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A couple different takes on the infrastructure bill for resource investors

Cory댊
April 3, 2021
Full Weekend Show

I hope everyone has a great Easter long weekend! Thank you for tuning in this week. Please keep the emails coming! I love hearing from all of you on the companies I am bringing onto the show and the topics you you would like us to discuss. My email is Fleck@kereport.com.

On this weekend’s show I focus a lot on the infrastructure bill and commodities broadly.

  • Segment 1 and 2 – Jesse Felder, Founder of the Felder Report kicks off the show with a focus on the infrastructure bill and government spending broadly. This all ties into a discussion on possible future inflation, higher yields, and commodities price action. Click here to learn more about the Felder Report.
  • Segment 3 – Marc Chandler, Managing Partner at Bannockburn Global ForEx is up next with a different look at the relationship between the infrastructure bill, commodities, and China’s recent purchases of industrial commodities. Click here to visit Marc’s free blog.
  • Segment 4 – A new guest to the show Doc Jones shifts our focus to active investing in the resources space. We discuss the pressures weighing on gold mining companies and the underlying gold price followed by the oil sector and what he is liking.

Exclusive Company Updates This Week


Jesse Felder
Marc Chandler
Doc Jones
Discussion
53 Comments
    Apr 03, 2021 03:17 AM

    Thanks to all the KE Report contributors to another full week of daily editorials, company updates, great insights and investable ideas on the blog, and another solid weekend show.

    Ever Upward!

      Apr 03, 2021 03:24 AM

      WTI Crude looks vulnerable not to mention recently tagging multi-year resistance at the 66-67 level. Should WTI break/breach $57 such development, should it occur, would likely trigger move to the $47-$51 zone.

        Apr 03, 2021 03:53 AM

        Mineralsrmoney – After such a epic move higher in Oil over the last year from negative pricing, to $10s-$20s, then $30s–50s, and into the mid $60s, then to see Oil breach recent support and dip into the low 50’s seems quite possible.

        The other factor recently has been the strengthening US Dollar, moving from 89 to over 93 so far this year continuing to pressure the commodity sector overall. Several analysts recently have been pointing out a potential move up in the greenback to 95, before it rolls back over to make the next leg down. If the dollar does keep strengthening, then this would be a further headwind for oil prices.

          Apr 03, 2021 03:27 PM

          Excellent points and all valid.

      Apr 03, 2021 03:16 PM

      Debt Consequences Catastrophic, No Runaway Growth Coming Says Brent Johnson

      Stansberry Research – April 2, 2021

      “The economy isn’t healthy like the markets are showing, says Brent Johnson of Santiago Capital. Joining Daniela Cambone, he examines the catastrophic consequences of U.S. debt… and breaks down his “dollar milkshake theory” predicting a bull market littered with major caveats. ”

      https://youtu.be/KvdDn13T5_I

    Apr 03, 2021 03:22 AM

    Thanks again for having Doc Jones on! Always refreshing to get UNBIASED data data data analysis! It’s a huge help to peer in to the thinking of due diligence masters as he is!

      Apr 03, 2021 03:55 AM

      +1 Agreed Patmann. Doc Jones is a savvy resource investor, and always has interesting insights worth mulling over.

    Apr 03, 2021 03:48 AM

    Jesse is really on the inflation bandwagon and makes a compelling case. For an opposite viewpoint, one should listen to Danielle Park on the weekly show with Jim Goddard. http://jugglingdynamite.com/
    She thinks everyone is on the same side of the boat in the inflation argument….interesting comments from both. Thanks Cory for bringing Jesse on……Can’t go wrong listening to him IMO.

      Apr 03, 2021 03:40 AM

      Agreed SilverDollar, Jesse always has interesting macro analysis to consider. I agree with him that the shift in focus from central bank monetary policy last decade, to more government fiscal stimulus, pumping helicopter money into the hands of individuals and businesses, will ultimately increase the velocity of money, and ultimately a pick-up in inflationary pressures over the next year or so.

      Apr 03, 2021 03:18 PM

      I guess Danielle hasn’t learned much in the last 12+ years. In August 2009, she was one of about 4 dozen familiar/mainstream analysts/experts who was bearish the stock market. I do not recall if she was also short as many were. Regardless, she and those other bears couldn’t have been more wrong and the short ones never got one chance to cover their positions at a profit or even flat.
      To be fair to Danielle, I have not heard the interview with Goddard so there might be details that would change my assumptions about here stance.

