Insider-Weekly-Issue 20230619 270

— Issue #270 —
Welcome back, friends.
From member Andrew flying over Canada. Stunning!
And this one from Peter. Looks almost unreal!
© 2023 Capex Administrative Ltd. | Unauthorised sharing may result in limb loss 1
IN THIS WEEK’S ISSUE
● Outed by pranksters (again)
● More domestic US bifurcation
● Changes in the sandbelt
● Türikye closes the door
● Does the end of the petrodollar spell the end of the dollar?
● Energy: East vs West
● Bitcoin update
● Yeah, nah!
● Everything is not awesome
● But offshore is awesome
● Money changes everything
● Copper and gold
● Pens, not picks
● Containership pain, tanker gain
● The Big Five:
1. Dyna-Mac
2. Aryzta
3. Pakistan
4. Ultrapar
5. Sanwil
OUTED BY PRANKSTERS (AGAIN)

You may recall the Russkie pranksters who hilariously caught out the orange lizard
(Christine Lagarde) a few weeks ago, causing her to reveal things she certainly now regrets.
Well, they just struck again.
Pretending to be the former President of Ukraine, Petro Poroshenko, the pranksters Vovan
and Lexus contacted the ex-President of France, Francois Hollande.
"Poroshenko" discussed with Hollande how together they managed to remove the previous
president of Ukraine Yanukovych and how the Minsk Agreements were a total head fake
and just a way to buy time for NATO (North Atlantic Terrorist Organisation) to pump
weapons into Ukraine.
"Everyone thought it was Putin who was playing for time. No, we were playing for time to
strengthen Ukraine," Hollande said.”
Now, I realise that none of this will matter. Certainly not to peasants in the West, spoonfed
propaganda from their “trusted MSM,” who assure them that if they identify as a pot plant
and someone laughs at them, it’s a “hate crime”. Forget about them. They’re lost and will be
washed away in the coming financial and social storm. No, what matters is that leaders all
around the world now know it with absolute certainty and their dealings going forward
with the West will be adjusted accordingly.
Oh, one other thing. Take a look at the offence… urgh, I’m sorry. I mean the “defence”
contractors. We can see that they began rallying in 2013. Now go back and listen to what
Hollande admitted to. Hmmmm!
This was definitely not the military industrial complex “helping Ukraine” in those seven
years. Definitely not! That’d be pure coincidence, and in fact, suggesting that is conspiracy
talk and almost certainly pro-Putin talk. Nope, can’t be any of that. That talk is best
censored. You know, for your safety.
Here’s the thing. The stock prices increased as capital poured into their corporate coffers.
When a defence contractor (after donating a tidy sum to political campaigns) is “awarded” a
military contract (from the government of course) to build a few gazillion stomper missiles
or whatever the hell these guys manufacture these days, it’s no different from any other
business that suddenly receives high demand for their product. What is important to
understand is that the governments are planning and leading this — despite signing “peace
agreements.” The narratives thrown out in the likes of the BBC, CNN, and the likes are pure
theatre and dare I say, “misinformation.”
You’ll also notice they’ve not stopped… at all. It’s almost as if by following the money you’d
have seen that NATO was lying to Russia when signing the Minsk agreement and you’d also
have seen where they were sending money to.
The very idea that Russia is fighting Ukraine is demonstrably false. They are fighting NATO.
War has simply not yet been declared, though at this point all relevant engaged parties
already know it. At this point it is only the hoi polloi who, like mushrooms, are fed shit and
kept in the dark.
So what do we do with all of this?
Well, it makes sense to me to be mentally prepared, and certainly with respect to our
portfolios understand that we’re already in a war. Wars are destructive to productivity,
supply, and they’re definitely destructive to optimism. Explain to me as if I were a dog (or
perhaps someone who wears a face mask) how ANY of this is positive for sovereign bonds
when governments are going to have to pay for war while their debt burden is already in
the stratosphere.
All I see here is a complete dismantling of the very idea that those in any position of power
should be trusted at all. In the financial world that is sovereign debt markets. And when
that collapse really gathers momentum, there’ll be no stopping it.
MORE US DOMESTIC BIFURCATION
We’ve long made the case, even pre-plandemic that the US was likely to split up. I know, I
know… it all sounds a bit loopy and it’s waaay beyond what any of us have experienced in
our lifetimes, but therein lies one of the seeds required for it to take place. You see, if
enough of the populace saw this as a real risk, they’d have already taken steps to avoid it.
But they haven’t, and so they won’t.
Fast forward today from when we first began pointing this all out and we’re now much
further down the bifurcation highway. It is social, political, and, of course, always economic.
https://www.cato.org/sites/cato.org/files/pubs/pdf/hanke-krus-hyperinflation-table.pdf
Domestic (in the US) bifurcation accelerates.
And in Texas..
GOP Sen. Ted Cruz Proposes Ban on a CBDC
“Sen. Ted Cruz (R-Texas) introduced a bill on Tuesday aimed at blocking the Federal
Reserve from creating a consumer-based central bank digital currency, or CBDC.
"The federal government has no authority to unilaterally establish a central bank

