|Vancouver Resource Investment Conference|
(THE BIGGEST STORY IN THE WORLD)
What a show, and what a time to be there!
28 January 2003 * by Richard Lancaster
Vancouver was amazing; the turnout
was great - although next year it'll be outstanding. There were
two thousand assorted gold bugs, stock boosters, newbies, newsletter
writers and idealists, milling around the trade show area and
attending the excellent panel discussions and presentations.
With gold going to new highs during the day and the Dow sinking
below 8,000 for the first time since last October, the Monday
session that Michael Nystrom and I attended was the perfect
setting for reinforcing what we believe and how we see the future
There was palpable tension over geo-political issues in the
air; there was some excellent discussion on this topic in the
second to last panel of the conference last night, where the
most amount of passion was displayed in terms of "controversial
issues." But I'll get back to this later.
Michael and I were mainly there to see Bill Murphy speak, and
to meet folks who are of a like mind - in terms of how they
see the economy developing, their views on sound money and market
manipulations. We also wanted to learn about mining stocks,
how people see the current valuations of these stocks, and who
trades them, and why.
First, let's summarize the day's gold related stock information:
There was a huge amount of data given to the audience regarding
very specific stocks, mainly gold exploration companies - but
other metals and diamonds stocks were mentioned sporadically
throughout. One of the big "take homes" for me was just how
this advisory industry works in and of itself. There is a lot
of boostering in the mining & exploration business, and investors
need to beware (paranoid may be the best term actually!). Learning
how to apply visceral instincts to deciphering what is being
said by whom and why - is possibly one of the investors' most
important tools in this space. Of course investors also need
to do their homework, and thoroughly. Gold exploration and mining
stocks are hugely speculative.
It is very easy, having lived through the entire Internet phenomenon
as CEO of my own company, from 1994 to 2002, to see a new speculative
bubble inflating in the gold industry. The new dot.bombs will
be mining stocks in the years ahead. Some of these stocks will
return 1000% +, and many of them will be pure hype with absolutely
no substance. If you are entering into this space for the first
time as an investor you really need to go and study the history
of financial markets, the "bubble phenomenon" and how to navigate
your emotions through the quagmire of constant change, uncertainty,
elation and devastation - I experienced all this, and more,
as an entrepreneur in the greatest financial bubble of all time!
This time around, I'm much better prepared, but I studied hard
and soaked up information from all sources to reach this point
- don't be lazy. Learn how to think for yourself.
Anyway, for the precious metals investor I think some of the
very best advice came from Paul van Eden (Co-editor of Doug
Casey's International Speculator). He basically said, "Invest
in people not projects." He was very aggressive with his opinion
- which I liked, his self-assurance was very comforting, and
the logic he used was impeccable. His perspective was that solid
business managers within the mining industry are rare; once
you find them, follow them. Solid managers will find the right
projects! More on Paul's opinion's a little later.
also enjoyed the presentation by Bob Bishop (here he is on the
Big Screen). Bob is one of the "old school tie" guys from San
Francisco, reminds me of the Bay Area investment bankers I used
to work with - very polished, slight air of superiority, but
quite passionate about his stock picks. He had some very sound
advice for traders; "Take some profit, take money off the table
when the stocks spike upwards, don't be caught holding the stocks
through the top and then riding them back down." There was much
more to Bob's presentation than this though, he articulated
a global financial picture that is long term unfriendly to the
stock markets - and very gold-friendly. He spoke with great
depth and authority, and I would suggest his newsletter is well
worth reading if you have a lot to invest and need sage advice.
At the end of Bob's presentation I was lucky enough to ask him
the last question. Here is how it went (the edited version):
Me: "Where do you see the US Dollar going by the end of the
year, where do you see the POG (Price of Gold) ending the year,
and where do you see the POG topping out"
Bob: "….it's just guess work…I think we go $1,000+ in the next
3 years. I think its going to go in fits and starts and I think
its important to know the back story of gold right now…..the
hedge situation, the derivative situation in this market. In
the last gold cycle the word was, "The Gold is there," whereas
in this cycle "The Gold is gone." I really don't think the central
banks have the gold, its gone!" Bob said more than this, but
this was the most important aspect of what he said. The central
banks of most of the industrialized world have sold their gold,
later I'll discuss a little about GATA and why. Bob did not
give a number for the US Dollar at year-end - he is not a currency
trader, but he said we are very early in a "big picture swing."
