Craig Hemke, Founder and Editor of TF Metals Report, joins us to for a lively discussion on the big moves higher in the commodities and precious metals, and both the shorter-term and longer-term market implications that will arise from the geopolitical tensions in Ukraine and the NATO sanctions towards Russia and removing them from the SWIFT banking network. While we all hope for quick resolution of the military aspects of the war, we discuss how many factors may be changing longer term, and then review how these will continue to underpin the macroeconomic drivers of inflation, Fed policy, and the correcting general US equity markets.
We also outline that the commodities and gold and silver were already moving before the Ukraine situation intensified and that even if there is a quick resolution, not all the move is coming back out, due to the more obvious sticky inflation, muted ability of the Fed and other central banks to really do much about it, higher energy prices, slow economic growth estimates, and general environment of stagflation that is setting in. When asked about why more generalist haven’t been flocking into the PM miners lately, Craig reminds listeners that most generalist investors have not clue yet about which companies to invest in and that is why the GDX and major producers get the bid first, but eventually as metals prices run higher and more capital is allocated to resource stocks, then those money flows will eventually come down the risk profile into the smaller junior miners.