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

[DurhamBorn]

3 hours ago, AWW said:

I agree with you. If only it was that simple though. How many people live round the corner from their folks, who themselves are in a house with enough spare rooms and which aren't full of old crap that they won't get rid of? Uprooting kids from schools and leaving jobs to move in with those who need care is a bit more than a "little" sacrifice.

True,my dad lives in the next town,my daughter lives in my close ,my son three streets away,and my youngest daughter lives with a gypsy and owns land all over the place and would stick a static next to one of their barns and stick me in there.

My dad reckons once i start looking after my grandson when she returns to work we can go around the pubs with him as babies are great for pulling in the chicks,hes 81 

[Don Coglione]

59 minutes ago, DurhamBorn said:

True,my dad lives in the next town,my daughter lives in my close ,my son three streets away,and my youngest daughter lives with a gypsy and owns land all over the place and would stick a static next to one of their barns and stick me in there.

My dad reckons once i start looking after my grandson when she returns to work we can go around the pubs with him as babies are great for pulling in the chicks,hes 81 

Careful!

 

[harp]

4 hours ago, Noallegiance said:

Bring it on I say!

I'm very thankful that folk down here, instead of moving, are spending on extensions and kitchens.

Saves me doing it when I take it off them for a snip.

I’m South coast! Just exchanged on my house, which sold over the asking,£1.3m. Buying a probate for £400k. Needs probably at least £100k spent at current (covid rip off prices). Market  is fucking crazy for the upper end at the moment. Thought I’d take advantage of it! That money IS my pension as I’ll have no other apart from old age one. Time to focus the mind and spend wisely soon. 

[Lightscribe]

8 minutes ago, harp said:

I’m South coast! Just exchanged on my house, which sold over the asking,£1.3m. Buying a probate for £400k. Needs probably at least £100k spent at current (covid rip off prices). Market  is fucking crazy for the upper end at the moment. Thought I’d take advantage of it! That money IS my pension as I’ll have no other apart from old age one. Time to focus the mind and spend wisely soon. 

Well done. I applaud anybody who’s taken on the system and won. I remember you saying that you cashed out BTC too to pay off mortgage etc.

There may be others in your position, but few who understand the point in time we’re in, so will wade back into debt up to their eyeballs. You’ve hit the peaks on multiple fronts and you’ll be set up for what’s coming.

On HPC, WICAO managed to FIRE (and hats off to him), but in my mind he had no long term strategy going into an inflation environment (as he himself admitted he had no crystal ball, just chuck everything into a mix of funds and ride the wave)

[Harley]

6 hours ago, DurhamBorn said:

I had my first daughter at 21,her mam was 18 by two days,beautiful looking girl,still a fab looking woman now.I had my next two at 25 and 29 .Any one of my kids would move my dad in with them tomorrow as would i or my brother and i know my kids would do the same for me.I dont think people did vote for these policies at least up here.I dont know anyone up north who gave a shit about how much their house was worth up until 2004 and southern BTL moved in buying up all the terrace houses up here. .However,down south my uncle was forever going on about how much his house was worth.Now his two daughters cant afford to buy.

The people who did vote for where we are were welfare scroungers and a large chunk of public sector workers.The worst part is,for now they are the groups protected from rising inflation with inflation linked benefits and pensions.

Indeed.  I will look after all my family regardless.  I love them, owe them, and it's the right thing for me to do.  Especially after seeing the recent care home fiasco.  What goes round comes round, although there'll be few left for me.  Ignoring the decency stuff, and the demonising of swathes of people to make it more palatable, those who plan differently will no doubt add the costs of their own care to their financial plans for when their time comes.  I won't be assisting in those plans.  TPTB must be chuffed with their progress in creating a lonely bunch of losers, which is what will happen.

[Bricormortis]

I have had a bit of info off a  professional Technical Analyst. He reckons GDX has broken out of a 9 month downtrend channel, retested and should rise. Higher highs and higher lows expected. Caveat, depends a bit on the gold price which is testing resistance at the top of its downtrend channel.

He sees Yamana pulling back then goes to the stars.

Lets see if he is right or wrong. Not financial advice.

