Dan Oliver – Thu 26 Mar, 2020

With all these bailouts coming it’s time to reassess the debt situation in the world

Dan Oliver, Founder of Myrmikan Capital joins me to kick off today with a little history on our current debt system. Looking ahead to when this global shutdown ends there will be a lot more debt in companies, individuals, and governments. Where does this all leave us?

Click here to visit the Myrmikan Capital website.


Comments:
  1. On March 26, 2020 at 4:59 am,
    cfs says:

    Has any country EVER saved itself by printing money ?

    Let’s face it, regardless of what they say, they printed money to kill interest rates and the carry-cost of money.

    You can’t fix the supply chain by printing money.
    YOU CAN BUY VOTES BY PRINTING MONEY.

    • On March 26, 2020 at 7:38 am,
      bonzo says:

      I can think of only one country that saved itself by printing money. The USA printed millions of “greenback dollars” under Lincoln to help pay to win the War Between the States.

  2. On March 26, 2020 at 5:12 am,
    CFS says:
  3. On March 26, 2020 at 6:35 am,
    Matthew says:
    • On March 26, 2020 at 7:03 am,
      OOTB Jerry says:

      GOOD article……………
      from the artilce………….
      Miners are not gold or silver. They are equities that can act as leveraged plays on moves in gold and silver. That’s what makes miners dangerous, but it also makes them exciting and potentially lucrative investments or trades, depending on your time horizon.

      • On March 26, 2020 at 7:08 am,
        OOTB Jerry says:

        When gold eventually continues its bullish rise to new all-time highs, it will become too expensive for the average person …….

        • On March 26, 2020 at 7:09 am,
          OOTB Jerry says:

          when gold becomes unattainable or too expensive, silver is often picked as the substitute.

          • On March 26, 2020 at 7:11 am,
            OOTB Jerry says:

            Final point…..which I agree……..
            gold’s outperformance of silver will likely be vicious but temporary. Judging from the current candle on the gold/silver ratio chart seen above, we may have already seen the turning point for silver.

            IMPACT Silver Corp. is the silver play
            Because 89% of the company’s production is silver, it makes IMPACT Silver Corp. one of the purest silver plays in the mining sector.

      • On March 26, 2020 at 7:20 am,
        OOTB Jerry says:

        Matthew………DID you write this article…….. 🙂

      • On March 26, 2020 at 8:07 am,
        Ebolan says:

        Jerry, what did that article you posted a while back on phosphate say?

        • On March 26, 2020 at 8:57 am,
          OOTB Jerry says:

          Ebo……….that there is a shortage……..

          • On March 26, 2020 at 9:10 am,
            Ebolan says:

            So how are they going to deal with that? New methods of production?

          • On March 26, 2020 at 9:21 am,
            OOTB Jerry says:

            Sludge……from sewer plants…..municipal waste…..The technology exist, since there is a lot of phosphates at the poo station… 🙂

          • On March 26, 2020 at 9:24 am,
            Ebolan says:

            Dang, does that mean San Francrapco will be rich again???

            Heck, I guess we’ll all be rich since the Demorats are turning this country into a feces loving nation! And anyone who doesn’t believe that can just look at the sidewalks and streets of all the big cities they run!

          • On March 26, 2020 at 9:31 am,
            OOTB Jerry says:

            Another 1849 Gold Poo Rush……..
            The DOJ, did say that people can not weaponize the poo, that would be an act of terrorism ……Barr, putting out the warning , so, as to protect the elites, when they are encountered on the streets….Particularly Nancy, Chuck and the Deepstate Fleecers of America.

          • On March 26, 2020 at 10:18 am,
            Ebolan says:

            Years ago I read that they were going to make electricity from sewage? Whatever happened to that?

            Maybe Elon can replace the bucket seats with toilets in his EVs! I’m sure that’s an effort we can all get behind, so to speak.

          • On March 26, 2020 at 12:15 pm,
            Excelsior says:
          • On March 26, 2020 at 1:17 pm,
            Ebolan says:

            Hah, I’m gonna post that in the other thread so OOTB sees it.

  4. On March 26, 2020 at 7:30 am,
    OOTB Jerry says:

    Back on point……People here already know this…..or should….
    It’s certainly done that under the current administration. Gold has risen by 38 percent since Donald Trump’s inauguration. Meanwhile the S&P 500 SPX index of large U.S. companies is up 13 percent and the Russell 2000 index of small U.S. companies is down 8 percent.

    “The case for gold is simple,” Strauss says. “You want to own gold in times of financial dislocation and or inflation. And that’s been the case since time immemorial. And gold behaves well in those cases. In those cases stocks behave poorly. It’s a great portfolio hedge. Gold does poorly when you’ve got strong economic growth and low inflation. Tell me when that’s going to happen. Gold held its value during 2008 and after all that money printing it tripled over the next three years.”

