The Nordic Leisure Group (STO:NENT B) Share Value Is Up 29% And Shareholders Are Holding On

We believe that investing is smart because history shows that stock markets will rise over the long term. However, if you do choose to buy stocks, some of them will underperform. For example the Nordic Entertainment Group AB (public) (STO: NENT B) the stock price has risen over the past year, but its 29% increase is below the market return. Nordic Entertainment Group hasn’t been on the list for long so it’s not yet clear if it’s a long-term winner.

Check out our latest analysis for Nordic Entertainment Group

In his essay, The Superinvestors of Graham-and-Doddsville, Warren Buffett described that stock prices do not always rationally reflect the value of a company. A flawed but sane way of assessing how sentiment has changed around a company is to compare earnings per share (EPS) to its share price.

The Nordic Entertainment Group had really great EPS growth last year. This remarkable rate of growth, while unsustainable, is impressive nonetheless. We are not surprised that the share price has risen. Turning points like this are the best times for us to take a closer look at a stock.

Below you can see how EPS has changed over time (you can find out the exact values ​​by clicking on the picture).

OM: NENT B earnings per share growth July 8, 2021

We like that insiders have bought stocks in the past twelve months. Even so, future profits will be far more important to whether current shareholders make money. These free interactive report about the Nordic Entertainment Group Earnings, sales and cash flow is a great place to start if you want to further investigate the inventory.

Another perspective

Nordic Entertainment Group’s shareholders gained 29% over the course of the year. While it’s always nice to make a profit on the stock market, we find that the TSR was no better than the general market return of around 48%. The last three months have not been so friendly for the Nordic Entertainment Group, the share price only increased by 4.0%. It’s not uncommon to see a company’s stock price between updates to shareholders. I find it very interesting to look at the share price as a proxy for business development over the long term. But to really gain insight we need to consider other information as well. Take risks, for example – the Nordic Entertainment Group has 4 warning signs (and 2 who don’t sit well with us) We think you should know.

If you’re into buying stocks alongside management, then maybe you will love this free List of companies. (Note: Insiders bought them).

Please note that the market returns given in this article reflect the market weighted average returns on stocks currently traded on SE exchanges.

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Opinion: AMC Leisure’s Share Value Is Being Manipulated

Wall Street has been ruled by private investors for almost six months. Even though private investors have been investing their money in the market for over 100 years, they have never had such an enormous impact on share prices as they did in 2021.

More specifically, retail investors on Reddit, Twitter, and other social media platforms have teamed up to buy stocks and call options out of the money on stocks with very high short interest. The goal of these retail investors is twofold. First they want a short press – a short-term event that pushes short sellers (ie, pessimists who bet on a stock’s downward movement) to exit. Second, since most short sellers are institutional investors, they want to “stick to the colors,” so to speak.

Image source: Getty Images.

“Monkeys” went crazy for AMC

Although GameStop was the representative of “Reddit-based trading” for months, it was replaced by the cinema chain AMC entertainment (NYSE: AMC)which has produced a higher return since the beginning of the year.

The army of retail investors who own shares of AMC, collectively known as the “monkeys” believe that a big short squeeze is waiting for the stock. Indeed, AMC has seen the number of short stocks spike in recent months. From June 15, 2021, Morning star listed 85.08 million shares as vacant, relative to a free float of closer to 449 million shares.

In addition to seeking a short squeeze, Monkeys believe Wall Street is deliberately manipulating AMC’s stock price. Read any message board and you will see multiple discussions about dark pool trading of AMC stocks, the implications of naked short selling (i.e. short selling of stocks that don’t exist), and the idea that hedge funds (kindly referred to) as the “hedgies” seek out bankrupt companies by dumping them into the ground.

In other words, AMC’s retail investors see themselves as a mission to embrace the manipulation of Wall Street.

But the kicker is that manipulation is taking place. It’s not coming from Wall Street, however. In my opinion, AMC’s retail investors appear to be the real source of stock price manipulation.