[harp]

8 minutes ago, Bricormortis said:

I have had a bit of info off a  professional Technical Analyst. He reckons GDX has broken out of a 9 month downtrend channel, retested and should rise. Higher highs and higher lows expected. Caveat, depends a bit on the gold price which is testing resistance at the top of its downtrend channel.

He sees Yamana pulling back then goes to the stars.

Lets see if he is right or wrong. Not financial advice.

It wasn’t David Hunter was it? 🤔

[Bricormortis]

25 minutes ago, harp said:

It wasn’t David Hunter was it? 🤔

Ha no, dont believe he a tech either. If that was his call atm I would maybe sell and run for the hills

[Hardhat]

1 hour ago, Bricormortis said:

I have had a bit of info off a  professional Technical Analyst. He reckons GDX has broken out of a 9 month downtrend channel, retested and should rise. Higher highs and higher lows expected. Caveat, depends a bit on the gold price which is testing resistance at the top of its downtrend channel.

He sees Yamana pulling back then goes to the stars.

Lets see if he is right or wrong. Not financial advice.

Any particular reason why for Yamana?

GDX allocation to Yamana is fairly small at 1.57% so some direct exposure might be good if there a a compelling case.

[Bricormortis]

12 minutes ago, Hardhat said:

Any particular reason why for Yamana?

GDX allocation to Yamana is fairly small at 1.57% so some direct exposure might be good if there a a compelling case.

I dont know what the reasoning is based on fundamentals. 

[DurhamBorn]

Yamana looks really cheap to me and iv been buying.It also owns a huge gold/copper deposit about to be developed.12 billion of copper minimum in that project and a good few million oz of gold.

It sold one of its mines far too early,but that did clear debts.

Harmony also has a huge copper project ,but it looks a long way from being built.

[Harley]

1 hour ago, DurhamBorn said:

Yamana looks really cheap to me and iv been buying.It also owns a huge gold/copper deposit about to be developed.12 billion of copper minimum in that project and a good few million oz of gold.

It sold one of its mines far too early,but that did clear debts.

Harmony also has a huge copper project ,but it looks a long way from being built.

Lots to like with fundamentals and technicals typical of its cohort.  Main downside to me is the 2% yield as 3% is my minimum.  Maybe I need to be flexible this one time!  Or stick with the higher yielders I currently hold.

[Harley]

Anyone using the Dragon portfolio and how did you go about implementing it as a UK retail investor?

[Hancock]

Anyone know why Jinchuan Group, is looking relatively cheap?

https://www.google.com/search?q=jinchuan+group+share+price&rlz=1C1CHBD_en-GBGB864GB864&ei=vjZZYMyMOYeW8gKGwYeQAQ&oq=Jinchuan+Group+share&gs_lcp=Cgdnd3Mtd2l6EAEYADIHCAAQRhD6ATICCAAyBggAEBYQHjoHCAAQRxCwAzoECAAQQzoJCAAQQxBGEPoBUIwjWM9FYOxQaAFwAngAgAGWAYgB-gWSAQMzLjSYAQCgAQGqAQdnd3Mtd2l6yAEIwAEB&sclient=gws-wiz

[Barnsey]

 

[Viceroy]

This is a free report from Goehring & Rozencwajg - Natural Resource Market Commentary - THE PROBLEMS WITH COPPER SUPPLY

It goes into much more than copper, 30 pages long about oil supply, gas, silver+gold, potash.. i've pasted some snippets.

https://f.hubspotusercontent40.net/hubfs/4043042/Commentaries/2021.Q1%20Commentary/2021.Q1%20Goehring%20%26%20Rozencwajg%20Market%20Commentary.pdf

 

The United States Department of Agriculture (USDA) just released its 2021 US farmers’ planting intention report. It was a shocker: US farmers now plan to plant almost 5 mm fewer corn and soybean acres versus the most recent surveys. We remain very bullish on global agricultural markets and recommend investors have significant exposure.

