Brien Lundin on the Star-Studded Lineup for the 2019 New Orleans Investment Conference & the Current Generational Buying Opportunity in the Junior Mining Sector

October 17, 2019

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is Mr. Brien Lundin. Brian is the publisher of the Gold Newsletter and host of my favorite conference, the New Orleans Investment Conference, which, Brien, I believe this year is from November the 1st through November the 4th. Is that accurate?

Brien Lundin: That's correct.

Gerardo Del Real: Well, I want to thank you for taking the time. I want to start by talking about the star-studded lineup. You always get the best of the best at the conference. This year though, there are some names that even me being within the industry I'm extremely excited to hear what they have to say.

Danielle DiMartino Booth is somebody who I follow and read almost on a daily basis, because I believe she really has her finger on the pulse when it comes to the Fed, what drives policy, and where it's going. You have Doug Casey this year, yourself, Mr. Brent Cook, Mr. Nick Hodge, Mr. Mickey Fulp, star-studded cast.

Tell us a bit about this year's conference and then let's get into why you picked the names that you picked this year, Brien.

Brien Lundin: Yeah, sure. This year I saw a lot of opportunities. Now we always, as you know, have a focus on geopolitics and economics, and then kind of drill down into the specific market sectors with a focus on precious metals and mining as well. So this year, we're covering geopolitics again.

We've got Stephen Moore of the Heritage Foundation, who was one of Trump's picks for the Federal Reserve Board before a great uprising that got him kind of forced to withdraw his nomination. We have Kevin D. Williamson, who is an extremely controversial columnist, conservative/libertarian columnist who I think will even make Doug Casey quake in his boots, as it were. So that's kind of our geopolitical end of it.

And as you mentioned, we have Danielle DiMartino Booth. We also have Grant Williams, who's a brilliant commentator on the global economic scene in the markets.

But one of the things I wanted to do – because I saw the opportunities not only in metals and mining but in certain areas of technology and cannabis and in other big markets – I tried to cover the bases. Of course, we've got all of the top experts in metals and mining. Again, we're known for that, and you reeled off a bunch of the names there.

I also have Simon Moores, who's probably the leading expert in strategic metals, energy metals, even rare earths and the like. I have Ross Gerber to talk to us about some of the technology plays out there. I have Sean Brodrick and of course your compadre, Nick Hodge, covering a bit about the cannabis market as well as the metals and mining. I have Matt Carr also from Oxford Club coming in to talk about the cannabis sector.

So we're really covering a lot of the bases here, a lot of the markets that I think offer particularly high speculative potential right now.

Gerardo Del Real: You know it's a star-studded lineup when we didn't even mentioned Peter Boockvar, Peter Schiff, and Rick Rule. Right?

Brien Lundin: Oh, you're right. I mean, it's just so many.

Gerardo Del Real: That's how incredible the lineup is this year.

Brien Lundin: Yep, yep.

Gerardo Del Real: Excellent. Brien, let's get right to it. The last time you and I spoke, right prior to last year's conference, we talked about the opportunity in the precious metal space. You were spot on in saying that 2019 was going to be a year where the precious metals broke out. We had a conversation back then and we spoke about the geopolitical situation in the US and around the world at the time, and you said that – if I recall – typically, you need more than that to see drivers in the precious metal space that would make the run sustainable.

I'm relatively new to this space, 11 or 12 years. In the 11 or 12 years that I've been in this space, I can't think of more geopolitical drivers, monetary fiscal drivers. It seems to me – and again, this isn't just US-centric, this is globally – that all the dominos are lined up for what I think is going to be an absolutely historic bull market in the gold space.

Despite that, everything about the way the juniors are trading, for the most part feels extremely bearish. Can we talk about the dichotomy there?

Brien Lundin: Absolutely. I have a bit of a controversial or not widely shared opinion in the markets. I totally discount the geopolitical end for gold. I think these geopolitical flashpoints are crises that come and go. There's no way you can trade on them. And there's really no logical reason to own gold, unless it's a geopolitical kind of thing where the United States is being invaded by a foreign power or something like that. There's no real argument for owning gold because something happens around the world in some very limited geographical area. So I tend to discount those.

Of course, with all that said, there are so many things going on right now and a general air of nervousness. I think President Trump tends to create an air of nervousness around the world that kind of encourages physical buying of gold.

