There Has Never Been A Better Time To Be A Gold Bull Or Timing To Be Loading Up On Gold Stocks
Investors sticking to explorers with important gold discoveries, gold mine developers with high-quality projects and best in breed gold miners are primed to be rewarded.
By the time Biden leaves office, it looks like the debt will grow to over $37 trillion as he pushes as much spending as he can out the door before he leaves. Servicing the debt is an alarming problem that not enough are paying attention to as it has surpassed military spending and is on its way to catching up to social security. These are key reasons that gold has been making several record highs in 2024 and things are shaping up for more of the same in 2025.
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Spotlight On A Gold Explorer Pick
Goliath Resources is my highest conviction pick for a gold explorer with an important discovery.
Last year was their best season of drilling at their Surebet discovery in the Golden Triangle of British Columbia. They had several high-grade gold hits with the drilling, highlighted by 35% of their holes hitting visible gold. They recently completed their 2024 drilling campaign and 92% of the drill holes had visible gold with over 100 drill hole assays pending.
Most of their drilling last year was at the top of the system, with sporadic fine-grained visible gold. This year, they drilled deeper into the system and saw a much higher percentage of visible gold that has transitioned into abundant fine-grained gold and coarse-grained visible gold.
In a great gold discovery, the more drilling that gets done, the discovery gets better and better. Another thing that often happens is that there are several pleasant surprises as more drilling is done. They are seeing those things happening as they do more drilling at the Surebet gold discovery.
Assaying labs are very backed up right now, and adding to the time it takes is that Goliath Resources is using a combination of fire assaying and photon assaying.
One of the issues with fire assaying is that it only uses a small sample of the core submitted for assaying and when there is significant amounts of visible gold, some of the gold can get missed, so there is potential of underreporting the representative grade. With photon assaying, it uses highly sensitive x-rays that picks up all of the gold and it samples all of the core sent in for assaying.
Photon assaying for gold is an emerging assaying method that is ideal for gold discoveries with significant amounts of visible gold. This season is the first year they are using photon assaying and I’m very happy they are using it because it is a bigger sample size and catches all the gold, so it is much more representative.
I would guess that assay results should start coming out soon and continue being released over the next couple of months. Stay tuned, it looks like they will have a great flow of news coming out right around the corner.
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The costs of medicare/medicaid, social security, interest on the debt and defense exceed the income from taxes. Everything else the government spends on is what causes the deficit. Fixing the debt problem is an insurmountable problem which is why I call it the Death Spiral of Debt.
Elon Musk and Vivek Ramaswamy get a lot of press about their department of government efficiency. Which is a department that is supposed to create fewer departments by creating a new one. It doesn’t have much power because it can only make recommendations that then need politicians to approve in order to make any changes.
It sounded good on the campaign trail, as they made the point that the government needs to slash spending to get on top of the debt crisis. They are right, but trying to convince politicians to slash spending is as unlikely as the chances the debt will be reduced. The numbers just don’t add up. If everything besides the big 4 expenses (medicare/medicaid, social security, interest on the debt and defense) were cut to zero, there would still be a deficit.
Making cuts to the big 4 is a non-starter, three of them (medicare/medicaid, social security and defence) are untouchable as cuts to them would cause a revolt. Interest on the debt is a function of the size of the debt and interest rates.
The only way to slow the negative effects of compounding interest when you are on the paying end not the receiving end, is either to slash the debt or interest rates need to go back toward the Free Money Era. The bond vigilantes are already rightfully worried about another wave of inflation kicking in. Which puts the Fed in a precarious position, even if they wanted to cut rates aggressively the bond vigilantes aren’t cooperating.
Once inflation gets out of control, it is insidious, the Fed can declare victory all they want, but that doesn’t mean they have stopped the likelihood of a second wave that could be bigger than the first wave.
Drivers of a second wave of inflation include Trump’s tariffs, mass deportation of immigrants may be popular with the MAGA crowd but that will also drive up wages and inflation. Cutting rates is also inflationary, as is insane government spending. The building blocks of a second wave of inflation are being put in place as we speak, even if the Fed has declared victory over inflation. In reality the rate of inflation may have slowed, but prices are still rising.
Who knows whether or not the Fed is committed to a rate cutting cycle. The bond vigilantes don’t seem interested in giving them the green light. Foreign central bankers are on a buyer’s strike because they look at the massive supply of bonds and question why they should buy as they get paid in a currency that keeps on destroying purchasing power. If domestic buyers aren’t asking themselves the same question, they should be.
To keep going with a rate cutting cycle the Fed will have to get back in the QE business to be the buyer of last resort and increase their balance sheet. QE during their “Goldilocks economy” after declaring victory over inflation is a tough sell. The voters aren’t buying it because they just showed up on election day to say the economy sucks.
