Where were we? Oh, yes. At The Fairmont Hotel Vancouver on West Georgia Street, in Vancouver, BC.
The historic 1939 luxury hotel downtown is sometimes called the “castle in the city.” The bar at the Fairmont hosted more than its share of meet-ups and showdowns during the ten-year run of the Agora Financial Investment Symposium.
The Agora Financial Investment Symposium isn’t your typical investment conference. It’s where macro debates spill into the hallways, portfolio ideas get challenged over dinner, and some of the best conversations happen long after the presentations end. Markets change, narratives evolve and predictions come and go, but getting a room full of curious investors and independent thinkers together is still one of the best ways to sharpen your edge. (Source: Shutterstock)
One year, while serving as its perennial host, we chanced upon Marc Faber sitting alone at the bar.
Marc Faber is a Swiss-born investor and economist, famously known by the nickname Barron’s had given him, “Dr. Doom.”
He earned the name honestly. His contrarian market forecasts, his early and accurate prediction of the 1987 “Black Monday” crash and his criticism of central-bank policy set him apart from the usual fare on the Barron’s Roundtable.
We’d known Marc for some time. He had delivered keynotes at the symposium, and we had cited his Gloom, Boom, Doom report on historic booms and busts, money printing, Asian markets and asset diversification in our first book.
Seeing him at the bar gave us a chance to talk without an audience or agenda.
“What brings you back?” we asked.
“We like it here in the summer,” he said, motioning toward the Vancouver streets. “And you always have the most interesting guest speakers and attendees.”
He went on to say that the professional staff at Barron’s, particularly longtime opinion-page editor Alan Abelson, did not like Bill Bonner or our company very much.
“Why’s that?” It was not the first time we had heard similar comments.
“I don’t know specifics,” he offered in his clipped accent. “But my guess is you all write with skepticism and critique Wall Street, just the way he does. But you’ve turned it into a business that makes money.”
Among the scenes we recall when we think of the Grey Swan legacy, this one stands out for two reasons: the coterie of rogue economists and analysts Dr. Doom was describing, and the distance it placed between us and the “serious” professionals at Barron’s.
Turning the enterprise into a legitimate business was another matter altogether.
Vancouver and the Practical Examination
The symposium was one place where the ideas behind Agora Financial became visible.
For 10years, geologists, monetary skeptics, resource investors, newsletter readers, contrarians, promoters and other hard drinkers assembled at the Fairmont. The ballroom held the formal program, while the corridors, restaurants and bar handled the arguments that refused to end on schedule.
Each morning began with the Grateful Dead’s “Hell in a Bucket” shaking the room awake.
“I’m going to hell in a bucket, baby,” the song’s refrain goes. “But at least I’m enjoying the ride.”
The late Bobby Weir suited a gathering of gold bugs, speculators and mining executives whose projects depended on a rising commodity price, a cooperative government, an accommodating capital market and several geological assumptions behaving themselves at once.
It also prevented symposium attendees from mistaking the gathering for the World Economic Forum in Davos, Switzerland.
Speculation among speakers and attendees alike remained an act of individual liberty. Doug Casey brought the instincts of the adventurer and enemy of official respectability. A year after smoking was banned indoors in BC, Doug opened his performance by lighting and puffing on a cigarette. He doesn’t ordinarily smoke.
We were all aware that money had become an instrument of sanctions, intelligence and financial warfare. Jim Rickards showed us how monetary policy had been weaponized in geopolitics.
Suburban prosperity rested on roads, fuel, maintenance and systems more brittle than their residents imagined. Jim Kunstler returned every abstract forecast to the physical landscape beneath it.
Natural resources demanded patience, management and respect for capital cycles. Frank Holmes brought that discipline. Markets also possessed a narrative life. Grant Williams followed ideas across the mists of time through the rise and fall of empires.
Skepticism toward promotion mattered as much as enthusiasm for the resource.
Our partner in the annual symposium, Rick Rule, was almost always ranked among the top speakers because he understood the distance between what the audience wanted to hear and what it needed to hear.
The subjects, each year, invariably followed trends in the resource markets.
Horizontal drilling and hydraulic fracturing turned natural gas from a scarcity story into a glut. The technology worked so well that producers threatened their own margins by bringing too much supply to market.
Oil followed the same path into shale. The Bakken, Eagle Ford and Permian Basin changed American energy production, but the economics still depended on acreage costs, decline rates, debt and a capital market willing to finance the next well.
A company could produce more oil every quarter and leave its shareholders wondering where the money had gone.
Rare earths introduced a different problem. The elements were not always rare in the earth’s crust, but usable concentrations, separation, processing and waste disposal created formidable barriers.
China had built dominance across much of that chain. A deposit outside China could be strategically important but still lacks the capital, expertise or processing capacity needed to turn rock into material for magnets, electronics and weapons systems.
Commodity enthusiasm often began with the correct observation that the world needed more energy, more metals and more materials. Not less.
