| Monday, July 29th, 2013 | | | | | | | Tales and Tributes from the "Last Hurrah" | | | By Jim Amrhein
From the last day of the last Agora Financial Investment Symposium
Vancouver, British Columbia
Dear Reader,
On the first day of this Tale of Two Americas Vancouver Symposium -- which, as you know by now, will be the last of its kind Agora Financial ever puts on...
Addison Wiggin, in his opening comments, talked a bit about a video game his kids are addicted to called Minecraft.
Now, at 44, I'm far too old and un-hip to know anything about Minecraft, but apparently players have to digitally "mine" just about everything they need to live.
From what I gathered from Addison's comments, they dig up and hoard various materials and valuables from underground -- then parcel them out to make the necessities with.
Now, I'm sure there's way more to the game than that (so don't light me up, geek-boys). But Addison's point was that at least in this one regard, Minecraft is very much like real life. Which was something he used as a teachable moment with his kids...
"If it can't be grown, it must be mined," Wiggin said on Day One.
And that thought is a perfect lead-in to today's action -- because more than any other day of this Symposium, Friday was about rocks...
What comes out of them: Energy, materials, minerals, precious metals...
And money, if you do it right.
So before all the "last hurrah" fanfare, let's dig into that right now...
David Franklin -- Investment Opportunities in Resources
First out of the gate in today's "rocks to riches" theme was Sprott Asset Management's David Franklin, a Vancouver Symposium favorite.
And in the early part of his presentation, he compared today's gold market...
To the Japanese squid market.
Now stay with me here, he's kinda got a point.
Under Japan's new "Abenomics" pro-inflationary policies, the cost of boat fuel has risen so much since the beginning of the year...
That it has become a losing proposition for Japanese squid fisherman to even cast off from the dock.
This has caused a squid shortage.
And as with all shortages, that can only lead to one thing: Rapidly increasing prices.
Now, according to Franklin, something very similar is happening right now in gold...
"There are NO kilo bars in the market, at the moment," claims Franklin. "There's a shortage of the metal in Asia."
Why is that important?
Because Shanghai has become the center of the gold-trading universe...
"Some of the numbers coming out of Shanghai are truly spectacular," David explains, "The Shanghai gold exchange, on a year-to-date basis, has delivered more than 1,000 tons of gold."
That means the actual, physical metal, not "paper" gold contracts.
This is pretty remarkable, since as little as two years ago, Shanghai was no bigger than any number of other gold exchanges -- around 100 - 120 tons.
Today, however, it's the bellwether destination for gold pricing and availability data. That's why Franklin puts such an emphasis on Shanghai's numbers.
And what he's seeing in those numbers is a huge and growing level of stress in the gold market -- not just in the trading of "paper gold," but especially in the demand for physical delivery of the metal...
Which is on the rise.
"Probably the most precipitous event in the gold market this year," explains Franklin, "has been the Germans requesting their gold back."
As you may remember, Germany made an aggressive move to repatriate 675 tons of their gold holdings abroad in January of this year. Franklin's got a great chart (one of many) showing the effects of this event...
"As you can see," he says, "Inventories have fallen off a cliff since they asked for their gold back."
Bottom line: With prices low and demand for physical gold delivery at all-time highs, a massive bullion shortage is about to play hell with the world gold markets.
Which, like in the squid example above, means rising prices...
"The price of gold is too low for the current market." Franklin told us all, point-blank.
I'm sure I don't need to draw you a map of what to do about that, right?
But aside from his angle on gold, there was a lot more actionable moneymaking guidance in Franklin's graphic-heavy presentation...
Like his compelling (irrefutable, actually) argument for aggressively moving into four other key commodities right now.
Believe it or not, one of these is uranium.
You'll definitely want to see his chart showing the shortage dynamics in that controversial element (and you can, right here).
You'll also want to hear Franklin's VERY persuasive argument for avoiding "perfectly priced" U.S. stocks right now, and for the foreseeable future...
If you're a Dow bull, you've simply got to hear this -- or you could lose big.
Now, like with almost all of AF's Symposium speakers, I could devote this whole dispatch to Franklin's speech alone, and still not cover it all.
But you know the deal: I'm on the clock with these things, and now it's time to roll on to our next speaker...
(Editor's Note: Until midnight tomorrow, you can claim ALL the conference recordings for up to a full HALF-OFF the normal price. Click here to grab your recordings.)
Brent Cook -- The Fundamentals of Turning Rocks into Money
If you're into the nuts and bolts of mining, and love to hear metals investing advice from someone with real dirt under his fingernails...
