Sign in to follow this  
Followers 0
Guy Daley

Where to invest with red hot inflation

Recommended Posts

Aside from all the renewable energy freaks on oilprice that are pumping what they are invested in which is nothing but renewables, here is a GREAT study on what prospers in a red hot inflation climate which is of course what we can expect from the demonrats.  Biden has already proposed a 1.9 trillion dollar stimulus bill on top of the 2 or 3 stimulus bills we've had already.  Copper is #1 but riding close in the #2 position is WTI.  Here is the article and the list.  I don't have any mining stocks but I do have about 1000 #s of copper.  (It's my coin jar).  But I'm going to shop for a dividend paying miner, this weekend.  There is absolutely no doubt in my mind that the demonrats want to destroy the dollar to prep the way for some global currency or some other alternative and they WILL do it by reckless, insane spending.  

https://www.zerohedge.com/markets/what-best-hedge-hot-inflation

From the article:

We found copper, crude oil prices, value stocks and energy stocks to be the most sensitive to the binary inflation measure. Furthermore, each of those assets/factors sported t-stats that are highly statistically significant. Interestingly, gold showed no correlation to our binary inflation measure. Silver did show a statistically significant positive correlation, albeit a small one.

Included are sectors that fare poorly during inflationary periods.  It's a top to bottom list.  

  • Upvote 1

Share this post


Link to post
Share on other sites

Some of your Royalty and Streaming Miners pay dividends.  Two which come to mind are MTA and FNV of which I have mentioned both on these comment threads.

Share this post


Link to post
Share on other sites

To corroborate on my original post:

https://www.wsj.com/articles/biden-stimulus-adds-fuel-to-copper-rally-11610724809?mod=itp_wsj

From the article:

 

Investors are ramping up wagers that the Biden administration’s focus on economic stimulus and electric vehicles will turbocharge a monthslong climb in copper and other industrial metals.

Even though they slid alongside other commodities Friday, most actively traded copper futures are still up more than 2% so far in 2021 and near their highest level since early in 2013. They have been lifted by buoyant demand from China and wagers that an improving global economy will further increase consumption later this year.

 

Share this post


Link to post
Share on other sites

6 minutes ago, Tom Nolan said:

Some of your Royalty and Streaming Miners pay dividends.  Two which come to mind are MTA and FNV of which I have mentioned both on these comment threads.

I checked them and they are both more along precious metals than copper miners.  Gold does poorly in a high inflationary environment "according to the article" and silver does somewhat better.  COPPER is at the top of the list leading by a large margin.  WTI is SECOND.  

Share this post


Link to post
Share on other sites

6 hours ago, Guy Daley said:

...here is a GREAT study on what prospers in a red hot inflation climate which is of course what we can expect from the demonrats. 

A conversational thread that has the hallmarks of economic illiteracy, not to mention other prejudices.

I pose a question to you below. Depending on how you answer (if you reply at all) I will pose other questions. These questions are designed to paint you into a corner. It will be interesting to see if you take the bait.

What has to happen for the US to 'repay' China for the $1 trillion China has 'loaned' the US by buying Treasury Bills?

Share this post


Link to post
Share on other sites

6 hours ago, Meredith Poor said:

What has to happen for the US to 'repay' China for the $1 trillion China has 'loaned' the US by buying Treasury Bills?

Will China pay the US back for its loans from WWII?  If yes, then China OWES the USA about $2Trillion as it was promised in GOLD

Share this post


Link to post
Share on other sites

(edited)

13 hours ago, Guy Daley said:


We found copper, crude oil prices, value stocks and energy stocks to be the most sensitive to the binary inflation measure. Furthermore, each of those assets/factors sported t-stats that are highly statistically significant. Interestingly, gold showed no correlat

Already in on Copper.  If I thought any Nickel mine was worth buying into I would, but they are all overseas and frankly the USD is falling due to massive inflation due to cowards in congress.  Judging by history in finance the fall from grace due to printing fake useless money is FAST and extreme.  So, USD out of country might hold value, until the USD is not the #1 in the world and then all those overseas assets... become junk status at best as those nations align with new currency reality and your $$$ vanishes.  At least if you hold hard assets in the hyper inflating country(assuming does not devolve into civil war) then your value holds more $$$ in long term. Especially in commodities which have to be made at home as FOREX will be hard to come by so only option is built at home.

Edited by footeab@yahoo.com

Share this post


Link to post
Share on other sites

7 hours ago, Meredith Poor said:

A conversational thread that has the hallmarks of economic illiteracy, not to mention other prejudices.

