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Asante Gold Signs US$5 Million Investment Into West African-Focused Roscan Gold

Asante Gold Corporation (CSE: ASE) announced on Thursday that it has entered into a binding term sheet earmarking a US$5.0
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This article was originally published by The Deep Dive

Asante Gold Corporation (CSE: ASE) announced on Thursday that it has entered into a binding term sheet earmarking a US$5.0 million “strategic investment” into West Africa-focused gold explorer, Roscan Gold Corporation. The move sets the stage for Asante Gold to grow its reach in the African gold exploration market.

Under the term sheet, the firm has agreed to purchase 22.1 million Roscan Gold common shares at $0.29 per share, a 14% premium to its share price on September 22, 2021. At the transaction’s close, Asante Gold is expected to own approximately 6.7% of the outstanding Roscan Gold common shares.

“Roscan’s 100% owned Kandiole Gold Project in West Mali is located in one of the most prolific and productive gold jurisdictions in Africa,” said Asante Gold CEO Douglas MacQuarrie. “With this investment, Asante’s shareholders gain exposure to Roscan’s large exploration upside, and at a very attractive entry point.”

Related to this planned investment, the two gold exploration firms also entered into an investors rights agreement which will give Asante Gold a possible right to appoint a member in Roscan Gold’s board, subject to time and ownership thresholds.

The investment transaction is expected to close on October 15, 2021, subject to customary closing conditions.

Asante Gold last traded at $1.13 on the CSE.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Asante Gold Signs US$5 Million Investment Into West African-Focused Roscan Gold appeared first on the deep dive.





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Author: ER Velasco

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Economics

Do Bonds Accurately Price Inflation? Since Before Any of Us Were Born

Many, likely the vast majority believe that the recent wave of consumer price increases is going to stick around. It’s already painful and even if it…

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Many, likely the vast majority believe that the recent wave of consumer price increases is going to stick around. It’s already painful and even if it isn’t inflation, they’re thinking, it soon will be. Maybe not 1970’s bad, not yet, at the very least something like then.

The bond market doesn’t just disagree, it keeps doing so vehemently. Nothing new, bond yields have signaled distrust and skepticism each and every time we go through one of these inflation panics. There was 2008’s fiasco today remembered for ending up more like the thirties than the seventies; renewal under QE “money printing” which very quickly deflated by 2011 and forgotten; then 2014’s “best jobs market in decades” simply vanished; finally, the 2018 “globally synchronized” comedy of hawkish errors.

Low yields aren’t just expressing some cynical opinion that we can quantitatively measure, the implications have been repeatedly proven true because those prices are largely made by those inside the shadows doing all the money. Or not enough, as the case has been.

Inflation, real inflation which lasts, is always and everywhere a monetary phenomenon. There hasn’t been the money for a long time, therefore there hasn’t been inflation. Instead, consumer prices, at times, have increased even jumped if only due to other factors which uniformly get verified as transitory.

That’s why I (and a very few others) become remorseless about being obsessively specific and demand full accuracy as to whether or not to call something inflation. Without the money, it won’t be so whatever else has to be responsible for consumer prices can only ever be transitory.

This time is different, everyone now says. Screw bonds! Sure, they’ve been on the spot predicting the Fed’s downfall since before 2008 (see: below) but more and more of late the Federal Reserve itself says you can’t rely on yields if or when the real inflation their QE policies have been desperate to inflict does arrive.

There’s been a curious uptick in scholarship purporting to study the best inflation prediction combinations. Most of them are just absurd fantasy, transparent attempts to discredit policymakers’ bond market nemesis. I’ll even give you a recent example, just a few days ago, published by the Cleveland Fed.

The study’s findings unsurprisingly disparage consumers, estimating that consumer surveys of inflation are the least helpful. Those conducted from businesses aren’t really any better, according to the Cleveland branch, while, predictably, the authors extol the virtuous capacities of “professional forecasters” as modern-day inflation oracles.

Professionals who just so happen to be – pure coincidence, I’m sure – formally trained Economists like the researchers in Cleveland and the rest of the Federal Reserve.

