Economic Crisis Avoidance Deus ex Machina - Part I: Active Asset Price Inflation - Eric Janszen

[BK]

Re: EJ’s Secret Message

I own a little bit of Palladium. It taught me about my flawed thinking on investments. I bought my few coins when Palladium was trading at $750/oz and within one year the price collapsed to $300-$400 range. In the last year Palladium is on fire and I think its due to scarcity/automobile manufacturing. Again, I find myself struggling with the constant problem with any investment is this the high or is Palladium signaling inflation is on the way?

Should I convert my Palladium to Gold?

Or will auto manufacturers shift away from Palladium for catalytic converters.

Wish I could see the future.

How high will Gold go and when are completely unknowable.

[dcarrigg]

Re: EJ’s Secret Message

I own a little bit of Palladium. It taught me about my flawed thinking on investments. I bought my few coins when Palladium was trading at $750/oz and within one year the price collapsed to $300-$400 range. In the last year Palladium is on fire and I think its due to scarcity/automobile manufacturing. Again, I find myself struggling with the constant problem with any investment is this the high or is Palladium signaling inflation is on the way?

Should I convert my Palladium to Gold?

Or will auto manufacturers shift away from Palladium for catalytic converters.

Wish I could see the future.

How high will Gold go and when are completely unknowable.

It's super hard for me to know what's moving on the commodity front. Weren't they saying palladium was spiking in the spring because of Russia and potential sanctions? I have no idea how that would actually fit into the supply chain. Have to figure biggest raw supplier is Russia and biggest buyer is China. Does China slow-down affect this? Their car numbers are crashing hard. A lot of variables in there.

[jk]

Re: EJ’s Secret Message

. But nobody really needs to have gold, not the way people truly need to get food and medicine.

gold's lack of utility is one thing that makes a perfect neutral settlement asset. it can be priced arbitrarily without in any way affecting the industrial economy [except for the production of wedding rings]. cb's have been accumulating gold again since 2013. it's the only thing they own other than the sovereign bonds of other countries. the usd, in the form of treasury instruments, is losing its role as THE reserve asset. it is being demoted to A reserve asset. other currencies can be held but lack the deep bond markets and/or convertibility to allow them to have major roles. there needs to be a neutral reserve asset. it will be the sdr, or a revised sdr including a commodity/gold component, or just plain gold. to serve this role, however, gold will have to be revalued sharply upward. the people who say there's not enough gold to serve this function are ignoring the fact that all you have to do is, e.g., add a couple of zeroes to the price and you've got plenty. china's reserves may be much greater than we know. if, for example, the chinese say that starting tomorrow they will buy or sell gold at 100 barrels of oil/oz of gold, that will be the price, established in an instant. and the price of gold in dollars will have to equal the price of 100 barrels of oil at that time. oil can go down or gold can go up, or some combination, but that ratio will be established.

[touchring]

Re: EJ’s Secret Message

It's super hard for me to know what's moving on the commodity front. Weren't they saying palladium was spiking in the spring because of Russia and potential sanctions? I have no idea how that would actually fit into the supply chain. Have to figure biggest raw supplier is Russia and biggest buyer is China. Does China slow-down affect this? Their car numbers are crashing hard. A lot of variables in there.

Russia can limit supply to push up the price of palladium.

[thriftyandboringinohio]

Re: EJ’s Secret Message

Some years ago iTulip threads were chock full of discussion about precious metals. One concept that emerged was that although all the precious metals are rare and expensive - gold, silver, platinum, palladium, rhodium - gold stands alone as true money. All the others, including palladium, have some industrial demand for using them up. So the prices of the other precious metals behave differently than gold, rising and falling with the industrial economy, with stockpiles depleting as they are consumed. So palladium supplies could indeed be choked off by Russia to drive the price up. But only temporarily. While palladium is the best material for it's markets, other materials and techniques can be pressed into service to substitute for palladium. Any Russian embargo would probably fail to keep the price up for more than a year or two.

