Historically, what have been the CPM Group’s recommendations regarding gold and silver – and what do you see for the future?
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Jeff Christian: Gold prices got up to $850 an ounce in 1980. From 1980 to 2000, if you look at my track record of telling investors to buy or sell gold on an intermediate 2-3 year outlook basis, about 68% of the time from 1980 to 2000, I was telling investors, "Don't buy gold. If anything, sell it short." It worked out very well. In November of 2000 and during the period of time when people say, "Do you think you'll see gold to $850?" I would say, "Look at where the world was in 1980 when it got there. We had American hostages in Iran. We had Soviet troops in Afghanistan. We had 14% inflation in the U.S., 21% interest rates, the deepest recession at the time in the post-depression period. You had something like 15% unemployment, I believe. You had massive economic dislocation. So, very importantly, you had Iranian and Soviet assets frozen in Europe, United States, and Japan. For 20 years, I would say to people, "If you can convince me that we'll see that kind of economic and political environment again, I will grant you $850." In November of 2000, when we were launching our gold year book, we said, "For 20 years, we've abrogated that presentation, but we're telling you today to buy gold, because we think the next many years we'll see a more hostile economic, political, and financial environment than we had in 1980." In fact, gold prices went from about $265 as of the day of that speech up to $1800, almost $1900, in 2011.
It's come off, but it's still at $1200, more than five times what it was in 2000. We're still telling investors to buy gold, because we think that the political, economic, and financial uncertainties going forward are even more severe than they have been over the last 16-17 years. If you look at that 16-17 years, what you saw was from 1968 until 2000, investors would buy in a typical year less than 20 million ounces of gold. Every so often, something bad would happen financially, politically, or economically and they'd buy 20-25 million ounces. From 2000 until today, with the exception of 2015, investors globally have bought more than 20 million ounces and as high as like 41 or 42 million ounces. More investors are buying more gold for a longer period of time at higher prices on a sustained basis than ever before in history. There's been an upward shift in the investment demand curve, if you want to speak economically, but what you're finding is that in 2000 and moving forward over the last 15-17 years, investors around the worlds have said, "I should have some of my wealth in gold and silver." Everything I'm saying about gold is pretty much true on silver too. Going forward, we think that investors will buy even more over the coming decade, per on an annual basis than they were back then.