Member Info for BilboMultiBaggin

Eve should probably stop selling CBD oil. As it doesn’t help you sleep, you need THC for a good nights Kip. In fact if I was to go drinking CBD oil before bedtime I would be up all night with indigestion, and heart burn,
So I would probably never consider buying an Eve mattress because of the baseless claims about their CBD products.
Now there’s a fact!

It’s not that I don’t disagree Barney, I just think many will see the profit from coal alone is dirty money.
Even if they are powering their electric cars on coal

Call what you want tax is tax, so we will have to agree to disagree,
However I hope you have more luck with your trade, than I have had with mine so far

You pay tax on silver, which you won’t get back when you sell

There’s a deep irony here. For years, many people argued that the world will turn Japanese. This referred to slow growth, deflation, demographic implosion and economic malaise, not good food, high living standards or a lack of insulation in homes which requires heated toilet seats as a result.

But what if the “turning Japanese” crowd has it precisely backwards? What if Japan is leading Europe into an inflationary nightmare, not a deflationary one?

What if Japan is currently revealing that, when push comes to shove, central bankers will always back their mates at the Treasury over those of us who need our money to maintain its purchasing power?

That is, after all, what tends to happen historically. Not many currency systems have opted for government insolvency when faced with a crisis. They prefer to print and trash the value of the currency instead.

And so … I’d like to reassure my in-laws. The euro is likely to crash like the yen is doing now. They’ll be able to bring me chorizo for New Year after all.

Nick Hubble
Editor, Fortune & Freedom

So… instability in Japan is a major problem for anyone else around the world who is trying to finance themselves. Which is pretty much anyone, at this point, thanks to crashing bond markets just about everywhere.

For some reason, the Japanese have an old habit of funding the wrong sorts of people at the wrong sorts of times. Japanese investors piled into Asian debt before the Asian financial crisis, sub-prime CDOs during the housing boom and the wrong European sovereign debt before Europe’s sovereign debt crisis.

This happens because they like to look for a little more yield in exchange for taking on a little more risk: this is because their home bond market doesn’t get much yield thanks to the Bank of Japan’s long standing and mad monetary policy.

It’s called reaching for yield and it often results in your hand getting lopped off.

Higher yield types of investments are the ones to blow up when things go bad, while the safer bonds tend to perform well during such times.

So, instability in Japanese funding as Japan experiences economic problems is a real worry. It exposes the weaker borrowers to a lack of lenders at a crucial time.

But I also have some good news… for my in-laws in Barcelona. The euro is next on the block.

The European Central Bank (ECB) is going the way of Japan with its monetary policy – prioritising the affordability of government debt over inflation rates.

The ECB had an emergency meeting last week to discuss the European sovereign bond market chaos. The risk of the euro area falling apart is rising as the interest rates on government debt surge and the differences between German and weaker nations’ interest rates surge too.

The ECB considers it a part of its mandate to save the euro from falling apart. And the real question now is which mandate is more important – inflation or keeping sovereign debt in Greece and Italy affordable for those governments. Because the ECB, like the Bank of Japan, is being forced to choose.

If you’re not sure what the choice will be, consider that the ECB will likely cease to exist if the euro does…

We’ll get to how bad this crash is in a moment, and why it should scare you. First, consider the situation the Bank of Japan is in – it’s certainly no laughing matter.

Japan’s government debt is terrifyingly high. If interest rates rise, the cost of paying interest will be downright dangerous.

And so, the Bank of Japan is trying to cap government bond yields at 0.25%. In order to do this, it is buying as many government bonds it needs to in order to keep yields that low. It is both funding the government and keeping the government’s borrowing costs down in one massive quantitative easing (QE) exercise.

But financial markets aren’t buying it – either figuratively or literally. They don’t think the Bank of Japan can keep yields that low with energy prices triggering high inflation all around the world, even in places that export the energy Japan imports.

Even the Japanese tax accountant doesn’t believe the inflation statistics any more, he told me.

