Inflation : 40 Year High

[nuckin_futz]

2 minutes ago, Elias Pettersson said:

I hear their geologist is on a helicopter as we speak...

Tell him to fasten his seat belt.

[Boudrias]

11 hours ago, Warhippy said:

Now THIS changes things.

 

Uganda reports they've found a gold deposit worth almost $12.73 trillion. Over 32 million tonnes worth. This has now been confirmed by numerous studies of the charted data.

 

The total global market cap for gold is $11.45 trillion.

 

This one single discovery is more than the entire global market cap.

 

What does this in fact do to the price of gold or gold as a "safe haven"?

 

Also...I heard Uganda threw a rock at like all their neighbors and America is on their way to deliver some freedom 

 

https://www.mining.com/web/uganda-says-exploration-results-show-it-has-31-million-tonnes-of-gold-ore/

Now we know why Musk is building those space ships. No, not to Mars, to the asteroids to mine all those precious metals. 

 

Uganda is a dictatorship. Maybe stories of fabulous wealth will placate the masses. It works everywhere else. 

[nuckin_futz]

Federal Reserve hikes rates by 75 basis points vs 75 bps expected

• The previous range was 0.75% to 1.00%
•  

The FOMC statement from the June 14-15, 2022 meeting is out along with the updated economic forecasts. The market was pricing in an 87% chance of a 75 basis point hike with the remainder on 50 bps. Out the Fed funds futures curve, the terminal top was in May 2023 at 3.982% with a path of 75/75/50/50 priced in for the next four meetings, including today.

 

The vote was 10-1 with the Fed's George voting for 50 basis points. That's a big surprise from one of the Fed hawks.

 

The median dot in the dot plot is at 3.4%, which is up from 1.9%. That essentially validates market pricing, which is at 3.65%.

 

Federal Reserve Chairman Jerome Powell will host a press conference at the bottom of the hour at 2:30 pm ET.

 

Highlights:

• Repeats that "the Committee is highly attentive to inflation risks"
• Cites Ukraine war and covid in China adding pressure to inflation
• Says it "anticipates that ongoing increases in the target range will be appropriate"
• No changes to QE runoff
• "The Committee is strongly committed to returning  inflation  to its 2 percent objective"

The line about being "strongly committed" is new language but I wouldn't say it's particularly surprising.

Edited June 15, 2022 by nuckin_futz

[Warhippy]

18 minutes ago, nuckin_futz said:

Federal Reserve hikes rates by 75 basis points vs 75 bps expected

• The previous range was 0.75% to 1.00%
•  

The FOMC statement from the June 14-15, 2022 meeting is out along with the updated economic forecasts. The market was pricing in an 87% chance of a 75 basis point hike with the remainder on 50 bps. Out the Fed funds futures curve, the terminal top was in May 2023 at 3.982% with a path of 75/75/50/50 priced in for the next four meetings, including today.

 

The vote was 10-1 with the Fed's George voting for 50 basis points. That's a big surprise from one of the Fed hawks.

 

The median dot in the dot plot is at 3.4%, which is up from 1.9%. That essentially validates market pricing, which is at 3.65%.

 

Federal Reserve Chairman Jerome Powell will host a press conference at the bottom of the hour at 2:30 pm ET.

 

Highlights:

• Repeats that "the Committee is highly attentive to inflation risks"
• Cites Ukraine war and covid in China adding pressure to inflation
• Says it "anticipates that ongoing increases in the target range will be appropriate"
• No changes to QE runoff
• "The Committee is strongly committed to returning  inflation  to its 2 percent objective"

The line about being "strongly committed" is new language but I wouldn't say it's particularly surprising.

More increases expected if I am reading this right, possibly the same possibly just 50 points again.  But more expected.

 

12 hours ago, nuckin_futz said:

This reeks like Bre-X.

Have been looking in to this, apparently this is far more credible.  Core samples, charts, holes drilled and seismic testing are all indicating that this is the largest single deposit ever found in the area.

