"One of the things people are pointing at as the next weak link in the chain is the derivative exposure of the banks," said Brien Lundin at the New Orleans Investment Conference.
Brien Lundin: Cracks in System Emerging, What is the Next Weak Link?youtu.be
As the global economy grows increasingly precarious, what warning signs should investors be watching?
Speaking at the New Orleans Investment Conference, host Brien Lundin said that as cracks in the system emerge, market participants are looking for a "Lehman moment" — in other words, a major institutional collapse.
"One of the things people are pointing at as the next weak link in the chain is the derivative exposure of the banks," he said at the event. "We saw that that's what forced the Bank of England to essentially pull back on its quantitative tightening and actually go right back to easing — temporarily, of course. It was the derivative exposure of its pension funds."
Lundin is also keeping a close eye on the cost of servicing the US federal debt.
"The cost of servicing the debt is soaring, and nobody's really talking about that," he explained. "The third quarter numbers are going to come out on October 27, and I think it could be a number that's really shocking to the markets."
In a conversation last month, Lundin reminded investors that it's important to be patient, and he reiterated that point at the conference. However, he also said now is a good time to be looking at the resource sector.
"(It's) time to be patient, time I think to buy these undervalued mining stocks and metals and accumulate them right now," he said. "We don't know what the actual bottom is — I'm not telling anybody to jump headfirst into the pool — but start looking at these companies and accumulating better ones that should be valued much higher."
Watch the interview above for more from Lundin on how broader market activity is affecting precious metals. You can also click here to read our recap of the event and here for our full interview playlist on YouTube.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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