currency," Cruz said in a press release. "This bill goes a long way in making sure big
government doesn’t attempt to centralize or control cryptocurrency and instead, allows it
to thrive in the United States."
Then in the land of Bourbon and guns…
Tennessee Creates State Gold and Silver Reserve
“On March 23, 2023, Tennessee Governor Bill Lee signed a bill into law that lays the
groundwork for creating a state reserve to purchase, sell, and hold precious metals such as
gold and silver. According to Mike Maharrey of the Tenth Amendment Center, such a move
would grant Tennessee ability to “achieve more financial independence with gold and
silver reserves, and could help undermine the Federal Reserve’s monopoly on money.”
“Help undermine the Federal Reserve’s monopoly on money?” Wow! That’s fighting talk that is.
Speaking of change…
CHANGES IN THE SANDBELT

It’s called the Shanghai Cooperation Organisation… and the head choppers just joined.
Long-term readers will recall we suggested as much two years ago. Well… tada!
“Saudi Arabia’s King Salman bin Abdulaziz approved a Memorandum of Understanding
(MoU) that grants the Kingdom the status of a dialogue partner in the Shanghai
Cooperation Organization, the official Saudi Press Agency (SPA) reported on Tuesday.”
Well, there you have it. In late 2021, following the absolutely atrocious withdrawal of US
troops from Afghanistan (leaving US citizens on the ground, including those who worked
for the US) and the resulting subsequent slaughtering of “sympathisers” and their families
(oh, you didn't see that on mainstream media… weird), we explained in these pages that
there were two key countries to focus on: Saudi Arabia and Taiwan. The reason? Both relied
on US protection for their very existence. It wasn’t even a month after the US withdrawal in
Afghanistan that the Saudis struck a military deal with Russia, moving rapidly to secure
their new military partner. Their main economic partner, we already know, is now China.
As I have said repeatedly, where trade goes so go military and political alliances.
And what does MBS have to say to his Western counterparts? Well, he’s now extremely
frank.
Saudi Arabia's Crown Prince is No Longer Interested in "Pleasing" the U.S.
Now, realise this war is fought on multiple fronts. As the West attempts to destroy demand
for oil they fight back.
Of course they did.
“OPEC+ announced a surprise oil production cut of more than 1 million barrels a day,
abandoning previous assurances that it would hold supply steady and posing a new risk
for the global economy.”
Keep in mind, this is the same White House that drained the SPR. The chart now looks like
an NFT price chart.
But wait, it gets better. While the head choppers cut output by 500,000 b/pd from next
month, Iraq, feeling left out, decided to a “voluntary oil production cut” of 211,000 b/pd as
of May till year-end. Then Kuwait “voluntarily” cut production by 128,000 b/pd also from
the beginning of May. Oman, feeling lonely, followed with a “volutantary” 40,000 b/pd cut
from the beginning of May. Aaand one more. The UAE cut 144,000 barrels of the stuff from
May, too. Oh, I nearly forgot one — Russia. The Russkies will also cut 500,000 gallons of
production this year.
All up, we’re looking at over 1.5m b/pd coming off market. If this isn’t a collective middle
finger, then I don’t know what is.
Right when the market is moving the other way.
What to expect? Well, remember this is the “heartland,” which has underpinned US foreign
policy for aeons now. NO foreign power can ever form any credible economic, political, or
military alliance in this region. Well, at least that’s been the crux of US foreign policy.
Basically if the US can’t have it… nobody can. It is, of course, why the US has simultaneously
funded and supported Al Qaeda (against Russia), ISIS (against Syria), and repeatedly and
constantly fueled unrest in the Middle East. Keep your adversaries pitted against one
another, and they’ll never join forces to supplant your supremacy.
This is now clearly a problem for the neocons. And right on cue..
U.S. Navy sends guided-missile submarine to Middle East
"It is capable of carrying up to 154 Tomahawk land-attack cruise missiles and is deployed
to U.S. 5th Fleet to help ensure regional maritime security and stability,"
Except this time it won't be so easy for a number of reasons:

