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Credit deflation and the reflation cycle to come.


DurhamBorn

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leonardratso

quick look how you would have done since august 2017, not so good im afraid, waiting would have been a boon, some are outstanding, the bulk a bit pap, having said that fundsmith T acc, evestor portforlio 2 and various vanguard lifestyle us equities have done ok really, Thing is all these could turn on a dime i suppose, i await that event.

Shares (watching) 2017-08-04 Latest NAV P/L P/L(%) Denom Notes
PRSR(Reit) 104.68 104.51 (0.17) (0.16) p LON:PRSR
Centrica(CNA) 200.09 153.80 (46.29) (23.13) p LON:CNA
SSE 1404.51 1384.50 (20.01) (1.42) p LON:SSE
Royal Mail 401.63 467.50 65.87 16.40 p LON:RMG
BAE 585.77 674.40 88.63 15.13 p LON:BA
Rangold 7111.38 5554.00 (1,557.38) (21.90) p LON:RRS
Anglo American 1269.95 1691.00 421.05 33.15 p LON:AAL
BHP billiton 1380.87 1668.60 287.73 20.84 p LON:BLT
Stagecoach 181.13 164.20 (16.93) (9.35) p LON:SGC
sirius minerals 24.2 33.5800 9.38 38.76 p LON:SXX pure punt potash
             
SSLV(silver) 15.88 15.18 (0.70) (4.41) $ LON:SSLV
SGLD(gold) 122.72 119.44 (3.28) (2.67) $ LON:SGLD
TLT(treasury) 124.92 121.49 (3.43) (2.75) $ NASDAQ:TLT (TGT:$150)
SIL (silver miners) 32.80 28.29 (4.51) (13.75) $ NYSEARCA:SIL
GDX(gold miners) 22.57 21.86 (0.71) (3.15) $ NYSEARCA:GDX
COPX(cop miners) 24.57 23.60 (0.97) (3.95) $ NYSEARCA:COPX
URAX(ura miners) 14.31 12.77 (1.54) (10.76) $ NYSEARCA:URA
FCG(Gas ETF) 19.88 23.33 3.45 17.35 $ NYSEARCA:FCG
Sibanye Gold 5.49 2.24 (3.25) (59.20) $ NYSE:SBGL
Yamaha Gold 2.46 2.84 0.38 15.45 $ NYSE:AUY
Harmony Gold 1.75 1.62 (0.13) (7.43) $ NYSE:HMY
Eldorado Gold 1.84 1.08 (0.76) (41.30) $ NYSE:EGO
Saskat potash-->nutrien 55 52.3000 (2.70) (4.91) $ NYSE:NTR
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sancho panza

Wolf argues for a pick up in the ten year yield.

https://wolfstreet.com/2018/07/17/yield-curve-inversion-consensus-rouses-contrarian-in-me/

'Markets have a way of blowing this type of consensus out of the water.

The phrase “yield curve inversion” may not be up there with “Taylor Swift” or “Kim Kardashian,” but it has by now cropped up in the media so often that people are Googling it all of a sudden:

US-Google-searches-yield-curve-inversion

Markets are by now taking this “yield curve inversion” for granted. It’s going to happen, it’s just a matter of time, they say, and whether it’ll be next week or at the next rate hike is not crucial.

This idea that the yield curve must invert is based on the principle that the Fed is raising its target range for the federal funds rate, an overnight rate, and that these higher rates are filtering into short-term Treasury yields, such as the one-month yield, the three-month yield, or the two-year yield. Meanwhile, the 10-year and 30-year yields are doomed to be stuck. And when the two-year yield gets pushed above the 10-year yield, that’s the moment of “inversion.”

An inversion of the yield curve, which happens rarely, has become a popular and accurate recession indicator over the past decades. The last time it inverted was followed by the Financial Crisis.

Today, the two-year yield closed at 2.62%, the highest since July 2008. The 10-year yield closed at 2.86%. The difference of 24 basis points is the narrowest spread since before the Financial Crisis.

The chart below shows the yield curves on December 14, 2016, when the Fed got serious about raising rates (black line); and today (red line). Note how the red line has “flattened” compared to the black line. The spread between the two-year and the 10-year markers, at just 24 basis points today, is minuscule compared to the 127-basis point spread on December 14, 2016:

US-Treasury-yield-curve-2018-07-17.png

If the 10-year yield remains at 2.86%, and if the two-year yield rises 25 basis points to 2.87% (likely by the next rate hike), the two-year yield would be higher than the 10-year yield, and the curve would be inverted.

