Don Durrett: Fear Trade Coming for Gold Right Around the Corner

• Palisades Gold Radio
  To subscribe to our newsletter and get notified of new shows, please visit http://palisadesradio.ca Tom welcomes back Don Durrett of GoldStockData. Don discusses how sentiment remains terrible in miners and the HUI continues to underperform. Investors seem to be waiting to confirm gold’s breakout. Silver needs to reach $28.50 to confirm a new move. When we reach that level silver could run into the thirties quickly and once gold is solidly above $2000 we will likely be off to the races for the miners. By June we’re going to have a good idea of where the economy is heading. If it doesn’t pick up and if inflation continues this will be very good for gold. Fear and uncertainty are the number one driver of gold and we see this increasing.
  –
  We saw this during 9/11 and again with the great recession of 2008. Everything has changed with MMT and now no one blinks at a trillion-dollar deficit. Wall Street still believes in the bull market and the ability of the Fed to act. They have yet to realize that everything is changing. The long-term fear trade will be back soon. Don believes inflation will be range-bound somewhere from 8 to 12 percent. The Fed is copying Japan’s 1990 period model and we’re not letting the excesses in the system be cleaned out. As a result, we have a lot of zombie corporations. The Fed is caught between a debt bubble that could pop and a desire to control inflation. They can’t do both. They aren’t raising rates because a recession could blow up the financial system. As a political gesture, they will briefly raise rates and then likely lower them back to near zero.
  –
  MMT requires regular injections of liquidity. All choices now are bad. All of these problems were manifesting well before the crisis in Ukraine. China, Russia, India are going to create some sort of commodity-based currency. Last week Biden said that the United States wants to help cryptocurrencies by encouraging investment and supporting their development. Don discusses the mining equities and why he prefers producers. The silver market is quite small so he has to limit his exposure to that sector. None of the miners are ‘safe’ so it’s important to keep allocations per miner small. Ukraine is going to be the catalyst and we could see a transition to a commodity-backed currency. We could see huge cash flow multiples come to major commodity equities. Valuations could head off the charts. Treasuries being liquidated by China could be the black swan as everyone else including Japan starts heading for the exits. Time Stamp References:
  –
  0:00 – Introduction
  0:39 – Miner Performance
  4:43 – Breakout Levels
  9:47 – Fear Trade & Physical
  18:05 – Inflation & Commodities
  23:40 – Inflation or Recession?
  31:53 – Technology & Markets
  37:38 – New Monetary System?
  41:09 – Bitcoin
  48:45 – Miners & Producers
  58:40 – Royalty Model Risks
  1:02:38 – Ukraine Thoughts
  1:06:20 – West Vs. East
  1:12:50 – Wrap Up
  –
  Talking Points From This Episode
  – Investors are looking for gold and silver to confirm their moves.
  – Fear and uncertainty are among the biggest drivers for gold.
  – Inflation will continue and how the Fed is cornered.
  – What happens should China, Russia, and India create some sort of commodity-backed currency.

end