London South East | The UK's favourite investor portal.

Well things have finally exploded and imploded, almost simultaneously in Oz. Perhaps a more obvious view of the progress and outcomes of the governments and academic experts managing the virus. The tip of the iceberg, where the iceberg is coming into view...

'A complete mess': angry business demands clarity from Victoria

Hundreds of business leaders frustrated with the lack of clarity from the Victorian government over economic closures went live in a series of live hook-ups on Tuesday night.
The level of anger and confusion is extreme, Prime Minister Scott Morrison and Treasurer Josh Frydenberg have contacted Victorian Treasurer Tim Pallas and Premier Daniel Andrews ...

The concerns cover almost every aspect of business and include supply and distribution, manufacturing, construction, organising permits for so-called "permitted workers", IT, legal services, online retail, fuel and food delivery.

"The situation in Victoria is a complete mess,'' chief executive of the Australian Industry Group Innes Willox.

"Twelve hours before lockdown, businesses have no certainty about how they can open, the circumstances in which they can open, and how they can remain open."

"CEOs face the prospect of having to explain why they are opening to police officers which is untenable."

"The government has issued vague directives and demonstrated a complete lack of understanding of how business actually operates."

One source said "the state of confusion is off the charts''.

"People have no idea what's going on.''

On Tuesday night, Mr Frydenberg spoke in a series of hook-ups to the leaders of more than 500 businesses....

and on the circus goes,

can one be;ieve in aything but gold?

best
the gnome

Finally we ee the business leaders start to tall about the ridiculous handling/management of the virus. Orica CEO came out yesterday, and today we see MacNameee come out. The "cure" is far worse than the disease, and will probably our last the disease by decades! as someof us have been saying for a long time. The effects of the "cure" are incalculatable, but are going to be very severe.

"The chairman of global biotechnology giant CSL, Brian McNamee, has warned that Melbourne's lockdown will have "devastating" economic, social and health costs and called for governments to put forward a credible virus strategy that is "not seen as blunt or punitive to the wider society".

The Melbourne-based medical doctor and chairman of Australia's second most valuable company, which is working to develop a COVID-19 vaccine, Dr McNamee said elimination of the virus in Victoria "seems remarkably ambitious from where we are now".

Dr McNamee questioned the Victorian government's stage four lockdown imposed this week.

"The direct and indirect costs are staggering and the devastating consequences are not well enough understood," he said in an interview with The Australian Financial Review.

"We're harming the social contract with our own society and particularly our youth and small businesses."

Most rural towns in Australia have not had the virus. Most in Victoria, but its all now in stage 4 lockdown?

Australia was designed with Social distancing in mind, first convicts from the UK society, and then we found out Australia has 7.7 million square kilometers of area, and we struggle with a population of 25 million. Then we all bought quarter acre blocks and put 2 m high fences around them. I am joking here but the strategy is appalling and poorly thought out.

In fact the strategy is a manfucature of the ridiculous frantic anxiety generated by the media, 24/7. We had Australia burn down in the last anxiety attack!?

We need commonsense to be regaiined, and business leaders to step over the media scrum and their servants the politicians.

In the meantime I cannot see anyone believing recovery stories and a rosy future but rather insure against a catastrophic economic collapse, and buy GOLD. We already seem to have a collapse by the communities in their governments.

In some ways I would love to be wrong, but gold has got a lot of upside to it. Nice price action on POG last night, be good to see CEY SP benefit more from this action.

best
the gnome.

The affairs of Europe have always been a distant interest, but worth a comment, as are those of the Central Bankers (a group of well educated economists with no worldy experience, think Greenspan)

Since 2000, Western central bankers have decided they know better than the markets and replaced price discovery mechanisms with a price-fixing system run by them. The results have been dismal, as they always are when humans fall into the trap of a Hayekian “FATAL CONCEIT”.
"Bureaucratic fixing of prices has a 100% failure rate in economics, this has been proven in all other sectors of the economy and will now be proven to be the case for central banks in the financial sector."
https://www.cobdencentre.org/2016/03/government-price-fixing-has-a-100-failure-rate-this-includes-central-banks/

On this score, consider major asset returns since the new millennium began.

Amazingly, the BEST PERFORMER HAS BEEN GOLD, which is a investment whose main merit to some is to protect savers against the idiocy of central bankers.
The second best investment has been Italy’s bond market (!). The flip side of cratering Italy’s corporate sector has been a relentless flow into government paper. Thank you Mr. Draghi for helping create one of the worst ever mal-investment episodes, which has been paid for by the suffering of Italians.

Third has been the US stock market.

