Gold's Bull Market Isn't Over—But the Risks Are Changing

Trevor Hall (0:16)

Hey, good morning, everybody. Welcome into this week's long form episode on Mining Stock Daily. Huge shout out to Tara Hutton, who helped make the Invisible investible. If you're at all interested in getting your company highlighted and being able to tell your story online through the Tara Hutton platform, it is amazing and really engaging. Go check them out at tarahutton.io. All right, let's jump into my conversation. Thank you, Jessica, and thanks for having us back.

Henrik, really looking forward to this conversation and preparation. You and I had a few conversations leading up to this. And there's just so many directions we're going to take this. We're going to try to keep it as succinct as possible. And the biggest themes we're going to stick with over the next 40 minutes, we're obviously going to talk Gold. We're going to talk debt in many different forms and what that means. And we will also talk about the miners here and the number of cycles we've seen most recently.

Just quick introductions with these slides. But you have some history in this sector.

Well, some family history. What are we seeing here in this image?

Henrik (1:31)

This is a 130-year-old photo taken out in Alberta of my great-grandfather in 1897

You can actually see him. He's the gentleman who sits on the left side of the carriage.

Trevor Hall (1:52)

That's amazing.

Henrik (1:52)

And he went up there. The story is actually he went to Canada a little bit in California, but then moved on to Yukon and didn't succeed there in mining. So he went down with a friend of his and set up this shop. You see on the photo there and they bought a farm where they actually grew horses that they bought from the Indians. And then they were selling the shopless to the mining industry at that point in time. And I think he left the country in 1905 with a few relics and enough money to buy a farm in Denmark.

Trevor Hall (2:35)

Thanks for sharing that history.

I love those old photos. Listen, we're going to talk about this gold bull market. And despite the volatility we've seen recently, I firmly believe we are still in a gold bull market. Walk us through your thoughts on what really ignited this. Was it the freezing of Russian sanctions? Was it central bank buying? All of the above or anything that maybe we haven't discussed?

Henrik (3:06)

Yeah, I entered this business in around 2014, by the way, or 2013, I should say. And it was a short stint, the first one, because there was my father-in-law's coal mine in Eastern Ukraine. And that ended in February, March of 2014 I know some of you have been here before, and you remember when we took the travel down from 2000 to 1050 And what we see there, I think, starts in around 2016, when we saw the 1046 low. And then the first move up was a... We didn't know at that point in time it was a low, but it is a correction. But the lines I've put in, there's one missing, but we'll get to that one later. But this is really the regime change we saw because of the Russian reactions into Ukraine. And then what the world then did to their own currencies afterwards. Felix Sulaabend this morning mentioned this. And I got to say, his historical and global macro view, I am at least 80% in alignment with. And he was speaking about the change, and it was maybe over hundreds of years he was talking about. I actually wrote an article about this published in April.

And I think every regime in the world, meets some obstacles and something just changes. And I do think this was the invasion into Ukraine and what happened to the Russian reserves in the central bank and elsewhere. I mean, it's not only the central bank, but all private assets in the west were also a lot of private assets by private people who not necessarily are in agreement with the political regime in Russia. They lost their assets on my own account. I was a part owner of a gold mine in eastern Russia, and we lost this because this was their counter move. So we stole from them, and then they started stealing from us. And the lines that I put in there are actually to show the exact dates. The first one is when the CIA report came out in November in 21, and it ended up in an article in Washington Post or Financial Times, I can't remember, maybe both even, one week later. And that's where we saw the first ball start up, that people were aware that actually the rumbling in Ukraine would probably develop into something new. And the next one is actually the week where we saw the invasion. And funny enough, it peaked up one or two days. And this is not an uncommon phenomenon because it happens once again in the same chart.