The AI Bubble, U.S. Midterms, and What's Next for Mining Stocks

0:16Chris Temple: I do owe a huge debt of gratitude to our next guest, somebody who's been coming to this show for many years. And as many of you know, this is my first time. But Chris Temple here of National Investor has always told me for probably the last six or seven years, you've got to go to New Orleans. You've got to go to New Orleans Investment Conference. It's one of the staple, iconic investment communities that's been around for so long. How have you never been there, Trev? Well, Chris, I'm here. And it's great to see you here, Trev. Good to see you, too. We've actually run around. We've ran into each other a few times this year.

0:50Yeah, we have out in Colorado and you name it. Yeah, yeah. Yeah, this is one of the stalwarts, especially for old school gold bugs and resource investors. You know, it's been over 50 years. I think it was two years, three years ago that Brian, you know, we celebrated the 50th anniversary of the New Orleans Investment Conference. And it really is one more than a lot of them out there where you feel you're with family. you're with people who are kindred spirits it's a lot of fun uh i've always loved the ribbon of libertarianism and limited government and some some of the broader political and cultural themes here yeah not just all the latest gold bug conspiracies but i mean it's deeper than that it's a lot of fun and and you know the the icing on the cake is that we're doing it in new orleans which is a blast to visit.

1:45Wonderful food. It's an okay town. Wonderful music. It's very okay. So, yeah, this is a lot of fun.

1:51Chris Temple: Yeah, well, it's good to see you. It's maybe fortuitous that we are recording here Thursday afternoon, the 29th of October. We've got a little bit of a midterm election coming up. A little bit. And every two years we say, that's the most important election of our lifetime, Chris. And, you know, maybe there's a little hyperbole to it, But not far off anymore. But this one does seem to carry a lot more weight as a midterm than I kind of maybe have remembered in recent years past. But it seems like we're seeing a lot of volatility in the markets. It's hard for me to decide if that's a direct reflection trying to get ahead of potential results from the U.S.

2:37Chris Temple: midterm, if it's overdone. if it's the volatility in the market represents something more than maybe a midterm kind of expectation. How are you seeing that relationship between U.S. politics right now and the volatility in the markets? There's two things, Trev. First of all, and I've said this in many contexts, as you've heard me say, I know for a while now, The AI bubble is something that dwarfs the bubbles in real estate mortgages that blew up in 2008. And then after that, you had kind of a corollary where Wall Street force-fed way too much cheap credit and equity investment into the energy industry when horizontal drilling was perfected.

3:23And whenever you have capital, especially irresponsible capital, force-feeding an industry way beyond its needs for capital, you're causing a problem. That has happened in spades with artificial intelligence, way beyond the magnitude of those other two examples I mentioned. And the reason why the market has not yet rebelled, though some cracks have started to appear recently, is because with President Trump and having the Republican Congress pretty much having his back on just about everything, right or wrong, Wall Street, not incorrectly, has viewed this as, okay, this is a game of musical chairs.

4:04It's fun. We're making gobs of money. Whether this is all real or not in the end doesn't really matter. The charts are all bottom left to upper right. Nobody wanting to reckon with the idea that at some point the music stops, they damn well better be one of the first ones to find a chair. So at the same time right now, we're having more and more cracks show up. And even some of the good companies, I mean, Oracle's paper that they floated a while back already junk-rated in the market. Oracle. You don't think of them as a junk-rated company, but their paper now is. Look at Alphabet's news this morning as you and I are recording this.

4:47One of the biggest hits ever on a single day for that big Mag 7 company. So at the same time that the chickens are coming home to roost and all of a sudden people are doing the math on some of these stories, We have the prospect that all of a sudden, if the Democrats win the House and or the Senate next week, the stock market overall is going to be more of a two-way bet because the president's not going to have this big tailwind force exerted on the market like everybody has treated these last two years. So there's a risk that we have a major debacle in the market. That's the financial and market impact.

