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Frank Holmes



Articles by Frank Holmes

American Exceptionalism Is Real

6 days ago

Nearly 120 years ago, an American engineer named Willis Carrier invented the very first electrical air conditioner. The device was such a hit that he founded the Carrier Corporation in 1915 to meet demand, making it the world’s first HVAC (heating, ventilating and air conditioning) company.
Fast forward to today, and Carrier Global, as it’s now called, is one of the largest HVAC manufacturers in the world. Last year it did some $18.6 billion in sales, close to half of it overseas. The Florida-based company employs approximately 53,000 people across six continents.
The reason I bring up Carrier now—besides the fact that, this being July, most of you reading this likely have your air conditioners running full blast—is because the company was the best performing S&P 500 stock for the first

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The Perfect Storm for Gold and Gold Stocks?

12 days ago

This Could Be the “Perfect Storm” that Pushes Gold to a New Record High

A “perfect storm” of surging government debt levels, plunging real bond yields, rising coronavirus cases and deteriorating economic forecasts pushed the price of gold to an eight-year high this week, and some analysts now project the metal to top its all-time high within the next 12 months.
Gold touched $1,778 an ounce on Wednesday, its highest level since February 2012 and coming within striking distance of the psychologically important $1,800 resistance level.
What drove the yellow metal’s price action this week was not just an alarming rise in confirmed virus infections—U.S. cases hit a new single-day record of more than 40,000 on Thursday—but also a weakening U.S. dollar. The greenback declined the most in three

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Are We Heading for a Second Wave of Lockdowns?

19 days ago

“I cannot emphasize how important this could be.”
That’s Dr. Sam Parnia, a doctor and professor at the Grossman School of Medicine at New York University. What he was reacting to is news that a cheap drug, dexamethasone, has reportedly been shown to reduce deaths among COVID-19 patients on ventilators by as much as one-third.
“It’s a huge breakthrough, a major breakthrough,” Dr. Parnia said of the study conducted by scientists at the University of Oxford.
The 60-year-old anti-inflation medicine is manufactured by a number of companies, including Mylan and Merck, and is widely available in pharmacies and hospitals around the world.
The discovery—if it’s everything the researchers say it is—comes just as new coronavirus cases and hospitalizations are spiking again in several countries,

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The Math Is on Investors’ Side

26 days ago

Most baseball fans know that the New York Yankees is the winningest team in MLB history. Of the 18,426 games it’s played since 1901, it’s won 10,378, or about 57 percent of them.
The Yankees have also won the most World Series championships. Between 1903 and 2019, the team has lifted the Commissioner’s Trophy a record 27 times, a win rate of 23.5 percent. (The 1994 World Series was cancelled due to a strike.)
As impressive as this track record is, it doesn’t come close to the U.S. stock market’s.
Over the past 90 years, the S&P 500 Index has ended the year up 61 times, for a win rate of 68 percent, or a little more than two-thirds of the time.
This means, of course, that the market has statistically ended the year down one out of every three times. It’s even rarer for it to sink lower two

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Airline Stocks Just Posted Their Best Week on Record

June 6, 2020

Today I’d like to start by lending my voice in support of those who seek to bring attention to and rectify the deeply rooted societal inequities that contributed to the senseless killings of George Floyd, Breonna Taylor, Ahmed Aubrey and others. Racism has no place in America. Full stop.
Many Americans understand and empathize with the outrage, even if they don’t necessarily agree with the looting and violence that have defined some of the protests.
A vast majority of the demonstrators want only to exercise their First Amendment rights peacefully, and it’s unfortunate when a few bad actors are allowed to hijack the protests.
Like the coronavirus pandemic and economic downturn, the civil unrest has generated a lot of fear and uncertainty among Americans.
But there are signs that the worst

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Wheels Up! Economic Recovery Could Be Faster Than Expected

May 31, 2020

Sometimes it can be challenging to remain optimistic, to look past the never-ending raft of negative headlines and see the upside.
This past week was no exception.
The number of COVID-19 deaths in the U.S. exceeded 100,000, a significant toll, with cases continuing to climb in new hot spots.
Meanwhile, political and racial tensions are running high. Violent protests erupted in Minneapolis in response to alleged police brutality. The incident also led to an escalation of the ongoing feud between Twitter and President Donald Trump, when Twitter blocked one of the president’s tweets for violating its rule about “glorifying violence.”
And across the Pacific, protests resumed in Hong Kong following China’s passage of a national security law that, among other things, enables Chinese law

