There are few people as knowledgeable about global commodities markets, fundamentals, cycles and the effects of investor sentiment on price movements as Jim Gowans. He is the former Co-President of mega-mining company Barrick Gold, the former President of De Beers Canada, and currently serves as the President and Chief Executive Officer of mineral exploration firm Arizona Mining.
In a recent interview with SGT Report Gowans warns that economic and monetary fundamentals suggest we have some deep rooted problems with no resolution in sight. Having personally witnessed the effects of Zimbabwe’s hyperinflation , Gowans notes that when currencies around the world finally collapse from the weight of unlimited quantitative easing, paper money as we know it today will no longer be a viable mechanism for trade. When that inevitable day comes for the U.S. dollar, the general populace will have no choice but to replace it with “in-kind” commodities like gold that will be used for trading for essential goods.
I was living in Africa, in Botswana, and looking over across the border into Zimbabwe watching hyperinflation to the point where people were collecting million dollar bills that were worth nothing… ZimDollars they called it… I had a few friends of mine in Zimbabwe that were trillionaires…
In Zimbabwe they went to the U.S. dollar… in other places they’ll go to in-kind commodities like gold.
Watch the full interview with Arizon Mining’s Jim Gowans:
Gowans says that mining is simply not sustainable for the companies who produce gold if the price is $1100 per ounce or lower, which explains why we’ve see a powerful up-trend in precious metals since the start of 2016:
You just look at the world economies and you know that the fundamentals are there for a significant change in gold price… it wasn’t sustainable at around $1100 or $1150… It doesn’t surprise me at all… I think you’re going to see gold start to rise again because of the fundamentals in the world economy.
I think a move has begun… When you have bonds at negative interest rates you know there’s something fundamentally wrong with the economy. That’s a statement of the relative safeness of currencies… when people actually feel they can buy that bond and pay money to keep it in that bond just because it’s a safer haven than other investments then that’s pretty bad.
Deep pocketed global investors and Wall Street institutions have certainly taken notice of the impending meltdown of global currencies and economies. That’s why people like George Soros, Stanley Druckenmiller and Carl Icahn are rapidly shifting capital into precious metals.
That’s telling us people are concerned about currencies… When you see gold and silver equities, and those are just proxies for the metal, it’s a much more convenient way to invest than owning physical… They see gold and silver as a much more reliable investment than bonds from all the central banks and the like… that’s what’s been driving gold and silver equities.
Keeping in mind that absolutely nothing has changed for the better since the Crash of 2008 and that the Federal Reserve has hinted at even more large-scale central bank intervention, we can reasonably conclude that the situation is about to get even worse.
That, of course, can mean only one thing: the price of commodities, especially safe haven assets like gold and silver, will continue to rise.