John Kaiser, editor Kaiser Bottom-fishing, then spoke about
Canadian Diamonds; his diamond mining presentation was so data
intensive, and dry, that Michael and I both took a quick nap!
John is clearly the Canadian expert on diamond mining - his
assertion that Canada could be producing as much as 50% of global
diamond output in the years ahead was an eye-opener though -
woke me right up! Especially when you consider that Canada produces
approximately 5% today. Of course John's presentation kept referencing
De Beers throughout - as the diamond cartel holds sway ultimately
over the industry - needless to say this "acceptance" so readily
of the monopoly nature of the industry, especially in times
like these, was a little nauseating for me. John's analysis
was expert by any definition, his integrity was apparent and
I would suggest that if you are in to diamond investing that
he might be your man to follow. Personally, I do not believe
in the investment value of diamonds, it's just not my bag!
The Coffin brothers both presented during the day on various
panels. Their primary investment advice echoed Bob Bishop's
- "Take profits." One particularly powerful statement by David
Coffin, which resonated with me, was "all gold stocks are trading
stocks." In other words, gold stocks are subject to peaks and
troughs based on breaking news. Trade the news, buy the dips,
sell when you hear of a story being broken in the news that
will pop the stock temporarily. Pick the top, sell and take
some profit, then buy the dip.
Various other presenters strutted their stuff throughout the
day's sessions. Below are some of the most interesting stock
picks that were provided by some of the best gold analysts in
the world today. These are the recommendations of a panel of
newsletter editors who were asked to pick their "somewhat risky
and then crapshoot" stocks - so these are the companies that
the experts feel are highly speculative - that could go to the
moon - or crash. Perhaps a diversified portfolio of all of these
would be the way to go? Hey, maybe Michael and I will start
a mutual fund of all of these stocks, hand's up investors who
would like to participate!!
- Altius Minerals
- Aurizon Mines
- Candente, Resource
- Cusac Gold
- Doublestar Resource
- Freegold Ventures
- Minco Mining
- NovaGold Resource
- Orezone Resource
- Pacific Northwest Capital
- Redhawk Resource
- Virginia Gold Mines
- Nevada Pacific
- Eagle Plains
I've done a lot of analysis of mining stocks in order to build
my own portfolio - and listening to these guys collectively
has helped me refine how I go about the process, and will enable
me to better balance what I own. There is simply no substitute
for getting expert advice!
Some of you know that I write from the perspective of being
a "sound money" proponent, a seeker of truth and justice in
the world at large, and therefore I am an advocate of gold for
those reasons. I'm an idealist! Therefore, I believe an investment
in gold is both a statement of support for free markets, freedom
of choice and freedom from oppression. Gold is the ultimate
store of value in the physical world today - has been FOREVER!
(Your individual soul is the absolute ultimate store of your
Anyway, back to gold! Because of gold's well known status globally
as the ultimate store of value, and because of its very special
position in our financial system, there has been a quiet war
waged on the Price Of Gold (War
Against the POG) by the central banks, bullion banks
and various governmental and non-governmental institutions globally
for the past twenty years.
men that I know of, and totally respect, have for the past 4
years been fighting a battle to expose the truth of the manipulation
of the POG; by whom, to what affect and why. This is the story
told by GATA, the Gold Anti-Trust Action committee. Bill Murphy
is the Chairman of GATA and the founder of Le Metropole Café,
a financial commentary site. He and GATA Treasurer, Chris Powell
(a newspaper editor by trade) both spoke at the show yesterday
- and in my opinion had the most important message for the conference,
which was completely reinforced by Bob Bishop's earlier comments
about the central banks not having gold in their vaults anymore
- and concealing this fact from the public for the past 20 years
as the gold was sold off at artificially low prices. This I
believe is the biggest story on planet earth right now, I can
think of nothing else that has more impact on our daily lives
than the ramifications of this amazing issue.
