John Kaiser, of KaiserResearch.com, has been a mining analyst for over 25 years and is a sought-out speaker that is invited to speak at some of the most prominent investment conferences around the world. We recently had a chance to speak with him in person at the San Francisco Silver Summit to get his current thoughts on the mining sector and what a bull market will potentially look like.
We’ve all heard that inflation, in terms of the money supply expansion, is at an all-time high. Something that is far less discussed is the “velocity” of money, which is the degree at which money exchanges hands, being at an all-time low. The velocity measure spiking is something that John specifically feels will also correlate to the rising prices of precious metals.
One of the most controversial topics that was discussed was interest rates. Higher interest rates are something he believes will facilitate higher velocity in the money supply, even though it might send an initial shock through the global economy. He also believes that higher interest rates will actually be bullish for precious metals long-term.
His analysis on precious metals is unique and not driven by inflation or even a hyperinflation narrative, but rather a purely fundamental aspect that leaves inflation and global uncertainty as the icing on the cake.
The highlight of the interview is when he discusses one of his favorite exploration companies at the moment. He insightfully shares that exploration companies do not have an asset they are selling for a loss, such as their producing counterparts. The producing companies are the ones who are feeling the full-blown effect of the pain, because most are not profitable at these ultra-low metals prices. Even the ones that are profitable are depleting their mining supply at profits that are close to nothing. Exploration companies, however, are not as directly affected by the metals prices, and, in fact, are in some ways benefitting by being able to fund their operations at lower costs than during bull market cycles when the cost of labor and operations increase.
John Kaiser shares one of his favorite exploration companies that he says has potential for as much as 20-times returns on your money invested. This is a company is located in Nevada, which John describes as having the best gold fields in the world, with less than a third of its potential having been found. Major developments are happening right now for this company.
As John so plainly states, “now is not the time to sit back and hibernate!”