With all of that said, I think it's an undercurrent and I think it helps. I don't think it's what's going to drive what you and I agree is going to be a multi-year bull market in the metals. Those metals being gold and silver, the monetary metals. What is driving that is the fact that these many years now of unprecedentedly easy monetary policy, near zero to negative interest rates, tremendous liquidity injections into the economies through quantitative easing has encouraged nothing in the way of solid economic growth, but really adrenaline-fueled growth, financial market asset bubbles, and most importantly tremendous debt creation.

Sovereign debts in particular now, around the world, and the US especially, have grown to the point where they absolutely demand some depreciation of the underlying currencies. They're too large to address in any other way. Moreover, these countries cannot afford to service those debts at anything approaching normalized interest rates. And in fact, any interest rate that's above the rate of their currency depreciation.

In other words, these interest rates in these countries cannot be higher than the rate of inflation. So what you have going forward in every of these developed economies, for as far as the eye can see, in this monetary regime, you will have negative real rates. As we know, that's tremendously bullish for metals, for gold and silver. So we're going to have this very powerful undercurrent of fundamental demand and fundamental drivers for higher metals prices for years and years to come. And we're right at the beginning.

Now, you brought up the dichotomy. Right now we have the junior mining stocks at relatively low levels, bargain-basement levels. The cheapest they've been compared to a lot of other financial financial assets. But it's a luxury right now. It's a window of opportunity. We know that we're in a bullish environment for the metals. We know that it's a major new bull market that's confirmed by fundamentals, by technicals. And yet, these junior shares are still at very attractive levels.

So they've been cheap before, but they haven't been cheap in this kind of underlying macro environment where you know that the metal are going to be supportive. So it's just a real window of opportunity. And I think investors just need to jump on it. I think it's a generational opportunity.

Gerardo Del Real: I absolutely agree with you, Brien. It's curious to me that last year when we spoke right around this time, the US, the Fed, the ECB, everybody was beginning their tapering program. And you and I both said it wasn't going to be sustainable because of math, right? Mathematics dictated that that just wasn't going to happen. Central banks weren't able to stimulate inflation the way they wanted to.

Deflation is really the fear of central banks around the world. And sure enough, here we are less than 12 months later, and not only are those tapering programs no longer in effect, but the opposite is true. We're back to cutting. We're in negative territory in a lot of countries. Thoughts on that?

Brien Lundin: Yeah. I had predicted back then – well actually, in early 2018, I predicted that the Fed would have to stop its program of rate hikes by the end of the year. And sure enough, they did. Then I said, once they started to hint that they were going to start cutting rates again, then gold would quickly add a couple of hundred dollars to its price. Well, as it turns out, since they began hinting at that in May, gold's added about $250 to its price. So that's worked out.

Now, what I think is really going to fuel gold is when the Fed reverts to and resorts to quantitative easing, full-fledged quantitative easing, once again. That I think is going to be what's going to propel gold to levels higher than the the past nominal highs of around $1,900.

Now, as we know, last week Fed Chairman Powell actually announced a return to quantitative easing. He couched that in terms, or with a warning that, "Don't call this quantitative easing." But one of the things I looked at and published just yesterday was, look back at Bernanke's speech in January of 2009 when he said the very same thing.

Gerardo Del Real: I recall.

Brien Lundin: "This is not quantitative easing." And that of course was QE1, and that was the firing gun on the Fed's rapid addition of $4 trillion in assets. Now, it's just history repeating itself.

The Fed is beginning to buy treasury securities, treasury bills at a rate of $60 billion a month, which roughly equates the rate of of asset additions in QE1. So it started again. And as we know, the addict is going to need an ever greater dose to get the same high.

So this quantitative easing, this next round is going to have to exceed anything that happened before. They're going to have to break new records. And I think new records are going to be broken for the gold price and the silver price along the way.

Gerardo Del Real: Brien, I want to thank you for coming on. I also want to thank you again, just as a fan frankly, of the conference and the lineup this year. I absolutely can't wait to get out there and hear what the Peters, the Danielles, the Dougs, the Brien Lundins, the Rick Rules, and everybody have to say about the market we're entering, because I think you phrased it perfectly in saying that this is a generational opportunity in the juniors. I really believe that a large part of how much money you make in this space is how you buy. And man, things are cheap out there.

Brien Lundin: I couldn't agree more, Gerardo. Really looking forward to catching up with you in a couple of weeks. And I hope your listeners will come on down to New Orleans. It's going to be a lot of fun and very rewarding.

Gerardo Del Real: We'll make sure to put a link up. Thanks again, Brien.

Brien Lundin: Thank you

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