You see this in the oil industry time and time again. Fears that we've found the last oil, that we're going to run out, pop up constantly. And soon afterward, because the price goes up, huge new reservoirs are discovered.
There is no doubt in my mind that as central banks begin to abandon the dollar, there will be an enormous amount of monetary demand for silver and the silver ratio will plummet. If you look at all of the monetary crises over the last 100 years, any time that there has been even a whiff of a collapse of the dollar, the silver ratio has soared.
You can tax the rich to pay for current spending. You can even tax them very heavily. But when the rich look forward for decades and see nothing but increasing taxes, debts, and government control of their businesses and assets - they will leave.
I didn't understand anything about fracking or horizontal drilling until about 2010, when I first learned about the Eagle Ford.
As you know, the United States has been a net debtor to the world each year since 1976, I believe. We've put a huge amount of dollars out into the world and those dollars have to be recycled in some way.
It's not hard to generate a paper fortune in a huge inflation. All you have to do is own the most important economic assets: energy, communication, and transportation.
The average household income has really stagnated since 1971.
Because America is the Saudi Arabia of natural gas. We have the world's largest reserves of natural gas, and the world's most sophisticated production and storage facilities, by a wide margin.
I was very bearish on natural gas for many years, pretty much from 2006 on. There was a tremendous natural gas bubble in the United States.
I'm happy to make returns of 4% to 6% a year on my real estate portfolio. If inflation comes along I'll be able to increase rent and have capital appreciation roughly in line with inflation.
Relative to oil, however, natural gas is very cheap and very attractive. And I think that natural gas in emerging markets is very attractive. There is very little natural gas infrastructure in places such as China, where there is tremendous demand for natural gas.
Many coal-fired power plants are being decommissioned or switched over to natural gas, but that takes a long time.
The management teams in these royalty and streaming companies have the highest-quality research and the most visibility into all of the producers. So if you really want to know what's going on in the resource space, you should talk to the management team of a royalty company.
I've been buying real estate because it's an asset I can control, that I could finance extremely cheaply if I chose to. I do not choose to; I buy my real estate in cash. I'm not interested in making money on it. I just want to keep my money safe.
The fear is that if the dollar falls below 50% of the currency basket held by commercial and central banks and insurance companies, there may be a democratization of the way currencies are priced.
Manipulating the bond market is so greatly reducing the cost of capital that so far companies have been able to maintain profit margins without raising prices. As a result, we've been exchanging capital cost for commodity costs but you can only do that for so long.
Measuring the oil industry in dollars gives you a very warped view. Pick a sound currency such as Swiss francs or gold grams and look at the oil business through that lens.
The yuan is actually a very attractive currency and will prove to be very reliable-much more so than the U.S. dollar.
Currency regimes in the past were always destroyed by volatility. So sooner or later, people desire a currency that is stable.
Any country whose currency is used as a reserve enjoys tremendous benefits because those currencies gain a significant discount to financing costs.