Bill's speech to a full house was right to the point. For 4
years GATA has been ignored, ridiculed and tormented, just last
week I waded in to an unsavory lambasting they were taking on
in their defense (not that they need my help, but it was just
the right thing to do). Bill, as a former pro-footballer for
the New England Patriots, is more than capable of taking care
of himself! For the past 4 years as they've exposed this gigantic
fraud, their efforts have shown scant reward, other than the
internal knowledge that they were fighting for a just cause
and slowly gaining ground.
Well now the tide is very visibly changing!
Here is a partial transcript of Bill's remarks. I videotaped
the show, and let me tell you, reviewing it today was a pleasure.
But enough already, you want to know what he said right!? The
following are extracts from the speech that I think are vital.
I urge you, if you are not part of the GATA Army, join today.
Learn all you can about this issue, study the history of gold,
follow the money and understand how this all came about. For
more information go to their site, come to our site, read, digest
and think for yourself. The independent investigation of the
truth is your right, your responsibility - use your power to
understand what really makes the world go around!
Here are the extracts. You'd better sit down. (Last comment
on this, if you feel you can disprove what Bill says here then
come forward with your evidence. In the three years I've been
following the money I have reached the identical conclusions
as Bill and Chris - I can find no objective way to refute a
word of what Bill is saying here).
Bill started by stating he wouldn't go back and give the "whole
spiel" on GATA and all of the minutiae, and that he wanted to
discuss the Strong Dollar Policy, what it was, where it came
from and how it was enacted.
Take it away Bill:
"What did specifically they (central bankers, IMF, BIS, ESF,
Treasury, etc.) do to keep the dollar strong?"
rigged the gold price. The motive for rigging the gold price
was; to keep the dollar stronger, hide inflation, to keep interest
rates lower than they would've been, to attract money to the
U S stock market, to take away a very simple barometer from
the public - which is gold. With gold rising as it is today
people say, "Well something is wrong." They automatically do
it right or wrong that's what they say. That was the motive
of the US government, the motive for the bullion banks was that
they got free money for about six or seven years. How would
you have liked to have gone to your banker and said I would
like to borrow money for 1% interest rates? They would've thrown
you out right on your kister. It just doesn't happen, but it
did for these people - because they would borrow gold, the bullion
banks, from central banks that had it sitting in their vaults.
They would take it to the markets, sell it, that supply would
create pressure. They would borrow at 1% interest rates, and
then they would use these funds for their funding operations.
They virtually had free money to do whatever they wanted to
do on Wall Street."
"But there is a problem with that and now they are facing it
big time. This was a great deal as long as you could borrow
gold at $300 and pay it back at $300, or borrow it at $280 and
pay it back at $280, and what if the price went lower? But now
with gold heading to $400 and much, much higher they got these
things at loan shark rates and they are choking."
"…..the rigging of the gold price was the lynch pin that is
causing so much aggravation in the financial markets today…..through
this strong dollar policy and the rigging of these markets they
caused a financial bubble, the bubble is now bursting and it
has a long way to go. So the ramifications are profound for
Bill then went on to discuss the basic movements of the POG
over time, the supply shortfall in gold production, central
bank gold lending, the rise in mining stocks being in the thousands
of percents for certain stocks going forward, and various other
issues. He stated that now the gold cartel is unraveling. The
bullion business is on fire. The smart money is buying gold
as they know GATA are right. Bill stated that at GATA they are
waiting for what he called a Commercial Signal Failure. This
is panic buying by commercial banks to cover their short positions,
when this happens there will be a massive spike in the POG.
Here are a few more choice quotes from Bill, these are keepers!
"The International Monetary Fund is the Arthur Andersen of the
"Australia has 3 ½ tons of central bank gold left!"
"We have a gold derivative neutron bomb that is going to go
off…..it's a matter of time before this kicks in and you will
have a massive gold short squeeze."
