Wisdom from Vancouver Conference – Jan. 22-23, 2012
Approximately 10,000 attendee’s witnessed the best mind’s on monetary and economic issues!
After attending one of my favorite money conferences, I would like to summarize some of the views which seemed most relevant and which made an impact upon me as an attendee. The following speakers seemed most impressive and knowledgable on the issues that they presented:
1. Danielle Park, www.jugglingdynamite.com: This lady seemed exceptionally knowledgeable and current on all the financial issues and current trends. Danielle’s viewpoint can be summarized as follows: She see’s no inflationary pressures evident in the world economy and, therefore, she is bearish on commodities and most stocks. She stated that the next downturn could be significant. The velocity of money flows suggests that money is not going into growth but is sitting in holding patterns in banks and corporations. Practically all Hedge Funds lost money in 2011. The world markets are highly leveraged again and this is a dangerous signal. The secular bear market will continue for another 5-7 years. CASH is king and the worship of cash will continue for some time. Danielle is not interested in investing in either silver or gold. She likes CASH and preservation of one’s purchasing power in these markets. Comment: this lady was one of the best at the conference. Her weakness, in my view, is that she seems unaware of our collapsing ‘fiat’ currencies…and the real role of gold and silver when ‘fiat’ currencies are collapsing all around us. Presumably, she thinks that our ‘dollar’ is a thing of value and can be salvaged from extinction. I would disagree on this viewpoint.
2. Gordon Chang, www.gordonchang.com: Gordon thinks that China is faltering badly. Factories are closing, electricity consumption is declining, workers are protesting, container ships indicate downturn, and $ reserves are now starting to decline. The past 35 years of uninterrupted growth is now over…and the wheels are coming off this engine of growth. Going forward, urbanization will slow down and this will affect growth to the negative. Currently, there are many ‘ghost’ cities that have sprung up with no occupancy. Real estate values are starting their decline. Total debt to GDP is now over 800%. China’s leaders will attempt to ‘kick the can down the road’ for the time being. Comment: Mr. Chang was quite impressive with his knowledge and understanding of the issues. His counterpart was Frank Holmes, www.usfunds.com. Frank viewed the situation in China as positive with growth continuing. Personally, I did not find his presentation as convincing as that of Gordon Chang. Each of you will need to decide for yourself which view is most realistic.
3. James Turk, www.goldmoney.com: Mr. Turk is the foremost expert on the history of money and the role of gold in our economy. James thinks that hyper-inflation is coming down the road. This leads him to forecast an eventual price for gold of $8000 or more. He sees mining companies as a good option now…as costs are down relative to revenues which can be realized (given the price of gold at $1600 and growing). A Bull Market on most mining stocks in 2012 will create great profit opportunities. Silver could likely outperform gold in 2012 as the historical silver/gold ratio is 16:1 and this ratio is currently out-of-line at its current ratio of 50:1. This ratio is likely to be closer to 30:1 by the end of 2012. Gold is money as it was chosen by the people some 5000 years ago as money. Comment: James has a great understanding of money and precious metals history. His view that hyper-inflation is coming down the road is unlikely, however. What is now happening is deflation and value destruction on a massive scale worldwide. This deleveraging and value destruction can not be reversed given that investors and consumers are not borrowing as in prior periods. Massive credit expansion creates hyper-inflation and this is not occurring given our digital money markets today. You can bring a horse to water but you can not make the horse drink. Without new borrowing and credit expansion, deflation and value destruction will happen…its a ‘snowball from hell’ once it gets moving! What we are likely to see in the future are more bankruptcies, foreclosures, and insolvencies on a growing scale. This trend is unlikely to lead to hyper-inflation as Mr. Turk assumes!
4. Jay Taylor, www.jaytaylormedia.com: Mr. Taylor is an Austrian economist and investment advisor. Jay is very knowledgeable on the history of banking, the Fed, and general economic issues. Jay thinks that the Fed was created to help the ruling elite control the money markets and future political trends. Jay now thinks that the Fed and the 2900 banks under the direction of the Fed have created DEBT that can not be repaid. He stated that Bernanke has recently created $2 trillion just to bail-out the European banks…and this process is likely to continue until the system collapses. Jay envisions a major credit contraction coming with DEFLATION as a consequence. He concludes that the Bretton Woods System created after WWII is now totally broken. He does not think that the European debt and deficit situation can be solved. All these events, he thinks, is positive for gold and gold shares. His top gold pick for 2012 is a company called Sandstorm Gold. Comment: Jay Taylor was one of the most informed economists at the conference and his judgment does not differ much from mine. My view is that a Deflationary/Depression is coming and this will be evident before 2012 ends.
In conclusion, the Vancouver Resource Conference, www.CambridgeHouse.com, was excellent and very informative. Personally, I would suggest that our economic situation is dire going forward. The problem is our digital money unit, debt, deficits, foreclosures, bankruptcies, insolvencies, centralized monetary creation by our Fed and other Central Banks, and an economic model (Keynesianism) which is broken. Going forward, we need to be thinking about a new economic MODEL/SYSTEM which promotes individual freedom and choice over CENTRALIZED administration. This reality, however, is unlikely until our current non-System totally collapses. At that point, the people will desire meaningful CHANGE. As of today, the best that can be expected is MORE OF THE SAME.
Stay current by keeping this website as one of your favorites: http://kingdomecon.wordpress.com. Enjoy
P.S. Ben Bernanke’s news conference today, 01/25/12, suggests that everyone should give gold and silver a new ‘look’ for the coming months. Ben appears ready to create more QE $ later this year as conditions worsen. This policy, however, will not create any hyper-inflation…but it will be good for those invested in gold and silver. Ben seems totally unaware of what is happening in the greater marketplace and if he is deceived about these markets, then most must also be deceived. Ask Ben this question: Where does he get his QE $ from? What is ‘thin air’, Ben?
