Author: Paul Ploumis
23 Oct 2014 Last updated at 05:09:38 GMT
(Kitco News) - Ned Goodman, president and chief executive officer of Dundee Corp., believes gold is undervalued while equities are poised for a crash.
Speaking at a keynote luncheon at the Quebec Mining Exploration Xplor 2014 Convention in Montreal, Quebec, Goodman was blunt regarding gold prices and where they're heading.
"We think gold is very undervalued at current gold prices," Goodman said. "I think gold will hit $1,200, and when it does, be a buyer because I think that will be a good place to be."
Touching on stock markets, Goodman didn't pull any punches, calling it a Botox market where all deficiencies are simply covered and propped up to look healthy.
"We are in a huge financial bubble, and it can burst any day," he said. "In the mid-1970's, the U.S. had negative real interest rates for13 consecutive quarters and it set the stage for an inflation crisis, soaring by 13% per year by 1980.
"Today, the U.S. has had negative real interest rates for 19 consecutive quarters – trust me, inflation is coming," he continued. "We've been living in that Botox economic environment, where everything has been distorted in many ways because of the Botox stimulus engineered with the Fed."
Goodman said it has led to China and Russia buying gold and U.S. property, with U.S. currency, as they try and debase the American currency and replace it with gold as the safe-haven bet.
"China's spending its U.S. dollars to buy gold, to buy office buildings in downtown New York to build condos in Brooklyn, to buy a London stock exchange – they're spending their U.S. dollars, getting rid of it," Goodman said. "Why? Because they're not stupid, they would rather own gold.
"So that explains my bullishness on gold and bearishness on the entire market," he added.
Addressing Quebec's resource sector, Goodman cited the need for innovation in the sector and his disappointment with the shelving of former Quebec Premier Jean Charest's maiden $80 billion $25 million Plan Nord mining project.
Part of the innovation, Goodman said, was the need for Quebec to invest in startup companies.
"The best source for startup reserve entities in Quebec to succeed is that great block of resource-filled land that was originally called Plan Nord – it became ‘Plan No'," he said. "The original Plan Nord was in the process of creating that needed innovation and entrepreneurship, and I was on of its practitioners.
"But when we were ready to move Plan Nord forward, it became Plan No and we had to wrap up our people, our ideas, our money and go elsewhere," Goodman said. "I therefore want to compliment the new Quebec provincial government for reintroducing Plan Nord, which we've already invested some $2 million for exploration with the keen hope that we can plan even more success."
Quebec Premier Philippe Couillard announced he would introduce the Plan Nord + mining plan for northern Quebec in mid-March while on the campaign trail. Most recently, Couillard said the government would pump $63 million into a Plan Nord development fund geared towards infrastructure and mining studies in northern Quebec.
Courtesy: Kitco News