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You Can’t Just Print More Gold

May 26, 2020

“I think there is a strong likelihood we will need another bill.”
That’s according to Treasury Secretary Steven Mnuchin, who supports additional fiscal stimulus to combat the economic impact of the novel coronavirus—within reason.
The secretary’s statement comes after the House passed a record-shattering $3 trillion relief package, though leaders in the Senate have said they will not put it up for a vote. Senate Majority Leader Mitch McConnell has made it clear that the next coronavirus bill “cannot exceed $1 trillion,” according to reporting by Axios.
Even so, the U.S. government’s response is already massive, dwarfing anything that’s come before it.
Across the pond, Britain’s government is likewise spending like crazy. The U.K. budget deficit widened to a record 62.1 billion pounds

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Bitcoin Is “Right Where Oil Was in 1890”

May 18, 2020

This week I was honored to participate in the first virtual Consensus cryptocurrency conference, hosted by CoinDesk. In years past, the annual gathering—attended by the world’s biggest crypto and blockchain companies, experts, entrepreneurs and investors—has been held in New York, but in an effort to curb the spread of the coronavirus, everything was moved online.
I was impressed with CoinDesk’s ability to adapt to unforeseen circumstances, and I want to thank them for the opportunity to participate.
No doubt many were disappointed to lose the in-person Consensus experience this year, but I believe it may have turned out for the better. Attendees were able to listen in to every panel and seminar for free, and from the safety of their own homes. This potentially allowed speakers’ thoughts

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Gold Royalty Companies Report a Strong First Quarter

May 11, 2020

A month is all it took to wipe out a decade of jobs growth.
U.S. employers cut an unprecedented 20.5 million jobs in April, the most in history, while the unemployment rate rocketed up to 14.7 percent. As of this week, a head-spinning 33.5 million Americans, or one out of every five workers in the U.S. labor force, have lost their jobs as a result of coronavirus lockdown measures.
With so many people out of work as we head into the second quarter, the next earnings season for S&P 500 companies is undoubtedly going to be one for the history books. FactSet reports that Wall Street analysts have already cut their second-quarter earnings estimates by 28.4 percent, the largest such decline on record.
Meanwhile, we’re seeing corporations file for bankruptcy protection at an accelerated clip. As

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Texas Leads the Nation in Reopening Its Economy

May 2, 2020

Today is “reopening” day for Texas, home state of U.S. Global Investors. Restaurants, retail stores and malls can now open their doors to customers again, so long as occupancy is kept at 25 percent of what it normally would be. In metropolitan areas such as San Antonio, social distancing and masks are still required in public places.
If everything works out well and we don’t see a massive spike in new COVID-19 cases, then bars, salons, barbershops, gyms and more could be next to reopen later this month.
This is all very positive for the state and local economies, especially San Antonio’s. Hundreds of thousands of people work in the city’s important travel and hospitality industry, which contributes some $15 billion to the San Antonio economy every year. Many of you reading this may have

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Seeking Free Cash Flow? Gold and Precious Metal Miners Have Got You Covered

April 25, 2020

Physical gold continued to catch a bid this week, trading above $1,760 an ounce, on a host of head-spinning economic news, from millions more Americans filing jobless claims to record money-printing to negative oil prices.
The national average price for a gallon of gasoline fell further to $1.78 on Friday, down more than $1 a gallon from a year ago. But the lowest price in the country may belong to a Shell station in Francis Creek, Wisconsin, which is reportedly selling (giving away?) gas for $0.75 per gallon, according to GasBuddy’s Patrick De Haan.
The seriousness of the coronavirus-fueled recession is reflected in April’s preliminary health reading of America’s manufacturing and service sector industries. The composite purchasing manager’s index (PMI) plunged to 27.4, a new series low,

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Make America Go Back to Work Again?

April 18, 2020

The world watches as a number of economies begin, or plan, to lift certain lockdown measures that were earlier put in place to slow the spread of the coronavirus.
China may have been the first to do so last week when it reopened Wuhan, the industrial city of 11 million that was ground zero for the novel virus, though life there is still far from normal.
This week, Italy began allowing small shops such as clothes retailers to reopen, with strict distancing guidelines still in effect, while Spain has allowed manufacturing and construction to resume operations. Germany is set to start gradually reopening its economy next week.
he government of Quebec added mining to its list of essential services, giving producers such as Agnico Eagle, Eldorado Gold, Glencore, IAMGOLD, Yamana Gold and others