        Apr 04, 2021 04:57 AM

        Ditto Matthew……I stopped listening to her years ago…..along with Peak Oil experts…

    Apr 03, 2021 03:26 AM

    Matthew, do you believe Doc Jones or Michael Oliver and Hedgelesss Horseman?

      Apr 03, 2021 03:43 AM

      Bonzo – believe them about what in specific?

      They are all sharp guys with interesting points of view and insights to consider, but did I miss some common and questionable point that they all made recently that isn’t believable?

        Apr 03, 2021 03:00 PM

        DOc Jones said that there is no correlation between the money supply and the price of gold.
        I think von Mises knew better.

          Apr 03, 2021 03:20 PM

          The point Doc Jones made there was nuanced, as the massive increase in money supply from central bankers quantitative easing last decade was not as inflationary as most expected, abd didn’t result in a correlating higher gold price in many years 2012, 2013, 2014, 2015, half of 2016, 2017, 2018. If all that was needed was just more monetary dovishness and money creation from central banks, then gold would screamed higher all those years in dollar terms. It didn’t.

          What was missing last decade with all the new money creation, was the Velocity in money, as that new money creation was hordes by banks and financial institutions to fix their toxic balance sheets, and then used to juice the general markets. It was circulating through the economy and turning over from one end user to the next with any velocity, which is why the inflation genie stayed in the bottle.

          What did move Gold higher in spurts was mostly as a result of central bank cuts and rises to interest rates, and the environment of lowering and the negative real inflation-adjusted rates.

          What is different over the last 2 years with the introduction of a series of Stimulus plans are that these government fiscal handouts are not just going to banks and financial organizations, but rather, directly to private citizens, a range of businesses, and to the various pet organizations of political interests, which will start increasing the velocity of money, increase inflation, and as inflation gains on interest rates, then it starts moving real rates back lowered again — and when we see that inflation start finally showing up in the government metrics that traders and algos are keyed off of, then that will be very constructive for higher gold prices.

            Apr 03, 2021 03:23 PM

            Correction: after the point about the missing key component of money Velocity last decade, that next sentence should have said:

            “It (money) was (NOT) circulating through the economy and turning over from one end user to the next with any velocity, which is why the inflation genie stayed in the bottle.

            Apr 03, 2021 03:48 PM

            The massive increase in money supply over the last decade was definitely more inflationary than is widely recognized but gold was not cyclically ready to respond for a variety of reasons. The bubbly stock market of 2018 was probably the biggest driver of gold over the last 3 years since big, smart money goes where it is treated best (which is why stocks benefitted from the Fed’s funny money after gold’s mini blow-off of 2011. Contrary to popular opinion at the time, stocks were nowhere near bubble level so that’s where the inflation flowed.

            Apr 03, 2021 03:16 PM

            Yeah, agreed that the money flows went into the general markets, and that is where it was treated best, and could be seen as where the inflation was channeled. The initial point bonzo raised though was about Doc Jone’s comments that we didn’t see a direct correlation to more money supply from QE and a higher gold price last decade. In that sense Doc Jones was correct, and there isn’t a direct correlation between the 2.

            Over the fullness of time, I agree that we’ll see inflation start ticking up higher in the metrics, but this will be much more energized by these series of trillion dollar stimulus bills going directing into the economy and circulating with a rising velocity of money to come, than FED or Bank of Japan, or ECB quantitative easing of the last decade.

          Apr 03, 2021 03:37 PM

          Bonzo, I haven’t listened to the interview but Doc Jones is incorrect if we are looking at the very long term. Over shorter periods, he’s right. The same goes for the stock market, commodities, and the general price level in the economy. All are subject to cycles of various lengths but all ultimately reflect “money” (currency) supply growth (inflation).

        Apr 03, 2021 03:29 PM

        Did Michael Oliver and the Hedgeless Horseman make that same point that Doc Jones did about money supply, or something along those lines?

          Apr 03, 2021 03:53 PM

          Oliver was going to be Austrian School economist and academic before he went to work for E.F. Hutton and was well on his way…
          https://www.amazon.com/New-Libertarianism-Anarcho-Capitalism-Michael-Oliver/dp/1491068620

            Apr 03, 2021 03:09 PM

            Yeah, I had heard him say that in previous interviews (he’s a bird of feather there as I most resonate with Libertarian Anarcho-capitalism personally).