1) There are no secrets anymore. The entire world knows the agenda. As such, you can
bet the clothing on your back that the Saudis know it’s coming. Forewarned is
forearmed and all that stuff…
2) The US is now fighting battles on multiple fronts while their economy is under
pressure and debts balloon. The US military is increasingly stretched thin and as
such the US relies on proxy cannon fodder… urgh, I mean “allies” to send their
citizens into the various meat grinders to “fight for freedom” because let's face it,
the American public has no appetite for body bags associated with developments in
any part of the world far removed from America itself.
You will notice (because you’re an intelligent thinking sort) that such circumstances are
wildly bullish for precious metals AND energy. Don’t cancel me for profiting from madness.
Oh, and speaking of cannon fodder. This is how the globalists view their fellow man. Take a
look at this advertisement taken in Idaho.
So if you’re poor (many more are now after the lockdowns), why not go fight to protect rich
Americans interests in Ukraine? What a fantastic deal! I mean who wouldn’t want to risk
their lives ensuring the deep state oligarchs get ever richer?
Sadly, many will go off to the meat grinder, filled with patriotic fervour from a lifetime of
ingesting propaganda, only to die never knowing the truth and believing they’ve been
fighting the devil himself (Putin now and someone else in the future) rather than furthering
the interests of sociopathic oligarchs. Perhaps the world has always worked this way.
In any event, frankly, I don’t see how China manages to stay out of a military conflict if the
West steps up bombing their economic allies. Pray tell, for example, what is China’s
response when the West bombs Chinese owned assets (mistaken or not) in any number of
the countries that China increasingly has assets in?
It’s not just Saudi sprinting away from Davos man. Those darned curry-eating, tea-growing,
cricket-playing Indians aren’t playing ball either. Damn them!
Russia's Rosneft signs deal to boost oil supplies to India
“India has been the biggest buyer of Russia's benchmark Urals grade crude in March.
Deliveries to India are set to account for more than 50% of all seaborne Urals exports this
month, with China in second place”
Those naughty naughty Indians with their dodgy stomach-moving vindaloos! Now they’re
busy cavorting with the Russkies. It’s almost like they’re giving the middle finger to the US
empire. By the way, Russian sales of crude to India jumped 22x last year. Yes, you heard
that right. TWENTY. TWO. TIMES!!
Moving on from this but sticking with the theme that the West is going to increasingly be
forced to deal with multiple (and ever increasing) recalcitrants failing to toe the line.
Key Asian bloc looking to dump dollar and euro – media
“The Association of Southeast Asian Nations (ASEAN) is set to discuss dropping the US
dollar, euro, yen and pound sterling from transactions and moving to settlements in local
currencies, according to the news magazine Tempo.
An official meeting of ASEAN finance ministers and central bank governors kicked off on
Tuesday in Indonesia. A regional grouping that aims to promote economic and security
cooperation among its members, ASEAN includes Brunei, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
"Efforts to reduce dependence on major currencies through the Local Currency
Transaction (LCT) scheme will be discussed. This is an extension of the previous Local
Currency Settlement (LCS) scheme that has already begun to be implemented between
ASEAN members," said the report.”
In a truly hilarious response to Brazil and China conducting trade without the greenback,
the White House diversity hire of the year Karine Jean-Pierre had this to say.
So if you’re a sovereign nation that wants to trade with another sovereign nation and you
choose to do that trade in a currency other than the USD you are “violating the rights of
ordinary Americans.”
It’s not her fault — she’s mentally retarded, so…
What now, Chris? Well, a move away from the USD and Western financial system, despite
what you’ve likely heard, is NOT automatically bullish the yuan or the ruble (too thinly
traded, anyway), and it promises to be an incredibly rocky road. It is, however, wildly bullish
for gold. You see, in order for a new financial system to be created (and the BRICs together
with the Shanghai Cooperation Organisation are scrambling to put one in place) trust is
required. It’s not enough to be afraid of the rickety old train we’re all travelling on. We still
need to travel, and the new bullet train that is desired is not built. It will be out of sheer
necessity, but in the meantime it is gold that will underpin safety for foreign central banks.
It’s why they’re buying so much of the stuff lately.
TÜRKIYE CLOSES THE DOOR

