The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Your cash is buying less. ..energy . water. food. rent.
Try buying gold from a knowing seller ... as opposed to a trader
I recommend ublock origin for you people annoyed by ads. Makes things considerably faster and less annoying for me.
Major European stock markets registered losses ahead of the last session of the week following major economic data on the state of the British and German economies.
The DAX lost 0.70%, while the FTSE 100 fell 0.85% and the CAC 40 declined 0.87% at 8:08 am CET.
The euro dropped 0.46% against the dollar to sell for 1.13782 a minute later, while the pound slipped 0.18% to $1.35288.
Baha Breaking the News (BBN) / ND
Have a good weekend y’al
The big "unpredicted event" is inflation is inflating at unpredicted levels, LOL. What exactly was the debt management program that the Central Bankers had in mind when they created so much debt, now $30 trillion in the US (and we have $1 trillion in sight in Oz) and they are talking about another "productive" war. There was the outlandish suggestion by some, that the only way to manage the debt was to deflate its impact through inflation, and if you could do this by keeping interest rates low, then away it goes.
So US inflation hits an "expected" new 40-year high of 7.3 per cent on Thursday. Consumer discretionary goods such as apparel and leisure products showed the largest year-over-year change in mentions of inflation, up 193 per cent and 182 per cent, respectively, to 75 per cent and 94 per cent of earning calls in the fourth quarter. Largish?
The central banks will find there are limitations (let alone reality) in their financial models but there are limitations on their capabilities.
There are essentially no limits on the creation of fiat, and debt, ... and the working of banks. Well thankgoodness it is not taught in high schools where it should be!? Worth a careful look and listen
https://www.youtube.com/watch?v=CXCMifLZsjs
Hang onto to real assets
bet
the gnome
No , scenario is totally different
Inflation is going beyond 10% maybe even 20%. Gold is still at the same price it was when inflation was sub 2%. Governments lack fiscal responsibility and basic logic and fiat currency is not sustainable. Its also really annoying posting on the share chats now with all these adverts stuck directly on top of the message box.
EU insurance laws should be changed, says Bank governor Bailey
Thu, 10th Feb 2022 18:38
Alliance News
(Alliance News) - Bank of England governor Andrew Bailey will say that EU laws which require insurance companies to hold enough cash to ensure they do not collapse are not well suited for the UK.
The governor is expected to tell listeners to a speech in the City that the so-called Solvency 2 regulations needed to be reformed.
"I do not for a moment consider that the Solvency 2 we transposed from EU law and regulation is best suited to the UK," he is expected to say at a dinner organised by industry group TheCityUK on Thursday.
"Why would it be, since it was designed to cover 27 countries? The case for reform is clear."
He added that in changing them the UK must first "ensure we define and set our expectations on safety and soundness and policyholder protection".
The Solvency 2 regulations were set to ensure the stability of insurance companies across the EU.
It has three pillars, the most important of which is ensuring that insurers hold enough cash so they can resist becoming insolvent if they get an unusual number of claims.
The regulations also include rules on transparency and on regulatory oversight. They came into effect in 2016 and were transferred to UK law when the country left the EU.
At the time the proposals were being debated, they were criticised by the boss of Prudential, who said they could drive companies out of the UK. Last year the business said it was committed to its UK headquarters.
The speech comes just days after the Governor sparked a backlash for saying that workers should help keep inflation down by not asking for big pay rises.
His comments came despite a huge increase in the cost of living, caused by rising energy prices among other things. The Bank predicts that inflation will reach more than 7% in April.
Both Downing Street and unions pushed back against the governor's words.
GMB general secretary Gary Smith said: "You do not appear to have called for restraint in price setting, or dividend payments."
By August Graham, PA City Reporter
Thank you Dasut,
Fair comments, especially about the management side of NHS trusts!
I only wish that Martin Horgan had taken over in 2018!
Tibbs You are preaching to the converted and I thoroughly agree that the old guard were way short in too many areas but there is nothing you or I can do about history. As I say we now need to have trust in the new team and keep asking pertinent questions when the opportunity arises such as the phone ins, and doesn't have to be a phone call as they take questions in writing during the presentations.
