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Dear Fellow Investor,
I’ve got a special treat for you this week.
It’s something that we provide every year to Gold Newsletter subscribers, along with nearly 100 pages of top investment intelligence in our annual year-ending issue.
You see, we produce a massive, extended-length issue of Gold Newsletter every year that features not only my latest commentary on the markets and a review of our junior mining company recommendations...but also excerpts of the transcripts from the latest New Orleans Investment Conference.
The result is an issue that in recent years has pushed 100 pages in length, and offers up some of the latest views of some of the greatest experts in today’s markets.
We’re busily editing the transcripts now, and also excerpting them for this big year-ending issue of Gold Newsletter, which will be delivered next week.
I’ve just finished excerpting and editing my speech, so I thought I’d share it with you in this week’s edition of Golden Opportunities.
Two things you should note:
1) These transcripts come from third-party contractors and are rife with typos and errors. We’ve tried to catch them all, but please forgive any that have slipped through.
2) I don’t normally include my stock recommendations in these free Golden Opportunities e-letters; I almost always reserve my picks for my paying Gold Newsletter readers. But for this excerpt, I’ve included my top stock recommendations as a special bonus for you.
If you’d like to get our special year-ending issue, plus a full year of Gold Newsletter with access to my ongoing mining stock recommendations and coverage, I’ll let you subscribe for half-price if you can act before the end of this week.
Just CLICK HERE to lock in this half-price rate for Gold Newsletter.
Now, enjoy the following excerpted version of my speech at New Orleans 2019.
All the best,
Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference
Brien Lundin
“How To Profit From The New Gold Bull Market”
Why is this a major new bull market in gold?
First off, anybody know what’s the most consistent, powerful bull market in U.S. finance? Anybody? Anybody hazard a guess?
Okay, well, here’s the answer. Federal debt. This chart shows the federal debt since 1900, and the trendline growth rate is 8.7377% over that long, long, 119-year time span....
Can you imagine if you could invest in something that rises that quickly, that assuredly, that consistently, year after year?
What’s interesting is right now the debt held by the public, and this is...what pundits will do when they want to downplay the debt, they use this lower number, $16.8 trillion. That’s debt held by the public. Well, that’s because there is $5.9 trillion of inter-governmental holdings. Now this they say is not real debt because, of course, we owe it to ourselves, so we can just forgive it. What they don’t tell you is the vast majority of that 5.9 trillion is held by the Social Security Administration. So I’d like to see them start forgiving that.
So that’s money that has to be paid. The fact is the vast majority of the now $22.7 trillion in federal debt has to be paid back by somebody.
If the gross federal debt continues growing at its trendline growth rate of 8.7%, it reaches $25 trillion, essentially by the time we meet here next year. It reaches $30 trillion by December 2022. So this is a tremendous growth rate that you’re not going to hear about in the financial media, in the mainstream media. But the fact is this trend line rate has held again for 119 years. So I would safely bet on it.
So what are some of the implications of this or is this going to get any better now? Well, the answer is no. Unsurprisingly, they’re back, trillion dollar deficits. Right now, or in fiscal 2019, the federal deficit came in at 984 billion dollars, nearly a trillion dollars, once again.
...I think we’re destined, or doomed, to trillion or trillion-plus deficits though, going forward, because there’s nobody on either side of the aisle right now who is vaguely concerned about the deficit or the debt.
...We went from zero to a quarter point on the fed funds rate (in December 2015) and yet, and this was only a quarter point a year when they first started actually hiking rates, and yet interest costs exploded to the upside. And why did that happen? Because the debt had gotten so large that even a small, small increase in interest rates had an out-sized effect on bottom-line interest costs....That’s why, and as I showed last year when I spoke, if the fed had gotten to their goal of, say 3% their initial goal was a 3% rate on the fed funds rate, if they had gotten to that, the implications were for trillion dollars a year in debt service payments. And that was politically impossible.