The chart below shows how the spread between the two-year yield and the 10-year yield appears to be headed to zero – a flat yield curve – or below zero, which would be the inversion moment:

us-treasury-yields-spread-2_10-2018-07-1

There seems to be an air of inevitability to the coming inverted yield curve. “The Treasury curve is on a one-way trip to inversion,” Bloomberg called it, citing Bank of America Merrill Lynch’s fund manager survey.

According to this survey, only 33% of the fund managers believe that the yield curve will steepen over the next 12 months, the lowest since 2011. Conversely, 67% of the fund managers would expect the yield curve to either stay the same, flatten further, or invert.

The possibility of a snap-back of the 10-year yield, which is infamous for violent snap-backs, is practically removed from this scenario. These fund managers are starting to line up on the same side of the boat.

This is the same crowd whose sentiment peaked at the end of 2016 that the yield curve would further steepen, after it had already steepened sharply for months. But instead, the yield curve changed course at the beginning of 2017 and started flattening—and hasn’t stopped since.

There is no doubt that there will be a recession. There are always recessions. The only question is when. There is a good chance that this might happen starting in 2019 or 2020, whether or not it is preceded by a yield-curve inversion.

By means of QE and ZIRP, or NIRP, central banks have explicitly manipulated bond markets – and other markets – to absurd levels. And in that manipulated scenario, a yield curve has lost its meaning as an indicator of economic realities.

Heck, the Bank of Japan started in September 2016 to explicitly target the yield curve, trying to keep the 10-year yield above but near 0% and shorter-term yields in the negative. “Yield Curve Control,” it called this. And it worked. The yield curve in Japan is precisely where the Bank of Japan wants it to be and is no indication of anything in the economy.

The degree of bond market manipulation is not as pronounced in the US. The Fed is stepping away from its easy-money policies and is turning increasingly hawkish. For many on Wall Street, raising rates and allowing markets to fend for themselves is always a “policy error.” Wall Street lives on cheap money and manipulated markets. And these folks are using the bruhaha about the flattening yield curve as a pressure point to get the Fed to back off its rate hikes.

But with so many people lined up on the same side of the boat betting on an inverted yield curve, the contrarian in me thinks that markets have a way of blowing this type of consensus out of the water, and that we’ll see another sharp snap-back of the 10-year yield – of the type we saw:

  • Between September 2017 and May 2018, when the 10-year yield jumped by more than a full percentage point, from 2.0% to 3.11%;
  • And between July 2016 and March 2017, when the 10-year yield jumped by more than a full percentage point from 1.37% to 2.62%.

The next 10-year yield snap-back would be the third since 2016:

US-treasury-yields-10-year-2018-07-17.pn

This would steepen the yield curve for a while and get the Fed through several more rate hikes, before the process of flattening would start all over again. Markets, if they’re allowed to do their own thing, just don’t like to follow consensus.

This Fed is getting seriously hawkish: It revealed that instead of thinking about backing off rate hikes because the yield curve is flattening, it’s replacing the yield curve.'

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54 minutes ago, leonardratso said:

quick look how you would have done since august 2017, not so good im afraid, waiting would have been a boon, some are outstanding, the bulk a bit pap, having said that fundsmith T acc, evestor portforlio 2 and various vanguard lifestyle us equities have done ok really, Thing is all these could turn on a dime i suppose, i await that event.

 

Shares (watching) 2017-08-04 Latest NAV P/L P/L(%) Denom Notes
PRSR(Reit) 104.68 104.51 (0.17) (0.16) p LON:PRSR
Centrica(CNA) 200.09 153.80 (46.29) (23.13) p LON:CNA
SSE 1404.51 1384.50 (20.01) (1.42) p LON:SSE
Royal Mail 401.63 467.50 65.87 16.40 p LON:RMG
BAE 585.77 674.40 88.63 15.13 p LON:BA
Rangold 7111.38 5554.00 (1,557.38) (21.90) p LON:RRS
Anglo American 1269.95 1691.00 421.05 33.15 p LON:AAL
BHP billiton 1380.87 1668.60 287.73 20.84 p LON:BLT
Stagecoach 181.13 164.20 (16.93) (9.35) p LON:SGC
sirius minerals 24.2 33.5800 9.38 38.76 p LON:SXX pure punt potash
             