Then Geologist Brent Cook's presentation is going to be one of your favorites.
Of all the presentations at the 2013 Symposium, this "rock jock" had some of the best graphics, in my opinion...
Not just charts and slides, but topographic maps of mining sites -- even what appeared to be thermal imaging or some sort of subterranean radio-wave imaging.
That kind of stuff is really eye-opening, especially in any discussion of mining.
But what was even more informative than his graphics was everything Cook revealed to us about the current state of the metals mining industry...
"What went wrong? That's what we're going to get into," Cook began, "Why it went wrong, where it leaves us -- and how right now, we're sitting at a prime time to take advantage of that in terms of making money."
"We're going to look at production versus discovery," he continued, "and we're going to do a little Geology 101, evaluate some projects... and kick around some ideas."
As it turns out, that's a lot of material. And there's no way I could do it all justice in a brief write-up like this. But usual, I'm going to hit some of the high spots for you.
The basic thrust of Cook's presentation is that there are a lot of things working against the mining industry nowadays.
But if you know what to look for, there are a number of exceptional opportunities to play this situation for big potential gains.
Just a few of the factors that are hurting the mining industry right now: - Discoveries -- Because of lower precious metals prices, higher fuel costs and other factors, miners aren't shelling out sufficient capital to make new, economically viable discoveries. And these discoveries are the life-blood of the entire precious metals market.
- Quality -- What discoveries are being made are of lower and lower metals concentration. Those "mother lodes" of yesteryear just aren't coming on line anymore. Lower-quality deposits combined with higher production costs makes a lot of miners, especially juniors, very vulnerable to extinction.
- Time to Market -- From discovery to production, it took just four years to get gold to the market in 1995, according to Cook. But today, the number is closer to 20 years. That means start-up miners need at least four times the operating capital they used to.
Looking at all this (and more), it's pretty clear that the gold mining industry is in trouble.
In fact, Cook estimates that up to 80% of the junior gold miners on the Venture Exchange (where most of them are listed) could be GONE a year from now!
"Bottom line," says Cook "this is an unsustainable business without new, economic deposits."
But as bad as this sounds, there are going to be some HUGE opportunities to get rich among the survivors in this segment.
Brent beautifully summarizes this in a chart at around 12:10 into his presentation (get that here right now).
"That 80-million ounce gap between production and discovery," he says animatedly, pointing to a section of this chart, "That is our opportunity."
Eighty million ounces? That's 2,500 tons of gold!
Even at today's low street prices, that's $104 billion. Sounds like a helluva good opportunity to me...
But the thing is, you can't just go out and start spraying your money around the junior mining sector and expect to get rich on this "gold gap."
You've got to very careful, according to Cook.
The old model for evaluating and comparing miners (called the "cash cost" model) can badly mislead investors nowadays.
The new model for separating the wheat from the chaff in the mining industry is the "all-in sustaining costs" model -- and it's harder to calculate. Cook goes into this a bit in his presentation.
But what might be a lot easier than trying to learn how to apply this model to mining-company balance sheets and make junior miner picks yourself...
Is to simply buy the seven particular companies he recommends at the end of his presentation.
One of these firms controls what Cook calls, "probably the most exciting mineral find on Earth right now."
You know the deal, though -- I can't just rattle 'em off in these dispatches. Not unless I want 1,000 Symposium attendees demanding my head on a pike...
But you can get the details on all of them in AF's outstanding audio and video coverage of this year's Symposium.
(Editor's Note: Until midnight, Tuesday July 30th, you can grab FULL access to all the conference recordings at the lowest available price. Click here to secure your recordings, and save the most money.)
These aren't the only hot picks in the "rocks" sector you'll get, either. Not if our next speaker has anything to do with it...
Matt Badiali -- The World's Greatest Moat
Geologist Matt Badiali has been speaking at the Symposium for years, and it's easy to see why AF keeps asking him back...
He's credible, articulate, upbeat, and always has something interesting to say.
The fact that Matt's right a lot of the time when it comes to resources doesn't hurt, either. And I, for one, believe he's right once again this year.
Because unlike a lot of the bears I've been hearing from this week, Matt (one of the show's "eagles") is optimistic about America's prospects...
"Today we're going to talk about something completely different," Badiali began, "...and it's happening right here in North America."
He started off by explaining the concept of the "economic moat." Coined by Warren Buffett, this phrase basically refers to a barrier against competition that a company (or in this case, a country) has successfully built around itself...
