by Gary Alexander
November 7, 2023
The New Orleans Saints won their last two games … a Louisiana Republican was just installed as the new Speaker of the House … and the streets in the French Quarter were the cleanest they’ve been since Ash Wednesday (since Mardi Gras and Halloween are the two rowdiest nights of the year, requiring street cleaners to come out in force). I arrived in The Big Easy on “All Saints Day,” November 1, the opening night of the New Orleans Investment Conference, or “The World’s Greatest Investment Event.” I’ve attended each event since 1981, the last 40 as speaker, MC and/or panel moderator, sometimes all three.
While some may dispute “World’s Greatest,” the world Event is the key. The first thing you hear, see and taste, after a few preliminary talks, is the hour-long Welcome Reception, with a Dixie-style trio. For years, it was Chris Burke’s clarinet-led trio and last week it was the Swingaroux trio. Within the hall, there are free drinks and a dozen or more Creole and Cajun food delights, then a few more investment talks after.
As for “Greatest,” top this: I’ve had the chance to interview the late economist Milton Friedman there for an hour, three times, plus former Fed chair Alan Greenspan, the late Presidential candidate Senator Barry Goldwater, and I’ve moderated a dozen spirited political debates. As a VIP speaker coordinator in the 1980s, my wife Karen has squired the likes of Henry Kissinger, William F. Buckley, George McGovern, Ambassador Jeanne Kirkpatrick, and Louis Rukeyser to and from the airport to the Rivergate convention center, and we’ve also hosted femmes fatales from Ayn Rand to Ann Coulter and Maggie Thatcher.
But enough name-dropping. We all know the investment focus of this group is Gold, but it has expanded far beyond gold. When James U. Blanchard III launched the first conference 50 years ago (January 18-20, 1974), gold was still illegal for Americans to own; gasoline prices were soaring due to the first Yom Kippur war (we’re now in a 50-year sequel). Since 1973, gold is up about 50-fold in price and crude oil is up about 30-fold, versus about 7-fold for the CPI. The conference now covers a cornucopia of natural resources but, more importantly, it covers the nature and future of money, and the future of our nation.
As I strode into the Hilton Riverwalk for the first sessions last Wednesday evening, I heard some superb talks on gold, since November and December are not just positive months for stocks, historically. They are also positive historical months in the precious metals. After hearing from the precious metals panel, the Aden Sisters (Pamela and Mary Ann) offered “Six Reasons Why Gold, Silver and Resources are Set to Soar.” Without showing their charts (which I captured on camera), I’ll summarize their six reasons:
#1: Interest rates have turned up after 40 years of decline. Using the 30-year yield, rates peaked at around 15% in 1980-81 and fell to 1% in 2020-21. In short order, they rose to over 5%. The 80-month moving average is now up to 2.7%. This is a “mega-change” of a 40-year trend, exhibited by the Fed’s stated policy of rates being “higher for longer,” after their stated ZIRP (zero interest rate policy) for over a decade. (Contrary to assumptions by many pundits, gold often rises in times of rising rates, like gold’s strongest bull markets, 1976 to 1980, when gold rose 8-fold, and 2001 to 2011, when gold rose 5-fold.)
#2: The U.S. dollar is beginning a long road down in terms of gold, but also in terms of stronger paper currencies. The dollar traded at over four Swiss francs in 1972, and now it is at par with the Swiss franc.
#3: Central bank gold buying is at a record high in 2023, after setting a new record high in 2022, and there is a reputed huge amount of new central bank buying off the books in several nations. China is now the biggest producer and buyer of central bank gold and probably private gold, including off the grid gold.
#4: The current national debt crisis, with a 10-fold increase in our national debt since 2001, resulting in rising interest on this out-of-control national debt. Interest on the debt now exceeds our defense spending.
#5: Global unrest in more nations with wars proliferating: Israel added to Ukraine, and China in the wings.
#6: The technical trend in gold charts from 1967 to 2023 points to a possibility of $4,000 gold this cycle.
I can’t say that I align with any super-high gold price predictions, as I see gold more in terms of passive (usually boring) insurance positions, a cash alternative, not a speculation, and not an alternative to well-chosen common stocks – but the Aden Sisters’ points were well stated, with ample historical precedents.
On Thursday morning, Robert Prechter showed us many convincing charts on the “Consequences of Market Optimism,” in which he backed up his view that this stock market is historically overvalued, and yet most traders are generally complacent. Samples: The Nasdaq 100 (speculative stocks) is at a record 19 times the Dow Utility index (composed of staid, boring stocks). He showed how the VIX (volatility index) is low, at 12.68, while the DSI is high, showing optimism. Also, the call vs. put index is high, showing optimism. I was almost convinced, but I recall him saying these same points many times.
Then, some brilliant investment advisors – including James Stack, Jim Iuorio and Peter Boockvar – also shared their concerns about the high technical levels in this current market, so they had reduced exposure to stocks. They were now favoring precious and industrial metals. Jim Stack’s overall stock exposure is currently equal to his all-time low, at 45%. Jim Iuorio likes gold, silver, mining stocks, bitcoin, crude oil and energy equities. Boockvar also likes energy and gold, uranium and copper, and he says the current “interest rate shock therapy” was caused by Japan coming out of its long-term zero-rate torpor.
Mid-day Thursday offered a long workshop break, so I took a break too, riding a Riverboat Jazz cruise with Duke Heitger and his Steamboat Stompers, but the weather was unseasonably cold (about 45 degrees) and the music was staged on an open-air upper deck, with some burning marsh fires out of control on the West Bank of the Mississippi, so I caught a bug which took me out of commission for the rest of the conference, so I’ll watch some seminar tapes and report on the rest of the talks next week.
Before closing, I want to say that Louis Navellier spoke often in New Orleans, and that’s where I first met Louis in the late 1980s before beginning to work with him in 1997. Louis is also a fan of gold and natural resources, including energy stocks, and he keeps a keen eye on world events, currencies and their impact on our investments, so what I’m hearing in New Orleans overlaps a great deal with Louis’ global views.
Next year marks the 50th New Orleans Investment Conference. Jim Blanchard ran the first 25 before his untimely passing. His protégé Brien Lundin ran the past 24, so I look forward to any surprises on the 50th.