The error occurred when investors assumed that every company chasing the themes would make money.
A commodity was not a deposit. A deposit was not a mine, and a mine was not necessarily a good company. A good company can still be a terrible stock at the wrong price.
The rock, the financing and the character of management had to survive separate examinations. Rick could listen to a presentation, identify the geological problem, the financing problem, and the character problem, then ask the question the speaker had crossed an ocean to avoid.
The exhibition hall offered a practical test. One booth held a legitimate company struggling to finance a difficult mine. The next contained three men, an attractive mineral specimen and a corporate name assembled from the words strategic, global and resources.
Which offered a good use for your money? Well, that was the perennial question, wasn’t it? The presentations set the stage. The hustle started in the exhibit hall. And almost always ended in the bar.
The symposium allowed readers to play the live-action game in which ideas they’d read about in the newsletters took on voices, faces and arguments in public.
It was exhausting.
The Books We Did Not Know How to Write
The books performed the same function in another form. They took arguments that began in daily letters and gave them room to travel through history, monetary policy, politics and human behavior.
One member of the Grey Swan fraternity recently asked me in what order they should read the books. We can only suggest that you read the third post-pandemic editions first because they are the most up to date. And tell you in which order they were published.
The first one came directly from the early days of our newsletter, The Daily Reckoning. We had acquiesced to our editor at John Wiley & Sons to give it a similar title. For subject matter, Financial Reckoning Day: Surviving the Soft Depression of the 21st Century, followed the recurring habit of crowds convincing themselves that history had been repealed. That this time really is different. And investing in dot-com companies was the retail investors’ way to riches.
The late 1990s led many people to believe that business fundamentals had become optional. If a company had a website, a catchy ticker symbol and the words “new economy” in its investor deck, Wall Street practically threw money at it. The internet changed the world exactly as promised. The valuations, however, required a bit of editing. (Source: WSJ)
The information technology bubble supplied the current scenery, but the story reached back through railroads, radio, automobiles, all the way to tulips and the first experiment with fiat money in the modern European financial experiment.
A newsletter could catch an absurdity while it was still warm. A book had to place it among its ancestors.
The dollar story began with less ceremony. And a case of benign miscommunication.
While working together on Empire of Debt, we had recently moved our family back from Paris to Baltimore to get the business end of the Daily Reckoning organized. Bill had just bought Gualfin, his ranch down in Argentina, and was serving as an active consultant to the London office.
Remember, this is still the old days. We were working on drafts printed on physical paper. For each set of edits, I would have to extrapolate where Bill would be next – London, Paris or Buenos Aires – and send a FedEx with the printed manuscript.
On one round of edits, the whole section I had written on the fate of the dollar post-Bretton Woods had been mailed back to me in Baltimore wit a red line drawn through it, some 37 pages in all.
Naturally, I thought the lines meant for me to cut those pages.
I did. Set them aside. Then, while waiting for the future round of edits to Empire of Debt, I continued to develop the book that would be published and hit the #1 on the Wall Street Journal financial book bestseller list… before we even finished Empire of Debt.
The third book, Empire of Debt itself, was printed six months later with the first edition subtitle Rise of an Epic Financial Crisis. It’s a tome.
We traced the origins of the ideas and political aspirations that drove the federal government’s mainstreaming into the heart of all American politics. We showed how the corporate and consumer culture followed suit. And the pattern of delaying the costs became a way of life for politicians and voters alike.
From Wilson to Reagan, there existed some restraint in each political party, some measure of responsibility over the national balance sheet. But after Reagan decided to spend the Soviet Union out of existence and thereby showed deficits do not matter to voters, both parties dropped the facade altogether.
Federal spending, military commitments, currency privilege and political ambition drew on the same reservoir of credit. Empires did not ruin themselves through arithmetic alone. They develop appetites.
The subtitle of the third post-pandemic edition of Empire of Debt is a little more fatalistic: We Came, We saw, We borrowed; a joke we’d first uttered while writing the book a decade before, a perversion, of course, of Julius Caesar’s declaration upon return from Gaul.
“Veni, vidi, vici” – I came, I saw, I conquered.
How the wisps of history have altered our own, ongoing brush with empire.
As we’re writing this tale, we realize it’s getting long in the tooth. When we pick it up again on Monday, we’ll tell you what happened when we decided to take the ideas in our books on the road with a film crew. Until then…
~ Addison
P.S. Yesterday on Grey Swan Live!, we returned to one of our favorite themes: Argentina’s economic turnaround. While DOGE met the Washington establishment and the establishment won, Mieli’s Argentina has truly taken a chainsaw to the administrative state.
Our man on the ground, Joel Bowman, author of Notes From the End of the World, provided a key update on what’s likely to happen next in Argentina, as well as a foreign perspective on what’s happening in the U.S. ahead of the midterm elections – election integrity or not.
