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Rule:  “I listen to Bernanke and people of his ilk mostly for amusement.  I’m not trying to suggest that what they say isn’t important, but the idea that Bernanke has managed to convince markets, investors, and intermediaries, that liquidity or cash in the system is a substitute for solvency is a very interesting achievement.

But the reality is that fortunes are made by betting against widely held premises such as the one I just mentioned, and that’s what I am doing with my own money.”

Eric King:  “Rick, you have seen the chart from the Richard Russell KWN piece which showed the number of bulls in the Gold Miners Bullish Percent Index which stands at a remarkable 0%.” 

Rule:  “I think that’s hilarious.  I have never in my life seen a sentiment index like that....

Continue reading the Rick Rule interview below...


To hear what billionaire Eric Sprott & Rick Rule are doing with their own

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“I mean I’ve never seen anything like that, and I think it’s very interesting in that I’ve always said in this business you are a contrarian or you are a victim.  There could be no discussion which shows a stronger contrarian bias than the chart you described (link to the chart at the bottom of this interview).  I think, further, that sentiment is a good indicator in the sense that people have most often acted on their sentiment. 

And if the number of people polled that were bearish or neutral on gold mining shares was 100% of the subset, that would suggest, at least in terms of the audience they polled, that the selling has already taken place.  In other words people always talk their book.  If you felt bearish about gold and gold mining shares, why on Earth would you hold gold or gold mining shares?

So it’s interesting to note that if the sentiment is 100% bearish or neutral, that would suggest that virtually all of the potential liquidation has occurred.  That’s a very interesting indicator to me.”

Rule also added:  “As a speculator I like to add alpha, and the opportunities right now are absolutely overwhelming.  I am still attracted to the feasibility stage and pre-feasibility stage developers.  They are the cheapest they have ever been.

I’m also particularly attracted to the uranium and platinum subset.  Those are two commodities that I think have to go higher, and they should have a very nice advance in the one-to-three year time frame.  But the truth is that I am attracted to all of the above sectors literally across the board.

As we speak, Eric, I am at a financial conference, and they are saying that the response rate they are getting on natural resource and precious metals oriented newsletters are the lowest they have been in 10 years.  This is another of the type of indicators that you had with the sentiment indicator chart.  So my suspicion is that when we look back on this period we are currently going through three years from now, we will sort of laugh at the bargains which were available. 

What I can tell you, Eric, is this are the fourth of these cycles I have been through, and what happens to speculators who deploy capital at the bottom of the cycle is that the recoveries are so vicious, they are so violent, the up-moves are so dramatic, that it really takes your breath away. 

Everybody wants to know, when is that going to occur?  My answer is I have no idea, but I know from doing this for 35 years that it is going to occur.  From my point of view if I have a question that involves a ‘when’ answer, as opposed to an ‘if’ answer, I would prefer ‘when’ questions.  And I absolutely feel that this is a ‘when’ question, not an ‘if’ question.  The bottom line here is fortunes can be made on the upside as these markets reverse course.”

CLICK HERE to see the piece which featured the remarkable sentiment chart Rule was referring to in his interview.

© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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Eric King

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