Frank Giustra Explains Why He Will Not Sell Gold Even as Prices Swing Wildly
Mining financier Frank Giustra sat down with Kitco News anchor Jeremy Szafron at the New Orleans Investment Conference, and delivered a blunt defense of his long held gold thesis.
The Fiore Group CEO, who helped turn a small company into Goldcorp when the metal traded under $300 an ounce and later founded Lionsgate, argued that the forces pushing gold higher have only grown stronger. His new memoir The Money Dilemma appeared just days later on November 3.
Giustra offered a clear test for abandoning the metal. “To convince me that I’m wrong, to convince me that my thesis is wrong, I would say give me world peace, honest politicians, and benevolent bankers. If you can give me all three of those things, I will walk away from gold.”
He sees none of those conditions arriving. “No world peace. It’s actually the world’s fragmenting in a way that’s quite dangerous. Honest politicians, I mean, that’s almost laughable right now. They’re gaslighting you every day on TV. Benevolent bankers, come on. It’s bankers that put us in this mess in the first place, them and the Fed.”
He expects gold to climb substantially over the years while swinging sharply in the meantime. “My gold thesis stands and I think that gold is going to go a lot higher over the years and it’s going to be very volatile. So, you have to appreciate that if you buy physical gold, you buy it to hold it and not to hope you’re going to trade it out 3 months from now because I can’t time. Gold works in mysterious ways. Gold preserves generational wealth. That’s what it does. Always has, always will.”
Central banks slowly replacing dollars with gold are building a lasting floor under the price, he said, even as retail and institutional buyers remain absent. “I don’t see any Lamborghinis in the driveway” and none of the frantic deal making that marked the period from 2003 to 2008, when he closed transactions almost every second day.
Geopolitical risks loom large. With Brent crude already above 110 dollars, Giustra warned that oil could surge much higher if the United States strikes Iran after the midterms. “I’m more in the camp right now that the US is going to attack after the midterms.” He called such a move the biggest mistake in history because Iran would retaliate across the region, including against underwater fiber optic cables, potentially tipping the global economy into deep recession or depression.
Wars persist, he argued, because of ego. “Throughout history leaders that either enter wars or inherit wars don’t want to be the leaders that lose. It’s all about personal legacy and ego. We’re in a world of 8 billion people, and we’re hostage to one individual’s ego that he can’t afford to say I lost, and therefore, millions suffer around the world. Thousands die. The economy gets destroyed. And all for one person’s ego.”
He tied those conflicts to gold by recalling the roughly 8 trillion dollar cost of Afghanistan and Iraq. “You slowly bankrupt the nation. You have to debase your currency in order to stay in the game. You debase the dollar, gold goes up. It’s that simple. That’s math. That’s not a theory.” He also predicted chaotic midterm results, with the House looking like a sweep against Republicans and the Senate outlook deteriorating, followed by investigations centered on affordability and corruption.
In the mining sector, rising diesel costs are squeezing producers. Giustra owns shares in Agnico Eagle and expects gold to hold a floor from central bank buying, so he is not selling. Majors will eventually have no choice but to acquire juniors to replace reserves, including large copper deposits. Copper faces a very large supply deficit after decades of underinvestment, and he highlighted his Copper Giant project in Colombia, where the new government is actively courting foreign mining investment.
Looking back, Giustra recalled being nearly laughed out of rooms in 2001 for advocating gold. After retiring at 39 he quickly grew bored, then watched the Bre X scandal freeze the market for years. His hard nosed immigrant father, a Sudbury nickel miner, once doubted the scale of his success.
In 2007 philanthropy became his central purpose, directing resources toward poverty relief, refugee resettlement, education, and homelessness. “That literally changed my life. I decided that was going to be my life. It gave me peace. And once you have peace, you don’t need anything else. Happiness comes and goes, but once you have peace, you’re set.” He added, “Who wants to be a billionaire? I don’t. I’ll never be a billionaire cuz I’ll keep giving it away. What is the purpose when you can use that wealth in a way that better society instead of just taking.”
Giustra closed by reiterating that dozens of black swans remain lurking, and the environment for gold is deteriorating by the day. His position has not shifted.
