Mark Skousen Warns of Slow-Growth Stagflation as Gold and AI Diverge

America's economist sees persistent inflation, uneven growth, and high technology valuations creating a selective environment for gold and mining equities.

America’s economist sees high valuations in technology, persistent inflation pressures, and uneven economic signals that could keep precious metals relevant even as oil and cyclical sectors face headwinds. In a wide-ranging interview, economist and author Mark Skousen painted a picture of an American economy showing clear signs of strain beneath the surface of elevated stock prices. While acknowledging the re-energizing effect of the SpaceX IPO on the technology sector, Skousen expressed caution about stretched valuations in artificial intelligence and described the broader economy as entering a period of slow-growth stagflation. Speaking on the Daniela Cambone Show, Skousen noted that the recent SpaceX listing has injected fresh momentum into tech stocks, with the company poised for inclusion in the Nasdaq-100. However, he contrasted this with what he views as unrealistic expectations embedded in many AI-related valuations, where market capitalizations in the trillions stand against earnings still measured in the tens of billions.

A Mixed Economic Picture

Skousen highlighted a growing divergence between headline economic indicators and underlying business activity. While GDP has shown modest positive growth, his proprietary gross output statistic — which emphasizes business-to-business spending and supply chain activity — has turned negative. He attributed part of this weakness to the effects of tariffs and a broader shift toward protectionist policies, describing the trend as a gradual but concerning development. Small businesses, which Skousen views as the backbone of the economy, are struggling to find workers and maintain momentum, even as larger corporations continue to report strength. This split, he argued, reflects an economy that is not generating the broad-based growth seen in previous cycles. On inflation, Skousen was direct. He believes the United States has entered an era of permanent, low-to-moderate inflation, with the Federal Reserve showing limited commitment to its 2% target. The appointment of Kevin Walsh as Fed Chair, whom Skousen described as an inflation hawk, could introduce more discipline, but he remains skeptical that rates will fall meaningfully in the near term given bond market signals.

Gold’s Role in an Uncertain Environment

Skousen remains constructive on gold over the longer term, despite a recent pullback that took prices below the 200-day moving average. He pointed to strong profit margins among gold producers and noted that companies such as Kinross Gold delivered exceptional returns in the prior year. While acknowledging the technical weakness in the near term, he views gold as a prudent holding in an environment of persistent inflation and uneven growth. On silver, Skousen was more skeptical of aggressive price predictions circulating in some corners of the market. He argued that forecasts of dramatically higher prices overlook both technological improvements in industrial applications and the historical tendency for commodity markets to mean-revert after sharp moves.

Implications for Mining Investors

For Canadian mining companies, Skousen’s outlook suggests a selective environment. Gold producers with low all-in sustaining costs and strong balance sheets are likely to remain better positioned than more speculative developers if inflation remains sticky and economic growth stays subdued. The combination of elevated gold prices relative to production costs and ongoing monetary uncertainty could continue to support cash flows for established operators. However, the broader stagflationary backdrop he describes — characterized by weak business-to-business spending and tariff-related frictions — could create headwinds for base metals and industrial commodities more closely tied to global manufacturing and construction activity. Skousen also noted that the second year of a presidential term has historically been challenging for equity markets. With mid-term elections approaching and policy uncertainty remaining elevated, he expects a more sluggish and volatile period ahead rather than a strong continuation of recent gains.

A Cautious Stance on AI and Growth Narratives

While recognizing the transformative potential of artificial intelligence, Skousen cautioned against assuming that current investment levels will translate into proportional earnings growth in the near term. He compared aspects of the current enthusiasm to the dot-com period, where transformative technology coexisted with unrealistic valuations and delayed profitability.This perspective reinforces a broader theme in his commentary: the importance of distinguishing between genuine structural shifts and market narratives that may outrun underlying economic fundamentals. For Canadian resource investors, Skousen’s framework suggests maintaining exposure to high-quality precious metals assets while remaining selective on cyclical and industrial exposures. In an environment where growth is uneven and inflation appears structurally embedded, assets with pricing power and relatively inelastic demand characteristics may continue to offer defensive qualities. The interview underscores that even as markets celebrate major listings and technological breakthroughs, underlying measures of business activity and inflation dynamics warrant careful monitoring. For mining investors, this environment rewards discipline over speculation.