Member Info for goldgnome

The big factors for slope failure

1. Fault geometries,
2. The lubrication of those faults
3. Slope Steepness/angle
4. Shear strentgth of the rock mass
5. Presence of "expansive clays"
6. Weight of the rock
7. Addition of lubricants (water)

They should have a geotech team 24/7 mapping/measuring and listenting for creaks and shudders. Catstrophic failure can be preceded by pore pressure buildup, micro failures ...ditto for eathquakes...I have not seen any report/s on the failure, any around?

best
the gnome

Well with debt levels exploding around the world, driven by a tsunami of cheap money, ultra-low interest rates and central bank quantitative easing – more than one in every five US dollars in existence was created in 2020 alone (!!!) as the money supply grew by more than 20 per cent — governments will be under staggering pressure to use those funds for all manner of spending.
You can expect other governments to do the same as commented previously
Where this new era of spending excesses leads remains to be seen but what is certain is that once the spending horse has bolted, it will be difficult to rein in.
Biden and Democrats will be eager to ramp up debt-funded spending over the next four years, with the President-elect promising to unleash a $US2 trillion green infrastructure package. He wants a second term, and to leave a positive legacy etc...
The lack of inflation and low interest rates means governments like Biden’s must invest in ways that don’t just support hedge funds or venture funds (as previously) but are for the public good.
The best is the new administration will soon deliver an “FDR moment” or a grand bargain in which taxes are raised to retool and boost America’s economy. “It won’t be the green deal, but there will be a new deal and the pay-fors for the new deal will occur because money is so cheap,”
For Australia, the loosest monetary policy in the country’s history is underlined by a roaring sharemarket and rebounding residential property prices – paradoxically when the economy is just beginning to recover from a deep recession. Household wealth hit a record $11.35 billion in the September quarter, with average wealth reaching $441,649 per person.

Three risks on the table NOW from the ultra-low interest rate environment – excessive risk-taking by investors, rising asset prices exacerbating wealth inequality and the possibility of a surprise inflation jump.

The RBA has cut the overnight cash rate to 0.10 per cent, committed to buying more than $100 billion of government bonds and set up a $200 billion cheap funding facility for commercial banks. Nevertheless, the Australian dollar rose above US76¢ before Christmas, partly because the iron ore price soared to at least $US176 a tonne.

“The accommodative monetary policy is being pursued by central banks to assist the world economy to recover from the pandemic until the vaccine is available to everyone,”

the gnome

The big lesson from 2020 is governments will do whatever it takes to support their economies and endear themselves to the voters (so they can get re-elected and on goes the show).
Investors can buy into a crisis with more confidence now knowing governments and central banks will throw money at the problem. and contnue to throw money untul the problem goes away. The history of viruses (goes back 10,000 years plus) is that they frequently mutate, and some do not have a vaccine that have been aorund a long time (Viral pneumonia). The history of vaccines is they have to be looked carefully for a long time to ensure there are no side affects. Another aspect of their history is they have to "mutate" in step withthe mutations of the virus...and on it goes....

Right or wrong, the reality is governments worldwide have shown more propensity than ever to support their economy during COVID-19. There's a limit (possibly dizzying heights) to how much support governments can provide, but it's hard to see them not stepping in during the next shock with circuit-breaker funding." ....

In Oz, with $77,000 worth of federal government debt carried, on average, by each working Australian by the end of next financial year, the politics of debt is set to become a more prominent issue.

The self funded retirees in Oz, and looking for new leads. If they were existing on an income from Fixed Income investments of say A$100k pa, this now requires $10m in the kitty at 1% interest rate. Well thats not for everyone, so people with say$2m in the kitty (or in assets that can be liquified to produce income) looking for dividend have to go up the risk tree to get, lets say, 5% interest or dividend to get the $100k pa... Which brings us to the attraction of CEY paying a possible 5% div in the future, if the new CEO can perfrom as good as his prediction (or better). ... worth a punt ... Tier 1 gold orebodies are few.

Bitcoin is romping away, which is not playing in exctaly the same field as gold, but not all that dissimilar.

best
the gnome

Thanks Sotolo,

There is so much deceit in the defintion of the Federal Reserve that one does wonder why they do not spell out exactly on their web site who owns the Federal Reserve, how it actually operates and who has controlling interests and REAL veto power. Little doubt that the Fed does control the monetary system, but who does own the Fed, and what control do they have outside of the controls of the market place (and we do know who owns that). Its creation is worth a solid read...
It would appear that the MONEY TRUSTS have done very well.

