Editor’s Note: I would like to introduce you another of our new editors, Greg McCoach. Greg is an entrepreneur, who has successfully started and run several businesses the past 22 years.
For the last 7 of these years he has been involved with the precious metals industry as a bullion dealer, investor, and newsletter writer. Greg’s years of business experience and extensive personal contacts in the mining industry provide unique insights that have generated an impressive track record for The Mining Speculator since its inception in 2001.
Luke Burgess
What Are People Thinking?
DENVER, CO — So few investors seem to be paying attention or truly thinking about the many changes that are coming to our world. This amazes me and leaves me wondering, “What are people thinking out there?”
“Thinking is really the hardest work, that is why so few people do it.”
— Henry Ford Sr.
I love this quote and have it framed on my office wall to remind me that thinking through things is really the hardest and most important work we do. And as Henry Ford said, it appears to remain true today that many people are not doing much thinking, especially as it relates to what is unfolding in our world at large.
How can they just ignore what is unraveling with finances, debt levels, risk, intrusive government, etc, etc, etc. at so many levels in our society and world.
And how can any rational person actually believe anything that the government or main stream media is touting these days. It all seems to be a pile of manipulative rhetoric and disinformation to keep people from understanding the real issues. But I guess this has always been the case before major changes sweep over the unprepared and non-thinkers in a society.
For a thinking person, who takes the time to read between the lines and do some research, one can quickly discern that this is a time to make decisions and preparations for your financial future and physical well being. More on this later…
I have recently returned from a very hectic five weeks of travel and am glad to be back in my office catching up on all the paperwork. While it is important for me to travel to attend the conferences and see the mining sites, the trips can be awfully exhausting. I have never been busier and find myself having to reorganize and re-prioritize my responsibilities in an effort to keep up with the demands. I have received a lot of questions via email and wanted to respond to several items that many have repeatedly asked. Here are some paragraphs on each topic.
Financial Markets
As I look around and contemplate the financial insanity, risk, and amazing instability at so many levels in our world, I am led to believe that sweeping changes are soon in store that will catch many ill-prepared.
It’s not just a few things anymore that could cause problems, but many trigger points that could reach critical mass very quickly.
Please forgive me if I don’t take the time in this piece to write about all of those trigger points. But, I fully expect to wake up one morning to hear about some financial chaos that has started in some part of the world. Where that will start and when that will happen I just can’t say. But it will happen.
When it does, owning the precious metals will be fundamental to one’s financial survival.
As I often say, take a core position in the physical metals while you can still buy this stuff and JUST HOLD. Don’t worry about trading it for short-term gains. People of wealth that do not have a position in the physical metals are in my opinion financially naked.
Gold Price
After our steep, but short correction, we are suddenly back over $650 an ounce and poised to make an historic run to new all-time highs later this year.
We heard a lot of saber rattling when gold was going down from the main stream media who was calling for gold’s demise, but alas these misinformed media minions are once again proven wrong.
How many times does this need to happen before people see through this stuff from the media. Think people, think! Gold is going higher, way higher than where we are now. Silver, platinum, and palladium will perform extremely well too!
Copper Price
Copper is also quietly moving higher again after the recent correction. I am on record as saying I believe we could see $5.00 a pound copper in the near future. Today it bested the $8,000 ton level over at the LME, the highest level in more than a month and is knocking on the $4.00 a pound level here in the States once again.
Some late session profit taking knocked it off the day’s high, but I see copper continuing to push higher for the next two years.
At that point I see major new supply beginning to come online from new mines that will start to slow copper’s ascent. Copper would then find its equilibrium price with that new production and supply situation. I believe the copper price at that point will still be in the multi-dollar range for many years to come.
Uranium Price
Uranium should no longer be considered a base metal. It is something more akin to a strategic metal or even precious metals because of the world’s absolute necessity for the stuff if the lights are going to stay on.
As more and more nuclear power plants are being built, the supply demand equation is simply way out of whack if all these plants hope to have uranium to operate.
While I was in China driving around we saw several new nuclear facilities being built. The amazing infrastructure growth of China and India will need a lot of uranium for the foreseeable future.
There simply in not enough material being supplied currently to keep up with this ever increasing demand. I see uranium prices going higher and being extremely strong for possibly a decade or more from now.
When playing the uranium stocks you need to be extremely selective with who you are willing to invest in.
Many are who have no experience in this market are starting companies hoping to cash in on the explosive situation that has developed in uranium.
Bottomline…stick with the companies that have experienced and proven management teams in the uranium business.
US Stock Market
The general US stock market will continue to weaken which will also add downward pressure to the US dollar. It is not only money flows into US debt that contribute to the US current account balance, it is also money flows into the stock market from abroad which constitute a considerable portion of the TIC.
Foreign investors are going to think twice about putting their money into US stocks especially with the dollar entrenched in a long term bear market. My advice is to get out of the general stock market while you still can. Prices will be heading lower for the foreseeable future.
US Dollar
Much has been written about the demise of the US dollar. It days are definitely numbered, but it has shown surprising resilience at times.
While that game may continue for a while, I see nowhere but down for the dollar in the long and short-term. Foreigners are losing their appetite for dollars and treasury bills, which is putting the US government in a lurch to keep up with its debt structure. Thus the need to create money out of thin air.
The dollar (humpty dumpty) will fall when foreigners have had enough of US paper. We are witnessing the early stages of this change. How much longer the US can keep the game going is anybody’s guess, but the dollar is going much, much lower than where we are today.
Mining Stocks
The precious metals stocks should rebound quite nicely later this fall and should show a volatile but big move higher. The precious metals stocks represent less risk than base metal stocks and should begin to outperform the base metals plays particularly as the dollar moves down.
