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

[Bricormortis]

https://www.youtube.com/watch?v=4KxsEzXlAM4

David Hunter latest via Miles Franklin ....duration is 28 mins.

[goldbug9999]

4 hours ago, Harley said:

Physical gold takes a lot longer to obtain, but paper gold can be bought immediately, which accounts for the performance difference".

Physical gold ETF/ETCs are not "paper" they are fully backed by actual audited gold bars in vaults. I've seen nothing in the 15 years since I first invested in gold to persuade me that the price doesn't reflect genuine demand (or lack thereof).

[Bobthebuilder]

8 minutes ago, Loki said:

Yup, that's what I meant - the materials get more expensive so the wages had/have to suffer as a result

For me that's a no no. If the work doesn't pay the right labour, I won't be doing it.

This is why standards have fallen so far in UK construction. Pay peanuts, get monkeys.

[JMD]

4 hours ago, Lightscribe said:

Or could have just forgot all about Bitcoin and put it all in ChainLink from this time last year and be sitting on 1723.96% ROI...You may of heard me mention it once or twice 

Anyway jokes aside, I do think the markets are hedging their bets between gold and BTC the divide being the older and younger generation hedging against the same outlook. As I’ve said before the governments are happy to take the tax at the moment, even the Nigeria government reversed their crypto banning decision. Problem is it’s growing bigger into mainstream investment vehicles and adoption. The government should have nipped it in the bud if they were intent on killing it off. The fallout will only become worse the bigger it gets as it dwarfs smaller volatile currencies.

As far as gold/silver goes, my pension is the place for paper physical in a balanced fund (after all, I may never see it). My ISA is for the miners (ride the wave in the shorter term) and my physical is my backup plan.

I have no wish to travel to vaults and wait in line with a bit of paper if ever SHTF. I’d rather be long gone rather than a sitting duck for either government confiscation or being robbed by the desperate.

Lightscribe, I was late to the crypto party, but now happy to say I at least own some BTC. You mention chainlink, I was aware (can't remember how, it might have been your own post!) of its future use potential/claims but have missed the boat on that particular coin. However was wondering if you are looking at other coins which look similarly interesting? If/when we get a further run up in BTC i intend to withdraw my original capital stake (and leave rest in as 'free ride'). I might spend some of my 'spare' cash on other crypto-coins so would be interested to learn how you became aware of chainlink before it's epic climb? Not asking for trading advise of course, more a question about how to source quality info about the coins, to help identify a future 'chainlink'?!? Highly speculative I know, but similar risk to the junior silver miners I think.                                               And believe there is something in that theory regarding money flows (if also anticipating money that has been as yet held back, eg institutions?) from gold to crypo. For example, im only an investor minnow in regards the precious metals markets, but this time last year my portfolio in pm's consisted of gold/silver, both physical and mine stocks. Today, because I have trimmed/reallocated into crypto (mostly BTC), my pm/crypto ratio% is now 80pm/20crypto (in terms of my capital invested, which is how I personally measure this; actual returns over last 6 months skewer these %'s totally!!).        

[AWW]

Have to confess, I don't understand what role paper claims on gold have in people's portfolios. I think there are two reasons to have exposure to gold. Firstly, as insurance against systemic collapse. Only physical gold, in your hand, provides this insurance. Secondly, because you think it's going to increase in value. In which case, buy a spread of miners, or GDX(J), as the miners are leveraged to the gold price. Happy to be educated as always.

[Majorpain]

1 hour ago, goldbug9999 said:

Physical gold ETF/ETCs are not "paper" they are fully backed by actual audited gold bars in vaults. I've seen nothing in the 15 years since I first invested in gold to persuade me that the price doesn't reflect genuine demand (or lack thereof).

Besides the banks getting the occasional fine for various PM market mischief?  JPM's spoofing got them a $920m prize for starters.

[goldbug9999]

 

9 minutes ago, Majorpain said:

Besides the banks getting the occasional fine for various PM market mischief?  JPM's spoofing got them a $920m prize for starters.

