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Credit deflation and the reflation cycle to come (part 2)


spunko

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2 hours ago, sancho panza said:

Someone was asking about royalty streamers

Decl:we're long SAND

https://incakolanews.blogspot.com/2019/10/sandstorm-golds-sand-sslto-size-matters.html

image.png.6837c741935fe09b70128cc84e583886.png

In the opinion of your humble scribe (and one of the several reasons I own some), SAND is overdue a re-rating. And part of that is simply because the wider market hasn't appreciated the growth in market cap we've seen as this company is now worth over U$1Bn, one of the important threshold numbers that allows more US instos to participate if desired. Also SAND trails the price/sales price/earnings multiples of the big streamer/royalty plays (FNV, WPM, RGLD) by too much these days and when the market begins to gives it due credit for growth, pipeline and its much improved financial standing (SAND has come a long way from the failed Brazilian bets of a few years ago), we should see a virtuous circle appear which sends SAND share prices and therefore market cap higher, simply because its market cap is higher. I see no reason at all why SAND can only command a price/sales of 11X while Franco, Wheaton etc get at least 15X and at some moments, up to 25X. 
 
SAND as stands today can go a lot higher, all it requires is a little more market traction. For sure when Hod Maden starts to kick in the company will change forever, but there's no need to wait that long for a successful trade.

thanks SP, I think that was me asking. I didn't know about the gold streamers until couple months ago and have been reading up on them.     

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Democorruptcy

Re Telcos not sure I've seen Telia mentioned on here? They cropped up in a BT note this week:
 

Quote

 

1.  Allison Kirkby is an independent non-executive director of BT Group plc.

2.  During the second quarter of 2020, Allison Kirkby will be appointed as President and CEO of Telia Company, a telecommunications company headquartered in Stockholm.

 

 

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As some of us use BullionVault

Dear BullionVault user,

We must make a change to our Terms & Conditions. It prepares for the possibility of negative interest rates being applied to money in the Client Money Bank Accounts.
As you know, interest rates around the world remain at historic lows. Some central banks, most notably the European Central Bank, have even gone to negative interest-rate policies.

This means that large banks must now pay to keep cash on deposit with those monetary authorities. As a result, a number of commercial banks in the Eurozone are applying negative rates to larger deposit accounts held in Euros.

To date, this has not affected any of BullionVault's segregated Client Money Bank Accounts. It may also be that the tide is turning. Sweden's Riksbank, the first central bank to impose negative rates, is reportedly planning to raise its key policy rate back to zero later this year.

Even so, negative interest rates are now very much part of the policymakers' toolkit, and you will understand that, as a commercial business, BullionVault cannot be expected to bear the cost of topping up Client Money Bank Accounts if negative rates were applied to them.

To prepare for this possibility, BullionVault needs the ability to charge a holding fee on cash kept in a Client Money Bank Account where our bank charges a negative rate of interest.

You can read the amended Terms & Conditions here:
https://www.bullionvault.com/help/terms_and_conditions.html
There is no other change. These amended Terms will apply in 30 days' time.

Again, none of BullionVault's Client Money Bank Accounts currently suffers a negative interest rate, so no holding fee is being applied or planned at this time.
We sincerely hope it will not become necessary. If it does, we shall give you 5 working days' notice so that you can withdraw funds, back to your own bank account, or use it to buy physical bullion.

Kind regards,

Robert Glynne
CEO, BullionVault

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21 hours ago, DurhamBorn said:

I think people worry too much about running out of money.I figure once your down to £50k get it into silver or gold physical and go on means tested benefits,without council tax i could live easily on the state pension and once you are down to state pension only you pay no council tax.