He then offered up a quote from US Secretary of the Treasury
from last week: "This wasn't picked up by the American press,
because we have such a great free press in America! (chuckles
from the camera operator…) Here's a quote from Secretary of
the US Treasury Paul O'Neill quote:
"It is all about sound bites, deluding the people, pandering
to the lowest common denominator."
The above-mentioned quote basically sums it all up for me!
Bill went on to mention that every time GATA speaks up that
the POG shoots up, this is attributed to the fact that the very
smart money follows GATA information - maybe this is a trading
tip? Dunno really!
At this point Bill wrapped up his speech and handed the podium
over to Chris Powell. Earlier today Chris (pictured below) published
the entire transcript of his excellent speech to the GATA Army,
if you would like to read it go to www.gata.org
and become a member. The excellent news from yesterday's
event is that Bill was interview for the first time in 4 years
by the major financial media after the event, so watch for that
story to hit the press shortly.
GATA's day has arrived! Vancouver was the moment in history
when the Biggest Story in the World was finally told……..and
heard. The outcome of this event will reverberate around the
financial world and affect global events for years to come,
it may be hard to notice at first - but the cat is out of the
bag and now the real battle will begin. No doubt events will
get far messier before they are eventually cleaned up. Unfortunately
how things may get messier is what I will finish with, and is
how the conference ended for me.
mentioned earlier the second to last panel was on "World Outlook."
This was basically the only part of the conference that was
dedicated to the geo-political ramifications of the machinations
within the gold industry. To a person on the panel there was
agreement that the economy and markets were going to get a lot
Victor Adair, Senior Vice President Refco Futures (Canada) -
one of the largest global futures trading firms - had this to
say, "the markets (US) went too high in the first place. They
will go lower than their real value………UNBELIEVABLY LOWER."
He then went on to state that the US imported deflation while
it exported manufacturing jobs. That the big action was in currency
trading and that the 50% appreciation of the US Dollar from
1995 to 2001 spelt a large downturn in the US Dollar going forward.
Paul van Eden then went on to say that we may experience the
worst of all possible economic consequences, whereby luxury
items such as cars, boats, fridges, etc. would deflate in price,
whilst basic living commodities such as oil and food would inflate
in price - - providing price relief for the wealthy who least
need it and slamming the poor who are already losing their jobs
and their incomes. That to me sounded like a description of
the 2nd Great Depression.
Finally there was some real tension on the panel regarding the
War on Terrorism, the War on Iraq and the true motivations behind
the current US government's actions. It was agreed by all that
the economy was in serious trouble way before 9/11 and that
there was no way to stop the economy from going in to a massive
decline. Where there was some serious tension was whether or
not the current regime in the US is using these wars as a distraction
from the economic debacle that is underway and to cover the
manipulations that have gone on and continue to go on.
From my own down-home analysis I would say that the people in
the room, based on clapping and cheering, where overwhelming
of the opinion that there is something much more sinister going
on with Iraq that purely a war on terrorism and evil. At one
point the comment was even made that "America is the biggest
terrorist nation on earth."
This was quite a show people! I wish you all could've been there.
One thing that was not debated in the time I was at the show
was Precious Metals Mutual Funds - of which I am currently a
big fan. So, shortly Michael Nystrom and I are going to launch
our own newsletter entitled The
Dashboard. In the first edition I will analyze the current
state of the PM Mutual Fund segment, the past 12 months performance,
my favorites (I currently own 4 of the best ones and have for
some time) and how to gauge the overall marketplace of over
13,000 funds. Michael will provide his own excellent commentary
on topical economic activity. As always we will somewhat differ
in how we think the 2nd Great Depression will actually come
around, but what you won't hear us argue about is whether there
will be one!
Cheers Richard Lancaster
PS. The subject of economic depressions is a dismal one in some
ways, and being a commentator on it feels like being some kind
of economic proctologist, or worse (no offense if you are a
proctologist). I believe in a very positive outcome to all of
this negative activity, this is all part of the growth of humanity
and a necessary stage we all have to live through. As such it
is very important to learn what is happening and why, who does
what to whom and why. Being in denial of the ugly stuff is simply
not an option if we are to realize our true potential here on
Keep the Faith, Rich
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