A person touching their smartphone, which is displaying a volatile stock chart.

Image source: Getty Images.

AMC is being manipulated, but not by Wall Street

As early as June 1934, the Securities Exchange Act was passed to cover secondary trading in stocks, bonds, and debentures in the United States. There is a section on market manipulation in this 367-page law that governs what is and isn’t legal in the investment world. Section 9 (a) and 9 (a) (2) state (Page 87, for those interested):

It is unlawful for any person, directly or indirectly … to carry out, alone or with one or more other persons, a series of transactions in a security that is registered on a national stock exchange, a security that is not so registered or in connection with any security Swaps or securities swap agreements in respect of such security that cause actual or apparent active trading in such security or increase or decrease the price of such security to cause others to buy or sell such security.

In other words, it is illegal to defraud other investors by doing anything that would artificially affect the price of an underlying security. AMC investors will tell you that they simply “like the stock” and that “it’s not illegal to buy and hold a company”. I agree and so do the law. If AMC investors like the stock, they can buy as much as they want and hold for as long as they want.

However, their actions on social media seem to indicate intentionally influencing the supply and demand for AMC stock. In particular, Reddit traders are using a combination of hype, deliberate ignorance of fundamental operational data, and misinformation to artificially drive AMC’s share price up.

How can I support these claims, you ask? Just search Reddit or Twitter for posts on AMC. You don’t have to look far to find the misleading or harassing tactics used to enforce what appears to be an honest (but coordinated) compliance. Pump-and-dump scheme.

A person texting on their smartphone while a chat bubble hovers over their device.

Image source: Getty Images.

AMC is constantly being hyped on social media

To begin with, AMC monkeys use absurd price targets and post thousands of times on social media boards every day to keep interest high. The most common tactic here is to keep proclaiming that a short squeeze is coming (despite no guarantee that one will happen) and ditch an absurd stock price level to keep less informed investors interested.

You can often find people on Twitter trying to get a hashtag version of the “AMC100k” or “AMC500k” trend. In other words, these people are trying to trick unsuspecting investors into believing that AMC will somehow go from $ 2 in January to $ 100,000, or $ 500,000 per share. For some context here, $ 100,000 per share would be a market cap that is well over double the US annual gross domestic product (GDP), while a $ 500,000 share price would be nearly three times global GDP (more than $ 250 trillion). Apple is currently the world’s largest publicly traded company with a market capitalization of $ 2.2 trillion.

These whimsical price targets may sound harmless, but they are a straightforward attempt to create artificial support with no fundamental support.

A person holding a magnifying glass over a company's balance sheet.

Image source: Getty Images.

Efforts to present income statement / balance sheet data are being dashed by the social media mob mentality

In my view, retailers are also manipulating AMC’s stock price by using social media tactics to stamp out any discussion of the company’s operational performance or balance sheet. And the reason is simple: the presentation of income statement or balance sheet data would completely destroy the purchase thesis of this company – and the manipulators know that.

Any attempt to discuss the company’s operating performance or its more than $ 5.4 billion debt will be posted on Reddit, Yahoo! and other message boards were quickly rejected and referred to as “FUD” (fear, uncertainty and doubt). Hence, the only message new investors will see is the carefully crafted message that AMC portrays as a short squeeze candidate with no obvious drawbacks and tens of trillions in market cap up.

But this never-ending confirmation bias doesn’t come close to telling the full story. While AMC has raised enough capital to stave off bankruptcy in the short term, the company’s 2027 bonds are nowhere near par value, suggesting bankruptcy still remains a very real possibility (albeit years later). This is not a FUD. That’s a fact.

In addition, ticket sales for the film industry were all rolled into one pretty steady decline in sales for 19 years. Even as AMC builds its market share, the industry has continued to shrink and is likely to continue to shrink as streaming and movie exclusivity goes against AMC.

