-- Published: Sunday, 1 November 2015 | Print | Disqus
Summary:
Chris welcomes back, Charles Hughes Smith, from the Of Two Minds blog.
The discussion includes the excessive risk posed to Americans from overpriced / overvalued housing.
Given that a house represents the chief source of upward mobility, and legacy to posterity, if another real estate crisis were to ensue, the financial repercussions would be far-reaching and intense.
In the last housing bubble Freddie Mac / Fannie Mae shouldered their responsibility for most of the easy loans.
However, the subsequent echo bubble is a direct result of easy FHA mortgages - over 90% of US loans are currently backed by US GSEs.
Risk is a favorite topic of our guest who notes the financial challenges facing the middle class today are far different than recent decades.
Tthe Too Big To Fail concept is reaching unsustainable levels, ubiquitous throughout the culture, luring entire generations into a false sense of security.
Charles Hughes Smith praises entrepreneurs, facing extinction in the US following the recent economic recovery period, according to St. Louis Fed metrics (Figure 1.1.).
Chris welcomes back Bill Murphy from GATA.org who is in New Orleans with Chris Powell at an Investment Conference, amid a stealth precious metals rally.
Our guest is convinced that the a big opportunity for oversized profits exists in the silver coin market, due to supply constraints.
He's monitoring resistance levels in silver bullion at $18.50 for signs of a new uptrend.
Once that level is surpassed, the host concurs that a new bull market could erupt with little warning.
Fundamentals and technicals may be irrelevant, if the PTB exhaust their supply of bullion to suppress the price.
Not only does the PBoC have a nearly insatiable appetite for gold, but the stockpile is virtually empty, when compared to the US / EU.
Gold demand will remain robust for years as China's policymakers increase the national hoard to offset the currency-turmoil threat.
On the heels of a multi-week PMs sector rally, John Embry, Chief Investment Strategist at Sprott Asset Management, returns to the program.
His work indicates much higher levels ahead for the sector, once the underlying bullion regains its footing.
Our guest doubts the Fed or their central banking colleagues will raise rates for years to come, to the delight of gold aficionados.
Monetary policymakers are constrained by staggering global debt levels - leading US money center banks hold over $200 trillion in notional derivatives - financial weapons of mass destruction (F-WMD).
As a result, even the hint of higher nominal rates could trigger a worldwide debt implosion of epic magnitude.
The issue appears to stem from a failure by officials to recognize the global scope of inflation.
According to the School of Austrian Economics, once national debt reaches critical mass, officials must either stop the printing presses or hyperinflation on a worldwide scale is imminent.
The host firmly agrees with John Embry and his business partner Eric Sprott who insist that silver represents the most undervalued asset class.
Their analysis suggests a 10 fold increase in silver is likely, which could represent a low-ball estimate if the global economy unravels.
Lower silver supply could add to already explosive demand, resulting in a massive shortage.
The end result could be a price surge of Herculean proportions.
The duo concur - the ideal investing mindset requires a paradigm shift, from capital appreciation, to wealth preservation.
Charles Hugh Smith pens the Of Two Minds blog that involves a wide range of interesting issues including investing and finance. Of Two Minds has a wide audience of over 200,000 individual hits per month. He is also a contributor to the Daily Finance and has written eight books.
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 invest@sprott.com.
Bill Murphy, GATA Chairman Murphy grew up in Glen Ridge, N.J., and graduated from the School of Hotel Administration at Cornell University in 1968. In his senior year he broke all the Ivy League single-year pass-receving records. He then became a starting wide receiver for the Boston Patriots of the American Football League. He went on to work for various Wall Street brokerage firms and specialized in commodity futures. He began as a Merrill Lynch trainee and went on to Shearson Hayden Stone and Drexel Burnham. From there he became affiliated with introducing brokers and eventually started his own brokerage on 5th Avenue in New York. He now operates an Internet site for financial commentary, www.lemetropolecafe.com.
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Charles Hugh Smith pens the Of Two Minds blog that involves a wide range of interesting issues including investing and finance. Of Two Minds has a wide audience of over 200,000 individual hits per month. He is also a contributor to the Daily Finance and has written eight books. 