Bond vigilantes are showing they are concerned about a second wave of inflation and voters saying the economy is struggling, sounds a lot like stagflation.
The Fed can focus on the artificial (their gentler term for highly manipulated) government economic data all they want. The real economy is a whole different story which the voters know all too well. They are stressed out from the job market that has been shedding full-time jobs for a long time while increasing part-time jobs. Plus, they are being kneecapped from high credit card interest rates, their own bank debt servicing costs, and inflation.
The real economy is in a tough spot, whether it is officially called a recession or not. The Fed interest rate policy is throwing workers and the economy under the bus. That is what the voters just said and I’m sure Trump is listening and some on his team have to be worried about stagflation or a hard landing when he takes office.
Another troublesome issue is that some on the Trump team recognize that government spending is what causes inflation, but as true political operatives, they all blame it entirely on Biden. Ignoring the fact that Trump was also a massive spender during his first term.
Obama was the worst spender for a two-term president, but Trump tried to beat him in one term. Then Biden came along and will beat Trump for creating debt in one term. Trump is getting a pass by his supporters, but that doesn’t change the facts concerning his spending habits. They seem to think their spending junkie has kicked his addiction.
Trump got a lot of support from wealthy folks because they like his plans to cut taxes. They will say that cutting taxes trickles down to create economic growth. Reagan tried it and turned the country from the biggest lender into the biggest debtor. All it really does is create a wider gap between the rich and the middle class.
Most serious people that have looked at the deficits and debt argue that taxes actually need to go up dramatically while slashing spending to make any serious impact on the Death Spiral of Debt.
The antidote to the debt virus is gold, specifically the Gold Standard. Which is the only true way to put restrictions on the politicians when it comes to their addiction to creating unsustainable debt and constantly devaluing the purchasing power of the US dollar.
After the US dismantled the last vestiges of the Gold Standard in 1971, devaluing the purchasing power of the currency started and has continued for the past 5 decades since. It initially brought on stagflation, then runaway inflation that needed extreme increases in interest rates to tame. Paul Volcker could do that because the debt was much lower back then as a percentage of GDP than it is now by a country mile.
Then Reagan got in office with the debt a bit under $1 trillion and left office with the debt around $3 trillion. Since then, the debt has continued to grow at an alarming rate and kicked into overdrive after the 2008 GFC when the Fed started the Free Money Era. Obama, Trump and Biden all took advantage of the Free Money Era by spending like drunken sailors.
Now the second worst spender of all presidents, Trump, is back for another stint and people seem convinced that he will slash spending. Despite all the evidence to the contrary.
No wonder Pierre Lassonde, one of the greatest gold bulls ever, has never been as confident that gold is heading much higher than he is now. The Death Spiral of Debt and cost of servicing the debt are what will drive gold much higher.
Chinese and Indians are hoarding gold, as are the central bankers in the BRICS nations and have taken a tremendous amount of physical gold off the market. While the gold supply pipeline is broken. Exploration that leads to important discoveries have waned for a couple decades, which is why there aren’t nearly enough gold mine development projects and major miners are struggling to increase production and replace their old mines with new mines. These factors mean that the gold supply chain will be broken for decades.
There has never been a better time to be a gold bull, or to own shares in explorers with important discoveries, high-quality gold mine developers and best in breed gold miners.
All the best,
Allan Barry Laboucan
Disclosure
Allan Barry Laboucan is a shareholder of Goliath Resources and owner of warrants to increase his position.
Rocks And Stocks News does not make buying or selling recommendations. The reports are for information purposes only. Sponsors pay a fee to Rocks And Stocks News for content creation. The business model of Rocks And Stocks News is to fund research and reporting on the sector, picks and sponsors through corporate sponsorship. We are thankful to sponsors for enabling commentary free of charge to readers and viewers of the reports. When reporting on sponsors it is on behalf of the sponsors discussed in the portion of the report mentioning the sponsor. Before making any investment decision it is important for you to speak with your financial advisors to consider your risk profile. It is also important to do your homework. To help in that process, Rocks And Stocks News means to be a gateway by doing reports and interviews of management of sponsors and picks. The reports and interviews should not be considered investment advice. Allan Barry Laboucan is the founder and owner of Rocks And Stocks News, he has worked in the mining sector since 1993 and has been reporting on the sector since 2005. He has worked with and been mentored by very talented geoscientists in geology, geochemistry and geophysics. He uses the skills he has picked up during his career to assess sponsors and picks in the reports. Whether a company is a pick or a sponsor they go through the same filter and are reported on when important news is made that Allan Barry Laboucan wants to discuss on the Rocks And Stocks News platform. He may own shares in sponsors and picks for investment purposes which he discloses when discussing them in the reports.