Besides, the company is not profitable and so is it $ 324 million burned in cash only in the first quarter.

This is important information that investors should know. If you still want to invest in AMC, that’s fine. But deliberately suppressing and hiding specific facts from unsuspecting investors while hyping what is essentially hype-driven propaganda does not allow people to make an informed investment decision.

A person holding cash behind their back and keeping their fingers crossed at the same time.

Image source: Getty Images.

Misinformation and lies are the basis of this movement

The most egregious sign of manipulation, however, can be seen in the way AMC monkeys do Spread misinformation to encourage this pump-and-dump scheme. Below are some of the examples you will see on a regular basis and why they are not true.

  • Monkeys saved AMC:“Not correct. AMC saved itself by issuing hundreds of millions of stocks and high yield debt earlier this year. Camaraderie is essential to keeping other retail investors informed, which is why this falsehood has persisted for so long. The fact is that the operational performance of AMC and only its operational performance will determine whether or not it will be stored.
  • Short-selling hedge funds drive companies bankrupt:“Wrong. Short sellers and buyers are just people hoping for different results. That result is ultimately determined by the company’s operational performance. No matter how many stocks institutional investors short sell, they cannot bankrupt a company. Anyone who does says you are lying to yourself otherwise.
  • Hedge funds control the MSM:“Wrong. AMC retail investors want you to believe that every institutional investor is evil and that there is an ongoing battle between David and Goliath. The fact is, hedge funds don’t control the mainstream media (MSM). This is misinformation. Maintaining retail investors to keep less informed investors informed.
  • Hedge funds fill your pockets:“Wrong. Monkeys also routinely claim that any journalist, analyst, writer, television personality, etc. who are not exactly on par with them is paid by hedge funds or has hedge fund affiliations, this is a defense mechanism to keep the ‘us against them “Maintain the mentality that is required to keep this pump-and-dump scheme going.
  • Basics don’t matter:Wrong. A company’s operational performance and balance sheet are always important. And if you don’t think they are, speak to them Washington Prime Group Shareholders who saw half of their investment fizzle out overnight when the company filed for Chapter 11 bankruptcy protection on June 13. Washington Prime was touted by Reddit traders just hours before filing for bankruptcy for its high short squeeze potential.

In my opinion, AMC retail investors are hypocrites. They preach for transparency and rail against unsubstantiated manipulation on Wall Street, but purposely block the whole story on message boards and continue to spread misinformation to manipulate the price of AMC.

I have no idea how long the AMC stock price can remain artificially inflated by retail investors. What I do know is that every pump-and-dump scheme in history has collapsed at some point. AMC will be no exception.

This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.

Bitcoin worth to set new report by year-end, institutional cash will flood in as soon as this occurs – Jason City

The multi-month decline in the price of Bitcoin, which began in April when the world’s largest cryptocurrency began its descent from record highs at the time, will only last the summer, according to Jason Urban, co-head of Galaxy Digital Trading at Galaxy Digital.

Speaking to Kitco News editor-in-chief Michelle Makori, Urban said institutional investors will re-emerge into the room through fall this year, pushing the price back up, breaking new all-time highs and at least US $ 70,000 by the end of the year -Dollars to achieve.

Galaxy Digital is a diversified financial services company focused on cryptocurrencies with four lines of business: asset management, trading, principal investing and investment banking. Founded by Michael Novogratz, the company recently partnered with Goldman Sachs to trade Bitcoin futures.

“I definitely think we can see a little over $ 70,000 by the end of the year,” said Urban. “I think we can expect all of the FUD (fear, uncertainty, doubt) we’ve seen over the past few weeks to cause a flat trend in the market this summer and I think that when we get into the Fall is coming, a lot of these institutional takeovers and these ambitious moves that we’ve seen are going to manifest, and we should see the market break those highs. ”

So what has been holding back the institutions so far? It’s no less, but it lacks clarity about the rules institutional investors need, noted Urban.

