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


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2 minutes ago, Bricks & Mortar said:

I've been getting itchy to buy a bit of Cornish Metals

Yup, I'm watching this one too.

Not sure what to make of it at the moment, the CAD price is $0.24 which should be 14p in the UK. Currently 10p on AIM so bit of a discount there. Most AIM stocks are treated like dogshit so that might explain it.

I think the mine is totally flooded at the moment so they are a long time and a lot of money away from production. Mine life is hundreds of years I think - been around forever :Old:

 

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Just wanted to wish everyone a happy xmas and for all adding their thoughts and knowledge to the thread this year.I think we can safely say without any doubt the thread has proved itself and a lot of

Re Breakdown in supply chains - I am finding this discussion interesting for numerous reasons. I work for a large clothing chain,  for a while basic best selling items are not being delivered, wh

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2 minutes ago, DurhamBorn said:

Redcar is the area to buy over there now i think.Close enough to Anglo Americans potash mine and also for all the new plants going into Teesside and the old steel works site.Iv ran the rule over a few.I feel dirty xD ,

😂😂😂

 

Plenty cheap as chips at Redcar too DB. 

 

They've started dismantling the Steel plant and cleaning the site up in anticipation of the wind and energy transformation. 

 

Redcar/Eston is going to be a boom area over the next decade I reckon. 

 

We could all club together and buy the houses up now. Dosbods rental empire beckons? 

 

Taxi for TC......... 🙈😆

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https://www.ft.com/content/40577a9b-d4d9-4cdd-8d08-43ce1c132406
 

Quote

 

Tin-buying frenzy sends prices to seven-year high

Tin prices have soared to a seven-year high after a manufacturing-driven buying frenzy that has drained physical stocks of the commodity.

The dark grey metal, usually associated with cans, has become a key material for the global electronics industry. It is used to make solder — the substance that binds together circuit boards and wiring. The shift to working from home has boosted demand for computers and other electronic devices, while China has also been stockpiling the metal to meet its goal of self-sufficiency in semiconductors, according to traders.

That has created a supply crunch for a global market that produces 360,000 tonnes a year. The price of tin for delivery in three months on the LME — the smallest by volume of the six main markets offered on the London Metal Exchange — has been driven up more than 70 per cent from its 2020 low to almost $23,400 a tonne.

 

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6 minutes ago, Metalheadz said:

Balance sheet looks fairly solid in the quarterly reports, it's a profitable business. They have a 50% stake in the mining operation by the looks of things, and they're mining tin at around $20k AUD / ton. So currently throwing off $8k of free cash per ton.

This was interesting though:

SHARE SALE FACILITY

During the quarter, the Company undertook a share sale facility (Facility) for holders of less than a marketable parcel of Metals X shares. The Facility closed on 30 November 2020, with 6,242,379 Metals X shares from 2,621 shareholders subsequently sold, reducing the number of Metals X shareholders to approximately 4,340 and reducing Metals X’s administrative costs associated with maintaining a large number of relatively small holdings on its share register.

So essentially using a simple division it looks like they consider anything less than 2400 shares a small holding? That's a $500 investment at current prices.

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5 minutes ago, Hardhat said:

So essentially using a simple division it looks like they consider anything less than 2400 shares a small holding? That's a $500 investment at current prices.

This is an ASX rule I think.

Under the ASX Listing Rules, any shareholding valued at less than $500 is considered to be an “unmarketable parcel” of shares.

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I'm puzzled by the fall in value of my index linked gilts over the last couple of weeks.

My understanding is the coupon and principal both increase in line with RPI. So come hell or highwater the return is inflation proof. As there is talk of inflation starting to pick up I would have thought that their price would remain stable. 

There has been little, if any, talk of interest rate rises, so why the fall. Is it because their performance is linked to the performance of GBP in currency markets? 

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13 minutes ago, sleepwello'nights said:

I'm puzzled by the fall in value of my index linked gilts over the last couple of weeks.

My understanding is the coupon and principal both increase in line with RPI. So come hell or highwater the return is inflation proof. As there is talk of inflation starting to pick up I would have thought that their price would remain stable. 

There has been little, if any, talk of interest rate rises, so why the fall. Is it because their performance is linked to the performance of GBP in currency markets? 

Negative rates are off the table and the entire yield curve has been rising. To value a bond you need to present value the cash flows. So you project the future cashflows based on the inflation curve and then discount back to today using the Sterling yield curve. 

In other words even if there’s been no change in inflation expectations if the yield curve has risen the future value of those cashflows are less discounted back to today.

