Investors, particularly in Europe, must be stockpiling gold now to shield themselves against currency devaluation, stated Frank Holmes, CEO of U.S. Global Investors. “What’s also exciting is why gold’s above $1 three hundred [an ounce] is seeing the amount of debt supplying poor real hobby fees. It’s $9 trillion,” Holmes advised Kitco News. Holmes said that issuing low-yield or poor-yielding debt, particularly in Europe, is “currency destruction.” Regarding the mergers in the mining area, Holmes said that consolidation is necessary due to a dwindling of reserves. “I think you get those clever guys who understand this thesis that there’s height gold, and [reserves] are very tough to update, so that you’re going to get these mergers that attempt to preserve their status quo,” he stated. His remarks come as Newmont and Barrick have agreed to a joint challenge in Nevada in place of a complete merger.
“It’s called top gold. They’re scrambling to try to maintain; they can’t update. Just think of Nevada. After they had placed their joint mission together, those two corporations would produce 4 million oz a year. If they collaborate and force down their charges, they could preserve that 4 million oz. A year,” he said. Holmes introduced that the highest boom inside the mining quarter might come from mid-cap and small-cap organizations.