Erdoğan ‘closes the door’ to US envoy in Türkiye over Kılıçdaroğlu talks
This follows on from previous statements made by Interior Minister Süleyman Soylu:
“Türkiye has the misfortune of having U.S. ambassadors seeking to plot coups in our
country. Every U.S. ambassador has been engaged in efforts to harm Türkiye. They also try
to dispel same advice to ambassadors of other countries,”
You see, the problem with having been involved in multiple coups globally is that this is no
longer any secret, and as such, power players know and realise this… taking necessary
steps to mitigate the risks they face.
Now, please realise this isn’t a pro or con necessarily for the Turks… or any other nation for
that matter. But it is significant nevertheless. It changes the balance of power in the world,
and that change brings about new and very different probabilities.
DOES THE END OF THE PETRODOLLAR SPELL

THE END OF THE DOLLAR?
The concept is gaining a lot of attention lately, especially with the deals being struck
outside of the dollar system. This is all true and part of a significant trend unfolding, but
consider this…
The oil markets are some $2 trillion and change. Assuming ALL of oil trade is conducted in
something other than the greenback, it’s still a drop in the $100+ trillion global economy
(by GDP) bucket.
While I believe this is the end of the dollar's reign, the idea that automatically the dollar
suffers is problematic. It’s problematic largely because there are NO REAL ALTERNATIVES
within the fiat currency world.
Something else to consider is that if we think through the coming (in my humble opinion)
war this will likely involve an escalation with NATO and Russia. That’s extraordinarily
bearish for the euro, which is roughly half the dollar index. Pray tell, where is the European
capital going to hide? Look, it's not the yuan. Firstly, it’s culturally different and most
European countries and citizens are NOT going to rush to either the yuan or the ruble. The
Chinese don't have an open capital account, which is why the currency is still thinly traded
and only offshore. So no, that's not gonna happen anytime soon.
The way I see it, European capital has to move to the US. EU GDP is the third largest in the
world after the US and China, standing at around $17 trillion. Toss in another $3 trillion
and change from the UK, and we’ve a sizable chunk of capital that will flow towards the
dollar. Sure, not all of that capital shifts, but sizable chunks do. That is much, much more
meaningful in aggregate terms than the oil markets. And that is bullish for the greenback.
Now, if we exit the fiat currency world, it’s only reasonable to think that the global South in
particular will increasingly diversify out of the dollar and hold “other” isht on their balance
sheets. Gold, of course, being one.
US debt now sits over $30 trillion. That doesn’t include unfunded government liabilities,
consumer debt, corporate debt, state debt, or municipal debt. As mentioned this is a huge
problem. But again, alternatives don’t really exist. It’ll be replaced, but these calls are
premature in my humble opinion.
What replaces it?
The strength of underlying economies is a necessary foundation for this. Certainly we can
see trends in motion here. Here is a chart of wokenomics (G7) vs the rest.
So right or wrong, the way to “play” this from where we sit is not in the currency world at
all, but in what will likely be ultimately used as a backing of some new currency. Getting
there is going to be a vicious process. It’s too early to know or even speculate. Just own the
BRICs asset baskets.
ENERGY: EAST VS WEST