One other inflation predicting method included “financial markets.” This didn’t score so hotly, according to the paper:

Based on in-sample and out-of-sample predictive exercises, we find that the expectations of professional economists and businesses, as demonstrated by the Blue Chip and Atlanta Fed measures, have provided substantially more accurate predictions of CPI inflation one-year out compared to those of households. The accuracy of the Cleveland Fed inflation expectations model, which could be viewed as reflecting the expectations of the financial markets, is somewhat behind these other two measures.

Wait, back up; the Fed’s branch used an “inflation expectations model?” This is supposed to be a proxy for financial markets, but instead is:

Inflation expectations of financial markets, as captured by the model behind the one-year-ahead Federal Reserve Bank of Cleveland inflation expectations series. The Cleveland model (Haubrich, Pennacchi, and Ritchken (2012)) estimates inflation expectations using data that include nominal yields from US Treasury securities, survey forecasts, and inflation swap rate data.

It’s bad enough they’ve thrown a bunch of things into the wash and hope to extract something useful via subjective stochastics, but one of those things purportedly of financial markets is “survey forecasts.” I absolutely hate having to point out the implication of what sure seems like an intentional act of dirty pool.

Truth is, we don’t need all the fancy econometrics to evaluate these things; after all, these Economists have been employing exactly those for a very long time and they understand, appreciate, and can usefully forecast less and less by the year. On the contrary, we’ll just draw some simple charts and rely on nothing more than our eyes and common sense.

And we’ll start back in history with the last true bout of unbridled inflation, the supposed template for what so many people have been led to believe is about to make its ugly reappearance: The Great Inflation.

This part is exceedingly easy and straightforward since the bond market does all the work; you just need to be freed from the grasp of illiterate Economics.

Yields went down, not up, during the Great Depression (not pictured but I went into detail why here). They did so because of generally tight money (interest rate fallacy) that the Federal Reserve and its bank reserves (even based on gold flows) couldn’t manage. Banks, not central banks, are where the money comes from.

This deflationary situation did not change through and after World War II. Even during those three periods when consumer prices surged (sounds familiar), to the left of the red arrow above, bond yields didn’t budge an inch (I’ve already covered how it wasn’t the Fed’s yield caps which had kept yields low here). The financial market looked past those as temporary deviations which wouldn’t last because they weren’t actual inflation.

Transitory supply shocks don’t bother yields especially at the long end of the curve which measures money conditions through the prism of longer run inflation and growth perceptions. If it isn’t money, therefore transitory, longer bonds don’t price it.

Starting in the second half of the fifties, though, yields began at first gently rising (late fifties, eurodollar?), indicating that the tide was turning and whatever leftover remainders from the deflationary Great Depression were finally, mercifully being overcome.

What followed a double dip recession in 1958 then 1960 was a few years of low inflation. Yet, even during those, bond yields were moving higher anticipating what was about to come.

The 3-month bill rate bottomed out in July 1961 while longer end Treasuries would gently increase from January 1963. These then accelerated sharply in July 1965 well ahead of the first main eruption of consumer prices by February 1966.

That’s not all; a near-recession in 1967 granted a minor reprieve to consumers, a slowdown (slack) which Economists and central bankers mistakenly judged the end of the inflationary trend. The bond market, by contrast, picked up on the renewal of inflation three-quarters of a year ahead of time (bills almost half a year).

Bonds vs. Economists isn’t a new thing in the same way the Harlem Globetrotters didn’t just start pounding the Washington Generals yesterday.

Adding the Fed’s Discount Rate policy to the above chart (below) just highlights how bonds were way ahead as policymaker actions repeatedly fell behind:


The whole process repeated during and following the 1969-70 recession, too. LT yields bottomed out in March 1971, began moving higher even as the CPI leveled off and continued to decelerate for another fifteen months until June 1972.

Furthermore, this upward move in yields presaged a spike in consumer prices around early 1973 which itself predated the OPEC embargo’s painful inflationary oil contributions later that same year. As you can see on the chart above, bond yields incorporated the inflation part of the 1973 jump while trading underneath (CPI rates above yields) the embargo/crude oil components of it; in the same way as yields undercut those earlier pre-inflation supply shocks after WWII.

In other words, the bond market neatly and expertly compartmentalized inflation from other consumer price factors at the same time as helpfully foreseeing the former.