And so, investors are selling out of Japanese bonds in anticipation of the Bank of Japan having to raise interest rates and crash its own bond market as the authorities in the United States, the UK, the euro area and Australia have done.

For now, fighting the speculative attack on its government bond market is forcing the Bank of Japan to create vast amounts of yen to buy Japanese government bonds. And that increase in the amount of yen is causing its value to crash on foreign exchange markets.

The problem here is highlighted in the headline from Markets Insider: “The Japanese yen used to be a “safe haven”. But it has just crashed to a 20-year low”.

This causes a lot of different problems. The least of which is that my Japanese parents-in-law are retired and living in Barcelona at the moment…

The yen’s crash also disrupts trade because Japan is an export powerhouse, for example. But there are more interesting angles…

Japan lends a lot of money to the world. It has been the world’s top creditor for 31 years in a row!

In Japan, laughter is about dealing with awkwardness.

Unless it’s a real belly laugh… but this article is about monetary policy, remember.

Usually, Japanese people laugh when you’re embarrassing yourself without realising it. It’s a warning that you’ve made some sort of mistake. The Japanese way to deal with the resulting awkwardness is to laugh politely to alert you of your error. Which doesn’t work.

How does this play out?

You think they liked your joke, but you’re actually on the “women only” carriage of the train. The joke just unleashes the pent-up awkwardness.

If Japanese people smile at you at the hotel, something is wrong. It’s probably because you’re still wearing the designated toilet slippers in the lobby.

Japanese people also laugh when they’re embarrassing themselves. Which only ever happens when they try to speak English, of course...

Now, Kuroda-san has a habit of laughing like a maniac whenever he tries to speak English. Which usually happens when he’s on Western TV making comments about Japanese monetary policy.

He thinks the laughter is making light of his broken English – a way to defuse any misunderstanding, excuse any miscommunication or avoid any unintended misinterpretation.

It’s a signal that people should sympathise with his embarrassment for his poor English skills, a way to apologise for not being able to express his meaning in the precise sort of way that central bankers are supposed to do.

Unfortunately, laughing like a maniac while discussing your own monetary policy for the world’s most indebted government is interpreted very differently by Western people…

Cue the collapse in the yen as the Bank of Japan tries to pin down Japanese bond yields.

Jacob this how it was explained to me

Dear Reader,

Last week, a Japanese tax accountant messaged me: “I’m afraid of the collapse of the Japanese economy…” Luckily, he speaks fluent English after a stint studying in California. But he hasn’t lost the Japanese habit of understating everything… I don’t think.

The message wasn’t entirely random. I’d asked him about the crashing yen and the latest outbreak of insanity at the Bank of Japan.

While the rest of the world is busy trying to bring down inflation thanks to a global energy crisis, the country which is famously dependent on importing energy is busily loosening monetary policy even more…

But, back to the Japanese tax accountant for a moment. Our conversation about Japanese monetary policy started a few months ago, as these things do, when we were out drinking in small-town Japan.

At the jazz-themed bar, I asked my friend, whose name means “three rounds” in Japanese, about Kuroda-san.

The head of Japan’s central bank is a household name in Japan. And being a household name is never a good thing for the head of a central bank. But, in this case, Kuroda-san is quite famous globally too. Which is really, really bad.

What makes Kuroda-san so special internationally, as far as I can tell, is a typical Japanese behaviour. It is usually misinterpreted by Westerners, leading to severe misunderstandings and, occasionally, marriage.

At the start of the week I was beginning to regret selling all but 25%of my shares last Friday, if it any consolation billy your decision to sell up at the beginning of the year wasn’t such a bad call after all I only got 20p more than you for mine

I’m now only holding 25% of my shares from my initial purchase now, which I’m happy to hold through thick and thin..
Just got to decide what to do with my gold mining stock..
Because atm it doesn’t seem like pms are being used as a hedge against inflation like they are supposed to

I hope so qz, as much as I love Glenda, and cannot complain over the way she has performed for me over the last 20 months I was very close to dumping her today.

