The waiting game for markets and economies continues

May 6, 2020

Chris Temple wraps up our editorials for today by taking a broad look at markets and assessing the economic restart that is starting. As a wide range of markets are moving sideways it al depends on how the economy can start to open back up.

Click here to visit Chris’s site and learn more about his newsletter – The National Investor.

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    May 06, 2020 06:44 PM

    A government’s arbitrary determination on which businesses can stay open and which ones cannot is tantamount to a regulatory taking. There is no warrant issued for the seizure of this property. No mechanism for the business owner to challenge the government’s arbitrary determination to close their business. When the government threatens a business owner or forcibly demands that business close, the business owner is being effectively deprived of the economic value of its property and the principal private use of that property. Whenever a government takes private property for public purpose, both State and US Constitutions require that business receive proper due process consideration followed by just compensation equaling a fair market value for that property. These Shelter In Place orders neither secure due process nor do they even mention reimbursement of fair market value. K A Hall.

      May 06, 2020 06:29 PM

      SPOT ON on this, cfs…it’s a regulatory “taking” indeed.

    May 06, 2020 06:50 PM

    With respect Mr. Temple, inasmuchas Norwegian Cruise lines has a warchest of over $2 Billion, raised by bond issue and increasing share count, there is zero chance of Norwegian declaring bankruptcy in the next 12 months.

    May 06, 2020 06:07 PM

    Media mis-interpreted the filing of Form 8-K
    Form 8-K is a very broad form used to notify investors in United States public companies of specified events that may be important to shareholders or the United States Securities and Exchange Commission.
    Norwegian cruise holdings filed the 8=K form early showing that AFTER one year of NO INCOME, they would have no cash reserve.
    However, they own private islands, and cruise ships which could also be liquidated.

    May 06, 2020 06:42 PM

    I never cease to be amazed by some really sleazy sub-humans.

    Healthcare workers got free flights to New York to volunteer to help out in hospitals.

    Not only will the sleazy mayor of New York require volunteers to fill out income tax forms, he will tax them on their free flights (as income in kind) and tax them per day based on their annual income back in their home state, even if they earn nothing in New York.
    What a piece of scum that #%# is.

    I wish I had volunteered in New York because I could then inform deBlasio where he could file that form.

      May 07, 2020 07:58 AM

      They should just say screw you deBlastard……..

    May 06, 2020 06:31 PM
    May 06, 2020 06:41 PM

    Mr T asked what narrative the generalist investors have to push the Gold price higher.

    I posted this on another thread today, but the Trillions of Dollar of debt the US just minted up is PLENTY of reason for higher Gold prices and larger funds are starting to get this point.


    “Some of the world’s largest hedge funds are raising their bets on #gold, forecasting that central banks’ unprecedented responses to the coronavirus crisis will lead to devaluations of major currencies.”

    “New York-based Elliott, which manages about $40bn in assets, told its investors last month that gold was “one of the most undervalued” assets available and that its fair value was “multiples of its current price”:

    “Funds are again betting that stimulus will weaken currencies, even if this does not show up in higher consumer price inflation.”

    “I suspect we will begin to see central banks begin to doubt each other’s creditworthiness and demand gold as payment instead of dollars or yen or euro or any other paper currency,” wrote Jerry Haworth, chief executive of hedge fund 36 South Capital Advisors, in a letter to clients. He calls gold “the credit default swap of central banks”.

    “Others see opportunities in gold-related stocks. David Neuhauser, managing director of Northbrook, Illinois-based Livermore Partners, told the Financial Times he had increased exposure to gold #miners this year in anticipation of #inflation or stagflation. “Either way it will be good for the metals.”

      May 06, 2020 06:44 PM

      Also I know Chris isn’t a fan of those that discuss the SDR concept and says “Don’t walk, rather run” but here is a generalist columnist pointing out the plans for the Chinese to have a disruptive Gold-backed digital currency. I wouldn’t be do hasty in dismissing this concept as viable, but I’m sure Mr T will scoff at the idea.


      Get Ready for the Next Game-Changer: the Digital Yuan

      Pepe Escobar – May 5, 2020

      “Last month, the People’s Bank of China (PBOC) confirmed that a group of top banks started trials in electronic payment in four different Chinese regions using the new digital yuan. Yet there’s no timetable yet for the official launch of what is called the Digital Currency Electronic Payment (DCEP).”

      “The meat of the matter is that a digital, sovereign yuan may be backed by gold. That’s not confirmed – yet. Gold could serve as a direct back up; to back bonds; or just lay there as collateral. What’s certain is that once Beijing announces a digital currency backed by gold, it will be like the U.S. dollar being struck by lightning.”

        May 07, 2020 07:19 AM

        You’re mixing apples and oranges on which I have had 2 different takes.

        I don’t scoff at all and have regularly said that — in the case of China and other national/regional currencies — they will be ascending.

        That is to be distinguished from SDR’s; the IMF is a tool of the West generally and the US specifically. As for them — SDR’s — I DO “scoff.”

        Addressed a lot of this in great depth just a few days ago:

          May 07, 2020 07:42 AM

          Yes, I’ve heard your comments on national/regional currencies ascending, but you had mentioned the US dollar would not get replaced. I’m not a big fan of the SDR concept bandied about by the likes of Jim Rickards either, but do believe the US Dollar’s days of dominance are limited, and that a new global digital currency is coming. The Digital Yuan, whether fully or partially backed by Gold could be a contender.

          I should clarify that in that article above it got into this topic about how China claims to back the proposed SDR concept, but it really isn’t what they want, and gives the West too much control as you mentioned. They want to be the control and believe it is time for the East to rise in dominance.

          Here were a few more passages from the article above that seem to tie this discussion together in a way we can likely both agree on:

          “Well connected banking sources in Hong Kong have told me Beijing is not interested for the yuan to replace the U.S. dollar – for all the interest across the Global South in bypassing it, especially now that the petrodollar is in a coma.”

          “The official Beijing position is that the U.S. dollar should be replaced by an IMF-approved Special Drawing Rights (SDR) basket of currencies (dollar, euro, yuan, yen). That would eliminate the heavy burden of the yuan as the sole reserve currency.”

          “But that may be just a diversionist tactic in an environment of all-out information war. A basket of currencies under the IMF still implies U.S. control – not exactly what China wants.”

          “The meat of the matter is that a digital, sovereign yuan may be backed by gold. That’s not confirmed – yet. Gold could serve as a direct back up; to back bonds; or just lay there as collateral. What’s certain is that once Beijing announces a digital currency backed by gold, it will be like the U.S. dollar being struck by lightning.”

            May 07, 2020 07:45 AM

            I do find your concept of regional areas going back to local currencies compelling and had posted that on your thread last week under the lifeboat posts.

            In addition, the crypto currencies may still have some roll to play as global “community” currencies, but it depends on their use case, adoption rate, acceptance rated, and ease in converting into and out of fiat currencies in a timely basis for real world transactions. Some of them, or something like them, still show promise.

          May 07, 2020 07:42 PM

          BTW – Chris I enjoyed that podcast you did with Trevor Hall on currencies, the Dollar, and the debt-based fractional reserve banking madness that continues on.

          Thanks for posting it.

    May 06, 2020 06:16 PM

    Chris Temple rocks. Not afraid to give honest opinion and that is all we ask for.