As a bogger flogger of mining equipment I would have loved for the customers to double up on equipment but it was never ever the case and as I say to predict everything by way of parts that are going to fail over the life of a machine is only possible to a certain extent. I do have first hand experience of a mining company that did over spend on parts and components so much so they had more parts in their stock by value than the local dealer who were supporting numerous mines. The mining company unfortunately actually went bankrupt and the new owners a major mining house chose to go the contract mining route and it is still operating 20 years on with good profits.
I don't have any specifics as to Barminco's short comings during their contract so can't comment on your criticism of them.
I am not sure what hands on experience Centamin on site team has in working the Sukari underground resource, why should they as they have had a contractor doing the mining?
I have seen contractors actually make more money through efficiencies for the mining company than the mining company was able to achieve when previously doing the mining themselves. It isn't just contractor mining being changed to owner mining it works the other way around.
I can't comment on Egyptian tax laws as it relates to depreciation.
The NHS heaven forbid Tibbs this can't be compared with a mine and I was once a member of a trust and goodness inefficiencies and down right incompetence was enough to tear your hair out. I only refer to management not the medical teams who I have the utmost respect.
Centamin being where it is to be expected, I liken the situation to the fable and
the Moral of “The Boy Who Cried, Wolf!
This short story teaches a moral lesson that people refuse to believe a liar even when he is telling the truth.
The boy who cried wolf story is a story that every child/company director should read and learn the underlying lesson from!
Pardey Josef and Youssef cried 560,000 -600,000 oz from Sukari far too many times knowing it was a lie!
It is painfully apparent now by the pile of uncleared waste in which Sukari is mired and the tears of clear up facing the new management that the claims that all was well at Sukari by Pardey on many occasions was just more lies!
Pardey promised those resource updates for the many millions of dollars spent drilling in West Africa and failed to deliver anything other than disappointment far too many times!
Agreed the those responsible for the years of deliberately distorting and misrepresenting the true state of things to share holders and the market have moved on, albeit with their saddle bags full of swag (Bonus shares).
Unfortunately the mess they have left behind for their successors is considerable and may be fraught with as yet unknown challenges to say the least , but that said the rewards for succeeding in their strategy may yet exceed all our best hopes and expectations!
Unfortunately though at this stage even if the Messiah were to descend with a heavenly choir of angels trumpeting that lessons have really been learned, that things have really changed for the better and that future production will be based on realistic and sustainable estimates, the market would most likely remain skeptical,suspicions or just unwilling to believe until there a year or so of proof, or possibly a miracle of some kind that could whisk away all that open pit crap and restore the flowing of high grade ore whilst reducing AISC at a stroke !
But as the market and we share holders all realise such miracles are unlikely in the real world, so the fate of Centamin, Sukari and our investment is dependent upon the professional ability determination and integrity of Martin Horgan and his new team to deliver on their promises over a period of time.
Imagine a company with a 7.6x debt-to-sales ratio, with negative net income, and where interest expenses are a quarter of revenue and climbing. That’s what the government would look like in that higher interest rate scenario.
Is this fixable? Well, not really.
once debt is beyond a certain event horizon where the math doesn’t work anymore, there is basically no amount of spending cuts or tax increases that can persistently reduce the debt-to-GDP ratio without inflating a big chunk of it away.
Either way, now that the math is where it is in terms of debt having reached unmanageable escape velocity, we’re probably stuck with the only option of the Federal Reserve holding interest rates below the prevailing inflation rate for a while.
Furthermore, the US partially de-industrialized itself over recent decades, and began running large trade deficits with other countries. A larger share of our GDP began to consist of consumer spending.
As previously described, consumer spending is now over two-thirds of GDP:
If asset prices fall (which they would almost certainly do if the government cuts spending and increases taxes), it would result in a reverse wealth effect, and probably weaken consumer spending, which would reduce GDP. It would also result in lower tax revenue, further contributing to the deficit
Rather than asset prices reflecting the state of the economy, asset prices are so inflated that they can hurt the economy if they fall.
