While we are completely off-topic down this CoVid-19 rabbit hole, I was just thinking about 2ic's comments about macro-economics and central banks running the printing presses at full speed.
If the thing that the world needs now is inflation - this little CoVid-19 bug might be just the ticket, (unfortunatley the Saudi's and Russians aren't playing nice by pumping out more low cost oil) but if this supply and demand shock for actual real tangible things - like commodities, goods and services gets really going, coupled with a convenient trade war and breakdown in global trade we could actually breathe life back into the inflation dragon.
Would be an interesting experiment for some countries to try, maybe put up trade barriers and tariffs and announce some big corporate tax cuts and announce personal tax increases to really put the wind up the consumers? Imagine that, if the lack of supply of goods from China and local producers not being quick/agile enough to increase domestic production would result in empty shelves then we might start to see localized and then globalized shortages of things with the premise that if you don't buy these things right now, they might be more expensive (or totally unavailable) tomorrow? It would essentially turn China from being an exporter of goods, to an exporter of inflation?
Couple that with some other inflationary government intervention of increasing interest rates, helicopter money for the poor, increased taxes and white elephant infrastructure spending. Oh and by the way - the taxman is going to take more of your pay packet next month, and your loan repayments are going up soon, now that's a behavioral motivator!
Maybe a bit inflationary shock through the worlds economy could work? Sounds like a deranged gold bugs fantasy but entertaining to think about.
Just thinking aloud - only half serious...
But going back on-topic - I can see both Esh and others arguments both being correct. Obviously CoVid-19 is a Black Swan that Esh and others didn't predict, even people walking around with sandwich boards saying 'The End is Nigh' on HC would have been overweight in gold and/or gold stocks (or were restocking their bunkers with ammo and canned food) and so far the metal has held up ok in USD and AUD terms, but the gold stocks themselves have been victims of the liquidity crunch, and from what I have seen the gold producers have been punished even worse than the base metal miners, and maybe not as much as oil exposed companies, even some supposed blue chips and other defensive's like food/healthcare have been smashed just as well as a lot of the Australian gold miners...
So as I understood it Esh's main concern was actually a lot of technical/execution risk in recent/new/reborn developers who stumble due to technical challenges, and incompetent management unable to respond to these technical challenges, and the track record of RSG BLK GGY EGS MOY MLX WPG etc and more site specific stuff such as Jundee or say Syama has sort of proven him right in that regard in that we have seen quite a few gold producers managed to go out of business in a benign high AUD gold price and relatively moderate cost pressure environment (i.e. permissive cost or capital, oil and wage input costs). What Esh has identified is actually a cultural failure in mining management where risks are not identified and actions not taken to rectify fast enough. The reasons for this are manifest and probably deserve their own thread but probably go back to some themes along the lines of "low hanging fruit" and boom/bust cycle self inflicted skill shortages. But they all come back to the same story of if you can't trust management to execute well, or tell the truth if something goes awry, then we shouldn't be there. If Esh had emptied his portfolio of all RSG BLK GGY EGS MOY MLX WPG six months ago because of technical risks then he isn't exposed to this latest totally unrelated CoVid-19 black swan event anyway.
WAF Price at posting:
49.5¢ Sentiment: Hold Disclosure: Held
(20min delay)