SSLV(silver) 15.88 15.18 (0.70) (4.41) $ LON:SSLV
SGLD(gold) 122.72 119.44 (3.28) (2.67) $ LON:SGLD
TLT(treasury) 124.92 121.49 (3.43) (2.75) $ NASDAQ:TLT (TGT:$150)
SIL (silver miners) 32.80 28.29 (4.51) (13.75) $ NYSEARCA:SIL
GDX(gold miners) 22.57 21.86 (0.71) (3.15) $ NYSEARCA:GDX
COPX(cop miners) 24.57 23.60 (0.97) (3.95) $ NYSEARCA:COPX
URAX(ura miners) 14.31 12.77 (1.54) (10.76) $ NYSEARCA:URA
FCG(Gas ETF) 19.88 23.33 3.45 17.35 $ NYSEARCA:FCG
Sibanye Gold 5.49 2.24 (3.25) (59.20) $ NYSE:SBGL
Yamaha Gold 2.46 2.84 0.38 15.45 $ NYSE:AUY
Harmony Gold 1.75 1.62 (0.13) (7.43) $ NYSE:HMY
Eldorado Gold 1.84 1.08 (0.76) (41.30) $ NYSE:EGO
Saskat potash-->nutrien 55 52.3000 (2.70) (4.91) $ NYSE:NTR

Many of those iv never owned of course,and a good chunk of the others were sold at good profits..Iv never owned Rangold for instance and iv never owned Sirius and both times iv owned Sibanye iv sold for very good profits,i actually sold it last time at about the price in that list (i own it again now having bought a couple of weeks ago,but my smallest PM holding).The only real dog i have in my portfolio at the moment is Eldorado Gold,thats down 24% on my average price,though i fully expect profits from it.FCG,URA,COPX were all sold for between 17% and 80% profits (URA twice for a combined 80%) and will never be able to buy them again.Il miss URA.I own all of those PM miners though,Yamana and Harmony being my biggest PM holdings out of a portfolio of 9 PM miners.Yamana is up 11%,Harmony is down 8%.I have sold some Yamana when they were up 24%,but will buy back if they fall another 5%.I also own Stagecoach from the list (average price £1.44) and Centrica (average price £1.57).GDX and GDXJ are both down less than 8% and SIL is down 11%.I would probably add a few more now,but as we cant i increased my direct holdings slightly.I still own Royal Mail,but sold 1/3 holding at £5.50 for a 35% profit  and bought back some Imperial Brands with the money as my holding was far too big (6% of portfolio now down to 4%).I am hopeful my PM portfolio will deliver a 100%+ profit,but time will tell on that.The PM miners i put on the thread earlier are the exact holdings in my portfolio.As ever people should only buy and construct a portfolio that is balanced to their risk profile and experience etc and take financial advice DYOR etc.

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leonardratso
3 minutes ago, DurhamBorn said:

Many of those iv never owned of course,and a good chunk of the others were sold at good profits..Iv never owned Rangold for instance and iv never owned Sirius and both times iv owned Sibanye iv sold for very good profits,i actually sold it last time at about the price in that list (i own it again now having bought a couple of weeks ago,but my smallest PM holding).The only real dog i have in my portfolio at the moment is Eldorado Gold,thats down 24% on my average price,though i fully expect profits from it.FCG,URA,COPX were all sold for between 17% and 80% profits (URA twice for a combined 80%) and will never be able to buy them again.Il miss URA.I own all of those PM miners though,Yamana and Harmony being my biggest PM holdings out of a portfolio of 9 PM miners.Yamana is up 11%,Harmony is down 8%.I have sold some Yamana when they were up 24%,but will buy back if they fall another 5%.I also own Stagecoach from the list (average price £1.44) and Centrica (average price £1.57).GDX and GDXJ are both down less than 8% and SIL is down 11%.I would probably add a few more now,but as we cant i increased my direct holdings slightly.I still own Royal Mail,but sold 1/3 holding at £5.50 for a 35% profit  and bought back some Imperial Brands with the money as my holding was far too big (6% of portfolio now down to 4%).I am hopeful my PM portfolio will deliver a 100%+ profit,but time will tell on that.The PM miners i put on the thread earlier are the exact holdings in my portfolio.As ever people should only buy and construct a portfolio that is balanced to their risk profile and experience etc and take financial advice DYOR etc.

yay, its an old sample portfolio, i own a few of them, mainly red on the PMMs but bought well below those heady 2017 prices, ill get shot of the US etfs that we cant get hold of anymore and start a new tracker spreadsheet. My only regret is that i didnt take a small punt on sirrius when i umm'd and arr'd over 24 pence, but hey you cant win em all, mind you i umm's and arr'd over fundsmith T class acc @ £2 a few years back, i did buy those topping up every month and they are currently £4.08 so cant complain really.

It does look like google finance has dropped any price pull for GB mutual funds, so im scraping prices off morning star now, so if anyones interested in the how to scrap former google finance GB_MUTF stuff let me know and ill publish the XMLEXTRACT formatting for morning star.

