Comment of the Day
7th February 2023
Eoin Treacy
Mar 8
Video commentary for March 7th 2023
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: financial conditions tightening again, 2-year yields at 5%, stocks ease, gold weak, dollar firm, cash and manageable debt likely to be deciding factor in survival for leveraged companies.
This section continues in the Subscriber's Area.
Powell Opens Door to Bigger Rate Hike, Says Peak Likely Higher
This article from Bloomberg may be of interest. Here is a section:
“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell told the Senate Banking Committee. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”
Eoin Treacy's view
That does not sound like someone who is about to stop raising rates. Of course central bankers rarely sound like they are about to change tack until they do. A lot will depend on incoming data.
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Perth Mint sold diluted gold to China, got caught, and tried to cover it up
This article for ABC News May be of interest to subscribers. Here is a section:
The historic Perth Mint is facing a potential $9 billion recall of gold bars after selling diluted or "doped" bullion to China and then covering it up, according to a leaked internal report.
Four Corners has uncovered documents charting the WA government-owned mint's decision to begin "doping" its gold in 2018, and then how it withheld evidence from its largest client in an effort to protect its reputation.
While the gold remained above broader industry standards, the report estimated up to 100 tonnes of gold sent to Shanghai Gold Exchange (SGE) potentially did not comply with Shanghai's strict purity standards for silver content.
One Perth Mint insider, who asked not to be named as they could face five years' jail if their identity is revealed, says it is a "scandal of the highest level".
"I don't know if I've ever seen one this big," they say.
The mint is the largest processor of newly mined gold in the world, one of Perth's top tourist attractions and well known for producing commemorative coins to mark everything from royal weddings to a new James Bond film.
Last year alone it sold $20.3 billion in gold. It is the only mint in the world that has a government guarantee.
Eoin Treacy's view
I’m currently reading The Dawn of Everything: a New History of Humanity. It’s heavy going. They go through many proof points in an attempt to justify their view. The overarching theme is we are people and have always been people. Over the millennia nothing has changed in terms of human nature.
I was thinking about that this morning as I contemplated the Perth mint’s fraud. History is replete with examples of governments who have attempted to cover over holes in the budget by debasing the currency. This is not quite the same because the mint does not produce coinage. The difference is academic for Chinese buyers who prize purity.
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Email of the day on carbon emission trading
you are showing charts and talking a lot about carbon emission certificates in the EU. (MO2 generic future on Bloomberg). is there any tradeable or investable instrument out there? tkx a lot!
Eoin Treacy's view
Thank you for this question which may be of interest to other subscribers. Carbon emissions are a new asset class with strong political backing. The prices series is increasingly being used as a benchmark to support investment in fossil fuel alternatives. As long as that remains the case, governments will restrict supply when prices fall to ensure a viable market.
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Eoin's personal portfolio: stock market index short initiated
One of the questions subscribers ask most often is how to find details of my open trades. To make it easier I will simply repost the latest summary on a daily basis until there is a change.
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