BOCA RATON, FLORIDA – Some 600 affluent investors and commodities backers got booster shots for their longstanding support of gold, silver, agriculture and non-USA currencies.
“Four or five years from now, and I’m not forecasting here, we could be standing on $4,000, $5,000 gold,” said Steve H. Hanke, an economics professor and commodities trader from John Hopkins University.
Dr. Hanke’s 55-minute delivery at Doug Casey’s Research Summit riveted a sold-out audience. Organizers at Casey Research allowed Dr. Hanke to exceed his allotted time, a gift that rarely happens in these expensive and tightly-formatted gatherings.
The professor’s flow-chart analysis of a declining dollar and a rising U.S. misery index started with an accounting lesson in central bank balance sheets. Dr. Hanke led his audience of commodities stalwarts through the dollar-carry trade — “sell dollar, buy rupee” – and across the floating-rate currency exchange system.
“You understand that at least half of all commodities moves since 2002 have come because of the weak dollar, 50 to 60 percent,” he said.
Those who have puzzled why in these past seven weeks metals and energy prices are surging in dollar price whilst asset-linked equities are declining got an answer: “Always trade the thing that gets the bulls-eye. The dollar. Gold. Trade gold, not gold mines,” he said.
Dr. Hanke said he was short the U.S. dollar vs. 24 currencies, including the dollar index. He also advised getting into inflation-tipped securities and anything that rises with U.S. Treasury Bond yields, like the exchange-traded fund known as the TBT (NYSE: TBT, Stock Forum).
A handful of currencies during the final week of April marked fresh or 10-year highs against the U.S. dollar, including those of Australia, China, New Zealand, Singapore and Switzerland. Canada and another clutch of nations are within 10 percent of new high points.
The miners had their moments.
Mr. Casey, an author and the chairman of his newsletter and conference service, said in a spirited address that he expects sharp gains in coming months and years for miners, prospectors and emerging markets real estate. Mr. Casey’s interests include parts of Africa and South America, where he spends most of his time developing a resort and expatriate community in northern Argentina.
The Aden sisters, Pamela and Mary Anne, asserted gold is “not a bubble.” The Costa Rica ex-pats said they expect the metal to reach at least its real-dollar 1980 mark, calculated at $2,300 an ounce. They pointed to the UDN (UDN) exchange-traded fund, which rises as the U.S. dollar declines.
As for agriculture, Steve Yuzpe of Sprott Resource Corp. (SCP) in Toronto said the holding company’s 60 percent-owned One Earth Farms is on track to own one million acres of Canada land by 2015. Another Sprott Resource-backed company, One Earth Oil & Gas, looks to control 100,000 acres of exploratory properties via negotiations with First Nations tribes across Canada.
For my money, three or four of the exhibiting companies were stand-outs. Chairman Yale Simpson of Extorre Gold Mines (XG and TSX: T.XG, Stock Forum) made a strong case for additional gains in what have been spectacular grades at its Cerro Moro vein field in southern Argentina. Its Zoe vein looked wide enough at 4.8 meters of 64-grams-per-metric-ton of gold and 7,500 grams silver to send Extorre shares soaring in U.S. and Canada markets.
“Keep an eye on our news,” Mr. Simpson said about the company. The stock has made Extorre a $1 billion company (fully diluted) in some 14 months.
The show also recognized Mexico primary silver producer First Majestic (TSX: T.FR, Stock Forum) as the latest of Casey Research service's “10-baggers,” or 1,000 percent stock gainers. Others among many have included UEC, R and RES.
Finally, long-time Yukon explorer Ron Netolitzky, after selling Brett Resources and its Ontario portfolio to Osisko Mining (TSX: T.OSK, Stock Forum), is still at it. He told California resources banker Arthur “Rick” Rule, “The Carlin Trend look-a-likes have everyone hopping (up there). Berry Creek has a lot of similarities.”
Mr. Netolitzky said prospectors in Yukon face severe cold, permafrost and remote locations. But they have “large areas that were never glaciated. If you get a soil sample and it grades good, the source is nearby. … You need intrusives in the district. You need a heat pump. We need higher grades because it is so remote.”
Mr. Netolitzky is active with a platinum group metals prospector in Mexico, Skeena Resources, and a uranium prospector in the U.S. and Athabasca Basin, Virginia Energy (TSX: V.VAE, Stock Forum).
SKED: I will be seeing Sandspring Resources (TSX: V.SSP, Stock Forum) and its Toroparu property in British Guyana for a second time THIS week. It is a copper-gold project. I do not own SSP shares. I am headed to New York City and then West Africa in one week’s time.
Coming: Join Stockhouse in early May as we size up how record-high gold prices and new technologies are re-invigorating fabled North American camps in Nevada, Yukon, Red Lake and more.
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