Silver price to rise 1,000% as gold hits $5k by 2027, governments to "debase" their currencies - Rob McEwen
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McEwen, who has almost four decades of experience in the mining industry and sold his company GoldCorp to Newmont in 2019 for $10 billion, claimed that as governments engage in loose fiscal and monetary policy, the weakening of fiat currencies will benefit hard assets like precious metals.
"Hard assets will increase in value as the dollar drops in relative value to other currencies, because governments are irresponsible," he said. "They steal from their citizens by printing excess money and borrowing in ways they shouldn't… Look at the amount of the debt most of the Western world has right now, it's enormous."
Speaking at the 2023 BMO Metals, Mining, & Critical Minerals Conference with Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, McEwen said that as a "student of economic history," he sees gold and silver rising as Western governments "debase" their currencies due to excess fiscal spending.
"Governments try to get out of their debt by debasing their currency, and we're going to see a huge wave of that," he forecast. "We're in an unprecedented period."
McEwen said that he is positioning his portfolio to benefit from the anticipated rise in gold prices through his investments in mining companies, including juniors.
To find out which specific junior miners McEwen is investing in, watch the video above.
A Critical Metal
As automakers seek to produce more electric vehicles, greater vertical integration and supply-chain consolidation will occur, according to McEwen, who sees car manufacturers gaining direct control over the critical metals required for electrification, such as copper and lithium.
McEwen's subsidiary, McEwen Copper, recently concluded a deal with automaker Stellantis, which manufactures Chrysler, Dodge, Maserati, and other prominent car brands. The deal involves a $155 million investment from Stellantis in return for 14.2 percent of McEwen's copper company.
In a statement released following the conclusion of the equity deal, Stellantis said that this is a "strategic investment" as the company aims to reach carbon neutrality by 2028.
In January, Tesla CEO Elon Musk tweeted that "no change in copper production is required for the transition to sustainable energy," despite pressure worldwide to move towards electrification and so-called green sources of energy like wind and solar power.
McEwen agreed with Musk but said that copper output would be strained in the coming decades due to lower mine production.
"You have to make up that loss," claimed McEwen. "We're not seeing an increase in production right now. You're hearing about new copper mines, but a lot of the established production is dropping off. The grade is dropping off, and the tonnage is dropping off."
These supply pressures could send the copper price higher by the end of the decade, said McEwen.
To find out how high McEwen thinks the copper price could reach, watch the video above.
|Pierre Lassonde: Gold to reach $2,400 by 2028 as geopolitical tensions mount, central banks purchase more bullion|
Inflation and the Federal Reserve
Over the past year, the Federal Reserve has increased interest rates by 450 basis points in an effort to curtail inflation, which reached a four-decade peak of 9.1 percent in June of 2022.
Although inflation has cooled since then, reaching 6.4 percent in January, McEwen said that inflation would "persist and get higher."
"Input costs are going up right now," he said. "There are shortages all over the place right now."
He pointed to his experience of the mining industry, which he said had faced shortages not only in materials, but also in workers.
"They [workers] are going to be demanding higher wages to compensate for the inflation that they're experiencing right now," he said.
McEwen, who correctly predicted prior Fed rate hikes, said that the Fed would "resist raising rates."
"There's going to be a tendency to want to pause [rate hikes], but I think it's temporary," he said. "The rates will go higher."
To find out McEwen's economic outlook, watch the video above.
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