I'm doing this now and haven't worked since 2006.  I had a few years before the state pension kicked in and I lived frugally on cash released from downsizing.  My work life was awful and making me ill so I figured I'd be better off doing this and don't worry about finances.  I find the state pension is  fine to live on.  My father died of a heart attack at the age of 49 and never lived to see his pension so I was determined I would at least have some time out of the rat-race.  I don't go on fancy holidays or cruises but have no wish to.  In fact the idea of being on a cruise ship fills me with dread:D

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1 hour ago, janch said:

I'm doing this now and haven't worked since 2006.  I had a few years before the state pension kicked in and I lived frugally on cash released from downsizing.  My work life was awful and making me ill so I figured I'd be better off doing this and don't worry about finances.  I find the state pension is  fine to live on.  My father died of a heart attack at the age of 49 and never lived to see his pension so I was determined I would at least have some time out of the rat-race.  I don't go on fancy holidays or cruises but have no wish to.  In fact the idea of being on a cruise ship fills me with dread:D

seems to fill those that do with lysteria and gastroenteritis .

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On 25/10/2019 at 03:43, Viceroy said:

a while ago I briefly looked at the tax implications of investing in MLPs as a non-resident alien and thought it might be a hassle? I might be wrong tho.  It involves a K-1, but I think a non-US res would have to file a 1040 with the IRS instead?  Dividends (known as distributions) would be taxed at full withholding as well as you are seen to be a partner in the company and doing business in the USA.  Have i got that right??

https://www.financialwisdomforum.org/forum/viewtopic.php?t=111305

https://www.quora.com/What-are-my-tax-duties-as-a-Non-Resident-Alien-owning-an-LLC-Partnership

Viceroy,thanks for the heads up on this.I had a deeper look and it looks confusing at best,at worst you might be filling in a US tax return.

Given there are  alternatives available in these sectors around the market cap/coma scale scores of these LP companies,it makes sense to avoid and take the path of least resistance.

 

Like I said thank you.

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On another matter,dear old mama P wants to buy some physical gold/silver.

I know we've had discussions on here about VAT/cost/shipping etc.I don't have time to go all teh way through the thread,can anyone tell me-and please don't be afraid to sue laymens terms-how she can get hold of some  without overpaying.

She's set up an account with the royal mint of her own bat,which is unusual for her, so she must be keen.I said I'd ask for the best place for her to go.

Any help gratefully received.

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33 minutes ago, sancho panza said:

On another matter,dear old mama P wants to buy some physical gold/silver.

I know we've had discussions on here about VAT/cost/shipping etc.I don't have time to go all teh way through the thread,can anyone tell me-and please don't be afraid to sue laymens terms-how she can get hold of some  without overpaying.

She's set up an account with the royal mint of her own bat,which is unusual for her, so she must be keen.I said I'd ask for the best place for her to go.

Any help gratefully received.

For physical silver, after shopping around I used CoinInvest / Silver-to-go, two websites for the same German company that do VAT free.  Bear in mind the premium on physical silver is pretty high, 20% ish, so only for long term holding really. Go for Britannias to ensure CGT free. 

For physical gold, Chards in Blackpool, or BullionByPost are the ones I've used. Chards are a smaller, more personal company. Good to deal with over the phone or in person. Compare premiums on both companies. Chards can be a tad cheaper if they have a lot of a particular type in stock. Go for Britainnias or Sovereigns for best value / lowest premium / GCT free. Sovereigns are likely to be in more demand if gold rises significantly, due to smaller size, and easier to hide.

When reselling gold and silver to a dealer, the year doesn't make any difference, so mixed year/best value is probably best.

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As per @Cattle Prod comment re finance for oil & gas.Bullish long term for the underlying,although could be a tough time looming for some of them.

 

https://oilprice.com/Latest-Energy-News/World-News/A-Death-Sentence-For-Small-Oil-Gas-Drillers.html

Some of the largest banks financing U.S. oil and gas drillers have recently reduced their expectations for oil and natural gas prices, determining the value of companies’ reserves and loans that they can take against those reserves.  

Wells Fargo, JP Morgan Chase, and Royal Bank of Canada, among others, have reduced the value of reserves of oil and gas companies, according to more than a dozen banking and industry sources familiar with the borrowing base redeterminations.