Adding to the banter above, the “non-Western Bloc” holds some 70% of the world’s crude
oil reserves, 80% of natural gas reserves, and 43% of coal reserves (probably a lot more
given that China has Indonesian coal wrapped up).
The sanctions on Russia may well backfire on the West in ways they never thought while
the US shale peaking out will just add fuel to this fire!
The only reason to worry about this is if you aren’t positioned the right way. We think we
are, so we aren’t complaining!
BITCOIN UPDATE
I want it to succeed. Oh, how I want it to succeed. But…
Take a look at this bill S. 686 which bans VPN usage for “banned apps,” and if you disagree?
Well, you get a 20-year sentence and a $250,000 fine.
It’s 55 pages of legal mumbo jumbo, which — if you’ve masochistic tendencies — you’ll
absolutely love reading. If not, here's what you need to know.
I am quite sure you’ve figured out by now that these bills are always always simply stepping
stones. First, it will be for “banned apps,” then it’ll be for “hate speech,” or some such
hogwash. Finally, it’ll be for everything, because… jeez, why do you need a VPN? What are
you, a terrorist?
In what is typical of a collapsing empire flailing about …
Senate, White House push new bipartisan bill that could ban TikTok
Ostensibly all of this is about countering Chinese influence, data gathering, and psyops. In
reality, it’s about implementing a worldwide industrial level surveillance system.
A friend of mine summed it up well:
“In summary, the way I'm reading the bill, if you use any tech in a way that a bureaucrat
doesn't like, or if you think you will in the future, or if they think you did at some point in
the past, no matter where you are in the world, and no matter your citizenship, the US may
sentence you to 20 years in prison and/or $1 million fine per instance (or twice the value
of any "transaction" they think you made if higher) and they may also seize and property
they consider connected. And all of this may happen in secret, without any courts
involvement.”
For your safety, of course.
Oh, and all are excluded from FOIA, congressional oversight, or any other checks or
balances. They make it especially clear that if they say you disagree with their statements
regarding the results of an election, you're also particularly subject to these penalties.
This is arguably the most totalitarian bill I’ve ever seen. It is likely to NOT be upheld in
certain states, as per topics just discussed. That means that the divorce of States within the
USA is coming.
Bringing it all back to bitcoin... In the short to intermediate term, I think it can and probably
will do quite well, but unfortunately I just don’t see it working long term. Those with the
guns (governments and central banks) don’t buy bitcoin and they’ll never ultimately allow
it. I pray I’m wrong.
YEAH, NAH!
We may never know what the catalyst was… and maybe it wasn’t one thing but many.
Either way, we always said that as we progress with the decade, the entire ESG, Covid,
climate change, Ukraine, and all associated lies and obfuscations would become
increasingly difficult to keep the global populace and varying self interested parties on
board and hence the ability to implement attendant policies globally would become
increasingly difficult. There are many reasons why the probability of this was always going
to increase with each passing day and with each additional absurd push forward by the
globalists. But in a nutshell, if I was to put it down to one thing, it is an awakening. Some
may awaken to a lie told to them. There are now so many on offer, and any will do. With a lie
the thing is that once a lie is revealed, trust is broken, and that trust transcends all
narratives.
Costa Rica backs away from leading oil and gas phaseout coalition
“Costa Rica will not be very active in Boga… I don’t think this is a great example. Costa
Rica will not lead by saying ‘we are in Boga’. Costa Rica has much more to teach (the
world) than by saying ‘we are banning this’,” said Tattenbach during a press briefing on
Tuesday.”
Translated this means that we’ve been watching the disastrous consequences of these
retarted policies in real time and we’re not too keen to be playing this game. We’ll start
with a strongly-worded but somewhat guarded notification to that effect and try keep the
Karens from screeching and glueing themselves to the freeway but secretly we’re rather
glad Ticas and Ticos have far more important issues to deal with (like making a living), so we
don’t anticipate any such problems domestically at least.
This is a positive move followed on from..
“Newly elected President Rodrigo Chaves has outlawed vaccine mandates. “Today
vaccines are no longer mandatory and any action against someone who does not want to
be vaccinated is a violation of the law,” the president stated. Although the president is
vaccinated, he stated that was a health decision he personally made. It is now against the
law in Costa Rica to force someone to be vaccinated against their will.
The president lifted numerous COVID restrictions when he came into power this May. He
began by eliminating the mask mandate for everyone who does not work in healthcare.
The Association of Physicians and Surgeons of Costa Rica, the Association of Pharmacists
of Costa Rica, and the National Medical Union of Costa Rica spoke out against the
president’s order to lift masks. He set out to lift the vaccine mandate in May too, but finally
signed it into law this August.”
The blessing for many may well have been Sri Lanka. Sri Lanka, you will remember, was the
country with the highest ESG score. A country that embraced the WEF’s agenda, only to
rapidly go bankrupt, impoverishing millions, and becoming a vassal state (more than it
already was). Like Bill Clinton and that dress it stands as a giant stain on the credibility of
these Malthusianists plans. Everyone saw what happened there (not Monica’s dress… Sri
Lanka).
EVERYTHING IS NOT AWESOME
We’ve been harping on about this for yonks now. Asset classes tied to interest rates are
going to be painful. In a nutshell, this is the FIRE economy. Finance, insurance and yes, real
estate.
With that in mind it's been a while since we have talked about Australian real estate.
Largely because we had nothing more to add to the fact we’re very bearish and as such
have no position.
That leftist rag the Guardian published this piece, struggling I assume, to hide the obvious
and tear Australians from their notion that everything is awesome.
Australia’s soaring interest rates have trapped ‘mortgage prisoners’ into crushing repayments
I won’t go into too much detail as we warned about what is transpiring now many moons
ago, so here is the short version. Mortgages taken out over the last 15 years at least (since
2008) have been taken out at rates that are more distorted from underlying real conditions
than Prince Harry’s view of his “hard upbringing.” As this relates to real estate it means that
real estate is severely mispriced.
The following story is simply a reflection of many.
This family's mortgage repayments will nearly double to $110k a year
Millions borrowed heavily, extrapolating the recent past (low and falling interest rates) well
into the foreseeable future. No price was too high for real estate. I recall having an
argument… ah, I mean “discussions” with some woke Sydney-siders about this very topic.
My attempts to explain how global debt, historic cycles, and how Australian financial
institutions are completely subject to the eurodollar market and hence interest rates being
set external of RBA policy set the stage for problems, only to be ridiculed as “you don’t even
live here, you don’t understand.”
What many don’t realise is that this is only just beginning. This poor sod (in the linked
article) is whining about a 3.6% coupon that caused him to sell his second car and cut out
those overseas luxury holidays. Pray tell, what happens when rates go double digits and his
payments go up four-fold?
As Grant Williams discusses in his last podcast (you should listen to Grant, by the way),
120,000 loans in Australia this year will roll from next to nothing to incorporate the last ten
rate rises in one go. There will be a tsunami of massively indebted families unable to afford
their monthly payments. Australian property prices are NOT priced for this.
Meanwhile, across the pond over in Hobbiton, in the land of Mordor, the RBNZ just jacked
rates by 50 bps.
RBNZ stuns market with bigger rate rise, more tightening seen
The benchmark rate now sits at 5.25%. Oh, and they promised another hike mid-year just in
case anyone got the silly idea in their little heads that they were done with rate hikes.
Here's a little aside for interest sake. During the Covid scam New Zealanders household
debt jumped by… deep breath, 19%.
You see, during the Covid… cough… “plandemic” interest rates fell dramatically, and just as
the banks (discussed last week) loaded up on bonds, so Kiwis flocked to the banks to load
up on debt. Hey, we’re locked in our homes, why not renovate? Put it on the mortgage.
What could possibly go wrong with funnelling debt into what was already an insanely
overvalued real estate market. Now with rates rising, inflation running double digits (don’t
believe anything these government stooges are saying about CPI, it’s obvious nonsense),
consumers are getting squeezed from all angles.
BUT OFFSHORE IS AWESOME

