Friday, July 24, 2015

John Embry and Richard Daughty

July 24, 2015

Featured Guests
John Embry and Richard Daughty
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Summary:
  • John Embry, Chief Investment Strategist at Sprott Asset Management, returns to the program with his thoughts on the precious metals sector.
  • The duo caution investors from parking too many investment portfolio eggs in paper assets, stocks / bonds given the abrupt rout in the Shanghai index
  • Conversely, the pullback in the precious metals sector is presenting a golden opportunity to procure value via dollar cost averaging.
  • Given the current mega-discounted prices, gold and silver producers are trading at a fraction of the price of their underlying metals.
  • Our guest notes the Greek nation is bankrupt, but EU economic ministers are constrained from stringent practices, because an exit could damage credibility, sending the dominos falling among other debt laden peripheral members.
  • The guest and host concur that the onus of responsibility for debt repayment falls squarely on the shoulders of the lender.
  • Nevertheless, the easy money carrot is still dangling, as the potential profits are too enticing for some to resist.
  • A mini-case study of Greece vs. Iceland involves the 2008 credit crisis.
  • Iceland emerged in far better economic shape.
  • By managing lenders and focusing on the rights of individuals, unemployment and GDP, economic order quickly revived, relative to Greece, where officials chose to ignore the Icelandic success story (Figures 1.1. - 1.3.).
  • The Icelandic tale resembles a modern economic version of David vs. Goliath.
  • Richard Daughty, AKA "The Mogambo Guru," returns to the show with comments on the impending Fed rate hikes.
  • Officials have borrowed far beyond their means, putting their constituents on the line in similar fashion as every other defunct government in economic history.
  • Not once in recorded history has any society escaped the clutches of a fiat paper system without facing severe financial consequences.
  • With nearly half of investors wealth tied to the US stock market, officials have a vested interest in holding prices artificially high.
  • The lack of transparency is becoming intense, financial opaqueness is the new standard practice.
  • The Mogambo has not ruled out divine intervention, yet he's hesitant to stake the household nest egg on it.
  • The duo compare the financial mess to the fateful last voyage of the RMS Titanic
  • Overconfidence has resulted with too few life boats for over 300 million Americans.
  • Savvy investors have learned the lesson of history, by adding precious metals investments to their portfolios, no financial iceberg is large enough to breach the portfolio hull.
  • The portability of precious metals further enhances the life preserver-like qualities.

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Chris Waltzek:
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