The US fiscal deficit, as bad as it already is, actually has been lower than it would have otherwise been, thanks to the constantly-increasing asset valuations. Those increasing asset valuations fueled higher consumer spending and higher capital gains tax income. If those asset valuations stop going up structurally as they have been, it can quickly make the fiscal deficit a lot worse
When it comes to my analysis of monetary policy, fiscal policy, and inflation/disinflation in the United States from an investor point of view, I consider the US national debt as being beyond the point of recovery in any sort of real terms.
In other words, regardless of who is elected going forward, I view the range of policies that could potentially allow US government bondholders to be paid back with positive purchasing power to be vanishingly small. Neither Democrat nor Republican administrations will be able to solve the debt problem without holders of cash and bonds losing considerable purchasing power.
https://twitter.com/LynAldenContact/status/1490718965957632004
excerpts from a recent article by Lyn Alden
When a country starts getting to about 100% debt-to-GDP, the situation becomes nearly unrecoverable.
What I mean by “unrecoverable” is that there is a vanishingly small probability that the bonds will be able to avoid default
a study by Hirschman Capital noted that out of 51 cases of govt debt breaking above 130% of GDP since 1800, 50 governments have defaulted.
The only exception, so far, is Japan, which is the largest creditor nation in the world. By “defaulted”, Hirschman Capital included nominal default and major inflations where the bondholders failed to be paid back by a wide margin
There’s no example I can find of a large country with more than 100% government debt-to-GDP where the central bank doesn’t own a significant chunk of that debt. Central banks quickly increase their holdings of government debt when the debt gets that large relative to the size of the economy.
Even the US Congressional Budget Office shows that the current forecast is dire, despite the fact that for political reasons they never factor recessions into their forecasts, and recessions result in larger deficits when they occur:
Let’s say that annual GDP is $25 trillion as it will be soon, and that federal debt is 130% of GDP, which would equal $32.5 trillion. If we assume that federal tax revenue is 17% of GDP, that’s $4.25 trillion per year in tax revenue.
So right off the bat, we can calculate that the debt/revenue ratio of the federal government in this example is $32.5 trillion divided by $4.25 trillion, or about 7.6x. If this were a company, it would be junk bond status based on that.
Texas Instruments (TXN), for example, has $7.7 billion in debt and about $17.6 billion in annual revenue, or about a 0.45x ratio of debt to revenue. That’s investment grade, although of course it depends on the profit margins of the company. Texas Instruments currently brings in about $7.3 billion in net income per year, so it has a debt/income ratio of 1.05x. If they devoted most of their net income to paying down debt, they could do so in a little over a year. Any lender can see that they have a good chance of being able to service their debt for the foreseeable future.
The government has a high debt/revenue ratio, and then also has negative income. If it were a company, that would put it down near the bottom of junk bond status at imminent default risk, rather than just normal junk bond status. The financial situation, if analyzed like a company, is abysmal.
From 1942 to 1951, for example, the US Treasury effectively forced the Federal Reserve to monetize US Treasuries and hold interest rates at 2.5% despite running inflation at an average of 6% per year. This was the only prior time in US history where federal debt as a percentage of GDP went over 100%, and they resorted to repressing yields and inflating a large chunk of it away.
The rest here:
https://www.lynalden.com/does-the-national-debt-matt
It felt like the only sensible thing to do was buy a few more
Gold up, ftse up even Nasdaq and s and p have jumped back from big drop- even my crypto is up! And yet CEY is still down ~1.75% today
This share can be very frustrating. Gold up at 1840 and we're back down at 90p
What's the matter with CEY today- come on, get with the gold game...
Better returns on cash ?,, banks pay nothing ,, other investment ?bonds etc ?