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It’s Always Darkest Before the Dawn

April 11, 2020

For the billions of observant Christians and Jews across the globe, Holy Week is the most religious time of the year. Whereas Christians observe and celebrate Christ’s crucifixion and resurrection, Jews commemorate the Hebrews’ exodus from enslavement in Egypt to the Promised Land.
In both cases, it’s a time of renewal and rebirth—something the U.S. and world need now more than at any other period in modern memory.
Even if they’re not among the 430,000 people in the U.S. who are confirmed to have contracted the coronavirus as of Thursday morning, a great number of Americans are hurting this Easter and Passover. Some 6.6 million additional workers filed for jobless claims this week, bringing the three-week total to nearly 16 million after last week’s figures were revised up to 6.9 million,

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Record Unemployment Claims and Oil’s Best Day Ever

April 4, 2020

Some of you may have already picked up on this, but any discussion about the COVID-19 crisis will undoubtedly include a number of superlatives such as “highest ever,” “most on record” and “unprecedented.”
This week’s events were no exception. On Thursday, a head-spinning 6.6 million Americans filed new claims for unemployment benefits, bringing the two-week total to 10 million. That’s more than the combined populations of Los Angeles and Chicago.
Seeking a way to properly visualize the massive spike in initial jobless claims, analysts at Cornerstone Macro noted that they’ll need to be log-scaled now and forever for us to see the business cycle.

“There isn’t much to say about this chart aside from letting the chart show just how unique a backdrop today is,” Cornerstone wrote. “Yes, it’s

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Congress and the Fed Just Opened the Stimulus Floodgates

March 28, 2020

Extraordinary times call for extraordinary measures, as they say, and this past week has been nothing if not total confirmation of that adage.
As of Friday morning, the number of confirmed coronavirus cases in the U.S. stood at more than 86,000. That’s now more than any other nation on earth, including China. New York City, home to roughly half of all U.S. cases, appears to have become the new global epicenter of the pandemic.
Hospitals in the hardest-hit areas of the countries “have passed a tipping point,” writes the Wall Street Journal, with New York having to quickly set up makeshift treatment centers and morgues to meet the spread of infection.
The news comes at a time when President Donald Trump is weighing whether the “cure”––social distancing, business closures and more––is worse

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A $10 Trillion Response to the Global Pandemic

March 21, 2020

This week I was introduced to a board game called Pandemic. In the game, players are up against the clock to find the cure to viral outbreaks and contain them before they spread across the entire globe.
What makes Pandemic especially unique is that, unlike most games, it’s cooperative. Players are not opponents, as they are in, say, Monopoly. Instead, they must work as a team to eliminate the viral threat, or die trying.
The real-life situation involving COVID-19 is very much the same. Preventing the spread of this disease will require the vigilance and cooperation of everyone on the planet in some capacity or another. While we await treatments and a vaccine to be developed, the most impactful thing people can do is keep their distance from others and, of course, wash their hands. To that

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Should You Buy the Panic?

March 14, 2020

If anyone has the right to say “I told you so,” it’s Bill Gates.
Two years ago, the co-founder, former CEO and now former board member of Microsoft urged governments to step up their preparedness in the event of a modern global pandemic. Such an event, Gates warned, could conceivably be more dangerous than any other threat facing humanity today, including nuclear proliferation, due mainly to the fact that we’ve become so interconnected.
Because new vaccines take time to develop and deploy, the U.S. in particular needed to invest in “antiviral drugs and antibody therapies that can be stockpiled or rapidly manufactured to stop the spread of pandemic diseases or treat people who have been exposed,” Gates said in a speech at the time.
And in a 2018 interview with STAT, he said he found it

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Looking for Buying Opportunities After the Historical Selloff

February 29, 2020

As I write this, the market is officially in correction territory, with the S&P 500 off 14.5 percent from its all-time close on February 19. It took only six days, in fact, for the S&P to fall 10 percent from its high into a correction­­—a new record, according to data from Deutsche Bank Global Research.
The decline has certainly hurt many equity investors and 401(k)s, and there may still be more pain ahead. Today the World Health Organization (WHO) raised its threat assessment of the coronavirus, or COVID-19, to “very high,” and warned that the illness could soon reach most, “if not all,” countries across the globe in the coming days and weeks.
I choose to remain optimistic, though. The underlying economy is sound. Nothing has changed about that. This selloff is purely incidental to the

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Investors Are Piling Into Safe Havens on Coronavirus Fears

February 22, 2020

U.S. factories rebounded strongly in February, suggesting the manufacturing recession may finally be behind us after the industry contracted for six straight months. The Philadelphia Fed Manufacturing Index jumped an incredible 20 points to 36.7, its highest reading since May 2017, while New York’s Empire State Manufacturing Survey rose more than eight points to 12.9, a nine-month high.
We won’t get the Institute for Supply Management’s (ISM) U.S. manufacturing purchasing manager’s index (PMI) until the start of March, but I see the positive regional surveys as a sign that the PMI could beat expectations.

