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04 May 2021
Please note - Comment of the Day and the Subscriber's Video will next be updated on May 4th.
Big Picture Long-Term video April 30th 2021
A link to this week's Big Picture Long-Term video is posted in the Subscriber's Area.
Copper Boom Is Just Beginning for the CEO of Biggest Gold Miner
This article from Bloomberg may be of interest to subscribers. Here it is in full:
Copper may be flirting with record highs but the metal is far from peaking as the energy transition revs up, according to Newmont Corp. Chief Executive Officer Tom Palmer.
Futures hit $10,000 a metric ton on Thursday for the first time since 2011 as mines struggle to keep up with surging demand. Newmont, the world’s largest gold producer, is increasing exposure to copper through several “mega projects,” Palmer said on an earnings call. Even if just one materializes, copper will account for 15-20% of the company’s total output by the end of the decade, he said.
“I’m pretty excited about having good exposure to copper at that time when the world is going through the energy transition,” Palmer said on an interview with Bloomberg TV following the earnings call. “Copper’s got a pretty good story in front of it. I think its day in the sun is more towards the end of this decade.”
The copper push doesn’t mean Palmer has a downbeat view on gold. He sees bullion prices holding their current “very healthy levels” or even moving higher given fiscal and monetary stimulus. India should remain one of the key sources of demand after the country recovers from the Covid-19 tragedy, Palmer said.
Mining executives have been slow to invest in new supply because they are still scarred from the negative experience of the last bear market. Green field mining is expensive and uncertain and they now wish to preserve their balance sheets and strong cash positions. Investors are certainly not complaining at the rising dividends either. There is a growing belief among gold mining CEOs that copper/gold deposits are the most attractive for new investment. That might also be considered a hangover from the mining bust because it hedges exposure to the gold price and diversifies income streams.
Email of the day on the inevitability of bitcoin's multiplication
Hi, what would be your comment on the following report from these people who were right more frequently than not:
Thank you for this article which may be of interest to the Collective. Here is a section:
For every million new users, the price of bitcoin rises $200. It happened every time except for February 2016, when the price was slow to hit.
The rise in the price has been amazingly constant. I’ll leave it to some future Avogadro to figure out exactly why. The important point is: If this relationship holds, bitcoin will hit $200,000 in 2022.
I realize that sounds like a large caveat – but these relationships have held for a decade. The compound annual growth rate (CAGR) of bitcoin has been 213% for more than ten years. $200,000 a year from now would be exactly 213% higher than today. It would be just normal trend growth.
The best time to buy bitcoin is around a year before the halving of the reward for mining (halvening). The last one was almost a year ago and the next will be in about three years. After the halving of the reward, the limited supply argument is burnished because it becomes twice as expensive to mine new coins so the need for additional resources increases while the value of coins already in existence inflates. That’s exactly what we have seen after every other halving and there is no reason to believe that will not persist.
Biden = Roosevelt: The Analogue
This side by side comparison by Ray Dalio may be of interest to subscribers. Here is a section on corporations:
Roosevelt, 1935: “We have established the principle of graduated taxation in respect to personal incomes, gifts, and estates. We should apply the same principle to corporations. Today the smallest corporation pays the same rate on its net profits as the corporation which is a thousand times its size.”
Biden, April 2021 Speech to Joint Session of Congress: “Recent studies show that 55 of the nation’s biggest corporations paid zero in federal income tax last year. No federal taxes on more than $40 billion in profits. A lot of companies also evade taxes through tax havens from Switzerland to Bermuda to the Cayman Islands. And they benefit from tax loopholes and deductions that allow for offshoring jobs and shifting profits overseas. That’s not right. We’re going to reform corporate taxes so they pay their fair share and help pay for the public investments their businesses will benefit from.”
Treasury Report on Biden Tax Plan, 2021: “The President’s Made in America tax plan is guided by [six principles, including] requiring all corporations to pay their fair share. To ensure that large, profitable companies pay a baseline amount of taxes, the President’s plan would impose a minimum tax on firms with large discrepancies between income reported to shareholders and that reported to the IRS. It would also provide the IRS with resources to pursue large corporations who do not meet their tax obligations, reversing a trend toward fewer corporate audits.”
When there are thousands of people on the street and parliament buildings are under siege, politicians tend to wake up to the public mood. The harrowing experience, many elderly politicians experienced in the USA during the Capitol riot, is likely to inform their decision making going forward. That’s true regardless of whether they are aware of it or not. Giving the people what they want, which is more money, is going to be high on the list of priorities.
Eoin's personal portfolio: breakeven stop introduced April 29th
One of the most commonly asked questions by subscribers is how to find details of my open traders. To make it easier I will simply repost the latest summary daily until there is a change.
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