I still think its 99% FUD. I just don't buy into the PM "big reveal" investment thesis - that one day a market fraud so big will be discovered that in-hand physical will demand some massive premium.

[Loki]

1 hour ago, Bobthebuilder said:

For me that's a no no. If the work doesn't pay the right labour, I won't be doing it.

This is why standards have fallen so far in UK construction. Pay peanuts, get monkeys.

Couldn't agree more. I watched the block pavers on a job rip out the insulation outside so their blocks fit yesterday. So that will be a cold bridge now

[Loki]

27 minutes ago, AWW said:

Have to confess, I don't understand what role paper claims on gold have in people's portfolios. I think there are two reasons to have exposure to gold. Firstly, as insurance against systemic collapse. Only physical gold, in your hand, provides this insurance. Secondly, because you think it's going to increase in value. In which case, buy a spread of miners, or GDX(J), as the miners are leveraged to the gold price. Happy to be educated as always.

My take on it is that all my other wealth bar normal assets is digital anyway so it can't hurt to have an instantly recognisable store of physical value that is fungible. 

[Guy De Bored]

Long time lurker here. Really enjoy the site and thread. My first post. A question. What does the site TOS stand for?

It is often referred to but never by its unabbreviated name... Grateful for the answer...

[Harley]

Gold and silver holdings warnings (one of several):

https://palisadesradio.ca/john-adams-david-morgan-cataclysmic-event-in-the-silver-market/

Sure, let's hope it's all BS.  Rick Rule has also been stressing the Sprott fund apparently is not allowed good for delivery bars.  Have to hold actual segregated bars.

"Tom welcomes both the Silver Guru David Morgan and the historically consistent John Adams to discuss the shenanigans in the metal markets. John outlines the ongoing shortages at the Perth Mint and how they are failing to deliver. Even “As Good As Gold Australia,” a Precious Metal Dealer and accredited Perth Mint distributor, cannot place orders for silver from the mint.

Investors need to be sure that they have legal title to bars. There are some serious concerns about allocated accounts at the Perth Mint as individuals attempting to change their positions from unallocated to allocated are being denied.

Based on the terms of their website, they are in default. Most days, even 1000 ounce bars are unavailable, and customers are now liquidating positions and going elsewhere for metal.

Concerns remain whether allocated accounts are being backed by metal. John notes that the Perth Mint may have leased gold from the Reserve Bank of Australia, which holds its gold at the Bank of England.

David takes us back in history to discuss the beginnings of banking during the time of the goldsmiths. Goldsmiths would hold customer gold but then discovered they could issue more claim checks than they had gold in the vault. This eventually resulted in runs on these vaults when customers became concerned. David says, “Just because your getting the best price does not mean you’re getting the best deal.”

David expresses concerns regarding the iShares SLV ETF that it could have become a fractional reserve system. He then discusses the failure of the Northwest Territorial Mint a few years ago.

Those with allocated bars should be asking for their metal. These bars may have been leased or rehypothecated numerous times. There is a lot of paper silver flying around, and we need to start counting what is real and what isn’t. There is a massive mismatch between silver and paper, and most contracts are worded that delivery with cash is acceptable. Therefore legally, they can’t default, but in practice, they will have defaulted.

John discusses why paper claims could be numerous against every ounce in vaults. Comex warehouse inventory has declined by 26 million ounces via deliveries. Every ounce pulled from the market means one less ounce that can be used to back paper markets. If everyone stands for delivery, the Comex will be forced to let the prices head higher.

David discusses what panic buying could look like based on currencies like Venezuela. However, if you live in Venezuela and have silver, you can still eat. Many investors and the population at large have a normalcy bias in the face of mounting global issues.

The bottom line is if you have a synthetic metal position, you should liquidate it today and acquire the actual metal. When this is done as a global movement, it will make a massive difference in where the price will go. This will also wake up the masses as to what is happening in the economic system and is how we crack the price suppression program.