I pose a question to you below. Depending on how you answer (if you reply at all) I will pose other questions. These questions are designed to paint you into a corner. It will be interesting to see if you take the bait.

What has to happen for the US to 'repay' China for the $1 trillion China has 'loaned' the US by buying Treasury Bills?

Irrelevant - If you don't understand how inflation is caused, stop asking IGNORANT, irrelevant questions.  

Share this post


Link to post
Share on other sites

(edited)

Guy, if I may, can we include the possible fall of the petri-dollar as a proximate issue to inflation?  I would be interested in reading views of whether or not members view the petro-dollar as a benefit or hinderance of the US and if the loss of the dollar as the fiat currency of the world would lead to higher inflation.  Did the current President, finding the boulder already positioned, not give that boulder a wee nudge off the precipice of the cliff by going solo policy wise and enacting tariffs on rival and ally alike? 

Edited by waltz

Share this post


Link to post
Share on other sites

16 minutes ago, waltz said:

Guy, if I may, can we include the possible fall of the petri-dollar as a proximate issue to inflation?  I would be interested in reading views of whether or not members view the petro-dollar as a benefit or hinderance of the US and if the loss of the dollar as the fiat currency of the world would lead to higher inflation.  Did the current President, finding the boulder already positioned, not give that boulder a wee nudge off the precipice of the cliff by going solo policy wise and enacting tariffs on rival and ally alike? 

Petro dollar = benefit for sure.  Higher inflation?  No.  Arbitrarily printing them leads to inflation and loss of trust leading to fall and disillusioned allies.   Solo policy?  No. Where do you get this baloney from? Tariffs on rivals?  Yes.  Tariffs on allies?  No.  Where do you get this baloney from?  All I saw was that a can had been kicked down the road, massive subsidies for Airbus/Boeing, and several other industries for 2 decades was finally not kicked.   If Tariffs were actually enacted as you claim, it would not be on a mere pittance of trade goods which flows back and forth because get this, different systems of governance have different proclivities and pressures which have to be addressed even when you are allies.  Might want to look at the give and take during WWII as an example.  Or the plaza accords during the 1980's when the Japan/EU were massively manipulating their currency to screw over the USA and it was rectified for a while.  Buckle up buddy, that is how relationships works.  Squabbles happen. 

Share this post


Link to post
Share on other sites

(edited)

footeab, I would agree net benefit.  I am trying to flush out my thoughts on the subject.  Could it not be argued that the dollar as reserve world currency artificially pushes its value up, making exports more expensive relative to competitors?  Therefore the fall of the petro-dollar would make US exports more competitive?  I think the benefit of lower borrowing costs on the massive debt, about to erupt further because of the incoming administration, outweighs this possible benefit.  Inflation may be a monetary phenomenon as stated by Friedman but demand has to play a factor in the value of the dollar.  

added:  forgot to ask about the retention of the petro-dollar could/would be a/the reason that MBS was dealt with using kid gloves? 

 

      waltz

Edited by waltz

Share this post


Link to post
Share on other sites

(edited)

2 hours ago, waltz said:

Guy, if I may, can we include the possible fall of the petri-dollar as a proximate issue to inflation?  I would be interested in reading views of whether or not members view the petro-dollar as a benefit or hinderance of the US and if the loss of the dollar as the fiat currency of the world would lead to higher inflation.  Did the current President, finding the boulder already positioned, not give that boulder a wee nudge off the precipice of the cliff by going solo policy wise and enacting tariffs on rival and ally alike? 

So you don't understand what causes inflation either?    You're ALREADY on the internet.  Use a search engine, type in "inflation" or "what causes inflation", and it's got absolutely NOTHING to do with the president or tariffs.  

While you're at it, find out what caused Zimbabwe, Venezuela's currency to become worthless.  Plenty of examples in world history.  Not sure why you're pretending that you do not know about them.  

Edited by Guy Daley

Share this post


Link to post
Share on other sites

25 minutes ago, Guy Daley said:

So you don't understand what causes inflation either?    You're ALREADY on the internet.  Use a search engine, type in "inflation" or "what causes inflation", and it's got absolutely NOTHING to do with the president or tariffs.  

I think it does: the president, the current one, okayed sending out stimulus money with very little regard for where it went. Well, a lot of it wound up in . . . equities. As such, we had equity-inflation like almost never before. The new president wants to buy votes and power and influence too so he pledges even more money-printing. He can do this, because he controls the whole shebang. 