And that's exactly how Matt characterizes the boom in energy that's happening right now in North America.
"I am going to try and prove to you today," said Badiali, "That North America, in spite of its government, has built an economic moat with cheap energy."
And prove it he does.
However, the way Matt suggests that we play this moat for some handsome market gains may not be what you think. I'll get into that in a second, though.
First, let me just hit some of the high spots of Badiali's case for this "moat."
He started off by showing us (Matt's speech was another great one for graphs) the incredible impact that economic moats have made for other nations...
Example: China, who built a huge one with cheap labor and lax regulation.
Then he started talking rocks -- and showed us the potential of America's own burgeoning economic moat.
"What coal did for the Industrial Revolution," says Matt, "Shale is going to do for us."
Using a series of colorful maps, Badiali showed us just how much natural gas there is in the U.S., now that horizontal fracking has come on the scene.
At a glance, it appeared to me that the rock strata under at least half of America's interior surface area holds potentially extractable gas...
As much as 1.6 quadrillion cubic feet of the stuff.
That's enough to meet all of America's energy needs for the next 65 years!
Beyond this, Badiali pointed out that natural gas production in the U.S. has risen 26% in the last five years -- while prices have fallen 72% since 2005.
So clearly, nat-gas isn't in a bubble, ether on the production side or the pricing side. The science and the trends say that this "moat" is here to stay.
But as interesting as all this economics and geology was, what really got everyone's attention is how Badiali suggested that we play this game-changing energy shift.
No, it's not LNG or pipeline companies or public power utilities or any of the stuff a lot of mainstream analysts are crowing about.
It's an angle on petro-profits I'll guarantee you've never considered...
But it has the potential to be far more lucrative than any of the obvious plays everyone else is going to make -- I'm talking about profit margins as high as 74%!
Want a hint?
Think "amber waves of grain."
Now, if that intrigues you as much as it did me, you've simply got to get some money in play on the three specific companies Matt's recommending on this "moat."
As always, you can find them in any of the coverage options AF is offering on this last-ever Vancouver Symposium...
(Editor's Note: It's your choice: digital, CD, or FULL high-definition video. You can enjoy all the speakers, debates, ideas and ticker symbols from the Vancouver Investment Symposium in the comfort of your living room with your recordings. But if you want the best price (a full HALF-OFF) you need to click here before midnight tomorrow.)
I'll give you the deal on that in a moment.
Before I do that, though...
I want to give you the grand finale you've been waiting for.
Bill Bonner, Agora Founder and President -- Doomsday Central Banking
As I mentioned last Wednesday, Bill actually took the stage on Day One of this final Symposium...
But in years past, he's traditionally been the "last word" -- and with good reason. His wit and wisdom are what a lot of attendees look forward to the most.
So in keeping with that tradition, and especially since this is the final event of its kind, I've held the highlights of his speech in reserve until now.
And it was sooo worth it.
In classic Bonner fashion, he cheerily opened with a bombshell revelation...
"The federal monetary policy has become a kind of 'Doomsday Device' for the economy."
"And yes," he continued, "there will be trillions of dollars lost, millions of people will go bankrupt, and millions of jobs will be lost."
"But if nothing goes wrong, it'll be a good thing."
Hmm...
How is the equivalent of financial Armageddon going to be a good thing, you're wondering?
You already heard Doug Casey's take on that yesterday. He said that by wiping away all of today's misallocations of capital (read: government overspending), it clears the way for the proper allocation of capital in the future.
But Bill's take is a little different.
He says financial Armageddon will be a good thing because...
"The whole system is set up to transfer wealth, and to transfer resources, from the future to the present," says Bill. "That's the way it works."
God, that's so true. It's exactly what the government does, with all its taxes and regulations and obligations.
And not just the government -- but Wall Street, unions, and other entities, too. They all have their own ways of picking the pockets of future generations...
But have you ever heard that point put so simply and correctly like that before?
Typical Bonner.
"So an Armageddon, in which all that stuff gets wiped away," Bill continues, "Is actually a good thing, especially for young people."
How could we have gotten so far off the "American" track -- the one that supposedly leads to a brighter future for each successive generation?
Simple...
"In democracies, the future doesn't vote," Bill answers.
Again, so crystalline. So brilliant.
In exploring the underlying reasons how we got where we are today, Bonner starts with a question: "What is money?"
Well, according to Bill's latest thoughts on the subject, "money" -- at least from an anthropological standpoint...