            I asked my question because I was trying to follow what bonzo meant by his question:
            – “do you believe Doc Jones or Michael Oliver and Hedgelesss Horseman?”

            When I asked in return:
            – “did I miss some common and questionable point that they all made recently that isn’t believable?”

            The response back was about Doc Jone’s comment on him disagreeing about a direct correlation of the Fed’s money supply to higher gold price. I just wondered if Michael or Erik had mentioned the same point, since they were all grouped together in the first question from Bonzo about “do you believe them?”

            It’s kind of a nebulous question to ask in the first place. It would be like asking “do you believe Quinton Hennigh, Dan Oliver, and Axel Merk?”

            If there are different questions for each one, then it would be helpful to know what those are separately, and ask about whether someone agrees or disagrees with a specific point or statement, rather than grouping 3 people together and asking if they are believable.

            Apr 03, 2021 03:27 PM

            Oliver and HH are more bullish on gold than Doc Jones. Oliver says gold will be 8K or higher in 2 years. Jones has just 20% in gold. I suspect HH has much more than that. I sure do.

            Apr 03, 2021 03:14 PM

            Bonzo, keep in mind that Oliver’s price targets and timeframes are based on his opinion while the “momentum structural analysis” that people pay him for is not.
            I have no doubts about $8,000 happening but it is extremely unlikely to happen in 2 years.
            I am also much more bullish gold (really the gold miners) than Doc Jones.

      Apr 03, 2021 03:13 PM

      Ron Paul: Gold and Bitcoin are at risk of government crackdown (Pt. 1/2)

      Kitco News – Mar 30, 2021

      “The best way to protect against economic turbulence is with hard assets like precious metals and real estate, but even these are under threat from the government,” former Congressman and host of The Liberty Report, Ron Paul, tells Michelle Makori.

      “The government is a threat,” Paul said. “They will crackdown because they have the ability to do it. We had a taste of [a free society]. If you don’t know where to start, just start with the Constitution, that might give you an idea of what a free society is all about.”

      Paul noted that this “crackdown” could take the form of taxes.

      0:00​ – Biden’s stimulus plan
      7:38​ – Central banks losing independence?
      14:35​ – Protecting your wealth
      16:05​ – Crackdown on gold, Bitcoin
      19:43​ – How to combat financial bankruptcy

      https://youtu.be/W_GTkEAsxOQ

        Apr 03, 2021 03:24 PM

        Miles Harris: Basel III, Good or Bad for Gold?

        Palisades Radio – March 29, 2021

        “Miles is an investor, free-market advocate, and macroeconomist. Miles takes us on a deep dive into how the Bank of International Settlements operates as the central bank of central banks along with upcoming Basel III changes in June. He believes their ultimate goal is facilitating monopoly control over fiat currencies and global monetary policy.”

        “Tier one capital refers to bank financial reserves, including its equity. Tier two capital is regarded as undisclosed funds like demand deposits. Gold is on the asset side of a bank balance sheet and is usually considered a risk-less asset. Its only risk is price changes, not unlike a foreign currency. They will consider gold as a zero-risk weighting if it’s allocated and has been hedged with a short position.”

        “Miles thinks now is a perfect time to go long gold as banks are closing short positions and banks seem to be taking possession of their gold.”

        https://youtu.be/0O-Vzjc7eMQ

      Apr 03, 2021 03:19 PM

      Will Rhind: Explosive Silver Price Movement Coming? And What’s Needed to Kick Gold Into Gear

      Stansberry Research – March 31, 2021

      “We have dealt with many years of capex restraints; couple that with an economy in the midst of recovery, with many stimulus measures on top, we can see an environment ripe for higher commodity prices,” says Will Rhind, founder of Granite Shares ETF. Speaking with our Daniela Cambone, he reveals the commodities he believes are set to benefit— and those that will not. He also notes that the gold market has been in bearish territory since August 2020, suggesting the metal needs an “inflation surprise” in order to take off.

      https://youtu.be/OhFdweAPnZw

    b
    Apr 03, 2021 03:12 AM

    Doc jones makes some good points, so does Danielle Park, interestingly my regular dealer was sold out of fractional gold coins, first time in 15 years that I know of.

