James Dines: Owning 'Wealth in the Ground' Is Your Best Bet to Surviving the Coming 'Supernova of Inflations'

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James Dines has been in the business of making bold calls for over 50 years. In this deep-diving interview, he minces no words about the dire risks the U.S. economy – and the world at large – faces at this juncture.

Simply put, he sees the excessive credit in the financial system as having placed the global economy on a collision course with hyperinflation.

Unlike past periods of turmoil, there are no truly 'safe' places for investment capital to hide. Geographic markets and almost all asset classes are positively correlated these days. They share many of the same risks, and if a systemic crash occurs, they will crash together.

At this point, says Mr. Dines, you want to invest in assets that can't be printed away by government desperation. You want to hold hard assets: "wealth in the ground," as Dines says (physical commodities, mining companies, etc.). They're your best best to make money at a rate faster than inflation is going to happen. 

On Government's Odds of 'Saving' the Economy

They are borrowing money with no intention of paying it off. Politicians hope to be safely dead by the time it hits the fan. This year alone America is going to be running a deficit of 1.3 trillion dollars. Most people do not really even grasp how much a trillion dollars is. One trillion dollars. If you spend one million dollars each and every day from now back to the time of Jesus’ birth, you could not spend one trillion dollars. Right now America’s debt is approaching 15 trillion dollars, which are numbers used for astronomy. How is America going to earn that? With Facebook and Twitter corporations? Our industrial base is gone. Entitlements of fixed forced payments are a large and growing section of it.

On Resource Scarcity 

 Energy is, of course, extremely important. We have been writing in recent years about the coming resource imperialism. I founded the neo-Malthusian school of economics, which says that the planet is limited and the population is soaring. By brute logic, it is obviously unsustainable. You cannot just keep having more and more people on the same planet without, someday, sooner or later, running out. The nations that perceive this would start buying assets with that in mind. The primary example, of course, is China. 

So there will come a time in the not-too-distant future where the last new copper mine on the planet will be found. Hard to believe – because there has always been more – but with the world’s population soaring into the billions on an accelerating uptrend, something is going to break. Along with the currency going to break, things are going to be happening here from out of nowhere. Because when you are going at high speeds toward a brick wall in the dark, things can happen very quickly.

On Peak Oil

So the rapidly increasing demand and the shrinking supply of oil, despite any short-term oversupply, which is probably true now… is going to lead to a stratospherically higher oil prices. As soon as the military grasps that they will start needing to put windmills on airplanes, they will seize the remaining supplies, and you will not be able to drive your car until the last drop. At some point there are some very disruptive changes coming to society.

On Gold

The price of gold and silver did not go up. It is the paper money that went down. Gold and silver are the ultimate money, coins of which are good anywhere in the world, no matter what is stamped on them, and that is the money. Depending on the amount of paper each nation prints is the price of gold in that particular country, or in that particular currency.

That is one way we were protected by the price of gold. Gold is the only investable asset in the world that has gone up the last 11 years without interruption, and that is because they are just running the printing presses. The more they do, the more value builds into gold and silver. Now of course, it will have its fluctuations. It went down in the 2008 crash, but came right back up and made new highs. We tend to ride those out, and it is very important understanding what the main trend is. When you are really clear what is happening in the world, you know how to place your bets, instead of doing it blindly or just following casual recommendations from people.

 Click the play button below to listen to Chris' interview with James Dines (runtime 56m:21s): 

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Or click here to read the full transcript.  

James Dines has become legendary for having made correct forecasts that were in complete contradiction to the rest of the financial community.

In an industry where it takes courage and conviction to go against the crowd, Mr. Dines defiantly warned investors of the "invisible crash" that would bring down stocks in 1966, the unexpected gold boom of 1974, the Internet revolution of 1996, and the market top in 2000. And now, he warns of "The Coming Uranium Boom" that is steadily approaching.

