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Mike Gleason (Money Metals Exchange): It is my privilege now to welcome in Frank Holmes, CEO and Chief Investment Officer at U.S. Global Investors. Mr. Holmes has received various honors over the years, including being named America’s Best Fund Manager for 2016 by the Mining Journal. He is also the co-author of the book The Goldwatcher: Demystifying Gold Investing. And is a regular guest on CNBC, Bloomberg, Fox Business, as well as right here on the Money Metals Podcast.
Frank, welcome back and thanks for joining us again today. How are you?
Frank Holmes (U.S. Global Investors): Outstanding.
Mike Gleason: Well, I’m looking forward to getting into some of these questions with you today, and to start off, I know you’ve had a lot to say about gold here recently in following your market commentaries and your Frank Talks like I do. Now before we get into some other stuff, including the exciting new gold fund that you’ve just launched there at U.S. Global Investors, let’s talk first about where we are in the metals right now. We saw prices heading higher earlier in the year, and then correcting lower more recently, but gold has really hung in there over the last month or so and it’s seemed to have found strong support in the low $1,200s. What do you make of the market action here recently in the metals, Frank?
Frank Holmes: Well, I think a big factor is real interest rates, and what’s happening in the bond markets around the world. A, debt levels are going through record highs. We saw money supply in EU, they jumped 5% in a month. It doesn’t matter, they’re just printing this money, but it’s stimulating their economy and that’s all they care about. And I think that you’re seeing this witness of this proliferation of paper money. You are witnessing that they’re manipulating real interest rates to be negative, and that is always good for gold.
You’re then seeing in the U.S. that even with rising interest rates, the dollar had one of its biggest declines last quarter, up over 3%. So, gold is rising in U.S. Dollar terms for different reasons than the rest, but it is to me, a real positive factor. We have global growth is being ignited from Europe, it’s good in Japan, and this is also good for the backend of gold. Then, I think the supply side is being restricted, and this silly tax in Tanzania of over hundreds of billion dollars. It’s just outrageous what these countries are doing.
You see it in Latin America and you see it in Mongolia and now it’s in Africa. They want money to come into these countries, they move the goalposts. There’s no fiscal stability, there’s no tax regime that’s disciplined for at least 10 years so you’re trapped capital. So, I don’t think you’re going to see supply coming onsite, so I think the world anticipates …read more
Source:: Gold Silver Worlds
The post Frank Holmes: Silly Money Printing, Negative Real Interest Rates, & Restricted Supply Form a “Great Scenario for Gold” appeared first on Junior Mining Analyst.