It’s day two at the Sprott-Stansberry Natural Resource Symposium in Vancouver, Canada.
And if you thought day one sounded good, day two was a cracker!
Doug Casey, in particular, was in fine fashion.
If you haven’t heard of him, he’s the Founder and Chairman of Casey Research — a globally recognised investment institution. Casey is libertarian and an anarcho-capitalist. And he’s well known for never not having an opinion.
And he lived up to his reputation. While I was hanging onto every one of his words, I was thinking: when is he going to have something positive to say!
‘Mining is a 19th century business’
Doug started off with a line that sent shivers throughout the room: ‘Mining’s worse today than it’s ever been before. And it has no future.’
Not very comforting if you’re a resource investor!
But then again, could he be right?
I mean, mining has been around since before the days of the Roman Empire. Back in those days, the Romans dug up gold, yielding an average of one gram per tonne they mined. Now, you’re mining it for one tenth of a gram. So Doug’s right when he says that ‘most of the high-grade, low-surface deposits are gone.’
And yes, gone forever.
Just look back 100 years…
The days of the gold rush seem like a fairy tale. No longer can you go down to the local creek and pan gold. You can’t even head to Bendigo or Kalgoorlie, start digging and load up the truck.
Now, complex technology is a must in the exploration business.
This means that studying geology, geophysics and geochemistry is mandatory. And even then, after spending millions of shareholder dollars, there’s not guarantee in finding a massive, high grade mineral deposit. After all, it’s just analysis at the end of the day.
So what good is there in mining?
To be honest, Doug couldn’t say much.
To start with, before you make any money from the mine, millions of dollars are spent on environmental studies — studies which often take years to complete.
This isn’t all.
While the environmental battle is on, the local communities start wanting a slice of the pie. And, of course, of your time and money.
Then, once you’ve analysed the rock formation, you’ve got to drill it. And if you’re lucky — I mean, really lucky — you’ll intercept something rich and thick. But then there’s millions more to be spent in proving up the deposit.
And if you finally do get around to mining the thing, government shows up again for their slice of the pie. Indeed, seeing the mine as an ‘entitlement fund’, government demands its fair share in royalties (if it doesn’t make money) and taxes (if it does make money).
So, yes, mining is not a sexy business.
But if you like boring…
Doug Casey says there’s one opportunity
Doug, like myself, believes that we’re in a massive bond bubble. For over 12 months, I’ve been warning you about the coming sovereign debt crisis in 2016/17. If you’re wondering, this is the event that should see gold go through the roof.
And if you question what will pop the bubble…
Think interest rates.
US interest rates have been falling for 30 years. This has fuelled the debt cycle to Armageddon levels. And it’s nearly ready to pop. Indeed, the first interest rate hike should come in September/ October. And a second rate rise is likely in December.
These events will trigger the end of the 30-year bond bull market. So while the stock market won’t crash this time, we’re not looking at a pretty situation.
In Doug’s words, ‘The next financial crisis will squeeze the standard of living, sending the world into a Great Depression worse than the 1930s. This is why gold stocks, which are trading at crappy prices, will explode in the years ahead, thanks to fear and greed.’
No argument here. In fact, this is the exact financial crisis that I’ve been preparing Resource Speculator readers for since last year.
I’m helping my readers take advantage of the resources bear market. The lower it goes, the more opportunities exist.
And I believe that we’re yet to see the final phase of the resources bear market. This means commodities have significantly further to crash, including gold, which I’ve long said will fall to US$931 per ounce.
That will offer a great buying opportunity to pick up the best gold stocks on the market.
If you believe that the sovereign debt crisis is coming, and you want to know how to survive and prosper immensely, resources are the place you’ll want to look in 2016/17.
Click here for more details.
Resources Analyst, Resource Speculator
Ed Note: This article was first published in Money Morning