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13 hours ago, geordie_lurch said:

I have added the details to my original post above now I'm back on my computer @Cattle Prod :Beer:

However in case others miss it then and the following is from Defying Hitler by Sebastian Haffner. You should be able to find more of it online for free. I've pasted some more of it below, with my emphasis added which sounds a bit like some of us and our Bitcoin investments to me and maybe the dating bit was the equivalent to Tinder :D

The old and unworldly had the worst of it. Many were driven to begging, many to suicide. The young and quick-witted did well. Overnight they became free, rich and independent. It was a situation in which mental inertia and reliance on past experience was punished by starvation and death, but rapid appraisal of new situations and speed of reaction was rewarded with sudden, vast riches. The twenty-one-year-old bank director appeared on the scene, and also the ‘sixth-former’ [the student in Britain between 16 and 18 years old, in his final two years of school, before entering the university] who earned his living from the stock-market tips of his slightly older friends. He wore Oscar Wilde ties, organized champagne parties, and supported his embarrassed father.

 

Amid all the misery, despair and poverty there was an air of light-headed youthfulness, licentiousness and a carnival atmosphere. No, for once, the young had money and the old did not. Moreover, its nature had changed. Its value lasted only a few hours. It was spent as never before or since; and not on the things old people spend their money on.

 

Bars and nightclubs opened in large numbers. Young couples whirled about the streets of the amusement quarters. It was like a Hollywood movie. Everyone was hectically, feverishly searching for love and seizing it without a second thought. Indeed, even love had assumed an inflationary character.

 

Unromantic love was the fashion: carefree, restless, light-hearted promiscuity. Typically, love affairs followed an extremely rapid course, without detours. The young who learned to love in those years eschewed romance and embraced cynicism. I myself and those of my age were not among them. At fifteen or sixteen we were a few years too young. In later years when we had to entertain our girlfriends with twenty-odd marks’ pocket money, we often secretly envied the older boys who had had their chance at this time. We only caught a glimpse through the keyhole, just enough to preserve a whiff of the perfume of the time forever in our nostrils. To us, it was thrilling to be taken by chance to a wild party; to experience a precocious, exhausting abandon and a slight hangover next day form too many cocktails; to listen to the older boys with their worn faces showing the traces of their dissolute nights; to experience the sudden transporting kiss of a girl in daring makeup . . .

 

There was another side to this picture. There were beggars everywhere and many reports of suicides in the papers. The poster columns were full of police ‘Wanted’ notices for burglars. Robbery and burglary occurred on a grand scale. Once I saw an old woman – perhaps I should say an old lady – seated on a bench in a park looking strangely blank and stiff. A little crowed gathered round her. ‘Dead,’ said someone. ‘Of starvation,’ said another. It did not surprise me particularly. At home, we also often went hungry.

 

Indeed, my father was one of those who did not, or did not wish to, understand the times, just as he had already refused to understand the war. He entrenched himself behind the maxim: ‘A Prussian official does not speculate’, and bought no shares. At the time I regarded that as extraordinarily narrow-minded and out of character, for he was one of the cleverest men I have known. Today I understand him better. In retrospect, I can sympathize with the disgust with which he rejected the ‘monstrous scandal’ and with the impatient contempt that lay behind the attitude that ‘what ought not to be, cannot be’. Alas, the practical result of such high-mindedness could degenerate into farce, and the farce would have turned to tragedy if it had not been for my mother, who adapted to the situation in her own way.

 

This is how the family of a high Prussian official lived from day to day. On the 31st or 1st of the month my father would receive his monthly salary, on which we depended for our survival. Bank balances and securities had long since become worthless. What the salary was worth was difficult to estimate; and its value change from month to month. One month a hindered million marks could be quite a substantial sum; a little while later five hundred milliards would be small change. In any case my father would first try to purchase a monthly pass for the underground as quickly as possible. That would at least enable him to get to his office and back, even though the underground involved considerable detours and waste of time . Then cheques would be written out for the rent and school fees, and in the afternoon the whole family went to the hairdresser’s . What was left was handed to my mother. Next day the entire family except for my father, but including the maid, would get up at four or five in the morning and go to the wholesale market by taxi. There, in a giant shopping spree, an Oberregierungsrat’s monthly salary would be spent on non-perishable foodstuffs in an hour. Giant cheeses, whole hams, stacks of tinned food and hundredweights of potatoes were piles into out taxi. If there was not enough room, the maid, with one of us to help, would get hold of a hand-cart. At about eight o’clock, before school began, we would return home, more or less provisioned for a month’s siege. And that was it. There was no more money for the rest of the month. A friendly baker gave us bread on credit. Otherwise we lived on potatoes, smoked or tinned food and soup cubes. Now and then there might be an unexpended supplementary payment, but it was quite common for us to be as poverty-stricken as the poorest of the poor for four weeks, not even able to afford a train ride or a newspaper. Putting aside money for such purposes would have been quite senseless. Within a few days the whole month’s salary would not have paid for a single tram ride. I cannot say what would have happened if some misfortune like a serious illness had befallen us.(pp.46-50)

...   

