Credit deflation and the reflation cycle to come (part 9)

[M S E Refugee]

13 minutes ago, Lightscribe said:

I’ll be sitting there watching, drinking the MPs subsidised wine at the commons bar in my silver goblet in candlelight whilst eating cucumber sandwiches from my platter.

I trust you have the correct Silver utensil to make your cucumber sandwiches, such as a Cucumber Saw.

Edited April 16 by M S E Refugee

[kibuc]

1 hour ago, Lightscribe said:

Hat tip to @kibuc

Disclosure- I went in at 5p 

If gold is in a bull run and at ATHs you can be sure there’s an incentive by all parties to get back to mining 

It's still a bit of a casino bet but I really like the odds here. Kouroussa aside, at $2300-2400 gold they will be generating tons of cashflow from their other mine in Mali - not enough to pay the EOY balance of $75mil in full, but surely enough to make a solid dent in it and get a new payment schedule from the lender. Obviously, the main play is Kouroussa getting into commercial production and that's where there's a blue-sky potential, but the downside risks seem to be significantly reduced by the gold rally.

It bounces rather violently, and I'll be adding another lottery ticket if I can get it at 6p or thereabouts.

[Harley]

Took some profits today.  A number of ETFs showing overall negative techs. Let's see how that works out - pullback, in which case I'll have to get back in higher than sold (an insurance premium), or something more sustained in which case all OK.  Very much hoping the pullback is part of a cup and handle pattern.   Anyways, always nice to see some realised green!

Edited April 16 by Harley

[RickyBacker]

7 minutes ago, kibuc said:

It's still a bit of a casino bet but I really like the odds here. Kouroussa aside, at $2300-2400 gold they will be generating tons of cashflow from their other mine in Mali - not enough to pay the EOY balance of $75mil in full, but surely enough to make a solid dent in it and get a new payment schedule from the lender. Obviously, the main play is Kouroussa getting into commercial production and that's where there's a blue-sky potential, but the downside risks seem to be significantly reduced by the gold rally.

It bounces rather violently, and I'll be adding another lottery ticket if I can get it at 6p or thereabouts.

Just a heads up in case you missed it...This was in the RNS from January so would need to be factored in to calculations.

"The Company's near-term revenue protection scheme has been finalised with 60,000 oz protected across the first three quarters of FY-2024 through forward pricing and cost collars, with an average floor price of US$2,000 per oz and upside of up to US$2,150."

[crashmonitor]

https://uk.investing.com/rates-bonds/gbp-2-years-irs-interest-rate-swap-historical-data

 

2 year swap back to post US inflation release highs after UKs stubbornly high 6% annual wage rise. 

[Harley]

1 hour ago, Pip321 said:

I’m confused with all this gold talk….

As I understand it the US has printed something like 80% of all dollars in existence in the last 4 years or so, so that means there are more dollars.

Now I imagine in order to do this they must have mined an extra 80% of gold over the same period into existence in order to support this money being printed. I mean money is backed by gold…surely?

I know Nixon temporarily removed the gold standard in 1971 but that was just temporary right?

It’s a mad world….money backed with nothing. Not long now and everyone will be millionaires  

It would be really interesting to look at the true quantity of fiat floating around verses the quantity of real things (be it gold, cars, clothes, wheat, labour, cocoa beans etc etc). That may start to show the true level of potential ‘inflation’ or rather ‘devaluation of currency’.

Interesting times….and every royal headline, political farce or wokey annoying topic I see in the news I see as just something trying to distract me from what is really going on.

That's why we're not greedy profit makers, just struggling not to lose as much.  Forget looking at fake inflation but the true meaning of inflation - an increase in the supply of money not supported by growth (whether the CPI type figures show it or not).  I see rising asset prices as largely a function of increased money - maybe more, maybe less, probably more overall which means a balanced approach could well be down in true real.  A pretty crap run for the last few years/decades.

[RickyBacker]

51 minutes ago, Pip321 said:

So (assuming BK arrives) at the lower values the stock market offers something else…it may not rise for 20 years and indeed it may fall further but it offers (depending on sectors, companies etc) a ability buy into assets to hold/store wealth at a cheaper value.

So BP @£2 or BT @40p or BAT @£10, Rio @ £30 etc etc. The dial has turned and as long as you pick well and spread a little you are buying assets….whether ‘assets’ then crumble further is another matter but you are relatively wealthier than your old self  who nearly bought 2 months earlier because now you bought 2 for 1.

It's also worth considering the inflation that takes place when waiting for the BK to arrive.
I was buying BT during the 2020 Covid lows at £1 per share.
Inflation adjusted (CPI) that is now the equivalent of £1.22 per share.
I can buy BT today at £1.05 per share.
Back up the truck?!
 

[Harley]

1 hour ago, HousePriceMania said:

Not including dividends, recovered much quicker.

If you think buying shares at the bottom of the 1929 stock market crash was bad, imagine buying them the month before the crash.

Or on the suckers rally prior to the real crash!

[kibuc]

9 minutes ago, RickyBacker said:

Just a heads up in case you missed it...This was in the RNS from January so would need to be factored in to calculations.

"The Company's near-term revenue protection scheme has been finalised with 60,000 oz protected across the first three quarters of FY-2024 through forward pricing and cost collars, with an average floor price of US$2,000 per oz and upside of up to US$2,150."

