Speaker 1: And the most liquid items as the US Treasury is
shorter than one year, so that puts in a bit
to the dollar. Then the other liquid item is gold,
so that puts in a bit of gold, and what
you want to have the price of gold going while
holding as the cost the mining fall and as we
use the TRB as the proxy for gold mining cost,
and recently here that goal divided by CRB its new
highs as one would expect, maybe even a little overbought.
But the trend is there, Carry, and the trend is
your friend.
Speaker 2: You're listening to Carrie Let's as financial survival Network where
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Speaker 3: And welcome. You are listening to the Financial Survival Network.
I'm your host, Carry Lutz. We're the second to last
day of July. The markets have tended to fluctuate, to
put it mildly, but gold is still in that twenty
four hundred dollars range. They managed to knock silver down
below thirty, but wanted to get an update from Bob
Hoy who has forgotten way more than I'll ever know
about the sector, that's for sure, and stay tuned because
at the end we'll have an offer so you can
get Bob's latest, latest, greatest list of miners that are
poised to really explode upward when the next phase of
the metals bull market is upon us, which will be
sooner rather than later. Bob, it's great to have you
back on the show. How you doing, Eric doing great?
Thanks and my colleague Rock. Sorry for the technical die
he does. You know the dollar particles right, But what
I've learned.
Speaker 1: Is that you want to use the real pricycle and
that is deflated by the you know, inflation, the CPI index.
And the reason why I did that is a decade
ago when I did the historical work. There were long
periods when England was on a gold standard there was
no change in the nominal price, but then over the
long period under your years, the real pricycle change is
then particularly interesting following a great financial bubble of which
we have been in, and one of the features of
a post bubble contraction has been gold real price going
up as deflated by inflation, and it has been. But
then last year in the summer I got I thought, well,
why mess around with that, because the only publisher, CPI
went the luck. So we then did gold divided by
the CRB, the very popular commodities index. So what I
assumed was that the CRB index was a proxy for
mining costs. And this is easier to point out when
when you say, okay, now, energy is a huge cost
of mining, and we're all in the proxy for energy prices.
And what's happened in the last seven months is that,
for example, who all has followed a half relative good
that portion of mining costs have been beneficial to the sector.
But I'm very content happy to stay with the fact
that the RB is probably a good proxy for mining
costs as you get and it is up something like
you know, the turn of the year. So that is
helping quietly helping all miners, anybody who's producing.
Speaker 3: All right, So that's helping it costs a lot and
making these things potentially way more profitable.
Speaker 1: Right now. Here's here's that point out. An absurdity is
that if people are and here's about gold stocks, because
the dollar is going to get crashed, and well, I
think what happened if in this inflationary world and dollar crashing,
if the price of energy for mining gold goes up
faster than the price of goal, you're not making money
the whole point. And now, the reason why this works
in the past is that with the great financial boom,
he's got all tons of bonds and debt, junk bonds
and all issued doing payable essentially large part of it
into the financial center in New York and doing payable
in dollars. So one of the features of the post
bubble world is a chronically firm senior currency. It used
to be sterling, and when London was the financial center,
now it's the dollar and New York is the financial center.
But then as all over the front of the debt
bubble collapses, that is a huge loss of liquidity. But
Mother Nature's got a way of increasing liquidity in the
banking system. She moves up the real price of gold,
the miners make more of it, produce more of it,
and then it gets into the banking system from the
bottom starts to rebuild liquidity. So as that point out
that a typical post bubble depression has lasted for about
twenty years with the business with the three to four
year business cycle coming and going. The recessions are more
severe than the recoveries. And as a matter of fact,
in the literature, the first use of the word great depression,
but it came in the early eighteen eighties when that
bubble had peaked in eighteen seventy three and British England
then was the senior economy, and British economists couldn't figure
out the prolonged weakness, and then they said, oh, it's
a great depression. And that's the first minch in the
literature that I stumbled on of that term the great depression.
And then of course that great depression ed eighteen ninety five,
and then you had the whole recovery fact that nineteen
twenty was the high for commodities, in nineteen twenty nine
was the high for the bubble, and then crashing all
over again. So yeah, mother nature is quite brutal that way.
But if you've got the game plan and it helt
the whole lot. So our view is for investors to be,
you know, fully fully invested in gold stock. They could correct.
Recent enthusiasm was quite noticeable and they big for that
dock market. The S and P could get hit in
the fall, so we wouldn't chase gold docks, but we
would look to repurchase selling pressures day in October sometime.