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1 hour ago, DurhamBorn said:

Many of those iv never owned of course,and a good chunk of the others were sold at good profits..Iv never owned Rangold for instance and iv never owned Sirius and both times iv owned Sibanye iv sold for very good profits,i actually sold it last time at about the price in that list (i own it again now having bought a couple of weeks ago,but my smallest PM holding).The only real dog i have in my portfolio at the moment is Eldorado Gold,thats down 24% on my average price,though i fully expect profits from it.FCG,URA,COPX were all sold for between 17% and 80% profits (URA twice for a combined 80%) and will never be able to buy them again.Il miss URA.I own all of those PM miners though,Yamana and Harmony being my biggest PM holdings out of a portfolio of 9 PM miners.Yamana is up 11%,Harmony is down 8%.I have sold some Yamana when they were up 24%,but will buy back if they fall another 5%.I also own Stagecoach from the list (average price £1.44) and Centrica (average price £1.57).GDX and GDXJ are both down less than 8% and SIL is down 11%.I would probably add a few more now,but as we cant i increased my direct holdings slightly.I still own Royal Mail,but sold 1/3 holding at £5.50 for a 35% profit  and bought back some Imperial Brands with the money as my holding was far too big (6% of portfolio now down to 4%).I am hopeful my PM portfolio will deliver a 100%+ profit,but time will tell on that.The PM miners i put on the thread earlier are the exact holdings in my portfolio.As ever people should only buy and construct a portfolio that is balanced to their risk profile and experience etc and take financial advice DYOR etc.

Well before this thread I knew very little except for passive funds.

Tonight I’ve been reading on Morningstar about some directors of pm miner Centamin and they all seem to be buying shares for themselves. In Centamin.

DYOR everybody etc, but once again, for the analysis, skills and the tools, best thread ever. 

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leonardratso
6 hours ago, Thorn said:

Well before this thread I knew very little except for passive funds.

Tonight I’ve been reading on Morningstar about some directors of pm miner Centamin and they all seem to be buying shares for themselves. In Centamin.

DYOR everybody etc, but once again, for the analysis, skills and the tools, best thread ever. 

this was happening at AUY (yamana) last year before the price hiked, i managed to catch that wave and made a good score, but dumped it when it looked toppy.

It does seem to have mainly held its gains to be honest, so it might be worth another punt.

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Another excellent article by Wolf, downsides to printing QE have been suppressed by the continual easy money, when no-one in the world is funnelling cheap money to zombie companies to keep them afloat its economic apocalypse time. 

https://wolfstreet.com/2018/07/18/risk-pricing-central-bank-bond-buying/

https://www.bloomberg.com/news/articles/2018-07-18/jpmorgan-s-erdoes-says-ecb-bond-buying-creates-zombie-companies

Quote

In the broader context, she was talking about investor complacency – the idea that risks no longer exist because they’re not being priced in anymore, and that there is nothing to worry about. And this has left investors unprepared for a downturn. This condition has its origins in the Financial Crisis – and what the Fed and other central banks tried to accomplish since then, and how the financial advisory industry has followed the instructions.

And this idea that risks aren’t there, or if they’re there, that they don’t matter because central banks will always bail out the markets at the smallest squiggle, and that therefore risks no longer need to be priced in – that’s a pandemic attitude today.

 

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sancho panza
4 hours ago, Majorpain said:

Another excellent article by Wolf, downsides to printing QE have been suppressed by the continual easy money, when no-one in the world is funnelling cheap money to zombie companies to keep them afloat its economic apocalypse time. 

https://wolfstreet.com/2018/07/18/risk-pricing-central-bank-bond-buying/

https://www.bloomberg.com/news/articles/2018-07-18/jpmorgan-s-erdoes-says-ecb-bond-buying-creates-zombie-companies

 

Wolf really has become a 'must read'.Covers so many subjects,so well and in a manner the layman like me can understand.

As I've said previously,I think Jerome Powell may well be seeing the distortion of risk pricing as one of the benefits of raising IR's aside from preserving dollar hegemony as prev discussed.

I genuinely think his lack of a neo classical education is a game changer as he'l see the asset bubbles for what they are.

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sancho panza
7 hours ago, leonardratso said:

this was happening at AUY (yamana) last year before the price hiked, i managed to catch that wave and made a good score, but dumped it when it looked toppy.

It does seem to have mainly held its gains to be honest, so it might be worth another punt.

Must say looking at a number of the charts across the PMM's and there are a lot ith little price action either way over the last few months.

I'm still averaging into the sector won't be selling for a long time I suspect.

Need to add a mix of some Harmony,Kinross,Sibanaye,Hecla,Couer,Tahoe,McEwen,SSR,First Maj,Pan American.

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NogintheNog
19 minutes ago, sancho panza said:

Wolf really has become a 'must read'.Covers so many subjects,so well and in a manner the layman like me can understand.

As I've said previously,I think Jerome Powell may well be seeing the distortion of risk pricing as one of the benefits of raising IR's aside from preserving dollar hegemony as prev discussed.