Contrary to what some Economists have claimed, the “financial markets” of little more than simply Treasury yields absolutely nailed the Great Inflation even as policymakers and experts fumbled around searching for answers and clues they would never find. Then-Federal Reserve Chairman Arthur Burns in August of 1971 had the nerve to say to Congress:

The rules of economics are not working in quite the way they used to.

The rules were always fine; Burns and those like him just didn’t understand how the monetary system had changed the way money worked within them. The bond market, the banks doing all the money, they had no problem sorting everything out.

OK, fine. This was a half century ago. What about something closer to today, the 21st century?

To start with, we’ve got yields moving higher in the middle of 2003 a year before the Fed’s eventual “rate hikes” which only then created confusion (“conundrum”) for Alan Greenspan when bond long end rates began to bunch up in anticipation of the decidedly high deflationary probabilities of the late eurodollar mania period.

The yield curve flattened, and then nominal rates began to fall by June 2007 long before any minus signs showed up in the CPI early in 2009.

What’s perhaps most powerful about the chart above is how the bond market (correctly) has treated each of the subsequent consumer price deviations dating back to the monetary breakdown during 2007: first in 2008, then again in 2011, and now in 2021.

Like those temporary supply shocks caught in the CPI’s of the immediate post-war aftermath, or the peak CPI created by the oil supply shock of 1973-74, bond yields also undercut each of those post-2007/broken eurodollar consumer price spikes…and are doing so yet again in 2021.

To really drive home this point, here are the two main charts one after the other, each one expertly sorting inflation from not-inflation by way of shadow money. 

Quite simply, if it is actual inflation, yields go up as the market will price the real thing before it makes it into the CPI levels.

If there isn’t money for inflation, and those trading Treasuries know about shadow money that central bankers and Economists don’t and haven’t for more than half a century, then bond yields won’t chase these other CPI’s because those spikes aren’t inflation meaning they must be something else which, without the money, won’t last.

Historically consistent. 

One of the key mistakes that Cleveland researchers and indeed all Economists make is treating all CPI increases as if they are the same; they keep searching for the best way to predict the annual CPI, rather than the proper way to sort out consumer prices! The reason officials keep committing such an egregious error is that Economics doesn’t even consider money. How could Economists? They haven’t taken the monetary system seriously since the Great Inflation shoved their ignorance into the limelight (criminally, the very same money ignorance the Great Depression had paraded before the world in a different way just a few decades earlier).

In lieu of this great deficiency, Economics has made it seem as if inflation is some voodoo mystery only its priestly class can describe from complicated mathematics rituals. You don’t need any of that, or them. All of this is publicly available, data, prices, everything, and it doesn’t take anything more than common sense divorced from that corrupted worldview.










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Hawkish Powell Hits Stocks; Bitcoin Flat As Breakevens, Bond Yields & Bullion Bounce

Hawkish Powell Hits Stocks; Bitcoin Flat As Breakevens, Bond Yields & Bullion Bounce

A very mixed week across the asset-classes.

Hawkish…

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Hawkish Powell Hits Stocks; Bitcoin Flat As Breakevens, Bond Yields & Bullion Bounce

A very mixed week across the asset-classes.

Hawkish Powell: rate-hike expectations surged higher but stocks gained, crude rallied but copper tumbled. Growth and Value stocks basically ended the week up around the same amount (while Cyclicals modestly outperformed Defensives). Perhaps most notably, rates vol and stock vol expectations are dramatically decoupled from one another.

Inflation: Breakevens soared to record highs… globally, bullion bounced but bitcoin ended the week unchanged and bonds only modestly higher in yield.

Source: Bloomberg

We do not that the long-end of the curve notably outperformed today (flattening the curve significantly) after Powell’s comments, in a clear signal from the market that it’s expecting a Policy error

Source: Bloomberg

Arguably, as Goldman details below, the market could be morphing back from a ‘stagflation’ narrative to a ‘reflation’ narrative

Heading into the week, the ‘stagflation’ narrative was continuing despite the fact that the S&P 500 had already bounced off of its late-September bottom and was heading back towards an all-time high.  And as we exit the week, the inflation debate seems to be evolving into a ‘the Fed will hike earlier’ narrative, with yields on 2-year Notes spiking to 0.50% — a level last seen in the first days of the pandemic way back on March 18, 2020.  Praveen Korapaty writes in last Friday’s note, “Front-end pressures mount,” that markets appear to have returned to a paradigm of simultaneously bringing forward and/or accelerating hike pricing and taking down terminal rate assumptions. Bond investors appear to be increasingly thinking that the rise in inflation that we have been observing will translate into an earlier Fed funds rate hike.