But the main thing is that as the rest of
industry does and the economy does poorly, the gold mining
side does very well. Like in the nineteen thirties or
the eighteen eighties, that does well. So you're going to
have fund managers out there, the more aggressive equity fund
manager guys, they're going to look at a couple of
quarters where the EC or DFKA golden neckt is out
noticeably outperforming the S and T. So what that means
is that carry that the equity fund managers who would
not normally look at gold, they're going to say, hey,
it's a good sector, I got to get in. So
there's a possibility of a new kind of player coming in.
So this is why I'm very polish for the longer
term on the whole breadth of the gold stocks, and
particularly like during your exploration. That's gosh, it was nineteen
ninety six when we've got a list of five by
during your exploration stocks and one of them turned out
to be well we're looking for a good exploration market,
and one of them turned out to be er Quippa,
which went to thirty dollars rather nice. So we now
have our list of eleven small cap gold stocks they
seem to have based and what to get with this
is potentially when they turn up, you're going to get
much better percent gains than say in the senior gold stocks,
unless you leveraged and don't care for leverage much. So
we've been advising accumulating our list of ele jr. And
one of them I'm particularly interested in. It's been not
been drilling, but it is now about the start thrilling.
So that's that's the plot for one of them. But yeah,
and if anybody's interested in our list of juniors, we'd
be pleased to send it to them. And also with
the provisions that one or two may just get stuck,
but within elaborate or twelve of them, there could be
some good winners, all.
Speaker 3: Right, Well, hey, one good winner can make up for
a lot of losers.
Speaker 1: Right. Well, it's hid that Eric Kuipa was the one
that worked for us, and that was a long time ago.
And any stocks, any stocks that goes to thirty dollars.
You're going to kind of like it or remember the experience,
won't you.
Speaker 3: Oh yeah, yeah, we need to see more of them, though,
we need some more of them, Bob.
Speaker 1: Yeah, Well, I think our list is it's pretty good. Summers.
There's there's a small producers, there, a small preproduction, and
then there's some history exploration stocks. And one of them
in which we can talk about separately, is it is
just starting to drill on what could be another witwaters
Rand geology. Now Whittwater's ran geology. It's in South Africa
and that's the system that hosts all of that gold mining.
And they kept the number carriers that wit has produced
some forty percent of all of the gold ever mined
in history and it's still even today and that's from
eighteen production and still today it's got one of the
outstanding reserves in the world. So Witwaters we ran gold,
sit and runs wherever you can say. So one on
the stock, as I say, we're just starting drill now
and we soon should get out of the h lit
thing and onto the get the network if they call it.
There could be a good run in the stock on
two things. One getting up on the recognized lifting and
two actually getting results out of the field. So yeah,
we can. They can get in touch with the analystics
can get in touch and yeah, or just sent me.
Speaker 3: Yeah, they can just send me an email k l
at terry LUTs dot com and say Bob's stocks or
Bob's picks in the subject line and I will forward
you the link.
Speaker 1: That's great because Rock, my colleague, is set up a
system for with this sore back of it all that
were really sat for it.
Speaker 3: Yeah, excellent, excellent, So just send that email and we
will take care of the rest for you. So as
far as looking ahead, so you still believe that that
belief that the dollar is going to go to oblivion
is uh, the dollar's death is greatly exaggerated.
Speaker 1: Uh yeah, that was my news of the dollars death
has been greatly exaggerated. Now let me give you I
handed at it a little while ago in in a great,
a great bubble the stock market gate. You get your tention,
but also the bubble is in that to it, and
that bubble like you wouldn't believe now once the party
is over, that that is due unpayable in US dollars
into New York. You know, all you have to do
is they have to sack percent seventy percent of all
the debt bubble doing payable in New York and just
servicing that dad into New York is a huge bid
for the dollar. But also you have investors around the world,
the very careful investors, and in a storm, they will
go to just the most liquid items. Return does matter,
and the most liquid item, as the US Treasury is
shorter than one year, so that puts in a bit
to the dollar. Then the other liquid item is gold,
so that puts in a bit of gold. And what
you want to have the price of gold going while
holding as the cost the mining fall. And as they say,
we use the CRB as a proxy for gold mining costs.
And recently here that goal divided by CRB its new
highs as one would expect, maybe even a little overbought.
But the trend is there carry and the trend is
your friend and sector of gold sectors on a longbow market,
and there would be times when it becomes fabulous with
a potential world scale discovery, and that's the one of
the ones you want to have in a sweet city
of eleven or twelve gold stars like air Kuiper one
that has that could come well very rewarding.
Speaker 3: Yeah all right, all right, so what about all the debt.
We're always worrying about all the debt. Does it just disappear?
What happens to you?