Prince_3k and other readers who have the same question,
I am not sure which country you are based in. The price of gold in pounds was last under £1300 an ounce back in October. Since then it has varied between £1326- £1380 and last night was £1358 on the current price uplift. So it has gained 4% or so since November. In Turkish Lira gold has shot far higher. As for USD we have the FED trying to keep USD more valuable as a reserve currency. If it drops lower than the oil price for example would go a lot higher and that would have global implications and drive inflation higher still. The effect of keeping the dollar higher in value and so lower inflation in commodities priced in USD, may arise from selling paper gold which reduces the gold price. However if you want to buy physical gold in the UK it has a premium added to it and you would get no change at £1390 an ounce or so here in the UK. Equally buying physical in USA will have a high premium per ounce attached to it. Eventually everything around us with high inflation needs more gold ounces to acquire it. Eventually there is a big rerate and for no explained reason gold goes up 20% or so and global inflation may have a read of 3% that year and in essence gold catches up. Over a long time gold keeps its value against inflation, but its not the case on a weekly or monthly basis and you need to look at over several years. You may like to read articles in gold eagle that will give different views about gold and its value. Tony
Gold is a brilliant hedge against very high or hyper-inflation, is my understanding. But single digit inflation and the prospect of higher base rates means investors can get better returns on cash. As there is no yield on gold it can depress the gp.
Can someone please explain to me why Gold price drops on increased inflation. Surely it's supposed to be an inflation hedge. I can understand increased inflation meaning increased likelihood of the fed raising interest rates, hence a reduction in gold price. But surely if gold price doesn't increase with larger inflation, then how is it a hedge?
In the title
https://twitter.com/barrickgold/status/1491729143033126914?s=21
Sotolo--a question for you. IF (looking a fair way off yet) Centamin went up to £1.50 would you sell yours? If not , at what price would you sell?
Pre "Wall" episode you were saying they were going up to £3 when they were about £2.20?
Just curious.
Hi Dasut,
"But then, I suppose, when with the benefit of hindsight one begins to search one's past for such 'turning points', one is apt to start seeing them everywhere."Kazuo Ishiguro
Looking back now the concerns flagged up in 2015 & 2018 by Kees Dekker about the way that Pardey his team were running Sukari were opportunities for them to change their ways.
But instead they continued to compound bad mining practice onto the previous bad mining practice whist denying that anything was wrong and papering over the cracks until a crack appeared that no papering over could cover!
i accept that unexpected difficulties can present themselves in mining but when that happens they should be truthfully acknowledged , explained fully and dealt with professionally in the most appropriate manner, none of which happened!
To say Share holders and the market were misled is an understatement, Pardey, Josef and Youssef continued to trumpet unrealistic and certainly as now apparent unsustainable guidance predictions in the Egyptian media and in Centamins quarterly reports to share holders and the market.
The link that Cowichan provided to the 'Times" article raising questions about what or whom was responsible for happened to the LHDR, this has never been explained to this day,why not?
I agree that mining equipment is very expensive, that said in comparison though failing to mitigate production risk by not having a contingency plan or even a spare LHDR can cost a lot more.
How many millions of dollars have been spent drilling holes for no return in the WA projects, some of that funding would have been better spent on Sukari producing ore rather than unfulfilled promises.
Barminco may have considerable experience in underground drilling,although their performance at Sukari does seem questionable in many respects.
In the absence of any explanation to the contrary after the failings in 2018 it is hard to have any confidence in the way that certain contractors operated which seems to have been on the limit or even possibly in a careless manner?
True the contactors staff have experience, but then the client/comapny must also have gained some understanding of the contacted out operations or works.
There seems little justification in staying with with a contactor for fear that that their equipment or fleet is unreliable or nearing the end of its life.
Contractors are in the business to make profits out of the client and certainly as happened in the the UK the NHS & Local authorities that entered into PFI partnerships in good faith by outsourcing to contactors have always ended up being taken advantage of because they are regarded as over a barrel which as been the case in every other industry as we are now painfully aware in today's world.
Far better to take control of essential operations by employing the right staff investing in the right equipment/plant and managing them in the proper way.
Equipment depreciation cost are reclaimable against tax.
I think that the problem is that as long as gold is stuck in this range, that it has been for so many months, cost inflation slowly eats away at most gold miners profits. They need gold 10% higher than a year ago to account for all the extra costs including of course Oil; in real terms gold is lowest it’s been in nearly two years, when and if it will catch up is the big question. Whatever todays cpi will be way ahead of the price.