Federal Reserve – The Contrarian Investor Podcast

Gold Prices Set to Move (Even) Higher: Dana Samuelson

Cover image, Season 6, Episode 12 Podcast

Gold Prices Set to Move (Even) Higher: Dana Samuelson

Published July 25, 2024

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Dana Samuelson, president of the American Gold Exchange, joins the Contrarian Investor Podcast to discuss why gold prices are set up to rally further — even after a 20% rise so far this year.

This podcast episode was recorded on Friday, July 19. 2024 and made available to premium subscribers the following business day. For information on becoming a premium subscriber — and the host of other benefits it involves — visit our Substack.

Content Highlights

Gold is trading right near all-time highs. Can there really be more room for upside? (1:48);
One thing missing from the equation for still higher gold prices is interest rate cuts… (3:36);
Another thing missing is fear in the market (5:07);
Gold has rallied 20% so far this year. A Fed rate cut will supply another 10%. $3000/oz. gold is in sight… (8:36);
What of the argument that there’s no tangible use for gold? (11:20);
Why gold coins are preferable to bars (14:30);
Background on the guest (19:39);
Quarters and dimes vintage 1964 are 90% silver (26:40);
View on digital currencies and Bitcoin. There is a place for it… (33:20);
How much of one’s portfolio should be earmarked for gold and precious metals? (37:15)

More Information on the Guest

What’s Got the Fed Spooked?

Published July 10, 2024

This blog post is an amended version of the Daily Contrarian from July 10, 2024.

Federal Reserve Chair Jerome Powell in his Congressional testimony yesterday again put forward the case for rate cuts. “Elevated inflation is not the only risk we face,” Powell said. “Reducing policy restraint too late or too little could unduly weaken economic activity and employment.”

It may not sound like much, but this is some of the most dovish commentary we’ve gotten from Powell since before his 2022 Jackson Hole speech. It begs the question whether the economy is really in as dire enough shape to where rate cuts become necessary, presumably as soon as the FOMC meeting on Sept. 18.

Existing economic data doesn’t exactly shout slowdown, much less recession:

Job production is still plentiful. Jobless claims are up a bit, but that’s from a low base.
Retail sales may not be growing as much as they were early in the year, but are holding steady at a very high plateau.
The housing market has slowed in certain parts of the country, but that might be more due to overbuilding than broader macroeconomic forces.

Conspiracy theories aside, it’s hard to see how the Fed could legitimately have an ulterior motive for cutting rates early. Either Jay Powell & Co are just stupid and reckless, or they’re trying to get ahead of things. Perhaps there’s a third alternative, which is that they’re setting the market up for rate cuts just in case they need them?

Come to think of it, even that gets into conspiracy territory. They probably are just concerned about the trajectory of the economy based on labor data and the housing market. Whether that is justified is another question entirely.

US Economy Too Strong for Fed, Where to Invest Now (Szn 6, Epsd 10)

Published June 14, 2024

With Leo Schmidt, River Eddy Capital

Leo Schmidt, founder of family office River Eddy Capital, rejoins the podcast to discuss his views on economy, markets, and where to invest capital in what may be a ‘stagflation lite’ environment.

“Labor markets are way too hot.” There will be “no landing” (1:48);
Non-farm payrolls came out much stronger than anticipated. What this says about the labor market (4:59);
‘Stagflation lite’ (8:31);
Our views of credit creation are outdated. The shadow banking system has replaced commercial banks as the primary source of credit. What this means (11:59);
The Federal Reserve probably needs to raise rates. Could they? Probably not — this year (22:21);
What does an investor do now? First up: Stocks that are AI/Nvidia (NVDA) plays. Celestica (CLS), Flex (FLEX), Sanmina (SANM), Jabil (JBL) (27:51);
Pharma spin-outs: Haleon (HLN), Kenvue (KVUE), Organon (OGN), Viatris (VTRS) (31:54);
Dollar stores, especially Dollar Tree (DLTR), are poised to outperform once there is an economic slowdown (39:07);
The bullish case for pipeline companies (46:59).