Member Info for carvegyber

The big question is will airline and shale oil defaults cause systemic failure in the financial system like the way subprime did? Are they big enough. Last time, no one had a clue because the loans were repackaged. I am not sure what it is like this time around. The subprime crisis took well over a year to play out.

The ratio is now 111. This is unprecedented right? It shows there are unusual and irrational forces at play at the moment on the market. There is I think large scale default risks starting to be priced in now.

Yes, I do wonder if the absolute bottom of FRES has been found and it is around the 550 mark. At one point, it even went up to 583 so something is supporting this price. There also have been analysts now raising their target prices so I am guess this has turned a corner. Just need supportive PM prices. With inflows to USD and gold, it just makes no sense for gold price to drop.

what a wild ride today huh?

I have to say, iron appears to be the safe haven. Remarkably steady. This silver drop is definitely a stock up point. There is now widespread panic and flight to USD has begun. I wonder if some of the dodgier etfs will have to buy physical gold to back up their holdings soon. Gold and more so silver is like a coiled spring I reckon....

I just hope that world leaders don't come up with more panic inducing measures like banning flights....

Sure as day after night, rate cut will come. Gold will be $1800 in a few weeks. It really is unclear which company is not really impacted by CV. I reckon PM miners come pretty close especially gold miners. Gold will shine and Silver will lag because of its industrial uses but silver will fly once industries return. Peak of CV in the west is about 8-10 weeks away.

Watch more of the central banks print money soon. But what will they buy with the money?

Been trading this for the last 4-5 months and if there is a time to buy FRES, this is it. Supportive PM prices and decent production. This is not like 2008 where the crash was caused by a banking liquidity crisis. There is plenty of liquidity going around. Just traders expecting bad news and staying out of the market. But they are not selling out of gold so PM prices are holding. Everyone is expecting more bad news. There has been a pattern of big hitting bad news everyday.

Yes but very few companies/countries can produce $30 oil. If it prolongs, lots of companies will go bust and stop pumping so it comes back up. If it prolongs, it could get nasty. Nigeria, UAE, Russia, Iraq would all go bust and god knows what implications there are. This is sitting pretty for now. The trading halt even rattled FRES. Day of drama. If ever I see buy the bounce, today is it.

I agree, there is so much to digest today and work out a strategy. It is very rare that I am exclusively in one commodity only and currently, I am all in on FRES, and silver and have been for the last 6 months! Good place now to start switching some into crude. I would avoid oil stocks as I don't know who will go bust but it looks like Russia will be first. Inflation will take off there and there will be blood on the streets soon. Will Putin kowtow to the Sheikhs (US)? We will have to wait and see. I wouldn't be surprised if Russia starts trouble and US and Nato will have to wade in reluctantly. Guess what happens when war is looming? Govs print money and gold flies through the roof. I can't see gold going anywhere but up in the next 2 months. If I have anymore money, I would double down now.

I think event will move fast and I think Gold will be pushing $1800 in couple of weeks. Just trying to break through the big barrier of $1700 for the time being... It is bound to take silver with it and imo, it could well leapfrog and hit $20s. When silver moves, it motors. I like this oil price war...

Looks like the crash is Saudi and oil led. Last few times oil was in the 30s, it proved a good buy. If history does repeat itself, then I would say we have found a floor and stocks will recover from here. The last month or so has proven to be remarkable in that gold goes up when stocks fall but also go up when stocks go up unlike normal. Gold, and also Silver will be in a good place because then people panic, they buy gold. When Central Banks panic, it supports the gold price....

Silver, imo has been unfairly punished with gold so when industries resume normal service, you could fin silver leapfrogging gold but that will take 6 months to play out. I am gonna switch into 3x leveraged silver ETF I think for the next 6 months.

I can't even get onto IG. LMAO. It is going to be carnage. Didn't someone say buy when there is blood on the streets?