We are about to be at a National Debt load of 8Trillion. That's double in a year. That's inflation. The president didn't cause the virus but he certainly over-reacted to the financial problems it caused, and subsequently inflated the monetary pool. The main reason we haven't seen "core inflation" is because most of that money didn't really leave to enter the vortex called the "velocity of money." Instead, a great gob of it went into equities. 

Share this post


Link to post
Share on other sites

4 hours ago, Guy Daley said:

Irrelevant - If you don't understand how inflation is caused, stop asking IGNORANT, irrelevant questions.  

Good to know you have perfect knowledge.

  • Upvote 1

Share this post


Link to post
Share on other sites

6 hours ago, footeab@yahoo.com said:

Will China pay the US back for its loans from WWII?  If yes, then China OWES the USA about $2Trillion as it was promised in GOLD

Lets say, for hypothetical discussion, that they simply returned $1 trillion in T-Bills to the US Treasury. Would that reduce their 'debt' by $1 trillion, based on your assertion?

Share this post


Link to post
Share on other sites

3 minutes ago, Meredith Poor said:

Lets say, for hypothetical discussion, that they simply returned $1 trillion in T-Bills to the US Treasury. Would that reduce their 'debt' by $1 trillion, based on your assertion?

Sure, of course USA has still decided to outsource all production of basic goods so we are still screwed if you ask me when the inevitable fall of the USD occurs.  The old Communist adage, about idiot capitalists(without a free market) who will sell you rope with which to hang them. 

Share this post


Link to post
Share on other sites

1 hour ago, Guy Daley said:

So you don't understand what causes inflation either?    You're ALREADY on the internet.  Use a search engine, type in "inflation" or "what causes inflation", and it's got absolutely NOTHING to do with the president or tariffs.  

While you're at it, find out what caused Zimbabwe, Venezuela's currency to become worthless.  Plenty of examples in world history.  Not sure why you're pretending that you do not know about them.  

Guy, sorry I paraphrased Friedman saying that inflation is purely a monetary phenomenon in my reply to footeab.  I have probably been commenting on the situation in Venezuela before you could find it on a map.  Though irrelevant, it was actually a link someone from Oilprice put up on Caracas Chronicles a few years ago that led me here to begin with.  My question is the relationship between inflation and the dollars status as the fiat currency of the world, ie. the metro-dollar.  What happens to dollar inflation if that relationship is lost?  How much of an influence does this have on the value of the dollar in relation to other currencies, not just the increasing number of dollars chasing a comparatively stagnant number of goods/services? 

Share this post


Link to post
Share on other sites

12 hours ago, Gerry Maddoux said:

We are about to be at a National Debt load of 8Trillion. That's double in a year. That's inflation.

Not really.   Inflation is when there are too many dollars chasing too few goods,   There is no indication that there are too few goods available for sale.  What is happening is that the machinery for producing all manner of goods, including housing, is not at anywhere near capacity.  The idle production capacity acts as a direct brake on inflation. 

12 hours ago, Gerry Maddoux said:

I think it does: the president, the current one, okayed sending out stimulus money with very little regard for where it went. Well, a lot of it wound up in . . . equities. As such, we had equity-inflation like almost never before.

Gerry, you are confusing causation with correlation.  Yes, there is a correlation with the rise in equities pricing on the stock exchange, but that rise is not caused by stimulus money.

I suggest a different process is at work.   You have this enormous instability at work in political Asia.  The cash (capital) there would normally be deposited in various banks, even if that earned little interest.  The risk capital would go into hard assets such as buildings and machinery.  B ut China (for example) has lots and lots of empty buildings, both residential and commercial.  There are reports of some 60 million finished residential apartments in China alone, with no buyers and no possible buyers.  think about that for a moment: a housing stock good for 240 million people, sitting empty.  That acts as an enormous depressant upon that economy, and the demand for fresh construction capital is non-existent. 

You have a similar situation,. at least analogous, in their factory sector.  Lots of excess production capacity and no home for the output, mostly due to collapse in demand due to COVID and the Trump trade barriers.  So risk capital is not going to be put to work.  Fine; where to park it?  Can capital flow to deposit accounts in places such as say Cyprus?  Well. the last time thir banking sector got into trouble, the banks simply gave the depositors a haircut of 50% of deposited capital - against their will, and without their agreement.  Under such circumstances, "return of capital" becomes more important than "return on capital." 