 

If true, what does something that large, that actually dwarfs the global market cap for gold do to the markets?

[nuckin_futz]

7 minutes ago, Warhippy said:

More increases expected if I am reading this right, possibly the same possibly just 50 points again.  But more expected.

Out the Fed funds futures curve, the terminal top was in May 2023 at 3.982% with a path of 75/75/50/50 priced in for the next four meetings, including today.

 

We just had the first 75 in that sequence.

 

The projection is to top out at 3.5%.
 

7 minutes ago, Warhippy said:

 

Have been looking in to this, apparently this is far more credible.  Core samples, charts, holes drilled and seismic testing are all indicating that this is the largest single deposit ever found in the area.

 

If true, what does something that large, that actually dwarfs the global market cap for gold do to the markets?

As they were with Bre-X's Busang property in Indonesia until they weren't.

 

This doesn't sound a little fishy to you? They claim to have found a single deposit larger than all gold ever mined in the history of planet Earth.

Edited June 15, 2022 by nuckin_futz

[Warhippy]

30 minutes ago, nuckin_futz said:

Out the Fed funds futures curve, the terminal top was in May 2023 at 3.982% with a path of 75/75/50/50 priced in for the next four meetings, including today.

 

We just had the first 75 in that sequence.

 

The projection is to top out at 3.5%.
 

As they were with Bre-X's Busang property in Indonesia until they weren't.

 

This doesn't sound a little fishy to you? They claim to have found a single deposit larger than all gold ever mined in the history of planet Earth.

I used to do hard mineral exploration before my accident.  You'd be surprised how much of what is found where.  We spent a fair a mount of time humping around Greenland where there was supposed to be nothing but making hit after hit on the nickle and copper cores.

 

Do I think the numbers might be fudged?  Until shovels are in the ground and ore on the belt.  Ya, probably.  But the area/region is well known for metal deposits both precious and ferrous.

 

 

So let's play it safe.  What if it's only half the estimated size, or just over half the global market cap.  What does that do to the markets?

[nuckin_futz]

16 minutes ago, Warhippy said:

I used to do hard mineral exploration before my accident.  You'd be surprised how much of what is found where.  We spent a fair a mount of time humping around Greenland where there was supposed to be nothing but making hit after hit on the nickle and copper cores.

 

Do I think the numbers might be fudged?  Until shovels are in the ground and ore on the belt.  Ya, probably.  But the area/region is well known for metal deposits both precious and ferrous.

 

 

So let's play it safe.  What if it's only half the estimated size, or just over half the global market cap.  What does that do to the markets?

It's also knows for rampant corruption.

 

If it's true it sends the price of gold crashing. As the anticipated future supply has just increased by 50%.

Edited June 15, 2022 by nuckin_futz

[flanny]

[RUPERTKBD]

I know this is probably oversimplifying things, but it seems to me that current levels of inflation are due to several factors....I say this because it seems as though some people are pointing fingers at certain factors, (or people) only....

 

- Supply lines have been (and in the case of China, still are) adversely affected by Covid-19

- Transportation costs (which are often passed on to the cost of goods) have been heavily impacted by the rising cost of fuel. This is at least partially because of the Russian invasion of Ukraine. It has also negatively impacted the world's wheat supply....

- While supply is down pretty much across the board, in many cases demand is up. People are coming out of the pandemic and are ready to buy things.

 

Now while that last may be the case, it's also true that the government supplied cash during the pandemic, may have, at least in part, fueled that demand. It's possible that some people received monies that they didn't need and that is now feeding into the problem of demand exceeding supply.....

 

I'll leave it to the more financially educated members of the board to poke holes in my theory....

 

[thedestroyerofworlds]

[flanny]

11 minutes ago, thedestroyerofworlds said:

Joe Mancin to the rescue. Imagine what we'd be dealing with.

