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.
Richard Daughty, who describes himself as "the angriest guy in economics,” is writer/publisher of The Mogambo Guru economic newsletter and a general partner and COO for Smith Consultant Group, serving the financial and medical communities. Prior to joining Smith, Daughty was a financial adviser to American Express Financial Advisers in Clearwater, Florida. He holds an MBA in operations research from the University of South Florida and is a strong advocate for sound fiscal and monetary policy. His comments appear frequently in such fine publications as GoldSeek.com, the Daily Reckoning and Barron’s.
John Embry joined SAM as Chief Investment Strategist in March 2003, with a focus on the Sprott Gold and Precious Minerals Fund. He plays an instrumental role in the corporate and investment policy of the firm. Mr. Embry, an industry expert in precious metals, has researched the gold sector for over thirty years and has accumulated industry experience as a portfolio management specialist since 1963.
After graduating from the University of Manitoba with a Bachelor of Commerce degree, John Embry began his investment career as a stock selection analyst and Portfolio Manager at Great West Life. He then became Vice President of Pension Investments for the entire firm. After 23 years with the company, John became partner with United Bond and Share, the investment counseling firm acquired by Royal Bank in 1987. John was named Vice-President, Equities and Portfolio Manager at RBC Global Investment Management, a $33 billion organization where he oversaw $5 billion in assets, including the flagship $2.9 billion Royal Canadian Equity Fund and the $250 million Royal Precious Metals Fund, the #1 ranked fund across the country for its 2002 net performance of 153%.
For more information about Sprott's award-winning investment professionals and their market insights, please visit us at www.sprott.com or contact us at email@example.com.
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