Gold will be explosive, unlike anything we’ve seen says Canada’s billionaire Frank Giustra

our next guest does not usually give many interviews and only speaks when he has a big message and now he's back saying we are headed towards another financial crisis and this time it will likely be much worse than 2008 he's a mining legend one of Canada's most successful people philanthropists and also happens to own the best olive oil on the planet Frank Giustra chairman of laya goals meaning studio Frank it's been way too long thank you so much for being with me here today nice to see you yeah who's the two years due here so that's why don't kid when I say you don't you don't speak often but when you do usually have a loud message I do and so I got this this hint from your one of your recent commentaries that I think you think something pretty pretty bad is lurking pretty Bad's gonna happen why do you think that we're headed into darker times than we saw in 2008 well because I think the world is in unchartered waters right now we're living in a in a world with a global debt bubble and anytime you get dead bubbles of this magnitude that are global that are fuelled by speculation something's going to happen and things are overvalued things are priced the pricing is not correct because you've had all of this quantitative easing or on world 25 trillion dollars in the last 10 15 years has been bought by central banks it's mispriced everything and it's fueled not only massive speculation but a debt bomb that's doubled since the last crisis I mean it's insanity so when people talk of a recession in 2020 is are those the timelines that you think you could see coming I think it's starting already and I think I think that the powers would be know that is coming global growth is slowing and there's you know we're overdue for a recession you can't stop recessions they happen this has been the longest running economic recovery in history since the crash and so you can see that global growth is slowing and you can see that the banks are central banks are starting to ease including the Fed in the US and it's and when it comes you have to ask yourself what might happen that will unravel some of this wild speculation so let's bring it home to Gold not because this is really you know the space where you made your name you know gold precious metals extremely well here how does gold play a role now well as you know I've been writing and speaking about this subject for almost twenty years now starting in 2001 when I started to write about it and what I predicted back then is has come to fruition and you know I started to see it with the feds behavior change starting the late late 90s early 2000s when greenspan was running the Fed and he was basically coming to the rescue at every financial crisis with with easy money and that just all that managed to do was encourage bad behavior and the beginning of moral hazard moral hazard in my opinion is like a gateway drug you know at first you think it's you know it's fine it's it's a you know it's a in small amounts it's okay but then it starts people start to get reckless and you've seen it so here's what I believe is happening I think we're in the third and final phase of the gold market the started in 2001 and this will be the most explosive phase for gold so in 2001 when gold was 250 an ounce you know it's when we when I first started writing about this when we created wheat and Reverend Gold Corp we could see the beginnings of the monetary policy change change in behavior monetary policy and that ramped up and created the financial crisis of 2008 and in 2008 I predicted that we wouldn't have a depression a lot of people were afraid we're going to go into a depression I said it's not gonna happen because we're gonna get all this printed money that's gonna create a floor on the system the economic system will pay the price later but gold is going to run and as you know starting in 2009 when I created the second gold mining company who endeavor gold began its run up until 2011 well this gold market just started the third phase and this is you know was really fueled by and I was waiting for the bell to ring and the bell rang when everybody started stopped raising rates which actually you could see that coming up you know last year they do know you could never normalize these rates I said it was impossible the Earthmen took never worked had you normalized rates to their normal five or six percent you would have imploded the whole system so I always predicted you would never they would only be able to raise rates to a point and then when he paused that rang the bell for me and when they started to drop rates I predict that this will be the beginning of the next really big run so so where were you this summer obviously this is one Gold broke out do you remember that moment when you started seeing it run up for you so what were you thinking were you thinking like aha I knew it well I knew it was you know I was thinking finally because I I was a couple years early and predicting it I started predicting this in 2016 that's why we created Leia gold was I was telling my partners you know what you're saying you know this is gonna let's do it again because I'm telling we're gonna get into they cannot maintain this facade that they're gonna normalize rates it's impossible it's absolutely possible so when it finally did happen I just said yeah well here we are and I'm not surprised so you know so when you say the word explosive let's talk about where you think gold could and I know you hate making forecasts I know before you say before you say that but what you know where could it go it's gonna blow through 1,900 and it's going a lot higher I just don't know what the number is and it's gonna depend on a lot of things it's gonna depend at the rate which the world countries around the world are going to compete to devalue their currencies which is the next phase of what after zero interest rates after the Fed is the last holdout and they're close to zero and they'll end up at zero before the recession is declared then they'll start QE QE is gonna start in Europe this fall the Fed will follow it's already been going on in Japan forever and then you're going to see competitive currency devaluations and possibly currency wars so do you agree with how the Fed is handling the is this the only I think they made their mistake I think they set the trap for themselves a long long time ago and I think it was an inescapable trap there's no you the arithmetic never worked and again after the 2008 crisis they talked about normalizing rates and unwinding the balance sheet and I said how are you going to do that I mean you will implode the economy which was we've seen very fragile anemic economic recovery this recovery has been subpar for the last 10 years past recoveries 5 to 7 percent