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09 April 2021
Video commentary for April 8th 2021
Eoin Treacy’s view
A link to today’s video is posted in the Subscriber’s Area.
Some of the topics discussed include: gold, large cap tech and bond prices rebound, Dollar eases back, global stock markets steady on renewed faith the Federal Reserve is not about to raise rates.
Email of the day on electric vehicles and reshoring
I came across this article (attached) about a new British company that has recently listed on the Nasdaq. Big questions about whether it can succeed, but it’s an interesting take on the possible future of local manufacturing, and not just for vehicles. If successful, it could presumably have an impact on the issues of on-shoring, local community development and not to mention the ESG sector.
Eoin Treacy’s view
Thank you for this email and the attached article from the Times. Here is a section:
One reason why the prediction is more convincing this time can be found on an industrial estate in Oxfordshire. Arrival will start producing electric vans at its first small plant outside Bicester soon in what the company believes will be a turning point for global manufacturing. Avinash Rugoobur, the former General Motors executive who is Arrival’s chief strategy officer, says that not only the motor industry will be watching closely. “Many other industries will say: ‘If Arrival can do it in automotive, why can’t we do it in our sector?’ ”
Valued at about $10 billion after its recent flotation on Nasdaq, Arrival has been working for five years on the necessary technology. Denis Sverdlov, its founder, a Russian telecoms tycoon and former government minister, believes that using highly automated small plants can be dramatically cheaper than traditional large factories. A decentralised model also should reduce carbon emissions and deliver big economic benefits to the microfactories’ communities thanks to localised supply chains.
To apply this approach to vehicles has required a fundamental redesign of the products. Arrival makes its bodies from coloured composite materials, doing away with the metal pressing and painting that take up much of a traditional car plant. Although Arrival makes some use of 3D printing, Rugoobur says that “3D printing can be an enabler of decentralised manufacturing, but is not the only way of getting there”.
During the pandemic, many of these techniques were used by British companies to produce personal protection equipment and medical components when supplies from China were interrupted. In addition to fears about the resilience of supplies, companies have been worried about rising wages in China and the rising costs of transport. The Suez Canal snarl up has heightened concerns. At the same time, many western governments have said that they want to build up domestic manufacturing in critical industries, a resolve only strengthened by the vaccine wars.
Email of the day on the gold/silver ratio:
I have been a subscriber for a year and just renewed. Enjoying your service. Keep up the good work.
My current dilemma/question is about silver – would you say that the fact that silver recently fell more than gold means we are coming out of phase 2 of the gold/silver bull market. Or can we still expect silver to go up in the medium term? If so, Is there a trigger point one should be looking for?
Eoin Treacy’s view
Silver is a high beta play on gold but the difficulty with that statement is that the condition is most applicable in the middle and late stages of the cycle. That means gold tends to lag gold’s performance by a wide margin at the beginning of the cycle. It then tends to trend higher against gold for the entire bull market.
Email of the day on corporate taxes:
Hi Eoin, I am shocked that the US is attempting to get agreement on a global minimum tax. If I replace Yellen’s speech with any global industry the same reasons would be justified to fix pricing which is clearly illegal. Why is no one challenging the legality of this or at least criticizing the move based on this premise? Kind regards, TG
Eoin Treacy’s view
Thank you for this email which may be of interest to the Collective. When it comes to agreements between countries there are few limits on what is possible given sufficient will. The barrier to agreement on taxation is probably lower than it is for incentives and supports because governments are broke and hungry for revenue.
Governments are curtailed from rising individual taxes or cutting back on social services because of the threat of social unrest. The rise of populism on both sides of the political spectrum is a direct consequence of the response to the credit crisis. It is the number one unintended consequence of pushing private sector debts onto unsuspecting populations.
Scientists Claim To Discover ‘Unexpected’ New Viruses in Wuhan
This article from Futurism.com may be of interest to subscribers. Here is a section:
A team of researchers claims that it found evidence of multiple viruses — including several brand-new coronaviruses — in agricultural genomes from labs in Wuhan and other Chinese cities.
Genetic sequences of crops like rice and cotton released between 2017 and 2020 contained the entire genetic sequences of new viruses that seem to be related to human diseases like MERS and SARS, according to research the team shared in the preprint server ArXiv on Sunday.
The “unexpected discovery,” as the team put it, of the presence of dangerous human diseases in these agricultural research facilities, suggests that safety protocols may not be up to par — and, as the team argues, that viruses may have accidentally been released as a result.
It’s important to note that this is all coming from preprint research that hasn’t been vetted by an academic journal or other experts in the field. While four of the six study authors are affiliated with hospitals and universities in Spain, Canada, and Japan, the first two researchers listed in the paper are independent researchers without affiliations to any research institutes, and a third is affiliated with an LLC named after himself.
Eoin Treacy’s view
China is the wild west for genetic research. The level of control and care in research is a function of standards of governance.
Eoin’s personal portfolio: futures long opened March 30th
Eoin Treacy’s view
One of the most commonly asked questions by subscribers is how to find details of my open traders. To make it easier I will simply repost the latest summary daily until there is a change.
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