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Jon Case: Monetary Expansion Yielding Diminishing Returns

Tom welcomes a new guest to the show, Jon Case of CI Global Asset Management. Jon is the lead manager of the Sentry Canadian Resource Class and Precious Metals Fund.

Jon discusses the massive money printing and stimulus that has, in many cases, increased household income. Further stimulus will likely be required to help heal the economy. He expects the pace of the recovery to be relatively slow.

With every central banking printing, we are going to continue to see asset prices inflate. Eventually, all that debt will result in a day of reckoning but exactly when that occurs is uncertain.

He discusses the Fed’s problem of encouraging inflation and why they have been unable to overcome the collapse in money velocity. He sees the role of government, central banks, and policymakers beginning to blur. Expect further direct government intervention to the consumer. The result of all this will be an environment very friendly to gold.

The US Debt to GDP levels has risen this year to uncharted territory. We weren’t expecting these levels for another four or five years.

Jon says, “The lenders are the ones that are losing the most in this environment. The biggest suckers today at the table are those that are lending to government at thirty-year rates.”

The biggest risk to the dollar and fiat currencies today might be digital currencies. Central banks are worried about being left behind by innovation. Money creation outside the halls of power is terrifying to governments and central banks. He discusses why the creation of a new digital currency seems likely.

Jon outlines what to look for in good mining equities. Some institutions are protecting themselves by having mining equities in their portfolios instead of just gold.

Talking Points From This Episode

  • Money Printing & Stimulus
  • Fed’s Fight for Inflation
  • Debt to GDP and Lending
  • Digital Currencies
  • Mining Equities & Green Energy

Time Stamp References:
0:00 – Introduction
0:50 – CI Global Overview
1:25 – Macro Debt Picture
3:36 – Market Risks & Assets
5:13 – Debt, GDP, and Inflation
10:10 – Asset Bubbles
12:32 – Debt to GDP Ratios
15:11 – Savers and Lenders
18:16 – Risks to the Dollar
21:28 – Gold as a hedge.
22:56 – Gold Equity Factors
26:25 – Dividends Growth Vs. Value
29:35 – Silver Vs. Gold
32:04 – Gold This Week

Guest Links:
Amazon Book (Reinhart/Rogoff):
Amazon Book (Ray Dalio):

Jon joined Sentry in 2012 and has more than 15 years of financial industry experience. Jon is the lead manager of Sentry Canadian Resource Class and Sentry Precious Metals Fund. Before joining Sentry, Jon was a partner and precious metals equity analyst at one of the country’s largest independently owned investment dealers. Jon has a Master of Finance Degree from the Rotman School of Management, University of Toronto, and a Bachelor of Commerce degree from McMaster University. He holds the Chartered Financial Analyst (CFA) designation and has been a member of the Toronto Society of Financial Analysts since 2006.

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