The value of reserves estimated by banks serves as the basis for many small oil and gas firms to get funding for their drilling activity and operations. And in recent months, in many cases, this is the only source of funding that many of them can get because the equity and bond markets are practically closed for small oil and gas firms right now.

 

With the lowered value of reserves, drillers now face an even more restricted access to capital than in previous months.

In the fall 2019 survey carried out in September by Haynes and Boone, for the first time since 2016, the majority of respondents expected borrowing bases to decrease in the redetermination season this month.

According to Reuters’ sources, the banks have cut their expectations for both natural gas and oil prices compared to the previous redetermination season this past spring. Natural gas price forecasts were slashed by around 20 percent, which industry sources say would mean a 15-30 percent cut in the size of loans. Banks now see natural gas prices at US$2.00-2.35 per million British thermal units (MMBtu) over the next 12 months. Oil prices are now US$1 to US$2 a barrel lower than estimated in the spring redetermination, according to the Reuters sources.

Related: Trump’s Latest Trade War Move Sends Oil Tanking

The lower borrowing base for loans could mean additional pressure on smaller U.S. drillers, as other forms of financing are not accessible now.

“Utilization of debt and equity capital markets as a source of capital for producers has gone from small in the spring 2019 survey to minuscule in the fall 2019 survey,” Haynes and Boone said in its survey just ahead of a of the redetermination season.

“E&P companies will remain boxed in on capital sources for a while. Public equity markets – a primary source of capital for upstream oil and gas companies before 2018 – will not reopen until 2021 or later,” Haynes and Boone noted.

By Tsvetana Paraskova for Oilprice.com

 

 

https://oilprice.com/Energy/Crude-Oil/Oil-Rig-Count-Plunges-To-Lowest-Level-Since-2017.html

The US oil and gas rig count fell sharply this week, according to Baker Hughes, with a drop of 25 rigs for the week. This week marks nine decreases out of the last ten weeks.

The total oil and gas rig count now stands at 830, or 238 down from this time last year.

 

The total number of active oil rigs in the United States decreased by 17 according to the report, reaching 696. That marks the first time since April 2017 that the oil rig count has fallen below 700. The number of active gas rigs decreased by 4 to reach 133.

Oil rigs have seen a loss of 179 rigs year on year, with gas rigs down 60 since this time last year.

Even though the number of oil rigs have declined by 181 this year alone, production has grown from 11.7 million bpd at the beginning of the year to 12.6 million bpd for week ending October 18—a growth of almost 1 million bpd in less than a year.

Oil prices were a mixed bag on Friday ahead of the data, with WTI up slightly at 12:35pm at $56.35 per barrel (+$0.12) and Brent trading down at $61.38 (+0.06) trading in a tight band as the market looks forward to potential action from OPEC+ in the form of deeper production cuts, but is growing increasingly worried about gloomy demand growth forecasts.

 

Both benchmarks are up more than $2 per barrel week on week.

Canada’s overall rig count increased this week, with oil and gas rigs increasing by 4, after last week’s 3-rig decrease. Oil and gas rigs in Canada are down 53 year on year. 

WTI was trading up 0.20 percent shortly after data release, while Brent was trading down 0.13 percent.

By Julianne Geiger for Oilprice.com

 

 

Decl:we're long some smaller oil & Gas players inlc BH

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40 minutes ago, sancho panza said:

On another matter,dear old mama P wants to buy some physical gold/silver.

I know we've had discussions on here about VAT/cost/shipping etc.I don't have time to go all teh way through the thread,can anyone tell me-and please don't be afraid to sue laymens terms-how she can get hold of some  without overpaying.

She's set up an account with the royal mint of her own bat,which is unusual for her, so she must be keen.I said I'd ask for the best place for her to go.

Any help gratefully received.

