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John Rubino: Debt Death Spiral Ignites Opportunity In The Miners

Tom welcomes a new guest John Rubino to the show. John is a former Wall Street financial analyst and accomplished author. Rubino highlights the concerning state of the U.S. consumer and the increase in debt since the pandemic. He points out that while some macroeconomic indicators may appear positive, consumer data points suggest a different story, with many Americans resorting to credit cards for everyday expenses. Rubino warns that the U.S. is running on a deep debt system that cannot handle higher interest rates and suggests that interest rates must decline to avoid a recession.

John is concerned for the potential economic crisis that could arise from the high levels of consumer debt and defaults on loans, as well as the low housing market. Rubino suggests that this downturn could be worse than the 2008 financial crisis due to the higher debt levels. The Federal Reserve’s change in stance from considering raising interest rates to cutting them is seen as a response to the potential crisis in order to maintain a strong economy and political power leading into 2024.

The conversation then shifts to the outlook for gold. Rubino mentions that with the Fed no longer raising interest rates, gold could rise, and historical charts indicate that it could perform well as a safe haven asset. The discussion also predicts an optimistic future for gold in 2024, with a potential resistance at $3,000 if it decisively breaks $2,500.

Rubino also speaks about the manipulation of gold by central banks and the potential for silver to outperform gold. He explains that silver’s psychological impact on purchase power could attract momentum traders, leading to an increase in the silver versus gold price. The underperformance of miners compared to gold’s performance is attributed to the high cost of mining, but with fuel costs decreasing and gold prices increasing, the margin could improve, making miners more attractive to investors.

The interview concludes with a discussion on investing in junior or exploration companies. Rubino mentions the success story of Great Bear Resources, a company that found a gold deposit and was eventually bought out, leading to a dramatic increase in its share price. He emphasizes the importance of management credentials, consistently positive drill results, and a supportive mining jurisdiction when evaluating such companies. The potential for buyouts and life-changing opportunities for investors is also highlighted.

Lastly, he discusses the importance of looking for opportunity during crisis periods and staying optimistic.

Time Stamp References:
0:00 – Introduction
1:34 – Consumer Debt & Savings
7:25 – Feds Recent Reaction
9:30 – Deflation & Slowdowns
12:44 – Debt & Bubbles
15:42 – Recession Retrospectives
17:49 – Public Financial Literacy
26:16 – Strategic Relocations
31:39 – Pivots & Gold Outlook
37:16 – Metals Manipulation?
42:29 – Gold/Silver Ratio
44:42 – Miners & Performance
50:37 – Bull Markets & Mergers
54:48 – Evaluating Miners
1:00:00 – Lessons & Profits
1:03:10 – Crisis & Opportunity
1:04:36 – Wrap Up

Talking Points From This Episode

  • The Federal Reserve has decided to end their interest rate increases due to political pressure and will soon start cutting interest rates.
  • Consumer debtload is a major indicator of a looming economic crisis as people are increasingly relying on credit cards for daily expenses.
  • Precious metals like gold are expected to keep rising, supported by multiple factors such as the high consumer debt levels and lack of trust in government.

Guest Links

John Rubino is a former Wall Street financial analyst and author or co-author of five books, including The Money Bubble: What To Do Before It Pops. He founded the popular financial website in 2004 and sold it in 2022, and now publishes on Substack.

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