To a cynic, it appears that (briefly) the money largely flows from the Fed to the markets, buoying and distorting the markets, at a time of chosing and in a manner of chosing, such that those who know the money flows become the beneficiaries of the money flows and around the money goes. Its not as simple as this of course, and their hick ups and blockers in the market place. But the big banks do get bigger ...
When one creates more money than there are sane places to invest, then there becomes amazing p/e ratios of bubbly proportions, ... Tesla p/e ~100 ... so investors are happy to pay a share price that is 100 times the value of its present earnings. Must be a good history of solid earnings or solid growth. Neither? Hmmm...
Lets look elsewhere ... broader perhaps
The SandP 500 p/e is now 75% higher than the long term 10 year average. Hmmm...
Netflix p/e ~80+ Hmmm

Lets think there is a bubble in the equity sector ... but buoyed by money creation, by ...

the gnome...do your own research and don't believe all you read, eoconomists and government ministers...and the multi marvellous media...

and Good Luck!

One of my Xmas presents was on the below link. Basically it is a free book about an important subject which is often confusing for people and more often not discussed much, and if so in a confusing manner, certainly not taught at University ... it can be downloaded in a variety of formats.

In essence

*Traces the money power through three and a half millennia from barter to the Euro.
* Draws fascinating, previously lost monetary principles from ancient Greece and Rome, from the experience of the Moslems, Venice, the Templars, the Jews, the Bank of Amsterdam and Bank of England, and the Federal Reserve System.
*Shows that the question of usury is far from settled, and that monetary reform is more a matter of morality and law than of economics.
*Demonstrates that a good money system must be based in law, not in commodities.
*Defines the essential elements needed to remove structural injustice from our money system.

https://archive.org/details/StephenZarlengaTheLostScienceOfMoneyScan44Mb

The other interesting free book of great relevance to now, and in the future is below, and it's about debt. The average understanding of how this works, and how it plays out is appalling

“RAY DALIO’S BOOK IS MUST READING FOR ANYONE WHO ASPIRES TO PREVENT OR MANAGE THROUGH THE NEXT FINANCIAL CRISIS”
LARRY SUMMERS

“A TERRIFIC PIECE OF WORK FROM ONE OF THE WORLD’S TOP INVESTORS WHO HAS DEVOTED HIS LIFE TO UNDERSTANDING MARKETS AND DEMONSTRATED THAT UNDERSTANDING BY NAVIGATING THE 2008 FINANCIAL CRISIS WELL”
HANK PAULSON

“AN OUTSTANDING HISTORY OF FINANCIAL CRISES, INCLUDING THE DEVASTATING CRISIS OF 2008, WITH A VERY VALUABLE FRAMEWORK FOR UNDERSTANDING WHY THE ENGINE OF THE FINANCIAL SYSTEM OCCASIONALLY BREAKS DOWN, AND WHAT TYPES OF POLICY ACTIONS BY CENTRAL BANKS AND GOVERNMENTS ARE NECESSARY TO RESOLVE SYSTEMIC FINANCIAL CRISES. THIS SHOULD SERVE AS A PLAY BOOK FOR FUTURE POLICY MAKERS, WITH PRACTICAL GUIDANCE ABOUT WHAT TO DO AND WHAT NOT TO DO”
TIM GEITHNER

https://www.principles.com/big-debt-crises/

I won't say I agree with all they say, but there is a lot of substance and insight in these publications.

enjoy! best read during a lockdown?? and perhaps a re-read?!

the gold gnome.

In what kind of period do gold miners go up in price? As with the physical gold, this is typically when monetary policy is being set on a “Keynesian” basis . In short, when the key central banks become Keynesian, investors should buy gold and gold miners; when central banks stop being Keynesian, investors should sell them.
Notes
1) Since 1985, the gold price has risen by about five times, while the goldminer index has merely doubled (ex-dividends). The takeaway is that gold miners performed strongly only when the central banks were Keynesian; the rest of the time it was best to avoid both gold and the miners.
2) Gold-mining equities—unlike gold—are not an “anti-fragile” [ Antifragility is a property of systems in which they increase in capability to thrive as a result of stressors, shocks, volatility, noise, mistakes, faults, attacks, or failures] asset. When markets face disruption and slip into the “left tail”, the miners fall like any other asset due to funding costs rising sharply. As such, they cannot be used to diversify a portfolio against a violent bear market. However ...
3) Gold miners are volatile assets that tend to outperform gold in Keynesian times, but do poorly when policy is focused on preserving savings.
To state the obvious we are in the PERFECT STORM of Keynesian thrusts by the Central Bankers. Money supply to the max, interest rates going negative.