His subscribers to The Dines Letter have profited so much that subscriptions are handed down to second generations.

 

Our series of podcast interviews with notable minds includes:

This is a companion discussion topic for the original entry at https://peakprosperity.com/james-dines-owning-wealth-in-the-ground-is-your-best-bet-to-surviving-the-coming-supernova-of-inflations-2/

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I am only in the market because the government forces me to "invest" a portion of my wages on Superannuation. I assume that this is a tax.
On oil: What advice would you give to a shareholder in a whaling ship just before the collapse of whaling? Get out, sit on the sidelines and wait for the next big thing.   Who would have thought it would be mineral oil?

We still have whaling (unfortunately) even as oil passes it’s zenith. But I would not advise anyone to buy and hold whaling shares.

My next move is to plant Date Palm trees. This is in recognition of climate change and the conclusions of the Business as Usual scenario of the Limits to Growth Report. Meadow and Meadows concluded that capital would have to be moved from industry into agriculture in order to feed a starving planet.

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First, thanks for the interview Chris.
First off, Dines states in the interview that he somewhat ‘discovered’ the complex synchronized motion of starlings in 1995 and used it as his book cover. He mentions this unknown force and that scientist are baffled to this day. And that recently, some girl’s videos/pics have been popular.

Bird flocking behavior has been well understood for decades now and first simulated on computers by Craig Reynolds in 1986 (Boids). It’s a classic computer scientist programming project. This is my first hint that Dines might not be all he seems.

Dines stated he didn’t do advertising all whilst giving an interview to Chris and pushing his books at every occasion: "I have a whole chapter about this in my book" "my latest book" "not enough time to talk about it here" etc… His website is also plastered with "the best investor ever" statements and "I made $1 million thanks to Dines"… Ok sure, but how about all the wrong calls Dines made over the year? Also, this doesn’t strike me as a website from someone who is not outcome dependent. Dines doesn’t advertise but does interviews all over the place pushing his books? 

He also does not elaborate on the High States idea in the interview eventhough he had time to elaborate. His books are $90 each incidently. Not cheap hey?

To summarize, take some of his advice but be weary the guy is just pushing his newsletter/books. Of course, everyone has to make a living, but don’t just listen to what he says but to what he does.

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Chris, your interview with Mr. Dines was as complete and thrilling a Podcast as I’ve ever heard.
I am self taught in this new career I have chosen, and have been electrified by all things global in scope, and commodities in nature. Geography, geology, psychology, mass psychology, trends,…etc. Everything turns me on. I read everybody. I cannot get enough. This is the first I have herd of Mr. Dines but I assure you his books will be purchased, and I will read them very soon. He will be someone I will come to know well. My next Mr. Matt Simmons. 

You were  dropped into my lap (why?) by fate perhaps, back in late 2007 or early 2008 when I started, and I have worked hard to just come to understand your broad scope of intellect. This may sound strange to you but I vsualize everything in the contexts of a baseball game. I see my future as the manager but first I go play the game as the players do. Hoping to get better by the veterans on the field, and learning by observations the intracacies from the manager, and how the game is played.  Mickey Mantle once said, "every day I learn something new in the game of baseball". He was top 5 of the greatest who ever played, and he always attained more.

I am no where near close to the experience, schooling or forward thinking visuals you present each and every day Chris. However, a great achievement for me is that I even understand you now. That is thrilling to me. Amazingly, I am having more and more epiphany’s as more and more information is bonding, giving me my next step up the clarity of information gained, and understood, ladder. Rapidly now (relative of course). 

It took me a long time just to understand terms and information, and try then to not think of yesterday, today, but the future. It’s the future that must be visualized, to prepare for properly. Forward thinking is abstract, and is why I probably enjoy this so much. I want desperately to separate from the herd, and reach the next pond before most of the others. Not so much for the benefits, or the greed of it all but for the knowledge accumulated (first) on the way. It’s a quest, and I delight in it, I do.