Speaker 1: It ends up massive loss to the only global economy
because you're going to have young fonds down to no
bed just and defaulting. But then you can't you don't
want to own high heeld bonds. Now. The other thing
is because the liquidity disappearance be fact that you don't
want to own long treasuries are there, but if you're
in deposits or short like three months bills, those three
months built, they're going to go back down to zero
percent again. Then the Fed funds will follow. So the
happy point could be say three to four year term
good corporate bonds. You get a howl a lot better
return than from fee bill or deposit type stuff, and
at a four year term you're not going to get
whacked too much by price. I really like it. For
fifteen some investors, it's the three to four year good
great corporate bonds. And if you go to a full brokers,
they will probably have a bond desk where they can
give you a fill on those bonds and you know,
whereas if you are send tree bills going to go
to zero, they fed funds. Oh you're there now talking
carry about h what's gonna be? Oh, it's a disaster,
fed chatter disaster. And I'll explain it is because in
a in a boom and I've got to figure even
back to five hundred pc, interest rate go up in
a boom and they go down in the bus. So
the current buzz is that an interesting because it's going
to cut and that'll get the party going. Oh, that
is dead wrong. And there was a guy with airstrusted
in September of two thousand and seven and I got
a quote bitten somewhere here, but I've used it and
break and rightly he said. He says, it's absolutely certain
that the FED pat will help the stock market. Well,
the stock market peaked in the middle of that October.
They economy peaked that September, and we went into this
eighth nine bear market, which was very severe. So the
point being, and also we did a chart and I'm
updating the study now, and you take it tart of
the S and P against the three months Pradier bill,
and not only do they fall together, but on the
fastest funges with the table rate are associated with the
fastest funges in the in the S and P. Really,
so they're talking up and they're excited about the FED
cut and FED cut will be a disaster.
Speaker 3: Hell, it's going to ask So that's going to cause
the market to collapse. Is that what you're saying here?
Speaker 1: It is a technical beast and it it became. Now
here's the way we look at it. It's easily May
and June of the year can be very good for
stock prices. And as a matter of fact, the of
the five great financial bubbles, if the first the SOUTHI
bubble seventeen twenty, the peaks were in May and actually
in London, the Southia bubble peaked in that June. So hey,
there's empirical stuff behind it. So what you want to
do is in June and July, which was what we've
been doing. Is if the action was not overbought, you're
in a rising trend of able market. But the action
we rang all our bells and whistles. This was that momentum.
It had sequentials that had all kinds of things on
a probable sea at all high. So the first would
be a loss of momentum. We've had that, and the
next it would take out a correction on the way up.
And that's happened. So I take a stock market is
going to do it around to August and then typically
if you're going to have a financial disaster, it will
more likely be discovered in the fall. So our advice
is to take money off the table and in long bonds,
in avoid young best again avoid just I mean, just
don't go there and raise the liquidity from your equity
portance bok. Sure that in a hard time liquidity gets
to be very important.
Speaker 3: Yeah, well, liquidity isn't important until it becomes important, right.
Speaker 1: I think somebody important said something about that's description of
going broke. They're going broke right, Oh, and then it
was very fast or something like that.
Speaker 3: Well, it's like bank runs. As long as people believe
that they can get their money from their bank, they're
happy to leave it there. But the second they believe,
where you believe that your bank is going to hit
the skids, you'll be lined up around the block. Now,
obviously in the West we've done away with bank runs
because you're not going to get cash all you're going
to get is a check to bring to another too
big to fail bank?
Speaker 1: And what does that do? Right?
Speaker 3: You got like nada, so so you get nothing from that?
Speaker 1: Right?
Speaker 3: But when to.
Speaker 1: Run into a cartoon in the seventeen to twenty bubble,
when it crashed, it left a lot of people broke.
And that's what this term lame doc and man and
oh yeah, Daniel Depot the writer Robinson Cruso I got.
There's a note by him where and the cry he
lot nineteen thousand pounds. There's stuffing like that.
Speaker 3: I was about a million bucks back.
Speaker 1: Finey and he and then the all three laments that
how many times you know, ten times that been rich
and ten times have been poor. I don't aim to learn.
Speaker 3: I can relate to that one. I'll tell you I've
been rich and I've been poor, and rich is better?
Speaker 1: All right?
Speaker 3: If you want the list of the stocks his top
mining picks, send an email to kl at Carrie LUTs
dot com. The list has changed a little bit from
last time. Make sure you go over to our site
Financial Survival Network dot com sign up for your free newsletter.
Bob always a pleasure. Thanks for stopping by.
Speaker 1: I'm glad we got together, carry and look forward to
the time.
Speaker 2: Thanks for listening to Carrie Letz's Financial Survival Network, your
solution to today's trying times. For the latest, go to
fine Financial Survivalnetwork dot com. Financial Survival Network now more
than ever,