Disruptive Discoveries Journal

quantitative easing

Mike Berry Interview with Jay Taylor on the Inflation/Deflation Debate

Chris BerryComment

Here is a link to an interview Mike just did with Jay Taylor. Jay pens the popular newsletter Jay Taylor's Gold & Technology Stocks and also runs a weekly radio show titled Turning Hard Times Into Good Times. You can find out more about him here

There is a lot of information packed in a short interview here and it is well worth your time. Topics include the direction for the Federal Reserve in the wake of the end of quantitative easing, economic metrics to watch,  the currency "race to the bottom", banks manipulating metals prices, gold and silver supply and demand, interest rate volatility, and just how long the current economic climate may last. 

On a more serious note, we'd like to say Happy Thanksgiving to our American readers and thank you to all our readers for your time. Give your family a hug and enjoy the next few days.

The Only Question That Matters In Mining Investment Today

Chris BerryComment

By Chris Berry (@cberry1)

For a PDF version of this note, please click here

 

This note will be shorter than usual as my travel schedule seems to have gotten the best of me. I recently returned from Costa Rica and am off to Europe tomorrow with Zimtu Capital to join them in Frankfurt (Nov 6th), Munich (Nov 8th), Zurich (Nov 10th), and Geneva (Nov 12th) as a keynote speaker on their annual bus tour. If you’d like to attend any of the presentations (numerous TSXV and CSX companies will be presenting as well) please let me know and I can get your name on the invite list.

 

The recent swoon in the metals markets likely has all of us questioning our faith and resolve. Personally, I see no reason why gold and silver, in particular, can’t go much lower and stay there indefinitely. Ultimately, supply and demand always equilibrate, but it can be painful waiting for this to happen. The perception of increasing economic strength in the US with a recent 3.5% GDP growth print plus continued US Dollar strength are outweighing the continued reports of gold and silver consumption in the Emerging World. 

2014 Q2 Economic and Energy Metals Review & Second Half Outlook – Part I

Chris Berry

By Chris Berry
 

  • During the second quarter of 2014, many share prices of energy metals companies struggled for direction after the dust settled from the Tesla (TSLA: NYSE) Gigafactory announcement.                                                     

  • Our theme of viewing the supply and demand dynamics of each energy metal individually continues to be the best course of action as the trajectories of each metal may differ. For example, lithium carbonate prices remained healthy while uranium prices fell by 8% in Q2 and are down 21% YTD.                                   

  • The recent precious metals price spike did not transfer over into the industrial or base metals sector.

  • Though economic data continues to improve selectively, there are still too many economic headwinds in place. Therefore only those resource investments that demonstrate the ability to produce at lowest-cost quartile costs or those that have a disruptive competitive advantage should be considered at this time.          

  • Despite nascent inflationary pressures, we are still inclined to believe that deflation (or disinflation) is the predominant threat to growth. The recent US Q1 GDP print of a 2.9% decline has many concerned that this was due to more than “the weather”.                   

  • We think that the second half of 2014 will be just as challenging as the first half for reasons we outline below.

 

Different Quarter, Different Catalysts

When Elon Musk announced plans to build a Gigafactory in the Western US (and has since discussed building multiple facilities), this sent select energy metals share prices into the stratosphere. Many believed this was the “turn.” The dust has since settled.....