    • On March 26, 2020 at 7:38 am,
      OOTB Jerry says:

      article….from marketwatch

  5. On March 26, 2020 at 8:17 am,
    Excelsior says:

    Buy Gold And Silver Mines Under Construction, In Lieu Of Physical Precious Metals

    Mar. 25, 2020 – Laurentian Research

    “Physical gold and silver are selling like toilet paper these days. Buyers have to pay an incredibly large premium to get hold of these monetary metals.”

    “In this article, I present the case of buying gold and silver mines under construction instead.”

    “Pre-production gold and silver mining stocks have become extremely attractive of late.”

    https://seekingalpha.com/article/4334213-buy-gold-and-silver-mines-under-construction-in-lieu-of-physical-precious-metals

    • On March 26, 2020 at 9:44 am,
      Excelsior says:

      CME resolving physical gold squeeze with delivery of 100-ounce, 400-ounce and 1-kg bars

      Neils Christensen – Tuesday March 24, 2020

      “The news comes after an intense trading day in the gold space as the market has seen strong physical demand and dwindling supply.”

      “According to reports, bullion banks across the board reported massive liquidity issues Tuesday in the physical market. The problem, according to many banks, was the Exchange For Physical (EFP) market, which allows traders to switch gold futures positions to and from physical. Spreads in EFP are typically around $2, but on Tuesday, because of a lack of supply, the spread increased as high as $40.”

      “Part of the issue is the lack of specific gold bars. CME contracts are for 100-ounce bars. However, Good Delivery listed bar from the London Bullion Market Association are 400 ounces.”

      https://www.kitco.com/news/2020-03-24/CME-resolving-physical-gold-squeeze-with-delivery-of-100-ounce-400-ounce-and-1kg-bars.html

  6. On March 26, 2020 at 8:21 am,
    SilverDollar says:

    Can anyone reconcile Dan’s position which calls for excessive price inflation and Rick’s position which says that all the debt is a massive short of the $$ so it’s headed much higher, producing massive deflation. Who’s right? We better find out!

    • On March 26, 2020 at 8:56 am,
      Matthew says:

      Rick would be right if the Fed would leave the market alone be we know that it won’t so Dan is right.

      The deflationists all seem to think that the deflationary forces will overwhelm the Fed’s ability to inflate but they are wrong. The argument will never end but the deflationists have lost every battle so far and will lose the war.

      The Fed and the gov can and will do a lot more insane things if need be and the dollar will lose massive purchasing power as a result.

      The dollar is strong relative to currencies that are in worse shape but is nothing but weak when it comes to holding real value. That’s why it buys less than one-sixth as much gold as it did at its 2000 peak.

      Proof that the USDX is a meaningless measure of value is the fact that it traded at today’s level in early 2003 yet gold was under $400/oz at the time. Of course we all know that the dollar purchased a lot more of everything back then even though its sharp decline had already begun thanks to the Fed/gov response to 9/11 and the stock bear that was underway.

      The REAL top in stocks and the economy happened 20 years ago and it’s been net price deflation since but only IF we measure things in real money, gold. The Dow lost 89% of its value versus gold after the 1929 top and it lost 87% of its value versus gold after the 1999 top.

      The dollar will keep losing purchasing power and the reason is inflation, not deflation.

      https://stockcharts.com/h-sc/ui?s=%24INDU%3A%24GOLD&p=Q&yr=50&mn=6&dy=0&id=t2066004928c&a=724703065&r=1585237638446&cmd=print

      • On March 26, 2020 at 9:05 am,
        OOTB Jerry says:

        I think that is a good summary……I lean to the inflation side….as a gold holder… 🙂

        • On March 26, 2020 at 9:41 am,
          Excelsior says:

          Agreed. The setup is Deflationary, but the Fed and the governments desire to print, backstop, and purchase anything not tied down will ultimately be Inflationary. That is why the Precious Metals rallied so hard when the 2 Trillion dollar stimulus plan and the $4 Billion in anticipated magical money from nowhere Fed buying of corporate bonds and mortgage-backed securities #QEtoInfinity was announced…. because it will spike the liquidity and money supply sloshing around and will utimately be an Inflationary disaster.

      • On March 26, 2020 at 9:31 am,
        Matthew says:

        Geez, I don’t know how “but” became “be” in the first line: “BUT we know…”

  7. On March 26, 2020 at 9:23 am,
    SilverDollar says:

    Thank you Matthew. I was hoping someone of your caliber would comment. Your 2nd paragraph says it all. No force out there can ever go faster than the digital printing capacity of the Fed.
    Thanks again and best of luck in your endeavors to survive this debacle our country finds itself in.

