Member Info for Tornadotony

https://www.longtermtrends.net/us-debt-to-gdp/The long term trends tell an interesting story. The debt ratio has blown out by a total of 25%. The future GDP in the post war era had many advances in technology to deliver future efficiency and recover debt profiles. It may happen again with new technologies that we can only imagine at the present time. Previous debt outbreaks however brought at least two decades of recession and slow growth advancement. They delivered little inflation, but a huge amount of deflation. What we know from 2008 pullback was that a ceiling just over 4% on 10 year Treasuries was possible when the debt to GDP ratios were moving from 40% to 80% range. Previously they could go much higher. The USA debt ratio and the same for many western economies is now 120%. It is likely that several banks suggesting 2.25% Treasuries as a new ceiling is a reality as otherwise a long period of slow growth is exchanged for the 1929 like depression. We are currently around 1.6%. The 2008 data tells us after an 8 month gold pull back, that the gold price acts around 2 months or so in advance where the 10 year Treasury yield actually peaks. We are currently moving at an upward rate of 0.2% a month so we are within 4 weeks of a possible major bottom on gold is my opinion.

I have read a variety of valuations, but the real value is knocking out a host of lung viral infections and knowing how many competitive and different options for treatment will be in play. I do not mind lower valuations like those put forward by EVA. It encourages some of us to buy a lot more shares while its sub £2 and being really happy with a 50% rise. If it goes higher thats just dandy.

Whitenight

We have stock that have increased 700%, that generates no money thus far, that have not even published business plans, that are expected to acquire debt at levels running into 100's of millions, that require years of construction, that have serious competition and are likely to run at 80 PE rates. We have stock like this with hundreds of millions in the bank, years of future on-going production, pays dividends higher than bond rates and PE rates well below 20. You can not make it up in this stock market. There is no logic and a monkey throwing darts at a board is how it looks like its all being run. May as well invest in a bent greyhound racing track.

If traders want to put their heads in a gas oven and switch it on its up to them. Shorting USA Treasuries to drive up interest rates is stupid. Only a matter of time before FED teaches them another lesson that being do not bet against the FED. Buying expensive bitcoin that has absurd volatility looks like another risky game imop.

Another reason to hold Synairgen as an insurance policy stock. I question if International travel will get back to where it was later in the year.

Covid-19 mutations in Brazil are suggesting to me to hold Shanta and other gold miners as an insurance policy. Its looking bad on that continent despite many vaccinations.

Brazilian Covid-19 is looking very ugly in South America and if spreads its not certain if existing vaccines work. Markets are way ahead of themselves especially the energy markets. Holding here is like an insurance policy.

Despite over 8 million vaccinations in Brazil the pandemic is sharply rising in southern Brazil and now into Uruguay. As much as we hope all the vaccinations get life back to normal, the continued rounds of mutations with this virus are likely to make it a long haul. No doubt that therapy market is needed.

https://www.bloomberg.com/opinion/articles/2021-03-10/the-coming-economic-boom-will-be-just-a-mirage?sref=IHd9Cx6X

Support lines 1663, 1649, 1629. 14 Day 20 RSI is at 1629.
Resistance 1702 and 1726.

What is becoming attractive is physical gold bars as the premiums are now falling. If they crash gold to $1480 and the pound stays at 1.38 to the dollar its equivalent to buying when gold was at $1319 (2019 prices here in the UK).

Somehow hold became whole and I did not spot.

BPat890

The USD is gaining strength as its interest rate to whole USA dollars in bonds has gone up in value (yield to around 1.6% on 10yr Treasuries where as for UK its 0.75%). The second factor is vaccine roll out with USA at 24% and the UK is actually higher. Hence UK is only marginally down against the USD and the euro is down significantly against both currencies as they have lower interest rates and have below an 8% vaccine roll out. The higher the interest rate the stronger the currency.

Its potentially bad for the USA government is amount of debt that is now subject to higher interest so a lot of austerity to follow unless the interest rate goes back down. Furthermore, if the USA interest rate hits around 3% the American equity markets essentially blow up as the monies earned from bond interest are likely to exceed dividend rates of most USA listed companies. USA company earnings are not that great and the PE rates in the market are at all time highs.

So the upshot is whether the USA Treasury yields breaker higher and gold keeps falling and this continues and we get a 2008 crash in the markets or whether the FED steps in with its plunge protection team and save the day. The key is to be sitting on some cash and not be overweight in this market. The current situation is under a cautionary flag. Hope the above is of some help.

Tony

https://edition.cnn.com/2021/03/04/investing/wall-street-repo-market-fed/index.html

Many of you have hear how the USA Treasuries 10 years are currently affecting gold. The above article explains what is going on to us non-experts on this part of the market.

If the government were to take 50%, the VAT bill would need to be paid back and the cost of building the Singuida mine has to offset the 50% rate otherwise there is no incentive to grow assets. It also would have to allow $8-$10M Luika exploration. Other taxes that are currently paid are removed and they are quite substantial. It is therefore unlikely to have a material effect in the current year and next year as well.

If they opt for just 16% ownership and retain existing taxes that are far more than just Royalties the difference is not that great. Again the Government owes a lot of monies in kind from VAT repayments. The 16% is about the same bill as the VAT currently owed to the company.

The above is how I saw it and maybe I am wrong but I was not unduly concerned as it was similar to the status quo.

Iglu

Your spot on about the channel. I see exactly what your talking about.

Tony

My AAZ position is relatively modest and below target exit price so its a hold from me. The divi helps maintaining a hold despite my plan to retire from the equity investment field.

Slow stochastics on the daily chart are zero. RSI now 37 on the daily. In theory a bottom could be in place this week.

Once again, I am calling it a day here and wishing you all the best with Pensana.

The additional measure to the list was a delay in paying tax in that additional profits above costs were tax free to around 25% or so. (This can be reversed after an election by a future government which the Chancellor of course would not say as they assume re-election of their party).

The downside, and I say this as someone who has lived under the tenure of Johnson as London Mayor. The track record on delivery of great promises is slow, sometimes reversed at a stroke, or they renegade on elements after someone is committed down a particular road and so do not always deliver on their side of the bargain. It happened in London on many projects and one or two that proceeded actually then failed (although unlikely for Pensana). Investors need to be wary of what they may have heard today as the reliability and credibility of some UK politicians has a lot to be desired.

My personal opinion.

Logically the central banks have to sort out the mess in the Treasuries rate. If Treasuries continue to rise, then all the programmes to get out of the pandemic are essentially crashed as Governments will not be able to borrow anything further. It then allows the pandemic viral infections to mutate, undermine all the existing vaccine programmes and undermine all the protective measures to restart economies. Either the central banks and others involved in the Treasury market are on the same page or they are not with government fiscal measures.

As for inflation, it is inevitable over a short period of time, but governments nor companies can afford employee pay rises. So any inflation argument against Treasuries is ephemeral as the demand side wanes after lockdown relief activity and things become more normalised. What is critical is that once growth does come back that governments show how they repair their balance sheet when tax receipts finally arrive and if they don't that is when bond yields spike. As for gold, its value should equate to money in circulation and that probably suggests $1850 as being around fair value as it should be 1350 x 1.36 (36% rise in debt dollars created) = $1855.