Mr. Dines delights in his life, and I relate to him very strongly. Probably why I feel this towards you too.

I want nothing more out of life now than to sit with my Lady, my dog, in a chair, at Yellowstone, and mentally drift through time. I want visuals more than things now. I just need to be able to afford to get there, and that requires I hold onto what my wife and I have modestly accumulated, so it doesn’t lose value but maintains its value. Nothing more and nothing less.

My lap top and radio are nice too. Tigers games are a simple pleasure that encompasses my entire life, the ebbs and flows. Very delightful because I visit with all that have come, and gone plus I get to share with the new, as in grandsons.

 As I conclude this, I just have a need to express to anyone who attempt to bring clarity, and understanding, that it is lonely sometimes with your own thoughts because the people in your lives haven’t moved from their spots yet. Be patient, we all are still moving forward, it’s just that some have separated, attained the knowledge, and thankfully are willing to teach you as you/they catch up. If and when their ready, they will hear you. I will hear you. All I will say Chris, is I am committed to catching up, and appreciate so much that you have kindness enough in your life to wait on me. A truly GREAT PODCAST. Frankly, it meant so much to me, and perhaps not so much to others but it is where I am at right now, that I needed to hear, and am quite satisfied that it came to me this morning. Regards BOB 

PS: Chris, your respect towards Mr. Dines resonated with me, you are a fine young man, and you have done your parents proud. Nice

 

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I’ve always found Dines to be a blowhard salesman of snake oil, but I’m glad I listened to this podcast anyways.
Dr. M’s question regarding high frquency trading and market sentiment indicators has been something I’ve been pondering for awhile. 

I’ve made a descent living in the past from a trading strategy that uses market sentiment data exclusively, but it simply hasn’t worked since 2008. For example, there was a fantastic sentiment setup in the market at the begining of this year that I really wanted to play, but it never materialized. 

A failure of this sort usually means one thing; too many traders are using the same strategy. I can only think that market sentiment analysis must be a major component of the algorithms used by the bot-traders these days. 

I still believe that markets are an expression of human nature, however, and it will be interesting to watch how the bots distort the expression of  human nature in a major market decline. 

I’m trading in my keyboard for a bowl of popcorn…this sheeple just can hang with the digital big boys anymore. Now if that doesn’t scream "Short the Market Now!", I don’t know what does.

Best…Jeff

 

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You DO realize that all of the talk toward the end of podcast about "the more you try and convince people the worse it works" and "people are where they need to be" and–although you did not use the terms–emotional "detachment" from those who ‘do not get it’ are all very core concepts of AA and Al-Anon. They are standard tactics for dealing with drunks and addicts.  I suppose what works with ethanol addicts might work with petroleum addicts. Right?
What you’re suggesting is standard Al-Annon tactics: lead by example and do the right thing, because trying to convince dysfuctional people that they have a problem is counterproductive and a waste of time and resources.

And by extension, you’re calling the average investor (and peak oil denier) dysfunctional.

As I said, innnnteresting. And please be aware that, statistically, only one in ten who needs the message of Al-Annon recovers. If the comparison with oil addicts holds - ouch.

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Chris… I have to agree with my fellow Tigers fan Robert Essian that this is amongst your best work, on so many levels.  Just WOW.
I want to especially point folks to what Chris says just before the 49 minute mark… from the transcript;

end of Dines comment  "…Unless you have a true understanding of your relationship to money and who you are as a person, in high states, even if you have the other three disciplines nailed down, this one will deceive you into getting to talk yourself into going against what you know you should be doing and then miss-stepping. Does any of that make sense?"

Chris Martenson: It does. It says that during the first part of our lives we go out into the world and we collect information from around us. And that at some point you have to understand that the next journey is inward, and the true mastery of the world involves mastering yourself more than facts and figures and data and information from outside. Is that right?