The best deals I've found:

https://www.coininvest.com/en/gold-coins/britannia/1-oz-britannia-gold-coin-2020/

https://www.coininvest.com/en/silver-coins/britannia/1-oz-britannia-silver-coin-2020/

https://www.coininvest.com/en/silver-coins/coin-bars/5-kilo-fiji-coin-bar-silver-argor-heraeus/

Silver seems to have much higher spreads...

Low shipping costs but 2% charge if paid by card.

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9 minutes ago, BearyBear said:

Silver seems to have much higher spreads... btw. this is a "coinbar" :) so no CGT...

It won't be CGT free.  Only British legal tender coins are CGT free. ( Britannias and Sovereigns, including the smaller half/quarter/tenth sizes, Queen's Beasts etc.). Maybe some from Crown Dependencies' coins too, but not sure.

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4 minutes ago, MvR said:

It won't be CGT free.  Only British legal tender coins are CGT free. ( Britannias and Sovereigns, including the smaller half/quarter/tenth sizes, Queen's Beasts etc.). Maybe some from Crown Dependencies' coins too, but not sure.

Yeah, I was wrong... edited.

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3 hours ago, janch said:

I'm doing this now and haven't worked since 2006.  I had a few years before the state pension kicked in and I lived frugally on cash released from downsizing.  My work life was awful and making me ill so I figured I'd be better off doing this and don't worry about finances.  I find the state pension is  fine to live on.  My father died of a heart attack at the age of 49 and never lived to see his pension so I was determined I would at least have some time out of the rat-race.  I don't go on fancy holidays or cruises but have no wish to.  In fact the idea of being on a cruise ship fills me with dread:D

And good on you janch.Like you say you decided running out of life mattered more than running out of money.That state pension is the key though.For frugal types its enough.I have no doubt i could live very well on it plus say £50 a week.I spend more time working out between now and 68 than after that.I doubt il ever go abroad again.No interest.I do enjoy weeks away over here though but we get a flat,take my dad and go halfs and take most of our own food.xD

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41 minutes ago, sancho panza said:

On another matter,dear old mama P wants to buy some physical gold/silver.

I know we've had discussions on here about VAT/cost/shipping etc.I don't have time to go all teh way through the thread,can anyone tell me-and please don't be afraid to sue laymens terms-how she can get hold of some  without overpaying.

She's set up an account with the royal mint of her own bat,which is unusual for her, so she must be keen.I said I'd ask for the best place for her to go.

Any help gratefully received.

I can recommend 'GoldSilver.Be'.  I've just had some Silver Britannias (minted 2019) delivered today, 30 coins cost 538 Euro plus 29 Euro delivery to the UK. They were significantly cheaper than CoinInvest when I was looking around a few days ago.  Just remember to pay in Euro using TransferWise.

https://goldsilver.be/en/1-oz-30-gr/1558-1-oz-silver-britannia-2020.html?search_query=britannia&results=73

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On 29/10/2019 at 15:39, DurhamBorn said:

v seen lots of people retire at 65 and a few retire at 50/55,most of the 65 year old ones dropped dead soon after,or had very poor health.Most of the 50/55 ones were in much better shape and had long mostly healthy lives.Im convinced the key age is between 50 and 55 where health starts to drop fast through work.Especially manual/poor hours work

That's what I love about this site..I go to the Brexit thread with low blood pressure and when I leave it's high, I go to the pension thread thinking I have it sussed and when i leave i realising I don't, and then I come to this one feeling chipper and then leave depressed!..where's YRS, he always makes me laugh, especially when he shares his latest `investment` and how the price ha suddenly dropped (shares not reductions) :-) :-) :-)

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23 hours ago, DurhamBorn said:

Yes,you can get a decent terrace in the north east for £60k though.If someone wants to retire early they can do it,but might have to move north.

Sod that, I would rather `Die in a ditch!`...on the other hand?!