[Warhippy]

5 hours ago, thedestroyerofworlds said:

GD yer facts and truths...

[Boudrias]

19 hours ago, Warhippy said:

More increases expected if I am reading this right, possibly the same possibly just 50 points again.  But more expected.

 

Have been looking in to this, apparently this is far more credible.  Core samples, charts, holes drilled and seismic testing are all indicating that this is the largest single deposit ever found in the area.

 

If true, what does something that large, that actually dwarfs the global market cap for gold do to the markets?

Markets aren't reacting yet? I have a buddy who's daughter has ran an orphanage in Uganda for many years. Pretty corrupt country with multilayered graft and theft. I am more inclined to believe this a political story to take pressure off the government. If I'm wrong then we will see how their development goes. Interesting that as Crypto collapses there is no rush into gold and bullion prices are holding around $1830. 

[4petesake]

15 hours ago, thedestroyerofworlds said:

 

 

[Boudrias]

36 minutes ago, 4petesake said:

 

 

Not necessarily. The time lag between investment decision and execution can take years. Then you have another whole different situation with refining. No new capacity for years as the risk didn't justify the investment. Volumes up on decisions made some time ago but down due to depletion of fields and bans on fracking and cancelation of drilling leases. 

 

By no stretch can either Biden or Trudeau escape their responsibility for what is happening in the oil industry. They might not be the only reason for why costs are up but they are a big reason IMHO. 

[4petesake]

58 minutes ago, Boudrias said:

Not necessarily. The time lag between investment decision and execution can take years. Then you have another whole different situation with refining. No new capacity for years as the risk didn't justify the investment. Volumes up on decisions made some time ago but down due to depletion of fields and bans on fracking and cancelation of drilling leases. 

 

By no stretch can either Biden or Trudeau escape their responsibility for what is happening in the oil industry. They might not be the only reason for why costs are up but they are a big reason IMHO. 

That’s true Bouds but let’s not pretend that Big Oil isn’t playing their hand to their advantage. They have millions of acres of leases at their disposal still untapped and relatively unexplored at a time when some Dems talk about doing away with oil subsidies and profits are soaring.

 

The ornery side of me wants to say that with the time lags you speak of maybe Obama should get more of the credit for the volume pumped out under Trump? But I won’t be disingenuous when I fully realize that Big Oil loved Trump and the way he de-regulated and opened up leases where they had been excluded previously.

[Warhippy]

4 hours ago, Boudrias said:

Markets aren't reacting yet? I have a buddy who's daughter has ran an orphanage in Uganda for many years. Pretty corrupt country with multilayered graft and theft. I am more inclined to believe this a political story to take pressure off the government. If I'm wrong then we will see how their development goes. Interesting that as Crypto collapses there is no rush into gold and bullion prices are holding around $1830. 

I'm trying to find more information on this.

 

It's like the lithium found in Bolivia where there was severe and serious doubt but it turned out to be there; just no water to refine it.

[Boudrias]

3 hours ago, 4petesake said:

That’s true Bouds but let’s not pretend that Big Oil isn’t playing their hand to their advantage. They have millions of acres of leases at their disposal still untapped and relatively unexplored at a time when some Dems talk about doing away with oil subsidies and profits are soaring.

 

The ornery side of me wants to say that with the time lags you speak of maybe Obama should get more of the credit for the volume pumped out under Trump? But I won’t be disingenuous when I fully realize that Big Oil loved Trump and the way he de-regulated and opened up leases where they had been excluded previously.

I was a tad surprised that Exxon fired back at Biden pretty strongly. Yes, I can agree that fracked oil can be brought on fairly quickly. Deep wells not so easy. If I am running an oil company I would be asking why should I invest? What happened under Trump? The Americans scooped a lot of those LNG projects that left B.C. They're eating our lunch as far as I am concerned. Half a dozen LNG plants in Rupert and Kitimat would be bringing in serious money. Balance of payments ++++ and a stronger Canadian $ to pay for food imports.  

