MTJV Interview, page-10

Let's wait until September when we have some idea of the structure of the IPO. This may well depend on results they announce along the way. Given that GSR is using a person with Plat reef South African background, it speaks volumes as to where this is going and who is driving it. Be interesting to see how successful CNJ's raise will be and who get diluted out, because otherwise, they may have lost the winning lottery ticket on the way to the shop. There is a chronic need to separate from CNJ given their position. If there is an economic resource and production process established, then its clear PGE's have a future to sell or develop. Can't make the economic decisions without the data. Step by step until then. Waited this long, so it won't matter and ground floor for both gold and MTJV.

With regard to gold, the temporary drop in price is due to Fed activities raising interest rates. This diverts capital into defence and from gold in my opinion and is not solely related to inflation when the figures are considered. The Fed's goal is to reach 2% inflation which is over the top IMO. Even was I was a young economics student at university decades ago, the goal was to have 3-4% inflation for economic growth because rising prices encourage investment due to lags to get the edge. Similarly, full employment was considered to be acceptable 4% with frictional unemployment as an incentive to work. N.B. Keynes and the monetarists, still so popular today pre-date me.

There is not going to be an inflation spike which was largely caused by the black swan event of Covid. Inflation is caused by a lack of supply. World shipping and production is building again, even in China. It is not in China's interest, now being a manufacturing country to upset world trade. We only see reactionary inflation figures due to lag and the fake news promotes it. The figures come out quarterly. The USA also has a legislated debt ceiling because it can't pay the yield beyond that level. But having beaten down inflation, it gives leeway to raise rates again to put pressure on domestic consumers and gold bugs to divert capital to alternative use which has a higher priority. The Ukraine war is a black swan event on top of Covid. The current world debt is something like 4 quadrillion dollars i.e. 1000 trillion dollars. Huge. The capital inflow from raising rates attracts overseas money to subsidizes internal goals such as re-invigorating the defence industry. It also detracts from the gold price which many competitors value. Countries that source funds from the USA pass on the rate rises to the ultimate consumer. The priority in the big picture for defence of democratic values. The increase in the number of bases and defence personal takes pressure off domestic unemployment too. Should the allies rebuild Ukraine we will be looking at 6% growth rates in the future. The sector to suffer is housing as funds are directed to alternative uses. Hopefully, it does not turn into the "Dutch disease" economic problem listed in the textbooks.

So lets look at real USA inflation, as published by Truflation on the 19/2/23. Inflation in the space of a year has come down from 12.5% to 5.5%. That's a massive decline. So I can't see a spike coming unless another black swan event of say natural disaster. What business is concerned about is that the Fed may have gone to far and create recession. But Uncle Sam is calling. There will be a traditional defence led recovery rebuilding Ukraine, defending Europe and establishing greater influence in the Pacific which will add to the velocity of money because people will earn it. That leads to real growth and incentive, something which a direct transfer payment to consumers has failed to do which disincentivises people to work. Spending on defence now will have a credit multiplier effect in the domestic economies of allies in the future. History has a habit of repeating.



Now consider an interview by Goldman Sachs Commodity Research head who I think puts things into perspective. Note, he is discussing this with a Saudi sponsored interviewer. Its the business that counts and capital crosses boundaries.


All food for thought.