Capitol Hill Democrats are taking aim at U.S based mining projects with an 8% royalty fee on existing mines and 4% on new mines. The royalties are on precious metals as well as base metals such as copper and lithium. This added drag on mining would act as a headwind to already struggling metal supplies. 

Last night saw the latest US Fed meeting and (finally) ‘confirmation’ of what they have been jawboning for a while and that is tapering of QE to ‘likely’ start next month.  Maybe because of all the lead up references the market did not, at this point, chuck a so called ‘taper tantrum’ as has occurred on previous attempts.  We discuss.

The Bitcoin market traded slightly higher this week, opening at a low of $43,789 US, and trading up to an intra-day high of $48,730. Prices are forming a consolidation trading range after the volatile sell-off that started last week, clearing $4B in excess leverage in one hour.

It's Friday and whilst not the 13th, it ends the week that marked the 13th anniversary of Lehman Brothers collapsing and cementing the contagion of what would become the GFC, one of the worst financial crashes in history. So over leveraged was the system that it’s all it took for the whole house of cards to come down. Coincidentally this week also saw China’s largest property developer, $300 billion Evergrande, technically default as well as the Institute of International Finance (IIF) releasing its latest global debt figures headlining another record high. We discuss the implications.

Whales moving the markets are more common in crypto, but since 10 August, a new major player has appeared on the long side of the gold futures contracts market. Raw data shows a large non-commercial trader has amassed as many as 40,000 COMEX gold contracts, the equivalent of 4 million ounces of gold - a cool $AU9.85bn. 

Last night saw more losses on Wall St as the CPI inflation print again came in strong, albeit slightly lower than expectations. ‘Transitory’ took another hit. This fuelled a strong gold rally and shares fell, now putting them in the red for the month so far. The prospect of higher rates and tapering amid the debate over the US’s next massive $3.5 trillion deficit funding relief package and looming debt ceiling is increasingly weighing on the market’s mind. So let’s look a bit further at what is a truly mind blowing set up in the US.

Wall St had another bad night Friday night, capping off the worst week on the S&P500 since mid June and the first 5 day losing streak since February. The question of course is where to from here? SocGen’s model says 10 years of negative sharemarket returns ahead. Does this see the Fed’s eye’s roll back?

If anyone needed reminding about the extent to which easy money is inflating sharemarkets the charts below paint a clear picture. In a nutshell, the zero interest rate and QE fuelled monetary stimulus central bank policies are designed to rob you of any traditional ‘safe’ yield via savings or bonds and force you to look for yield via shares and make everything look awesome. If you are a company, that includes buying back your own.

The US sharemarket jitters extended last night and is set to see losses in our local market this morning. Whilst some of the pressure was due to weakening growth concerns and worsening COVID fears, paradoxically concerns of tightening supply chains and labour markets yet again raises the dual spectre of forcing the Fed’s hand at tapering amid lurking stagflation.

Famed Fund Manager Mark Mobius has advocated for the Golden Rule: “10% should be put into Physical Gold”. The Mobius Capital Partners founder argued, “Currency devaluation globally is going to be quite significant next year given the incredible amount of money supply that has been printed.”With US$86.6 Million AUM, it’s not the biggest fish in the sea, but is a part of a growing chorus of market participants seeking a safe haven.