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

[Sound Money]

Seems like Robinhood are coming to the UK. Commission free trading. (Taxable accounts only though)

[Talking Monkey]

1 hour ago, kibuc said:

Anyone holding Endeavour Silver here? They've just announced suspension of mining operations at El Cubo. Produced 2.6mil oz silver and 25k oz gold in 2018. Simply put, they ran out of ore that's worth digging up at current prices.

Im holding some of this shit, what you reckon Kibuc is it done for  or hold on for the long haul

[leonardratso]

all failed investments become long term.

[Agent ZigZag]

With discussion at times of gold potentially reaching $5000-$10,000 an ounce and silver at $200oz, even oil $200 a barrel, subject to the levels of inflation within the system can anyone answer the following.

If a loaf of bread is say £1 then at todays gold price at £1134 I can buy 1134 loaves, and silver at say £13, then 13 loaves. Projecting into the future say 2027 how many loaves will gold and silver get me.

The same principle can be attached to property , (Dominic Frisby I recall did a piece on this) measuring the cost of the average house/flat in gold ounces.

 

[Thorn]

Maybe think sort of in terms of a suit of clothes for work.

Historically it was 1 oz of gold to buy the uniform and kit for one Roman Soldier.

I suppose a modern day fancy suit would be similar? 

Plus half a farthing for a Litre of our Aftershave or two farthings if you go for the Multipack.

Talking of great bottles of chemicals...anybody know what’s the best stuff to try and use to clean off black burnt bits off the hot stone at the base of a pizza machine..? 

[Bobthebuilder]

2 hours ago, Agent ZigZag said:

With discussion at times of gold potentially reaching $5000-$10,000 an ounce and silver at $200oz, even oil $200 a barrel, subject to the levels of inflation within the system can anyone answer the following.

If a loaf of bread is say £1 then at todays gold price at £1134 I can buy 1134 loaves, and silver at say £13, then 13 loaves. Projecting into the future say 2027 how many loaves will gold and silver get me.

The same principle can be attached to property , (Dominic Frisby I recall did a piece on this) measuring the cost of the average house/flat in gold ounces.

 

Wouldnt it be nice to buy a lifetimes worth of goods at todays prices?

Damn you inflation and damn you perishable goods.

If i could buy loafs of bread today at gold price of $10,000 it would last me over 80 years.

[MrXxxx]

2 hours ago, Thorn said:

Maybe think sort of in terms of a suit of clothes for work.

Historically it was 1 oz of gold to buy the uniform and kit for one Roman Soldier.

I suppose a modern day fancy suit would be similar? 

Plus half a farthing for a Litre of our Aftershave or two farthings if you go for the Multipack.

Talking of great bottles of chemicals...anybody know what’s the best stuff to try and use to clean off black burnt bits off the hot stone at the base of a pizza machine..? 

OK, unless this a wind up on the DosBods pizza machine saga that I have missed over the last few days, I would think Bicarbonate of soda or toothpaste would be the best, with both being food related products...although I am sure one of the buggers on here will suggest Tcut! :-)

[Bear Hug]

https://seekingalpha.com/article/4307763-outlook-energy-income-meets-capital-gain-potential

This looks interesting.  Just parts of it below, it's a long article:

Quote

An Outlook On Energy: Where Income Meets Capital Gain Potential

...

The battered consumer

We are not talking about the American consumer, but rather the American MLP consumer. In other words we are referring to the oil and gas producers. While the US has delivered on its promise of natural gas and oil production growth, that production has come with some serious damage to the E&P sector. While the broader sector ETFs have escaped some damage, mainly due to the strength of the integrated names, like Exxon Mobil (XOM) and Chevron (CVX), the pure exploration and production plays have been killed.

 

...

Chesapeake’s bad news has carried over to master limited partnerships, i.e. the pipeline companies that carry its oil, writes Mizuho’s Paul Sankey, who listed “scary new language from Chesapeake (CHK, NC)...in its 10-Q...on concerns of the knock on transport effect of CHK’s contracted positions” as one of the reason that group of stocks got hit. The Alerian MLP ETF fell 1.2% to $8.50 on Wednesday.

