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

[sancho panza]

9 hours ago, Bricks & Mortar said:

Wow!  DXY down to 96.5.  It's all happening fast now.

 

 

Explains why the yellow stuff so strong.

@DurhamBorn

you picking up any potash at the mo?

[sancho panza]

[sancho panza]

IKN $1800 call by year end.I thi k he's a little light there.I suspect new all time USD high in next few months.

https://incakolanews.blogspot.com/2020/03/gold-has-broken-out-today-and-is-going.html

Be clear that by calling long on gold, it does not necessarily mean an auto-bull on any other metal or even the precious metals mining stocks, we need to consider those separately. All I'm saying is that the price of a troy ounce of gold has made a very significant move today and is now on course for U$1,800/oz by the end of this year:

 

 

Get used to the idea and adjust portfolios accordingly, if required. As for mining stocks, IKN forecasts that the next fashionable buzzphrase among analysts and dilettantes* is set to be "cost creep".

[Democorruptcy]

17 hours ago, Agent ZigZag said:

Your in good company. You want to see my share list. A sea or red. Whilst dividends help smooth the pain my funds are still down. Patience and emotion is a skill I am still learning in order to alleviate out all of the emotion

This week reminded me of a mate who used to bet on golf. As he put the leaderboard on teletext, he held a large piece of paper over it and moved it up the screen, one player at a time, not wanting to see his player until uncovering the leader. It was such as anticlimax when his player had dropped off the bottom of the leaderboard 

Maybe some strategically placed bits of paper to stuck to your laptop/monitor to cover a red portfolio value while you look at other things? 

[kibuc]

13 hours ago, Bricks & Mortar said:

Gold/Silver ratio looking a bit, um...  well I'm no expert, but it looks like its doing one of those sharp UP moves that seem to precede a sharp DOWN move, (historically).
Is silver about to take off?

https://www.gold.co.uk/price-ratio/gold/silver/5year/

G/S ratio all-time high is 100.28 and we're getting close. This is an anomaly and will correct itself at some point, probably quite rapidly. 

[Democorruptcy]

23 minutes ago, kibuc said:

G/S ratio all-time high is 100.28 and we're getting close. This is an anomaly and will correct itself at some point, probably quite rapidly. 

How?

Will gold drop or silver rise?

[Sugarlips]

9 minutes ago, Democorruptcy said:

How?

Will gold drop or silver rise?

Either way at this point it sounds like Silver won’t drop so would be a good store of value

[DurhamBorn]

2 hours ago, sancho panza said:

Explains why the yellow stuff so strong.

@DurhamBorn

you picking up any potash at the mo?

Yes a couple hit my ladders so im about 60% in them now of what id have if all hit.I havent got a big allocation to the sector due to lack of targets.Iv also started to ladder into aluminium sector,Norsk Hyrdo main one but also Alcoa,bought first ladders last night in Alcoa.Norsk produce a lot of their own energy,so should get a big advantage once energy prices rocket.I noticed a MSM article yesterday somewhere saying "Energy is dead" ,i love those sort of things in the mainstream.

[Democorruptcy]

5 minutes ago, Sugarlips said:

Either way at this point it sounds like Silver won’t drop so would be a good store of value

Sorry but no, they could both drop but silver could just drop less, so the ratio is cut.

I'm not suggesting they will it's just that when the G/S ratio is suggested to be high, it doesn't always mean silver is cheap. 

[Bricks & Mortar]

36 minutes ago, Sugarlips said:

46 minutes ago, Democorruptcy said:

How?

Will gold drop or silver rise?

Either way at this point it sounds like Silver won’t drop so would be a good store of value

I've got most of my portfolio pointing at silver miners.   I expect a sudden and sharp move to the upside for the silver price. 
But later on, in the event we've all been waiting for, equities tank, and gold & silver also tank due to margin calls caused by leverage, like we saw last Friday.

EDIT TO ADD - Expect?  Maybe hope would have been a better word.

[kibuc]

27 minutes ago, Democorruptcy said:

How?

Will gold drop or silver rise?

Usually when gold drops, silver drops even more so a belated silver rally would look more likely. But these are not usual times. 

[Democorruptcy]

4 minutes ago, kibuc said:

Usually when gold drops, silver drops even more so a belated silver rally would look more likely. But these are not usual times. 

Have you got a chart on that to hand?

I agree these are not usual times and we are now in the 2nd decade of them 

[TheCountOfNowhere]

Only thing ive ever learned about investing is... When the stock market in the process of collapsing, give it at least 6 months before you buy. 

[Democorruptcy]

13 minutes ago, TheCountOfNowhere said:

Only thing ive ever learned about investing is... When the stock market in the process of collapsing, give it at least 6 months before you buy. 

