Monday 1st September 2014

Resource Clips


Spotlight on the juniors

Companies, investors and pundits converge on the 2013 Vancouver Resource Investment Conference

by Greg Klein

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A marketplace of ideas about the market itself—that partly describes the 2013 Vancouver Resource Investment Conference. This year the Cambridge House event brings several hundred companies together with prospective investors. But the conference also features about 50 speakers with maybe 50 divergent (although often overlapping) perspectives on the state of the juniors.

Cambridge House calls this Vancouver event the world's largest investor-focused resource exploration conference

Cambridge House calls this Vancouver event “the world’s
largest investor-focused resource exploration conference.”

Among those on hand January 20 were Michael Berry speaking on Obamanomics, Rick Rule on his love for bear markets and Chris Berry on specific critical and strategic commodities for 2013.

Canadian-born Michael Berry, co-founder of Discovery Investing, fell just short of doom and gloom in his cautionary tale about the transformation of United States economics, culture and governance. More than ever before, he said, taxation, deficit spending and redistribution of wealth are firmly entrenched as government polices. The purpose, he stated, was to remake America. The program has disturbing implications for Canada and the rest of the world, he added.

“We have now turned the corner with the second administration of Barack Obama. Politics, not economics, is now the driving force—period, end of story.”

When it comes to boosting its power, U.S. government methods are myriad: Executive orders, challenges to the constitution, the appointment of czars who aren’t checked by the constitution, redistribution of wealth, repression of investment and market manipulation of gold, silver and currency. Outright confiscation, Berry warned, has happened historically and could happen again.

Helping rationalize government policies is a government belief that “anyone in government is smarter than anyone else.” Society, meanwhile, becomes ever more polarized. “It’s not violent yet but it could be violent at some point in the future,” he warned. “It’s happened before.”

The market of course went off the cliff in 1997, so there was the ’97-to-2002 bear market, a truly dismal bear market—when my net worth skyrocketed.—Rick Rule, chairman of Sprott Global Resource Investments

But just from an economic viewpoint, the future looks bleak indeed. “Sometime around 2030, which is not all that far in the future, we will have amassed 200% federal debt relative to GDP…. That’s exactly what the Obama administration wants to do…. When that happens, the current structure will not be sustainable and the government will have to step in and reorganize the economy.”

Massive, growing government debt “is the tool the government is using to socialize the economy,” Berry stated. “It’s not a legacy we want to leave to our children. But it is a legacy with great implications for gold and silver.”

To protect themselves, Berry suggested investors “must eschew the dollar and every fiat currency you can think of,” own precious metals and consider other investments including water and infrastructure.

“I think you need to be looking at risk, thinking about risk, and those ten-baggers that will help you tread water as the U.S. moves towards an ultimate socialist state,” he concluded.

Following with good-natured overstatement was Rick Rule, chairman of Sprott Global Resource Investments. “There’s basically nothing I could say that would depress you more,” he quipped. But ever the contrarian, Rule added, “It defines me well that when everyone else seems to be depressed, I’m on my way to being elated.”

He predicted the junior bear market—the “nice, ugly bear market,” as he called it—has another 18 to 24 months to go. And for anyone who wants to make money, “it’s an extremely good thing.” It’s time to do some bargain-hunting, he maintained.

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