Hi
@BDR70Please take whatever i say with a pinch of salt as im just guessing like everyone else.
From what i understand based on listening to folks much smarter than me in the space is, government bonds are essentially certificates of confiscation going forward as interest rates will actually be highly negative on a real basis (inflation adjusted). This is what happens when debt and deficits in the US are as high as they are (130% debt/gdp and 7% deficits atm). Emerging Market games of the last few decades get emerging market results (fiscal dominance which the US finds itself in. Lyn ALDEN has some decent pieces on that recently)
At the short end the T bills less than a year duration are essentially cash deposit equivalents (may pay a higher rate than CDs) but the long end treasury market is essentially illiquid as foreigners arent buying them, hence why most of the US debt rolls have been at very short dated duration (yellen shifted issuance to the front end last couple years and another 7 trillion needs rolling this year) other wise markets would have gone no bid at the long end and a confidence crisis in the most liquid market in the world would have triggered another bond market melt down like we saw in Mar 2020.
One thing that stands out is that post that Apr 2020 liquidity pump (circa 5 trillion usd) I'm surprised the Fed/treasury didnt let the inflation keep eating away and reducing debt/gdp but from what ive read it was to help Biden so he wouldn’t get creamed in the mid terms in 2022. The debt/gdp did get reduced initially as inflation kicked in, then the Fed started raising rates dramatically in response to the inflation that they created in the money pump.
Going forward to where we are today, the new administration has a 2 year window to deliver reults or be a lame duck regime, remember Trump has only 1 term allowed. This is why i think there will be some drastic steps taken to weaken the USD (DXY which is primarily measured against yen and euro) and the US govt interest expense is so high, they NEED the interest rates lower (interest bill exceeded defence spending recently, look up Ferguson's law).
This is why my 3 to 6 month time frame I mentioned as I believe the new administration will have to have a positive impact very early to ride the goodwill landslide victory they achieved ad its going to require a few unpopular decisions and inflation is baked into the cake regardless of what policies were promised. If any unpopular moves taken early result in positive outcomes by the time the mid terms roll around, all will be well for the new govt.
I was referring above to a mega bullish backdrop for commodities and PMs (note how gold went up as rates went up post FX confiscation of Russian reserves) as the markets are signalling a shift away from USTs to new neutral reserve settlement assets that cannot be confiscated (and US won't invade China or Russia to take their gold like they did iraq/Libya as China and Russia have nukes.
High inflation is baked into the cake now and in high inflation environments, hard assets do very well.
Lots of examples in recent history (for eg look at what happened to bonds when US funded their war effort in 1942, fdr told the bond market to deal with it so Fed pinned short end at 3/8% and 10 year at 2.5% and the quantity of issuance ballooned) and they ran this playbook to 1954 I believe.
So for NWC, we have a project in the state that produces 70% of USA copper and with a pro mining, pro energy establishment taking the reins on Jan 20, we are in a very positive position indeed.
There will be govt grants for the taking as we are in Cold War 2.0 and energy and materials security are tantamount during these periods in history
What's a pound of copper worth in a peace time scenario vs a war time one?(a lot more in the war time scenario) and pricing becomes secondary when national secirty needs are in play.
The risk is always the underlying commodities will perform but acutal companies may not follow suit straight away and other factors of how companies are run will have a huge impact on returns.
I do know last few times I've spoken to Nick from NWC he is well aware and navigating the shift in landscape to the company’s advantage. Time will tell but if you look at the lobbying of the governer and senator from recent asx announcements we are making the right moves for support from Washington on both sides of the political spectrum with potential alternative sources of funding being investigated. (Inflation reduction, act critical minerals act.etc)
Apologies for the long winded response, hope it makes sense but one thing ive noticed last few years is the global adjustment of the world order has a lot more impact on commodity markets and companies compared to prior decades when world was more unipolar.
I'm not a great trader but what I am here for, is if there is a massive shift as the last 4 decades (that wall St uses as the framework) has shifted, then when this gets acknowledged and the sector rotation into hard assets and away from financialised ones transpires, then all boats will catch the rising tide and get the uplift and the lower risk undervalued ones should get some love in a big way, that's why I'm here.
We have a minimum deposit (which ive always thought was 15Mt eventually as it's open at depth and always been just a guess but looking more likely as we keep drilling deeper) which should increase in value dramatically as the commodities prices adjust upwards in a multipolar global market and as it grows along strike and thats our base case valuation of what we have and what we can add.
Post the Colorado school of mines expert evaluation of our exploration prospects let see if we can hone in on new VMS clusters on a cheaper basis by doing less drilling but increasing the prospectivity so when we do drill we get a higher positive strike rate. That is all bonus upside to expanding Antler base case.
Like I said at the start I'm just guessing like everyone else and may well be wrong but the above is some of the framework that runs through my mind.
In a high inflation environment, stocks, gold and BTC should do well. I'm not a fan of bonds personally based on the above but like I said it's just my opinion and I may well be wrong. I just view the US market through and emerging market lense atm based on their fiscal dominance position.
Through that lense all the recent and forthcoming decisions by Fed, Treasury etc make a lot more sense.
Enough of my rambling, have a great weekend, hope some of that makes sense.
(20min delay)