Where to park the capital?  Well, the safe haven of choice is the USA.   But US Treasuries have a lousy return, near zero.  So the capital, known as "hot money," flows into the US equities market, a market that is understood by foreigners, not like the US Wall Street Bond Market, riddled with derivatives and debentures that are likely frauds and worthless.  It does not take much of that hot capital to go into the stock market for that market to rise significantly.

And when that capital is withdrawn, as it inevitably wil, then that market will fall off the proverbial cliff. 

Another example of risk capital seeking a (relatively) save home is the Canadian urban housing market, especially in cities popular with Asians - Vancouver and Toronto.  There, the influx has pushed home prices to well over the million-dollar market, as those cities have little if any free land available for building and in any event the construction industry cnnot roll out rapidly to absorb excess demand as the governments are so burdensome in issuing permits.  So the resale market has taken off, and new local buyers are totally priced out of the market.  Try  buying a resale house in say Montreal with less than a million; cannot be done. 

The same house built outside Lincoln, Nebraska, might run you $210,000.  The difference?  When builders have excess demand, they simply buy some outside farmland and up go the houses. 

Overall, there will be little inflation in the USA, as demand in the aggregate remains depressed.  The consumers are not out there buying.  When the stimulus checks came in, consumers simply used that cash to reduce debt - mostly unsecured credit card debt to various banks and near-banks.  The reasoning is obvious: the interest rates on credit cards are controlled by the States. The State of South Dakota simply caved in to pressure from credit-card outfits and removed the usury interest rate, so the banks can charge whatever they want.  The result is that outfits like the abusive, predatory CitiGroup set up and re-incorporated CitiBank as a bank in South Dakota  (Sioux Falls, to be precise), a complete sham to be sure, as the Bank has its HQ tower at 388-390 Greenwich St., New York, NY. That used to be the Travelers Insurance Co. HQ until Travelers and CitiBank merged and became CitiGroup, and Sanford Weill, the biggest pig of the Street, took over as the boss of bosses   ["capo de tutti capi"].  It has over 200,000 employees, and basically none of them have ever set foot in Sioux Falls, South Dakota, or could even find it on a map.  The idea of Citi being located on the Dakota plains is classic Wall Street Lawyer crap.

Citi will charge you some 27.5% on that credit card, and with the changes in the US consumer bankruptcy laws written conveniently by the attorneys for MBNA Bank (of Wilmington, Delaware), the same outfit that had all its officers and directors convicted for participation in criminal banking fraud schemes,  the cards became the single largest income stream generator for the banks and card outfits.  So consumers, who have been abused for decades by those outfits, simply  paid them off or at least down. That depresses banking earnings and again removes aggregate demand from the system, so inflation remains a remote prospect. 

Those are the people that are fuelling the current political unrest: the ordinary folks who have their incomes stolen away by the pigs of Wall Street.  Wall Street is comprised of criminals, hacks, amoral pondscum and pigs.  Try to reference that when you are looking at financial streams.  There is a reason we had the Occupy Wall Street movement - and for the NYPD to suppress it with force.  It is classic class warfare. 

  • Great Response! 1

Share this post


Link to post
Share on other sites

2 hours ago, Jan van Eck said:

Citi will charge you some 27.5% on that credit card, and with the changes in the US consumer bankruptcy laws written conveniently by the attorneys for MBNA Bank (of Wilmington, Delaware), the same outfit that had all its officers and directors convicted for participation in criminal banking fraud schemes,  the cards became the single largest income stream generator for the banks and card outfits.  So consumers, who have been abused for decades by those outfits, simply  paid them off or at least down. That depresses banking earnings and again removes aggregate demand from the system, so inflation remains a remote prospect. 

Those are the people that are fuelling the current political unrest: the ordinary folks who have their incomes stolen away by the pigs of Wall Street.  Wall Street is comprised of criminals, hacks, amoral pondscum and pigs.  Try to reference that when you are looking at financial streams.  There is a reason we had the Occupy Wall Street movement - and for the NYPD to suppress it with force.  It is classic class warfare. 

More Piketty. Are you familiar with his theories? 

I am not in 100 % agreement with his writings myself, but I do find a lot truths there. 

