Rule Symposium 2022: Fed can’t fight inflation and recession at the same time – Investing News Network | Omd Cialis

In the last week of July, market professionals, investors and corporate executives gathered in Boca Raton, Florida for the Rule Symposium hosted by veteran investor and speculator Rick Rule.

The four-day event, held from July 26-29, included numerous panels, presentations and discussions on the current commodity cycle and what is driving the stock markets.

There has also been a rigorous discourse on the mode, drivers and factors causing inflation, as well as how central banks like the US Federal Reserve are responding by raising interest rates.


Day 1 and 2: Bursting bubbles and banks

After a brief introduction and a well-attended gala reception on July 26, symposium attendees rose bright and early on July 27 to hear insights from leaders like James Rickards.

Rickards, who is an economist and editor of Strategic Intelligence, participated in Super Bubbles – Fact or Fiction? Panel discussion also attended by Rule, Grant Williams, Podcast Host and Senior Advisor to Matterhorn Asset Management, and moderator Albert Lu, Founder of Luma Financial.

To provide context, Lu laid out common definitions of bubbles and superbubbles: both are delineated by sigma variations—a unit of measurement used when talking about statistical significance—only in different amounts.

“They have defined a two-sigma variant as a bubble and a three-sigma variant as a superbubble,” he said. “A bubble happens a few times in a lifetime (e.g. the dot-com bubble). A super bubble is like 1920, maybe once in a lifetime.” However, Lu acknowledged that these things are happening more frequently now.

This sentiment was shared by Rickards, who noted that bubbles are easy to see – due to the sigma variations – but difficult to predict when they will burst.

According to the well-known economist, there are currently three super bubbles: stocks, real estate and commodities. Panelists stressed that once a bubble bursts, it could take up to 25 years to recover; However, good companies will be able to maneuver out of uncertainty faster and more agile.

The remainder of the morning included presentations from Ross Beaty, Chairman Emeritus of Pan American Silver (TSX:PAAS,NASDAQ:PAAS) and Equinox Gold (TSX:EQX,NYSEAMERICAN:EQX). He used his time to highlight the value of gold, saying its long track record validates its position as a store of value.

“I just think that gold is like a coil spring today,” he said. “It just has this amazing intrinsic value. And that intrinsic value will be realized more (in the) near future.”

Beaty’s gold-focused presentation was followed by an introduction to Battle Bank, a new financial institution founded in 1994 by Rule alongside Frank Trotter and Vincent Amato, two of the men behind EverBank.

Conceived as a “better bank” and formally launched in early 2023, Trotter told symposium attendees that the Battle Bank will function as a national community bank with low overheads.

“The US banking industry – Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), Chase (NYSEAMERICAN:CCF), Charles Schwab (NYSE:SCHW) – US banks retain $53 billion per year of your money,” Trotter said.

“Because[US banks]have to run branches, they have to do all these other businesses that they do. And the branches are really there so they can sell high-priced products like variable annuities and things like that to people wandering in aimlessly off the street.”

After a break for lunch, the symposium guests divided into groups and participated in focused workshops covering a range of topics including company presentations, market overviews and investment strategies.

Day 3: Fed rate hike and inflation take center stage

Danielle DiMartino Booth took the stage early July 28 as the day’s keynote speaker; Fittingly, their appearance came the day after the Federal Reserve’s last rate hike.

DiMartino Booth, an outspoken critic of Fed Chair Jerome Powell, underscored the impossibility of Powell’s insistence that the Fed could steer a soft economic landing.

“Yesterday we had what the market certainly interpreted as another Powell pivot,” DiMartino Booth told the crowd. She added that the Fed has a choice to make: it can either curb inflation or fight the recession.

“We can’t do both. And I think that’s what we need to focus on,” she said.

The founder and head of Quill Intelligence concluded her speech by underscoring the connection between the rising stock market and rising interest rates.

“Every time the stock market goes up, it says, ‘This is another really big rate hike,'” she said. “And what people don’t understand is the irony that risky assets are going up, which means you’re buying another rate hike that’s lagging through the economy — but we’re seeing it.”

Later that morning, DiMartino Booth sat on the “Taming Inflation – What Will it Take?” panel with Dr. Nomi Prins, David Stockman and Rule.

dr Prins, a financial expert and author, sees the current market as an opportunity to buy resource positions, particularly in the energy space. “What we saw yesterday is the Fed looking at what’s going on in terms of the real bits of inflation that’s driving this core number up and driving the headline up, which is all energy related,” she said.

Stockman, who served as director of the Bureau of Management and Budget under US President Ronald Reagan, warned of the precarious position the Fed now finds itself in because of the country’s $88 trillion debt.

“The Fed has no choice but to tighten further because inflation is much deeper anchored and will stay in the (8 to 9 percent) range for much longer than anyone is expecting today,” Stockman said.

“And as a result, the economy will collapse badly. And then we’re going to find out that this party that we’ve been throwing for the last 20 to 30 years wasn’t practical.”

Inflation was also discussed separately by Rickards the day before – explaining why rate hikes may not be enough to reverse their effects and noting that inflation comes from multiple sources.

“The supply-side of inflation called ‘cost push,’ (where) oil prices go up, food prices go up, transportation costs go up … and those costs are driven into the economy.” The other type of inflation, which Rickards called “demand Pull” comes from the demand side of the economy. Here, consumers get “an inflationary mindset” that causes them to make large purchases now only to avoid paying for the same item later.

As noted by Rickards, we are currently in an inflationary “cost hike” driven by the high cost of energy, food, transportation and so on. The economist and editor went on to say that while we haven’t seen “demand-pull” inflation, we certainly could, and it’s “something worth watching very closely.”

Investing News Network conducted video interviews with a number of expert speakers from the symposium on the penultimate day of the event – click here for the YouTube playlist.

Day 4: Mining veterans share words of wisdom

The final day of the conference began with a speech by Rule, who paid his respects to Lukas Lundin, the mining magnate who founded the Lundin Group. Lundin died on July 26 after a long battle with brain cancer.

During his eulogy, Rule shared how often Lundin played a pivotal role in his life.

Following his somber remarks, Rule moderated the annual Living Legends panel, a venerable who’s who of the mining industry, including Beaty; Randy Smallwood, Chairman of the World Gold Council and CEO of Wheaton Precious Metals (TSX:WPM,NYSE:WPM); Sean Roosen, CEO at Osisko Mining (TSX:OSK); Rob McEwen, CEO of McEwen Mining (TSX:MUX,NYSE:MUX); and Robert Friedland, executive co-chairman and director of Ivanhoe Mines (TSX:IVN,OTCQX:IVPAF) and Ivanhoe Electric (TSX:IE,NYSEAMERICAN:IE).

The hour-long discussion was highlighted by each legend recounting their entry into the mining sector and how their projects and paths have crossed over the years.

Friedland was also present following the panel for the closing keynote address of the symposium, where he underscored the important role that the resource sector plays towards the global goals of mass electrification.

The four-day event ended with a hilarious exploratory panel discussion that focused on case law. The panellists agreed that a company’s management team and track record are of paramount importance. But that means little when the project is in an inhospitable or geopolitically unsafe jurisdiction.

Dont forget to follow us @INN_resource for real-time updates!

Securities Disclosures: I, Georgia Williams, do not hold a direct interest in any of the companies mentioned in this article.

Editorial Disclosure: Investing News Network does not guarantee the accuracy or completeness of any information reported in interviews it conducts. The opinions expressed in these interviews do not represent the opinions of Investing News Network and do not constitute investment advice. All readers are encouraged to do their own due diligence.

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