble”. Also in this segment, Ryan Puplava has this week’s Market Wrap-up, Erik Townsend gives an update on commodities, and Rob Bernard has the Fixed Income Report.
Tax increases a short-term headwind for the markets
Jim welcomes back Louis-Vincent Gave, CEO at GaveKal in Hong Kong. Louis believes the Chinese market has bottomed, and there is value to be found there, particularly in RMB bonds. He sees tax increases in the US as a short-term headwind to the markets, and looks to a “Dogs of the Dow” strategy as the most sensible way to invest in the US near term. Louis also sees increasing merger and acquisition activity as a big story in 2013.
Bullion Banks Have A Gold Short Problem
Jim welcomes Nick Barisheff, CEO at Bullion Management Group. Nick sees gold moving higher by the end of the year, as Germany begins repatriating gold, and central banks have leased out massive amounts of gold, which Nick believes is the elephant in the room. He also notes that a number of bullion banks are sitting on large short positions in gold. Nick sees the current situation in simple terms; buy when prices are down.
Politicians Will Cut A Deal Or Boldly Kick The Can Down The Road
Jim welcomes back Brian Pretti CFA, Managing Editor at ContraryInvestor.com. Brian sees a likely political compromise on the “Fiscal Cliff” tax increases and spending cuts due to start in January. They will cut a deal, or at the least, postpone any decision until later in the year. Brian also discusses the sorry state of the economy in California, and how recent significant tax increases won’t help matters. Brian and Jim also discuss the state of the markets post-election.
America’s Achilles Heel–50% of US debt now owned by foreigners
Jim welcomes Ross Hansen, Founder of Northwest Territorial Mint, now America’s largest private mint. Jim and Ross cover a variety of topics, including Ross’ belief that Germany will ultimately opt out of the Euro and go to a gold-back Deutsche Mark. Ross also sees the US on an unsustainable financial path, eventually leading to a dollar collapse. Ross notes that when the music finally stops, you will want to own precious metals.
Circuit breakers on stock exchanges not working
Jim is pleased to welcome Dave Lauer, a market structure and high-frequency trading consultant to IEX Group. Dave recently testified before the Senate Committee on Banking, Housing and Urban Affairs as to the dangers of high-frequency trading and also suggested potential solutions. Dave’s key points to combat the growing threats to market stability are to level the data-access playing field, reinstate the uptick rule, eliminate the maker-taker business model, and implement a market-wide surveillance system.
Real Estate now attractive for investors
Jim welcomes Bud Conrad, Chief Economist for Casey Research. Bud discusses real estate in the economic cycle, and believes it’s now an attractive investment. He also lists where you should have your money now; metals, food, real estate and energy. Bud also talks about what worries him at the moment: rising food prices, Libya and the Middle East, a possible China-Japan conflict, and the massive US budget deficits. Bud and Jim also discuss interest rates, and how they could start rising.
Energy stocks at best valuations in a decade
Jim welcomes back energy expert Joe Dancy to discuss how record food prices will likely disrupt energy markets next year, as well as potentially set the stage for more turmoil in the Middle East. Joe also discusses the myth of energy independence in the US and why the energy stocks are the cheapest they’ve been in a decade.
Gold equities trailing gold bullion due to lack of new discoveries and replacement of reserves
Jim is pleased to welcome geologist Keith Barron PhD, founder and Exploration Geologist at U308 Corp. Keith discusses the concept of "peak gold" as five million ounce gold discoveries grow ever more scarce. He also talks about how gold equities have lagged the price of gold due to a lack of new discoveries and problems in replacing gold reserves. Keith also expects to see the price of gold over $2,000 oz. by mid-2013.
Central Banks now funding the majority of Government spending
Jim welcomes Gregory Weldon, President & CEO of Weldon Financial. Greg and Jim cover a number of topics, including the global bond market as a massive bubble, and how central banks are funding the majority of government spending. Greg also believes QE3 is not effective so far, and expects the Fed to announce additional Treasury purchases in the next few Fed meetings. Greg also sees Japan as the next "black hole" in the global debt crisis, as Japanese citizens have finally exhausted their savings and can no longer buy government debt.
What is Bitcoin, and Can It Compete with Government Currency Monopolies?
Jim welcomes Jon Matonis, an e-Money researcher and Crypto Economist focused on expanding the circulation of nonpolitical digital currencies. Jon explains the definition of "crypto-currency" and discusses Bitcoin, the first true crypto-currency, which he describes as ''digital gold." Jon and Jim discuss the potential of Bitcoin, if it will eventually compete against government monopoly currencies, and if crypto-currencies could in fact become the future of money itself.
New high for gold coming−but not until 2013
Jim welcomes Ned Schmidt CFA, publisher of The Agri-Food Value View and The Value View Gold Reports. Ned discusses the "must own" stocks in the agriculture sector, but cautions that agricultural equipment manufacturers are not having a good year. Ned also notes that world grain surpluses have all but disappeared and the corn shortage is basically an American story, not global. In the precious metals sector, Ned sees new highs for gold, but not until next year. He also advises buying dividend-paying stocks if investing in precious metals equities. Finally, he believes that gold bullion has finally been recognized as a legitimate investment class.
