Brien Lundin – Can The Precious Metals And General Markets Float Higher Together On The Ocean Of Fed Liquidity?
Brien Lundin, Publisher of The Gold Newsletter, joins us today to discuss the precious metals sector and how the upcoming Fed rate hikes will affect the markets. We discuss the pattern of how each time the central bank has done a tightening cycle that it has ended with rates hiked to lover and lower levels before reversing course. We also review the massive federal debt levels and how it isn’t feasible to truly normalize rates to the hot inflation levels we’ve seen recently.
Next Brien shares why he doesn’t feel a large corrective move in the general stock markets is a prerequisite for a rally in gold, silver, and the mining stocks. He believes both the precious metals sector and general equities can both float higher together on the ocean of Fed liquidity. We discuss the potential reasons and market psychology for why PMs didn’t respond in 2021 to the higher inflation and what may change that moving forward. We wrap up discussing a few mining stocks that Brien feels are doing good work to move their projects forward. Companies mentioned are (GSHR) Goldshore Resources and (MAI) Minera Alamos.
The price level in the conventional markets is absurd. Inflation is at crazy levels. The total of brokers’ loans is approaching one trillion dollars. It had been only 350 billion at the end of 2016. Is that nuts or what? The price level is preposterous and it is the result of only a handful of high flying tech stocks.
The higher they go, the harder they fall. But people have short memories when it comes to speculation. Every crash in the last thirteen years has been followed by a recovery, and every recovery had brought prices to a new high point. There is no reason to sell, you are bound to win in the end. Forecasters for a long time have been calling wolf. The Federal Reserve is not afraid of inflation, they first called it transitory but then they said it is just a bump, and it has failed to bring hard times.
Look at the character of the stocks that are leading the advance. They are not solid companies, they are mostly information companies that provide a service but don’t have tangible manufacturing capabilities. It all seems so easy to understand to people that have a very short speculative memory. There is trouble everywhere you look but it hasn’t brought the conventional markets crashing down, at least not yet. The media controls the narrative, but the narrative is broken, and when the banks and the investment companies, which in turn control many other holding companies and hedge funds start to unravel, WATCH OUT!
Even Harry Dent say’s US Markets will lose 90% of their value this year, Harry Baby, I think this time you are right! LOL! DT
Harry Dent has been saying that same thing for over a decade, going on 2 decades now.
DT: Excellent comments. Sounds like a plan.
John Rubino say’s Americans are buying record numbers of RV’s because they can’t afford housing. America is the only country in The World that can go to the poorhouse driving an RV! Say, it ain’t so, Joe. LOL! DT
Buy an RV, load up on high quality bonds and hit the road.
When we spent a couple weeks driving across the country in a RV last year as round 2 of our move, I saw the appeal to selling everything and going mobile, traveling, staying in new areas, and making the world one’s backyard. The thought has crossed my mind to become an RV nomad, but there is something refreshing about having a home base with all of the stuff and conveniences that is comforting.
Hey Ex, In Canada the weather is not conducive for RV’s much of the year, but we do have our trailer parks. You can really party all day and all night in Mr. Leahy’s campgrounds. Work, I’m too heavy for light work, too light for heavy work, and too s$xy for night work. LOL! DT
DT ~~~ Too Too ~~~ https://www.youtube.com/watch?v=P5mtclwloEQ
Hi BDC, funny video, Thanks! DT
You guys crack me up…
Terry: That is why I bought a small amount of CWH over a year ago. Well managed and pay a dividend. I want to buy more on weakness.
CWH is doing very well, with a good dividend.
Harry Dent interview on Kitco, claiming there will be a crash later in 2022. He’s emphatic, almost argumentative about it, says the only safe assets are government and AAA corporate bonds.
What country’s bonds and what Corporations? That would be interesting. Hope not JPM.
I posted that a few of my REE’s caught some bids. I wonder when might they get popular again?
aghead – My only 2 REE plays right now are Ucore Rare Metals (UCU) and Energy Fuels (UUUU). Both had pretty nice moves on Friday to close up the week.
Are there any REE companies you have your eyes on as a potential opportunity. I used to track the sector carefully about a decade ago, and am aware of a some of the other companies but none of them really impressed me that much. I had a position in Commerce Resources and Leading Edge Materials in years past as well.
Crescent Point Energy, CPG. This is a Calgary based oil and gas producer with a P/E of 2.0 and an EPS of $3.72. It has already tripled in a year but where does it go from here? Just trying to present other alternative investing ideas.
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https://stockcharts.com/h-sc/ui?s=cpg
CPG weekly 3 year chart.
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https://schrts.co/HJbYxTqJ
And a 2.33% divvy…
If interested please check out the Financial Statements because there is some unusual activity but if they earn a bunch of cash they will likely hike the divvy and/or buy back stock. Eric Nuttel is the expert of these Canadian oil companies. All IMHO of course. I own some in a pension fund.
Crescent Point was the darling of the Canadian oil patch 10-15 years ago could do nothing wrong but I don’t know what happened between then and now.
Dan, what about Painted Pony, another previous Nuttal favorite?
Painted Pony was taken over by CNRL. The Canadian O/G companies are very beholden to their shareholders and realize there is value in dividends, buybacks and takeovers because new exploration, or growth, is less lucrative than it was because of the new energy generators coming online one by one over the next decades IMHO. The oilsands should be one of the last producers on the planet as the infrastructure is mostly there unlike shale and offshore.
https://cdn-ceo-ca.s3.amazonaws.com/1grfb2s-GC%20G%20seasonal%20chart.JPG
GDX coming down for weekly and seasonal cycle low on light volume retests so far on both daily and weekly bars…Nothing scary yet …Dirth of buyers…good…if 9/27/21 weekly swing low is tested w price and rejected we have the makings of a several trading cycles up seasonal rally…much better than last half of 2021 which was a series of single trading cycles up in a down trend …meaning each rally was a single trading cycle up and took great diligence to trap gains…glta
American Manganese, AMY.v. It may be breaking out IMHO.
Dan – Thanks for sharing your thoughts, and the companies you are following here with the KER crew.
I’m using weekly charts lately instead of dailies to cut some of the fuzz out.
Group Ten, PGE, is starting to look interesting, I have been drawing forks all over the charts and am trying to figure out what’s next.
The Fed is doing nothing more than jawboning as usual. All markets are manipulated to some extent, more so than in the past. Looking to past for clues to the future is a trap.
The Fed is trapped.
I am looking for some geopolitical event to change the narrative. I give the Fed at best one rate hike.
Gold more so now than ever is a “world” sentiment indicator. The powers that be will not let the ignorant masses start believing that physical bullion is better than paper money.