February 5, 2017
The last several years have seen massive gains for both stock market and digital currency investors with prices hitting unprecedented levels of growth.
But one particular asset class, despite its necessity for day-to-day global activities, has been totally ignored by the general investing public. According to venture capital financier Carlo Civelli, there are varying reasons for why mining companies involved in commodity metals like copper, zinc, gold and silver have been either stagnant or seen disproportionate drops in their market value versus broader stocks, but one in particular stands out as of late:
The exploration stocks are just not attracting the following that they used and the reason for that could be the whole blockchain and Bitcoin mania… which is diverting a lot of speculative money from what used to be the commodities markets.
And while we’re likely to see continued interest in crypto currencies over coming years, Civelli notes that recent political developments in the United States, as well as favorable supply demand fundamentals, suggest that 2018 will be a breakout year for commodities markets after having hit cyclical lows. In an interview with Future Money Trends , Civelli says that President Trump’s tax cuts have shifted the global balance and may have postponed any serious economic problems for another ten years.
The United States has become the tax haven of the world.
Coupled with Trump’s trillion dollar infrastructure plan, the widespread tone of economic optimism across the global economy explains why Civelli has been aggressively gobbling up mining stocks  (and he’s not talking about digital blockchain mining):
We could be at a reversal of the dollar to the downside, which is obviously due to all the tax cuts. The lower dollar will stimulate growth but at the same time the interest rates may not go up as much as everybody thinks… so the dollar could go lower… and that could lead to an opposite extreme…
In other words… tax cuts and a lower dollar should mean commodities go up… and we’re also looking at a very favorable supply/demand condition where you can see the commodities copper and zinc are sneaking up and mining stocks are not really following yet.
…We are looking at a very good 2018 in commodities… and also on the gold side, gold stocks should really start to follow the gold price more accurately.
And while Civelli’s believes that Trump’s tax cats could provide a significant boost to the U.S. economy in the near-term, the long-term outlook may not be so positive:
By lowering the tax rate to 21% you obviously stimulate growth… but at the same time Europe seems very distant with tax rates of over 35% or higher. So the [U.S.] economy is going to continue to boom… but what Trump has really done is he has postponed the debt problem for the next 10 years or so… Trump is saying the economies of the world, in particular the United States, will grow out of this problem…
I don’t think that’s going to happen because one day when the interest rates go back to normal… the debts will still be there…
And what will save investors when that time finally comes?
As we all who invest in commodities believe… ultimately you will have to have some gold in your portfolio to protect against all this… it’s not going to end well.