Tag: streetwise

Louis James: Are You Ready for an Early Shopping Season?

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The Gold Report: Jeff Clark, senior precious metals analyst at Casey Research, recently wrote in an article titled "Time to Admit that Gold Peaked in 2011?" that countered a chart making the rounds showing gold matching its 1980 inflation-adjusted dollars peak in 2011. The chart implies we should expect a decade or more of lower prices. Aside from the fact that John Williams of Shadow Government Statistics might have a problem with how inflation was calculated, how are gold's fundamentals different today than they were in 1984?

Louis James: The fact that things are different today than in the 1980s is a really good point. The argument over methodology almost doesn't matter. Even if it were true that the gold price of 2011 matched the inflation-adjusted gold price of 1980, that wouldn't mean that gold has to go down the way it did in 1980. There wasn't a near collapse in the banking sector back then. There wasn't the Lehman Brothers upset. The government did not triple the money supply. We're dealing not with apples and oranges, but apples and whales.

TGR: If history is not a map for the future, is John Williams correct that we are getting ready for hyperinflation? Continue reading "Louis James: Are You Ready for an Early Shopping Season?" →

Mike Breard: Buy Small for Deep Profits

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The Energy Report: How do you choose the energy names in your coverage list?

Mike Breard: I look for managers with great track records. For example, I attended the annual meeting of Matador Resources Co. (MTDR:NYSE), and there were 150 people there. Normally, only maybe 20 people attend the annual meetings of the junior energy companies, but these folks had been investing with the current managers of Matador in private deals for 30 years. They were so eager to get in on the newest venture of these guys that Matador stock has tripled during the past year.

TER: What is driving Matador's success? Continue reading "Mike Breard: Buy Small for Deep Profits" →

How to Find Wild Flowers in the Weeds

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The Gold Report: In January, the exchange-traded fund SPDR Gold Trust (GLD:NYSE.Arca) outperformed its silver counterpart, the iShares Silver Trust (SLV:NYSE.Arca), by about 6%. Should investors expect gold to outperform silver for the entire year?

Michael Fowler: Gold and silver are going to perform in tandem this year. Gold is in a corrective phase at the moment. I expect it to average around $1,300/ounce ($1,300/oz) and silver to average about $21/oz. We expect gold and silver prices to increase into 2015.

TGR: We've seen a bevy of bought-deal financings to start the year. Some, like Luna Gold Corp. (LGC:TSX; LGC:BVL), are financing below current market prices. Could you provide us with some insight as to what's happening there? Continue reading "How to Find Wild Flowers in the Weeds" →

Six Gold and Silver Leaders at Today's Prices

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The Gold Report: Gold is up for the year. Do you expect this trend to continue?

Benjamin Asuncion: For 2014, we're officially forecasting an average gold price at $1,300/ounce ($1,300/oz). We've elected to err on the side of conservatism in our commodity forecasts, which leaves company valuations to be more reflective of operating performance than reliant on higher metal prices.

TGR: Ambrose Evans-Pritchard of the Daily Telegraph says if the Federal Reserve "has to back off [tapering] again, gold will have a fresh lease on life." Do you agree, and do you think the Fed is committed to tapering?

Geordie Mark: I agree that if the Fed backs off tapering, it's a total game changer for sentiment. Janet Yellen, the new Fed chair, has certainly been quite cautious as to how she's going to approach monetary policy, so right now we're in a wait and see period, but that being said, the market now appears to show a certain positive sentiment for precious metals companies.

TGR: We've seen various currency panics around the world in recent weeks. Will this lead to a flight to safety in the U.S. dollar? Continue reading "Six Gold and Silver Leaders at Today's Prices" →

Food, Water and Fuel Are Necessary to Life and Investors

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The Energy Report: In your Gold Report interview last fall, you said that the two biggest reasons for the erosion of the middle class are peoples' inability to save money due to low interest rates or low wages, and higher taxes, especially the hidden taxes we end up paying.

Bob Moriarty: Yes. I think there are 37 taxes on a loaf of bread. Taxes have increased dramatically over the last 20 years, including what are called the "unclaimed taxes."

In an article James Gruber wrote on peak oil last month, he made the point that debt is actually a future call on energy. Under the General Agreement on Tariffs and Trade, when you owe money, you've already spent the energy. He argues that the economy is an energy system, not a monetary system. He's absolutely correct, in my view.

"The enormous increase in wealth we've seen worldwide over the last 150 years has stopped."

The enormous increase in wealth we've seen worldwide over the last 150 years has stopped. There will be no more growth. From a mathematical point of view, you cannot increase growth. Energy consumption per capita has to go down, and that means wealth goes down. All the debt we've accumulated is a noose around the neck of society.

TER: Gruber also wrote, "Deflation is winning the battle over inflation." His argument is that excessive debt has to be deleveraged and in that deleveraging process, asset values will plummet. Central banks are doing whatever it takes to create inflation in an environment where deflation is really the underlying tide. What do you have to say about that? Continue reading "Food, Water and Fuel Are Necessary to Life and Investors" →