I genuinely think his lack of a neo classical education is a game changer as he'l see the asset bubbles for what they are.

Nah.... I don't think he will.

In other words his Boss won't.

https://www.bloomberg.com/news/articles/2017-11-02/trump-hated-low-interest-rates-then-he-became-president

The US$ will be sacrificed:Passusabeer:

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3 hours ago, sancho panza said:

Wolf really has become a 'must read'.Covers so many subjects,so well and in a manner the layman like me can understand.

As I've said previously,I think Jerome Powell may well be seeing the distortion of risk pricing as one of the benefits of raising IR's aside from preserving dollar hegemony as prev discussed.

I genuinely think his lack of a neo classical education is a game changer as he'l see the asset bubbles for what they are.

Yes, hes definately taken the view that not doing anything is worse in the long run than potentially lighting the time bomb a la 2008 now.  Fed is sailing in uncharted waters.

2 hours ago, NogintheNog said:

The US$ will be sacrificed:Passusabeer:

Central banks got away with QE because they all did it at once so they only escape was physical assets.  Now the Fed is both raising rates and issuing more treasuries sucking $'s out of the world market to earn the higher rate of return in the US, thats not a dollar negative situation IMO.  It would be a strange world where the Fed is raising rates and the $ is falling.

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5 hours ago, NogintheNog said:

Nah.... I don't think he will.

In other words his Boss won't.

https://www.bloomberg.com/news/articles/2017-11-02/trump-hated-low-interest-rates-then-he-became-president

The US$ will be sacrificed:Passusabeer:

Dont apply the same thinking to the US as youd do other countries.

US does not trade much. Weak dollar is not much good.

However getting cheap petrol and having cheap holidays imported goods does boost us punter. Remember, big snap back from whats goot for wall street to whats good for main street.

US labour market is red hot.

All those QE enhanced house price increases are coming back as wage inflation. Trust me on that.

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I don't think Powell gives much of a fudge about Trump, I'm with Sancho and spygirl on this one, he's going to stay the course, until he's sacked of course. I have no doubt they'll unwind QT and go QE mad when shit hits the fan, but until then Powell very much seems to be staying impartial, focusing on the reasons to hike much more than the crybabies demanding he take a break, like Trump today, how his stance has changed since he got in power, incredible. The continuing strength of the DXY is causing prolonged suffering in EM's, contagion to spread to the West soon enough.

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sancho panza
2 hours ago, spygirl said:

Dont apply the same thinking to the US as youd do other countries.

US does not trade much. Weak dollar is not much good.

However getting cheap petrol and having cheap holidays imported goods does boost us punter. Remember, big snap back from whats goot for wall street to whats good for main street.

US labour market is red hot.

All those QE enhanced house price increases are coming back as wage inflation. Trust me on that.

https://wolfstreet.com/2018/07/19/how-long-can-this-euphoria-in-trucking-and-rail-last/

'“Many modes are reporting limited capacity or no capacity at any price shippers are willing to pay.”

Everyone in the industry is loving it.

“The environment for us right now compared to where we were at the end of last year is dramatically different,” CSX CEO Jim Foote said Tuesday evening, when the railroad reported that earnings had jumped 72% from a year ago on a 6% revenue increase. “In terms of the pricing environment and the capacity environment, it’s a good time to be in the railroad business,” he said.

The day before, trucking company J.B. Hunt reported that revenues rose 24% year-over-year and net income 7%. It attributed the surge in revenues to higher shipping volumes, the prices it has been jacking up in response to the demand, and an improved freight mix.

Container imports at the ports of Los Angeles and Long Beach, the largest ports in the US, rose 8.4% year-over-year in June. Typically, about 70% of their container imports are from China. Container imports at the Port of Oakland, which also gets a large portion of its imports from China, jumped 8.7% in June.

In the US, demand has been very strong across all modes of transportation. Freight shipment volume (not pricing) by truck, rail, air, and barge, according to the Cass Freight Index, jumped 7.2% in June compared to a year ago. This pushed the index, which is not seasonally adjusted, to its highest level for June since 2007. The index does not include shipments of bulk commodities. Note the strong seasonality in the chart below with volume in June typically declining from May:

US-Cass-freight-index-shipments-2018-06.

But the year-over-year increase in June of 7.2% pales against the 11.9% year-over-year increase in May. While still hot, June was the first single-digit increase this year, with the prior five months popping at year-over-year growth rates between 10.2% to 12.5%:'

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sancho panza
1 hour ago, Barnsey said:

I don't think Powell gives much of a fudge about Trump, I'm with Sancho and spygirl on this one, he's going to stay the course, until he's sacked of course. I have no doubt they'll unwind QT and go QE mad when shit hits the fan, but until then Powell very much seems to be staying impartial, focusing on the reasons to hike much more than the crybabies demanding he take a break, like Trump today, how his stance has changed since he got in power, incredible. The continuing strength of the DXY is causing prolonged suffering in EM's, contagion to spread to the West soon enough.

https://www.themaven.net/mishtalk/economics/trump-criticizes-fed-rate-hikes-and-blasts-the-strong-dollar-yxfhuiiPGUCCbDM9C01Jmg/

'Trump is speaking his mind on interest rate policy, a subject that is normally taboo for presidents.