In August 1923 the dollar reached a million. We read it with a slight gasp, as if it were the announcement of some spectacular record. A fortnight later, that had become insignificant. For, as if it had drawn new energy at the million mark, the dollar increased its pace ten-fold, and began to mount by a hundred million and milliards [by British measurement, thousands of millions] at a time. In September, a million marks no longer had any practical value, and a milliard [a thousand million] became the unit of payment. At the end of October, it was a billion [by British measurement, a million million]. By then terrible things had happened. The Reichsbank stopped printing notes. Its notes – 10 million? 100 million? – had not kept up with events. The dollar and price levels in general had anticipated them. There was no longer any usable currency. For some days trade came to a standstill, and in the poorer parts of the city the people resorted to force and plundered the groceries. The atmosphere became revolutionary once again.

So I need more food ,fuck.

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8 hours ago, sancho panza said:

I've been running my slide ruile over barrick as well.I've jsut started doing coma scores for this year last Wed/Thu when kids at nrusery,so I'll be doing these in the next week or two.On first viewing KGC will get a strong score.FCF is looking like  $1bn+ for 2020.

Barrick yet to psot 2020 figures.But I'm hoping for some more drift.We're in Barrick sub $15 from 2018,and I'd happily add around that level again.

Our buy price on KGC is lower and I don't think we'll see sub $4-50 on that.But I'm thinking of offloading the royalty streamers to go into Barrick/KGC/Newcrest.

https://uk.investing.com/equities/kinross-gold-cash-flow

image.png.a23e81d120e72df2966e0aa5dbe0576b.png

Will you be posting your coma scores SP? Always very interesting to see them. Personally I am looking for silver minors. I was aiming for equal portfolio allocations of the silver/gold miners, but find I'm still underweight the silvies, and fear I have left it too late to buy at half decent prices. Though as these are all long term holds I don't mind 'overpaying' for some good ones. Others thoughts and suggestions most welcome. 

Edited by JMD
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4 hours ago, Bricks & Mortar said:

I've been getting itchy to buy a bit of Cornish Metals.  I mean, here in Britain, we know where the tin comes from, right?
They seem to be registered in Canada, and have a couple of former tin mines in Cornwall.  Just did an IPO on AIM, and plan to be exploratory drilling for tin soon and for next couple years. (they're drilling in a tin mine, which I reckon is a good place to start.)

Is your Ozzie producer Metals X Ltd?  (EDIT - I see it was.  not many tin miners about).  I fancied them a few months back, but not available on HL.  Almost bought Metals Exploration PLC by mistake!  Anyway, I continued wanting something tin, and this Cornish effort surfaced recently.  Just hovering over maybe selling a Uranium miner and having a bit of them instead.

 

I nearly bought them. But have recently decided to concentrate my hard commodities to mainly just copper, uranium, coking coal, lithium. But I get where your coming from, as buying British miners is almost irresistible prospect, so am personally waiting for Cornish Lithium to list shares.

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3 hours ago, JMD said:

I nearly bought them. But have recently decided to concentrate my hard commodities to mainly just copper, uranium, coking coal, lithium. But I get where your coming from, as buying British miners is almost irresistible prospect, so am personally waiting for Cornish Lithium to list shares.

why do you think that?  surely the UK has outsize input costs for power, staff wages, insurance, environmental controls, etc?

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8 hours ago, Metalheadz said:

I knew prepping at the initial Covid stage was going to pay off sooner or later. :)Soon the 20p tin of beans at Lidl will be worth more than the beans inside them.

I’ve inadvertently been stacking another physical PM other than silver without having a clue! B|

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https://www.businessinsider.com/personal-finance/mortgage-refinance-rates-today-february-22-2021-2?r=US&IR=T
 

So US mortgage rates ticking up. UK to follow?