It’s time for people to wake up and demand what is the real money".

PS:  I own a bit of everything.  

[JMD]

54 minutes ago, AWW said:

I think there are two reasons to have exposure to gold. Firstly, as insurance against systemic collapse. Only physical gold, in your hand, provides this insurance. Secondly, because you think it's going to increase in value. In which case, buy a spread of miners, or GDX(J), as the miners are leveraged to the gold price. Happy to be educated as always.

I agree. And I assume the same considerations apply to silver?                                                                                         But isn't there a timing element here also? For example, I bought phsp/sslv - physically backed silver funds. I bought at average 100/1 gsr ratio and my intention is to swop/arbitrage to gold when gsr is favourable to gold. At that time i may buy all physical gold or mix of actual phys gold/gold fund. I thought I had until later in the cycle, say 2026?, to attempt to implement this plan. But are we saying I'm taking high risks now? Everyone has different risk tolerance, but in terms of confiscation, etc, I thought that was 'scheduled'(!) for late this decade when monetary collapse may even happen?

[ONC]

Welcome. TOS. means “The other site”, which was Housepricecrash.co.uk.  This thread started there a few years ago then came here.

I used to like TOS, I learnt a lot there, but it seemed to lose its way, not been back for years now. 

 

 

 

[Harley]

5 hours ago, Lightscribe said:

I was commenting on BTC taking the wind out of the sales in regards to paper gold, in regards to the younger generation understanding how the likes paper can manipulate the physical market. They know the likes of JPM rig it, so that’s why their preference is either physical PM or preference towards BTC instead of paper. Obviously older generation doesn’t tend to like BTC so will tend towards both paper physical PM.

That's the sort of thing he was saying in the podcast.  It's more a case of BTC v paper gold v physical gold.  Same with silver excluding the commodity angle.  Just look at the premiums and availabilities at these paper prices.  BTC is in part highlighting the issues in the PM market.  The generation stuff IMO is like most generalised generation stuff, BS.  The big boys and girls have been moving in and they represent all generations.  The crypto market has moved on from the old cliches.

PS:  This PM market bifurcation is being seen in the crypto market as increasing amounts are being taken off exchange into cold storage.  OK, part of the general maturing of the market with family offices, etc buying to hold rather than trade but still a possible dynamic.

[Calcutta]

25 minutes ago, Guy De Bored said:

Long time lurker here. Really enjoy the site and thread. My first post. A question. What does the site TOS stand for?

It is often referred to but never by its unabbreviated name... Grateful for the answer...

How the hell did you find us without TOS? 

It means Tramriel Operating System. We all used to work for Atari but lost our jobs when Alan Sugar decided to cancel the project. 

[Majorpain]

59 minutes ago, goldbug9999 said:

 

I still think its 99% FUD. I just don't buy into the PM "big reveal" investment thesis - that one day a market fraud so big will be discovered that in-hand physical will demand some massive premium.

We shall see, the paper price isn't wagging the physical dog any more, I was going to pick some of the nice 2021 Britannia's, but good luck getting them for anything less than a massive premium.

[Harley]

25 minutes ago, Calcutta said:

We all used to work for Atari but lost our jobs when Alan Sugar decided to cancel the project. 

Well, that's what we all told you!  

[Lightscribe]

1 hour ago, Harley said:

The big boys and girls have been moving in and they represent all generations.  The crypto market has moved on from the old cliches.

Has it though? I don’t think it has. It’s still very early in acceptance let alone investment worthy in the mainstream. One look at the the arguments in the comments on articles on the FT you can gauge the consensus. I still stand by it’s a generational thing.

