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European equities traded higher in Wednesday's pre-market hours amid earnings season. Earlier, Santander unveiled results for the fourth quarter and the year 2021. In addition, Investors will closely monitor news on the coronavirus and the situation in Ukraine.
At 7:30 am CET the DAX gained 0.37%, while the CAC 40 added 0.49%, and the FTSE 100 rose 0.43%.
The euro and the pound were flat at 7:28 am CET, selling for $ 1.12683 and $ 1.35236, respectively.
Baha Breaking the News (BBN) / JGA
Happy hump y’al
Geodrill are very good operators ... great to have them on board.
PART 2
The risk of inflation
In the meantime, if lower interest rates do not lead to business expansion and higher production (and there are good reasons to suppose they may not) then the net result is a larger amount of money circulating in the economy with no new production happening.
This will eventually set off inflationary pressures, which make savers worse off and provide a disincentive for saving. But saving by households is fundamental to making funds available for businesses to borrow.
In the absence of increased production this extra money may also make its way to non-productive financial assets such as equity and houses, setting off speculative bubbles in those markets. HAPPENING NOW
Why might businesses not expand, even with lower interest rates? In deep recessions it is not the lack of credit that holds them back, it is that they cannot sell their goods at prevailing prices. This reduces demand for labour, further reducing demand for goods because more customers are unemployed.
It becomes a vicious cycle of insufficient demand, where the key issue is not credit or liquidity but rather a crisis of CONFIDENCE. Monetary policy loses its teeth at this point, leaving fiscal policy (via deficit financing or tax cuts) as the only option.
It’s all about TRUST ...
However, government borrowing is a long-term game. The entire system, whether deficit financing or printing money, is based on trust — that the government will honour its debt.
Simply put, no government could satisfy all its creditors if they wanted their money back at the same time! But as long as the government keeps making the interest payments on the loans, or at least has the capacity to pay back some of those creditors (sometimes by borrowing even more), the economy remains stable. The juggler’s balls stay in the air.
If for some reason trust in a government goes, watch the balls come crashing down. Any hint of default or not honouring debt obligations will lead to long-term damage to a government’s reputation and its future ability to borrow. No one will want to hold the government’s debt in the form of government bonds.
When that happens, we see capital flight — money flows out of the country as people seek a return elsewhere. The value of the currency goes through the floor, with catastrophic effects on the economy, such as occurred during the Asian financial crisis in 1997.
The economic crisis MANY COUNTRIES is facing is real and deep. Attempting to cancel debt would only reduce trust in the government and risk making the crisis worse.
According to proponents of MMT (modern Money Theory), a country that issues its own currency can never run out and can never become insolvent in its own currency. It can make all payments as they come due. Therefore, there is no risk of defaulting on its debt...
Lots to think about, but what you dont do is take on debt in someone elses paper promises. USA rule book
best
the Gnome
You are into something very interesting. Debt is almost meaningless if it is owed to yourself, in your own currency. Imagine owing yourself $100. What interest, ...etc
So, what does happen when the government wants to spend more than it raises in tax revenue? It needs to borrow money (known as deficit financing), and so instructs the Treasury to issue debt.
There are three major types of debt: treasury bills, treasury notes and treasury bonds.. Treasury bills have the shortest maturity (less than a year) while treasury bonds have maturities of ten years or more. They all must be paid back in the future.
The debt is typically held by banks, institutional investors and managed funds (such as Kiwisaver accounts). Because the government is not expected to default on the loans, the debt is considered to be secure. So, these bonds can typically be issued at lower interest rates than bonds from other financial entities.
Where government debt goes
When the Res BANK engages in “quantitative easing” it essentially buys up these government issued bonds. To do this, it prints currency to pay for the bonds and this currency goes into circulation, increasing the money supply.
Quantitative easing floods the system with liquidity — the amount of money readily available for investment and spending. In turn, this should put downward pressure on interest rates because money is cheaper to borrow when there is more of it.
The Reserve/Central Bank can also lower the official cash rate (OCR) to push retail interest rates (on mortgages and savings deposits) down. The aim in both cases is to make borrowing cheaper in the hope that businesses will borrow money to invest, in turn creating more jobs.
If the RES BANK is buying government bonds from the banks and investors who had bought them earlier, it follows that the creditors have been paid off. So why can’t the government simply write off this debt?
Firstly, this takes away the RES BANKs ability to act as an independent entity, which in itself is problematic. But even so, the debt does not disappear, it just takes the form of that additional amount of money floating around the economy.
At some point this extra money will end up being deposited in commercial banks and be held as reserves which earn interest from the RES BANK.
The currency in circulation is also legal tender backed by the authority of the government. If no one else wants to accept it, holders of this money should be able to sell it back to the RES BANK for something of value in return (US dollars, say).