Spending for offshore oil and gas is rocketing higher, but we still don’t see any mutual fund
managers game enough to invest in offshore (drillers, subsea, OSVs, etc.). In other words,
we are still years away from the crowd waking up to offshore and making it a crowded
trade.
Here is something to keep in mind: check out the performance of the S&P 500 Oil & Gas
Equipment and Services Index relative to the S&P 500 integrated Oil & Gas Index below (if
OIH and XLE went back far enough we could have used those two). We recon this is a
reasonable proxy for capital expenditure vs production. You could say, at times, it gives a
good proxy for how well oilers have been maintaining their reserves.
Over the last 30 years oil and gas service stocks have never underperformed oil majors
by this magnitude and for this length of time. This suggests that majors have been running
down their reserves the likes of which we haven’t seen in at least a generation… and it is a
precursor to supply coming shortfalls.
We never like to sit on the fence so here goes — within the next five years oil prices are
going to trade at record highs and once oil goes through $100, it won’t fall below. Greed
will get the better of oilers (as it does with everyone), and they will throw money at
exploration and development like they haven’t done so in a very long time (i.e expenditures
will exceed the highs of 10-15 years ago). As a result, we will see the index above trade at
new highs. Put differently, oil service stocks will dramatically outperform oil producers.
Here is the catch… there isn’t the capacity for exploration and development as there was in
the “good old days.” What is happening with Borr is a strong hint...
The tick is clocking… and asymmetry is quickly dispersing.
Make sure you’ve got some chips on the table.
MONEY CHANGES EVERYTHING
We love this quote:
Speaking of idiots… not that we are lining up to buy Shell, but:
But remember this…
We know. You just can’t make this stuff up! Anyway, to us it proves that capitalism beats
socialist ideologies (eventually). Money really does change everything.
COPPER AND GOLD
An interesting relationship: gold and copper indexed to 100 as of 1993. You’ll see they
don’t deviate too far from each other. As of 12 months ago, they had performed exactly in
line with each other. Seems to us that you should see your holdings in copper and gold
(from a physical perspective) as one and the same, at least over a long-term time frame. If
gold is going to double within the next five years or so (don’t laugh), copper may not be far
behind or even maybe a little ahead.
Our contention has been that gold will run on a loss of trust in the financial, political, and
monetary system. It's why central banks have been buying the snot out of the yellow metal.
Certainly we’re well down that particular road but copper is typically seen as the economic
indicator. It’s why the term “Dr. Copper” exists. So in terms of narratives they’re quite
different, but as you can see, there exists a correlation between the two.
And speaking of copper…
PENS, NOT PICKS

