Navigating inflation and precious metals [Video]

In a recent episode of the Money Metals Podcast, host Mike Maharrey interviewed David Morgan, a renowned precious metals analyst and founder of the Morgan Report.

The conversation covered a wide array of topics, from inflation and its impacts on precious metals to the dynamics of the silver market and the potential for platinum. Morgan shared his insights on current economic trends, historical perspectives, and future predictions.

Who is David Morgan?

David Morgan is a highly respected analyst in the precious metals sector and the founder of the Morgan Report, a research and advisory publication dedicated to the precious metals market. With decades of experience, Morgan is known for his in-depth analysis of silver, gold, and other metals. He has been a featured speaker at investment conferences worldwide and is a frequent guest on financial news programs.

Morgan's expertise extends beyond market analysis; he is also a passionate advocate for sound money and economic freedom, often highlighting the historical and monetary significance of precious metals. His work aims to educate investors on the intricacies of the market and the importance of maintaining a diversified portfolio.

Key questions and answers:

How do you see the recent CPI data playing out in the precious metals market?

Morgan expressed skepticism about the CPI numbers, noting that the way inflation is measured today is significantly diluted compared to 1980. He mentioned John Williams from Shadowstats.com, who suggests the true inflation rate is likely double the reported figures. Morgan emphasized that while the official rate might be around 3%, the cumulative inflation over the past few years still heavily impacts consumers.

• David Morgan: "The way they measure the CPI now has been diluted greatly from the way it used to be measured in 1980. The true inflation rate is at least double what purportedly we're at."

What are your thoughts on the gold-silver ratio and its historical context?

Morgan explained that historically, the gold-silver ratio never exceeded 20 when silver was used as money. He believes that silver's dual role as money and an industrial metal keeps its price at production cost rather than market value. He predicted a bullish future for silver due to increasing industrial demand, particularly in photovoltaics, and rising investment interest, especially from China.

• David Morgan: "When it was money, the ratio never got above 20 for thousands of years... Silver is more than money; it's money and an industrial essential commodity."

How do you view the potential of the platinum market?

Morgan highlighted that 70% of platinum comes from South Africa, which faces significant energy and political challenges. He sees this as an opportunity, suggesting that any disruption in supply could lead to a substantial increase in platinum prices. He also noted that platinum has historically been more expensive than gold and that its demand is likely to rise with a shift back to hybrid vehicles requiring catalytic converters.

• David Morgan: "Seventy percent of it comes from South Africa, and they're having energy problems, they're having political problems. It wouldn't take much for something to go awry... where all of a sudden, that small supply would drain to a much smaller one."

What will it take to boost gold stocks and align them with the physical metal market?

Morgan noted that gold stocks are currently undervalued, making them attractive to value investors. He suggested that as gold prices continue to rise, interest in gold stocks will naturally follow, potentially leading to a significant rally. He emphasized the importance of recognizing the value in mining shares, which are highly leveraged to gold.

• David Morgan: "The cure for low prices is low prices... the earnings on these gold stocks are pretty phenomenal in some cases, and they're highly leveraged to gold."

How might the upcoming presidential election impact the precious metals market?

Morgan discussed the potential impact of the presidential election on the precious metals market. He suggested that while the election might temporarily influence market sentiment, the underlying economic issues will remain. He emphasized the importance of realistic expectations and long-term planning, regardless of who wins the election.

• David Morgan: "Regardless of who gets in, this 3% inflation but groceries are up 400% in the most recent years... I think we have hit that point where almost everyone in the United States knows this inflation thing is for real and there's no way out."

Conclusion

The interview concluded with Maharrey expressing his appreciation for Morgan's insights and looking forward to future discussions. Morgan's comprehensive analysis and historical perspective offered listeners a deep understanding of the precious metals market and the broader economic context.