“I think there is obviously some regulatory clarity about what can and cannot be done,” he said. “The smart players [in the crypto space] want to work with regulators to find solutions that address their concerns while allowing the technology to thrive. ”

Urban comments come as Bitcoin has just faced a new onslaught of criticism, this time from the Bank for International Settlements (BIS), which wrote in a recent report that “Cryptocurrencies are speculative assets, rather than money, and are used in many instances to facilitate money laundering ”. , Ransomware attacks and other financial crime. ”

Earlier this week, the People’s Bank of China banned Bitcoin over-the-counter trading in China and banned several large miners, reducing the country’s crypto mining capacity by 90%.

Urban said regulations could be beneficial, but attempts to ban Bitcoin are simply pointless.

“You can’t forbid progress. You can regulate it, you just can’t ban it, ”he said.

For more details on where institutions are on the acceptance curve and what Urban sees as the only existential threat to Bitcoin, watch the video above. Follow Michelle Makori on Twitter @MichelleMakori (https://twitter.com/MichelleMakori).

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not an invitation to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article assume no responsibility for any loss and / or damage that might arise from the use of this publication.

Retail gross sales producer value index Might 2021

Producer prices rose faster in May in nearly 11 years as inflation continued to build in the US economy, the Department of Labor reported Tuesday.

The 6.6% increase was the largest increase in the final demand index in the past 12 months since the Bureau of Labor Statistics began tracking the data point in November 2010.

On a monthly basis, the producer price index for final demand rose 0.8%, ahead of the Dow Jones estimate of 0.6%.

That higher price pressure came amid a sharp drop in retail sales, which fell 1.3% in May, which was worse than the 0.6% estimate, according to the Census Bureau.

Goods inflation remained the dominant inflationary force, increasing 1.5% versus a 0.6% increase in services. In the pandemic economy, goods are way ahead of services as economic barriers constrained consumer demand for service-related purchases.

Excluding food and energy, the 12-month terminal demand PPI rose 5.3%, which was also the largest increase since the BLS began tracking that number in August 2014.

Significant price increases on the manufacturer side came from non-ferrous metals, which rose by 6.9% over the course of the month. Grain prices also rose 25.7%, oil seeds rose 19.5%, and beef and veal rose 10.5%. Fresh fruit and melons were down 1.9%, while large organic chemicals and asphalt were also down.

Although services continued to be a smaller contributor to overall producer price pressures, the index rose for the fifth consecutive month.

The higher numbers are likely to add to an ongoing debate about whether the inflationary pressures of the past few months will continue.

Federal Reserve officials believe the current spike will prove temporary as supply and demand issues balance out and low levels are flushed out of the system during the pandemic lockdown.

However, several notable Wall Street names including Bank of America CEO Brian Moynihan and hedge fund billionaire Paul Tudor Jones told CNBC on Monday that it was time for the Fed to reverse the policy put in place during the pandemic to withdraw of easy money.

The Fed kicks off a two-day meeting on Tuesday at which no major monetary policy changes are expected to be announced.

While inflation data has caught the attention of the street, consumers have withdrawn their purchases as the impact of government economic controls wore off.

Excluding cars, retail sales fell 0.7% in May, well below the 0.5% estimate. Without petrol stations, sales fell by 1.5%.

Sales in building materials and gardening supplies were down 5.9% during the month, while sales in other stores were down 5% and sales in general merchandise were down 3.3%. Clothing and accessories stores grew 2%, while bars and restaurants grew 1.8%.

Sales are now dramatically higher than a year ago when the country faced a pandemic that left 22 million people unemployed.

Clothing and accessories sales increased 200.3% from May 2020, while hospitality and restaurants increased 70.6% and electrical and home appliance stores increased 91.3%.

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AMC value about half of its skyrocketing value, says investor Trey Collins

One of AMC Entertainments Most avid private investors will play a long game of stocks, but will see stocks return to earth before the end of the year.