5:31Politically, Trev, you've got to go at least back to 1994 for the kind of a major change in politics we're going to have. And I say this as someone who has always been skeptical of Trump, even from his first term, but was happy with what seemed to be a legitimate populist political realignment. After he won the election for the second time in 2024, he was at the cusp of a major and galvanizing impact on American politics that could have lasted a generation or longer. The Democrat Party has become the wine and cheese party, the elitist party. The Republican Party, largely under Trump and his messaging, is the party of the middle class.

6:15He got more minority votes than any Republican president in history in most cases. He did very, very well. And in two years, he has succeeded, if the midterms turn out the way it looks like they're going to, in snatching defeat from the jaws of victory, and just as quickly undermining and negating a lot of this generational political realignment that he was at the head of, seemingly yesterday.

6:43Chris Temple: What's seemingly yesterday, I mean, it's a follow-up is, I think, the way we see it right now, it's the way the polls, and obviously polls are obviously wrong quite often, right? But right now the polls have the Democrats probably taking the House. The Senate may be going to be a little bit more difficult to do. And so I don't want to say that they get full control of the Senate and the House, but at least partial control in one of those places is going to make the next two years pretty damn difficult. But I just kind of question, what should us as resource investors be prepared for for the next two years?

7:24Chris Temple: I think that we can still remain bullish. Gold people can still remain bullish. However, when it comes to resource development, all the positive things that have been put into place under the second Trump administration, does that have a chance of being unraveled? Some of it will. There's no question about that. And Trev, I think to be fair, it'll be more perception and the messaging than it will be on the ground. Sure. And maybe it's more fear like internal. And that's not unfounded because, look, there have already been specific promises on specific projects that the Trump administration funded, invested in, accelerated permitting on.

8:10You know, Trilogy Medals and Ambler Road in Alaska, top of the list. guaranteed even John Paulson though he already sold out and tried to run while get while the getting is good I guarantee you he will be hauled in front of a House committee to want to know how much money he made by being Trump's buddy when the government took a stake in trilogy medals okay that's one example I'll give you another example you may already know this and we were talking about this at our recent better in our backyard conference in the Twin Cities where one of our speakers, along with two members of Congress, Nick Begich from Alaska and Pete Stauber from Minnesota, were there.

8:50And one of the other panelists that we had on this particular discussion was Curtis Moore, who for a long time, I know you know Curtis, he's been a VP of energy fuels for a long time. And he told the story, not that this isn't public knowledge already, that When Mark Chalmers, a longtime CEO, retired, Ross Bapu came in, he's a new CEO since about mid-year or so. And like a lot of new CEOs or officers of a company will do, he's announced that I love this company. I think it's great. I think that the share price is not reflective of what the value is here. So I'm going to buy some stock. Well, several days after that, the Trump administration announced that they were trimming the footprint of the Bears Ears National Monument out west, which has some impact on energy fuels and the area that they can work.

9:38And bear's ears, I won't get into the whole story, but it's like the Boundary Waters. It's like Ambler Road in Alaska. This has been a political ping-pong ball, which for years, a Democrat administration will expand the boundaries or outlaw mining or do whatever. The Republican administration comes in and says, that's overkill, that's too much wokeness, and we need to develop these areas and be realistic about these monuments or whatever they are. OK, so the ranking member of Stauber's own committee in the House, the House National Resources Committee, a congressman from California who would ostensibly be the chairman of that committee if the Democrats take over, he's already sent a letter to Energy Fuels saying we're going to investigate you for insider trading and other nefarious things because we don't believe your public utterance that Mr.

10:27Bapu, that you bought a million bucks worth or whatever it was of stock and energy fuels, thinking it was cheap, you bought it knowing that Trump was going to do this. So that's a silly example of many that are going to come. And anything that the Trump family is involved in, anything that was funded by the government, a lot of these things are going to be fair game for investigations. And it doesn't matter if these projects are right and make economic sense and are needed for national security, because the next two years is going to be all about get Trump.

