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Rule:  “I am just back from Asia, Eric.  That trip just reinforced to me that the resource market is probably bottoming and heading higher.  The demand for resource-related investments in Asia is incredibly strong....

Continue reading the Rick Rule interview below...


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“As you know, Sprott has won mandates from a variety of Asian investing entities.  Visiting with them and going to speak at a conference in Hong Kong just reinforced the need that Asia has for resource related investments, which will most likely be in place for the next 10 years.

The difference in sentiment between the conference I spoke at in Hong Kong and the conference I just spoke at in Vancouver was really noticeable.  The Asians view this as an incredible opportunity to get involved in the sector, whereas in Vancouver you could feel the mood was downbeat.

We both know that the summer is generally very soft in junior resources.  My suspicion is that we are now entering a period from now to September that is perhaps the last good buying opportunity in the sector.  So that's what I'm focused on.  I'm looking for bargains and looking to deploy the money that Sprott has been successful in raising over the last year.”

Eric King:  “What are your thoughts as you look at the markets?”

Rick Rule:  “I think the gold and silver markets are going lower in the very near term.  That might just be me talking my book because I have lots of cash to spend.  I noticed that we've had 10 acquisitions in the gold sector in the last 12 months, but it hasn't picked up sentiment in the sector.  I think this is extremely bullish.

Takeovers generally bring cash and courage into a market, and that there are still sellers in the face of all this good news is perversely, to me, very encouraging.  We just had another $570 million acquisition announced today.

I don't know if you saw Ivanhoe Mines’ financing, but when the best promoter in the world figures out that in order to get the project going he needs raise the money and goes ahead and offers a full warrant, that tells me that we are coming into a very good financing season.

It's funny that the B-grade promoters in Vancouver are arguing with you, trying to get a half a warrant, while the best promoter in the world, Robert Friedland, decides that he has to advance his project and so, yes, he gives a full warrant.  I promise you that the B-grade promoters will come to their senses because they are not better promoters than Friedland.  Also, the platinum and palladium markets have been performing relatively well.  We have lost 1 million ounces of platinum production, so that will give us a deficit of 1.6 million ounces for the year.

Of course we are attracted to other markets that investors hate right now.  Uranium is selling at about $28 a pound when it takes about $70 to make, including sustaining capital.  So that can't last forever.  Also, the coal markets are clearly in liquidation mode, but we are certainly attracted at this point to the coal sector.  We are also attracted to the ag-mineral space, although it's probably early there. 

I should explain to KWN readers around the world that I have made a lot of money over the last three decades investing in sectors that are in liquidation.  This occurs when the selling price of the commodity is less than the cost of producing it.

It's counterintuitive to buy an industry that's in liquidation, but unless the price of the commodity increases, the commodity becomes unavailable.  Can you imagine a world without coal or uranium?  That's a world without power.  Even in the People's Republic of California, even though the people of the state hate coal and uranium, those energy sources are still a substantial contributor to the power grid.  

So either the price of these two commodities goes up or the lights go off.  Those are the two choices, and I'm betting that the price is going to go higher.”

Rule added:  “I would like all KWN readers to join me at the Agora Conference in Vancouver.  This conference has traditionally been the finest investing conference in the natural resource business.  So I would like to extend a special invitation to all KWN readers around the world to come to the conference and you can sign up by clicking on the link at the end of this interview.  Also, if KWN readers either click on the link or call and mention King World News they will receive a special price for this conference.”  CLICK HERE to sign up to meet Rick Rule and others at the Agora Conference (signup info at the bottom of the link & be sure to mention King World News).

IMPORTANT - KWN has many more interviews being released today.

© 2014 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.

The audio interviews with Bill Fleckenstein, MEP Nigel Farage, Michael Pento, Dr. Paul Craig Roberts, Gerald Celente, John Mauldin, Eric Sprott, James Dines, Andrew Maguire, David Stockman, Art Cashin and Dr. Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

Eric King

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