Speaking of CNBCs “Squawk Box” On Friday morning, Trey Collins, 23-year-old host of Trey’s Trades channel on YouTube, said he believes the fundamental value of AMC stock will be between $ 20-25 per share by the end of 2021.

“I think most retail investors understand that this is not the true fundamental value of AMC,” said Collins.

The company’s shares hit an all-time high this week, hitting $ 72.62 before pulling back. The company’s shares rose about 11% during intraday trading, last trading at about $ 57.

“Just because the stock market is telling you exactly what every single security in the market is worth at that point in time, if there’s someone willing to buy AMC stock, which trades for $ 47, that means that it’s worth $ 47, ”he said. “The momentum trading aspect, while not necessarily reflected in current earnings or future expected earnings, does not mean there is no money to be made.”

Collins uses social media to document his investments in the stock market and has become the de facto go-between between AMC and its largest shareholder base, the Monkeys. Collins interviewed AMC CEO Adam Aron twice, including Thursday night, broadcast their conversations live on its 280,000 subscriber channel, many of whom own AMC shares.

“Adam Aron sets the bar for CEOs who reach out to retail investors who care about what they ask, what they are looking for, what matters to them, while looking after the long-term health of the company,” said Collins.

Collins has used his platform to disseminate information about AMC stock over the past few months and denounce short sellers who are betting against the company. Collins publicly declares that he is not a financial advisor and warns his social media followers not to “blindly follow my financial decisions.”

AMC’s transition from a mature company to a meme stock came in the wake of the coronavirus pandemic that closed the brand’s theaters and suspended revenue. When AMC fell behind on its rent, it hurried to raise funds. With AMC close to bankruptcy, short sellers poured in, doubting the company could weather the storm.

Thanks to AMC’s own fundraising and the apes that drove the company’s share price up, Aron was able to use interest in the stock to raise more money.

After selling hundreds of millions of shares in the past six months AMC urges its shareholders to spend 25 million more that it can spend after 2021.

Aron reiterated during his interview with Collins on Thursday that the company was company examine several acquisition opportunitiesincluding purchase ArcLight and Pacific theater locations closed during the pandemic, and would use funds from stock sales to do this.

He also said the money could be used to pay off debts, cut interest costs, or pay off millions in unpaid rents.

AMC has short about 18% of its float stocks, up from about 5% for an average US stock, according to data from S3 Partners. This week’s rally drove short sellers’ losses to more than $ 5 billion over the year, S3 data showed.

The company’s shares are up more than 2,300% since January.

AMC buying and selling frenzy doubles inventory value

An AMC theater is pictured in Times Square in the Manhattan neighborhood of New York City, New York on June 2, 2021.

Carlo Allegri | Reuters

AMC entertainment rode the wave of “meme stocks” trading Wednesday and hit record highs.

The stock closed at an all-time high of $ 62.55 per share, almost double Tuesday’s closing price. The previous closing record was $ 35.86, which was set on March 23, 2015, according to FactSet data.

At one point, AMC stock rose as high as $ 72.62, well above its previous intraday high of $ 36.72 that occurred on Friday.

With retailers gathering around AMC, the cinema chain has returned the favor.

AMC executives have welcomed the new investors who have brought the company massive profits over the past few months. On Wednesday the company did make special efforts to communicate with this new base, offers free popcorn and the promise of exclusive screenings for those who stocked it.

The manic activity comes despite a report that a hedge fund has sold its stake in the cinema company. On Tuesday, AMC reported that it was sold 8.5 million newly issued shares to Mudrick Capital, the latest in a series of capital increases for the company, a favorite of Reddit traders. The company raised $ 230.5 million from the sale and said it could use the funds to make acquisitions, modernize its theaters and tear down its balance sheet.

CNBC Pro’s Stock Picks and Investment Trends:

The hedge fund later turned around and sold all of his AMC shares for a profit, according to Bloomberg news.