BTB, to nationalise mines in Mexico, the gov will need to move very far to the left and that normally happens after large scale sovereign defaults is on the cards. Mexico has low risk of this due to its high FDI from US and the west. If it has any whiff of nationalisation, industries would start moving out big time and soon it would turn into Venezuela. V was only able to do that on the back of pumping out black gold from their ground at $100 oil. Mexico hasn't got anywhere near as much.

The pattern is very clear. Everyday, this opens high, gets pushed down, then it rises above the high and then gets pushed down at close. Think the market is really working it hard to get some liquidity here. Very possibly as a result of rejoining ftse 100 when every tracker needs to reshuffle but don't want to pay top dollar.

Gold is. Silver isn't. Last time we are at this gold price silver was in the 1800s. It is struggling to break 1750. Ridiculous. It has been punished because of its high industrial uses although the scarcity factor is 15:1 to gold so if you work on pure store of value based on scarcity (not even considering the industrial uses), then it should be $110! Food for thought. I am sure smart money is chasing Silver but for the moment, the big thing on everyone's lips barring a few savvy commodity traders is Gold. Even Jim Rogers didn't mention silver in his interview. Just gold. It is a mindset thing.

We will have to agree to disagree. Can't see how feds, ecb or boe will let banks go bust this time around. A few Italians banks have gone bust or merged but once the ones that are deemed too big to fail is involved, central banks will just print money to bail them out. ECB have already said they will do whatever it takes and have been good for their words.

BTB, banks are in no hurry to go under because the government discovered in 2009 that they can print money and inflation doesn't kick in. Until it does, they will just carry on QE to fund any bank that gets caught out. MMT is here to stay and only inflation can debunk that. Bernie gets in, maybe. With world recession on the cards due to CV, we won't be getting that for a while although if goods shortages are caused by CE, it could lead to inflation. Banks will no longer go bust due to lack of liquidity. They go bust because rates rise and they can't repay or afford the loans.

If inflation takes off in the US, USD is going to get hammered and gold will bust through $2000. The conditions seems ripe now and it just takes a catalyst. Big Bernie the BS?

We just need silver to outperform gold. It has lagged Gold big time and the ratio is now up over 95 again. Once China's manufacturing gets back to normal, which it almost has, it should calm fears. I think this CV scare will blow over soon because people realise that locking down London or NY ain't gonna happen. Death rates are marginally higher than flu so all the fear and quarantine has been overblown. The more people that catches it, the less the virus will transmit because of immunity! Another month or two, all this will blow over.

Correcting couple of typos. $2.12m in para 2 should read $2.12b.
$2.42 in para 3 should read $2.42b.

This got mullered for the first few hours when the headlines appeared disastrous when actually it was old H1 news and I believe there was a concerted driving of order books to shake out shares. It went from -6% to +6% in one day when people realised H2 was actually very good. Now when H1 20 results are out, the H1 20 v H1 19 performance should be fantastic provided PM stay where it is or better now for the next 4 months.

Looking then again onto 2020 performance using what is in the FY results, I worked out that revenue will be $2.2b using the lower production target of 51mOz silver and 815kOz gold. This is additional $80m over the 2019 revenue of $2.12m. I am using average silver price of $17.5 and Gold $1600

Using the higher target production of 56moz and 900koz, we get to $2.42 which is $300m more. Capex in 2020 will be $95m higher but from what I can gather from the reports, they believe that the cost of sales will improve because the measures put in place will start to come into effect. Even assuming they are the same, we will still be fine cash wise but if we hit the trifecta of better cost of sales compared to 2019, higher metal prices than what I assumed, and production at the top end of guidance, then we are looking at additional profits of $300m+ which would take us close to the $500m profit mark. Surely the SP would be more than double where we are now. We probably have to wait until end of the year to get close to that though.

So gents, lets see how the 3 factors play out over the next 4 months. We will get some clue from the quarterly production figures....

Wish us luck.