 

President Donald Trump said Thursday he hoped the Federal Reserve would stop raising interest rates, delivering an unusual censure of the central bank.

“I am not happy about it,” Mr. Trump said about interest-rate increases during an interview conducted Thursday by CNBC.

Mr. Trump said he was “not thrilled” because every time the economy strengthens “they want to raise rates again.”

But he also said he wouldn’t interfere with the Fed. “I’m letting them do what they feel is best,” he said.

Easy Money

Europe’s “making money easy, and their currency is falling,” Mr. Trump told CNBC. “China, their currency is dropping like a rock. Our currency is going up. I have to tell you, it puts us at a disadvantage.” A stronger greenback makes U.S. exports relatively more expensive on world markets.

A Federal Reserve spokeswoman declined to comment Thursday.

Mr. Trump said he knew some people didn’t think it was appropriate for the president to comment on interest rates or the dollar, but he said of those concerns, “I couldn’t care less what they say.”

During his presidential campaign, Trump was highly critical of Fed Chair Janet Yellen. He accused her of keeping interest rates low to help Democrats. Ms. Yellen denied the accusation and said politics didn’t factor into the Fed’s decisions.

In addition to not understanding trade, Trump just proved he does not know anything about currencies either.

"Easy money"? Sheeesh! And what about that selective memory?

Mike "Mish" Shedlock'

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26 minutes ago, sancho panza said:

https://www.themaven.net/mishtalk/economics/trump-criticizes-fed-rate-hikes-and-blasts-the-strong-dollar-yxfhuiiPGUCCbDM9C01Jmg/

'Trump is speaking his mind on interest rate policy, a subject that is normally taboo for presidents.

 

President Donald Trump said Thursday he hoped the Federal Reserve would stop raising interest rates, delivering an unusual censure of the central bank.

“I am not happy about it,” Mr. Trump said about interest-rate increases during an interview conducted Thursday by CNBC.

Mr. Trump said he was “not thrilled” because every time the economy strengthens “they want to raise rates again.”

But he also said he wouldn’t interfere with the Fed. “I’m letting them do what they feel is best,” he said.

Easy Money

Europe’s “making money easy, and their currency is falling,” Mr. Trump told CNBC. “China, their currency is dropping like a rock. Our currency is going up. I have to tell you, it puts us at a disadvantage.” A stronger greenback makes U.S. exports relatively more expensive on world markets.

A Federal Reserve spokeswoman declined to comment Thursday.

Mr. Trump said he knew some people didn’t think it was appropriate for the president to comment on interest rates or the dollar, but he said of those concerns, “I couldn’t care less what they say.”

During his presidential campaign, Trump was highly critical of Fed Chair Janet Yellen. He accused her of keeping interest rates low to help Democrats. Ms. Yellen denied the accusation and said politics didn’t factor into the Fed’s decisions.

In addition to not understanding trade, Trump just proved he does not know anything about currencies either.

"Easy money"? Sheeesh! And what about that selective memory?

Mike "Mish" Shedlock'

The irony of all this (of course) is that Trump's tax cuts have played a big part in stoking inflation along with his trade war.

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On 19/07/2018 at 00:37, Thorn said:

Well before this thread I knew very little except for passive funds.

Tonight I’ve been reading on Morningstar about some directors of pm miner Centamin and they all seem to be buying shares for themselves. In Centamin.

DYOR everybody etc, but once again, for the analysis, skills and the tools, best thread ever. 

Its right across the sector.Yamana directors have all been buying,the Chief exec at Eldorado bought a big chunk,and the sector has seen the most insider buying the last 6 months of any.Sentiment is at 8% retail bulls on the PM sector,and although nothing is ever certain that points to all the weak hands having sold.When gold turned up a few bucks last night over half the mining complex shot up.That indicated they are a coiled spring.Im happy to wait.

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Gordie Lastchance

As I've been taught on here, you can't time the market, but perhaps there's a way of using timing to your advantage when it come to gold, according to this link. 

https://seekingalpha.com/article/4187240-gold-stock-summer-lows?page=1

I've pasted a trio of paragraphs of the article that might give a little flavour:

"While investors and speculators alike can certainly play gold stocks’ coming powerful uplegs with the major ETFs like GDX and GDXJ, the best gains by far will be won in individual gold stocks with superior fundamentals. Their upside will far exceed the ETFs, which are over-diversified with underperforming stocks. A carefully-handpicked portfolio of elite gold and silver miners will generate much-greater wealth creation.