The older generation think it’s all tulips and railroads and have seen it countless times and the younger think the likes of JPM have them over a barrel in the established system so will gravitate away from that. However both agree that physical PMs makes up part of the hedge, so it’s a win win 

[Bricormortis]

1 hour ago, JMD said:

I agree. And I assume the same considerations apply to silver?                                                                                         But isn't there a timing element here also? For example, I bought phsp/sslv - physically backed silver funds. I bought at average 100/1 gsr ratio and my intention is to swop/arbitrage to gold when gsr is favourable to gold. At that time i may buy all physical gold or mix of actual phys gold/gold fund. I thought I had until later in the cycle, say 2026?, to attempt to implement this plan. But are we saying I'm taking high risks now? Everyone has different risk tolerance, but in terms of confiscation, etc, I thought that was 'scheduled'(!) for late this decade when monetary collapse may even happen?

What I have concerns about is silver being a strategic metal, necessary for industry including electronics, defence and the greening of the economy. There is a knowledgable guy on Youtube, Don Durett, a bit rampy perhaps, but he does mention that he believes the powers that be wont let silver go above $100 for that reason. 

Although the powers that be wont set the price of physical coins directly, they can indirectly interfere in the market, eg make silver etfs illegal, not allow 1000 oz bars to be traded, you might feel that would actually boost the price of coins, but there is some risk it stymies or collapses the silver market once people fear repression. And I believe repression is 100% inevitable...as laid out by Napier recently.

I dont thinlk the govt will confiscate physical, as there are other more sublte ways as exampled above. 

That is something worth thinking about and will cause me to consider gradually rotating out of PHSP and into gold stocks  if  silver ever gets towards the $100 dollar mark. I will keep enough coins for currency collapse insurance to stand a chance of being able to survive one year on them.  Plenty of skinny folk in Venezuala wish they did that already.

(I think the required stash at current values was about £2000 physical to survive a year in Venezuela.) Dont ask me anything about this last bit as I dont know the answers and likely enough no one else does either.

[Bricormortis]

Covid fear was a psy-op. British Psychology Society on the war path.  MSN...From an article in the Telegraph.

.State of fear: how ministers ‘used covert tactics’ to keep scared public at home (msn.com) edited bits copy and pasted below f y i.

 

Whether frightening the public was a deliberate – or honest – tactic has become the subject of intense debate, and dozens of psychologists have now accused ministers of using “covert psychological strategies” to manipulate the public’s behaviour.

They believe the Government, acting on the advice of behavioural experts, has emphasised the threat from Covid without putting the risks in sufficient context, leaving the country in “a state of heightened anxiety”.

They also claim that “inflated fear levels will be responsible for the ‘collateral’ deaths of many thousands of people with non-Covid illnesses” who are “too frightened to attend hospital”

They are so concerned that the British public has been the subject of a mass experiment in the use of strategies that operate “below their level of awareness” that they have made a formal complaint to their professional body, which will now rule on whether government advisers have been guilty of a breach of ethics. 

See full article at the link.

[Lightscribe]

12 minutes ago, Bricormortis said:

What I have concerns about is silver being a strategic metal, necessary for industry including electronics, defence and the greening of the economy. There is a knowledgable guy on Youtube, Don Durett, a bit rampy perhaps, but he does mention that he believes the powers that be wont let silver go above $100 for that reason. 

Although the powers that be wont set the price of physical coins directly, they can indirectly interfere in the market, eg make silver etfs illegal, not allow 1000 oz bars to be traded, you might feel that would actually boost the price of coins, but there is some risk it stymies or collapses the silver market once people fear repression. And I believe repression is 100% inevitable...as laid out by Napier recently.

I dont thinlk the govt will confiscate physical, as there are other more sublte ways as exampled above. 

That is something worth thinking about and will cause me to consider gradually rotating out of PHSP and into gold stocks  if  silver ever gets towards the $100 dollar mark. I will keep enough coins for currency collapse insurance to stand a chance of being able to survive one year on them.  Plenty of skinny folk in Venezuala wish they did that already.

(I think the required stash at current values was about £2000 physical to survive a year in Venezuela.) Dont ask me anything about this last bit as I dont know the answers and likely enough no one else does either.

