A supply crunch is coming and this will cause commodities to skyrocket in 2020, this according to Frank Holmes, CEO of U.S. Global Investors.
“This theme of ESG, environmental, social governance, is driving everything and it’s going to harm exploration. We’re going to see a supply-side restriction but people are going to have babies and the world is going to chug along and grow, but the commodities aren’t going to be there,” Holmes said, adding that a huge price rally would follow.
On equities, Holmes said that U.S. markets may still be the best option for stocks.
“I don’t think [stock markets] are frothy and I don’t think there are many other places to go, and I think that what you have to recognize is that some of these other central banks like Switzerland are printing money out of the thin air,” he said.
Holmes’ comments come as stocks rallied on news that the Chinese reached an agreement with the Trump Administration on the trade deal.
Holmes noted that today’s macroeconomic environment requires investors to continue to hold gold.
“You have to have gold because there are going to be imbalances with currencies back and forth and China and India, 30 years ago, were 10% of the global consumption of gold, but today they are 50% of the consumption of gold and that’s correlated to rising GDP per capita,” he said.