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4 hours ago, janch said:

I'm doing this now and haven't worked since 2006.  I had a few years before the state pension kicked in and I lived frugally on cash released from downsizing.  My work life was awful and making me ill so I figured I'd be better off doing this and don't worry about finances.  I find the state pension is  fine to live on.  My father died of a heart attack at the age of 49 and never lived to see his pension so I was determined I would at least have some time out of the rat-race.  I don't go on fancy holidays or cruises but have no wish to.  In fact the idea of being on a cruise ship fills me with dread:D

Ditto, and I am planning for my 2006 moment for all the same reasons...comments like yours (and others on this thread) make me realize that it's not `abnormal` to a) want early retirement/better work-life balance, and b) to live frugally is not being tight-fisted!

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3 hours ago, sancho panza said:

On another matter,dear old mama P wants to buy some physical gold/silver.

I know we've had discussions on here about VAT/cost/shipping etc.I don't have time to go all teh way through the thread,can anyone tell me-and please don't be afraid to sue laymens terms-how she can get hold of some  without overpaying.

She's set up an account with the royal mint of her own bat,which is unusual for her, so she must be keen.I said I'd ask for the best place for her to go.

Any help gratefully received.

For sovereigns, I've used Chards, Hatton Garden Metals and CoinInvest (Germany). All ok. Costs pretty similar between all three, I let them choose and tend to get a mix from late Victorian through to modern. 

For silver Britannia's, I tend to opt for Silver 2 Go. Also bought through Goldcore but delivery very slow with them.

Finally, I keep an eye on general auctions. Now and then I can pick up gold/silver at below market rates.

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2 hours ago, MrXxxx said:

Ditto, and I am planning for my 2006 moment for all the same reasons...comments like yours (and others on this thread) make me realize that it's not `abnormal` to a) want early retirement/better work-life balance, and b) to live frugally is not being tight-fisted!

Frugal can mean living much better.I bought the pizza oven below after an Italian friend told me about them.Saved a fortune since.Makes incredible pizza in 4 minutes.00 pasta flour from Sainsbury £1.10 will get you 5 pizzas,tomato puree from Lidl 33p mixed with water and oregano,grated cheese (never pre-grated as its mostly potato starch) and toppings i get in the reduced counter and freeze from cooked chicken ,ham,salami etc.I often make them to use up the last bits of a cooked chicken strip the underneath,legs etc.Usually works out about £1 a pizza and top quality.

https://www.ebay.co.uk/i/251558202672?chn=ps&norover=1&mkevt=1&mkrid=710-134428-41853-0&mkcid=2&itemid=251558202672&targetid=595627790153&device=c&mktype=pla&googleloc=1006526&poi=&campaignid=6619151969&mkgroupid=84510980848&rlsatarget=aud-629407025185:pla-595627790153&abcId=1140496&merchantid=7286014&gclid=Cj0KCQjw6eTtBRDdARIsANZWjYZhBJD3QQj3PQRpOw-7bvxSumuOdJrM6EZe_TIeF4PlCrawpdejICAaAvwiEALw_wcB

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Guyana Goldfields reported Q3 production and financials a few minutes ago. I only got to the "$1882 AISC" part and stopped reading, I might continue tomorrow but I think I already know all I need. It sucks to be right sometimes. 

Great Panther should report in the next half an hour or so. 

Also, Wesdome provided an absolutely stunning Eagle River exploration update yesterday and is flying today, +10% and touching all time highs. Q3 financials still to come next week. Yum yum. 

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20 minutes ago, kibuc said:

Guyana Goldfields reported Q3 production and financials a few minutes ago. I only got to the "$1882 AISC" part and stopped reading, I might continue tomorrow but I think I already know all I need. It sucks to be right sometimes. 

Great Panther should report in the next half an hour or so. 

Also, Wesdome provided an absolutely stunning Eagle River exploration update yesterday and is flying today, +10% and touching all time highs. Q3 financials still to come next week. Yum yum. 

Thanks for the update. I had limit orders for couple of hundred pounds on all three few weeks ago. Only Wesdome didn't get bought! (

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