The news also bodes well for President Donald Trump’s reelection bid. The weak U.S. PMI, under pressure from the U.S.-China trade war, has been the one significant drawback in an

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Where to Get Income in a Low-Yield World

February 15, 2020

So far in 2020, the yield on the 10-year Treasury has averaged an anemic 0.01 percent when adjusted for inflation. Since the end of January, it’s actually dipped below 0 percent, trading as low as negative 0.14 percent on January 31.
What this means is that investors are guaranteed to lose money on the 10-year T-note if held until maturity.
It’s against this low-yield backdrop that Judy Shelton, one of President Donald Trump’s nominees for the Federal Reserve Board, went before the Senate Banking Committee this week for her confirmation hearing. A former Trump campaign advisor, Shelton is seen as an unconventional pick for the central bank role for two main reasons: 1) She’s advocated for a return to the gold standard, and 2) She has recently argued in favor of lower interest rates—which

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Gold Projected to Beat the Market in 2020: CLSA

February 8, 2020

Gold will outperform the S&P 500 Index in 2020. That’s one of several projections made by CLSA in its just-released “Global Surprises 2020” report.
The Hong Kong investment firm has an impressive track record when it comes to making market predictions—last year it had a 70 percent hit rate—so it may be prudent to take this one seriously.
I’ll have more to say on this in a moment. First I want to share with you an eye-opening conversation I had this week at Harvard Business School (HBS), where I’ve been attending the annual CEO Presidents’ Seminar and going over case studies involving Netflix, Amazon and more.
As you know, the coronavirus has disrupted day-to-day life in many parts of China and the surrounding region. That includes Hong Kong, whose economy is being served a one-two punch

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Nontraditional Funds Took the Stage at World’s Biggest ETF Conference

February 1, 2020

When Derek Jeter speaks, people listen. After all, the former Yankees shortstop’s talents and successes, on and off the field, seem otherworldly.
Drafted straight out of high school in 1992, Jeter went on to become the first ever Yankee to record 3,000 hits—an achievement reached by only 27 other players in baseball history. He also holds records in doubles and stolen bases.
The five-time World Series champion was recently inducted into the National Baseball Hall of Fame—in his first year of eligibility, no less—and when casting their votes, the Baseball Writers’ Association of America (BBWAA) gave Jeter the second-highest plurality in the group’s 112-year history.
Jeter stopped by at this year’s Inside ETFs in Hollywood, Florida, drawing larger crowds of attendees than any other speaker

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New Beginnings With the Year of the Rat

January 25, 2020

It’s been a whirlwind couple of weeks! From Switzerland to Vancouver to Boston, I went from being student to teacher. I’m grateful for the opportunity to learn from others and to share my own story.
As I told you in last week’s Investor Alert, I attended the Crypto Finance Conference in St. Moritz, Switzerland, where I got to hear from not just the Winklevoss twins but also Arthur Hayes, cofounder and CEO of cryptocurrency exchange BitMEX.
Arthur has such an inspirational story. A graduate of Wharton School of Business, he moved to Hong Kong to work as an equity derivatives trader and market-maker. After losing his job in 2013, the 33-year-old decided he was done with banking and turned his sites toward bitcoin—which had just crossed above $1,000 for the first time, ending the year up a

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Bitcoin Has Its Best Start to a Year Since 2012

January 21, 2020

Besides its breathtaking mountains, world-famous chocolate and wartime neutrality, Switzerland is perhaps best known for its commitment to financial privacy. Banking secrecy became law in 1934, making it a crime for Swiss banks to disclose accountholder information of any kind to third parties.
Although such privacy laws have been impacted in recent years—mostly by U.S.-led global efforts to counter money laundering and tax evasion—Swiss banks still enjoy a reputation for being secure and discreet, and they continue to attract assets from all over the world.
It’s appropriate, then, that the country should host the world’s most private conference on what’s potentially the most private asset class: cryptocurrencies. This week, hundreds of crypto investors, experts and enthusiasts from all

