Casey Research Investing Summit – 2 solid days of incredible insight into the global economic challenges and opportunities facing us.
It was attended by many of the top economic and investment experts in the world, including people such as Rick Rule, (one of the brightest minds in the commodities space), Frank Holmes (CEO of U.S. Global Investors, one of the most successful money managers in the world), Peter Schiff (author of Crashproof and the guy who accurately predicted much of today’s fallout 2-3 years ago), Robert Friedland (President and founder of Ivanhoe Mines, one of the the leading authorities on the mining sector), Doug Casey of course, and about 2 dozen other leading authorities.
It was truly the brightest minds in the investing and economic arenas, all focused on gaining clarity on what has led to the greatest economic collapse since the Great Depression, where we’re going from here, and most importantly — how to profit from it.
Here’ a photo with Peter Schiff, author of 2 books I highly recommend – “Crashproof” (which Peter is currently revising and will re-publish as “Crashproof 2.0” later this year), and “The Little Book of Bull Moves in Bear Markets“. Peter has become a media sensation after having predicted much of the economic collapse and problems that we’re seeing now, several years ago.
I came home with 40+ pages of notes, and I will be drawing on some of this insight for several posts over the days and weeks to come.
However, I thought I’d summarize the key points made during the program, and some of the critical views on which many of the experts concurred:
The U.S. economy is in for a lot more of what we’ve already seen. Most at the conference believe that we are 50% (optimistically) through the problems. There are systemic risks that persist, and the risk levels are massive as we move forward, in almost all asset classes.
While the problem was created largely in the U.S., it has been exported to all areas of the world, touching all asset classes and sectors. We will see the effects of this last for many years, particularly in areas such as Europe, and of course in the U.S. Many speakers felt the U.S. economy would be sluggish for 5-7 years still, before seeing any significant signs of improvement.
Inflation is going to the problem of the near future, as the massive “stimulus” efforts the U.S. government undertakes will result in full-scale inflation raging. Last week, Ben Bernanke made it clear that they would do ANYTHING and EVERYTHING to avoid deflation. The problem is they’ll do so much today, once the signs of inflation really start to show, it will be too late to slow it down, and inflation will spiral up.
A key consequence will be a decline of the U.S. dollar. Every single speaker and panelist indicated that they fully believe the U.S. dollar WILL decline. The only debate was by how much — from as little as 20% to as much as 60-70% from where it is today. A clear indication was that investors need to diversify themselves out of the U.S. dollar, if that’s where most of their wealth is currently held.
Virtually every speaker indicated that they personally held gold and/or silver in their porfolio in some amount, and they were unanimous in suggesting that gold was an incredibly important component to be holding, as gold prices would likely go higher, from a low projection of the $1,200-1,300 range, to as high as $5,000 or $6,000 per ounce.
Most of the speakers said that we’re in a period of incredible opacity (ie: we can’t see where things are going), but we’re coming into a period where there will be opportunities that we will NEVER have the chance to take advantage of again in our lives.
Most of those who spoke or participated in panels felt the general stock market would suffer lossses for at least another 18-24 months, but there would be incredible bargains to pick up, if you knew what you were looking for and how to do your analysis.
Admittedly, my brain hurts after taking in about 20 hours of high level, brain-challenging economic information and data. But more than ever, I remain convinced that inflation is something that needs to be watched, and it’s absolutely critical to position yourself to take into account these things that I’ve been talking about for months now. The U.S. dollar has NOWHERE to go but down, and you MUST begin preparing for this to occur, because it will soon be too late. There were discussions about the U.S. government placing currency/asset controls on its citizens, essentially forbidding U.S. investors from moving assets and capital out of the country. There were some very dire concerns about the level of government interference and control being created, and the new law crushing the AIG bonuses last week was a key example of that. I mean, think about this for a minute .. if the U.S. government can push through a law in 4 days to punish people who got those bonuses, it shows that they can target and attack virtually any group that is out of favor. This should be of major concern to capitalists, because more and more, entrepreneurs and business owners are becoming targets. The spirit of the free market and capitalism was alive and well at this conference, and at the end of the conference, most speakers said that notwithstanding the problems remaining ahead, that the storm WILL pass, and behind it will be an incredible range of opportunities to build wealth very efficiently. So I would pass on to you that while there are serious problems that remain unsolved, and challenges that will continue to test many individuals and businesses, life WILL go on. You can’t put your head in the sand. Now, more than ever, is the time to EDUCATE AND PREPARE yourself for what lies ahead. It’s up to you whether you interpret the future as a PROBLEM or an OPPORTUNITY. But the rules have all changed, and you need to begin learning how the “new” world is going to work, and how you can create value and wealth in it.
