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Casey Summit: "Silver is the investment of the decade" - Eric Sprott
Pinnacle Digest writes: Casey Research has recently concluded its annual investment summit and one of its top writers summed up the results in an interesting phrase: "The situation is hopeless, but it’s not serious."
What this means is that, although many of our respective politicians, from the US to Japan and the EU are driving our economies off a cliff with flawed monetary policy, investors can still make money - a lot of money. This is a standpoint our team at Pinnacle has always believed in and will continue to believe in no matter what market we find ourselves in. There really is, always a bull market somewhere.
At the Casey Research Summit in early September, Eric Sprott, the founder and CEO of Sprott Asset Management explained that the US national debt has far outpaced the government's ability to pay it off. It's become unsustainable – and made continuously worse by the Federal Reserve, which pushes more and more debt onto its balance sheet, thus blowing up an ever-bigger bubble.
When it comes to the EU, Sprott is convinced the fat lady is literally singing. The pain hasn't been felt fully with the destruction or end of the EU yet, but the parts are in motion. He believes that the real death knell for the current financial system may have been sounded back in July by the emergence of NIRP (Negative Interest Rate Policy). The German government was able to sell bonds with a negative interest rate – in other words, when the bonds reach maturity in two years, investors will get 0.06% less than they put in. Invest in bonds and lose money. How can this be? Investors are so scared, so sure the EU will collapse, that inflation will destroy their savings, or numerous nations will be sure to exit that they are willing to lose a bit of money instead of most of it!
Sentiment is that things are going to get a whole lot worse in Europe and downgrades are coming. This is something all of us need to be aware of.
Another guest speaker and respected investor Rick Rule also spoke about his philosophies on investing. He explained that investing necessarily involves a series of hits and misses. This could not be truer of the junior mining sector which we specialize in at Pinnacle. Rick noted that, whoever claims that they correctly anticipated all of the market turns of the past thirty years is simply lying: "No one has a system that turns out uniformly positive results. If they did, everyone would be using it."
Rick explained that the best lesson to learn from our mistakes is that we will continue to make them. He stated that, "The trick is not to be right all the time, it's to be right more often than you're wrong." Herein lays the difficulty and challenge all investors must face. Rule believes in positioning oneself ahead of trends that are unstoppable, then waiting for the market to come to you. That takes patience, the courage to buy when others are selling, and the discipline to sell into a market that is roaring higher.
There will be a time to sell into this precious metals and commodity bull market, but it is nowhere in sight. Bernanke and many central banks around the world continue to remind us of this, by continuing to implement overwhelmingly inflationary policies. Protecting our wealth from inflation has become priority number one.