In this week’s “Resource Heads”, we’ll start with a market overview. I’ll give my opinion on the ethics behind “profiting” from war, and I’ll talk about what happened in the markets last week, and try to figure out why. Later, Patrick Karim will show me the only thing that moves the gold price, using the “Chart of the Week” segment, Dr. Quinton Hennigh will try to help me understand what mineral systems are, Menachem will tell me whether war is inflationary or deflationary, and at the end I will share a personal story about the hyperinflation that I lived through, and how that’s formed my opinion on holding physical precious metals.
What you need to know
- Russia invaded Ukraine. They’re now at a full-blown military war. I never expected this.
- Some Russian banks will be kicked out of SWIFT. Russia central bank still has access to SWIFT.
- Gold went up on the initial news of the invasion, but fell back quickly. Likely due to the sections not being bad enough.
- Profiting from an inevitable situation, taking geopolitics into account, and investing in the right assets at the right time is not wrong, in my opinion. Just don’t dance.
- The only thing that gold cares about is the inflation-adjusted purchasing power of the USD, according to Patrick Karim.
- Gold is a leading indicator. Don’t try to explain history by looking at the price of gold, use the price of gold to know what’s going to happen to inflation and the USD, says Patrick Karim.
- War is deflationary in the long-term, as it destroys the value of the collateral, it increases the interest rates as it decreases the ratings of the borrowers and makes it less attractive to borrow money, therefore creating less monetary inflation. However, some parts of the economy can experience inflation, due to the destruction of the supply chain disruption and destruction.
- Mineral systems are very important to understand. Dr. Hennigh made a lot of money for Eric Sprott in 2016, by studying a mineral system.
- Top 3 channels on YouTube, if you want to learn more about geology are: GeoHug, Ore Deposits Hub, and The Australian Institute of Geoscientists
- I like owning just a little bit of physical precious metals as insurance. My mom & dad fed my & my brother because they had some physical precious metals during the hyperinflation in Bulgaria, in 1996.
Timestamps:
00:35 Am I profiting from war?
04:40 Gold’s performance last week
08:15 What really moves gold?
13:30 Market performance last week
16:15 Is war inflanionary or deflationary?
29:30 What are mineral systems?
38:30 My approach to physical gold & silver
Please read this, and the full disclaimer over here, it really is important and for your own good:
This article should not be considered investment advice of any sort. No trading recommendations are being made in this article. Be diligent and do your own research before risking your capital. The investment decisions of the author are based on their own investor profile. This includes, but is not limited to, their risk profile, their cash balance and their debts. The author likely has a higher risk appetite than yourself. That’s why you may never assume anything on this website to be personally tailored to your situation. Resource Talks, nor the Author of this article are a registered advisory service and we do not give investment advice. Our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time.
Am I wrong? Is my beard ugly? Did I miss something? Great! We’re all here to learn. If you caught a mistake in this article, please start a conversation down below by correcting me and providing further literature for me and future readers to benefit from. Thank you.