Of course the central bankers will pull all manner of stunts, and have done. in July 2012 the European Central Bank under
Mario Draghi changed the very nature of monetary policy. Up until then, the job of a central bank was to anchor the system through short rates. But Draghi wanted to manipulate long rates in order to “save the euro”. He basically said that nominal long rates would never again be allowed to rise, or that the ECB would, in effect, “reinsure” investors in German and Italian bonds against loss. Such a promise obviated the need to own gold, and its price promptly plunged. As is usual when physical gold dives, gold-mining stocks fell even more, ending up four standard deviations undervalued versus their anticaptory model. Gold dived down to $1200 per ounce as a result, and stayed there until May 2019, whereupon it rose to $1800 plus, and has stayed there with the virus related financial stress ensured by the governments around the world.
The level of distrust in governments around the world is ballooning, and with it trust in the model of central bank phd economists and idealogue laden monetary mangement gurus.

Great time for gold, the best of times for the forseeable future,

the Gold Gnome

Merry Xmas to you from a red hot location temperature wise! Santa is in 14 day quarantine in west Oz, but on appeal it has been commuted to 14 minutes! So on her way. The xmas tip she left was to buy more shares in cey and to get more exposure to productive hard assets. ... wishing all an outrageously happy healthy and profitable New Year!!!

The BIS is an interesting plank in the financial system, and voices some interesting views

Gold holdings as part of a Nations wealth ... and the case for holding more gold?

Abstract
Almost five decades after the collapse of the Bretton Woods system, gold continues to form an important share of global foreign exchange reserves. This may be because gold has traditionally offered reserve managers many benefits, such as the absence of default risk. This paper explores whether these large investment shares in gold are also justified from a risk-return standpoint, or whether any other explanations have to be brought to bear. To do this, we go beyond the simple application of portfolio optimisation techniques, comprehensively analysing all possible long-only combinations of gold and representative fixed income reserve portfolios. We conclude that the market risk associated with gold is substantial when evaluated against a broad range of criteria, such as mitigating portfolio volatility, tail-risk, the probability of loss, and measures of diversification. This will tend to limit overall allocations. Nonetheless, for portfolios with higher sensitivity to interest rates (duration) and for reserve managers who measure their returns in a non-reserve currency, we find evidence that gold may function as a hedge, making it easier to justify sizeable gold holdings from a purely quantitative perspective.

Findings?
From a market risk perspective, a low-duration, reserve currency fixed income portfolio may benefit only from very small gold allocations (between 0% and 5%), on average. Nonetheless, sizeable gold holdings may be justified, from a purely quantitative standpoint, for portfolios with a higher duration and for reserve managers who measure their returns in a non-reserve currency. In addition, when looking at the benefits of gold as a protection against an extreme event, we find that high allocations (of between 20% and 50%) may be adequate in some cases. Our results suggest that choosing an appropriate share for gold in reserve portfolios is a complex task. The answer depends crucially on both the purpose (policy objectives) and implementation (numéraire, risk tolerance etc) of the reserve management process.
https://www.bis.org/publ/work906.htm

Gold has a primitive allure in the human psyche, that is very hard to displace. Some of it comes down to trust, and trust is difficult to put a economical value on, let alone input into the economists mathematical models. Yet if you take trust out of a company for instance, the cost of production of the company goes up very quickly. At the moment and indeed the last decade or more, trust in governments, economics theories and banks has been in rapid decline, and justifiably so.
https://www.usi.edu/media/3655208/Trust-and-Economic-Progress.pdf

In gold we trust, as they say...

best
the gold gnome

A new landscape is with us, and the governments are almost all on the same hymn sheet. Create money to create employment, prop up businesses, and stave off lot of social unrest. The global financial system that we take for granted, which is underwritten by global central banks and overseen by prudential authorities, is under siege from a disruptive technological advance that is increasingly impervious to regulatory pushback.

