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.
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.
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.