growth rates we've been averaging to two and a half for the last ten years and it's only been a recovery because of all of that free money so I I just I don't see and out yet because of the way human behavior works I just think that we're gonna have to see a lot more pain eventually someday we're gonna have to restructure the global monetary system but that's not gonna happen yet you think everyone should own gold and our portfolio I think it would be reckless if you're an investor you would be reckless not to own some gold it's insurance and if you don't have some insurance in your portfolio you're crazy is it physical is the mining stocks is that both for you is that ETFs I think well listen I'm a professional so obviously I have a different risk profile than some other people might but the way I look at it I own the physical okay number one number two i bypassed the seniors because I don't see I find that there it's gonna be difficult for them to grow the major gold mining companies I might as well just on the physical for that part of the ride and then I like to own or create the intermediate producers which this is my third one layer gold and I'd like to own a lot of those a lot a lot of shares and those because that's where the growth is going to come from and you're going to get both the benefit of the rising gold price and a growing company with growing earnings and growing production then I like and this is where the risk profile changes for a lot of people and you know I can't make those recommendations but I like to own developers I like to choose hold shares and companies have a deposit that is economically feasible at some gold price and will in a rising gold price go into production and get acquired or you know built its own mining company so I own some of those and then very rarely I invest in exploration because it's you know it's exploration and it's it's a difficult game I mean I do I do I have one position but for me that's rare so do you think will finally start to see the money flowing back into the juniors there's so much talk of it oh it's all in cannabis now it's all in the Crypt those when's it coming back to mining it's it's like every cycle that I've seen since 1978 okay we will have to see a new high on gold but what it's we're not that far off the money will come we'll cut has to go back to 1900 I think yeah I think but I think the money flows will definitely come in and I think you're gonna see insanity in that space much like you've seen insanity in that space before because there's so much liquidity in the world and what is there only 80 gold producers any world I mean that's yeah and speaking about you mean you're so look you're all over and in the mining space right you mentioned a a gold you're also a huge stakeholder and in Sand Springs so and I've seen you watch shows people are pitching you constantly okay so how do you choose when you're gonna get involved what makes you think okay is it the people behind it is obviously that the fact that there's more all the gold there most of it is about people when I'm building whether it was gold Corp or endeavor or now lay a gold it's all about the people I mean without Telfer I talked all for int I doing this in 2001 I mean he was really the driving force of actually making it happen you know it was my idea and I kind of put all the people together we raised the money but it was his management skills that made that's such a success so quickly Neal would you're the same thing we did that endeavor he's a brilliant mining executive and building minds of making acquisitions structuring balance sheets so yeah so it's for that part of its people okay and then you go through your business plan you create your gold mining company so that's that's one approach to it otherwise it's an asset if you find sands purring I invested in in 2014 I think it was and I thought to myself gold is going to go back again it's not gonna set it 1,100 forever I've always believed that so I told my people find me something that is highly levered to the goal price that has great asset but it's out of the money right now and they came up with sensible so I want to dig a little deeper about how you would play this market you mentioned what you like and how you would be diversified but can you talk a little bit more about how you know you know is it really possible for someone to make substantial amounts of money right now in this mining sector yes but you have to be careful mining is risky especially junior mining especially exploration and it's it's a tough tough game you really I think all you can do in that business is is back management groups that have done it before that are honest that don't over promote that do it right and have done it right many times before that's the only and even there you're taking a risk because it's in a mother nature outside of mining you've been you've been busy you kind of took a step back from mining there for a while right you've it was quiet there was nothing going on so you were in you know philanthropy is a huge see eighty percent of my life a percent of your life this olive oil best alone in the world you're just involved in just lotuses so how do you choose you just do things you love or I'm curious so I'd like to always learn new things I mean I'm always trying I've had for careers different things you know I love movies I love television I love making olive oil I love you know cooking I love my music studio we create songs you know I love adventures and I get I do I do a lot of adventures with my friends where we do crazy stuff and you know life is about balance and so I've figured out I should have written about this in my blog the five secrets to a balanced life and I really believe those things saying you have to have balance cludes family includes adventure includes includes learning new things all the time includes giving to others and being passionate about what you do I love how you told me once you like doing things that make you feel alive because I think I asked just that Frank why are you jumping out of planes and then going on fighter jets and doing crazy stuff it really does keep you alive and I think there are two things that either keep you young or keep you learning new things so learning a new subject you knew nothing about or going on an adventure where you're scaring yourself a bit you're going oh I have to learn this you know whether it's jumping out of a plane at whatever height 30,000 feet or or climbing a mountain you have to learn something and you have to challenge yourself and it's scary it's you know so you have to scare yourself once in a while but now that Gold's been making such a huge comeback and offline time to work you're you're so I was gonna say is this as this become your new main focus not because you feel that there's a lot of room here yeah much