10:58Chris Temple: You think so? Even though he's going to be done after two years, what's the point of taking him to the woodshed when he's done in two years? Well, first of all, and I mean, look, you know me long enough. I've got my own misgivings, plenty of them, about a guy who I often call the orange wonder. But he's been, in most respects, in my view, less bad than the Democrats would have been, certainly less bad than Kamala Harris would have been in most ways. And there is just this visceral Trump derangement syndrome. You've got lots of Democrat members of Congress that act just like a cue ball car bill from down here in New Orleans.

11:32He's just a nut, and he loves the fact that he has Trump derangement syndrome.

11:37Chris Temple: And he's got to think if he's got to go see a specialist or something. I wonder if he's ever spoken at one of these things. He has. Has he been? Jim has been here before. Okay. And look, I like him to a point. Yeah, yeah. He's a fun guy, funny guy to listen to. He's enough of a traditional Democrat, I guess, that I can tolerate some of what he says. But no, it's going to be a freak show because, regrettably, and the Republicans do the same thing with their base and the right of center people, especially on social issues, okay? The Democrats are going to be all about get Trump and go after the bad capitalists and all of the corruption that has been in the Trump administration and stuff like that because a big part of why they're going to have all these investigations is to set up for 2028.

12:23Chris Temple: Yeah. So one of the things that has bothered me the most out of the past two years, and I've said this before here on the channel, is that, as you know, I have my constructive criticisms of the man in the White House and the Oval Office. I've been very disappointed in for many things. But I also will give him credit where credit is due. And when it comes to resource development, the reshoring of supply chains, trying to at least light a fire under U.S. manufacturing on all different levels, that should not go unnoticed and that should be very much appreciated. What has been a real shame is that the rest of the chaos outside of those policies have just absolutely shadowed the good things that have been put in place.

13:12Chris Temple: It took his eye off the ball that you just described that he would have, again, that's one of the things that would have galvanized him and his movement as a generational movement. Absolutely. And this is where I think if the other side, if the Democrats could come back to what they used to be, that they would see these as important policies and used to be the foundation that they ran on in the 70s, 80s and 90s. and go back to that type of policy and realize we can take these ideas, give credit where credit is due to Donald Trump. We're just going to do it better without the chaos and without the grift and without friends in power to help us make these decisions and sway where it goes.

13:59Chris Temple: I just think if there was any sort of good head on the shoulder of somebody saying, this is the direction we should go, they would actually clean house. They would. And they could just as quickly and violently take the heart of the nation back as Trump did to a great extent. I'll give you the top example. If I was a Democrat Party strategist, Trevor, there's a bill that is about to die its fourth death in its fourth straight session of Congress. It would create a national infrastructure bank. You've talked about it. I've talked about it many times. I'm very passionate about this. there are over 60 co-sponsors of this bill, all Democrats.

14:42And I got up Congressman Stauber's backside a little while back on this whole thing. He and I talked, just the two of us, a whole boatload of people. But I had him for the better part of an hour explaining this bill to him. And he had to be honest and say, look, if this was something that I had a chance to co-sponsor, I would. But the problem was it was sponsored initially. The lead sponsor was Danny Davis from Illinois, one of the octogenarian old liberals in the House who this year is finally retiring. And everybody else is a Democrat who's a co-sponsor of this thing. And the reason why Pete really didn't know much about it until I said something to him about it was because nobody in his conference cares.

15:28Because it's a Democrat-sponsored bill. Well, what did Donald Trump run on and come up short on in his first term? Infrastructure. Okay. We have, according to the American Society of Civil Engineers, a multi-trillion dollar funding shortfall. A good friend of mine also here this week at the New Orleans Investment Conference, David Tice, he bankrolled out of his own pocket a documentary he's about to re-release on Amazon called Grid Down, Power Up, about our power grid. Hundreds of billions, if not a couple trillion is needed just for that, let alone the other infrastructure needs. All of these things require the mining and so forth to a great extent that he has helped to foster.