BHP takes out copper producer Oz Minerals:
OZ Minerals sits on a forward P/E of 25x. What an absolute “bargain.”
So BHP would rather get rid of coal mines sitting on P/Es of ~3x and pay 8x more for
copper mines. “Value creation” is far from the first thing that springs to mind!
To us this just signals the paranoia that surrounds this “electrification revolution” and
“global warming” hysteria, coupled with spineless management kneeling at the woke altar
far too busy learning about the exciting new range of pronouns on offer.
It could also be argued that there is little appetite for spending money on exploration and
development, which involves work and risk. They’d rather just take over smaller
competitors (even at silly valuations) in the hope that the brainwashed masses terrified of
global… urgh, I mean climate change, will reward them with a higher share price. A “planet
saving” premium because their ESG score is now better.
We guess this is good in some respects because it does little to nothing to increase the
supply of copper and nickel.
Ditto on the gold front…
In fact, the same can be said for Exxon’s proposed takeover of Pioneer:
Spend your excess cash generated by high oil prices on takeovers rather than exploration
and production. By the way, Pioneer generated $8.4 billion in surplus cash last year and
sent almost $8 billion of that to shareholders via dividends and share repurchases.
Remember folks, M&A always takes place at two points in the cycle — the top when
elevated share prices allow for acquisitions and the bottom where free cash flows from the
folks who are left (after a strong bear market have decimated the sector) are used to buy
up smaller players.
CONTAINERSHIP PAIN, TANKER GAIN

This is perhaps the biggest reason why we remain bullish on tanker stocks…
And a graph for good measure…
Fancy getting a tanker built when all berths at shipbuilders are taken by building out
containerships? By the way, good luck on getting an offshore rig or OSV built.
THE BIG FIVE