And yields on 10-year Treasuries also briefly touched 1.70% this week, suggesting that bond investors are actually also feeling fine about longer-term growth.  And this better feeling is also being reflected in stock prices with the S&P 500 breaking up above 4500 and hitting a new all-time high this week.  So, the ‘stagflation’ narrative seems to be morphing back into a ‘reflation’ narrative — something similar to what we were experiencing when the economy first ‘reopened’ last spring.

Digging into each asset class, stocks ended the week higher overall (despite today’s Powell-driven dip that sent Nasdaq down around 1% today)…

The S&P and Dow closed at record weekly closing highs…

In Canada, the S&P/TSX Composite is up 13 straight days to a new record high – the longest winning streak since 1985…

Source: Bloomberg

Rather interestingly, this week saw “get out and party” recovery stocks underperform the “stay at home and sulk” stocks…

Source: Bloomberg

Cyclicals modestly outperformed Defensives on the week…

Source: Bloomberg

Growth barely outperformed Value on the week…

Source: Bloomberg

TSLA topped FB in terms of market cap again today (to become the 5th biggest company in the S&P) as Musk’s carmaker surged to new record highs above $900…

Source: Bloomberg

But the week’s biggest gainer was Trump’s “TRUTH” SPAC which ended up over 800% (though at one point it was up over 1600%)…

Source: Bloomberg

VIX traded down to a 14 handle this morning – the lowest since before the pandemic lockdowns began…

Treasury yields ended the week higher, but the long-end notably outperformed…

Source: Bloomberg

The yield curve ended the week notably flatter (after a wild ride midweek back to last week’s highs)…

Source: Bloomberg

Policy Error? The flattening started with the June taper chatter…

Source: Bloomberg

Inflation Breakevens soared to record highs today (US 5Y topped 3.0%) across the globe today…

Source: Bloomberg

The dollar ended the week lower, chopping around at one-month-lows…

Source: Bloomberg

Cryptos had a wild ride for the week with Bitcoin reaching new record highs after BITO’s launch before fading back to unchanged on the week today (Ethereum modestly outperformed on the week)…

Source: Bloomberg

Bitcoin ended the week just above $60k, well off the $67k record high…

Source: Bloomberg

The newly launched Bitcoin (futures) ETF (BITO) ended below its opening level…

Bitcoin Futures were well bid as BITO launched but the premium over spot has faded since…

Source: Bloomberg

Commodities were very mixed with copper clubbed and silver soaring (gold and crude also rallied)…

Source: Bloomberg

Rather interestingly, the huge divergence between copper and silver occurred at a key resistance level (around 20 ounces of silver to buy copper)

Source: Bloomberg

Finally, we note Mizuho’s warning of the impact of today’s more hawkish speech from Fed chair Powell. Our view that the divergence of equity implied vol (at pre-pandemic lows) from rates implied vol (rising to the highs of the year in most markets) is unsustainable, is showing tentative signs of turning.

Source: Bloomberg

The sharp move lower in Nasdaq futures and widening of CDS indices is a warning shot, we feel, of how risk assets would break down if the Fed was to try to stamp out inflation at such an early point in the cycle as mid 2022.

Commodities relative to stocks are starting to flash some red alerts…

And if one needed an excuse to buy some protection against that whiplash reality check for stocks, VIX is at a critically cheap level relative to VXV…

Source: Bloomberg

That has not tended to end well for stocks.

Tyler Durden
Fri, 10/22/2021 – 16:01



Author: Tyler Durden

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Crypto roundup: Valkyrie Bitcoin ETF debuts on Nasdaq; market down but Solana shines

Bitcoin now has its latest US-based futures exchange-traded fund (ETF), with the Valkyrie BTF product officially launched on New York’s … Read More
The…

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Bitcoin now has its latest US-based futures exchange-traded fund (ETF), with the Valkyrie BTF product officially launched on New York’s Nasdaq stock exchange. The crypto market overall, meanwhile, has pulled back a bit.

