The New President Is A Tiger That Hasn't Changed His Stripes When It Comes To Spending - He Was Great For Gold During His Last Term And Will Be Again During His Second Term
@rocksandstocks)
NOV 19, 2024
(https://open.substack.com/pub/rocksandstocks/p/the-new-president-is-a-tiger-that?utm_source=post&comments=true&utm_medium=web)
Immediately after Trump got elected, gold got hammered which indicates that the paper traders of gold feel Trump is not good for gold.
The key reason that gold has been in a powerful gold bull market is due to the Death Spiral of Debt that has caused BRICS nations central bankers and investors in China and India to load up on gold. A contributing factor is that the gold supply chain is broken with not enough important discoveries, too few new gold mines in development, and majors struggling to increase production and replace their old mines with new mines.
Need I remind folks that Trump had the record for debt creation in one term, only surpassed by Biden. It seems a pretty big stretch to believe that Trump will slash spending, sorry Elon, as he has already proved he loves creating debt at an insane pace. Tigers can’t change their stripes and in all likelihood he will beat Biden’s record in creating debt during one term.
__________________________________________________________________________
Spotlight On A Top Pick
This section of the written reports is for highlighting sponsors at Rocks And Stocks News and picks.
i-80 Gold (sponsor, see disclosure below) got punished when they came out with news that they were no longer negotiating with a potential partner for their base metals project and were putting the base metals projects on the back burner to focus on building five gold mines.
This game plan is the one their new CEO, Richard Young, has come up with to grow the company. He knows what he is doing as he built Teranga Gold from a small miner to a successful takeover at C$2.4 billion. He wants to have the company completely focused on building five gold mines in Nevada.
Another thing that spooked shareholders is that they talked about the need to fix the company’s balance sheet. They had a webinar to talk about why they need to fix the balance sheet and want to put the base metals discoveries on the back burner to focus on building gold mines.
During the webinar, Richard Young also mentioned that any one of their individual gold projects are worth more than the valuation after it got hammered. Since the stock got taken to the woodshed, he put his money where his mouth is and has been an aggressive buyer in the open market.
At the time of writing, insider reports indicate that Richard Young has bought a little over $1 million worth of stock in the past few days. When he first joined he had bought around the same amount in dollar terms at a much higher price.
Obviously, he did his due diligence and knew what the companies had for issues and assets when he stepped in as the new CEO. Since then, the stock got hammered after he presented his game plan, and he doubled up his cash investment by buying stock in the market. This is a pretty good sign he believes in his game plan and that he and his team can pull it off.
The five gold mines they are planning to build are big and high-grade. They had past resources of around 15 million ounces, and since then a lot of drilling has been completed that needs to be plugged into updated resource estimates.
Another gem of an asset is their autoclave. There are plenty of sulphide gold deposits in Nevada that need such a facility to process their material, there are only a few available. This one asset alone could be a wonderful engine for growth. To process their own sulphide gold deposits and to look at acquiring others.
Key developments I am watching are efforts to clean up their balance sheet, update their resources and do economic studies on the five gold mines they plan to build. I suspect that we will see plenty of news coming out over the next few months.
They are my top pick for a turnaround in gold stocks. Turnarounds are often a bumpy ride early in the process, but ultimately I think they have the right team and assets to pull it off. Plus, I’m very impressed with Richard Young’s success building Teranga, his purchases of stock in the open market and think he has a stronger asset base to build from than he did with Teranga.
____________________________________________________________________________
The new Spender-in-Chief is going to be just like the last one and the one before him. Which is none other than the guy that just got elected.
This all adds up to the Death Spiral of Debt getting much worse, because this time around the cost of servicing the debt has become very troublesome since Trump was last in office and he is without a doubt a massive spender.
The central bankers in the BRICS nations are selling their US debt and USD fiat currency to buy gold. While Chinese and Indians are the ultimate buy and holders of physical gold. Collectively, they have taken a lot of physical gold off the market.
Paper traders of gold have been having their fun and games since the election, but that won’t last long and the physical buyers will regain control of pricing gold.
All the best,
Allan Barry Laboucan
Disclosure
i-80 Gold is a sponsor of Rocks And Stocks News, content creation about them is for the benefit of the company. Sponsors also benefit readers and viewers of the reports as it makes content creation possible for no charge to the Rocks And Stocks News audience. Allan Barry Laboucan is an owner of the tradable warrants of i-80 Gold.
Rocks And Stocks News does not make buying or selling recommendations. The reports are for information purposes only. Sponsors pay a fee to Rocks And Stocks News for content creation. The business model of Rocks And Stocks News is to fund research and reporting on the sector, picks and sponsors through corporate sponsorship. We are thankful to sponsors for enabling commentary free of charge to readers and viewers of the reports. When reporting on sponsors it is on behalf of the sponsors discussed in the portion of the report mentioning the sponsor. Before making any investment decision it is important for you to speak with your financial advisors to consider your risk profile. It is also important to do your homework. To help in that process, Rocks And Stocks News means to be a gateway by doing reports and interviews of management of sponsors and picks. The reports and interviews should not be considered investment advice. Allan Barry Laboucan is the founder and owner of Rocks And Stocks News, he has worked in the mining sector since 1993 and has been reporting on the sector since 2005.