Civil unrest cycle to accelerate by 2014
Jim welcomes Martin Armstrong of Armstrong Economics and founder of Princeton Economics. Martin sees a strong trend of financial and economic power moving to Asia. In the US, he notes that stability is vital to economic growth, but that is lacking in Washington. As to the stock market and gold, he sees the next up-cycle for both beginning by summer 2013, with the Dow reaching 20,000 later next year. He sees the "smart money" moving out of bonds and into stocks. Martin believes the strongest up-cycle for gold will be in 2016-2020, when he sees gold prices going parabolic. He sees the civil unrest cycle accelerating in 2014 in the US, driven by layoffs in the public sector.
The US is on the verge of a manufacturing renaissance
Jim welcomes Jeffrey Saut, Managing Director of Research at Raymond James Financial Inc. Jeff believes that valuations are much better today than in the crash year of 1987, and that March 2009 marked the low in this market cycle. He sees very little investor belief that this is a new secular bull market, even from institutions, which is a bullish indicator. Jeff sees investors looking in the rear view mirror, as they usually do, and believes that exiting the stock market will be a big mistake. On the other hand, he sees the bond market as an accident waiting to happen within the next 3-5 years. Jeff would only turn bearish at this point if there was a "black swan" event that would disrupt the US economy, such as large-scale war in the Middle East.
Analysts always underpricing forward precious metals prices
Jim welcomes back John Doody PhD, Editor of The Gold Stock Analyst. John sees silver stocks as gold on steroids and believes that because of the small universe of silver producers, there is great opportunity in this group. John also discusses how many gold equity analysts act like they hate the metal, and underprice forward precious metals prices. He also mentions that Gold Resource Corp is a great company with very poor public relations.
US Fiscal Issues too great and have gone beyond easy fixes
Jim welcomes back John Williams from Shadow Government Statistics. John believes the US has been given a "free pass" due to election year politics, but if its fiscal issues are not seriously addressed after the election, the dollar could come under attack. He feels the fiscal issues are now too great and have gone well beyond the point of "easy fixes." John recommends precious metals, real estate and hard assets as the best defenses against a dollar that will be increasingly debased.
Gold will hit $2200-$2500 before the public gets engaged
Jim is pleased to welcome Ian McAvity CMT, editor of Deliberations on World Markets since 1972. Ian sees all the Quantitative Easing by central banks as nothing but a banking bailout, and believes the world is heading toward a global currency crisis. Ian believes gold is the best investment alternative, but doubts the public will become engaged until the price reaches the $2200-$2500 range. Ian also believes the precious metals equities have bottomed, and gold is the key driver of silver. Ironically, the biggest current buyers of gold are the central banks themselves.
Energy still a bargain, despite rise in oil shares
Jim welcomes back Kurt Wulff CFA, Independent Energy Analyst at McDep LLC. Kurt notes that in terms of new supplies of oil and gas globally, North America is currently the one bright spot. He also mentions that the foreign oil majors, particularly European, are a bargain, due to their focus on dividends versus stock buy-backs. For income investors, Kurt discusses where to invest now. For growth investors, he feels they should stick to shale and small cap names for now. In general, Kurt sees energy as still a good value, despite the recent rise in energy equity shares.
Remain overweight the agricultural stocks within commodity equity portfolios
Jim welcomes Don Coxe of Coxe Advisors LLP to discuss the Commodity Super-Cycle. Don believes that because most commodities are no longer priced primarily by Europe and North America, they are less risky than conventional Wall Street economists understand. Don strongly feels that investors need to invest where the demand is, and will be, for coming decades. That means economies whose consumption of commodities per unit of GDP is still far higher than ours. Since 1998, Don has advised clients to "invest in companies which produce what China needs to buy."
Three scenarios that put the bond market in jeopardy
Jim welcomes Axel Merk, founder of Merk Investments LLC. Axel discusses the potential risk to the US dollar, beyond the issues of the Fiscal Cliff. He also discusses three scenarios that put the bond market at risk going forward. Axel notes that unless Medicare is truly reformed, it will cease to exist in the future. With the rising cost structure and arrival of the baby boomers, there are simply not enough wealthy people to tax to save the system.
US budget deficits will continue until the bond market revolts
Jim welcomes back Russell Napier, consultant with CLSA Asia-Pacific Markets. Russell sees bank credit contracting, and a dearth of borrowers globally. He also notes a weakening in money-supply growth among the emerging market countries, and money exiting China as labor costs rise dramatically. Russell believes the days of China funding the US budget deficits are over, and that the environment of "financial repression" will last for decades.
Global austerity will produce inflation, not deflation
Jim welcomes back Dr. Peter Warburton, Director at Economic Perspectives Ltd. in London. Dr. Warburton offers nine compelling arguments for higher inflation coming our way. He sees global markets becoming more oligopolistic, leading to more concentration of production and higher prices. Dr. Warburton predicts the future will likely hold an agonizing cycle of false hopes and disappointments, which will repeat until the cycle ultimately triggers an uncontrollable inflation.