Exactly my thinking. Simply put, you can’t ignore the physical need for the most conductive metal on the planet in an ever more digital and electric age regardless of manipulation. 

[Lightscribe]

3 hours ago, JMD said:

Lightscribe, I was late to the crypto party, but now happy to say I at least own some BTC. You mention chainlink, I was aware (can't remember how, it might have been your own post!) of its future use potential/claims but have missed the boat on that particular coin. However was wondering if you are looking at other coins which look similarly interesting? If/when we get a further run up in BTC i intend to withdraw my original capital stake (and leave rest in as 'free ride'). I might spend some of my 'spare' cash on other crypto-coins so would be interested to learn how you became aware of chainlink before it's epic climb? Not asking for trading advise of course, more a question about how to source quality info about the coins, to help identify a future 'chainlink'?!? Highly speculative I know, but similar risk to the junior silver miners I think.                                               And believe there is something in that theory regarding money flows (if also anticipating money that has been as yet held back, eg institutions?) from gold to crypo. For example, im only an investor minnow in regards the precious metals markets, but this time last year my portfolio in pm's consisted of gold/silver, both physical and mine stocks. Today, because I have trimmed/reallocated into crypto (mostly BTC), my pm/crypto ratio% is now 80pm/20crypto (in terms of my capital invested, which is how I personally measure this; actual returns over last 6 months skewer these %'s totally!!).        

Perhaps take this to a PM as we don’t really want to divert off into crypto again? I’ll be happy to send you some articles and documents.

[Guy De Bored]

Many thanks ONC (and Calcutta!!) for the TOS explanation!

All makes sense now.

Now I have that sorted, I hope I can add my two-penneth to the wider conversation in due course...

[Harley]

3 hours ago, Lightscribe said:

Has it though? I don’t think it has. It’s still very early in acceptance let alone investment worthy in the mainstream. One look at the the arguments in the comments on articles on the FT you can gauge the consensus. I still stand by it’s a generational thing.

The older generation think it’s all tulips and railroads and have seen it countless times and the younger think the likes of JPM have them over a barrel in the established system so will gravitate away from that. However both agree that physical PMs makes up part of the hedge, so it’s a win win 

Yes I do.  Sorry.  The idea crypto is an edgy new thing for the cool young kids is over and this generation segregation thing with all its baggage so beloved by some is just a handicap.  The market is far deeper and more complex than simple characterisations.  You have companies, hedge funds, wealth funds, family offices, HNW individuals and all the rest.  All smart, professional money.  Old money have kept their money by moving early with the times.  The simplistic idea of a market of edgy young things and horrible set in their ways boomer retail investor types could cost an investor dearly, as it should because investing demands better.  They are marginal players.  Retail, whatever age, forever late, just in time to pick up the bill.

[Lightscribe]

36 minutes ago, Harley said:

Yes I do.  Sorry.  The idea crypto is an edgy new thing for the cool young kids is over and this generation segregation thing with all its baggage so beloved by some is just a handicap.  The market is far deeper and more complex than simple characterisations.  You have companies, hedge funds, wealth funds, family offices, HNW individuals and all the rest.  All smart, professional money.  Old money have kept their money by moving early with the times.  The simplistic idea of a market of edgy young things and horrible set in their ways boomer retail investor types could cost an investor dearlyvas it should because investing expects better.  They are marginal players.  Forever late, just in time to pick up the bill.

I didn’t say it was an edgy new thing, I’m simply implying that at this point in time with an increasingly bleak financial outlook inherited by the younger generation, they will look elsewhere, crypto provides the outlet for that until it’s regulated out of existence. The markets and hedge funds will follow the money regardless. Whether that consists of the older demographic inadvertently investing in managed hedge funds incorporating crypto is irrelevant.

Passive investment funds have worked verbatim in recent history. But will they work forever more and fund all those pension funds all the while pension ages increase and the carrot gets drawn further away?