Wealthion’s Best Of 2024: Lobo Tiggre Description: As we wrap up the year and celebrate the festive season, we wanted to share some of our favorite moments from one of your favorite Wealthion interviews from 2024: Lobo Tiggre with James Connor. Enjoy!
All the best for a happy, healthy, and prosperous New Year!
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Original interview: https://youtu.be/fqnySl8ib1I
Andrew Brill 0:00
Happy Holidays from all of us here at wealthion. To all of you, I’m one of your hosts here at wealthion. Andrew brill, we took a look back at this year, and hope you enjoy these favorite guest moments from one of our best interviews of 2024
Lobo Tiggre 0:18
the global economy is in recession. The US has been in this rolling a sort of mask recession, because of the labor market looking good, looking good, not necessarily being good, but looking good, and that when that final pillar of the US, labor or consumer, gave way, that’s when we’d likely see the fireworks going. And it seems to me that we’re at that threshold right now.
James Connor 0:43
And to your point, when you look at the price of oil, it’s been vacillating between this 70 to $80 a barrel. Copper was at five. Now it’s closer to $4 a pound. And quite often, these commodities are considered barometers of the economy or the global economy. Do you think that’s what these two commodities are telling us that the global economy is slowing down
Lobo Tiggre 1:04
absolutely especially consider that we have, you know, a hot war in the Middle East. You know, just if you had said that was going to happen to somebody you know three years ago, I’m sure that if you polled, you know, whoever Bloomberg polls, I don’t know where they find these people. They pull for these numbers. They pull out of their hats or other parts that we won’t mention. But you know, if you had polled people three years ago that there would be a major blow up in the Middle East, Israel at war, everybody would have been talking triple digit oil prices. So you may say, oh, 70s, 80s, you know, that’s still pretty hot. Well, okay, yes, historically, it’s pretty hot, adjusted for inflation, not so high. But with war, a hot war in the Middle East, that’s actually dirt cheap oil, in my view. So I see that as a very bearish indicator for global demand. And Dr Copper has called that for a reason. There have been serious okay, we had new supply coming out of the DRC. But we also had a lot of hits to copper supply coming out of Panama, problems in Peru, kerfuffles in Chile. So there has been actual supply constraint. And so for prices to go down in the face of that is really, you know, a big deal. There’ll be just a report. I forget who published it just this last week, I remember seeing a report how demand is just not keeping up even with the supply drops. So yeah, I think these are very powerful indicators. You know, both of them, oil is the energy of the world still, and copper, dr, copper is used in so many things. Both of them, I think, are telling something quite clear. If you’re willing to listen about the global economy,
James Connor 2:46
and you mentioned earlier that you you’re expecting a hard landing. What do you mean by that? Exactly. I’m
Lobo Tiggre 2:53
glad you asked, because, you know, hard landing should mean, you know, soup lines, all that sort of thing. Maybe not the Great Depression or Doug Casey’s infamous greater depression, but a real recession, we should see a lot of people out of work and a painful adjustment, typically in a recession, the US recession lasts two or three years. Housing and autos really take it on the chin, other telltale sectors, and I’m not sure. No, no, let me rephrase that. I don’t want to mince words. I do not think that’s actually what we’re headed for. When I say hard landing, I think that’s where we’re headed, in that direction. But I do think that the powers that be will not let it happen, or they’ll do everything they can. In other words, the money helicopters will fly again, the money flood gates will open. Pick your metaphor, bazookas, whatever metaphor you want. I think that the Fed is already pivoting in that direction. The time has come. Powell said to change policy, and don’t forget fiscal policy, even if inflation resurges. And Powell doesn’t want to go down as it burns. He wants to be a Volcker and he slams the brakes back on again. That doesn’t mean that Congress won’t send people stimmy checks. They’ve already established no fault of their own as sufficient cost to send people, not just a, you know, a boo boo kiss, you know, a few 100 bucks or something, but 1000s and 1000s of dollars, you know, material money, not to the banking system, but direct to consumers, because it’s no fault of their own, and obviously a recession is no fault of their own right. So the precedent is there. The the very recent message from the powers that be is, if anything goes