Cycles

“Everything moves in cycles. Twice a century, the ocean lets us know just how small we really are.” - Bodhi / Point Break

“Adventure is the life of commerce, but caution is the life of banking.”

- Walter Bagehot

The avid surfer or entrepreneur seeks optimization using external forces and timing.

A quick study of real history of Australia to the North American West was shaped by mining collateral to recapitalize of the European banking system [1800’s]. 

Lending and establishing sound lines of financing can become distorted in artificial pecuniary booms where sentiment becomes sanguine with high confidence in systems. Promises to pay contracts encourage FOMO - Fear of Missing Out.

Recent PowerBall Lottery over $2B & FTX Collapse signaling Peak Greed.

Improper price discovery of capital where the cost of funds is distorted may further exacerbate a cycle.

The financial system of the west is set for the greatest wealth transfer in history. No wonder there are no shoppers at the coin stores this season. All sophisticated people are in levered ‘real estate’ to their favorite growth promise to pay from Tesla to Ponzi Data Coin. Nothing by Chance.

We see this bear market priced in constitutional money rather than Federal Reserve Notes - Watch the Dow / Gold ratio. Stocks in the past decade have received the hyper inflation acting as a currency. DARPA / CIA Crypto was no accident. Psychological moves to digital currency were well noted by former Investment Bankers such as Catherine Austin Fitts.

We were fortunate to cut our teeth in the commodity / resource markets during Phase 1 of the Great Secular Bull Market in REAL. Innings 1-3 may have been 2001 - 2021. The stealth Phase is moving to the Institutional Phase.

Speculation in Aurelian Resources helped secure our property in Manantiales, Uruguay. This was a rare discovery of a Tier One Asset in Ecuador by Kieth Barron. Despite comments about another geologist on the team making the discovery it was Keith’s full skin in the game and ‘Human Action’ to make the Lundin Gold property possible.

Rebuilding from the ashes of going against the machine has been constructive. One of the greatest gifts is rapid compressive of the situation - In surfing this is called; ‘Getting the place Wired.’

Noting the scammers becomes almost clairvoyant with the ability to say ‘No’ /

Being early to a huger systemic shift with real assets going on sale takes patience and humility.

We envision the possibility of a junior mining cycle boom for the following reasons:

1. Central Banks recognize the end of the fiat cycle & have been preparing.

2. 40+ year in promises to pay by Western Financial Countries are seeing a shift.

3. Major Producers face extreme depletion. Every day of mining is cannibalization to Assets on the Balance Sheet.

4. Mass Psychology of Speculation in Digital & Financial Asset Frauds.

5. NASD / SEC / FINRA Indian Casino Economy Confirmed on a Recent trip to San Francisco.

Morgan Stanley noted the mean for investment capital in gold & precious metals assets is around 2-3%. Today less than 1/2 of 1% [50bps] is in the miners or physical.

Exchange Traded Fund GLD is Paper.

Revisions to the Mean can be beautiful events. GDX in the S&P would need to go 5x just to revert to the 2010 market. Nice thing about depressions is only the strong survive. Unlike the 2002 period when 1st looking at these markets the new breed consist of real leaders and stewards of capital.

Quality over Quantity. Allow the Smart Keyboard warriors to fight the last war.

Ride The Ultimate / CAS

Parting Thought // Ludwig von Mises noted today’s predicament clearly in Theory of Money & Credit [1981]. Financial ‘errors’ are not new phonemes and often provide a great transfer of wealth until participants lose confidence in the system.

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It is to the great merit of the Austrian business cycle theory that it explains recurrent errors in investment decisions by a common cause, namely, the monetary organization that prevails in western civilization. The main features of this system are fractional reserve banks and a central bank operating as a lender of last resort. Under these circumstances commercial banks can unexpectedly increase the quantity of money substitutes (today mainly demand deposits) and, by lending this new money out, push the market interest rates below the level they would have otherwise reached. Thus, with the given production capacities more investment projects are begun than can ultimately be sustained. A systematic error has occurred. It is impossible that all projects are successfully carried out, and this must sooner or later be discovered. When this discovery gains widespread attention, the business cycle has reached the crisis phase. The supposedly least profitable projects are now abandoned and production continues on a more solid base. However, the source that brought about the systematic error is still operating. Still, commercial banks can increase the quantity of their money holdings beyond the quantity of money they may dispose of. And still the central bank helps them in cases of “liquidity crises.” Therefore, systematic error is likely to occur again.

Picture: The San Francisco Mining Exchange was a regional stock exchange in San Francisco. Formed in 1862 to facilitate the trading of mining stocks as the San Francisco Stock Exchange, the Chicago Tribune described the exchange as "once the West's most flamboyant financial institution."