This is absolute Gold folks… wisdom distilled.  For me, the simplest way to explain the journey Chris refers to is this;

We evolve into the person we are through many influences, and without knowing it or realizing it, we create a "me" that is not always in harmony with our true spirit.  We may have taken a particular career path more to please our parents than to please ourselves, or we may not be aware of our own tendencies to fall into a victim mentality… because we think that is the only way we can get others to care about us… many permutations… but the net is that on some levels, or many levels, we are living a life that is a lie… and that lack of integrity with our core can manifest itself in many less than positive ways.

I am sure there are many ways to take the journey… and like most journeys, the first step is to become aware that this possibility exists.  It does!  As Chris says… "mastering yourself" … or as I like to say, getting a better grip on the controls of spaceship Jim H, can pay off huge dividends.  For me, it has meant becoming much more comfortable with myself, in my own skin so to speak… such that I can take criticism much better than I used to.  It has also made all the difference in my work as a manager of people, where the integrity and authenticity of my relationships with my team has allowed me to recruit from within the company through the word of mouth of my existing employees.   

My own journey included weekend immersion classes taught by the Excellence foundation in the Seattle area;

http://www.excellenceseminars.com/

The second in the series is called, "The Wall"   www.excellenceseminars.com/programs/the-wall

To me, the most beneficial aspect was this;

"Position Release: Learn how to let go of attitudes, habits, and patterns that do not support full participation and success in life and replace them with workable positions."

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Dines seems to be hot on non-renewable resources, and his "wealth in the ground" seems to be mainly about non-renewable things you dig up and sell to other people.
However, I think a more realistic target for the indicators he tracks is productive farmland. We all eat for a living.

(And yes, I have a vested interest – we’re looking for hands-on partners in small-scale sustainable agriculture and energy production.)

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Your logic in knocking Dines with regard to Dines’ discussion of bird behavior is quite tortured, if not completely specious.  Dines does not seem to me to be implying that he discovered this behavior in Starlings… rather he is commenting on his insights into the nature of the mechanism by which they move.  My own intuition is that they move through a very rapid version of the "stadium wave" … but Dines is saying that it’s something beyond this, and that the coordination is simply too fast, and across too long a length scale to work this way.  Whether you agree with Dines or not, I don’t think this is comparable to Al Gore’s invention of the internet, as you seem to suggest.Secondly, it’s not new news that EVERYBODY TALKS THEIR BOOK.  What I look for is whether a person is speaking from conviction, and passion… or whether they are just out for a buck.  I can assure you that Dines doesn’t need the money anymore.  
       

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I’ve found that people cluster into several groups when confronted with such facts. These roughly correspond with the Kubler-Ross stages of grief:Deniers. If they bother to look at facts at all, they can tell you all about abiotic oil. But more likely, they are so hypnotized at the dazzle of the mass media that they don’t even care. As George W. Bush said, "How will this look in 50 years? Who cares! We’ll all be dead then!"
The "yeabuts." My father is one of these. "Yea, but they’ve got new stuff in the labs just waiting for the price of oil to get high enough."
Talkers. They can quote the latest story on The Oil Drum, can tell you the date of Peak Oil from three different points-of-view, and have read all about the best survival strategy. Then they hop in their SUV and drive 30 minutes to an office job.
Everything will be alright if we only just… These are the people who have changed their light bulbs and own a Prius – and think everything would be just fine if everyone else did what they did! The difference between these and commercial developers is that developers want to build little houses in the woods – but these folk already have their little house in the woods, and don’t think anyone else should be allowed to.
Investors. How can we protect our capital while making a killing off the stuff that everyone is going to want? There seems to be a lot of those in this list, and who knows? Maybe they’re on to something? But then, maybe their bodies will be found someday with gold coins in their mouths…
Doers. They actually grow some of their own food, and if they aren’t there yet, at least they’re working on food self-sufficiency.
I agree with safewrite. There ain’t more than about one in ten in the last group.
But no one’s crystal ball is perfect, and perhaps A Miracle Will Occur, and one or more of the other clusters will thrive. All I know is that the last group has the best chance in the widest range of scenarios.