Is simply a way of defining relationships between people.
Basically, the whole point of "money" is to have a way of settling all manner of obligations between human beings.
Easy enough to understand, right?
Here's where it starts to get tricky. According to Bonner, there are only two kinds of monetary systems in society.
The older of these two systems is the credit-based system. It's been around for eons.
Now, in small tribes, where everyone knows each other's business and speaks the same language and all that, this system can work...
But this becomes increasingly difficult with the passage of generations -- and with the expansion of the tribe, or the assimilation of others into it.
"The important thing to remember is that in a credit-based system," says Bill, "the amount of credit is infinitely expandable."
Another key point about credit-based systems: They have to be managed. People have to keep track of who owes what, who's paid what, etc.
So that necessitated the development of the second kind of monetary system.
One that was based on the immediate settling of accounts with physical exchange of some fungible material that's equally valuable and usable to everyone...
Something like gold, for example.
Follow so far?
If you do, then you may be able to imagine where Bill's taking us with this discussion...
Toward the pitfalls of central banking.
But I promise -- as with every speech Bonner ever gives, you can't imagine the clarity, profundity, and humor with which he gets us there.
He doesn't need graphs and charts to do it, either. He has his legendarily incisive mind, and his one-of-a-kind, folksy, accessible mannerisms.
Now, I won't spoil any more of Bill's speech for you...
Especially since this is his last-ever Vancouver Symposium.
But I will tell you that it's absolutely riveting -- a tour-de-force grand finale.
You'll laugh, you'll cry (you may a little, actually, when you hear Bill's conclusions)...
And you'll learn more about history, money, credit, mortgages, government, booms, busts, corruption, economics, real income, real unemployment, real wealth, and just plain old reality...
Than you will in any other 45-minute span of your life. I guarantee it.
If you've never been to the Vancouver Symposium -- or been lucky enough to see Bill Bonner speak in the flesh somewhere else...
You really do owe it to yourself to get AF's high-definition video coverage of this final Symposium event.
(Editor's Note: Last call before the price goes up! Until midnight tomorrow, you can claim ALL the conference recordings for a full HALF-OFF the normal price. Click here to grab your recordings.)
As I've said repeatedly, this event marks the last time ever that Bonner will be taking the stage at the posh Fairmont Hotel Vancouver. It truly is the end of an era.
And on that sad note, I'd like to add my own brief denouement to this Tale of Two Americas... A fond farewell to the king of investing conferences Before the final curtain here, let me apologize for a couple things.
Firstly, I'm sorry about that horrid image of my hairy legs dangling over the canyon in Wednesday's dispatch...
I hope none of you poured bleach into your eyes after seeing that.
Secondly, I'm sorry that there weren't enough hours in the day for me to cover every speaker or special event at this year's symposium.
I told you from the outset that this "grand finale" was going to be the most jam-packed event yet.
Even on this somewhat shortened final day, I still couldn't manage to cover one of my favorite events, the annual Resource Investing Panel...
All the Symposium's "rock stars" were on it: Badiali, Cook, King, Franklin, and Rick Rule as moderator.
I'm told they discussed several big moneymaking themes -- and named 13 specific resource and commodities companies they think are "right now" investments.
Believe me, I'm as anxious as you are to find out what these picks are.
In fact, it'll be the first thing I skip to when I get my own copies of the high-def videos of this event (which is one of the perks I get for covering it).
Also today, I missed out on income specialist Mark Lichtenfeld's presentation, The Only Investing Strategy You'll Ever Need. I'd really wanted to cover that...
But the fates conspired against me, and I couldn't sit in on it.
I can tell you this much, though: If his presentation was anything like his book, Get Rich With Dividends, it'll cost you huge money if you miss it, too.
And of course, there were lots of others I couldn't preview for you as well -- like the brilliant (and hilarious) Jeffrey Tucker and Doug French of Laissez-Faire Books...
Or Agora Financial's newest editor, Neill George (another income expert) who I'm told was phenomenal...
Or Sprott Resource Corp's Steve Yuzpe on how to invest in agriculture...
Or anything that happened in the more than 65 intensive "break out" sessions with the Symposium's experts (that's an event record, by the way).
But as I've been saying for a week now, the good news is that you don't have to miss out on any of these things...
To get all the best parts of this lucrative Tale of Two Americas Symposium, all you need to do is get Agora Financial's state-of-the-art coverage of the event.