 

..We are entering into a new era in global oil markets. While most analysts are concerned about demand, the most important driver will likely be supply. After a decade of robust growth, the US shales are now exhausted and incremental growth will be very difficult to achieve. Two decades ago, investors worried we were running out of oil while today’s investor worries that we have passed peak demand. Although we cannot say for certain what the coming decade will bring, it will almost certainly defy conventional expectation. The US shales have been an extremely prolific source of supply but we firmly believe their best days are behind them. As this realization sinks in, we believe investors will focus on those companies with the remaining high-quality assets. We recommend investors maintain sizeable investments in high quality E&P and oil service companies with a sizable earnings leverage to higher oil prices.

 

..We remain extremely bullish toward grain prices as we progress through the decade. As we described in our last letter, we run high risks of slipping into a global agricultural crisis. Grain inventories are now at extremely low levels and the 2021 Northern Hemisphere growing season looks problematic. Given the strength in global grain and related protein demand and the change about to take place in global weather, namely that we have now entered a prolonged cooling cycle, global crop growing conditions will become much more challenging in the next several years. Strong demand is about to collide with climate-related supply problems. It now looks like China might become a huge wild card in global grain markets as its agricultural demands, now spilling over into exports markets, continue to increase. We recommend investors maintain significant exposure to agricultural-related equities, with a particular emphasis on fertilizer producers.

 

..The inflation signal, first delivered by the April 2019 BusinessWeek/Bloomberg cover story, is now being confirmed by underlying economic and financial data. Money supply growth is surging and physical shortages are developing. The banking system is in excellent shape and stands ready to lend.

Despite these trends, investors continue to pile into technology stocks, SPACs, crypto-currencies and long-term bonds; each of which will perform terribly in an inflationary environment. In stark contrast, inflation hedges such as commodities and natural resources remain priced at record low levels relative to financial assets and are ignored by almost all investors.

The countdown to inflation is ticking and we are getting closer and closer to an explosion in inflationary pressures. All economic signs point in that direction, yet few investors are prepared to protect themselves, yet alone profit from an investment landscape that is about to suddenly and radically change. It’s 1979 all over again — except in reverse.

 

..For investors looking for an asset class with huge sensitivities to inflation, silver should be seriously considered. In the inflationary 1970s, silver appreciated an amazing 40 fold in price. It was ultimately the focus of a huge operation by the Hunt Brothers to corner the market, driving silver to over $50 per ounce — a price that is still 100% higher than the price of silver today.

Although not as cheap relative to gold as it was last year (the gold-silver ratio is 70 versus its all-time high of 125 last year), silver still has significant upside potential. In the last gold bull market which peaked in 2011, the gold-silver ratio fell to under 35. During the great precious metals bull market of the 1970s, the ratio fell to 15.

Given our belief that inflation is about to become a huge problem, we would like to emphasize two points. We believe the manipulation of silver prices last quarter by retail investors will only be the first of many attempts by speculators to “bull” the silver market this decade. Before this precious metals bull market is over, we believe another attempt will be made by either financial speculators or wealthy individuals to corner the silver market, much like the Hunt Brothers tried to do 40 years ago. In dollar terms, the silver market is only 5% of the gold market. Given the massive amounts of money creation, silver would present itself as a tempting target. Second, we believe before this precious metals bull market is over, we will see the gold-silver ratio approach the level it saw back in 1980 — 20 or below. If gold hits our $15,000 target and the gold-silver ratio falls to 20, this implies a silver price of $750 per ounce — 30 times higher than today’s price.

In summary, the corrective phase in gold remains in place. Although gold demand remains extremely strong in India, conflicting demand signals are still emanating from China. However, central bank gold buying has receded to almost nothing and western physical gold demand has now turned into a source of supply. The loss of this demand from both central bank and western investors is pressuring the gold price. We are carefully monitoring the potential return of demand from both sources. For long-term patient investors, you are again being presented with another great buying opportunity in both gold and silver. For investors with shorter time horizons, we still believe that depressed markets such oil, natural gas, and agricultural fertilizers offer greater opportunity in the short term.

 

..The great bear market in gas over the past 13 years was caused by surging supply. Our research tells us that natural gas supply growth in the US will slow dramatically, if not turn negative, in the next several years. At the same time, domestic and export demand for US natural gas continues to grow. The bull market in natural gas has begun with little attention from the press. We recommend investors own a diversified portfolio of natural gas-related equities. Valuations are very low and natural gas prices are going much higher.

