If you subscribe to this report, you likely view gold as an undervalued, under-appreciated asset that is overdue for a substantial (and sustained) move to the upside.

The fundamentals underpinning the precious metal are clear, obvious, though no one appears to be paying attention.

Across-the-board (accelerating) inflation, difficult-to-comprehend debt ($29 trillion on-balance sheet — $120+ trillion off-balance sheet in the US alone), negative real interest rates, increasing market volatility, not to mention geopolitical risks—take your pick: Afghanistan, North Korea, Taiwan, Ukraine…

On the subject of debt, we talk about these multiple trillion-dollar liabilities like it’s chump change.

The pic below represents one trillion dollars in double-stacked pallets of $100 bills (for those of you wondering). The tiny image on the bottom left is an average-sized man standing next to said one trillion-dollar stack.

On the subject of ‘printing presses gone wild,’ it’s recently been suggested that 40% of all the greenbacks currently in circulation have come into existence over the past two years.

In his own unique way of paring down complex subjects to their most basic parts, Rick Rule characterizes QE as “government-sponsored counterfeiting.”

The way I view it, the USD represents the common stock of the United States of America, and its board of directors—the Fed—is a serial diluter, threatening the purchasing power, and ultimately, the standard of living of its shareholders (the average American citizen).

This next vid is an oldie but goodie (those who haven’t seen this, prepare to howl)..

As its primary savings vehicle, the average American is buying 10-year notes that are currently yielding ~1.5%. They’re doing this while the USD is depreciating by ~6.5% per year.

That’s a negative 5% rate of return (potentially) for the duration of said note. What impact will losing 5% per year have on one’s savings and quality of life?

Smart Money?

According to Rick Rule, precious metals (and related assets) currently comprise < one-half of one percent of the total value of savings and investment in the US. The norm—the three-decade mean—is one and a half percent. That sets up an interesting dynamic and a potentially powerful catalyst if investment in the sector merely reverts back to the three-decade mean.

If the average investor suddenly clues into the destructive forces behind QE and negative real interest rates, demand for all things gold and silver will triple. If it accelerates beyond that… I think Doug Casey once stated it best: “When the market wants into gold stocks, it’s like trying to force the contents of Hoover Dam through a garden hose.”

This is why we’re here. The way I see it, those of us accumulating high-quality gold and silver plays at these lowly levels will soon be marked as ‘Smart Money’.

Going forward

As I stated recently, I’m looking to shake things up a bit here at Highballer—I’m looking to cast a wider net when shortlisting potential candidates for your consideration. In the coming weeks I’ll be presenting several new ideas—companies I believe hold significant upside based on their underlying fundamentals.

Three of these companies are coming on as Highballer clients. FYI, I won’t take just any company on. They need to check all my boxes. First and foremost, they need to be helmed by experienced management teams whose values align with their shareholders.

Management is everything in the junior exploration arena (nearly everything). You can have a great company-maker of a project, but without the right team in place—a combination of gifted rock kickers and competent capital market types—things can fly apart at the seams. Operational inefficiencies often create a processional effect that can lead to an erosion in shareholder value via reckless spending and an endless cycle of heavily dilutive raises.

The client companies I feature in these pages have the technical and capital markets side covered.

I’ll present the first company on my list in the coming days after they drop (pending) assays from their flagship project—sometime next week would be my best guess.

In the meantime, I hope to be updating progress on a diversified energy metals company we follow closely.


—Greg Nolan

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