Tag: the gold report

Perched on the Knife's Edge with Jay Taylor

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The Gold Report: Jay, what investment themes are you focusing on in your newsletter?

Jay Taylor: I focus a lot on the huge credit deflation that the markets are demanding. Debt has become so large that it cannot be serviced with the amount of income available. The so-called solution requires the creation of more debt money. In a fiat currency system, money is debt.

At some point, total debt levels have to be wound down to levels akin to the normal levels of the past when total debt to GDP in the U.S. ranged between 175% and 225%. Following Lehman Brothers it grew to over 360%! These debt levels simply cannot be repaid from current income steams even with zero interest rates. Those debt levels are leading to tension in the banking system that bodes very well for gold because people are starting to lose confidence in the banking system and in the fiat monetary system itself. As long as credit deflation remains intact, it will be a very bullish environment for gold and gold mining stocks. Continue reading "Perched on the Knife's Edge with Jay Taylor" →

Look to Midtier and Small-Cap Gold Equities for Growth: Joe Foster

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The Gold Report: In the first decade of this century, the Van Eck International Investors Gold Fund gave its investors an annualized average return of about 25%. How has the fund performed since we last talked in August 2010?

Joe Foster: Gold stocks have had a tough time in the last couple of years and the fund was essentially flat during that period. The stocks have underperformed the gold price, which is up about 38%, and that is reflected in the fund performance.

TGR: How has the fund performed against the NYSE Arca Gold Miners Index (GDM), its benchmark index?

JF: Since our last interview in 2010 their performances have been similar, roughly flat.

TGR: How much does the fund have under management and how many positions does it hold?

JF: We have approximately $1.4 billion (B) in the International Investors Gold Fund and have 55 stocks in the fund.

TGR: As of May 2012, the Van Eck International Investors Gold Fund was allowed to invest in a wholly owned Cayman subsidiary, which lets it invest directly in commodities and commodity futures. How has that changed your investment strategy? Continue reading "Look to Midtier and Small-Cap Gold Equities for Growth: Joe Foster" →

Chris Ecclestone Picks Latin American Gold Plays

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The Gold Report: The Hallgarten website says, "Over the years, the team has successfully picked trends using our macroeconomic underpinnings to guide investors through the treacherous waters of the markets." Could you give us a couple of trends that retail investors could take advantage of?

Chris Ecclestone: The chief trend I see is a change in the nature of this gold market recovery. Production is going to be king. In 2009, cash was king after the economic crash. Now it's production. If a company doesn't have a preliminary economic assessment (PEA), it is going to wallow for a fair while. The main focus is going to be if these companies can become real miners or if they are just going to be forever out there with their project generator models.

"Production is going to be king."

There are a lot more companies on the "For Sale" side then there are companies out there to buy them. A lot of them are going to be left standing alone at the wall. The only companies that are going to get the attention of majors are those that are along the continuum between PEA and production. Continue reading "Chris Ecclestone Picks Latin American Gold Plays" →

Bob Moriarty's Stock Tales from the Crypt

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The Gold Report: Appropriately for this time of yearHalloween and the Day of the Deadgold's hold above $1,700/ounce (oz) seems to be reviving some junior mining stock prices that had been left for dead. What are some names with a heartbeat?

Bob Moriarty: NOVAGOLD (NG:TSX; NG:NYSE.MKT) has come back from the dead a couple of times. In 2001 or 2002, NOVAGOLD was the number one gaining stock on the Toronto Stock Exchange. It reached $20/share at one point. In 2008, it hit a low of $0.46/share; 18 months later it had bounced back to $17/share.

TGR: And today it trades at $5/share.

BM: The lesson here is to buy when stocks are cheap and sell when they get expensive. Too many investors in the junior mining space marry the damn stocks. They fail to sell and take their profit when they have the chance. If investors aren't willing to sell at a profit, the only alternative is that they sell at a loss.

"Too many investors in the junior mining space fail to sell and take their profit when they have the chance." Continue reading "Bob Moriarty's Stock Tales from the Crypt" →

Geologist Merrill McHenry Keeps His Eye on the Guerrero Gold Belt

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The Gold Report: Merrill, speaking as a geologist, what makes the Guerrero Gold Belt in Mexico so highly prospective for gold and silver mineralization?

Merrill McHenry: Two words: plate tectonics. Two tectonic events in that area of sufficient scale to create an entire region filled with gold mineralization.

In more detailed terms, the Chortis plate, which was about the size of Colorado, impacted the western side of southern Mexico. The first event, about 140 million years ago, created "laramide" north-south extensional faults. That was followed, about 70 million years later, by a strike-slip to the southeast. As the strike-slip slipped and subducted under the southern portionwhat is today Guerrero Stateit rotated many of those north-south transitional faults and shear zones into roughly 40-degree and other angles, creating a chimney effect, which brought the mineralization, in liquid form, much closer to the surface. In geological terms, this is called a metasomatic transfer. The strike-slip also created various low-angle extensional faulting allowing laterally displaced mineralization and improving strike-length potential. Continue reading "Geologist Merrill McHenry Keeps His Eye on the Guerrero Gold Belt" →