    Apr 03, 2021 03:26 AM

    I see Quinton Hennigh and Shawn Ryan are players with Labrador Gold, I read somewhere that Dr. Q believes there could be 4 or 5 mines eventually in this area. Quinton and Bob M, Eric Sprott were all over New Found Gold when that discovery was first announced. I wouldn’t be surprised to see any two of these people start to make a more aggressive move in that area. Quinton will definitely have the capital when Novo starts steady production. By aggressive I mean an acquisition. Quinton thinks big and he has all the right contacts to start acquiring. Time will tell but this industry needs some new players, the old guard like Beatty and Lassonde, etcetera, etcetera, are leaving the stage. DT

      Apr 03, 2021 03:50 AM

      I agree DT. Quinton is sitting on all these boards for a reason that will eventually be revealed in my opinion.

      Apr 03, 2021 03:59 AM

      Good comments DT. I do agree that some of the companies exploring for gold in Newfoundland will get consolidated down the road as they grow and develop deposits to a large enough size to put takeover targets on their backs.

    Apr 03, 2021 03:53 PM

    10 Million Tonne Annual Copper Deficit Coming!

    w/ Alex Tsukernik President & CEO | Nova Royalty – $NOVR.V

    Cambridge House International – April 2, 2021

    https://youtu.be/IY5LDLIGUfM

    Apr 03, 2021 03:57 PM

    This Man Has Executed $2B in Mining Exits

    Douglas J. Hurst Chairman – Northern Vertex (NEE) (NHVCF)

    Cambridge House International (w/ host Jay Martin – April 2, 2021)

    0:52​ Doug Pioneered The Royalty Model
    5:33​ What Doug Did After the First $700M Exit
    7:50​ $1B Exit in 18 months – Newmarket Gold
    11:30​ Mike Allen & Northern Empire Exit
    16:13​ Eclipse Gold Mining x Northern Vertex Merger
    20:39​ Understanding Risk of Dilution as an Investor

    https://youtu.be/bq6i3sjTHZM

    Apr 03, 2021 03:09 PM

    “This is a Time to Buy, Not Sell” says Mining Stock Fund Manager Willem Middelkoop

    MiningStockEducation – April 2, 2021

    “Fund manager Willem Middelkoop shares that it is the time to buy, not sell quality mining stocks. He shares his outlook on precious metals and commodities as well as discusses his fund’s approach to investing in this interview. Willem Middelkoop is the chairman of the Commodity Discovery Fund’s management team and is ultimately responsible for the fund’s investment policy. Willem is one of the pioneers of discovery investing and is the author of seven books on economics and financial markets.”

    https://youtu.be/hj2xJH2IIUo

      Apr 03, 2021 03:11 PM

      Gold Needs to Outperform the Stock Market says Jordan Roy-Byrne

      MiningStockEducation – April 3, 2021

      “Jordan believes that until gold outperforms the stock market we will not see a powerful and sustained gold bull market. He provides commentary via talking through the two charts linked below. Jordan also talks about how the miners are performing and shares thoughts about investing in the juniors right now.”

      https://youtu.be/bgUO8z-hY_E

    Apr 03, 2021 03:02 PM

    Justin Huhn: News For the Uranium Bull Market: Massive Nuclear Fuel Shortages Coming?

    I Love Prosperity (w/ Jake Ducey) – Apr 3, 2021

    “Uranium investing is starting to get very excited, because there are beginning to be signs of a massive shortage of nuclear fuel and uranium, that could develop. It seems everyday there is new bullish news for uranium, because it’s the only source of “green energy” that realistically can power the world. The fact is clear, this uranium bull market could be bigger than the last one.”

    https://youtu.be/LSrFiRwQd3M

      Apr 03, 2021 03:05 PM

      Stars Are Aligning For Uranium Price Rally

      Frik Els | March 31, 2021

      “The spot price for U3O8 moved above $30 per pound for the first time this year as uranium producers and mine developers hoover up above-ground inventories and reactor construction continues apace.”

      “Two new research notes from BMO Capital Markets and Morgan Stanley say today’s price marks a floor and predict a rally in prices over the next few years to the ~$50 level by 2024.”

      “The stars seem to be aligning for a new phase of nuclear energy investment with the US, China and Europe bolstering the bull case for the fuel this month.”