wrong, we’ll send you free money as long as you vote for us. So I didn’t, I’m didn’t say that we’ll send you free money because it’s the right thing to do. So that can, you know, may paper the problem over I mean, if it blows up, we’re looking at, you know, major changes. I suspect that they may be able to paper this over again. As incredible as that may sound, given all that we’ve been through, but if nothing else, I think. That’s actually highly inflationary. We’ll see how the economy responds. If the news is scary enough that, and then the powers that be pivot, and they start sending people money. You know, that very thing could actually scare people, instead of making people go out and spend because now they got more free money in the mailbox. It could have people saying, holy, beep. You know, something is really wrong here. And you could actually see people pay off credit cards again, save again, buy gold. Gee. What a concept. You know. You could see a fear reaction sparked by the very same thing that they hope will just, you know, open the party and get the spending going again. Consumer, rah, rah, rah, we’ll see. I have no crystal ball. I don’t know how that will play out. They know how bad that’s going to get, and I think they’ll let the money helicopters fly before it gets that bad, so that could prevent it. If people start getting checks in the mail, then they don’t need to go down to the unemployment office, even if they’ve lost their job. So I don’t want to predict the unemployment number, but I think it will be obvious the impact of this, and again, the more easily foreseeable trend is the impact on money printing and what that does to real things that can’t be printed. So
James Connor 6:17
let’s talk about that now. And you touched on gold. Gold’s up 20% on the year, which is not too bad. And maybe you can give us your whole thesis on on gold and why you like it in this environment.
Lobo Tiggre 6:28
Well, first and foremost, say, okay, you know gold. Bug likes gold. Why are we even talking about this? What kind of what kind of headline is that? But I’m not a well, I was going to say, I’m not a perma bull, but I’m talking about gold versus the dollar, these fluctuations and speculating accordingly. And that’s not a constant. As a person who believes that gold is money, as I just said, there’s no time that I wouldn’t buy bullion just add to my stack. That’s like saying Lobo, how much is too much money, or how much is too much savings? You know, I’m never going to have too much savings. I’m always going to want to add to my stack. So, yeah, am I a permeable on gold? Sure, fine, you know, but don’t dismiss me, because last year, gold was not my highest conviction trade on this more speculative side with the stocks and things, that was uranium that worked out quite well. Uranium doubled last year. I’m not saying therefore I’m bullish on gold. So gold’s gonna double this year, but it’s up already and in I have to say again, I’m not trying to portray false modesty here. I’m trying to be accurate. And the reasons why I said that gold was my highest conviction trade for this year, like uranium was last year. Had to do with what we’re talking about now, the recession, the labor market breaking down, as we’re seeing now. Gold pulled a hockey stick before that happened. So I had a lot of people telling me earlier this year, Oh, you’re such a genius. You know, gold’s up already. Well, yeah, but not for the reasons that I said, and the reason why I’m bringing this up is because another pushback might be, you haven’t asked this, but a pushback might be, well, gee, Lobo gold’s up already. You know, has it priced in what you’re talking about? And so my answer is, no. The points are recessions going into recession in particular tends to be bullish for gold rate cuts. You know, gold famously doesn’t pay interest. That’s a bullish factor for gold inflation. If you directly correlate inflation and gold C by CPI, it actually has a very low correlation. In my view, though, that this is because gold leads inflation. So gold spikes in 2020 the inflation doesn’t kick in until 2022 and it looks like there’s no correlation, but gold was telling you what’s coming if the money helicopters fly again, as I expect them to use here, I think the smart money knows this, and I think you’ll see a lot more deep pockets piling into gold, even If inflation, CPI, at least, continues tracking towards the Fed’s arbitrary 2% target. And then the money printing, you know, filters through the economy. We start seeing real assets go up and inflation goes back up again. So you know that that’s the leading factor there. I’m sort of losing my thread of thought here for where we’re going with this question. But the argument, or that, the key point with this is that all the reasons that I was bullish for gold, which are now we see playing out. I think the evidence is clear in front of