Typically, such a sale would result in a sell-off as the newly issued shares dilute the value of the existing shares. Instead, the stock climbed higher.

Trading was robust on Wednesday. The stock stopped several times as it hit new highs. At the end of the day, more than 710 million shares were exchanged, almost double the outstanding shares of AMC. The company’s average 30-day volume is 143 million shares.

Shares of other heavily shorted stocks such as Bed bath in addition, GameStop and blackberry were also involved in the buying frenzy. Bed Bath & Beyond shares were particularly active, closed at $ 44.19, up 62%. That was the highest closing price since January 27th.

Last week, Bank of America said the chatter to catch up again in these stocks. Since then, trading has been more active.

The run-up of the AMC share has resulted in CEO Adam Aron sees his own fortune skyrocketing by more than $ 200 million since the beginning of the year. It was a staggering turnaround for the company when its business was effectively shut down during the pandemic. The cinemas in most parts of the country were closed for months. With no money coming in from ticket sales and concessions, AMC fell behind with its rent. On the verge of bankruptcy, short sellers raved about the stock.

Retail investors inspired by Reddit chats have used their growing numbers to fight back. Last week, Investors shorting the stock have lost an estimated $ 1.23 billion according to data from S3 Partners, the shares rose more than 116%. The stock is up more than 2,850% since the start of the year.

Did Madison Sq. Backyard Leisure’s (NYSE:MSGE) Share Worth Need to Acquire 13%?

On average, stock markets tend to rise higher over time. That makes investing attractive. But not every stock you buy is going to do as well as the overall market. For example the Madison Square Garden Entertainment Corp. ((NYSE: MSGE) the share price has risen over the past year, but its gain of 13% follows the market return. Note that companies generally do long-term, so last year’s returns may not reflect a long-term trend.

Check out our latest analysis for Madison Square Garden Entertainment

Madison Square Garden Entertainment is not currently profitable, so most analysts would expect revenue growth to get an idea of ​​how fast the underlying business is growing. Shareholders in unprofitable companies typically expect strong sales growth. Some companies are willing to shift profitability in order to grow sales faster. In this case, however, good sales growth is expected.

Madison Square Garden Entertainment even cut sales by 91% last year. Given the drop in sales, the modest 13% increase in the share price over the year seems pretty decent. In general, we’re pretty unhappy about losing stocks that are not seeing sales.

The graph below shows how revenue and earnings have changed over time (indicate the exact values ​​by clicking on the image).

NYSE: MSGE earnings and revenue growth May 16, 2021

These free interactive report on Madison Square Garden Entertainment Balance sheet strength is a good place to start if you want to further investigate the inventory.

Another perspective

We’re excited to announce that Madison Square Garden Entertainment is up 13% over the year. The bad news is that this is no better than the average return on the market, which was around 53%. The past three months have not been particularly good for shareholder returns as the stock price has lagged the market by 8.7% over the past three months. It could be that because of a major change recently, investors are more concerned about the business (or that the stock price has just gotten ahead of itself before). I find it very interesting to look at the share price as a proxy for business development over the long term. But to really gain insight, we need to consider other information as well. Take risks, for example – Madison Square Garden Entertainment has 1 warning sign We think you should be aware of this.

We’ll like Madison Square Garden Entertainment better when we see some big inside buying. Check this out while we wait free List of growing companies with significant insider buying recently.

Please note that the market returns reported in this article reflect the market weighted average returns on stocks currently traded on US exchanges.

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Bitcoin (BTC) value falls after Tesla stops automobile purchases with crypto

Artur Widak | NurPhoto | Getty Images

GUANGZHOU, China – Hundreds of billions of dollars were wiped off the entire cryptocurrency market afterwards Tesla CEO Elon Musk tweeted that the electric vehicle maker would do so Suspend car purchases with Bitcoin.