One way or another, sooner or later the debt will have to be honoured....END OF PART 1
"By the end of 2020, the Bank of Japan owned 45% of government debt outstanding."
https://twitter.com/DonLawson_/status/1488626926709194752
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If a government owes money to a branch of itself - is it really debt?
Why doesn't Japan buy up all the remaining debt - then forgive all the outstanding debt too?
Thoughts anyone...
Hello MrBond, I tend to ignore a lot of comments, especially from repeat offenders.
I had to teach myself that in daily living there are people I regard as worth avoiding rather than listening to and sadly I’ve had to apply the same wisdom when choosing what I read on this message forum.
Some people are simply “hardwork” and best left alone.
I’m sure they’ve noticed but I’m no one’s fodder.
Best of to all!
I afree Razors and Mr T.
But as Rich said earlier there have been some Weird Posts recently.
They will not be happy with anything positive it seems.
Also I am glad that Geodrill are replacing Barminco for the drilling from what I understand.
There is also a review of the underground mining - as Centamin said in the last announcement they are looking at all options (keeping them, replacing them, or doing it themselves!
Lot's more updates to come yet and despite what some say I think Basel 3 will have a positive effect on POG as 2022 progresses!
I agree Mrtibbles, I picked up on one of the broker recent recommendations when he used the term “Catalyst”,
saying there would be plenty throughout the year to give the stock upward momentum.
The hard work is keeping that in mind when the share price drops back as it did recently, obviously following the gold price.
Here’s to as many positive “Catalyst” throughout 2022 as Martin Horgan and his crew can muster.
If you take a look back this turnaround for gold is as explained by Andrew Maguire, POG was hammered prior to options day closing on 31st Jan.
Yes, perhaps some of those that didn't seem to think much was happening will be a little happier ,I'm sure there will lots more news to come yet though!
This is great news.
Although they didn’t mention GEO Group, Centamin did tweet in October that drilling had begun at Sukria for the first time in several years.
One day all this will lead to a positive RNS that will propel the share price back to where it belongs.
https://twitter.com/centaminplc/status/1453290250973982727?s=21
If you're interested in Shanta, I reckon a sensible strategy there would be buy a third of your position size at some point relatively soon, as the prices are still stupidly low (probably after seeing if today's rise holds or pulls back), then look to buy the remaining two thirds at some point within the next 4/5 months (see if you get lucky and it dips again), after which point the Q2 results should come in, and hopefully indicate a rise in production. It's probably a coin flip where it goes from current prices in the short term (depending on gold and whether there was an II seller and if they've finished or not).
I do hold Shanta, but I'm not celebrating, as it's been hammered lately, but hopefully should be turning the corner after this quarter, with production starting to rise back up, and in the new year a new mine on stream.
One is up 18.52% and the other, the duff.
Sadly I’ve had no involvement in either.
Chucky ar la!
And what is more says he./she is not an investor .
Rich I agree, especially as that info did not come from Centamin, but from some Aussie Greens.
Pity people do not read and comprehend more.
Ignoring the rather weird rant (most of that) you make a rather flawed assumption.
In that, if gold stayed at this level, let's say $1800, then CEY would continue to make a lot of money, distributing hefty dividends to shareholders, probably remain at least at this share price level (or go higher probably), whilst simultaneously funding exploration.
At the current dividend rate you could have made over 40% after 5 years from dividends alone with no share price rise and no rises due to any exploration success/development.
There seem to be a lot of weird rants in recent months on gold miners (most of which have had II's selling out on the gold price pullback).
The thesis they put forward is a stupid one . Mothballing a mine doesn't come without irrecoverable sustaining costs , far better to invest in a passive Gold ETF
I ceased to be an investor in Centamin after the last mining update which revealed a significant uptick in costs with no more gold...just a lower level of annual production to make the mine life at Sukari extend from 10 years to.12. I do that with my pay packet, I spend less to make my wages last longer..my wages still remain the same overall though .
Time for a reality check , starting with the known givens
AISC for 2022 will be around $1,350 and annual production around 445,000 ounces .. This gives a profit . at today's gold price, of approx $450 per ounce sold
In 2020 the profit margin was $790 on a higher level of production .
To replicate the 2020 results will require an average gold price during 2022 of approx $ 2,140 per ounce ..quite a leap of faith to achieve that ..yes it might happen , but also gold could conceivably fall to $1,600 an ounce or less
. If ( as no doubt they will ) continue ( wouldn't you with their remuneration package ), they should cease dividends immediately and focus on exploration and hope for the best . If they stopped dividend payments though, the share price would fall to 60 pence and they know it ..best to appease shareholders with a dividend and stay in a job !
So with that backdrop what can be done to maximise shareholder value ?
Very simple , distribute the $250-300 million cash in the bank back to shareholders as a special dividend ( approx 20 pence per share )
Then NO MORE EXPLORATION EXPENDITURE BEYOND THAT NECESSARY FOR DOROPO .