So what we’re looking at now is a new reality. We’re facing a new normal as it were, and it is that record-low interest rates and ever-easier monetary policies have spawned, they’ve helped create, these unmanageable debts — debts so large that service costs are crushing at any interest rate that’s above the rate of inflation.
...So ultra-low to negative real rates are not only likely, but absolutely necessary under the current monetary regime. This is enormously bullish for gold, silver and metals for the foreseeable future. This is a tailwind, an undercurrent, a supporting bullish dynamic that will be around, that will always buoy metals prices. We will have fluctuations. We’ll have corrections. We’ll have big price spikes along the way. but the thing you need to come away with is a realization that the environment, the monetary environment we are going to have...is going to be supportive of higher metals prices.
Once again, nothing is new. What happened in 2008? The Fed had a proven recipe: Step one, cut rates.
...Another thing that I said was that...if they enact step two, which is quantitative easing...then that’s when we’re really going to see the fireworks start. Well, in fact, they just have, but don’t call it QE. We can call it maybe NQE, not QE, but as many of you know, a few weeks ago, chairman Powell announced a new program to buy $40 billion of U.S. Treasuries every month.
But it’s a temporary program. Don’t worry about that. It’s only temporary. It’s like those temporary taxes we see all the time. It’s going to go away, and it’s only $40 billion a month, and it’s not quantitative easing. Interestingly enough, that $40 billion a month is right about the same size as QE1, which, when it was enacted in January of 2009, Ben Bernanke in a speech said, “Don’t call this QE. It’s not. It’s not QE.”
Five years later, $4 trillion to the balance sheet in three rounds of quantitative easing later, it was obviously QE.
So if it walks like a duck, quacks like a duck, it’s a duck. This is QE....And the implication of this, again, if you look back in 2008, late 2008, 2009, when they started quantitative easing, precious metals prices soared. So now we have a more immediate catalyst for gold prices, and that is the return to quantitative easing.
This chart shows the real, inflation-adjusted price of gold in current dollars. When you look back in time, the 1980 price, which was $850 at the time, that was a nominal record price of gold. To reach that level today, again, you’d have to get up to a gold price of $2,805. So basically if it feels like the late ’70s, it’s going to be $3,000 or more gold by that point. Just the 2011 peak, which was $1,920, that’s now $2,144.
In my time remaining, I’m going to go over some specific stocks. I like Aftermath Silver (AAG.V), it’s a new silver play. We recommended it at 10 cents in Gold Newsletter. It’s now about 20 cents [now C$0.28]. It had gotten as high as over 30, but it’s got a significant silver resource. And I like that play. They’re going to make a lot of news in the new year, I believe.
Great Bear Resources (GBR.V), the most exciting discovery story out there. I was one of the first people to recommend it. At one point it was up 28 times our entry level in our Gold Newsletter Alert. It fell back a bit. It actually made its way back to my buy list from a hold recently because the play is expanding in a different direction that I think is even more impressive.
Revival Gold (RVG.V), great gold project in Idaho. Two million ounces going to three. Great management team.
Goldplay Exploration (GPLY.V), a real rarity, high-grade silver, shallow, open-pittable. You rarely see that. High-grade silver is usually vein-hosted (and) underground. To have an open-pittable, high-grade silver deposit is exceptional and now they’re finding high-grade gold.
Just to back up a bit on those, I own Aftermath, I own Great Bear. I do not own Revival. I do not own Goldplay. And I do not own Chakana Copper (PERU.V). I like this play because it’s very high-grade copper and gold in breccia-type pipes, and it’s at an all-time low for some reasons due to their share structure. I think that’s going to be fixed as they continue drilling. They’ve got plenty of money to do it.
Millrock Resources (MRO.V) has a great play in the Goodpaster district of Alaska. I made one of the most famous recommendations from this podium years ago with Millrock and it subsequently went up about 20 times in price. I think this is perhaps not going to go 20 times in price, but I think it’ll do a multiple if they have success at Goodpaster. (I own Millrock personally.)
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