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Dollar Weakness Could Be the Catalyst Commodities Are Looking For

January 11, 2020

It’s that time of year again! Near the start of every year, I share with you our ever-popular Periodic Table of Commodity Returns, now updated to reflect the final results of 2019. To view the interactive table and download a copy of your own, click here.
Commodities as a whole had a mostly positive 2019, returning 16.53 percent as measured by the S&P GSCI. This far surpasses the five-year average of about negative 11.52 percent, between 2014 and 2018.
Precious metals were responsible for much of the growth. For the third straight year, and for the fourth time in six years, palladium was the top-performing commodity. The metal, used widely in the production of catalytic converters, increased an incredible 54.21 percent to end 2019 at $1,912 an ounce, a slightly higher price than gold’s

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America Remains the Land of Opportunity. For Everything Else, There’s Gold

January 4, 2020

By Frank HolmesCEO and Chief Investment OfficerU.S. Global Investors
In 1967, a woman then known as Svetlana Alliuyeva arrived by plane in New York. Moments after landing, she held a press conference during which she renounced her native Soviet Russia, describing it as “profoundly corrupt.” She burned her Soviet passport and called her father—who had died in Russia a decade earlier—“a moral and spiritual monster.”
Her father was Joseph Stalin, the former dictator of the USSR.
In case you weren’t around at the time, Svetlana’s defection to the U.S. was a very huge deal. Having changed her name after remarrying, Lana Peters became a U.S. citizen in 1978. She made millions from her autobiography—something that was categorically unachievable in her communist homeland.
In 1991, she got to see

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Expecting a Market Downturn? Make Sure You’re Following the “Noah Rule”

December 14, 2019

In his letter to Berkshire Hathaway shareholders for fiscal year 2001, Warren Buffett made one of his now-famous pronouncements:  “Predicting rain doesn’t count, building an ark does.”
Buffett admitted to forecasting some of the market turmoil during the year, which was exacerbated by 9/11, and yet he failed to convert thought into action. Thus, he violated what some investors now call “the Noah rule,” named for the ancient prophet who saved himself, his family and a few million animals by building a ship in anticipation of a great flood.
Predicting a major economic or financial event—whether that’s a recession, market downturn or even your own retirement—requires that you also take action. Otherwise your prediction was meaningless. This is why I’m always recommending that investors have a

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Need-to-Know Numbers You Might Have Missed This Week

November 30, 2019

Another year, another Thanksgiving. I hope all of my American friends and readers had the chance to spend some quality time with family as we begin the busy holiday shopping season. The leading retail trade group expects sales this month and in December to increase as much as 4.2 percent over last year, for a total potential value of $730.7 billion.
Part of this growth is due to the market selloff that happened at the end of 2018. But there’s more to the story than that.
As I told you last week, the U.S. purchasing manager’s index (PMI), a leading indicator of economic activity, turned up for the third straight month in November. This is a good reflection of healthy demand, and a possible signal of further upside. There’s still a month left to 2019, and yet stocks are already up an

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This Economic Indicator Is Proving the Naysayers Wrong

November 23, 2019

Flying in the face of negative economic news, U.S. factories picked up steam for the third straight month in November. The preliminary manufacturing purchasing manager’s index (PMI), a leading indicator we closely track here at U.S. Global Investors, pulled further away from its August low with a reading of 52.2 this month. That’s up from 51.3 in October and marks a seven-month high.
Remember, investors are better served when they follow the trend lines, not the headlines.

A raft of economic reports on Friday welcomed the turnaround:
Chris Williamson, chief economist at IHS Markit—which releases the monthly PMI—wrote that the November reading “adds to evidence that the worst of the economy’s recent soft patch may be behind us.”
Responding to the manufacturing uptrend, Renaissance Macro’s

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You’re Probably Underinvested in Gold

November 2, 2019

The U.S. was founded 243 years ago, and in that time it’s amassed some $23 trillion in debt and counting. As massive as this number is, it’s still less than half what Elizabeth Warren says her government-run “Medicare-for-all” program would cost… over only 10 years.
The Massachusetts senator and presidential contender made the announcement this morning, responding to critics who’ve demanded to see some details on her proposal. According to her campaign, the price tag to provide Medicare-style health care to every American would be “just under $52 trillion.”
To put things in perspective, that’s close to one-fifth of the total wealth in the entire world, which Credit Suisse estimated to stand at $280 trillion in 2017.
The $52 trillion is just the nominal price tag. It doesn’t take into

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