Maybe we won’t see negative rates after all. If thats the case housing market is definitely screwed. Perhaps intentionally after BoE signalled to prepare for negative rates.

https://www.ftadviser.com/regulation/2021/02/04/banks-given-6-months-to-prepare-for-negative-interest-rates/

Edited by Lightscribe
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18 hours ago, Noallegiance said:

The thing that causes me the biggest problem is looking at what people who aren't doing what I'm doing are doing. That's not an easy sentence to read.

I'm not a gambler. It's clearly late/approaching very late in the cycle where fashionable stuff is popular, with prices getting ridiculous for my (very) humble savings. 

I keep having to remember that I'm at the start of this. I don't have 000s to chuck at stuff and lose. I'm at least 25+ years from drawing my pension.

Today, my inflation/PM/telecoms/infrastructure/raw materials portfolio is looking well despite all indices being down. Those days are not common, but are becoming more so. I think money may be starting to flow toward where I have been positioned for just under a year. Long way to go yet, though. It's felt like a long year.  

For me, I'd be happier holding on to the reasons I'm doing this with my personal approach that suits me. If I start being duped into gambling now I'll hate myself for the losses and am unconvinced the 'wins' would be worth the stress.  

It's a very personal thing. I'll take 'more comfortable' in decision-making and outcome over 'moderately wealthy' but with added stress. 

But it's damned hard to keep that front and centre.

Agreed and I think I am in a similar boat. The challendge for me is working out where to save the cash I'm earning monthly while I'm earning well, to insulate myself from nasty surprises such as no longer earning well. I'm well positioned as a result of this thread but it's not life changing money at the moment

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10 minutes ago, C-gull said:

Agreed and I think I am in a similar boat. The challendge for me is working out where to save the cash I'm earning monthly while I'm earning well, to insulate myself from nasty surprises such as no longer earning well. I'm well positioned as a result of this thread but it's not life changing money at the moment

If I was back in employment then I'd select a portfolio approach (see earlier posts or shout) and then drip feed the monthly savings into the worst performing asset class, e.g. rebalancing the portfolio by buying low. With an appropriate porfolio you should be placed to benefit in the long run regardless of what happens in the economy. You wont make 100% gains but you wont have heartburn either.

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6 hours ago, wherebee said:

why do you think that?  surely the UK has outsize input costs for power, staff wages, insurance, environmental controls, etc?

re buying British Lithium, Wherebee you are right to remind me, as really i'm breaking one of my own rules regarding 'seeking value' (difficult to achieve at best of times), ie West has bigger costs compared to rest of world. ...So then, perhaps i'm just being sentimental, and 'returning supply chains', etc, does chime with this thread's cyclic thesis - plus the irony of mining returning to the UK is rather hilarious!! ...hmm, so not a purely investment decision after all, i will need to decide closer to the stock's ipo. 

Edited by JMD
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5 hours ago, wherebee said:

why do you think that?  surely the UK has outsize input costs for power, staff wages, insurance, environmental controls, etc?

I can't speak for JMD, but I'm also hot for British miners.  I'm imagining a future, where government, (EU + UK) require higher standards for mined minerals.  Like, measuring the carbon footprint, employee safety and working conditions. 

And, if not governmental regulation, then suppliers of electric cars, windmills and other users of the mined products are likely to want to put those carbon footprints and employee conditions in their sales brochures.  "All our lithium is produced from carbon neutral mines by fair pay workers at the highest safety standard"

Britain likely to have more zero carbon energy available than most places.

Then, you got the higher wages effect.  Leads to more mechanisation.  Which is great, until the thing breaks.  In Britain, you call the tech and he gets in his Tesla truck and has a screwdriver on the machine a couple hours later.  It doesn't work so well in less developed countries.

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23 minutes ago, Bricks & Mortar said:

 

I can't speak for JMD, but I'm also hot for British miners.  I'm imagining a future, where government, (EU + UK) require higher standards for mined minerals.  Like, measuring the carbon footprint, employee safety and working conditions. 

And, if not governmental regulation, then suppliers of electric cars, windmills and other users of the mined products are likely to want to put those carbon footprints and employee conditions in their sales brochures.  "All our lithium is produced from carbon neutral mines by fair pay workers at the highest safety standard"

Britain likely to have more zero carbon energy available than most places.

Then, you got the higher wages effect.  Leads to more mechanisation.  Which is great, until the thing breaks.  In Britain, you call the tech and he gets in his Tesla truck and has a screwdriver on the machine a couple hours later.  It doesn't work so well in less developed countries.

fair call, but has that worked for any other manufacturer or producers?  Pressure for ethical sourcing has been around for 30+ years.  All the factories overseas do is put in suicide nets...

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