Who’s most at risk? East Daley Capital’s Ryan Smith and Zack Van Everen point to Crestwood Equity Partners (CEQP) and Williams (WMB), among others. They estimate that Chesapeake’s reduced drilling could knock $120 million off Crestwood’s adjusted EBITDA in fiscal 2023, while Williams could see above-market rates get knocked to normal levels, which could result in a $140 million dent in its earnings. Energy Transfer (ET), Kinder Morgan (KMI) and Plains All American Pipeline (PAA) also have exposure to Chesapeake, Smith and Van Everen write, though it is much smaller.

Stay Long, But Buy the cheap hedges

We think there's more growth left in the US but it will come at a far higher price and when the E&P's have cleared out their balance sheets. So we need to get to higher oil prices first, and then the growth will come with a lag. In the interim, the MLPs may have to contend with some areas that have overbuilt assets. Prices on MLP stocks have traded negatively or at depressed levels as investors are assuming that MLPs have a very rough future ahead of them. We think it's prudent to hold some high-quality hedges in the E&P space.

Canadian oil plays have suffered worse than MLPs and are good hedges that will benefit as the US shale plays repair their balance sheet. Unlike the US plays, most Canadian oils are massively free cash flow positive and have far lower decline rates. The irony is that with new pipelines being blocked in Canada, the companies have nowhere to put the cash but into debt reduction and buybacks. Suncor (SU) plowed $1.7 billion into dividends and buybacks and we expect this number to double in the next three years. Canadian Natural Resources (CNQ) delivered another spectacular report and showed that anyone looking for a sustainable oil business at even $40 needs to look in their direction. CNQ generated $1.5 billion CAD in free cash flow after dividends just in the last quarter.

Note on the Midstream Sector

One catalyst for this sector to outperform is the end of the year end tax loss selling. We should note that speculators have been taking advantage of the situation by heavily shorting midstream stocks. Here as some examples:

1. Short interest on Energy Transfer (ET) is currently at 5.3% of the total float (dividend yield is at 10.5%).
2. Short interest on MPLX (MPLX) is also at 5.3% (dividend yield is at 11.2%).
3. Short interest on Genesis Energy (GEL) is at 6.1% (dividend yield is at 11.9%).

The end of tax loss selling which would be in late December could very well result in a big rally for the sector, fueled by both the super high yields that the sector currently provides, and short covering. We are bullish on this sector where many of higher quality companies yield well over 10%.

 

[Loki]

5 hours ago, leonardratso said:

all failed investments become long term.

Welcome to Club New Gold

[Bobthebuilder]

2 minutes ago, Loki said:

Welcome to Club New Gold

And Great Panther.

 

[Loki]

1 minute ago, Bobthebuilder said:

And Great Panther.

 

Can't say we weren't warned! 

[Craig]

3 hours ago, Thorn said:

Maybe think sort of in terms of a suit of clothes for work.

Historically it was 1 oz of gold to buy the uniform and kit for one Roman Soldier.

I suppose a modern day fancy suit would be similar? 

Plus half a farthing for a Litre of our Aftershave or two farthings if you go for the Multipack.

Talking of great bottles of chemicals...anybody know what’s the best stuff to try and use to clean off black burnt bits off the hot stone at the base of a pizza machine..? 

I've never taken any chemicals to the base of my pizza maker. Just burn it by putting the machine on for a while, then brush it off with a wire brush.

To be fair though, I've started using pizza pans, so the cleanliness of the stone doesn't bother me too much.

[Thorn]

34 minutes ago, Craig said:

I've never taken any chemicals to the base of my pizza maker. Just burn it by putting the machine on for a while, then brush it off with a wire brush.

To be fair though, I've started using pizza pans, so the cleanliness of the stone doesn't bother me too much.

Did you get good ones that fit Craig and if so could you post the link - got some online and they weren’t great

[Thorn]

1 hour ago, MrXxxx said:

OK, unless this a wind up on the DosBods pizza machine saga that I have missed over the last few days, I would think Bicarbonate of soda or toothpaste would be the best, with both being food related products...although I am sure one of the buggers on here will suggest Tcut! :-)

Serious about the ounce of gold and Roman soldier unifrom and kit but only messing about the aftershave. 

And actual genuine question about the pizza machine base. 

Love the TCut idea  though MrXxxx... might add a wee drop to the aftershave formula for a bit of va va voom for the ladies. 