I thought you were going to say, when it's collapsing give it.... until it drops below 4,000

If only we knew it would again! Not sure the NCV problem will last long enough, Mark Carney said it's temporary!

A sobering chart though if the portfolio is already red!

[Agent ZigZag]

The Gods have been kind to me today as I have finnally got the bulk of my Pension transfer through to my SIPP. I have added to my oil and gas shares, with a nice price entry point to.

[onlyme]

Oops wrong thread, sorry.

[Talking Monkey]

10 minutes ago, Democorruptcy said:

I thought you were going to say, when it's collapsing give it.... until it drops below 4,000

If only we knew it would again! Not sure the NCV problem will last long enough, Mark Carney said it's temporary!

A sobering chart though if the portfolio is already red!

The whole melt up thing is looking less likely unless the Fed does another cut and a load of QE. 

[JMD]

17 hours ago, kibuc said:

It turned out to be an equivalent of a shit mining stock, where you canno trust a single word that the management is saying. The number of red flags throughout the 2019 was astonishing.

Keep in mind that in Spring 2018 their share count was about a half of the current one, so the current market cap is about twice what it was back then. Don't let the SP fool you.

However, a bit perversely perhaps, I'm planning to build a sizeable position starting in Q2 (or maybe even in March if my miners deliver). I have no idea where they are with the gas storage project, it might be that it's dead and burried, but I think there will be a lot of public money thrown at industrial projects and H&W might benefit.

Interesting what you say there, let us know how that strategy works out. Its my biggest paper loss at present, but i'm not brave enough put more in, so will need to sit it out and hope to break even once/if government policy/investment changes.

Thanks kibuc, loki, ponty mython, tdog, for your thoughts on this.

[Agent ZigZag]

2 minutes ago, Talking Monkey said:

The whole melt up thing is looking less likely unless the Fed does another cut and a load of QE. 

Possibly . Speaking with alot of traders and fund managers of late. The City appears very bullish. The general consensus is that central banks have their backs and are providing the necessary liquidity. This thread is about it being to little and too late to change the course of direction. At a guess I am ignoring the day to day doom and gloom and consider the market to correct back up.

[Democorruptcy]

10 minutes ago, Talking Monkey said:

The whole melt up thing is looking less likely unless the Fed does another cut and a load of QE. 

I posted the image trying to nail the bottom for those feeling dizzy with all the red on their screen. 

[JMD]

DurhamBorn, I believe that Flybe had a £100m market cap, but had £200m debts, so was always kinda untenable as a business, and debt deflation caught up with it in the end.

However, isn't the more interesting thing - as per the ideas of this blog - that their low price ticket offerings will now no longer be available, and which ever airline does take on their former routes will put fares up - i.e. massive inflation in air fares, and part of the reflation cycle in action?       

Happy to be corrected if I've go this wrong and this isn't what happened to FlyBe. 

[onlyme]

1 minute ago, JMD said:

DurhamBorn, I believe that Flybe had a £100m market cap, but had £200m debts, so was always kinda untenable as a business, and debt deflation caught up with it in the end.

However, isn't the more interesting thing - as per the ideas of this blog - that their low price ticket offerings will now no longer be available, and which ever airline does take on their former routes will put fares up - i.e. massive inflation in air fares, and part of the reflation cycle in action?       

Happy to be corrected if I've go this wrong and this isn't what happened to FlyBe. 

The above, with cherry picking of routes that can command a premium, fewer scheduled flights to gain the premium price from fewer (more desperate) flyers. Other routes will not be taken up.

[Iamcynical]

My thoughts exactly - the desperate flyers will now be prepared to pay much more than they were when they took the flybe fares for granted.  Customers who always choose on price need to be careful what they wish for, and businesses that base their entire business model on simply being the cheapest, also need to be careful what they wish for !

I wonder how long the hierarchy, at Southampton airport in particular, sat on their hands whilst the stark warnings were all around regarding flybe's demise ?  I guess they'll be ok as they should have plenty of money in the bank, but the people working the bags, security, coffee shops etc are presumably going to be really struggling now.

[TheCountOfNowhere]

2 hours ago, Democorruptcy said:

I thought you were going to say, when it's collapsing give it.... until it drops below 4,000

If only we knew it would again! Not sure the NCV problem will last long enough, Mark Carney said it's temporary!

A sobering chart though if the portfolio is already red!

You can clearly see the qe/low ir effect

[Barnsey]

Most of what I own is heavily in the red, but I just see them on sale and want to buy more, yet can’t really as house purchase in months to come must take priority. My K+S is down 30% and I thought it was cheap when I bought it!