The bottom line is gold stocks bottom around the middles of market summers. These major lows offer the best seasonal buying opportunities of the entire year. Gold stocks start powering higher again in mid-summers mainly because gold’s own strong autumn rallies start getting underway. But the psychology surrounding gold stocks also gets a major boost from their big quarter-on-quarter production surges in Q2s.

As investors and speculators see Q2 results arrive between early Julies and mid-Augusts, they love the sharply-higher QoQ gold mined. That leaves the gold miners’ fundamentals looking much stronger, also lowering costs and increasing profitability. Traders who want to ride these big autumn rallies need to be largely deployed before most of this parade of good Q2 results arrives. Get buying before summer lows pass!"

To DB: As our resident expert who has previously listed miners you've bought for your portfolio, what would you regard as the, say, top three (to quote the linked article) "elite gold and silver miners... with superior fundamentals"?

Also, SP, you've posted extensively about the miners - any thoughts about this?

And to everyone else who has bought miners recently and has seen their price drop - it's not fate, it's cos it's summer! :)

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sancho panza
2 hours ago, Gordie Lastchance said:

As I've been taught on here, you can't time the market, but perhaps there's a way of using timing to your advantage when it come to gold, according to this link. 

https://seekingalpha.com/article/4187240-gold-stock-summer-lows?page=1

I've pasted a trio of paragraphs of the article that might give a little flavour:

"While investors and speculators alike can certainly play gold stocks’ coming powerful uplegs with the major ETFs like GDX and GDXJ, the best gains by far will be won in individual gold stocks with superior fundamentals. Their upside will far exceed the ETFs, which are over-diversified with underperforming stocks. A carefully-handpicked portfolio of elite gold and silver miners will generate much-greater wealth creation.

The bottom line is gold stocks bottom around the middles of market summers. These major lows offer the best seasonal buying opportunities of the entire year. Gold stocks start powering higher again in mid-summers mainly because gold’s own strong autumn rallies start getting underway. But the psychology surrounding gold stocks also gets a major boost from their big quarter-on-quarter production surges in Q2s.

As investors and speculators see Q2 results arrive between early Julies and mid-Augusts, they love the sharply-higher QoQ gold mined. That leaves the gold miners’ fundamentals looking much stronger, also lowering costs and increasing profitability. Traders who want to ride these big autumn rallies need to be largely deployed before most of this parade of good Q2 results arrives. Get buying before summer lows pass!"

To DB: As our resident expert who has previously listed miners you've bought for your portfolio, what would you regard as the, say, top three (to quote the linked article) "elite gold and silver miners... with superior fundamentals"?

Also, SP, you've posted extensively about the miners - any thoughts about this?

And to everyone else who has bought miners recently and has seen their price drop - it's not fate, it's cos it's summer! :)

I'd never limit myself to three.Experience has taught me to spray n pray widely.Hence,I'd rather spread myself thinly across ten to twenty stocks(I tend to avoid the ones that have had big run ups or be overleveraged) than be focused on 3.So much can go wrong eg floods/collapses.Gold mining is a risky business both physically and financially.

We're currently spread across 8(off the top of my head).If purchase costs are consitituting 3/4% of purchase price,then in the case of he PM miners,I'd opt for an ETF.Just my view,DYOR etc

Off the top of my head(I'm sat in a car park)-Barrick,Kinross,Sibanye,Goldcorp,New Gold,Novagold,Yamana,Gold Fields,Anglogold,Harmony,El Dorado,Tahoe,McEwen,First Majestic,Pan American.

I'd like to but NewCrest and Newmont but they're too high for me.

I'd welcome any opinions on which have best fundamentals..

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Castlevania

I’d agree with diversifying. A lot of the mines are in developing countries, with huge political risk. All you need is for a populist government to wack up taxes, accuse you of tax evasion etc and the share price will collapse. See the issues by miners in Tanzania and the Democratic Republic of the Congo over the past year.

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1 hour ago, sancho panza said:

I'd never limit myself to three.Experience has taught me to spray n pray widely.Hence,I'd rather spread myself thinly across ten to twenty stocks(I tend to avoid the ones that have had big run ups or be overleveraged) than be focused on 3.So much can go wrong eg floods/collapses.Gold mining is a risky business both physically and financially.

We're currently spread across 8(off the top of my head).If purchase costs are consitituting 3/4% of purchase price,then in the case of he PM miners,I'd opt for an ETF.Just my view,DYOR etc

Off the top of my head(I'm sat in a car park)-Barrick,Kinross,Sibanye,Goldcorp,New Gold,Novagold,Yamana,Gold Fields,Anglogold,Harmony,El Dorado,Tahoe,McEwen,First Majestic,Pan American.

