In 2011, as gold prices rocketed to $1900 and oil was trading above $120 a barrel, there were few analysts who saw anything but further gains. But Marin Katusa of Katusa Research had a different opinion. At a major commodity conference Katusa, to boos and jeers from the audience, held strong to his analysis that an imminent deflationary collapse in commodity prices was on the horizon. And collapse they did.
According to Katusa, who is closely involved in the Canadian resource sector, most people simply assumed the good times would go on forever… because it was different this time. But like any uninhibited party fueled by unlimited cash, the hangover was sure to follow.
There’s no doubt you had massive high paying jobs. In Canada, the province that benefited the most is Alberta… In the last twelve months they’ve had 70,000 layoffs of jobs paying over a hundred grand a year.
…when I’d go to these oil towns you’d sit down at the casinos with them and these guys were all about the hookers and blow… they were all about their toys… big fancy trucks… snow mobiles… and they’re in the field for two weeks and they make $20,000 and blow it all at the casinos.
You knew it couldn’t last.
As Katusa notes in his latest interview with Future Money Trends, though the crash has been brutal for the sector, it’s not over yet and it’s going lower for longer.
They [OPEC] can survive at $20 oil…
For two years everyone’s been saying, “OPEC’s going to cut back.”
They reality here is, why would OPEC cut production? That would only prop up the Russians and the shale sector.
And while most will argue that low oil prices will wipe out most of America’s shale industry, Katusa has a contrarian view, suggesting that shale sector debt, while significant, is not necessarily going to cause these companies to go under in the immediate future.
Because what banker in their right mind wants to get dirty and actually operate an oil field?
So the debt will be amended, extended and then they’ll pretend.
… Because you can’t just shut down an oil field. You have to reclaim those wells, which means you have to shut them down and environmentally reclaim them… and it costs more to do that today than what the actual value is.
The bankers know that.
… With innovation, in the Western world, costs will decrease and the bankers have no choice but to amend, extend and pretend the debt.
So they’re going to go lower for longer.
In short, going forward we should expect widespread manipulation from the producers and the banks themselves to keep the bankruptcies at bay.
But recession still looms, and Katusa says that there are two things we can count on in the near future and why people need to rethink their investments:
The economy is changing… In a zero-interest rate policy world people have to rethink their investments… You’re looking at higher volatility, lower returns, but much higher risk.
With all this going on in the world there are only two things that can happen.
We continue with negative interest rates, which I see the trend globally… 35% of Eurozone countries already have negative interest policies…
And there’s going to be quantitative easing for the people… QE4-P… and that’s the reality here.
Negative interest rates are a tax on wealth… a tax on savers.
And if you haven’t already guessed, amid all the volatility and debasement of currencies, one asset class, according to Katusa, will survive and counter the coming helicopter drop of freshly printed dollars:
There’s a great way to make money on this if you get ahead of QE4P… the quantitative easing for the people… and gold is one of the ways to do that.
In his must-see interview, Katusa expands on this forecast by noting that, on top of all the bailouts, trade tariffs, and quantitative easing to follow, China, in an effort to maintain the perception of stability in their economy and financial markets, will soon begin flooding the global economy with commodities like aluminum, steel, iron ore and coal, which will continue to have a deflationary impact on broader commodity markets.
But the one sector they can’t flood – precious metals – is the very sector investors should be looking at as a way to not only preserve wealth going forward, but to grow it exponentially as crisis continues to hammer the global marketplace. That’s why Katusa has disclosed he is writing million dollar checks to one specific gold acquisition company, in similar fashion to other noteworthy insiders who are moving heavily into gold including Doug Casey, Eric Sprott, George Soros, Stanley Druckenmiller and Carl Icahn.
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