Looks like putin is cutting off the gas taps to Europe, So they will be firing up all those coal power stations

Looking at pms this morning it looks like he made the right call to me
Well played

I still thy Glenda has a bit more to go… when the daily headlines change from inflation to stagflation…. That’s when glen will become vulnerable imo..

June 1, 2022, 6:00 AM EDT
TORONTO--(BUSINESS WIRE)--Li-Cycle Holdings Corp. (NYSE: LICY) (“Li-Cycle” or the “Company”), an industry leader in lithium-ion battery resource recovery and the leading lithium-ion battery recycler in North America, today announced that it has executed long-term commercial agreements with Glencore plc (LON: GLEN) (“Glencore”), a leading provider of primary metals for the production of electric vehicle (EV) batteries. The Company also announced that Glencore has concurrently completed its previously announced $200 million investment in Li-Cycle through the purchase of a five-year convertible note, and that Kunal Sinha, Glencore’s Head of Recycling, has been appointed to Li-Cycle’s Board of Directors.
“We’re pleased to launch our strategic partnership with Glencore, enabling us to pursue our shared vision to enable sustainable, localized supply chains for electrification metals. I am confident that we can better serve our collective customers by leveraging our complementary capabilities and delivering an integrated approach by combining primary and recycled metal supply,” said Ajay Kochhar, Li-Cycle co-founder and Chief Executive Officer. “Further, Glencore’s investment bolsters Li-Cycle’s already strong balance sheet, further enhancing our ability to complete our current pipeline of Spoke and Hub facilities and meet our operating needs while maintaining financial flexibility.”
Glencore is a leading provider of primary metals for lithium-ion batteries and electric vehicles, including being the top producer of cobalt and a top three producer of class I nickel globally. Li-Cycle is a leading lithium-ion battery recycling company, driving value through the Company’s robust base of battery supply customers and its innovative Spoke & Hub Technologies™. Bringing Li-Cycle’s and Glencore’s complementary capabilities together will help accelerate the path to a circular economy for critical materials in the lithium-ion battery supply chain.
“Achieving our ambition of NetZero total emissions by 2050, requires working collaboratively with other like-minded partners. We are pleased to work with Li-Cycle as a key strategic partner in closing the loop for battery metals, at scale, in localized supply chains, with a sustainable footprint that effectively combines primary as well as recycled raw materials,” said Kunal Sinha, Glencore’s Head of Recycling and Li-Cycle’s newly-appointed director.

It’s too useful

So we end today where we started yesterday.

While there may be a time when gold forms part of the world’s monetary system again, it’s very unlikely that silver ever will.

Wednesday’s history lesson in bimetallic ratios is just that, history.

There’s no reversion to the century long mean of 50. There’s no plummeting back to a gold-to-silver ratio of 15, like in Newton’s days.

The gold-to-silver ratio average has been slowly nudging higher since both gold and silver became freely traded, and since then the increasing ratio (needing more ounces of silver to buy gold) is reflecting silver’s decoupling from money and its switch to an industrial metal.
Simply put, silver is too useful to society to just be money.

You can drink it, wear it or wrap yourself up in it. You use it to eat, absorb energy or send a message. No silver, no electronics. That’s no light switches, no computers, no phones, solar panels or wires. Because of its antibiotic properties, it is widely used in the medical industry.

Silver has superior thermal and electrical conductivity amongst the metals, and it can’t be easily replaced. It’s malleable and ductile, which means that it can be rolled, hammered or pressed into flat sheets, or drawn into a thin wire without splintering or fracturing.

In some industries, silver is used as a coating for copper cables for nanosecond (one-billionth of second) transfers. Adding a thin layer of silver speeds up the signal and reduces voltage drop.

