It Looks Normal But It Ain't
Source: Rudi Fronk and Jim Anthony for Streetwise Reports 05/27/2019
Rudi Fronk and Jim Anthony, cofounders of Seabridge Gold, explain why they believe current economic trends favor gold.
Buy equities and sell gold because the economy is strong and the Fed is supportive? Really?
We think you should not be fooled by the reigning narrative. Consider the following:
- In 2018, U.S. real GDP growth was the best in years. Nominal GDP rose more than 5% while the national debt grew by more than $1.2 trillion, about 6% of nominal GDP. Government spending counts in calculating GDP. So, if the national debt had not risen, economic growth in 2018 would have been negative. Strip out the annual deficit, which is borrowed, and the U.S. economy is actually shrinking.
Will the Fed cut rates aggressively and reintroduce QE if the U.S. economy moves towards recession? Sure thing. Will it work? Probably not, in our view. Debt levels are already too high. Will this monetary stimulus help the stock market? Probably not. Aggressive Fed policy did not prevent the crashes of 2000/1 or 2008. And this time around, we know two things we did not know back then: Fed stimulus doesn’t work and it can’t be taken back. We can’t imagine a more favorable environment for gold.
This article is the collaboration of Rudi Fronk and Jim Anthony, cofounders of Seabridge Gold, and reflects the thinking that has helped make them successful gold investors. Rudi is the current Chairman and CEO of Seabridge and Jim is one of its largest shareholders. Disclaimer: The authors are not registered or accredited as investment advisors. Information contained herein has been obtained from sources believed reliable but is not necessarily complete and accuracy is not guaranteed. Any securities mentioned on this site are not to be construed as investment or trading recommendations specifically for you. You must consult your own advisor for investment or trading advice. This article is for informational purposes only.
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Disclosures:
1) Statements and opinions expressed are the opinions of Rudi Fronk and Jim Anthony and not of Streetwise Reports or its officers. The authors are wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the content preparation. The authors were not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the authors to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
2) Rudi Fronk and Jim Anthony: we, or members of our immediate household or family, own shares of the following companies mentioned in this article: Seabridge Gold. We personally are, or members of our immediate household or family are, paid by the following companies mentioned in this article: Seabridge Gold.
3) Seabridge Gold is a billboard sponsor of Streetwise Reports. Click here for important disclosures about sponsor fees.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Source: https://www.streetwisereports.com/article/2019/05/27/it-looks-normal-but-it-aint.html
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