According to Coinmarketcap.com, the value of the entire cryptocurrency market was around $ 2.43 trillion at around 6:06 a.m. Singapore time on Thursday when Musk made the announcement.

By 8:45 a.m., market cap had dropped to around $ 2.06 trillion and wiped out around $ 365.85 billion. The market has reduced some losses. Since Musk’s tweet, the cryptocurrency market had lost $ 165.75 billion in value at around 9:22 a.m. Singapore time.

In February, Tesla announced in a regulatory filing that it had purchased $ 1.5 billion worth of Bitcoin and planned to accept the cryptocurrency for payments.

Citing environmental concerns Thursday, Musk said Tesla was “concerned about the rapidly increasing use of fossil fuels for bitcoin mining and transactions, particularly coal, which has the worst emissions of any fuel.”

Bitcoin is not issued by a single entity such as a central bank. Instead, it is maintained by a network of so-called “miners”. These miners use specially designed computers that use a great deal of energy to solve complex math puzzles in order to make Bitcoin transactions. Bitcoin’s energy consumption is higher than in some individual countries.

Around 9:34 a.m. Singapore time, Bitcoin It fell more than 12%, according to CoinDesk data, falling below the $ 50,000 mark for the first time since April 24. Despite the recent decline, Bitcoin is still up over 400% in the past 12 months.

Other cryptocurrencies ether and XRP were also much lower.

Musk was a big advocate of digital currencies including Bitcoin and DogecoinThis has helped raise prices over the past few months.

Tesla CEO said the company will not sell Bitcoin and intends to use it for transactions “once mining moves to more sustainable energy.”

Bitcoin has grown in the last year as a company such as square and Tesla announced Bitcoin purchases and large institutional investors entered the cryptocurrency space. Big investment banks like Goldman Sachs and Morgan Stanley have also been looking for ways to enable their wealthy customers to get in Bitcoin exposure.

Greater Gold Value Is Not Correlated To Cash Provide Development

Indeed, it is considered almost biblical canon that a huge increase in money supply will inevitably lead to a huge increase in money supply Gold price. Historical examples of France in the late 18th century, Germany (Weimar Republic) in the 1920s, and more recent Zimbabwe or Venezuela are often cited as evidence of the relationship between money supply growth and its effect on the price of gold.

However, this is not the case. Below is a table showing the relationship of Gold prices on the monetary base from 1918 …

Since the gold price peak in 1980, the rate has fallen sharply. The low point (0.28) was reached in December 2015. All of this decline occurred in the context of quantifiable greater growth in the supply of money and credit.

More tellingly, all of this decline occurred while the price of gold rose from $ 850 to $ 2000 an ounce. The decline in the ratio occurred between 1934 and 1970 while the price of gold remained fixed at $ 35 an ounce.

So we have a steady rise in the price of gold, but the ratio of the price of gold to the monetary base continues to decrease. Seems like it should be the other way around. Or maybe it is not the growth in the money supply that determines the price of gold. Perhaps the price of gold reflects something other than the amount of money.

Indeed it is. The higher gold price correlates with the loss of purchasing power of the US dollar.

It is equally important that the US dollar’s loss of purchasing power is NOT quantifiable and predictable. In other words, doubling the money supply over a period of time does not necessarily mean that the US dollar will lose half of its purchasing power.

The expansion of the supply of money (and credit) is inflation. The effects of this inflation, such as the loss of the US dollar’s purchasing power, are volatile and unpredictable.

(Read more about the US dollar and the price of gold in my article Gold and US dollar hegemony.)

Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT IS NOT AND WHO IS RESPONSIBLE FOR IT and Everyone welcomes the FED!

Value hikes forward, however client firms hope consumers will not discover

Shoppers search for items at a Costco wholesale store on August 4, 2020 in Colchester, Vermont.

Robert Nickelsberg | Getty Images

Inflation is coming.

Look no further than coke and Procter & Gamble share plans to raise prices this week to compensate for rising raw material costs. The cost of raw materials, which range from lumber to resin, is rising, and companies are taking steps to protect profits.