us that the reasons why I said 2024 was going to be a great year for gold, we’re seeing that play out now, as you and I speak, but we’re seeing it play out from an area, you know, from gold already at 2500 whereas when I made that call, we were still fooling around with 1900 2000 so I was thinking, hopefully, maybe gold will end up 2500 by the end of the year. We’re already there, and now the. Things that I think are bullish for gold are starting to happen. So, you know, I don’t want to make crazy numbers out there, but just, just think about it. You know, a modest, let’s say, 20% gain from where we are now. And you know, in a major bull market, gold can easily go up 50% if we just go up 20% from where we are now, that puts us close to $3,000 gold. It’s not a target. I’m not promising it. I’m just saying, you know, that would not be a huge or outsized increase from where we are now, given the bullish factors that I see ahead of us, and the best news I can say about this is really an extraordinary opportunity that we have is that the investors have been so bearish, even gold bugs, you know, every time gold goes up, they say, oh, it’s going to get crashed. You know, the the smackdown team is going to come knock it back, or the manipulators, or whatever it is, just, you know, it’s almost like, you know, a battered spouse. It just doesn’t want to admit that, you know there’s any change there the gold bugs. If the gold bugs themselves are bearish every time gold goes up or fearful every time gold goes up, what about the mainstream? They’re not gold bugs. They don’t believe it’s money. So that there’s been this really enduring negativity about gold stocks, even though we’ve had nominal all time high, after all time high in the gold dollar exchange rate, that’s creating a terrific opportunity. So I
James Connor 11:31
want to move on now and discuss nuclear energy and uranium. And you’re very bullish on the long term prospects of uranium, but it’s now 15% on the year. And this is quite surprising to me, especially given the recent news out of kazatoprom, which is the world’s largest uranium producer. And before you provide us with your thesis, why don’t you first tell us about the news out of kazatoprom and what it means. Sure,
Lobo Tiggre 11:56
it’s kind of interesting that the market, at least this time seems to have got it more right than last time. We’ve had two bits of news out of Gaza and Prom recently, and it’s important to understand that they’re not just the world’s largest producer, they’re also the world’s lowest cost producer. So if your biggest source of supply is the one really setting the prices or able to undercut all the competition, that it’s sort of like, you know, as Nvidia is to AI, you can’t ignore Nvidia, and whatever they do has a huge impact on that space. It’s like, that was kazatomprom and uranium. So it’s really significant. Now they have so large a part in the market that and prices were lower in recent years. It’s sort of like OPEC, they voluntarily cut back their production by about 20% below the permitted level, and that worked. It helped support prices. Other things happened, Sprott came along, hoovered up the cheap pounds. Japan started restarting reactors. The whole world seems to have gotten the memo that windmills and solar panels are not going to be enough. So there’s a nuclear renaissance happening at the same time, but kazatomproms voluntary restraint was a big part of bringing the market back into something resembling balance. So this was years ago, and they had announced several years ago that they were okay. Uranium prices have started coming back up again. We’re going to start ramping our production back up to our permitted level, subsoil use agreement level. And this year 2024 they were supposed to bring it back up 10% and then next year 2025 of the other 10% to go back to 100% of the agreed upon levels, but they ran into trouble along the way. War happened. The other war in the world, with Ukraine and Russia, had trouble getting enough sulfuric acid and transportation issues, construction delays and things. So they actually produce less, not more, uranium in 2023 than in 2022 which was a surprise, they yanked their guidance for 2024 and said, Well, you know, maybe we won’t produce 10% more. Now, here’s to your question. Recently, a few weeks ago, they announced, well, we’re actually doing better than we thought, and we now think we’re going to increase our production by 5% in 2024 and uranium stocks tanked around the world. Everybody panicked, oh no, because that compounds producing more uranium, which to my setup here, right? If there’s the world’s largest and lowest cost producer, that 5% increase, boy, that looks like a, you know, huge increase. Of course, it will affect prices, which are set at the margins, but they were going to increase 10% so that 5% increase is actually a 50% decrease from what they were