Jim Grant joined Kitco News to share his thoughts on the gold market. Author of The Forgotten Depression and publisher of Grant’s Interest Rate Observer, Grant is one of the most reserved and staunch gold bulls in the financial media. Grant admits he is extremely frustrated with the gold market given the underlying fundamentals of the global economy. But with his typically patient demeanor, he maintains that now is a great opportunity to buy. Grant prefers to invest in non-numismatic, physical gold bullion, like Krugerrands. He also buys gold mining stocks.
We are in one of the most radical periods of monetary experimenting in the annals of money. It could be this all works out. That is a possibility. I rate that as a very low probability. For that reason, you want to have exposure to the reciprocal asset of the paper assets that are now most popular. Gold to me is now the conjunction of price, value, and sentiment. I am very bullish indeed.”
Jim Rickards appeared on Bloomberg to explain why gold hasn’t actually lost any real value. It’s just the strength of the dollar that has pushed down nearly all commodities and currencies. Rickards argues that now is a very good time to buy the yellow metal, especially if you’re looking for the safest way to preserve your wealth from fluctuations in fiat currencies.
Ken Hoffman, Global Head of Metals & Mining Research with Bloomberg Intelligence, spoke with Kitco News about the possibility of China putting its yuan currency on a gold standard. Hoffman emphasized it is not difficult to imagine, because China has been laying the groundwork for years – buying up gold, starting a gold bank, building extra vaults, and soon launching a yuan gold fix. He believes the timing of it largely hinges on whether or not the International Monetary Fund decides to accept the yuan into its basket of reserve currencies this year.
A gold standard, plain and simple, is not a big constraint on a currency. It actually is something that worked for hundreds, if not thousands of years. It’s not this horrible thing… [A Chinese gold standard] would be a game changer. It would make gold very interesting. It would make it a currency again in terms of the way the rest of the world looks at gold.”
Carl Icahn made news this week when he sold his stake in Netflix. However, the bigger message Icahn shared with CNBC was that he thinks the United States stock market is “extremely overheated.” He warned investors that he sees similar problems as 2008:
I personally do [think that the US equity market is in for a dramatic pullback]. I’ll tell you that to me it’s a no-brainer.”
Billionaire investor Icahn isn’t the only high-profile advisor warning against high-yield bonds. Ian Spreadbury, one of the biggest bond fund managers in Britain, is warning investors to start saving in cash and precious metals.
The Telegraph reports that Spreadbury is worried about another “systemic event” rocking the markets, “possibly similar in magnitude to the financial crisis of 2008.”
The best strategy to deal with this, he said, was for investors to spread their money widely into different assets, including gold and silver, as well as cash in savings accounts. But he went further, suggesting it was wise to hold some ‘physical cash’, an unusual suggestion from a mainstream fund manager.”
It’s been a while since we heard from Jim Rickards, one of the leading contrarian economists. In a new interview with Kitco, Jim shared his opinions on a wide range of topics. He talked about the current relationship between the United States dollar and the Chinese yuan, as well as what he expects to happen in Greece. He shares Peter Schiff’s opinion that politics will prevent Greece from leaving the euro. He also agrees that the Federal Reserve is not going to raise interest rates until 2016, or maybe even as late as 2017. On top of all that, he sees the dollar losing value in the coming year and price of gold rising.
Renowned investors like Bill Gross and Carl Icahn have warned Fox Business that a bubble is forming in financial assets. Icahn told Fox:
[In] the financial markets, I believe that there really is a bubble brewing. Interest rates now are at a low that in the history of the Federal Reserve, they’ve never been held down this long. I don’t think anyone will deny it’s unchartered territory. It could be very, very destructive.”
Fox followed up with Marc Faber to get his take in the interview below. Faber warned of a destructive bubble in even stronger terms and recommended investors turn to gold mining shares, as well as physical precious metals for protection. He advocates storing your gold and silver internationally, for fear of confiscation from the federal government.
Peter Schiff doesn’t necessarily agree the government would take such a drastic course of action. The government doesn’t have the same incentives to seize physical gold nowadays. However, if you are interested in storing your gold and silver abroad, SchiffGold’s Precious Metals Specialists can help you find a safe and trustworthy custodian.
Dr. Ron Paul shared his free market perspective of Federal Reserve policy with CNBC. Dr. Paul warned that the stability of the current financial system “depends on a psychological acceptance of this system.” He argued stocks and bonds will crash dramatically when the markets realize that ever-expanding debt and money printing have only stimulated malinvestment.
Of course, Dr. Paul’s warnings fall on deaf ears. The financial media continues to support the narrative that Fed policy is essential to economic growth. A CNBC article about Dr. Paul’s interview simply looks at the growth of the S&P 500 to conclude that “the Fed has not committed any obvious policy errors thus far.”
If all the world’s debt were backed by gold, the US dollar price of the yellow metal would be nearly $34,000. Frank Holmes of US Global Investors explains the math in an insightful article.
While Marc Faber thinks the Federal Reserve should have raised interest rates years ago, he’s not at all surprised that it did not raise rates this month. In fact, he thinks the United States and global economies are too poor for Janet Yellen to raise rates at all this year. He predicts the US will be in another recession before the end of the year.
Ross Beaty is the Chairman of Alterra Power Corp and Pan American Silver. He is an expert in the energy sector and precious metals mining. Beaty spoke with Cambridge House Live about why he owns gold and silver as a protection from the economic and political uncertainties of the next decade. From disruptions in the energy sector, to unstable central bank policies, Beaty sees the potential for the world to get very “weird.” You want to own precious metals when that happens.