Good News For Gold Mining Investors – Merger Mania Is Gripping The Sector
January 15, 2019
News broke yesterday of the biggest merger in gold mining history. Newmont Mining (NYSE:NEM) announced that it was combining with Goldcorp (TSX:G/NYSE:GG) to become the world’s largest gold producer.
This follows on the heels of the Barrick-Randgold merger, which was announced last September, and completed a fortnight ago.
It’s merger-mania in gold mining. What are the implications?
The top dog merges with a total dog
Until recently, Newmont Mining had enjoyed top dog status as the world’s largest gold miner. It has three producing mines in the US, three in Australia, two in Ghana and two in South America (comparatively stable jurisdictions for a miner). Last year it produced some 5.3 million ounces of gold, and it has further reserves of just under 70 million ounces. Its market capitalisation, before yesterday’s announcement, was close to $17bn.
Over the last ten years, it has been creditable, if unspectacular performer, at least by gold mining standards, and, since 2016, has comfortably outperformed the sector’s benchmark exchange-traded fund (ETF) – GDX (NYSE:GDX).
Keep in mind this sets up a continuous metal currency metal arbitrage the would be demanded for paper at a key technical point for paper gold in dollars. JES
Gold Hits An All Time High In 72 Currencies
January 15, 2018
It is natural that we measure things by a familiar yardstick – the problem is that being so-biased or lazy, we can be deceived.
Take gold. Popular belief has it that gold prices have not performed especially well despite some egregious geopolitical and economic factors. Well measured in 72 currencies, gold is at … or within a few percentage points … of being at an all time high for people in those countries. Not on the list are the British Pound, the Swiss Franc, the Euro and Chinese Yuan – but we are not far off in all of those currencies too. Only in USD does gold lag – and not all of us live in the US.
Using the dollar gold price, as most of us do, has disguised what is actually quite a powerful bull market. If my memory serves me right, we saw the same phenomenon – a stealth rally in minor currencies – ahead of the last major gold bull run (in dollars) in the late 1990’s. Arguably this may be a very good leading indicator.
Faulty yardsticks also takes us onto wealth management. Measuring our net worth in local currencies, we might be rather pleased with ourselves – smug even. However we chose to ignore the fact that the yardstick is not a constant … it is shrinking and sometimes really quite fast. It’s the natural corrosive effect of inflation. Knowing this, governments give us a gauge for yardstick shrinkage to use such as RPI or CPI, to reassure you that the shrinkage is minimal… and then lie about it.
There are alternatives.
Bill Holter’s Commentary
Nothing to see here…unless you are a traitor to the nation, have committed gross financial fraud or traffic in humans!
2019 Brings Changes To Military Justice System
January 1, 2019
FORT MEADE, Md. — A host of changes to the Uniform Code of Military Justice became effective Jan. 1, modernizing definitions for many offenses, adjusting maximum penalties, standardizing court-martial panels, creating new computer-crime laws, and much more.
The changes strike a balance between protecting the rights of the accused and empowering commanders to effect good order and discipline, said Col. Sara Root, chief of the Army’s Military Justice Legislation Training Team.
“We’re pretty excited,” Root said. “It’s a healthy growth of our military justice system.”
Root and three members of her team spent the last year traveling to 48 installations to train 6,000 legal personnel and law-enforcement agents about the changes. Her two-day classes included everyone from judges to law clerks, and privates to generals, she said, and even 600 from other military services.