16:13So if I was a Democrat strategist, amid all of the other investigations and stuff, I would reintroduce this thing, which it inevitably will be introduced again next January, get it through committee and start making a big deal out of this and say, okay, Mr. President, we're going to call your bluff. You really want to be a good executive and help with infrastructure, and this will help mining and everything else too, get on board with this National Infrastructure Bank. Because anybody that hasn't looked at this should look at it. This is as much or more a Republican type of a free market initiative that would create hundreds of thousands of jobs, trillions of dollars of infrastructure spending, but do it in a way that does not add a nickel to the deficit.

16:58Chris Temple: Yeah. Okay? And that's what I would do if I was a Democrat strategist to show how the Democrats are going to regain the middle and regain the economic arguments and initiatives and put the president on a spot and say, will you support this? Yeah. It would make both parties kind of actually work in the middle. It would. Yeah. What a novel idea. Yeah. Yeah. We had our mail-in ballots in Colorado. I filled mine out. It was a very lengthy one this year, Chris. And I got done this thing. I got done. It took a while. I got done with it. And I sat there. I was like, I can't believe I'm voting for half this shit.

17:36I mean, I can't believe some of this is even on the ballot.

17:39Chris Temple: Like, it's so much just insider interest trying to get things done. It's just politically motivated. It doesn't even belong on a ballot. You know, I just shook my head. I can't even believe I have to fill something on this out. Okay, man. it's going to be interesting here next week. It's going to be like, what do you kind of expect? Like, what are your kind of expectations? Is this what we're seeing in the media? Congress goes to the left. I've done a couple of podcasts with some very smart people who follow this. One guy I talked to recently pointed out the fact that a lot of the polling out there has been suspect in the past that undercounted.

18:16Chris Temple: Absolutely. Trump votes and Republican votes. I don't think that's as big an issue this time, number one. Number two, the energy is with those who are angry at Trump. The big tell to me, Trevor, was probably a month, five weeks ago, something like that right now. I was listening to Mick Mulvaney, who was Trump's chief of staff in Trump 1.0. I think he ran OMB for a while as well when he was in there. And he admitted something that is really the death knell for the GOP, I'm afraid, next week. And that is that the Republican Party strategy, and we can see it play out since then, pretty much is written off the swing voters that came to Trump in 2024.

18:58The independents, those who follow Kennedy, those who follow Tulsi Gabbard, those who were fed up with Biden and the open borders and having your daughter share a locker room with a boy and all this kind of stuff. All of those people that came over, they have no incentive to go out and support Trump because they feel they've been betrayed. And in more instances than not, they have been.

19:20Chris Temple: Can you blame them? No, not a bit. I don't blame them. Not a bit. So given that, and given that the voter turnout probably favors the Democrats, a good colleague of mine who for years was a staffer on Capitol Hill reminded me the other day when I interviewed him that the Cook Political Report between them and then to a secondary extent Frank Luntz, the big pollster, Those are the ones you want to listen to if you want totally nonpartisan feedback. The Cook Political Report believes that the Democrats will end up between 227 and 237 House seats, which means the Republicans will end up between 198 and 208.

20:06Chris Temple: Big swing. That would be a pretty substantial swing. Not as massive as in 1994, but the message will be as massive as it was in 1994 as far as a repudiation of the party in the White House. at the moment. The only reason it won't be worse is that the Republicans, on the surface, netted more safe seats out of redistricting in the last year or two than the Democrats did. So they have the upper hand there. That might be what keeps the Senate 50-50. But I think that in the next six days, we're going to get even more of a sense of, Will there be a big follow through momentum wise? Because here again, the Cook Political Report, something like 15 or 20 races that they have changed the status of in the recent past.

