Joe Foster is the portfolio manager for some of the Van Eck funds, and particularly the famous Van Eck gold miner ETF (ticker: GDX). Following the collapse last week in gold and other commodity prices, resourceinvestor.com interviewed him, and the transcript can be found here:
Van Eck Gold Fund Manager Talks Market Conditions
Here are a few brief excerpts from the interview:
JOE FOSTER: In broad terms, the post-Bretton Woods financial system is failing due to years of overly accommodative monetary policies that have left the world awash in U.S. dollars. The symptoms of this financial mismanagement are the development of asset bubbles, excesses in credit creation and a collapsing U.S. currency. This, along with negative real interest rates and a potentially inflationary commodities price cycle are supporting gold as a financial hedge and currency alternative.
The gold bull market was primarily a dollar-linked phenomenon through 2006. Now, in addition to dollar weakness, we have layered on the weak economy, financial chaos and inflationary pressures. You couldn’t ask for a better scenario for gold.
I believe the U.S. is heading into the worst recession in many years and one that could possibly spread throughout the globe. The magnitude of the housing meltdown and the unprecedented failure of the credit markets make it unavoidable. I believe these problems will be supportive of gold for the many years it will take to return the markets to some form of normalcy. It’s an environment in which gold will thrive.