In the West, the response of governments has been mostly permissive. There is broad acknowledgement of the innovation blockchain represents, and the transformative implications it may have across industries.China has let the experiment run in part because it controls 65 per cent to 75 per cent of the compute underpinning bitcoin’s consensus algorithm. This translates to commanding the heights, as it affords the theoretical possibility of a doublespend attack on the network.In the meantime, the People’s Bank of China has fast tracked the development of the e-Yuan, a central bank digital currency (CBDC), as a means of displacing TenPay and AliPay in the domestic payments market. Will bitcoin just become another medium of (in) convenient exchange?

Gold?
During the 6 crisis periods since 2007, Gold bullion has returned an average 12.12% compared to -16.41% for the S&P 500 Total Return Index and 6.35% for U.S. Treasuries (as of 11/30/2020).

The COVID-19 pandemic has created a new financial landscape, where returns from traditional financial assets, in real terms, could be subpar for many years. By contrast, this crisis continues to highlight gold’s value as a potential safe haven investment.

YTD through November 30, 2020, gold has delivered strong relative performance gaining 17.11%, compared to 8.25% for bonds and 14.02% for stocks.

The higher gold prices go, the more analysts and investors talk about it, and the more financial media report on it. Added exposure generally translates to more investor interest; that's why some analysts expect prices to go even higher.

Phillip Streible, an analyst with Blue Line Futures, predicted gold would hit $US2500 by December next year. Other market watchers believe it could happen as early as...by this year's end.

Trillions getting printed, governments proving they are battling with the virus, let alone its mutations, let alone getting a recovery in motion. What we have seen in the last 12 months, is how democratic processes have delivered mediocrity to the people. Could be so much better.

good luck all...hard to see gold not going to go a lot higher
the gold gnome

Benz Mining would be another to watch carefully. Early stage but ... Nice grades, and the ore discovery seems predictable with the use of TEM.
https://benzmining.com/ as was the case when it was first discovered by Placer decades ago. They lost the plot, but now have a new team and updated search (TEM) technology....

go gold.... abd CEY remains of great interest to me.

the gnome

Yes, perhaps nefarious is a tad harsh.

the gnome

I always worry when the cost breakdowns are not clear. To state the obvious something/s are hidden, and then the question comes, as to why?

The gold miners generally, have been only a whisker short of nefarious reporting of costs, which was one of the reasons for bringing in the AISC.
....so much money injected into the monetary system by central banks, hard to see the value of any decent hard assets decreasing in the near future.
cheers
the gold gnome.

The economic recovery, slowing for months, is in danger of going into reverse. That's why a growing list of economists, business lobbyists and other advocacy groups are urging lawmakers to rally around the $US908 billion ($1.22 trillion) aid package currently gaining bipartisan support in Congress.
Experts say the plan would provide relief to several battered corners of the economy. It includes nearly $US300 billion for small-business aid, $US180 billion for unemployed workers, and $US160 billion for state, local and tribal governments.
As many as 13 million Americans are receiving benefits under two programs that expanded and extended the existing unemployment insurance program. Those programs, created by Congress in the spring, are set to expire at the end of the year — an outcome that members of both political parties have said they want to avoid.
States and local governments, which have been battered by pandemic-related costs and collapsing tax revenues, have already cut more than 1.3 million jobs, and much deeper cuts loom.

There is an old saying "Cui Bono", which is very helpful to remember, whether in investing or soving crimes or alike...
Cui bono? (/kwi? 'bo?no?/), in English "to whom is it a benefit?", is a Latin phrase about identifying crime suspects. It expresses the view that crimes are often committed to benefit their perpetrators, especially financially. Which party benefits may not be obvious, and there may be a scapegoat
There are brokers, analysts, instiution, shorters, longers, nutters etc...

good luck all, and good night!
the gold gnome

Its not that gold is going up, its that the purchasing power of the paper stuff is following its long term trend down, you might get the idea at the below web site
https://www.measuringworth.com/calculators/ppowerus/
and another for the graph enthusiasts
https://howmuch.net/articles/rise-and-fall-dollar

The suggestion is this trend will accelerate...

best
the gnome

Mr T

Yes this fsmily business was a worry, and needs to be managed along properly

The other aspect of what is happening that generally happens, is the the new CEO tends to chuck out all of the dirty linen, and position the company for growth. During this phase, when there is a fair amount of negative news, there is SP loss. For those experienced investors, this is the best time to buy!!!

