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South Africa, Electricity, PGMs & Gold

When I was a General Partner of Lazard Freres in the 1980s, we actively traded the South African US dollar bonds issued by Eskom, which at the time was the highly efficient, modern, and extremely well run and capitalized utility in South Africa, and the biggest power company in Africa.  It is remarkable what has happened to Eskom since then; now a troubled utility. Don't take those words literally... I have not been close to Eskom nor done any analysis, but am simply sharing my intuitive sense of things. YES, IT IS CRITICAL HOWEVER, SINCE TO MINE FOR PLATINUM GROUP METALS OR GOLD IN SOUTH AFRICA, IT IS NECESSARY TO HAVE ELECTRICITY. Just two days ago, NERSA, which is the...

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Platinum & Palladium

Today is Wednesday, 2/27/19. While Platinum is up to 870.9, looking at April futures, Palladium is down 36.2 to 1483.5. As a reference, Gold is also down 2.9 to 1325.5 and Silver 11.6 cents to 15.81. Historically, all of the precious metals tend to move together, but over the past many months, Palladium, given its very strong bid and supply tightness, has typically (though not always) run, whatever the market behavior of other PGMs. My thesis is that Platinum is dramatically cheap to Palladium. It doesnt take great wisdom to come to that conclusion, looking at historical pricing when Platinum has most often traded at a premium to Palladium, let alone a discount of almost 600 dollars. :-) Same can...

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