    • On March 26, 2020 at 9:28 am,
      Matthew says:

      Thank you SilverDollar, best of luck to you.

  8. On March 26, 2020 at 9:54 am,
    OOTB Jerry says:

    Rhodium back up to $6500…….from 2500……..rocket ride from hell…….
    Worse than BitCON……………..

  9. On March 26, 2020 at 10:05 am,
    David says:

    Volume on US MAKOF almost 4 times normal currently @ 715000+.

    • On March 26, 2020 at 11:07 am,
      Excelsior says:

      Volume on MKO is 3 time normal volume @ 727,604.

      I guess the markets liked those new drill hits, I know they warmed the cockles of my heart. 🙂

      • On March 26, 2020 at 2:19 pm,
        David says:

        Nothing like warm cockles. What’s a cockle?

        • On March 26, 2020 at 7:10 pm,
          Matthew says:

          Cochleae cordis = ventricles

  10. On March 26, 2020 at 2:27 pm,
    RICHARD/DOC says:

    I would wage Rick Ackerman will be correct about deflation. At least at first. I believe we’re in the early stage of a very nasty secular bear market. Considerable wealth will be destroyed and when we come out of it, there may be some pent up demand but not the amount a lot of folks believe. The consumer will be poorer and you can bet they won’t be spending like before drop. Housing prices should also take a hit in spite of very tempting mortgage rates creating even more a sense of poverty. The dollar should stay strong for some time and so the question is: what will drive inflation. You can bet debt laden companies with less demand for their products will not be raising wages anytime soon and wage growth is usually the biggest driver of inflation. Forget about commodities since demand will be down initially. The good news for some commodities is that mines will have been shut down balancing supply/demand. With debt overhang, GDP growth should struggle. It most likely will not be a pretty world for some time.

    • On March 26, 2020 at 3:47 pm,
      Matthew says:

      Rick’s view has been that deflation wins, period. If it’s “at least at first” then Rick would be wrong. Plenty of inflationists agree with deflation first.

      What we will not see much of, if any, is a contraction in the money supply (true deflation) or price deflation in the items that we need every day. Yes, non necessities can fall despite the falling purchasing power of the currency. Economic contraction and wealth destruction are deflationary forces (not deflation itself) that will be met with inflation of the money supply (which is the true definition of inflation).

      An inflationary depression is very plausible (falling purchasing power of the currency along with severe economic contraction).

      If we end up with a Japanese style outcome, the deflationists still lose because it is a myth that Japan has been in a deflation. It’s a very persistent myth that benefits spendthrift Keynesian governments but it is most definitely a myth. The yen purchases far less today than it did 30 years ago when the Nikkei topped and there’s far more of them in circulation. That’s inflation.

      The dollar should stay weak. It’s been getting weaker for the last 18 months which is why gold is up 40%+ in that period. Gold is the real and leading measure of dollar health, not the CPI and not commodities whose fate depends on the economy. Gold does not hide what the government has done, and is doing, to our money.

      The biggest driver of price inflation, including wage price inflation, is inflation of the money supply. When prices rise under a sound monetary system, it happens in part of the economy at the expense of another part of the economy. The general price level (prices across the board) does not rise without inflation of the money supply. There would never be a nationwide housing bubble under a sound monetary system.

      Definitions matter and it is nearly impossible to find a deflationist that has it together.
      The bottom line is this: In true deflations, savers enjoy more purchasing power of the currency unit overall, not just in a few toys or other discretionary items. If we see that anytime soon, it will be fleeting.

      https://mises.org/library/what-has-government-done-our-money

      • On March 26, 2020 at 3:48 pm,
        Matthew says:

        The word “inflation” originally applied solely to the quantity of money. It meant that the volume of money was inflated, blown up, overextended. It is not mere pedantry to insist that the word should be used only in its original meaning. To use it to mean “a rise in prices” is to deflect attention away from the real cause of inflation and the real cure for it…
        Inflation for Beginners
        https://mises.org/wire/inflation-beginners

        • On March 26, 2020 at 7:19 pm,
          Matthew says:

          The final paragraph of the linked article is worth reprinting here for those who don’t feel like reading the whole thing. Hazlitt nails it:

          “Inflation, to sum up, is the increase in the volume of money and bank credit in relation to the volume of goods. It is harmful because it depreciates the value of the monetary unit, raises everybody’s cost of living, imposes what is in effect a tax on the poorest at as high a rate as the tax on the richest, wipes out the value of past savings, discourages future savings, redistributes wealth and income wantonly, encourages and rewards speculation and gambling at the expense of thrift and work, undermines confidence in the justice of a free enterprise system and corrupts public and private morals.”