Veteran investor Peter Grandich is warning that the market is overlooking the biggest signals in decades, with precious metals and insider selling flashing red. In an interview with Kitco News, Grandich didn’t hold back the criticism of the U.S. economic policy, the Federal Reserve, and the complacency of equity markets.
"We're going to see a major revision that could wipe away well over a million jobs that were supposedly created over the last 18 months," he said, talking about the labor data that previously supported the "soft landing" narrative. He pointed directly to the Bureau of Labor Statistics' birth-death model, calling it "BS," and said investors should brace for a painful revision.
Precious metals, in his view, are telling the real story. Gold has surged toward $3,600 an ounce, and Grandich argued that Wall Street's refusal to pay attention is blinding investors to what's coming.
"Gold has been a tremendous barometer that Wall Street doesn't tend to look at because it's kryptonite to them," he said. "It's clearly signaling that the U.S. and some other areas in the world have some very difficult problems ahead."
Silver, meanwhile, is finally coming into its own. Grandich said the fundamental case for silver "hasn't been this strong in 40 years" and sees the potential for prices to soar. "I think we can get to see a triple-digit silver price," he said, adding that this could come alongside $5,000 gold. "Silver is no longer just the poor man's gold."
Looking back at his career spanning over four decades, Grandich remembers the 1980 silver squeeze when the Hunt brothers tried to corner the market.
"Based on when that was made, we’d have to get to almost $200 to adjust for inflation. So, my call last week for $100 silver – I don't think it's out of the realm."
Beyond bullion, Grandich is also bullish on natural resources. He singled out the gold-and-copper combination as the sweet spot for miners and predicted a wave of takeovers.
"There's going to be a real acceleration of M&A activity, especially among the juniors," he said, noting that majors with cash-rich balance sheets are hungry for growth.
On the political front, Grandich was sharply critical of President Donald Trump's foreign policy, while clarifying he got his vote in last year's election.
"He made a huge mistake of taking a big stick into a trade war when he should have taken an olive branch," Grandich said. "Instead of strengthening our global economic standing, it weakened it." He added that U.S. policy missteps have left the country more vulnerable just as global competition intensifies.
However, his harshest words were saved for the Federal Reserve.
"The FED became more like the Wizard of Oz. With the curtain closed, it looked like they were powerful and all-knowing. But, when the curtain was pulled back, we found out that they really blundered," he said.
In his view, political interference has already undermined credibility. "Markets are starting to price in what you'd call a banana republic risk premium," Grandich argued. Ultimately, he believes the Fed will return to money-printing as its only weapon: "That's why gold is going to keep climbing."
As for equities, Grandich warned that the behavior of insiders should alarm retail investors. "In recent weeks, we've had record public buying of equities while simultaneously at the same time some of the biggest selling levels for both corporate insiders and large institutions," he said.
"In 41 years, I've never seen the public beat corporate insiders and institutional investors. It's happened exactly zero times. We are at one of the most dangerous times for investors in my entire career," he warned.
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