Fourth on THE list has been two-year Swiss franc bonds—a substitute for gold. It is doubtful that Switzerland, with a current account in excess of 7% of GDP, needed the money.

Last on the list is the eurozone equity market, which since 2000 has returned 3.5% a year, and since 2007 a princely 0%.

Yet everyone is happy in Europe today because an agreement to issue some common bonds has been reached in Brussels. Never mind that this will make no difference so long as Italy’s natural rate is negative. I’m afraid that things will get worse before they improve. This view is encapsulated by the German proverb “better the end of horror than a horror without end”.

I am sticking with gold, and have been for a decade now ... and I am very happy in Oz!!!

best
the gnome

If people did stop travelling (good arguments they should, if not for their own sake) .... the effects would ricochet through nearly every community, industry and business, from manufacturing to real estate, restaurants, luxury goods, financial services (etc). All this would risk setting off a raft of corporate insolvencies, high unemployment and a sharp downturn.
Now the coronavirus-related collapse in world tourism, which represents more than 10 per cent of global economic output according to the World Travel and Tourism Council, may well trigger the next stage of this crisis, in which we move from a public health emergency and mass unemployment to widespread insolvencies in myriad industries, and we enter into the down spiral.
Even with billions of dollars in government aid programs (assumes the parties can agree LOL), US commercial bankruptcies were up 43 per cent in June compared with the same month of 2019.
The fact that people are not travelling – not even as far as the office – affects real estate, too. The value of global real estate is greater than that of stocks and bonds combined. According to Green Street Advisors, the unleveraged value of commercial real estate in the US is down by 11 per cent since the outbreak of the pandemic.
Transaction volumes in the second quarter of the year dropped by 68 per cent – the lowest level since the post-2008 financial crisis. There was distress across every property type in every part of the USA.
Real estate is the largest portion of the tax base in New York and other cities. Neighbourhoods where expensive office towers sit empty have a spooky, deserted atmosphere. Big tech firms such as Google, among the top real estate spenders in many big US cities, are not sending workers back until the next northern summer. How do councils provide services. What happens if they don't?
As AG Bisset put it in a June research note, the collapse in mass tourism and the potential reverberations from it recall the 1928 collapse in grain prices that ultimately helped to trigger the 1929 market crash and the Depression.
What we are seeing is the demise of an industry that has supported many other sectors. I suspect that once vacation season has come and gone, particularly if the US fails to provide more (how much more...who knows) stimulus money, we will see ramifications that stretch far beyond the travel and tourism business itself. Out for decades...to the next generation and beyond...

good luck ...
go to the local pub and have a beer? buy some gold or gold shares?

best
the gnome

The Monday papers in Oz not a lot better...

The Victorian State wants the National govt to bail them out, for what is their own incompetence, and have settled for less. No one knows how much the governments actions are going to cost, but you can bet it will be paid in massive debt loadings into the next few decades. The Reserve Bank has said a firm NO to negative interest rates

Tough new COVID-19 business restrictions are due to be finalised by the state government on Monday (but golf and fishing are not going to be allowed?! - bought a chuckle as the way I play golf its perfect for self isolation... I hardly ever see anyone, but I do get 18 glimpses of the fairway!), with industries set to be designated into three categories and the rules due to take effect from Wednesday.
1. Essential food and services businesses will remain open largely as normal, including supermarkets, butchers, bakeries, pharmacies, doctors and petrol stations. Cafes and restaurants will be allowed to offer take away services and home delivery only.

2. group of yet-to-be-defined businesses will be forced to reduce output and operating hours.
3. a category of businesses and workers will be required to operate from home, or if they cannot do so, temporarily shut down.

The REPORTING season is nearly withus: "Expectations are pretty downbeat and corporate Australia is going to deliver one of the worst reporting seasons on record," said Perpetual's head of investment strategy Matt Sherwood.
"The economy has been in recession for more than half the earnings period so they’re going to be pessimistic results, but there's going to be a cross-section of stocks that do better. It’s a two-speed economy."...and one speed is in reverse!

Real Estate is taking a battering and is going to go down further in prices. As an investment this looks unappealing, as rent payments are ... tentative ... making invesment income dry up, hence can the interest be serviced?, especially when the income from a job is on the cards to dry up, capital losses to be expected,
Melbourne is set to lead a further plunge in capital city property prices in July, as investor-driven apartments fall out of favour and demand for houses in regional areas surges. New data is set to show a fall in values of about 1.1 per cent in Melbourne, 0.8 per cent in Sydney, 0.1 per cent in Brisbane and the Gold Coast, and 0.6 per cent in Perth. Adelaide prices were steady over the month. Data for Canberra, Hobart and Darwin was not available.