It’s not the known uses of silver you should be watching, rather the unknown future use that could drive silver higher. Rapid changes in technology could put pressure on known supplies of the metal and, ideally, this is what nudges the price upwards for investors.

But any return to the good old days of silver being valued more closely to gold are gone.

In the past few millennia, silver has moved from being the only money that matters to being perhaps the only commodity we need more of in the future.

The industrialisation of silver is diminishing its role as money, effectively demonetising the metal.

It’s not that silver isn’t valuable. It’s just that its utility is now more important to us than historically.

Until next time,

Shae Russell

The structural decline in silver supply

There is a structural decline in the supply of silver, but, at present, it’s a mostly a pure silver miner problem, where declining grades reduce the amount of silver mined each year.

This isn’t really a problem for miners where silver is mined as a by-product of another commodity.

While 26.7% of all silver mined comes from pure silver miners, almost three-quarters of newly mined silver comes from polymetallic deposits such as gold, lead, zinc and copper.

This distinction matters.

Supply of silver is dominated by metals other than silver. Meaning that more silver will only come to market as more base metals are mined and consumed.

Base metals are linked to economic activity. Economic growth means more base metals will be dug up to meet demand, in turn bringing more silver to the market.

This, by the way, is why the silver price has been kicked down to 2020 lows. Silver is mirroring copper’s reaction to slowing global growth, as well as China’s major city lockdowns.

Rather than pure silver miners, the world’s silver supply relies on base metals being found, extracted and needed by society.

The beauty of a polymetallic deposit that contains silver is that it acts as an offset on the cost of production of the other metals such as copper, lead or zinc.

The problem, however, is these other miners are usually not particularly interested in the silver. Even if the silver price rises, it’s highly unlikely to encourage them to go and find more.

To boot, pure silver miners have minimal elasticity: in plain English, they can’t dramatically increase supply in the event that the price soars. In fact, they would require a long and sustained silver bull market to invest the millions of dollars required to develop their reserves further.

We face a similar problem with scrap silver, which often fills the gap in the silver market.

At present, scrap silver makes up around 7% of total silver supply. While there is some sensitivity to the price, scrap silver is industry driven, not consumer driven. If the price rises, we are unlikely to rush off and cash in our electronic devices or knives and forks for a few bucks.

What all of this mining gobbledegook means is that the old economic adage “the cure for high prices is high prices” doesn’t really work when it comes to silver.

Anyway, now we have the information on how silver comes to us out of the way, we can get on to why the metal is never really going to be money again.

Silver mining has declined in the past decade

There are lots of arguments as to why it should rise drastically.

One of the key reasons justifying a massive increase in the price of silver is that there’s not enough of the stuff coming out of the ground.

Which is somewhat true if you look at one area of silver supply – pure silver mines. In other words, those whose primary commodity is silver.

Over the past decade, less of the white metal is being mined from these. According to data from 2019, there’s been a 36% decline in ore grades from the world’s 12 largest silver miners. Meaning that there’s less and less silver in every tonne of earth dug up.

Not only that, but with the silver price slumbering for the past decade, silver mining companies carried out what’s called “high grading”. Basically, while the metal’s price was low, they were forced to mine the highest-grade ore to cover costs.

This means that, as miners dig away at their best stuff, it leaves the lesser-grade stuff in the ground –ideally to be extracted when prices are higher in the future.

When the silver price got a kick higher during the pandemic and once mine shutdowns ended, those higher prices did incentivise pure miners to move to some of the lower-grade product.

This compounds the problem, as it reduces the quantity of silver that finds its way to the market. Though, to be clear, supply of mined silver isn’t reduced so far as to cause a shortage. In fact, the market will be in a small surplus this year.

Yet, technically speaking, shouldn’t the shrinking supply of an already rare good increase its scarcity value and drive its price up? Well, yes. But silver is actually more complex than that.

Some are even suggesting that silver is detaching itself from money
And being thought of as less of a PM and more of an industrial metal
I will look to see if I still have the mail