Category: Uncategorized

History of US Government Income

Despite record tax collections since 2012 the US government still runs a deficit each year…

Mandatory spending is consuming the US government income (future estimates by the CBO).

Let’s just say promises will be broken one day in one form or another.

Platinum-Looking for an Entry

As a long term buy and hold, platinum looks like a winner.


Platinum is one of the world’s rarest metals. All the platinum mined to date could fit into an average size living room. The biggest producer of platinum is South Africa, accounting for nearly 80% of the supply. The largest consumer of platinum is the  jewelry industry (51%) followed by auto catalysts (21%). Since most of the supply is coming from South Africa going long platinum is like going short the South African government. Each day that passes South Africa is looking like a future Zimbabwe.
Anglo American Platinum is one of the largest producers of platinum. Their web site is information overload. I had to dig through to find out that the AISC hidden in the foot notes.

Will GE Survive?

General Electric has been in free fall since Q2 2017. This is despite a roaring bull market in stocks last year.

I can summarize GE’s problem in two charts.


There operating cash flow has gone negative.
More importantly though, they have to much debt. When assets and liabilities get this close I get suspicious of accounting games being played to make it look like you are not buying a stock with negative equity. For instance ‘Goodwill assets’, ‘other long-term assets’, etc are high on their balance sheet. Digging deeper you could discover you are buying shares in a company with negative equity.
Amazingly, despite these deteriorating financials, the stock went side ways in 2016 all the way through the first quarter of 2017.

The Bullish Case For Gold

Putting aside central bank mischief for a moment.
Just supply and demand.
Below is the world mine production total.

Mine production is at a record high. So why be bullish?
See the mine production per country.

China and Russia, two of the largest producers are net importers. China in 2017 imported about a 1,000 metric tons. Not a single ounce of gold leaves China. When you take away China and Russia, the production picture looks very different.
Gold bottomed in 2016 at about 1,050$/ounce. The mining shares are a disaster. You can’t give them away. In the next five years, the prices of these stocks will be a multitude higher than they are at present.