[leonardratso]

11 hours ago, Loki said:

Can't say we weren't warned! 

i bailed at a loss months ago, stuck the residual  into sbgl i think, made it back and more, got to at some point bite the bullet, especially with shit like this, never know if it will be there next month or not, itsa bit like buying junk from china, you best make sure its cheap enough that you can write it off cos you aint going to pay to return it, thats what they bet on i reckon. Having said that, i recently bought a SS watch strap after mine broke, now it wasnt an exact replica of the broken one but its actually better quality than the original and locally the original second hand strap are going for 50-70 quid, the copy i paid £12.99 for (expensive by chinese standards) and i was pleasantly surprised when it arrived, its damn good, and solid - none of this cheap hollow folded crap and works much better than the original ever did.

 

SS - stainless steel (not the nazi guys).

[MrXxxx]

On 05/09/2019 at 19:26, Democorruptcy said:

Amerman's latest:

Will Fed Actions Create Dow 40,000 - And Triple Gold Prices?

Just read this and thought I would bump it just in case some missed it. Its a really good read, and highlights the points DB (and others) has been making about the threats of drawdown, low return/interest rates, and capital erosion.

What's nice is that it uses real world values and figures to support it, and especially, shows how the traditional safety/default move upon retirement into gilts etc may no longer `work`, and may even be deleterious!

[kibuc]

19 hours ago, Talking Monkey said:

Im holding some of this shit, what you reckon Kibuc is it done for  or hold on for the long haul

It's all about Terronera for them, a massive deposit expected to fully replace El Cubo and then some. They are not done, not by a long shot, but need to complete Terronera and hope for prices to stay where they are at the very least - Terronera is projected to have 23.5% IRR against $17/oz silver and $1275/oz gold.

Things can go wrong during construction, grades might not turn out to be as expected and prices may go in whichever direction, so a bit risky-risky.

[Bobthebuilder]

I see Lagarde is talking about European growth coming from public investment now.

[spygirl]

11 minutes ago, Bobthebuilder said:

I see Lagarde is talking about European growth coming from public investment now.

Ahhhh .. just likes Gorddies 'investments'

Bah germany, which has shit infrastructure, what spending is there?

Spain has infrastructure coming out of ears. And debt to match.

 

[Ellandback]

4 hours ago, leonardratso said:

i bailed at a loss months ago, stuck the residual  into sbgl i think, made it back and more, got to at some point bite the bullet, especially with shit like this, never know if it will be there next month or not

Well played, my miner picks have been brutal since I got some skin in the game a few weeks ago. Sticking with them though as it's a long term play for me - Although I'm concerned about PM miners being nationalised by governments if PMs really shoot for the moon.. probably worrying unnecessary.

[JMD]

On 20/11/2019 at 17:16, DurhamBorn said:

Its a very decent way to do things.Kaplan does similar towards countries.It made it a lot more difficult though when they removed access to US funds as there was much greater choice in their index funds,though i havent really looked into whats available to UK investors.Might be worth listing all the country trackers/funds for people if anyone can be bothered sometime.

I intend this to represent half my emerging markets investment, though will hold off until after stock markets correct/crash. I will be monitoring how the Money Observer experiment goes, they have opted mostly for the iShares msci etfs. Although for Greece, I notice they have chosen the Global X msci provider (which excludes Coca-Cola) instead of the iShares one, called 'Greece + coca-cola' (so including coke). In terms of pure market cap coca-cola (24% of Greece stock market) should really be there - so not sure how/why different providers, using/claiming the same index, make these decisions?   

https://www.moneyobserver.com/etf-portfolio-finding-value-worlds-cheapest-stockmarkets

https://www.msci.com/constituents??_cookiemanager_WAR_cookiemanager_BPN1837uqqrxqHP=accept&_cookiemanager_WAR_cookiemanager_pageUrl=https%3A%2F%2Fwww.msci.com%2Fconstituents%3F

 

[JMD]

Has anyone used this email?             [email protected]

Apparently, you send it your list of gold/silver miners along with their tickers, in a plain text email, and It should send back to you a ranking/ratings report. However, i'm not getting back any results.

I know its mainly a marketing ploy, but am interested to see what kid of 'report' they provide to us mere mortals.  

