Today King World News spoke with Michael Belkin, the man who advises the most prominent sovereign wealth funds, hedge funds, and institutional funds in the world. Belkin issued a major warning and also said fortunes will be made in silver.
Eric King: “Michael, you advise the biggest money on the planet — from institutions to hedge funds to sovereign wealth funds, etc — in London, Tokyo, New York and elsewhere. What are you telling your clients when you meet with them? What are they asking you and what are you telling them to do?”
Cocaine Hedge Funds And A Changing World
Michael Belkin: “Sell the stock market is what I’m telling them. In college I took a class on psychology and it taught me there was a way that you train rats to keep pushing on the sugar lever or the ‘cocaine’ lever. So basically what the central banks have done is they’ve given a cocaine lever to institutional investors, where they just keep buying the Nasdaq and selling volatility. So their nose is always pushing the (cocaine) lever…
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Michael Belkin continues: “And then like B. F. Skinner did with his rats, you take the cocaine away and they go crazy. So I think that’s what’s happening. I think they (hedge funds) have been trained to buy the Nasdaq — Google, Facebook, Amazon, these kind of stocks — and these stocks have kind of topped out and they are not really hitting new highs aggressively anymore. So it’s not really working but they are still pushing the lever with their nose — more and more and more cocaine, more Google, more Amazon, more Facebook.
Ching World Bullish For Gold And Especially Silver
But if you look at the world, something interesting has happened. China now has this One Belt, One Road infrastructure program. So China has a $1 trillion program. Basically it’s railways and roads across Asia as well as ports. It’s rebuilding the old Silk Road. And the way this applies to markets is all the sudden base metals and stocks like BHP took off starting in July. A lot of these stocks are up 10, 15, 20 percent, and I had these stocks on my outperform list. China is buying a lot of copper, base metals, nickel, cement, iron-ore, to buildout this infrastructure. So base metals are rallying big time and base metals stocks are rallying, while the rest of the world in the West is rolling over and their economies are weakening. This all ends up being bullish for gold in a roundabout way but not the usual way you would think of such as a monetary crisis.
Gold and silver have not been super-rewarding until the last couple of weeks, but I believe they are breaking out. To institutional investors I’ve been saying there is a limited amount of (high quality) gold and silver stocks, specifically silver. I think that the markets are setting up for a major outperformance of silver vs gold. Silver popped above its 200-day average on Monday. It’s only about 5 trading days above it. Gold did that about two or three weeks ago. GDX also did that about two or three weeks ago.
Fortunes Will Be Made In The Silver Universe
Silver stocks are really depressed. It’s a limited market cap group. There are only about $30 billion of investable silver stocks. There are large mining companies where silver is a small component of what they produce as a byproduct of base metals. I don’t include those in my investable silver universe. If you look at the investable silver universe, there’s only 26 companies. Ironically, a lot of these silver stocks were knocked down right before silver reversed, and I’m saying, ‘buy them.’ This is a huge buying opportunity.
There are just not enough silver stocks to go around. And when the silver price starts rallying, these silver stocks are going to get squeezed. It’s like a huge long…This is an amazing audio interview with the man who advises the biggest money on the planet, where he discusses exactly what he is advising institutions, hedge funds, and the largest sovereign wealth funds in the world to do with their money. He also explains why fortunes will be made by investors in the silver universe and elsewhere and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
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