Share this post


Link to post
Share on other sites

17 hours ago, waltz said:

Guy, sorry I paraphrased Friedman saying that inflation is purely a monetary phenomenon in my reply to footeab.  I have probably been commenting on the situation in Venezuela before you could find it on a map.  Though irrelevant, it was actually a link someone from Oilprice put up on Caracas Chronicles a few years ago that led me here to begin with.  My question is the relationship between inflation and the dollars status as the fiat currency of the world, ie. the metro-dollar.  What happens to dollar inflation if that relationship is lost?  How much of an influence does this have on the value of the dollar in relation to other currencies, not just the increasing number of dollars chasing a comparatively stagnant number of goods/services? 

Either you want an inflation hedge via equities as per the information provided in the original post OR NOT.  What's with the goofball question?  Inflation is caused by the expansion of the money supply with ZERO BACKING.  Uncle Fraud is spending as fast as it can to destroy our currency.  Savers are going to be destroyed unless they invest in something that will keep pace with inflation.    This is all very, VERY basic.  Why are you confused by ANY of it?  

Share this post


Link to post
Share on other sites

18 hours ago, Gerry Maddoux said:

I think it does: the president, the current one, okayed sending out stimulus money with very little regard for where it went. Well, a lot of it wound up in . . . equities. As such, we had equity-inflation like almost never before. The new president wants to buy votes and power and influence too so he pledges even more money-printing. He can do this, because he controls the whole shebang. 

We are about to be at a National Debt load of 8Trillion. That's double in a year. That's inflation. The president didn't cause the virus but he certainly over-reacted to the financial problems it caused, and subsequently inflated the monetary pool. The main reason we haven't seen "core inflation" is because most of that money didn't really leave to enter the vortex called the "velocity of money." Instead, a great gob of it went into equities. 

So you don't want to give congress any credit for the stimulus bills they passed?  In fact, Pelosi held up a stimulus bill for a long time for political purposes BUT all the responsibility for the deficit spending belongs to the president huh?  You know the stimulus bills PACKED with pork?  All of that falls directly in the presidents lap, huh?  Amazing, absolutely amazing.   

Current national debt is approaching 28 trillion, not 8 trillion and it did NOT double in a year.  But that too is also irrelevant.  What is important is that you know WHAT causes inflation and how to cope with it.  Apparently you don't know and don't care, congratulations.  

Share this post


Link to post
Share on other sites

3 hours ago, Guy Daley said:

Either you want an inflation hedge via equities as per the information provided in the original post OR NOT.  What's with the goofball question?  Inflation is caused by the expansion of the money supply with ZERO BACKING.  Uncle Fraud is spending as fast as it can to destroy our currency.  Savers are going to be destroyed unless they invest in something that will keep pace with inflation.    This is all very, VERY basic.  Why are you confused by ANY of it?  

"Either you want an inflation hedge via equities as per the information provided in the original post OR NOT." Salesman talk. I have the product that is the solution to your problem. No one else does. Buy! Buy! Buy!

"What's with the goofball question?" Everyone on this site is an idiot, can't you see? People that think about things just waste time. JUST DO IT!

"Inflation is caused by the expansion of the money supply with ZERO BACKING." Other than residential real estate, commercial real estate, oil and gas deposits, energy generation and transmission infrastructure, the air transportation system, the telecommunications network....

"Uncle Fraud is spending as fast as it can to destroy our currency." So the objective of the Republican Senate, the Democratic House, and the Autocratic Executive Branch is to ruin the United States. This is a coordinated, single minded objective.

"Savers are going to be destroyed unless they invest in something that will keep pace with inflation." Is there a distinction between 'being destroyed' and 'going broke'? Being dead of COVID is most likely 'destroyed'. Having lost one's savings might be distressing, but a lot of people have lived through such experiences.

"This is all very, VERY basic.  Why are you confused by ANY of it?" Some of us are Acidic, and we neutralize basic corrosive chemistry, ...er. thinking.

Share this post


Link to post
Share on other sites

^

You're right, I don't know much about it and should have kept my mouth shut. Or at least checked to put down the correct figure (which I had just read off the National Debt Calendar on the Internet).  

For the record, I thought the stimulus bill was a travesty due to all that pork. But I'm pretty dumb about that too.

In truth, I'm old, and bored, and enjoy education, which I should obviously get elsewhere. But the fact that I'm old means that I lived through severe inflation. At that time real estate, oil and gold did well and stocks and bonds did poorly. 

I also should have given attribution: It was Liz Ann Sonders, the chief economist for Charles Schwab, who actually said that we have "equities inflation." She's usually pretty accurate.

But it sounds like you've got this one nailed, so I'll just read what you have to say. I'm always eager to learn from the better educated. 

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  
Followers 0