The price increases follow a year of increasing demand for a variety of items, from paper towels to peanut butter jars. Sale of Consumer goods rose 9.4% to $ 1.53 trillion last year according to the Consumer Brands Association. Many manufacturers withdrew advertising and promotions to keep up with demand and gain market share without much marketing.

James Knightley, chief economist at ING International, predicts consumer prices will continue to rise in the near future, up nearly 4% year over year by May. The consumer price index, which is how much US consumers pay for a shopping cart, rose 2.6% in March from the same period last year according to the Ministry of Labor.

The stocks are “too low”.

Low inventory levels help companies improve their pricing power, he said.

“According to the Institute for Supply Management, the latest survey found that 40% of manufacturers say their customer inventories are” too low, “” Knightley said. “This is further evidence that corporate pricing power is increasing.”

Food industry analyst Phil Lempert said numerous factors have increased costs for farmers who pick produce, factories that make packaged consumer goods, and meat packers who process beef, pork and chicken. The ports are congested, the truck drivers are scarce and the food workers have to try to distance themselves socially. That makes it harder to keep up with demand and ship items, from cereals to Italian cheeses, worldwide.

Price increases are secret

Moody’s analyst Linda Montag said she does not see higher prices as a competitive advantage as all consumer businesses face higher raw material costs. In addition to Cola and P & G PepsiCo, Kimberly-Clark, General Mills and JM Smucker have dealt with price increases. And consumers may not even realize they are paying more for diapers or soda.

“Consumer companies across the board are very adept at implementing price increases without having to forego price increases of five to 10%,” Montag said in an interview.

Some of these methods include using new packaging, selling smaller packaging for the same price, or offering promotions that lower the price until consumers are used to the higher sticker price. Hedging positions also give some manufacturers such as Coke and Pepsi more flexibility to gradually increase their prices, as they do not feel the effects of higher raw material costs for several quarters.

More cash in consumers’ pockets means less risk

Price increases always carry the risk that the demand for these products will decrease. However, Moody’s analyst Chedly Louis said she doesn’t expect consumers to resort to private label products because consumers trust bigger brands during the crisis. This behavior is expected to last longer.

“There is potential for consumers to move to cheaper, lower margin products within P & G’s product portfolio. It’s still P&G, but it’s cheaper,” said Louis.

Many consumers also have more cash in their wallets from doing government stimulus checks and years without travel, sports games, and fine dining.

Not all companies have the same flexibility to raise prices. Piper Sandler downgraded Kraft Heinz Shares on Friday, citing the company’s relatively weak pricing power as a reason for the decision. Analyst Michael Lavery wrote that the company’s pricing power lags behind that of peers like General Mills, Mondelez and HersheyTherefore, rising prices could affect demand.

Discounts are rare

Most retailers will pass the higher prices on to consumers. Lempert said grocers are juggling more expensive services like online grocery delivery or roadside collection, leaving little margin for profit margins to absorb higher grocery costs.

Grocery costs had already risen as retailers offered fewer discounts while shoppers cleared shelves last spring and bought more cooking utensils than usual in the months that followed. Phil Tedesco, vice president of Retail Intelligent Analytics at NielsenIQ, said that in a typical month, 31.5% of units will be sold through promotions. In March, only 28.6% of the units were sold through promotions.

“This has resulted in fewer opportunities for shoppers to take advantage of the in-store sale, and as a result, the total cost of food products has increased slightly,” he said.

JP Morgan analyst Ken Goldman wrote in a note to customers Monday that higher prices will help grocers, especially given tough comparisons with last year’s skyrocketing demand.

“Too much inflation is bad for grocers, but a gradual 2-3% (roughly the percentage that producers have to go through) with a shift in the mix towards higher-priced products is likely to help a lot right now,” he said.

– CNBCs Melissa Repko contributed to this report.