Mining stock disconnect presents long-term value
The guest argued that the disconnect between record-earning gold and silver producers and their lagging stock prices is a temporary knee-jerk reaction to liquidity fears.
The argument
Despite printing record free cash flow, major miners have sold off due to fears of a US dollar liquidity squeeze from Middle East escalations. The guest expects miners to bottom out and surge once the metal consolidation phase ends.
The thesis, stress-tested
✓ What validates it
- ✓Stabilization of gold and silver prices post-consolidation
- ✓Next quarterly earnings showing sustained record free cash flow for major producers
▸ Risks discussed
- ▸A severe US dollar liquidity squeeze dragging down all equity prices
- ▸Prolonged consolidation of physical gold and silver prices
Hear it yourself
"seeing signs that the petrodollar is under threat as, of course, we've seen oil for renminbi transactions between China and Iran assuming what what you're saying all plays out and we start to see gold used more as an instrument of trade. Is that putting major pressure on the petrodollar and the US dollar's reserve currency status? And what do you think The US response would be to that? I think the, US Dollar will still be a reserve currency, for the western block of countries. Like, you know, I'm thinking just the European countries, Canada, Australia, etcetera."
11:45
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