Comment of the Day
Video commentary for March 9th 2022
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: relief rally underway across stock markets, oil, gold and wheat pullback to unwind short-term overbought conditions. Bund yields surge and Euro strengthens on speculation around ECB tightening,
Ukraine Open to Neutrality But Won't Yield Territory, Aide Says
This article from Bloomberg may be of interest. Here is a section:
Ukraine is open to discussing Russia’s demand of neutrality as long as it’s given security guarantees, though it won’t surrender a “single inch” of territory, a top foreign policy aide to President Volodymyr Zelenskiy said.
“Surely, we are ready for a diplomatic solution,” Ihor Zhovkva, Zelenskiy’s deputy chief of staff, said in an interview with Bloomberg Television on Wednesday.
The aide reinforced Ukraine’s demand for security guarantees “from the U.S., from Great Britain, from Germany” and others -- “only security guarantees from Russia will not be enough,” though he declined to spell out what those measures would entail.
Preconditions for talks with Russian President Vladimir Putin would be a cease-fire and the withdrawal of Russian troops, Zhovka said.
My view - When the war is over, Ukraine is most likely to follow a Finland-type solution. They may apply for membership of the EU, but not NATO. They will receive security guarantees from their neighbours, but will need to retain a significant military and constant vigilance nonetheless. Relations with Russia will be irrevocably damaged and portions of Ukraine will likely become part of Russian territory. However, the fact remains many of Russia’s pipelines flow through Ukraine’s territory. Trading relationships will be necessary.
Might Have a Russian Titanium Problem
This article from Barron’s may be of interest to subscribers. Here is a section:
There is a lot of lightweight, ultrastrong titanium metal in modern jet planes. Titanium cuts weight and improves fuel efficiency. That’s the good news.
The bad news is that Russia is a big supplier of titanium. That might become an issue for Boeing (ticker: BA) shares depending on how long the Russia-Ukraine conflict rages, how long sanctions are in place against Russia, and how long it takes other titanium suppliers to ramp up production.
Monday, The Wall Street Journal reported that while Boeing has suspended parts of its business in Russia, Boeing’s relationship with titanium supplier VSMPO AVISMA remains up in the air. Boeing didn’t immediately respond to a request for comment about its VSMPO relationship.
My view - Gold mine investors are familiar with the arguments for sourcing supply from politically stable parts of the world. Everyone else is waking up to the reality of political volatility now. This is going to be a consideration for every shovel ready project going forward. Russia’s supply is integral to the smooth functioning of the global economy and sourcing fresh sources from outside the country is going to take both time and money. That’s a recipe for volatility, both up and down, over the coming years.
I had the pleasure of meeting Philip Andrews, CEO of Resource 500 in Riyadh in January. He is raising capital to develop a high grade, vanadium/titanium resource in Greenland. At the time he was pitching it to the Saudi government. My understanding is the company is primarily interested in finding a partner to help develop the asset, and is not picky about where the ore will eventually be processed. Here is a link to the pitch deck.
China is the primary supplier of titanium so it is one more industry they have control over.
President Biden to Sign Executive Order on Ensuring Responsible Development of Digital Assets
This press release may be of interest to subscribers. Here is a section:
Explore a U.S. Central Bank Digital Currency (CBDC) by placing urgency on research and development of a potential United States CBDC, should issuance be deemed in the national interest. The Order directs the U.S. Government to assess the technological infrastructure and capacity needs for a potential U.S. CBDC in a manner that protects Americans’ interests. The Order also encourages the Federal Reserve to continue its research, development, and assessment efforts for a U.S. CBDC, including development of a plan for broader U.S. Government action in support of their work. This effort prioritizes U.S. participation in multi-country experimentation, and ensures U.S. leadership internationally to promote CBDC development that is consistent with U.S. priorities and democratic values.
My view - This announcement does not propose anything new. The Federal Reserve has been investigating the merit of a central bank digital currency for years already. The reason the crypto sector responded favourably to this announcement is because of its enthusiasm about the future of digital assets.
The Chart Seminar June 6th & 7th in London
My view - Now in its 53rd year, the first venue for The Chart Seminar in the post pandemic era will be in London on June 6th and 7th at the Army & Navy Club.
To reserve your place please contact Sarah@fullertreacymoney.com.
Delegate Rates:
Full fee: £1799
Each additional delegate: £850
Fuller Treacy Money Subscriber rate: £850
Prices exclude VAT where applicable
Eoin's personal portfolio: equity index long closed at a small loss March 1st
One of the questions subscribers as most often is how to find details of my open trades. To make it easier I will simply repost the latest summary daily until there is a change.