I'd like to but NewCrest and Newmont but they're too high for me.

I'd welcome any opinions on which have best fundamentals..

I hold 9 and agree a good spread is needed.I also dont want elite miners,i want ones with big reserves.I buy half from one list i call my rubber band stocks,these are ones that have been hit very hard from recent highs,Harmony and Eldorado and Sibanye fit that side and i bought them all.The other half i buy are stocks that look good from a technical point.They have kept up or only gone down slightly as gold fell.Yamana fits that side.

I still think we might see $1450 to $1560 gold in the not far off future and im happy to wait.

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NogintheNog
22 hours ago, Majorpain said:

It would be a strange world where the Fed is raising rates and the $ is falling.

I agree totally. If Powell keeps tightening then I'm sure the US$ will soar. However I think that this is all very reminiscent of 2007/8, and if it is then it won't be long before rates are on their way back south again. O.o

1 hour ago, DurhamBorn said:

I still think we might see $1450 to $1560 gold in the not far off future and im happy to wait.

I assume with US interest rates going down at the same time?

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On the subject of PMs, stock picking and insider buying - here's a link to a good interview with @economicalpha on his strategy. I've posted a link to this guys Twitter in the past. He's great for info and insights into the industry. I wasn't following him for the Kirkland Lake stuff in the interview but he put me onto Wesdome.

https://ceo.ca/@goldfinger/conversations-with-goldfinger-2-first-ever-interview-with-economic-alpha

Some quotes (but the whole thing is well worth a read)...

Quote

It’s a stock pickers market right now in mining and junior mining. You can pull up a five year chart of GDXJ or GDX and see if you just held them you haven’t really made any money. However, if you traded it well there has been enough volatility to do pretty well if you had good timing. But my point is that there hasn’t been a reliable trend that investors could ride over a longer time frame (years).

If we were in a bull market that was well understood and clear then retail investors could do very well, just like the FANG stocks have been performing well recently. When the precious metals mining sector is doing well it usually results in the majority of stocks doing well, sometimes even regardless of their individual stories and how they’re doing operationally. A rising tide generally lifts all boats in the mining sector.

Quote

I would attribute some of that (KL investment) to a bit of luck - a good process and some luck along the way. What drew me into Kirkland Lake was the high grade nature of the Macassa Mine, I liked the fact that it was a high grade gold mine that had been in production for years and they had about 8-10 years worth of reserves remaining at the time. I also liked the fact that Macassa was a free cash flow producing gold mine, for me cash is king. For me it’s not just cash flow, it’s free cash flow that is important. Free cash flow is a huge driver of a stock and when you can create cash flow outside of your capex expenditure you now have internally generated financial resources to apply to generate excess returns above your cost of capital. You can take those excess cash flows and use it to conduct exploration programs on your properties (assuming they are prospective), you can buyback stock, you can pay a dividend, you basically have more flexibility and the threat of stock dilution is mitigated. Miners can be serial stock diluters, and that’s part of the business. Kirkland Lake had that financial flexibility so they started exploring Macassa beyond what they had done historically in the past.

Quote

I prefer to invest in junior/intermediate/mid-tier producers because they are still small enough for large gains but there are fewer variables and projects have been largely de-risked. Explorers are obviously much more cheaply valued but that is for a good reason due to the questions around whether they have an economic deposit as well as all the hurdles they need to jump over to bring a project forward to the production stage.

 

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Green Devil

Trying to trade some US ETFs today, i find today that my broker has now blocked all EU customers from trading US ETFS!

WTF?

Apparently the EU changed the rules for our own protection, off course there are EU based equivalents but the fees are far higher and the markets are illiquid.

https://www.elitetrader.com/et/threads/priips-kid-on-ib.322160/

What are you guys using to trade ETFs, obviosuly ETFs include spiders, diamonds, triple qs, gold miners, gold funds.. etc etc?

 

 

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1 hour ago, Green Devil said:

Trying to trade some US ETFs today, i find today that my broker has now blocked all EU customers from trading US ETFS!

WTF?

Apparently the EU changed the rules for our own protection, off course there are EU based equivalents but the fees are far higher and the markets are illiquid.

https://www.elitetrader.com/et/threads/priips-kid-on-ib.322160/

What are you guys using to trade ETFs, obviosuly ETFs include spiders, diamonds, triple qs, gold miners, gold funds.. etc etc?

 

 

Nothing,we are in the same boat.Myself iv bought individual stocks instead,lucky enough most are on the US and Canadian markets.Hopefully once we are out of the EU we will be ok.

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