Luke Gromen said recently he
expects the US Fed to change course in Aug22.
The US Jun22 quarter GDP is announced on 28Jul22.
Yield curve inversion is flashing red again.
The last time this happened was the COVID hysteria, which was managed with QE. Just before that time, the Reverse Repo (RR) market blew out, principally indicating that US Banks had stopped trusting each other with overnight funds.
Its now blown out to US$2.4t. Some commentators believe that any G-SIB (Global Systemically Important Bank) that emerges with liquidity problems, will be aided with funding from there. They may be surprised that when the US Fed drops interest rates to zero with RR (in order to mobilise liquidity), that the funds still remain.
Sh!ts getting real.
Now the recent BRICS (+OPEC wants to join) Annual Summit trumpets the need for a parallel world reserve currency to counter western hegemony. I'm sure you read it in all the MSM. No? Well, that's a surprise isn't it.
The BRICS are all major Gold producers with substantial Gold reserves. Much conjecture about them not trusting the US$ given their track record of weaponising it with economic sanctions. Yet trusting each others fiat currency less. They all trust Gold though. A Gold based cryptocurrency perhaps?
The strong US$ is certainly suppressing PoG and other commodities prices. Were the Chinese COVID lockdowns in recent months to contain viral contagion ... or to slow their economy to counter skyrocketing commodities prices?
Whether it is the US Fed changing course, or the emergence of the bifurcation of the world's reserve currency, the outlook for the US$ is looking a bit tricky.
A graph doing the rounds in other HC Forums shows the current manipulation of the PoG.
In just one quarter, precious metals derivatives had soared from $79.28 billion to $491.87 billion. That’s a 520 percent increase in a span of three months.
“Beginning January 1, 2022, the largest banks are required to calculate their derivative exposure amount for regulatory capital purposes using the Standardized Approach for Counterparty Credit Risk".
There is the decided perception that Wall Street megabanks have been hiding from the public the true extent of their involvement in the gold market through some ginned-up derivative definition.
JPMorgan Chase is the last bank in the U.S. that should have a $330 billion involvement in precious metals. On September 29, 2020, the U.S. Department of Justice charged JPMorgan Chase with rigging the precious metals market and charged it with a criminal felony count, to which it admitted. According to the Justice Department, the rigging occurred for more than eight years, from March of 2008 to August of 2016, and involved “tens of thousands” of incidents.
Despite this criminal conduct, federal regulators apparently have no problem with JPMorgan Chase continuing to hold an outsized share of a market it rigged.https://wallstreetonparade.com/2022/06/report-jpmorgan-chase-and-citibank-hold-90-percent-of-all-gold-and-other-precious-metals-derivatives-held-by-all-u-s-banks/
Meanwhile NST is on track to challenge Newcrest in coming years for the No.1 spot of Australia's top Gold producer. Whether it be Fimiston underground expansion, Golden Wonder, KCGM Optimisation (
200kozpa+) or even Pogo expansion (
all options outside of their current expansion project to production of 2mtpa), the wheels are in motion.
NST is the second largest Gold miner in Australia with production of 1.6mtpa. Its MC is $8.074b.
NCM holds the top spot with production of 2.2mtpa. Its MC is $17.63b.
The market doesn't seem very forward looking with NST. Of course if it was an ESG stock, it would be multiples of the current P/E.
I expect NST to achieve FCF for the Jun22 quarter of about $300m. Mar22 achieved $284m. Issued shares are about 1.15b and therefore the Company is effectively earning FCF of more than $1.00 per share. With dividends based on 20 to 30% of FCF. H1FY22 dividend was 10c. Full year dividends total 20c, which is 20% of earnings.
At the current share price the NST dividend yield is 3.14% fully franked. If the whole of earnings were distributed as dividends they would total 15.7%. Grossed up for imputation credits would be 22.43%.
What other ASX Companies are giving you an implied ROI of 22.43%?
The NST share price should be more than double its current level.
Yeah OK, I know what you're gonna say. Blatant ramping. We have downrampers lately who blithely say the share price is going to $5.00, without any rationale to support it. Yet if someone should upramp, cosmic rationale notwithstanding, they get verbally castrated. I claim licence.