[Boudrias]

I don't link so here is a few observations made by John Mauldin (USA economist). USA housing demand destruction of + 36% as determined by the number of potential buyers who cannot qualify for a $400,000 mortgage. What is the average mortgage size in Canada? I suspect higher. Paul Volker, USA Central Bank Chairman back in the '70's & early 80's made multiple 1% Fed rate increases in attempts to curb inflation as it hit 13.5%. Larry Summers, Obama admin, says the USA is closer to that number than most people want to acknowledge. Today's numbers are not a apples to apples comparison because the constituents of the measurement basket have been changed. 

 

Mauldin suspects a recession of some duration. The public demands government guarantee prosperity and growth. The bottom line is that government cannot do it. Politicians have used deficit spending as their #1 tool and it has finally created the inflation that has been warned of for decades. Food, clothing and shelter will reassert their role in people's lives. Many of the social programs will lose funding and government employment will be less.  

[Warhippy]

2 hours ago, Boudrias said:

I don't link so here is a few observations made by John Mauldin (USA economist). USA housing demand destruction of + 36% as determined by the number of potential buyers who cannot qualify for a $400,000 mortgage. What is the average mortgage size in Canada? I suspect higher. Paul Volker, USA Central Bank Chairman back in the '70's & early 80's made multiple 1% Fed rate increases in attempts to curb inflation as it hit 13.5%. Larry Summers, Obama admin, says the USA is closer to that number than most people want to acknowledge. Today's numbers are not a apples to apples comparison because the constituents of the measurement basket have been changed. 

 

Mauldin suspects a recession of some duration. The public demands government guarantee prosperity and growth. The bottom line is that government cannot do it. Politicians have used deficit spending as their #1 tool and it has finally created the inflation that has been warned of for decades. Food, clothing and shelter will reassert their role in people's lives. Many of the social programs will lose funding and government employment will be less.  

We're at that perfect tipping point where major economists politicians and sound economic theory are warning that stagflation may be setting in and inflation is rampant.  That the percentages indicated may be off by 4% to 7% depending on the nation of state/province spoken of.  They all indicate or suggest a recession of some severity is coming.

 

Yet another group, the wealthy and the vocal are saying that the numbers don't say that at all.  Ironically they are usually the type to fight against the government.  That employment numbers, personal wealth and high demand for product and property are too strong to see anything major happen.  That much of it is supply chain issues that can be worked out.

 

Both groups appear to be right and the truth lies somewhere in the middle.  I work in a so called "lipstick industry" in that it is recession proof, because even in the worst economic climates people want to feel good about themselves and will spend.  I am seeing some significant losses and pull back from corporate clients and personal sales.  Restaurants are emptier on busy nights.  People are holding off on major purchases and home renos.  

 

I am not economically smart enough to know the terms or read the data like yourself and futz.  In fact I'd say I am ignorant in the truest sense of the word but always curious about how things work or of the opinion of people smarter about this subject than myself.  I fail in my industry and with seeing everything that's going on in a near perfect storm; how things CAN'T be bad and how something bad isn't coming.

 

Home owners bought homes they couldn't afford.  Interest rates going up, they'll have to choose between lifestyle and home.  Then as it worsens between home and bills.

People lived on borrowed credit to fund their $100k lifestyles on $40k a year wages.  Their monthly minimums will increase with interest rates.  They can't afford more payments.

Home owners who were eligible applied for multiple (this is scary btw, look at those numbers if you can) reverse home mortgages.  Now those bills are increasing their $ isn't

Food up 30% fuel up 70% housing costs increasing by double digit percentages monthly.

Nations spent to the bloody hilt. Now they have the choice of helping the people or helping the business class with what's coming and we know who will benefit.

 

I mean, between all that and no laws to prevent a run on homes, farmland, property, foreclosures or repossessions on luxury items or properties by corporations and foreign investors I can't see how this is going to end well at all in the short term