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Chris Martenson: It does. It says that during the first part of our lives we go out into the world and we collect information from around us. And that at some point you have to understand that the next journey is inward, and the true mastery of the world involves mastering yourself more than facts and figures and data and information from outside. Is that right?
"This is absolute Gold folks… wisdom distilled." (From J.H.)

A slam dunk, and I don’t even drink. I never look at a man’s wealth personally, I seek the content of his character. My Pops used to tell me as I was awed by something someone had, and he would just say: "Strip it all away, remove him from his comfort zone, and get to know him. Then admire him if you like." I know allot of truly uninspiring rich people, and to die for individuals who have less but way more. It was the combination, and presentation of this podcast from Mr. Dines, and Professor Martenson, that gave me my comfort with it. Good Stuff…Grandsons are here, and I am over joyed, no cash can replace every minute spent with them. Hell, they can’t make change for a quarter yet. Perspective folks. Peace

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[quote=Jim H]Your logic in knocking Dines with regard to Dines’ discussion of bird behavior is quite tortured, if not completely specious.  Dines does not seem to me to be implying that he discovered this behavior in Starlings… rather he is commenting on his insights into the nature of the mechanism by which they move.  My own intuition is that they move through a very rapid version of the "stadium wave" … but Dines is saying that it’s something beyond this, and that the coordination is simply too fast, and across too long a length scale to work this way.  Whether you agree with Dines or not, I don’t think this is comparable to Al Gore’s invention of the internet, as you seem to suggest.
Secondly, it’s not new news that EVERYBODY TALKS THEIR BOOK.  What I look for is whether a person is speaking from conviction, and passion… or whether they are just out for a buck.  I can assure you that Dines doesn’t need the money anymore.  
       
[/quote]
 
At some point in the past I had read a article about a computer scientist who had modeled the swarming behavior of flights of starlings.  Perhaps the guy mentioned above.  As I recall, the model began to work when he was able to model an individual birds relationship to several other birds around him.  As that changed minutely, the individual changed as well.  Magnified to the group, it appears to turn on a dime en mass.  The Wave is probably a good analog.

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The starling videos, to me, look like what JH suggested, a wave.  IOW, they don’t all turn on a dime.  That leaves room for a signal being passed between birds that they respond to quickly, but not simultaneously.  OTOH, I have also seen videos of schools of fish, in which they do appear to turn on a dime.  My eyes do not detect a time lapse in movement of the school.  They all turn simultantaneously.
This suggests that different mechanisms may be at work.  But what do I know?  I’m just a bird watcher.

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The original Transition writings openly acknowledged the similarity of "addiction" work to what needed to happen with respect to Peak Oil descent.  … dons

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The human eye cannot detect sub 100 millisecond differences, however, there are a lot of milliseconds in that range … room for a lot of things to happen.  … dons

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Maybe, but then he shouldn’t be preaching how he doesn’t do any advertising when he is blatantly adversing in this very same interview.
If he didn’t need the money anymore, why charge $90 a book? I don’t recall many books costing $90 in my local bookstore…

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Following the conversations it seems to me that people are arguing from different positions on Maslows hierarchy of needs.
from wiki

Those who approve are talking from the top. I am addressing the bottom. I guess that puts me down there with the plankton.

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Maybe I’m just getting too old.  But, I remember Jim Dines touting this same doom and gloom stuff back in 1981 and 1982, just as the market and economy was in the ignition phase of a 30 year tear.  He was a big deal back then, and he had a lot of his readers scared.   I don’t know about the success of any of his predictions after that; as the folks who followed his advice were left standing in the station as the train pulled out.  He lost a lot of credibility and his following dropped to almost nothing.
I especially like the hype that  "James Dines has become legendary for having made correct forecasts that were in complete contradiction to the rest of the financial community."  Considering that almost everything economic I read these days is negative, I have to laugh that Dines claims he is contrarian.  He is all about selling fear, and there’s always a market for that.