[DurhamBorn]

30 minutes ago, Barnsey said:

 

Yep,banks mostly repaired their balance sheets after 08.This is a fiscal driven recovery cycle with the usual wild swings as cycles turn.

 

[Harley]

On 15/05/2021 at 14:07, MrXxxx said:

OK so this weeks Macrovoices podcast [https://www.macrovoices.com/podcasts-collection/macrovoices-podcasts] were discussing a new interest rate hedging approach [Simplify Interest Rate Hedge ETF | Simplify] that may be viewed as an alternative strategy to the PM silver approach discussed on here in the last year or so. So here are my thoughts on this ETF/interview, please feel free to critique.

The ETF could be used in three ways:

1. as a mid-term ETF trading oppportunity that would focus on the potential for rapid interest rate rises in the next 2-4 years, by buying now and trading out on a high rather than holding for the long-term.

2. as an insurance policy hedge for those

a) with high wealth in a variety of assets, especially those that are illiquid and susceptible to increased interest rates i.e. those with property (especially mortgaged) and/or

b) with a company pension scheme with limited options i.e. having a 60/40 provision and unable to transfer out of easily.

Thoughts?

 

I just listened.  I need to do some DD this week but I noted the emphasis that this was for those exposed to interest rates rises.  Maybe a simple options hedge would suffice for those primarily concerned with portfolio risk, but the leverage offered by the ETF seemed high (need to check).  Is this ETF open to UK investors?  I'm also going to check out the other ETF offerings (one now with more to follow).

[23rdian]

18 minutes ago, Harley said:

I just listened.  I need to do some DD this week but I noted the emphasis that this was for those exposed to interest rates rises.  Maybe a simple options hedge would suffice for those primarily concerned with portfolio risk, but the leverage offered by the ETF seemed high (need to check).  Is this ETF open to UK investors?  I'm also going to check out the other ETF offerings (one now with more to follow).

Appears to be buyable on Interactive Investor at least.

[Lightscribe]

Looks like it could be another leg down today. Nikkei over 1% down today and futures are slightly down too so far.

BTC is leading the way shitting the bed. I’m shored up in PAXG and GBP while I wait to see how today unfolds.

[MrXxxx]

2 hours ago, Harley said:

Is this ETF open to UK investors?

Don't know, the options available to our US cousins is always greater. I think the advantage with this ETF was that a) you were covering both sides of the equation, and b) its longer duration.

[Lightscribe]

Nikkei recovered to just over 1% down now. Futures still flat. BTC recovered to $45k very quickly. With the reopening of everything today (however long that lasts) I expect the FTSE now to be up today, depending of course whatever happens when the US opens later.

[Harley]

38 minutes ago, Lightscribe said:

Nikkei recovered to just over 1% down now. Futures still flat. BTC recovered to $45k very quickly. With the reopening of everything today (however long that lasts) I expect the FTSE now to be up today, depending of course whatever happens when the US opens later.

So another day in the markets then!  Actually yes, things are getting choppy all round at these elevated levels.  The Japan ETF VJPN looks like it has topped on the monthly, although my holdings are OK for now (Yoko Rubber up a nice 4%).  Hopefully I'll be able to pick up more stocks later.  HK appears to have been acting the opposite these last few days.  Not sure what's next.  Down or forming a bullish symmetrical triangle?  FTSE getting close to overbought but maybe a bit more before a move either way.  US looks interesting with NASDAQ v S&P v RSP.   BTC has just created a major inflexion point for me in GBP so could go either way but down 3.8% atm.  Been weakening for a while, topped out with a doji last month, and now down 25% MTD.  All IMO, DYOR.

PS:. Vol is my friend.  Nice to see it back.

[Harley]

TYX, US 30yr bond yield, looking toppy here.  Hit major resistance on the monthly and momentum now weakening from overbought.  But looking at the other side, been range bound (congested?) for the last few months so maybe base building?

[Harley]

Is GDX doing what it does best - not following the technicals?!   Pulled back on the monthlies, setting up a nice downtrend only to reverse, for now.  But after several years fighting the bagger, I finally got it, for now!   Or rather some constituents.  Gapped up today.  All that ex-BTC?