to the delight of people that are working around me I'm you know because for a long time I think God there's you know there's nothing to be done you're just waiting I got the phone call you said you know I'm ready to come back on I said oh boy that means he thinks there's something big gonna happen here yeah and as I was saying to earlier you know if this is going to be an explosive gold market but and I know your viewers are all rooting for our gold price most of the merger here because they're invested in gold but if be careful what you wish for because if things play out the way that I predict they're gonna play out this is gonna be a very ugly world to live in and and I see gold as insurance I think you should own it in every portfolio it should be your insurance but I don't relish the world we're gonna be in with fight if gold goes to butt ugly in the sense that our money will be worthless ugly that will be in a recession people will be out of jobs what's ugly well what's ugly is that these things usually lead to either hyperinflation or to some sort of collapse and with those things comes geopolitical conflicts and you know social conflict you know massive unemployment lots of crazy if you just look at what I suggest people I don't want to be a debbie downer here and should because they don't know I'm here to talk about gold but I think a lot of people should dust off some history books and really look at what's happened in the past when this sort of thing takes place it's not it's not pretty would you still be in the crypto space now you know a crypto was interesting I just I and and again and I don't think it's going away but I would rather be in gold and I have this debate with crypto players and gold players all the time and you know and I've heard all the are Gold is physical you can't hack it it's not a pet rock - yeah it's a currency it's a curse yeah always has been and look at the way the central bank's are buying it it's a currency and you can't deny that the crypto world you know I'm always worried that in an environment where a crypto currency challenges a sovereign currency in any dangerous way I think they'll take them out and Frank I got to ask you about silver oh I'm gonna get a lot of emails saying why don't you ask him about silver well a silver will go for the ride and we'll tag along side of gold and at some point it will outperform gold as it always does it's more volatile than gold but it will track gold and you know if someday gold pulls back silver will pull back even more I've been watching this since 1978 when I got into this business and silver is a classic it just it will at some point outperform and what about US equities do you buy the the big stocks are you in absolutely not wow we're way overdue for a correction this if you think this market has almost doubled since the crash and it's up three hundred percent from pre crash highs lows I mean sorry that was from the crash lows of ten percent and doubled from the pre-crash highs it's only been fueled by massive amounts of free money the markets overextended I did you see that piece that Ray Dalio put out a lot of paradigm shifts he nailed it he nailed what's happened it's basically people the market behaves in a certain way for a long period of time things get popular people get overextended and then they get hurt and this has been a long long run and I think there are two things moral hazard is basically out of control on all this stuff because there are two things that people have been conditioned to believe by on dips so every time that there's a correction or a crash you buy because you will make money I remember this going back to 1987 when the market crashed you know the argument goes back to then that you know sure but the year later you know you could have made a lot of money and post 2008 crash same thing I hang in there because the market will rebound very shortly so we've been conditioned that always buy on dips are on Corrections and that the Fed will always come to the rescue and what people forget is that there were long periods bear markets the 1969 bear market lasted until 1982 13 years the 1929 bear market I mean so it lasted for almost a decade people forget that you can we I think we're overdue for a bear market and eighth you know a 30 percent correction in a recession in a bear market recession is a lay down ya know I'm thirty is easy I'm it could be a lot more and it can stay low for a very long time with very flat movement for many years or people are just not interested anymore interested to learn that you're not exposed to these I'm not I don't own a single share no I think we're in anyway it's overpriced it's overvalued and it's been running too long this is the longest-running bull market in history and it's fueled by cheap money there's no other reason there's no reason for that type of growth in the market well I guess people have this fear of missing out they're like I got to be in town I gotta be in square I'm gonna miss them that's what ray Daly's talking about people have become accustomed to a type of behavior because it's been going on so long and and in and they think it will never end and will go on forever and it's not this markets gonna have a correction we're gonna go into a recession something will happen and you're gonna have and there will be a time to buy the stock market absolutely but I wouldn't buy it now all right the Frank Giustra I always appreciate when you take the time because I know your time is limited so I appreciate you coming in New York and sitting down with me your favorite recipe to make with this award-winning olive oil it's a new oh thank you for asking I make this it's a great I she wrote an article if you go to Frank Giustra calm which is my blog I write about everything and I wrote an article about a pesto sauce made with the leaves from the Raby broccoli with roasted peppers using that olive oil to make the pesto Wow cooking show is coming though we just we don't do that we're gonna do that and I could vouch this is incredible olive oil thank you so much Frank my pleasure thank you for coming and thank you for watching we will have much more for you on koco.com so be sure to stay tuned - thank you [Music] [Applause] [Music]

Channel: Kitco NEWS

Views: 822,463

Keywords: gold, silver, finance, news, investing, investing news, finance news, financial news, economy, precious metals, gold price, silver price, gold price today, gold price 2019, gold price analysis, gold price prediction 2019, gold price forecast, frank giustra, precious metals investing, gold news, gold and silver, gold price prediction, economic collapse, federal reserve, kitco news, economic collapse 2019, recession, recession 2020, recession 2020 prediction, #gold, bitcoin, crypto

Id: BnTHFGS58iE

Length: 20min 47sec (1247 seconds)

Published: Tue Sep 03 2019