20:57Every single one has been changed to a status favoring the Democrats. Every single one. So it's probably not going to be a good day. I'm very cautious on all markets based on what we see in the outcome. The only good thing I would probably say is that the Federal Reserve, which chickened out again yesterday and kept interest rates steady, even though inflation is higher and everything else, that's a whole other story we'll talk about at a different time, they might get an assist from the bond market because if the democrats do win next week and especially convincingly all else being equal which it may not be later but all else being equal that's going to be bullish for the bond market keep somewhat of a lid on interest rates because the perception probably right will be that among other things trump's not going to get his trillion and a half dollar new military budget that he wants.

22:01That won't go. There will be pressure on him and possibly some of the first investigations over Iran and what happened and who got tipped off multiple times on oil markets and stock market trading and stuff, depending on...

22:15Chris Temple: Don't we want to know? I feel like we deserve to know. I think that what happened is asinine and a scandal and criminal. Yeah, I do too. And I never got too much on this, but I think anybody who ever made a big deal out of Hunter Biden selling second-rate paintings to stick the profits up his nose, they owe Hunter Biden an apology if they'll tolerate what the Trump family has done and his friends over the Iran war. What Hunter Biden did was baby stuff. Yeah, yeah. I do get a little concerned after the election next week. I mean, the playbook already is to call election fraud. And we have probably done more damage to the voting infrastructure and its traditions and establishments just by seeding moments of, I don't know, like, we've decayed that own sector itself.

23:20And I know there's legitimate concerns. There are. And that's a two-way street.

23:24Chris Temple: But I feel like the more, you can already feel like the playbook is, well, we're just going to say it was election fraud once we lose a few seats. And it's already working. It just decays it. Yeah, look, here's where sometimes the president gets too stupid and too outlandish for his own good. Yeah. You're going to question an election in Alaska before the votes or even it's cast, let alone counted. I mean, that's just dumb. And in California. Look, no question at all we should have voter ID. No question we need to tighten up voting standards around this country where anybody that comes in that, look what they just said again in New York, you know, Mom Donnie in New York.

24:08Just walk in the door and vote. You don't need an ID. Nobody agrees with that. And even Carville, who we referred to a few minutes ago, says, look, that's a stupid losing issue for Democrats. Get off of it. There should be voter ID. That should not be even in play. That shouldn't be in question. And that's legit. So, Mr. President, don't make it illegitimate by questioning an election before it even happens, before there's any evidence. Because two guys have the same name in Alaska. All right, well, that's kind of a weird quirk. But wait and see what happens.

24:40Chris Temple: Yeah, it's just, I hate to do more damage to an institution than really it deserves. Right. Right, and I think that just is another anecdotal example of the direction this whole thing is going. My friend, it's really good to see you. Good to see you, too. Love doing this in person. Maybe touch base after next week. Let's see how things play out. I'm going to be traveling quite a bit in November, but maybe in December you and I touch base. Yeah, God only knows what's going to happen between now and then. Well, I bet the sun still comes up. It will. Yes. Who was it, Orphan Annie saying that? The sun will come up tomorrow.

25:19Yes, that's right. It will. And we'll all still be here. The world's gone through worse things than this, and so is the country. But last parting shot is that you're going to need to be cautious as an investor with just about everything. I've advocated, as you've seen, our audience for months now before everybody else got their brains kicked in with a lot of good companies, not a little not so good companies and resources. I had people taking profits even this time last year and into early this year. got a lot of dry powder. Don't be in a big hurry. Don't let the money burn a hole in your pocket because we need to see how this shakes out.

25:53And nobody really has a full playbook yet of what's coming. You can infer a few things, but not much more than that. So be careful.

26:00Chris Temple: All right. Chris Temple, everybody, national investor, longtime friend and guest here on the podcast. Good to see you, my friend. Thank you so much. And you.

26:30Chris Temple: Thank you.