going to do and but somehow markets got it wrong or panicked or whatever, and people sold off on that day they put out that news, there were double digit drops in numerous uranium stocks. Now, just a few days ago, as you and I recorded. This, we had the new announcement where they announced their results and their forward guidance for 2025 they’re now saying that they are going to continue increasing. They expect to be plus 12% in 2025 but remember, they were supposed that’s up from minus 20, right? So they’re still guiding for less of an increase than they had originally planned. Not only that, they put in the news that they are petitioning to the government to move the goalposts those subsoil use agreements I talked about the permitted levels, they’re basically saying that their problems supplying enough sulfuric acid, which they use to mine the uranium out of the ground, and their construction delays and things are so protracted that they want to change the amount they’re permitted to produce so they don’t miss it by so much every year they’re moving the goal posts. So this time, the market seemed to get the momentum, and a lot of uranium stocks jumped, you know, you know, high single digits, some of them double digits, on that news. So the answer to the question is yes, because that I’m prom is increasing its production, but that increase is less than they had originally intended, and it’s so much less that they’re actually changing their goals. Because longer term, they’re still they’re saying that they’re struggling to reach what they otherwise could have done, and that, I think, is forcing all the industry insiders to go back and rejigger their models. They were pounds in their models coming to the market that they now know are not coming. And so I see this as extremely bullish. The day of that news, we got a pop as you and I are speaking, it’s given it back a little bit. You know, markets are jittery and so on. And at the end of the day, uranium stocks are still stocks. So if you have the stock markets wobbling, that can affect the uranium stocks as well. Bottom line is, I see a tremendous opportunity here as well. Now I’ve just said that about gold stocks, so don’t get me wrong, not everything is great. I’m not one of these people that everything is always fantastic. It’s really pretty much gold and silver and uranium, and that’s it. Almost everything else, copper, oil, other things. Because of my recessionary outlook, I’m not interested in buying any of those until I’m sure the recession has done its worst. But uranium is different. At least I know that uranium is different. Maybe the people selling uranium stocks today don’t know it, but you know, oil prices are more volatile because the family can tighten their belts, you know, decide to go see grandma less often, use less gas and so on. But uranium, nuclear power, that’s what you use to keep hospitals running and airports and, you know, important things like that. It’s 24/7 365, base load energy, the stuff you always want on so it is much more recession resistant. And I’ve looked at this in the last four recessions, uranium prices were mildly sideways to up, and in the one that it was down, which was the great financial crisis, uranium had actually done a huge spike in 2007 and was, I think, making a rational correction before 2008 hit. So it was not the 2008 recession that made uranium pull back. And, in fact, it was recovering quite quickly until Fukushima hit. So I think, I think that one case of the the one out of four in which uranium went down in a recession. It wasn’t because of the recession. So that makes me willing to buy into Uranium stocks now, which are still on sale. That’s the terrific opportunity I’m talking about. Stocks are on sale. Uranium is still at a price where, okay, it’s down 15% whatever. It’s at a price level where the better companies make tons of money. This is this. Don’t be clear about this. Don’t get this wrong. The current corrected uranium price is not bad for the miners, unless you have, you know, a lowest decile project, the current price levels are great for the actual business of making money uranium mining. So the stocks are down. The price is good. The supply and demand scenario couldn’t be better, and and it’s only skewing towards the upside that the Chinese just announced 21 new reactors this last week, and they’re already building scores of them. So the to me, the writing on the wall here is great. And for anybody that missed uranium doubling last year. You’re wondering, well, gee, is it too late? You know, I think this correction that we’re in now is a terrific buying opportunity. Thanks again
Andrew Brill 19:28
for watching these favorite moments of 2024 and we hope we can continue to provide you with information that will help you invest wisely and be financially resilient. Wishing all of you a healthy, happy, safe and prosperous 2025!