Gold looks to be a fair store of wealth
Solid gold producers as well.

a good week ahead for the goldies

the gnome

“Africa has turned into a pawn in the chessboard of experimentation for all manner of ill-digested development theories and pet hypotheses."

The efforts of the IMF and World Bank have been close to abysmal from what I have seen in Africa, and one could add in various other countries in South America, Latin America SE Asia.

The game that gets played runs along 2 lines.

One is to change the taxation and investment laws (IMF guidance), to compensate investors for the additional risk of investing in a risky country. Net result is that a non sustainable asset gets taken away, government income is minimised and benefits to the local people at the point of mining is very minimal, but there is an environmental legacy not to mention a depreciation in many of the dry places of non-renewable water. In some dry countries the water in the palaeochannels/ground which are sucked dry, dates in excess of 10,000 years ao, and now being desert will not be renewed. Profits are made, but where?

The second is the transfer pricing profit shifting taxation rort, which means that the local mining company's profits in the developed country are then shifted to alighter taxation regime. The mining company HQ in some tax haven employs all the staff and owns all of the equipment, and hires staff and equipment out to local comp at good prices to reflect additional risk (etc), and right before your eyes the costs of mining gold in the developing country are more than the income..and away go taxes. So no or minimal local profit means minimum local tax, which means minimium loca income to the host government. Now ask yourself if the WB and IMF were really concerned with development and poverty aleviation etc, they would have got on top of this right from the start, such that the maximum value is derived for the owners of the resource in the ground?

Outside of mining you come to infrastructure gravy train. Large loans are made (why would the WB and IMF give out small loans when their running costs are so high due to their extravagant admin costs) to governments, who clip the ticket in every way possible, such that roads are paper thin (like other magnificent infrastructure projects and white elephants) and fail surprisingly quickly (and v little benefit goes to poor local people) yet the debt is born by those poor people who have not been the beneficiaries of the loan for generations.
https://www.transparency.org/en/news/where-are-africas-billions#

My argument is to wipe out all of the misplaced debt, put in place proper governance with rigorous independent auditors, and use the money to teach the people to fish, not give their governments handouts to buy houses in Europe or wherever, or send their children to elite schools, who in turn return and become part of the ticket clipping elite in the next generation.

Sorry for the rant, over now...I have taken my medicine, but please dont mention the World Bank, the IMF of the PhD economists

JP Morgan's infamous statement to Congress in 1912 that "gold is money, everything else is credit" is an underlying concept in the money game.
Move forward to the recent claim from the Perth Mint "That said, gold is not only a crisis investment, having delivered long-run returns of more than 9 per cent per annum over the last five decades,"

We now have SendGold, a trading platform specific to the commodity and which bills itself as the world's first "gold as a service" technology provider. The founder : "I realised how fragile the monetary system is," she says. "It was bets on top of bets that nobody understood."...SendGold is limited to the purchase of physical gold title , which is more expensive due to the need for storage, auditing and insurance, but provides greater defensiveness. The SendGold platform has been experiencing a surge as more investors cotton on. Although its sweet spot is more experienced investors between the ages of 35 and 55, SendGold is drawing in gold enthusiasts across the spectrum with minimum purchases as low as 50¢ and investors aged 18 to 97 using the platform. It charges brokerage of about 1 per cent.

Since January it has seen transaction volumes snowball by 819 per cent and the average transaction size grow by 311 per cent.

Some 80 per cent of that activity is coming from Australia, where SendGold is headquartered. It operates in 14 countries, with a focus on the developing world markets where remittances and gifts are an important cultural feature of the local financial services landscape.
https://www.sendgold.com/
The darlings in the FinTech space have been focussed on ultimtately debt, and feed into the the buy now, pay later phenomenon. Someone will have to pay of cou
The Perth Mint oversaw the sale of 120,000 ounces of minted gold bars and coins in April, which is triple the average monthly sales over the past eight years.

But where the rising demand for gold is really evident is in the market for gold-backed exchange-traded funds. "More than 700 tonnes of gold was bought through these vehicles in the first six months of the year globally," "That’s more than any full calendar year going back to 2003, when gold ETFs were first launched."
The ASX-listed VanEck Gold Miner ETF rose 44 per cent in 2020 and hit a record close of $60.75 on Monday, and gold mining companies were also benefiting from the surging price.
VanEck rival BetaShares has seen inflows into its currency-hedged Global Gold Miners ETF in the first six months of 2020 already exceed the whole of calendar year 2019.
Gold ETFs have the additional "counter-party risk" of being managed by a third-party investment manager, she says.

