Summer Shopping Opportunities For Mining Equities Abound: Rick Mills

Equity valuations have so far failed to keep pace with rising bullion prices, but that makes for some outstanding investor opportunities among a few particularly well-positioned juniors that Rick Mills identifies as running ahead of the herd this summer. In this exclusive interview with The Gold Report, Mills, publisher of Ahead of the Herd newsletter, points to continued low interest rates and increasing inflation as reasons that precious metals prices will keep climbing. And if discussions about elevating gold to Tier 1 asset status come to fruition, hold onto your hat, because that could shift the rate of ascent from steady to meteoric in a New York minute.

The Gold Report: Prices of the mining equities were languishing when we spoke in January, particularly precious metals equities, and we've had little respite since then. But you foresee potential for a bullish resurgence in gold equities. What's your rationale behind that outlook?

Rick Mills: I believe we're going to see higher levels of inflation. We're going through a deflationary bout now because most of the money issued by the Federal Reserve is actually parked at the Fed. It isn't out there being spent, so it's not causing inflation. It's basically just propping up the banks. When the banks start lending and when the money gets into circulation, we'll see increased levels of inflation and, of course, that will be good for gold.

TGR: Lack of access to capital for small business due to stringent credit requirements is one factor that has put a damper on the economy. What will prompt banks to ease up on credit standards?

RM: I'm probably going to stir up a little bit of controversy by saying so, but I firmly believe that the way out of the dilemma we're in is to spend more money. A lot of people don't agree. They think we should cut back on spending, raise taxes and go onto an austerity program. That is absolutely the wrong thing to do. Taxes should be reduced. I believe they should be spending a lot more money.

TGR: Who should be spending more money?

RM: World governments should implement massive global infrastructure maintenance and build-out programs, and put the money not into the banks but into the small businesses that will build the infrastructure. These small businesses are the ones responsible for most of the job creation. So, give the money directly to the small businesses. Hire them to do this infrastructure build.

Take a look at our global water supply problems, our highways, our bridges, the brownouts because our hydroelectric power corridors are so outdated, the switching stations literally melt when they overload. We can actually spend our way out of this. In a fiat currency regime, because nothing is anchored to gold, the only way to move forward is to keep spending money. We saw this when the U.S. Quantitative Easing Two stopped and the lack of liquidity immediately upset the markets. If we undertake the infrastructure build-out program and give the money to the small businesses that create jobs, as people get back to work, they'll have money, spend it and revive the economy. And it's not only the U.S.—every country in the world has an infrastructure deficit.

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TGR: What would more capital distribution among small business mean for the price of precious metals?

RM: The moderate to high levels of inflation I anticipate will make gold a much more attractive asset. The banks will keep interest rates low to help stimulate business borrowing, and with low rates, typically below 2%, you've got higher rates of inflation than you are getting for interest. I wrote an article called "aheadoftheherd.com , as well as publisher, editor and host of the website. Focusing on the junior resource sector, Mills has had articles appearing on more than 400 different websites including: The Wall Street Journal, Safe Haven, Market Oracle, USA Today, National Post, Stockhouse, LewRockwell, Pinnacle Digest, Uranium Miner, Beforeitsnews, Seeking Alpha, Montreal Gazette, Casey Research, 24hgold, Vancouver Sun, CBS News, Silver Bear Cafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor, Mining.com, Forbes, FN Arena, Uraniumseek, Financial Sense, Goldseek, Dallas News, VantageWire, Resource Clips and the Association of Mining Analysts.

DISCLOSURE:
1) Sally Lowder of The Gold Report conducted this interview. She personally and/or her family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Gold Report: Cangold Limited, Great Panther Silver Ltd., Aurizon Mines Ltd. and Terraco Gold Corp. Uranerz Energy Corp. is an Energy Report sponsor. Streetwise Reports does not accept stock in exchange for services. Interviews are edited for clarity.

3) Rick Mills: I personally and/or my family own shares of the following companies mentioned in this interview: North American Nickel Inc. I personally and/or my family am paid by the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview.

Written By: The Gold Report