This post clearly demonstrates the need for mullite factor analyses for any investment. What we know is that their are several off ramps for capital in the mining space-especially in the gold mining-several which where discussed in the post-shout out to The Oregon Group-which we need to revisit. Their are three factors that really make or break mining companies-especially gold miners and they are competent management, supply chains, competent work force, & political risk. This superfecta is hitting the mining industry all at once and you can hear it from every CEO earnings calls. Review Kazatomprom cutting back production because of supply of acid-which The Oregon Group covered. The gold miners are facing the same issues. But most importantly, when investing in gold miners one can not forget what gold miners are. Gold miners are a leveraged bet on the gold price, a bull case. This structure is the main culprit behind the disconnect. This leveraged postilion has been further impacted by inflation-in supplies & labor-retarding the profits & cash flow of the gold miners.
As for the metal itself, central banks have been the main buyer because of the Basel 3 rules which give the metal reverse status. The regulation reclassifies physical, allocated gold as a Tier 1 asset (the safest tier), comparable to cash, while it continues to categories paper gold, or unallocated gold, as Tier 3 (the riskiest tier). Given that gold is now on par with Treasuries as a collateral asset, and given that gold is not control by any one government, it makes sense to own it, especially from an accounting stands. This shores up the banking system from the tomfoolery of MMT. Interestingly the United States foreign reversers are held in gold at 77%, reported at cost on The Fed balance sheet.
This post clearly demonstrates the need for mullite factor analyses for any investment. What we know is that their are several off ramps for capital in the mining space-especially in the gold mining-several which where discussed in the post-shout out to The Oregon Group-which we need to revisit. Their are three factors that really make or break mining companies-especially gold miners and they are competent management, supply chains, competent work force, & political risk. This superfecta is hitting the mining industry all at once and you can hear it from every CEO earnings calls. Review Kazatomprom cutting back production because of supply of acid-which The Oregon Group covered. The gold miners are facing the same issues. But most importantly, when investing in gold miners one can not forget what gold miners are. Gold miners are a leveraged bet on the gold price, a bull case. This structure is the main culprit behind the disconnect. This leveraged postilion has been further impacted by inflation-in supplies & labor-retarding the profits & cash flow of the gold miners.
As for the metal itself, central banks have been the main buyer because of the Basel 3 rules which give the metal reverse status. The regulation reclassifies physical, allocated gold as a Tier 1 asset (the safest tier), comparable to cash, while it continues to categories paper gold, or unallocated gold, as Tier 3 (the riskiest tier). Given that gold is now on par with Treasuries as a collateral asset, and given that gold is not control by any one government, it makes sense to own it, especially from an accounting stands. This shores up the banking system from the tomfoolery of MMT. Interestingly the United States foreign reversers are held in gold at 77%, reported at cost on The Fed balance sheet.
What are some good mining index funds to buy into?