Despite potential downside risk, gold prices may move higher and not because of inflation but rather because of deflationary pressure. Here, on Kitco News, I explain how rate hikes may work in gold’s favor.
Just click here to watch
Last week, Brazil Resources (BRI.V) announced game-changing news…
BRI is a small gold exploration company with several projects located in the U.S., Canada, and Latin America. Over the past few years, they’ve used one of the worst bear markets in the history of the resource sector to acquire these gold assets for pennies on the dollar.
There was a time when nobody wanted to own defense stocks …
In 2012, the sector underperformed the markets. Investors avoided defense names because the U.S. government was about to cut the defense budget by $1.2 trillion over the next 10 years. That amounts to about a 15% reduction in spending on an annual basis.
These spending cuts were part of the 2011 Budget Control Act. The goal of this legislation was to avoid a debt-ceiling crisis and reduce our huge deficit over time. These cuts would start in 2013 and take place annually through 2021.
The defense sector would see the biggest cuts. That explains why most defense names underperformed the market.
Ten years ago, Stanley Druckenmiller issued a dire warning …
Druckenmiller is one of the world’s greatest investors. He is famous for forcing the devaluation of the British pound in 1992. He was working for hedge fund legend George Soros at the time. This trade generated more than $1 billion.
He also founded hedge fund Duquesne Capital in 1981. Over the next 30 years, he averaged 30% annual returns. That’s more than four times better than the S&P 500 over the same time frame. In fact, Druckenmiller never had a losing year over his 30 years at the fund.
A few years before the credit crisis, Druckenmiller warned investors that Federal Reserve Chairman Alan Greenspan was creating an “epic mortgage bubble, which was sure to crash.” If you followed his advice, you probably saved a lot of money, as stocks plunged by more than 30% in 2008.