Gold, Crypto and More on the Meb Faber Show
June 01, 2022
Read Time 1 MIN
History and finance go hand in hand. Many of the problems we face today have been faced before. Our CEO Jan van Eck recently joined the Meb Faber Show to help provide historical context for current market themes. For example, the last time investors faced rising inflation with surging commodity prices was the 1970s. Jan outlines the importance of owning real assets and commodities in this type of environment and reiterates our view that we are in the early innings of a new commodity super cycle (8:24).
Jan also touched on another one of his key points from his market outlook: Growth and disruptive technologies like crypto are attractive, though richly valued. From a historical perspective, Jan discusses the parallels between gold and crypto (14:25, 32:47). In fact, at one point in time, it was illegal to invest directly in gold bullion, so people invested in gold miners instead. Sound familiar?
Other highlights of the discussion include:
- 22:57 – New economic models and being the first global asset manager to issue an NFT.
- 27:26 – Parallels between crypto and the wild cat banking era of the 19th century.
- 49:46 – Things he’s excited and nervous about as he looks out to the future.
- 54:24 – The importance of critical thinking and what he teaches students.
- 56:08 – Jan’s most memorable investment.
You can listen to the full podcast here: Meb Faber Show Episode #416: Jan van Eck, VanEck – Thematic Investing, Gold & Digital Assets, and Financial History.
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Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not generally backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. The value of cryptocurrency may be derived from the continued willingness of market participants to exchange fiat currency for cryptocurrency, which may result in the potential for permanent and total loss of value of a particular cryptocurrency should the market for that cryptocurrency disappear. Cryptocurrencies are not covered by either FDIC or SIPC insurance. Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and value of cryptocurrency.
Investing in cryptocurrencies comes with a number of risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. There is no assurance that a person who accepts a cryptocurrency as payment today will continue to do so in the future.
Investors should conduct extensive research into the legitimacy of each individual cryptocurrency, including its platform, before investing. The features, functions, characteristics, operation, use and other properties of the specific cryptocurrency may be complex, technical, or difficult to understand or evaluate. The cryptocurrency may be vulnerable to attacks on the security, integrity or operation, including attacks using computing power sufficient to overwhelm the normal operation of the cryptocurrency’s blockchain or other underlying technology. Some cryptocurrency transactions will be deemed to be made when recorded on a public ledger, which is not necessarily the date or time that a transaction may have been initiated.
- Investors must have the financial ability, sophistication and willingness to bear the risks of an investment and a potential total loss of their entire investment in cryptocurrency.
- An investment in cryptocurrency is not suitable or desirable for all investors.
- Cryptocurrency has limited operating history or performance.
- Fees and expenses associated with a cryptocurrency investment may be substantial.
There may be risks posed by the lack of regulation for cryptocurrencies and any future regulatory developments could affect the viability and expansion of the use of cryptocurrencies. Investors should conduct extensive research before investing in cryptocurrencies.
Information provided by Van Eck is not intended to be, nor should it be construed as financial, tax or legal advice. It is not a recommendation to buy or sell an interest in cryptocurrencies.
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