      “Although nuclear energy was not mentioned explicitly in the $2 trillion Biden infrastructure proposal released today, its federally mandated “energy efficiency and clean electricity standard” is hardly achievable without it.”

      https://www.mining.com/stars-are-aligning-for-uranium-price-rally/

        Apr 04, 2021 04:12 AM

        Would be a good time to buy a royalty play that holds physical uranium and has option to buy at $27.50…….hmmmmm maybe even get greater leverage if there were warrants and they were trading at a discount too…🤔

          Apr 04, 2021 04:27 AM

          Sorry at $28.73…. my memory isn’t what it used to be

          Apr 04, 2021 04:03 AM

          Good point Wolfster. Heck, it may even be a good time to acquire some unloved Uranium mining stocks that have even more leverage to rising prices when their idled mines and development projects have economic margins that will look multiples more attractive at $50+ U308 long-term contracting prices. Hmmmm 🤔🧐👨‍🏫

    Apr 03, 2021 03:48 PM

    For about a year in 2013-14, gold traded at between 11 and 14 barrels of oil. In 2018, it traded as low as 16 barrels. Today, it is trading at 28 barrels and hasn’t been so oversold in almost 8 years. I believe the 50 year average is around 15 barrels. In addition, the better miners surely tied-up a lot of cheap oil last year as it hit (officially) $6.50 per barrel.
    I think the huge a-b-c correction in gold vs oil since April is essentially over which might, in part, explain why the best big gold miners have been performing so well in recent weeks. Gold and gold vs oil do not have to take off for the miners to catch a strong bid, they just need to show that they are done falling. It is my bet that the coming move will see the miners perform better relative to the metals than they did last summer.
    Gold vs oil:
    https://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24WTIC&p=W&yr=8&mn=0&dy=0&id=p43936350165&a=723858345

      Apr 03, 2021 03:34 PM

      That is a great chart. Thanks. Looking forward to the coming week.

        Apr 03, 2021 03:56 PM

        For starters, the miners should blow past their mid-March highs.
        https://stockcharts.com/h-sc/ui?s=%24GDM&p=D&yr=2&mn=8&dy=0&id=p65501844180&a=673663556

          Apr 03, 2021 03:44 PM

          It would be great if we did just see the double bottom, and if that holds and we see the PMs start rise over the next 2-3 weeks.

          I’d much rather see that scenario play out, than the prevailing bearish consensus of 2-3 months of more downward prices, but am prepared for either scenario.

            Apr 04, 2021 04:28 PM

            Got my tax bill Friday. Last year’s couple of months of trading requires me to liquidate 11% of my trading account. I am most interested in a nice run before May 17.

      Apr 03, 2021 03:02 PM

      Back in 1980 and also for a while last year an oz of silver was higher than a bbl of oil, and today it takes over 2 oz of silver to buy a bbl of crude. Sell oil and buy silver.

    Apr 03, 2021 03:30 PM

    They used the 2010 Census charts!

    On March 31st, Mike Lindell, the CEO of MyPillow, released a one-hour television special entitled, Scientific Proof: Internationally Renowned Physicist Absolutely Proves 2020 Election Was Biggest Cyber-Crime in World History.

    https://welovetrump.com/2021/04/02/mike-lindell-tv-releases-scientific-proof-on-new-television-special-with-world-renowned-physicist/

    Apr 04, 2021 04:28 PM

    I’ve never paid any attention to Wolf Ricther and, based on the following, that’s fortunate:
    https://www.peakprosperity.com/the-looks-like-the-market-top/?

    Apr 04, 2021 04:14 PM

    It wouldn’t be surprising to me to see April a “holdem” month for gold—-gold could even end the month a little up from here—-if that happens, May and June could be problematic again. Watch out for May for the conventional markets—-is “go away in May” a possibility this year? If it is the PMs shouldn’t benefit from it. As mentioned before, if one looks at the monthly chart for the conventional markets, pricing is now challenging the previous highs on the MACD way back in early 2018. The 12 month MA line is a considerable distance from the 26 month MA which could be a very bad set up for May especially if the 12 MA in May turns aggressively toward the 26 month MA. https://schrts.co/qKQpqwAF

      Apr 05, 2021 05:10 AM

      Doc,

      Short term pattern gdx targeting 36 before a turn down and back up to test 37 possible 38 just kissing that 200 day moving average. This should happen within the next 3 weeks as you said this month would paint a rosy picture for gold but i would expect the last week of april to set the stage for the turn down. Its going to get nasty. Ive told everyone and warned everyone to be cautious.

      If i told you were gdx is targeting on my radar it would shake you but i believe we are looking at the same chart and possibilities.

      glen

    Apr 05, 2021 05:26 AM

    Jack Chan’s charts point to gold in an uptrend long term and short term. DT

    http://www.321gold.com/editorials/chan/chan040521.html