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osb272646, I agree that there’s money in selling fear and sometimes it’s important to step back and take a deep breath. An interesting exercise is to scroll through the headlines from all the previous articles on this site for the last 2 years or so predicting imminent collapse. Well TPTB have managed to keep things together every single time. I’m not criticizing this site at all, far from it, becasue I don’t disagree that the whole system will collapse at some point, the question is how long will that take. I am beginning to think that we might want to consider that things may continue on as they are now for a while longer than we might think because the whole sytem is faith-based and people’s unwillingness to accept the truth of the fundamentals may well be able to keep it alive for a while longer, especially at 0% interest. Or maybe it will fall apart this year, who knows. We tend to make our predictions here based on fundamentals but there are still enough resources available I think for the manipulators to be able to hold those fundamentals off for a while.
And I can’t comment on Dine’s track record in the 80’s but things are quite different now than back then. In the 80’s the fear was from going from a gold backed currency to a fiat currency, and then jacking interests rates up to offset the stagflation. Well we are now out of natural resources and we have no similar options left other than currency devaluation which would be a cataastrophic event. Back then we were not at the peak of a ponzi scheme whereas now we are.

Regarding China buying up all the world’s resources right now, well that is hitting close to home here in western Canada. Canada used to own the largest single petroleum deposit in the world. I think China now owns most of it. Here we are seeing a massive campaign to get a pipeline built to the west coast to ship our resources to China. The politics are geting very slimy, and when 4000 Canadians signed up to speak at the National Energy Board’s review process (me included), we were all branded by our very own prime minister as "foreign radicals". The irony is disheartenting because it’s China behind the push to get Canadians to willingly give up our resources in return for worthless pieces of paper $$$ and some jobs.

This ties into the theme at the end of the interview about not being able to convince people of the facts no matter how they are presented, because China is somewhat successfully convincing many here to sell out their own futures and ship our resources overseas. And talk by me of the fact that the world is running out of resources, is at Peak Oil, and that we should instead keep them here because there is nothing of value that Canada could be paid for in return for its oil just falls on deaf ears. It is very sad and incredibly frustrating to watch, as our political system is quickly becoming corrupted, not too far behind the US now in its incompetence and complete disregard for its duty to its own citizens.

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Thank you Rodneyrimes and all, this is the most entertaining discussion thread I have seen on this site.I notice that the world is so complex and that there has been so much science developed it is almost impossible to synthesize what has been done before and come up with a new  force of nature.  But a science as seriously untethered from reality as psychology seems to do this on a regular basis. I wonder if the new bird theory of nature took into account the fact that a bird senses and responds to information much faster than a human (partly because the nerve paths are so much shorter from eyes  to brain and to muscle how many times compared to a human) and the metabolic rate is much higher etc.  In the 50 milliseconds it takes my eye to even perceive a change, the bird has seen and responded to a stimulus. same for the fish. Did the psychologist account for this fact or maybe my fact is wrong?  I dont have time to get into this but the posts from everyone are very interesting thanks.
Safewrite: thanks for your very interesting observations about drug dependents and its relationship to fossil fuel dependents and the inability to deal with the addictions.  CM’s comments and yours are great nuggets to me.  Whatever helps me prepare (in particular your insights) is most interesting and also most valuable because of the overriding need to prepare for the Reset.
To my knowledge, every person interviewed by CM is selling something.  Yet, the most interesting and useful aspects of these often are the discussions that follow. Just as Adam Smith discovered or observed for society in general, lets accept the self promotion as a good thing. Since we are not paying each interviewee for his time, I accept this in the spirit that I accept public radio or public internet news.
In my opinion the best "wealth in the ground" for preparation is buried gold, silver, seeds guns and ammo.
best wishes everyone