Five deep value ideas that you probably wouldn’t have heard of before let alone considered.
These aren’t trade ideas as such, but if you were to take each position short them in equal
weights and hold those short positions for five years, you would most likely be taken to the
cleaners, which answers the question of whether or not they would be a good investment.
Please read our important disclaimer here regarding any recommendations.
Stocks that have caught our attention this week…….
1. Dyna-Mac
2. ARYZTA
3. Pakistan
4. Ultrapar
5. Sanwil
DYNA-MAC
We have discussed Dyna-Mac on a few occasions before over the last few years. They make
topsides for FPSOs. These things:
A topside is the machinery that receives fluids (crude oil, water, and a host of other things) from
a subsea reservoir through risers, which then separate fluids into crude oil, natural gas, water,
and impurities within the topsides production facilities onboard.
These units in turn get “bolted” onto FPSOs. These weird looking contraptions:
Here is a pictorial representation of how it all works:
Dyna-Mac has half its market cap accounted for by net cash (cash less outstanding debt).
It looks like Dyna-Mac is going considerably higher, although it is easier making that call at 0.10
rather than 0.22.
This stock has a market cap of some $180m so few mutual/hedge funds would have any interest
in buying it, but it is a worthy game for mere mortals like us.
ARYZTA
ARYZTA is known for its Delice de France range of French-style bread-based products and its
higher end of artisan breads available from La Brea Bakery. Other brands include Shamrock
Foods, Cuisine de France, and Hubert. Aryzta is particularly known for providing McDonald's
burger buns. They operate 53 bakeries and kitchens across Europe, North America, South
America, Asia, Australia, and New Zealand. Aryzta refers to itself as one of the largest frozen
bakery companies in the world. This stuff:
If you enjoy your morning croissant from your local cafe, chances are that it wasn’t produced by
that cafe but rather Aryzta.
The chart below suggests some fundamental change is at hand. Looking closer at Aryzta there
has been a big corporate restructuring over the last few years, and the last 12 months has seen
Aryzta return to profitability after a number of years of losses.
PAKISTAN
It is said “don’t try to catch a falling knife,” but a stock market (as opposed to a stock) sitting on a
P/E of 3.8x and a dividend yield of 10%? In dollar terms, the Karachi exchange is down some 70%
since 2017.
Although in rupee terms, it is down “only” 20%.
This is the culprit — the rupee has been smashed.
Little wonder why the Pakistanis love their gold. Here’s gold in Pakistani rupee indexed:
Anyway, including an allocation to the Global X MSCI Pakistan ETF (PAK) in one's portfolio is
probably not a crazy idea at these valuations.
ULTRAPAR
Essentially a play on the Brazilian economy. Ultrapar is a Brazil-based company primarily
engaged in automotive fuel retail. The company operates:
● Fuel distribution (Ipiranga), the distribution and marketing of gasoline, ethanol, diesel,
fuel oil, kerosene, natural gas for vehicles, and lubricants, as well as provides related
activities across the Brazilian territory,
● Gas distribution (Ultragaz), which distributes liquefied petroleum gas (LPG) to
residential, commercial and industrial consumers in the South, Southeast, and Northeast
regions of Brazil,
● Chemicals (Oxiteno), which produces ethylene oxide, as well as its primary derivatives
and fatty alcohols, and
● Storage (Ultracargo), which operates liquid bulk terminals, primarily in the Southeast and
Northeast regions of Brazil.
That looks like a trading range breakout.
SANWIL
A Polish manufacturer of this stuff:
An interesting looking chart:
And a company worth more dead than alive…
WEEK’S HUMOUR
Actually, this first one goes into the humour section, though it’s 100% real, and we should
all be mourning the death of rational thinking. You can click the link to read all about it if
you’ve the stomach for it.
In the meantime, let’s all stand with Emily. She deserves our support.
John Kerry, giving a speech in Jakarta in 2014 about climate change…
“And they agree that, if we continue to go down the same path that we are going down
today, the world as we know it will change – and it will change dramatically for the worse.
So we know this is happening, and we know it with virtually the same certainty that we
understand that if we reach out and touch that hot stove, we’re going to get burned. In
fact, this is not really a complicated equation. I know sometimes I can remember from
when I was in high school and college, some aspects of science or physics can be tough –
chemistry. But this is not tough. This is simple. Kids at the earliest age can understand
this.”
Yeah, physics is tough. But climate change, even kids get it!
Sincerely,
Chris MacIntosh
Founder & Editor In Chief, Capitalist Exploits Independent Investment Research
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— Issue #270 —

Welcome back, friends.

From member Andrew flying over Canada. Stunning!

And this one from Peter. Looks almost unreal!

OUTED BY PRANKSTERS (AGAIN)

So what do we do with all of this?

Domestic (in the US) bifurcation accelerates.

GOP Sen. Ted Cruz Proposes Ban on a CBDC

"The federal government has no authority to unilaterally establish a central bank

Then in the land of Bourbon and guns…

Tennessee Creates State Gold and Silver Reserve

CHANGES IN THE SANDBELT

Saudi Arabia's Crown Prince is No Longer Interested in "Pleasing" the U.S.

Of course they did.

Right when the market is moving the other way.

U.S. Navy sends guided-missile submarine to Middle East

Except this time it won't be so easy for a number of reasons:

Russia's Rosneft signs deal to boost oil supplies to India

Key Asian bloc looking to dump dollar and euro – media

It’s not her fault — she’s mentally retarded, so…

TÜRKIYE CLOSES THE DOOR

DOES THE END OF THE PETRODOLLAR SPELL

What replaces it?

ENERGY: EAST VS WEST

In what is typical of a collapsing empire flailing about …

For your safety, of course.

This is a positive move followed on from..

The following story is simply a reflection of many.

This family's mortgage repayments will nearly double to $110k a year

BUT OFFSHORE IS AWESOME

Make sure you’ve got some chips on the table.

Speaking of idiots… not that we are lining up to buy Shell, but:

But remember this…

And speaking of copper…

PENS, NOT PICKS

OZ Minerals sits on a forward P/E of 25x. What an absolute “bargain.”

Ditto on the gold front…

CONTAINERSHIP PAIN, TANKER GAIN

And a graph for good measure…

THE BIG FIVE

Stocks that have caught our attention this week…….

Here is a pictorial representation of how it all works:

Although in rupee terms, it is down “only” 20%.

And a company worth more dead than alive…

John Kerry, giving a speech in Jakarta in 2014 about climate change…

© Copyright 2023 by Capitalist Exploits

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