Speaking of “rules”, excuse the pun but I also caught up with Rick Rule, who is one of the most respected authorities in the commodities world. Rick is the Chairman of Global Resource Investments Ltd., and his private funds returned a NET of 55% per year since 1998, and he’s been a go-to guy for commodities for many years.
I was able to speak with Rick about a number of things.
I asked him, “what’s the biggest challenge you face right now?”
His answer was that the state of denial is incredible, at ALL levels. Everyone is afraid to admit what’s really going on. No one wants to admit they’ve taken a loss, and a lot of the financial industry simply has not acknowledged or admitted how serious things really are.
I would completely agree with Rick, and it was fascinating for me to be able to share ideas and challenges with so many talented professionals like Rick.
I’m not ready to make an announcement yet, but I will tell you that I am working on having Rick Rule and Peter Schiff speak at future events that we are organizing.
I believe their messages MUST be heard by the individual investor. The media has distorted the reality of what’s going on so badly, hearing the truth from people who aren’t afraid to say it is probably the single most important thing that you need right now to be successful as an investor.
So stay tuned — I’ll provide more updates about the Casey Summit, and I hope to have some exciting announcements over the weeks to come!]]>
5 Responses
Hi Greg,
Can you please elaborate on how to “position yourself” as you mentioned in …
“But more than ever, I remain convinced that inflation is something that needs to be watched, and it’s absolutely critical to position yourself to take into account these things that I’ve been talking about for months now.”
Thank you kindly.
Consider your investment portfolio and remove from it anything that will not benefit or do well in an inflationary period. Bonds, for example. Think about things like gold, silver, other precious metals. Real estate in NON-US currency.
In an inflationary period, investments with fixed returns do not do as well as equity investments, all things being equal. However, you also don’t want to push all in with one strategy. You have to think through the various scenarios, and try to cover off the various contingencies, as I’ve demonstrated I do with my Contingency Matrix.
There is no simple answer to what someone should do, since everyone is in a different situation (geographically, financially, and otherwise) but the idea is to think through what effects inflation will have on various types of asset classes.
Now the big question is how does all of this affect us as Canadians…
If the USD falls then the question is against what currencies? Most importantly, how does it relate to the CAD. That relationship is key and I have yet to hear anyone do anything but close their eyes and throw a dart to guess what will happen here.
If the CAD follows the USD down then I will likely wish I was holding more gold and silver. If the CAD stays rises above the USD then silver and gold will likely have little importance except possibly for the period when Americans try to scoop it all up.
Any thoughts on this Greg and the consequences of a USD crash for Canadians? I have been trying to come up with some solid conclusions but it seems like a random event of the week changes my view.
The CAD will not follow the USD down. The USD will decline, measured against the CDN $.
The main reason is that the US is creating a massively inflationary environment, which will ultimately destroy the value of each US dollar. It will therefore take more US dollars to buy the same thing that it does today, INCLUDING a Canadian dollar.
While Canada will see some inflation as the result of its own modest stimulus efforts, it will pale in comparison to the US. Because gold/silver is measured in US $, you will see the price of gold/silver rise significantly.
From the perspective of our currency, a US$ crash will make us relatively wealthier, because our dollar will rise and be able to buy us more at the same price.
However, a US$ crash will cause Canadian goods to be more expensive. That will have a negative impact on our export sector as an example, and it will be more expensive for Amercians to travel to Canada.
I believe the damage from this export issue will be offset by the bull market we’ll see again in the commodities sector, which will drive the overall export market for Canada. As we saw last year, even oil at $147 did not dramatically impact the demand for oil.
The biggest question you need to answer is what you think is going to happen with commodities going forward. If you think $40 oil is the new reality, then Canada is likely going to face a lot of challenge.
If you believe that oil is unreasonably low and we’re going to see another commodities market run, Canada will quickly run out in front of most major developed nations in terms of its growth, GDP and market leadership.
You can probably guess which case I believe!
Hi Greg,
I’m almost finished reading Michael Maloney’s book “Guide to Investing in Gold and Silver” that you recommended a while ago and I’ve found it to be completely fascinating. However, in listening to you speak about your diversification in gold as well as that of the speakers from the Casey conference I’m not quite clear on what holding physical gold does for you even if it shoots up to $5000 an ounce besides being a valuable commodity unless you have a tremendous supply of it. What I mean is, if you have 10 ounces and you cash it in, you now have $50,000, but you don’t have any more gold. Is the purpose to use it as leverage for credit or to cash it in for money?