I think the new CEO is playing by this hymn book, and appears to be doing a good job.

As for the price of gold, I think Oz is doing the front running of what is going to be the new norm.

Key points:

Net debt for Commonwealth, state and territory governments is forecast to hit $1.4 trillion by 2023-24
Almost every government is using the larger debt levels to finance deficit spending, including infrastructure investment (commonly termed virus recovery)
Western Australia is the only state government forecasting budget surpluses for the next four years

best

the gold gnome

The big thing to watch is the mountains of debt now being exposed. Just had the state of Queensland disclose the Non-Financial Public Sector borrowings – in the budget speech to State Parliament.. he spent a few minutes talking about the finer points of the total debt – which includes the general government sector as well as the state-owned corporations – which is set to top an eye-watering $130 billion by 2024.Budget $130m of debt, PLUS a decrease in royalty based revenue of 45% (due to the reduction in coal production amongst other things). Victoria was $137b.

Treasury is forecasting Australia's net debt position will be $703.2 billion for 2020-21 (meaning a net debt-to-GDP ratio of 36.1 per cent). And that debt will increase to $966.2 billion in 2023-24 (to a net debt-to-GDP ratio of 43.8 per cent)

As the COVID-19 pandemic rages, governments in advanced economies have opened their coffers to support households and small businesses, spending on the order of 15 per cent-20 per cent of GDP in many cases. Cumulative debt levels now exceed GDP in many developed countries; and, on average, debt as a share of GDP is approaching post-World War II highs. In this strange world of ultra-low interest rates, what limits are there on government borrowing? According to advocates of Modern Monetary Theory (MMT), there are none, at least not for countries that issue debt in their own currency and have spare productive capacity! And on it goes. The theory is fine, just like some other social theories. Reality is very different.

But after all, the central bank can simply print money to pay off maturing debt, and this should not result in inflation as long as there is sizeable unemployment...and on the ride goes, where it stops no one knows, but the purchase power of money will decrease...price of gold will go up as money is devalued.

Go gold...

best
the gnome

Great pick up! I am not at all convinced that the Burkina Faso assets are a wash out. I would easier believe that the mining companies of today are under done in technical expertise, and overdone in accounting and legal types as board members and hence conservative biased decision makers (they just do not have the aligned experience or technical competencies to make the decisions required ot uild highly profitable mining companies).
There is a tremendous amount of gold in this region and gold mining of an artsinal sort, has been happening here for 100's of years.

good luck all
the gnome

PS. Another day and another farce in Oz. The WA Premier announced sometime ago, that he is lead by the best scientific advice. The advice was that Victoria (or any persons from another state), had to have ZERO community transition for 28 days. This came and went on Friday last week for Victorians (who have suffered a bit of the last 12 months). No lowering of the border pass for Victorians coming to West Australia (to celibrate some obscure event called Xmas with their families). Obviously worlds best medical advice now ignored. Stupid self centred political populisom reigns fully exposed and supreme.

Highly unusual, good pick up.... a new business model for the service industry

Well it happened in Oz at a state level, now with Victorian Govt spending exrtaordinary levels of debt, rivaling the total national debt, to try and spend thmselves out of trouble (devalue the A$, cripple th future generation etc)

Government to spend $49b, rack up huge debt to turn Victoria around

Normal text sizeLarger text sizeVery large text size
7
View all comments

TODAY'S TOP STORIES
Just how big is the state government's debt?; Millions for parks, cancer care and research

Catastrophe, recovery and debt: The tale of the Victorian budget

Lifters, not leaners: Victoria steps in where federal budget did not

The Victorian government will use record levels of debt and deficit to spend $49 billion in the next four years in an effort to drag Victoria out of the disastrous COVID-19 recession.

Handing down this year’s budget on Tuesday, which represents an unprecedented level of intervention by a state into the employment market and other aspects of the economy, Treasurer Tim Pallas said the government had set an ambitious target of creating 400,000 jobs over the next five years.

A massive spend, with the jobs plan at its centre, will take the government’s net debt to nearly $155 billion within three years, more than 28 per cent of Victoria’s total annual economic output.

Will happen in each of the states, at Federal level, and will happen in the US etc etc

Hang onto real assets, and watch out for the snakeoil guys trying to talk the economy up.

best
the Gnome