Thanks! For some reason, I thought it was only affecting H1 production. End of Q3 stings a little bit.

[Yadda yadda yadda]

50 minutes ago, M S E Refugee said:

I trust you have the correct Silver utensil to make your cucumber sandwiches, such as a Cucumber Saw.

Where does one go to purchase a silver cucumber saw? Toolstation or Next Home?

[wherebee]

30 minutes ago, Yadda yadda yadda said:

Where does one go to purchase a silver cucumber saw? Toolstation or Next Home?

One sends the butler out to get it.

[Axeman123]

44 minutes ago, Yadda yadda yadda said:

Where does one go to purchase a silver cucumber saw? Toolstation or Next Home?

13 minutes ago, wherebee said:

One sends the butler out to get it.

Only if you are common AIUI, a gentleman inherits his cucumber saw...

[M S E Refugee]

I love Francis, he always tells me what I want to hear about the Precious Metals.

 

 

[Axeman123]

2 minutes ago, M S E Refugee said:

I love Francis, he always tells me what I want to hear about the Precious Metals.

His twitter is entertaining as well; one minute he is unwittingly catching a deadly poisonous fish in the med and asking his followers for recipe advice, and the next he is being quite "anti-semetic" about geopolitics.

[Onsamui]

Collective Debt – We Must All Pay For Student Loans | Armstrong Economics 

Again, I want to state the importance of Jerome Powell’s words. It is unusual for the central bank to break with the government for any reason. “In the long run, the US is on an unsustainable fiscal path. The US federal government is on an unsustainable fiscal path and that just means that the debt is growing faster than the economy,” Powell finally warned, later adding, “effectively, we are borrowing from future generations.” He warned that we must begin to prioritize fiscal policy immediately to fix this unending crisis....

[DurhamBorn]

6 hours ago, crashmonitor said:

UK Wage growth unexpectedly comes in at 6.0% for February, 5.8% was expected. Totally incompatible with 2% Core.

 

https://www.reuters.com/world/uk/uk-regular-wages-grow-60-3-months-february-2024-04-16/

Less than bennies and workers are taxed on theirs.Bennies got 6.8% as did retired public sector.Workers need 10%+ to keep up with bennies.

Edited April 16 by DurhamBorn

[ThoughtCriminal]

I'd say this tweet nails it.

Dosbodder I think.

 

 

[Onsamui]

Imagine Waking From An 8-Year Coma – Reflections From The Last ECM Wave | Armstrong Economics  It is incredible how much can change within one wave of the ECM. I can assure you that the world will be a very different place by the next one.

[Jay]

2 hours ago, Harley said:

Took some profits today.  A number of ETFs showing overall negative techs. Let's see how that works out - pullback, in which case I'll have to get back in higher than sold (an insurance premium), or something more sustained in which case all OK.  Very much hoping the pullback is part of a cup and handle pattern.   Anyways, always nice to see some realised green!

Interesting..it does look like something is up…gold rising on a stronger dollar..higher gold represents diversification away from dollar and treasuries..Chinese buying gold but still in deflation territory..it maybe political..

higher gold prices means higher inflation expectations according to gromen..treasury yields continue to rise..yen depreciating rapidly into multi decade lows..metal sanctions on Russia..Israel beating its chest..oil at 90…not exactly an environment for equity returns..

us economy is resilient so maybe continuation of dollar strength…am still waiting or rather hoping for more liquidity but still no signs of it arriving..interesting times..if the us don’t cut soon then there will be pain..

[spygirl]

 

Superdry boss hits back at 'not cool' criticism

https://www.bbc.co.uk/news/articles/cl7ledeq02wo

Ive had a grand total of one flights from Gatwick.

Never again.

When I was hanging around the entire building seemed full of multigenerations of families all wearing flimsy SuperDry binbags, ehad to toe.

 

 

[ThoughtCriminal]

Here's one for everyone to bookmark to use every time you hear some wanker saying "I'd happily pay more tax!".

There you go motherfucker.

https://www.gov.uk/guidance/voluntary-payments-donations-to-government

[Democorruptcy]

2 hours ago, ThoughtCriminal said:

I'd say this tweet nails it.

Dosbodder I think.

 

 

Look on the bright side, things could be a lot worse:

It's less than a million new long term sick

It's not a double figure £tn unfunded black hole

There are still some births

It could be more than 1m imported and under* 200k working

4.2% unemployment is low historically

GDP is positive

* Phew.... I nearly put 'less than' there and might have got pedanted.

[Funn3r]

1 minute ago, Democorruptcy said:

* Phew.... I nearly put 'less than' there and might have got pedanted.

Phewer! 

[Jesus Wept]

Fairly symbolic - a portent of what is to come? 
 

[Harley]

2 hours ago, Jay said:

Interesting..it does look like something is up…gold rising on a stronger dollar..higher gold represents diversification away from dollar and treasuries..Chinese buying gold but still in deflation territory..it maybe political..

higher gold prices means higher inflation expectations according to gromen..treasury yields continue to rise..yen depreciating rapidly into multi decade lows..metal sanctions on Russia..Israel beating its chest..oil at 90…not exactly an environment for equity returns..

us economy is resilient so maybe continuation of dollar strength…am still waiting or rather hoping for more liquidity but still no signs of it arriving..interesting times..if the us don’t cut soon then there will be pain..

Fyi, We didn't sell it all.  And then, only some trades.  IOO, some are still in an uptrend.