Next , sack the whole board ( Mr Horgan is the emperor with no clothes ) and bring in a much reduced and more focused team to manage down existing assets for cash , distributing ALL operating cash surpluses (annually ) back to shareholders in the form of dividends .. This will give shareholders a 12 year income , poss more with Doropo
Of course a viable alternative to reward shareholders more quickly will be to sell this future income stream as an annuity to any interested party now , as well as approx $600 million of physical assets , plus selling off existing mining licences
Face facts guys , Beyond Sukari and poss Doropo, Centamin has no gold ..it will have to explore to find some , which will quickly eat up remaining cash with no guarantee of reaping any reward. Furthermore ,setting up a new operation in another country will incur huge set up costs . Risk of subsequent asset seizures ??
Just think .. Anyone who has invested in Centamin at any time , for the past 15 years using a buy and hold strategy has lost money . To continue to do so will be to take out a leveraged position on future gold prices. You don't need to be a shareholder to do that
Just my candid opinion..you form yours. Good luck
Ciao !
European stocks traded higher in Tuesday's pre-market hours, ahead of the release of new economic data. During the day, investors expect German, EU, and UK manufacturing PMIs and the German unemployment rate. Meanwhile, news on COVID and the Ukraine crisis will mark the day.
The DAX gained 0.73% at 8:15 am CET, the CAC 40 added 0.84%, while the FTSE 100 rose 0.58%.
The euro and the pound were flat against the dollar at 8:13 am CET, selling for $1.12414 and $1.34557, respectively.
Baha Breaking the News (BBN) / JGA
Jan 31, 2022 (Bloomberg) -- A senior gold-mining executive sees the potential for a record year of mergers and acquisitions as companies turn to deals to prop up production at a time of rising bullion prices.
An M&A cycle that kicked off with Barrick Gold Corp.’s 2018 takeover of Randgold followed by Newmont Corp.’s purchase of Goldcorp is only just beginning, said David Garofalo, the former Goldcorp boss who now oversees Gold Royalty Corp.
In the past decade and a half, the industry has been focused on strengthening balance sheets and paying dividends, resulting in a depletion of reserves. To avoid that turning into a production slump, companies will scoop up more single-asset players, Garofalo said in an interview Monday.
https://www.bnnbloomberg.ca/gold-dealmaking-is-set-to-take-off-along-with-prices-gold-royalty-s-garofalo-says-1.1716226
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Interesting Mr Garofalo mentions single-asset players in particular.
Also, we may have lost a director -
https://www.linkedin.com/in/marna-cloete-4878aa82/
if so we ought to get a market update from Centamin with details...
And ask him why we bother with digging & refining Sukari's gold ;-)
The Journal of Sustainable Finance & Investment has a better idea:
-------------------->>>
Baur recently explored this idea with a couple of his colleagues at the University of Western Australia Business School. In a 2021 paper, they proposed leaving unmined gold in the ground and letting “nature act as a natural vault and custodian legally protected by gold firms and the government.” In this scenario, investors could buy stock in gold-exploration companies that have identified underground gold but have no plans to mine it. This would give investors an alternative to purchasing shares of the aboveground gold that currently sits in bank vaults around the globe.
Would the unmined gold, which the paper calls “green gold,” actually earn money for its investors? Baur and his co-authors considered the costs of gold exploration and gold mining, and the uncertainty of the quality and amount of gold that might exist in any given underground location. They then ran an empirical analysis, and concluded that unmined gold can still be a valuable investment.
https://www.tandfonline.com/doi/abs/10.1080/20430795.2021.1974242?journalCode=tsfi20
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Found that gem in The Atlantic article on mining here:
https://www.theatlantic.com/science/archive/2022/01/gold-mines-reopening-california/621403/
A thoroughly anti-mining piece IMO . These magazine purveyors ignore the fact that everything we touch and use in our modern lives come from the extractive industries in one way or another.
Interesting article. The Feds view on the world and even the US is in great disagreement with facts and reality in general, as commented on before. You may get another view at the games in play in the US, that the main stream press dont like to comment on ...
https://www.youtube.com/watch?v=piYt3rYJcZI
Social unrest is going to be a way of life, they have "mistried" consistently to bring this about in the US, and now lets see what happens. Disruption will take on new meaning.
best
the Gnome
I am afraid as soon as air power has gone, with a tremendous area to cover and no borders, not only insurgent ,but many bands of the tribal Bandits will control the northern areas ,where the majority of the mines are.
The goverment forces will be able to control cities but not much more.
I know of kidnapping for ransom as well as gold shipments robbed.
the loss of air power could be devastating. Even the western areas.
Also in the wet season many areas are deluged. Making for difficulties not only in supplies but mine traffic.
Not ideal,but someone might step in,fingers crossed.