I am not typically fond of conferences, but the Cambridge House Phoenix Resource Investment Conference and Silver Summit was packed with the industry’s top analysts, thinkers and newsletter writers. It also showcased several promising junior miners and was well-attended by gold bugs from across the spectrum. Speakers included Peter Grandich, Jason Hommel, Bill Murphy, Thom Calandra, Ted Butler, Greg McCoach, Jay Taylor, Roger Wiegand, David Morgan and Al Korelin.
Here are some of my key takeaways from the conference:
1) Most of the speakers were expecting the general market to rally and gold to correct in the short-term. This is expected to last anywhere from a few weeks to two months, with an expectation that the market downtrend will accelerate around the April-May timeframe, due to a second round of foreclosures, credit card and auto loan issues and CDS risk, which is estimated at $500-$750 TRILLION. Gold stocks could be dragged down during this time frame as investors move to cash and throw out the proverbial baby with the bath water. Stay clear of REITs as real estate has much further to fall.
2) The dollar rally could continue throughout 2009, but precious metals have decoupled and can rally along with the dollar. Deflation will quickly turn into hyperinflation without much warning and this is expected to occur sometime in early 2010.
3) The Obama stimulus package will only exasperate the problem as it is utilizing the same tactics that got us into this mess in an attempt to solve it. It will not work and while it may delay the pain, it will only make the end result more severe. The U.S. government and Fed are incapable of pulling us out of this mess. Either Citigroup or Bank of America will be nationalized before the end of the year. Stay clear of financial stocks.
4) The economic crisis is global with European banks in even worse condition than U.S. banks. The current recession will turn into a depression with the potential to be much worse than The Great Depression of 1929.
5) Silver will outperform gold significantly during the next upleg, as the gold/silver ratio is far too high and above historic norms. There is less investment-grade silver above ground than gold. With such a small silver market, the Barclay’s ETF continuing to increase their holdings at such a fast pace and signs of shortages in several forms of silver, we could see the price go ballistic if only a small fraction of investment dollars enter the silver market.
6) Get out of debt as soon as possible and make sure to hold 10-30% of your wealth in physical gold and silver bullion. Store it in a safe that is cemented/bolted into the ground and hidden. Do not trust ETFs, certificates or bank safety deposit boxes.
7) The bond market is the next big bubble to pop and investors can profit from this by owning UltraShort 20+ Year Treasury ProShares (TBT).
8) To prepare for the upcoming depression: Get a food storage, have a safe haven place to go in case of trouble, be able to protect yourself and family, learn to garden and build closer local communities, help to educate and prepare others and of course, own physical gold and silver.
I have been writing about many of these very ideas for some time now, but there were also plenty of new concepts and angles presented over the weekend. Unfortunately, the outlook is not very bright for the U.S. or global economy and it looks like we are headed for very difficult times. My goal is to understand the scope, potential and proximity of these events and then determine the best ways to protect capital and profit going forward. I am by no means a doom and gloomer, but I believe it is prudent to hope for the best and prepare for the worst.
I met with the presidents of several junior mining companies and discussed their plans, properties, financing situation, production forecasts and expectations in the near term. I also met many of the speakers, analysts and newsletter writers and had discussions about recent developments with junior miners and the companies they believed had the most upside potential going forward. We discussed companies that have just made huge discoveries and others that are about to move into production for the first time. I am in the process of researching these companies and will summarize my findings and make recommendations to premium subscribers in the March 1st edition of our newsletter, Road Less Traveled.
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