 

[JMD]

On 21/11/2019 at 12:49, kibuc said:

Anyone holding Endeavour Silver here? They've just announced suspension of mining operations at El Cubo. Produced 2.6mil oz silver and 25k oz gold in 2018. Simply put, they ran out of ore that's worth digging up at current prices.

Yes I own it, depressing news. But I guess as DB initially warned (in general across the sector, not specifically about this miner), valuations will be about ounzes in the ground, so long as these companies can survive that is.

[Craig]

16 hours ago, Thorn said:

Did you get good ones that fit Craig and if so could you post the link - got some online and they weren’t great

I just use basic ones with holes in them. Seem to work fine. Found it easier to make the bases and put them onto these, rather than trying to get them off a peel or the like, as invariably they'd stick:

https://www.sainsburys.co.uk/webapp/wcs/stores/servlet/gb/groceries/sainsburys-home-non-stick-pizza-tray-131471486-p?gclid=Cj0KCQiAq97uBRCwARIsADTziya0JE1WVVxW7VUc8Nx163vZN3h0YOdt_bt-4VsbVdfOjd_7YY-xJTgaAtuVEALw_wcB&storeId=10151&langId=44&krypto=dVURDvC0GRoB9tPCSanEBNX%2FwahCs%2FosuzdeF378JGkhX544r%2Bsc2URyNJ%2BSnPHRNwdJMoLNiz0F9lJPob4cVZ7j36lhXZsCAi2GFarmdqswoLCbbncRZHprwn8JSb%2B2GcfwwuclMDgLLn1kOPZOcst1BTa%2F%2BwWb9zvp2ZVERuXj2LUmyV2qsgJFxlITMl8vvg3BHnxgQr1LGVodFcXopNfLq58AX6UOJEIv8dhVOOE7PrDZXzK%2FQGZ6Xg139tJ2JB8%2B6sVjnw1EhQI8A%2FW1fwVof3EARf9YbwICd%2BdRDQE4dX2rIf1dVn%2FOs4sg9bQVXDQXapk0mBs33c50NbfnT4miLuZPGBi1xY8d7LF2XwI%3D&ddkey=https%3Agb%2Fgroceries%2Fsainsburys-home-non-stick-pizza-tray-131471486-p

[DurhamBorn]

Anyone who invested in the PM miners and sold when i did back in the thread should of made between 60% and 200% on the different stocks.I made over 80% total i think (i didnt check exact figures).Main reason it was "only" 80% was because i had really big holdings in the likes of Harmony that i sold just below a double even though they ran another 20%+.I also had a much smaller amount of Sibanye because i had too much exposure to South Africa so limited them early on purpose.

I still own several silver miners and i fully expected they would be all over the place.Even those are still up though on average.For instance im up 64% still on Alexco Resources,+5% on the Endeavour holding but have been in ,out and back in and took a 40% profit on them earlier.The only silver miners im down on is Great Panther at 19% down and Fortuna at 13% down.My entire silver miner portfolio cost around 60% of the profits i made on the gold miners.I intend to buy back the gold miners and more silver miners if they pull back as i expect them too.The reason im holding £40k in the silver miners though is in case im wrong and the sector starts its bull run and doesnt come back.I fully expect some silver miners to 50 bag in the next cycle.Some might go bust before we get there,hence having a good spread.

The other stocks iv been buying are a mixed bag as expected.Some are up over 60% including dividends (Go Ahead),some down 20% and a couple more.However there are now a lot of bottom ladders that are up over 20% including Vod,SSE,and others.The portfolio is actually up when including dividends and im expecting that i might end up 20% down on it in a sell off.I dont focus on those numbers though.The main aim is to point my families assets to areas that should be able to front run,gain from,or at worst stand still against inflation (and survive a debt deflation).The election has shown just how much the parties are wanting to spend and inflation will turn investment on its head.Funding growth on negative cash flow goes out of the window when inflation and rates move higher.

My main focus now is the oil sector,but im waiting mostly because i see $40 oil a big threat,then a big spike down.Im also waiting on the insurance companies.Not life,motor,household insurance.They will get smashed in a sell off,but will be big winners in a reflation as rates increase.

Its a very difficult period.If Labour won the election sterling could go into a fall few imagine.After the election we then enter a period where we could see some currencies start to crack down.

The main takes are the road map is still for very high inflation as we move into the mid 2020s and financial dislocation as wealth evaporates as debt is liquidated and/or inflated away.