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Wow!. I only a few large businesses!. I was not making a general remark that "All Chinese business were poorly managed". For example "Evergrande" is so big that it has disproportionate effects on the whole economy. I never meant to infer the whole lot were poorly managed. I think that "Xi Jinping" would take interventionist action far beyond that of any other government if a major shock came to their economy from one business. I might be wrong!. I could talk at great length about all these issues but it would far beyond the scope of KMR specific issues, Macro (or whole economy) yes but not Micro (company/individual specific). PS Does anyone know if titanium is heavily used in construction?. Paint and toothpaste whitening, aircraft and catalytic converters I know but what about construction?. Once again, sorry if anyone thought I was pointing my finger at ALL Chinese!. :-)
Well, I think every investor is aware of the possibility of a major recession, perhaps starting with a large Chinese building contractor. My guess is that China has so much interest in supporting (not very well managed) major businesses that no major recession from this will come. Yep, I may well be wrong. But I think the Chinese economy will not sharply crash soon.
Michael Carvill, Managing Director sold less than 7% of his total holding. Probably just needed some cash for something practical. At less than 7% of his total holding I would not worry. Surely it is clear that we are at the start of a commodity supercycle?. The amount of insider buying earlier this year is very encouraging. My guess is that if the market continues to value the company at this level then a takeover attempt will come. Who?, how much?, no idea!.
Producer sovereignty has been an ongoing concern for many for a long time, long before the internet!. There is no real chance of anything being done about it, in my opinion. I think that if Bitcoin had never existed the POG would certainly been stirring if not soaring at he moment. I think given how much inflation is around that the USA $M2 velocity will at least start to return to normal perhaps even soar. This means that the USA Yf will be hit very very hard in Feb / March 2022. Yes there will be some growth and a lot of asset price inflation, however the price level will come under exceptional pressure. POG will soar. Bitcoin is an unknown variable. It might have collapsed by then it might collapse later. I can not think of any rational way to judge this. my guess is that gold will sharply respond when it does. When?, I just do not know. I expect to stay with CEY till March 2022. If the market anticipates this and spikes I might jump off earlier!. Level heads please gentlemen!!.
Hi All, my analysis is that the US inflation rate will be sharply higher around March2022. This is based on the $M2 figures and assumes that the velocity will be close to (or even higher than) 1.6. Yes, the USA economy will expand as will assets prices.. However the exceptional pressure from the QE will force hard the inflation rate. Close to this time there will be many warning signs and the POG will start to respond. Probably the CEY share price will anticipate this and considerable upward movement will occur. How much this will be?, and how long?, I have no idea. It should be noted that the velocity is very hard to predict (though someone did post some very helpful graphs on this) so this might confound my analysis above. Bitcoin is a house of cards and in my opinion heading for an almighty crash, when?, and how big?, I have no opinion. Blomberg seems to be predicting a gold spike soon. If so?, and if it is big enough?, I might be selling CEY and returning early in 2022. Otherwise I am staying till around March 2022. Helpful and constructive remarks please!, anyone spot mistakes?.
The $M2 money supply is going through the roof. This must cause inflation around two years after it first started to expand. Thus March 2022 in the USA will be critical. So far the inflation is not extreme so far because of the time lag and the exceptionally low “V” [velocity of money].
Low “V” is caused by low inflation expectations. Bottlenecks in the supply chains are causing inflation. This will naturally push up the “V” figure?. The whole world is absolutely sloshed in broad money because of QE. Gold prices closely correlate with inflation.
Mr Biden is starting a “Barber” boom in the states. So very soon the USA will overheat and inflation will sharply ignite. At least in the $ area. Central bank independence will slightly mitigate the inflationary disaster more than was the case in the 1970s?.Central banks simply can not afford to rise interest rates because of high levels of national debt everywhere?, [not just in the states]?. Crypto currencies have slightly stolen gold’s role as an inflation hedge. However they are very unstable and are perhaps facing taxes and other obstructions from legislators because many governments are not keen on them?. They do not want privatised control of the money supply?.Cryptos are potentially vulnerable to hackers?, might even be wiped out completely by hostile cyber actions?. They are very unstable anyway?.Thus gold will shine in an inflationary world after the cryptos crash?. CEY has production cost and output issues?, however higher gold prices would still make the company very profitable?. CEY is cash rich and the dividend is thus safe and secure. CEY is still a good bet and might even be a BUY at the moment?. Pundit Russel Napier is extremely bullish about gold prices!. Constructive remarks please!, I missed anything important?.
Martin Bankess has just bought 40,000 bringing his total to 260,000. This MUST be a good sign!.
Assuming a 22 month delay between $m2 and inflation. Then the USA inflation rate should rocket in February 2022. This assumes that the velocity returns to historically normal vale. Rather than it's current extreme low value. Today's Moneyweek quotes someone saying it is difficult to be bullish about precious metals on one page and then on another emphasis the need to hold gold as part of a portfolio!. Personally I do not think it is, however, there are times when a gold miner is an excellent investment. This week I have done well with KMR (an ilmenite miner). Last weeks Money-week quoted someone being very bullish about gold. Apparently a week is a long time in magazine editing!. I recommend to everyone Russel Napier's views on gold and inflation. I am not completely convinced but I do think everyone who holds any gold mining stock will be every interested!. It has been a roller-coaster week with an excellent ending for me!. I am staying with CEY.
I've been re-reading my own post trying to spot anything wrong with it. There are two things I can spot. Firstly modern central banks might be more competent and willing to knock inflation on the head early. So no 1970s style runaway.
Secondly it is possible that cryptos are not as unstable and fraud prone as I think (we simply do not have the data to judge this, cryptos are so new). We do not know if there is a direct inverse relationship between gold and crytos. I would say there probably is, but no data set can confirm this. For the moment I am HOLD on CEY and a 23% loss. Sadly I already have too much in this one sector; so I can not even consider more investment on any gold miner!. If my original post is correct then this is a BUY moment!. A risky one though!!.
Ladies and Gentleman please read my thoughts below and correct any mistakes and make constructive remarks. Please be objective and nice!.
The $M2 money supply is going through the roof. This must cause inflation around two years after it first started to expand. So far the inflation is not extreme so far because of the time lag and the exceptionally low “V” [velocity of money].
Low “V” is caused by low inflation expectations. Bottlenecks in the supply chains are causing inflation. This will naturally push up the “V” figure?.
Am I right so far?.
The whole world is absolutely sloshed in broad money because of QE.
Gold prices closely correlate with inflation.
Am I still on track?.
Mr Biden is starting a “Barber” boom in the states. So very soon the USA will overheat and inflation will sharply ignite. At least in the $ area.
Is this correct?.
Central bank independence will slightly mitigate the inflationary disaster more than was the case in the 1970s?.
Central banks simply can not afford to rise interest rates because of high levels of national debt everywhere?, [not just in the states]?.
Still correct?.
Crypto currencies have slightly stolen gold’s role as an inflation hedge. However they are very unstable and are perhaps facing taxes and other obstructions from legislators because many governments are not keen on them?. They do not want privatised control of the money supply?.
Still correct?.
Cryptos are potentially vulnerable to hackers?, might even be wiped out completely by hostile cyber actions?. They are very unstable anyway?.
Thus gold will shine in an inflationary world after the cryptos crash?.
CEY has production cost and output issues?, however rising gold prices would still make the company very profitable?.
CEY is cash rich and the dividend is thus safe and secure.
CEY is still a good bet and might even be a BUY at the moment?.
Constructive remarks please!, is any of the above correct?, missing anything important?.