Of course if you were the lucky person holding palladium when it happened you could laugh all the way to the bank, and the Russian oligarchs may indeed give it a go. I've seen something like it done once before - google "Hunt brothers corner silver market".

[BK]

Re: EJ’s Secret Message

Well said!

[vt]

Re: EJ’s Secret Message

A great friend, now deceased, was the Silver broker for the Hunt brothers

[thriftyandboringinohio]

Re: EJ’s Secret Message

A great friend, now deceased, was the Silver broker for the Hunt brothers

Way cool vt!

[touchring]

Re: EJ’s Secret Message

Any Russian embargo would probably fail to keep the price up for more than a year or two.

Of course, it's impossible for an embargo to last forever because the ultimate goal is to dump whatever existing stock just before the bubble bursts. So at some point, the oligarchs would need to dump their palladium. It's like timing to dump all your bitcoins onto fools when the price was $19k.

[thriftyandboringinohio]

Re: EJ’s Secret Message

Of course, it's impossible for an embargo to last forever because the ultimate goal is to dump whatever existing stock just before the bubble bursts. So at some point, the oligarchs would need to dump their palladium. It's like timing to dump all your bitcoins onto fools when the price was $19k.

Yup. I wonder if there is any signal to watch for palladium other than the spot price that might give a trader a little extra time to buy in?

[Chris Coles]

Re: EJ’s Secret Message

A great friend, now deceased, was the Silver broker for the Hunt brothers

He must have made more money from the trading than the Hunt Brothers.

[vt]

Re: EJ’s Secret Message

No, unfortunately my late friend, Mike Robertson made very little:

"The CFTC raised margin rates to 100%. The Hunts were accused of market manipulation and ordered to unwind their position.

They were subpoenaed by Congress to testify about their true motives. After a decade of litigation, Bunker received a lifetime ban from the commodities markets, a $10 million fine, and was forced into a Chapter 11 bankruptcy.

Mike saw commissions worth $14 million in today's money go unpaid.

In the end, he was only left with a Rolex watch, his broker's license, and a silver Mercedes."

Quote by John Thomas


I met Mike in the mid 80's and became a close friend. We spoke frequently and I saw Mike one or two times a year, the last time a few months before his death at 61.

I miss him, but still keep in close touch with 8 of our other buddies that spent a lot of time together with Mike and I.

[dcarrigg]

Re: EJ’s Secret Message

No, unfortunately my late friend, Mike Robertson made very little:

"The CFTC raised margin rates to 100%. The Hunts were accused of market manipulation and ordered to unwind their position.

They were subpoenaed by Congress to testify about their true motives. After a decade of litigation, Bunker received a lifetime ban from the commodities markets, a $10 million fine, and was forced into a Chapter 11 bankruptcy.

Mike saw commissions worth $14 million in today's money go unpaid.

In the end, he was only left with a Rolex watch, his broker's license, and a silver Mercedes."

Quote by John Thomas


I met Mike in the mid 80's and became a close friend. We spoke frequently and I saw Mike one or two times a year, the last time a few months before his death at 61.

I miss him, but still keep in close touch with 8 of our other buddies that spent a lot of time together with Mike and I.

Truly sorry about that story. Feels as if it helps me understand your perspective. Mean that in the truest and most sincere way possible.

[vt]

Re: EJ’s Secret Message

Thank you DC. Many advisors have left the corrupt Wall Street firms, but where some went still weren't serving the public.

I feel many are here because EJ has laid bare the failure of the FIRE economy. I am in full support of significantly reducing the financial sector, and having all advisors be fiduciaries.

Fintech and other innovators will transform the banking system and make it much more efficient, plus serve the public interest.

My friend Mike Robertson did do very well after the silver crisis, becoming one of the most successful advisors while serving his clients in a fair way. He battled health problems since 2000, but still raised two sons and served his community well.

[touchring]

Re: EJ’s Secret Message

They were subpoenaed by Congress to testify about their true motives.

I'm just wondering if this would be the outcome of the crypto project. There must be tons of laws that have been broken by all the stakeholders.