We also have a new joint venture made up of Perth Mint and ASX-listed Security Matters Limited called trueGold that will focus on supply chain integrity and freezing out so-called conflict gold. Hope the JV works a bit better than their web site
https://www.securitymattersltd.com/null
as good a

Well the tecchs have bounced again, and supposedly bounced bigger and better, but how much longer when every economy is going backwards ... the popular narratives are being shown to be fairy tales as the second wave is on us, and the third is coming behind ...

Aided by lockdown effects, Big Tech has rolled out some stellar results. Self-isolating consumers have replaced devices and devoured cloud computing services, spurring a new upgrade cycle. Apple is again growing iPhone sales, while Amazon, Microsoft and Google posted annual revenue rises for 2Q20 of 29% to 47% for cloud activities. Such demand has boosted Asia’s tech supply chain, with Samsung Electronics managing a 23% year-on-year jump in operating profit, aided by a 13% rise in memory chip prices. Yet having floated all boats, surging hardware demand is about to become more specific, with some segments facing excess supply and others sustained tightness.

This dynamic can be seen by Taiwan’s export order growth in June hitting a two-year high, while South Korea’s was anemic. It follows a two-year divergence between the two countries’ export performance. As a result, some Asian hardware suppliers will thrive, while others face bulging inventories and softening prices. Regional currencies and asset prices will be impacted.

South Korea and Taiwan lead an Asia electronics supply chain that has gotten more specialized and concentrated. Korea rules in memory chip production, which accounts for about 20% of its total exports, and more than half of global market share. The issue is that memory chip production is commodity-like and Korea’s export performance has been hit by both price and volume effects. In contrast, Taiwan rules as a “foundry” maker of microprocessors for designers like Advanced Micro Devices that outsource production. Taiwan controls more than half of the foundry business, which allows its firms to share resources on research and development costs and sustain their position on the technological frontier. Unlike memory chip makers, foundries take orders on-demand and operate on shorter product cycles.

In recent months, Korea has seen a one-off demand-kicker for electronic products due to global lockdowns. The surge in remote working and learning has boosted both personal computer sales and server demand for data centers and cloud computing services. This lifted both the price and volume of memory chip orders, which is a core part of many devices. It also helped to digest the inventory overhang that restrained Korea’s electronics exports in the past two years,,,

Yet this one-off demand boost looks to have played out as the parlous state of major economies is causing sales growth to ebb. It has led to concerns about the durability of the memory chip cycle, especially as corporate IT investment is weakening. ...

good luck all, wash your hands
the gnome

The disasters loomig in the Oz Economy appears to be a result of the fact that you dont have to have any qualifications to be a politician. Management prowess near zero! Self interest, ego sky high. I really feel very concerned for the young people who are going to have to clean up this utter mess.

The federal government's economic recovery outlook has already been dashed only a week after its budget update, due to a looming harsher lockdown in Victoria and tighter Queensland border restrictions weighing on business activity and hurting confidence across the country.

PM challenges WA, Qld over border closures

Scott Morrison has called on West Australian Premier Mark McGowan to relax his border restrictions, saying there is no reason why the state should be closed to jurisdictions that pose no health threat. Amid fears that unnecessary economic damage is being inflicted by some closures, the Prime Minister also cast doubt on the decision by Queensland Premier Annastacia Palaszczuk to shut the state's borders to everybody from greater Sydney when there is no medical advice to do so.

Victoria suffers record-breaking case and death numbers

Federal health authorities have warned that community transmission poses a bigger concern to Victoria's control of its COVID-19 outbreaks than aged care home clusters, as the state announced a record-breaking 723 new cases and 13 deaths on Thursday.
The 723 new cases marked the biggest single-day increase in Australia during the pandemic, outstripping Monday's record of 532 cases in Victoria and 549 nationally.

Escalating outbreak puts another nail in budget numbers

Victoria's mistakes have already undermined the timeline for national economic recovery and the return of jobs, but Scott Morrison is more concerned with ensuring the Andrews government doesn't compound the errors.

NSW, Victoria ready proposals to fix 'train wreck' tax system

NSW and Victoria are developing detailed proposals on cutting stamp duty and reforming payroll tax for other states and the federal government to consider as part of a national tax reform blueprint.

and on the show goes

best
the gnome

Latest Share Chat

Member Info for goldgnome

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)

Latest Share Chat

Member Info for goldgnome

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)

Please enter at least 2 characters

No results found

Search results

Recently viewed

Trending