1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar

The Ludwig von Mises Institute

Advancing Austrian Economics, Liberty, and Peace

Advancing the scholarship of liberty in the tradition of the Austrian School

Search Mises.org

Long Way To Go

Mises Daily: Friday, October 19, 2007 by

A
A

[This article originally appeared in Liberty Watch magazine.]

Despite precious metals prices being on fire, attendance was light at the Hard Assets Investment Conference held Sept. 10 and 11 at Mandalay Bay. The usual graying and balding suspects were present, but, clearly, investing in commodities and natural resource mining stocks has not caught on with Generation X or Y or beyond.

Anyone sporting a Mohawk haircut or flashing lip and eyebrow rings were attending the nearby Game Stop convention. And there seemed to be almost as many Game Stoppers outside satisfying their nicotine habit at any one time than the entire cast of gold bugs hearing about drill holes and mineralization zones.

But while the yellow metal and yellowcake are shining brightly, the brightest stars in resource investing decided to skip the Vegas conference this year. Past years have featured keynote speakers like Jim Grant. This year, an unknown Dr. David Ranson spoke about how the price of gold is a better measure of inflation than government statistics.

Crowd favorites Doug Casey and Rick Rule were nowhere to be found, and the conference missed them terribly. Without Rule and Casey, many interesting Canadian junior miners, prospect generators and drillers didn't exhibit at the show because there would be no one speaking that would recommend their stocks.

Consequently, the only speaker that somewhat filled the trimmed-down speaker's hall was uranium bull James Dines. Dines has been a bull on uranium stocks for years and he still believes they are going higher — all of them. Dines, flanked as always by leggy young blondes, told the crowd that China and India will construct thousands of nuclear power plants and those plants will require yellowcake to operate. "The uranium shortage will last another five or 10 years," according to Dines.

The gold-investment world's version of the band Heart, The Aden sisters, spoke about gold's wonderful prospects on day two of the conference. Mary Anne Aden led off by saying that the gold price is on its way to $2,000 per ounce because of the perfect economic storm of increased government debt and massive global liquidity. To put the gold market in perspective, all of the gold ever mined is only equal to the budget to pay for the Iraq War. Sister Pam said that gold's 1980 price of $850 per ounce would be an inflation adjusted $2,204 today, and with the world's reserve currency under pressure, the gold price is going higher.

Gold legend Rob McEwen's company U.S. Gold was an exhibitor at the conference and assistant to the chairman, Ian Ball, told the couple dozen who attended his presentation about the company's prospects in Nevada. U.S. Gold has a massive land position in the Cortez Trend in northern Nevada between mining heavyweights Barrick and Newmont. The Silver State ranks number one in the world for million-ounce gold mine discoveries, Ball explained, and his company believes the Cortez Trend will be as prolific as the nearby Carlin Trend, where 180 million ounces have been discovered and 60 million ounces have already been mined.

As is custom, the conference concluded with the Bulls & Bears debate. So while workers hastily tore down the exhibit booths next door, newsletter writers Eric Coffin, James Dines, Ian McAvity and Paul van Eeden worked at having a difference of opinion. Technical analyst McAvity believes the stock market will soon plummet 20 to 25 percent, and maybe crater as much as 40 percent in the next few months, "taking everything with it." McAvity made the same prediction a year ago. All of the panelists are bullish on gold long term, with Dines seeing the price soaring to $3,000 to $5,000 per ounce and silver going to $100 per ounce.

Unlike McAvity, Dines doesn't see a sell-off coming for the stock market and thinks stocks will rally. Paul van Eeden believes the credit market crack-up will slow economic growth and the base-metal stocks will feel the pain. Eric Coffin took the other side of that argument, believing that the growth in China and India is real.

All should remember that resource stock investing is not for the faint of heart. As James Dines quipped, "If you want to double your money with no risk, fold your cash in half, and put it back in your pocket." But if investment-conference attendance is any indication, the price of gold and other commodities has a long way to go — up.