Digital asset manager Valkyrie’s ETF joins the similar ProShares product in the US market, BITO, which had been crushing it with record amounts of volume for an ETF launch in its first two days.

Because Bloomberg’s senior ETF analyst Eric Balchunas is the go-to guy on Twitter for insights on these matters, we’ve gone to his feed once again…

As for the Valkyrie Bitcoin ETF, it also seems to be off to a reasonable start. Shame its ticker couldn’t have been called BTFD, though… (Don’t geddit? Look it up here.)

“This Bitcoin Strategy ETF is a major leap forward for this asset class,” said Valkyrie CEO Leah Wald in a statement today.

“It enables investors to participate in the digital asset markets through a regulated, transparent product that trades on a trusted, reliable exchange and can be bought and sold as easily as any other investment currently available.”

 

Paul Tudor Jones still likes Bitcoin as inflation hedge

As has been well documented by Stockhead, and others, the current crop of regulator-approved ETFs track the value of BTC futures listed on the Chicago Mercantile Exchange (CME).

A spot-backed, or physically backed Bitcoin ETF is the one the crypto crowd really wants, however, as this is the product that’d require funds to take full custody of Bitcoins, instead of essentially trading in IOUs at premiums and discounts to the actual BTC price.

As the famed billionaire hedge-fund manager Paul Tudor Jones said to CNBC earlier this week regarding the new ETFs:

“I think a better way to get in would be to actually own the physical Bitcoin, to take the time to learn how to own it,” before adding… “I think the ETF would be fine. I think the fact that it is SEC-approved should give you great comfort.”

Tudor Jones also confirmed Bitcoin is his preferred inflation hedge right now, against a weakening US dollar.

“Clearly, there’s a place for crypto,” he said. “Clearly, it’s winning the race against gold at the moment … It would be my preferred one over gold at the moment.”

We know who would agree with him…

 

Mooners and shakers

So, overall we’re seeing a reddish day in the crypto market, and that’s not necessarily anything to be concerned about. It might have something to do with some big-player profit taking after an extremely positive week on the whole. A week that clocked new all-time highs, and not just for Bitcoin.

Source: Coin360.com

At the time of writing, the entire crypto market cap, consisting of about 10,000 coins on about 550 exchanges, is down by about 1.5 per cent since this time yesterday. It’s chilling out around US$2.64 trillion in total valuation, give or take a few hundred million.

And as you can see from the top-coin market overview above, Bitcoin (BTC) and Ethereum (ETH), crypto’s dominant ones, are a little stagnant today – down about two to three per cent in the past 24 hours.

There are outliers in the top 10, though, most notably “layer 1” smart-contract platform Solana (SOL), which is getting very close to touching the all-time high of $2.13 it set about a month ago. It’s changing hands for US$2.09 and up 15 per cent.

Could ex-England football striker Wayne Rooney have caused a surge? Yeah, probably not…

One of Solana’s main rivals, Polkadot (DOT), is also having a decent day, up about four per cent, and digging in around US$44. Anticipation for the Polkadot parachain crowdloans is building. They begin on November 11.

And there are other strong ones in this playing field faring even better: Avalanche (AVAX) is up 11.5 per cent since yesterday, while Fantom (FTM), and Elrond (EGLD) are both about 11 per cent to the good.

And the the highly rated Kusama-based platform Moonriver (MOVR) is also glowing, up 24 per cent since this time yesterday, and +54 per cent over the past seven days.

DeFi beaut THORChain (RUNE), meanwhile is still surging, up 18.5 per cent over the past day and 35 per cent on the week.

As for the overall market as we head into the weekend, it feels like we’re in another holding (or HODLing) pattern, waiting once again for the next big move.

Remaining cautious and level-headed about the crypto market is something to keep in mind, as a larger short-term correction is never off the cards… but there are no shortage of coinheads in the cryptoverse who still feel like the following…

The post Crypto roundup: Valkyrie Bitcoin ETF debuts on Nasdaq; market down but Solana shines appeared first on Stockhead.






Author: Rob Badman

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