Orderbook Vs. Shipping Rates

The orderbook as a percentage of total fleet peaked in 2008 at 50%. Today, the orderbook to fleet level is at 20%, so there are not a lot of ships being built. Even if they are being built, it takes around 2 years to build one.

History shows that when the orderbook to fleet ratio is low, the baltic dry index spikes. This is because shipping rates rise due to a constraint in supply of ships. Once the orderbook to fleet ratio rises again to a certain level, the baltic dry index will start to go down again.

 

For more info on container shipping, go here.

Container Shipping Market

Freight rates for bulk shipping have gone up a lot, so what's the outlook for container shipping?

The container shipping market is going to grow at 8.5% per year.

All continents will see growth.

 

Growth will only accelerate.

The fleet is almost being used at full capacity and orderbooks are at all time lows.

Supply is constraint, we don't see any new ships being built. 

A lot of ships are ageing and will come off the market.

Danaos Corporation trades at PE of 6 and is at book value. This is a good buy.

Commodity Bull Market

The future of commodities looks bright. 

Who will buy the bonds that the Fed tapers?

The Fed owns 53% of the 10 year treasuries. Who will they sell it to? 

Refined Copper Vs. China Copper Scrap Premium

The price of refined copper is usually higher than scrap copper. Sometimes this premium disappears when scrap copper is in short supply. This indicates that copper has found a bottom.

Infrastructure Bill Deficits

A visualization of deficits to come. Could boost copper in 2023.

U.S. Debt Limit

Yellen has no money left as the debt limit prevents her to borrow more money.

 

Treasury General Account Vs. U.S. Dollar

Whenever the U.S. Treasury is out of cash in the Treasury General Account (TGA), additional cash will need to be borrowed by raising the debt limit and monetized by the Federal Reserve. This puts pressure on the U.S. dollar currency.  

Sprott Holdings Update August 2021

Sprott has filed its new holdings in August 2021.

What's notable is:

They added a lot of gold miners and energy stocks: Equinox gold (undervalued), Mag Silver (low cost), Suncor, Schlumberger.

They sold Americas Gold and Silver (they had some production issues, covid and blockades), B2Gold (no growth) and Fortuna Silver (bad diversification into Africa).

Triffin Dilemma: The U.S. is losing share as a percentage of the world economy

The U.S. economy is becoming more and more insignificant by the day. As the rest of the world grows and uses the U.S. dollar in trade, more and more dollars are needed. Since the U.S. economy is so small, these dollars need to be printed in existence or the U.S. deficit needs to grow in order to supply the world with dollars.

Palantir Buys Useless Pet Rock

Palantir said they bought $50 million dollars in gold bars. This represents 3% of their equity, which is significant.

Coal Price Vs. China Power Consumption

The coal price is directly correlated to China power consumption because China is the largest consumer of coal.

 

Oil Forecasted to Decline

Oil is forecasted to decline as production rises. 

As production increases.

China power consumption hits record high in July

China July power consumption is up 13% yoy. Obviously this is good for commodities. 

Vehicle Sales Vs. Used Car Prices

There is a correlation between vehicle sales and used car prices.

 

USD Net Spec Positioning Long

The U.S. dollar shorts are now flushed out, this could mark the top in the U.S. dollar. 

Capstone Mining has highest growth among peers

If you just hold Capstone Mining long enough, the growth will only accelerate. 

Gold Forecaster Index: Everything Is Going Higher Except The USD (05-Aug-2021)

The new trend in Europe

Fintech and pharma are the place to be. 

Yardeni Increases Outlook

Yardeni upped his forecast from 4300 to 4500 in 2021 and from 4800 to 5000 on the S&P in 2022.

Update: Yardeni upped his forecast again just a few days after he upped his forecast.

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Junk Silver Premiums Diverge

A recent phenomenon has occured. Junk silver premiums have gone lower to 15% while silver eagle premiums stayed at 50%. Considering the fact that junk silver is bought for its content, I think this metric is more reliable to predict the silver price. Junk silver demand is a real proxy for silver bullion demand.