As I've mentioned, this comes in three flavors: - Audio-only digital MP3 files -- $99
- Audio "combo" of MP3s and hard-copy CDs -- $149
- A/V "bundle" of MP3s, CDs, and high-def digital video -- just $199
To choose which option you prefer, you can click anywhere you see red in this dispatch.
Now, I'm not going to tell you that you won't get a lot out of the audio-only recordings. You certainly will...
But what I am going to tell you is that the video coverage is better, hands down.
That's because with video, there's never any ambiguity about what's being said. You can see it all right there on screen...
No more rewinding audio recordings again and again and asking yourself: "Did he say that ticker was AMT or AMD?"
And all the charts and graphs these guys are always referencing when they talk?
With AF's video coverage bundle, none of that stuff will be gobbledygook to you any more. You'll be able to see and understand it, just like the people in the front row.
And all those roaring belly laughs you keep hearing?
When you're watching all the action in high-def, you'll finally get all the jokes.
The choice is yours, but I just want to remind you of something: This is the last Agora Financial Investment Symposium there will ever be...
I know that if you don't capture it for your future enjoyment somehow -- audio-only or high-def video -- you WILL regret it.
Well, that just about wraps it up for me.
(Editor's Note: Although your Roving Reporter series is coming to an end, you still have a short window of time to act to claim the LOWEST possible price. But that window is closing. 30 hours and counting.... Have you grabbed your recordings yet? Click here to listen in to all the action at the lowest price.)
Before I sign off from this event forever, though, there's one last personal anecdote I want to share with you.
It happened on Day One of this year's Symposium -- and it's a little surreal...
But I swear it's absolutely true. What the Eagle Told ME As you know from these dispatches, I'm working balls-to-the-wall, around the clock once the Symposium gets under way...
But I just couldn't leave what might be my very last time in Vancouver without one more spin around the beautiful and serene Stanley Park.
So at 8:30 Tuesday morning -- while I should have been prepping for the bottled lightning that is Day One of the Symposium...
I hooked a ride down to Spokes cycle shop on the waterfront to rent a mountain bike and take my last lap around the island.
And as I got warmed up and rolling along, two things were on my mind.
The first thing was how much this event has meant to me over the years. As I may have mentioned, this year marks my fifth trip to the Symposium.
I can honestly say that at just this one annual event, I've learned more about money -- not just making it, but about money itself...
And more about resources, metals, agriculture, technology, and the markets...
And more about economics, politics -- and the way the world actually works...
Than from all other sources combined throughout my 44 years. College and grad school included.
The second thing I was thinking about was that eagle and bear I'd seen the day before.
The symposium was about to kick off. And I knew that it was going to be about the increasing divergence in America between never-say-die entrepreneurialism and a bullying, unchecked, ever-more-punitive government.
I was thinking about what I'd written the night before about the symbolism of the eagle and the bear, as it relates to the Tale of Two Americas theme...
And I was really having an inner crisis about which of these two forces I actually thought was going to prevail. It's getting to be a tough call nowadays.
OK, here's the surreal part.
In the middle of this thought, I passed under the awesome span of the Lion's Gate Bridge, and rounded Prospect Point to a spectacular final view of Burrard Inlet.
And so that you could experience this splendor along with me, I stopped to take the picture at right...
This "eagle or bear?" question still dominating my mind.
Now, after I had my shot, and was about to pedal off, I turned for one last look up at the bridge looming high above me.
And from out of its shadow, about 100 yards over top of me...
Flew a magnificent bald eagle, pumping its wings, making slow but steady progress against a stiffening west wind.
I watched that beautiful bird, my hand shielding my eyes, until I could no longer make it out against the cloudless blue sky.
And with that, I had the answer to my question.
That's really what the Agora Financial Investment Symposium has been all about these 14 long years...
Helping people find answers to the financial questions of the day.
I hope this Symposium has helped you in some meaningful way at some point during that span.
And I hope these dispatches I've written have helped to lead you toward the one decision you need to make to get the answers you seek this year...
You know what that decision is: Audio or video.
And you can make it right here. Choose wisely...
And Viva Vancouver!
Fare thee well,
Jim Amrhein
Symposium Roving Reporter
P.S. I don't need to tell you again that this is the last chance you'll ever have to get your own piece of financial history -- with audio or high-def video coverage of the LAST Agora Financial Investment Symposium...
But I should remind you once again that after tomorrow at midnight, your prices for this coverage will go up by as much as 50% -- no matter which option you choose, audio-only or high-def video. To lock in your low "show price" now, click anywhere in red in this dispatch.
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