Dennis Gartman is the man behind The Gartman Letter, a daily newsletter discussing global capital markets. For almost 30 years, The Gartman Letter has tackled the political, economic and social trends shaping the world's markets. ETF.com recently caught up with Gartman to discuss the latest developments in the financial markets.
ETF.com: I recently heard you talk about oil. You said it was a "worthless commodity." Would you elaborate on that?
Dennis Gartman: It is clearly not worthless now. I said eventually it shall be a worthless commodity. At some point, 20 to 40 years into the future, it will effectively be worthless because new technologies will abound, and better capabilities of drilling will abound.
Most importantly, some new form of fuel will take its place, whether it’s fusion, fission or natural gas. That’s the history of the world. Something will supplant crude oil, and it will be effectively made worthless.
ETF.com: Looking at the shorter-term picture, do you think oil will hold the $40 level?
Gartman: It probably will hold it in the near term. Will it hold it two years out? Almost certainly it will not. There's just too much done and capable of being done in the avenue of fracking.
We have to remember, fracking has taken crude oil production up by 3 million barrels per day here in the U.S. in the past three years.
It was only a few weeks ago that the first well was fracked in Russia. It hasn't even been introduced yet into Saudi Arabia or Africa or Australia, all of which are great producers of crude oil. Now imagine what fracking could do to production in those countries.
ETF.com: Gold has been quiet recently. Do you expect it to make any big moves soon?
Gartman: The most interesting idea about gold is that it made its low almost two years ago, and yet nobody is bullish. You’re right at $1,200, or almost 10% to 15% higher than where you were at the lows in late December 2015.
But is there any joy or enthusiasm to the gold market? The answer is abundantly no.
Why is gold so psychologically weak? Because there's an inherent lack of inflation anywhere in the world. That will change.