David Gilgur

Genuine question for fellow QT nerds / financial plumbing experts. The BoE MPC voted to keep the pace of Quantitative Tightening unchanged at £100bn for the next 12 months, c. 90% of which will come through a passive run-off of existing holdings, and c. 10% from active sales. Bank reserves are currently upwards of £700bn, well above the BoE’s own estimate of even the £490bn upper bound of the Preferred Minimum Range of Reserves (which should delineate between what central bankers have started calling “abundant” and “ample” reserves). In other words, by the Bank’s own reckoning, it should have lots of room to shrink its balance sheet before bank reserves start to become scarce. Fine. However, this is happening against the backdrop of exponentially growth in banks drawing on the Bank’s Short Term Repo (STR) facility – not something you would expect in an environment where every bank has “abundant” reserves. If you were sitting on the MPC, would this give you pause? Are there any risks associated with moving out of "abundant" territory too quickly, or are gilt-backed reserves just going to seamlessly get replaced with repo-backed reserves?

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Deep dive on the appropriate doctrine for #AttritionalWar. This is something people in the West are having a lot of trouble with. The short version is to forget about #WunderWaffe. If they cost $100M per jet, and only available for 29% of the time, working from specially prepared runways, with limited ordnance, you lost already. The same is true of industrial policy when facing competition that has scaled their production system with truly massive state-of-the-art automation. George C. Scott, playing General Patton put it best...  'Give me 400 000 gallons' It is the exact same problem with #CriticalMinerals. You cannot go develop a heap of new mines if you have no buyers. No business can operate without buyers for the product. NONE of this is complicated. EVERYBODY gets it except those in Washington DC and those who drank the Beltway Kool Aid. The result is very simple to forecast. The West bleeds out from its own self-inflicted wounds. It is not necessary. It takes actual skill and dedication to accomplish this demise. https://lnkd.in/gASq6RjA https://lnkd.in/gf9TWmiV

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Very interesting comments made in the US Senate by John Barrasso, Senator for Wyoming re the US ban on Russian uranium. “…Russia’s choke hold on America's uranium supply is coming to an end.… America is finally starting to take back our nuclear energy security as well as our energy future.” More detail on the Senator’s comments is available at https://lnkd.in/gn-rMazF but this line struck me as underlining the strength of US intent  “…Putin now controls 50% of the world’s enrichment capacity. Today, he supplies 24% of America’s enriched uranium. Putin’s control is so vast that currently today the equivalent of one out of 20 homes in America is powered by uranium enriched by Russia!” Given Peninsula Energy Limited (PEN.ASX) Lance Project is based in Wyoming this can only be good news for the company as it readies for re-start in late 2024. It sounds like the US is serious about banning Russian uranium and developing its own nuclear enrichment industry. US utility companies have had 2.5 years to prepare for this transition and once the ban is signed by President Biden it will allow the Department of Energy to spend up to $2.72 billion to support domestic production of LEU and high-assay low-enriched uranium (HALEU), which is a more concentrated fuel intended for use in prospective advanced reactors. https://lnkd.in/gbCeq54k That is good news for another ASX company, technology meets nuclear energy play Silex Systems Limited Systems that is establishing the Paducah Laser Enrichment Facility (PLEF) for production of natural grade uranium hexafluoride (UF6). The PLEF opportunity is underpinned by the 2016 agreement between GLE and the DOE, which, through the acquisition of over 200,000 metric tonnes of depleted tails owned by the DOE, provides the feedstock for the production of natural UF6 at a planned rate equivalent to the production of around 5 million pounds of uranium a year for approximately 30 years. A lot happening in nuclear energy globally, lets hope we don’t get left behind by stunted debate and poor leadership in Australia. #nuclearenergy #energytransition #decarbonisation

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From my published musing 9 years ago today. The QEs have been done and QT had a short implementation time and now QE again. With 35 trillion USD of Government debts we can only expect "Triffin dilemma" will be tested soon especially with BRICs and dedollarization being championed now due to unbridled use of economic and financial sanctions. Economic cycles of boom and bust are either will happen for every 7 to 10 years, and might be what was stated 9 years ago will happen soon. "In a nutshell, Aggregate Demand= Govt consumption+Private Consumption+Net Investment + Net Export =GDP= Velocity of Money x M2; Therefore, if Govt consumption goes down, one or 3 other components of AD need to go up. On consumption be it governmental or private consumption, velocity of money, meaning business transactions need to be pushed up by multiply to increase consumption thus consumptions are and always be the main driver for economic prosperity. This is Keynesian economic solution. Increasing M2 will result in monetary easing or quantitative easing which might results in inflation unless the money supply was only increased at M3 level which is what is happening in USA, EU and Japan. This is Bernanke solution based on the Chicago School of Economic or the monetarist. Ultimately, this solution might or will result in debasement of currency unless one can control the demand for one treasuries. Not so easy but has been done by the Fed. There is always a sweet spot for equilibrium. That equilibrium is now being tested. Triffin dilemma, how to resolve?"

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𝐇𝐨𝐰 𝐌𝐮𝐜𝐡 𝐀𝐫𝐞 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐢𝐧𝐠 𝐄𝐫𝐫𝐨𝐫𝐬 𝐂𝐨𝐬𝐭𝐢𝐧𝐠 𝐔𝐬? The recent news: The Pentagon found an additional $𝟐 𝐛𝐢𝐥𝐥𝐢𝐨𝐧 worth of accounting errors in aid sent to Ukraine. These errors were mainly due to problems in correctly valuing defense articles, leading to big discrepancies in the reported aid totals. This raises concerns. Why is this a problem? 1️⃣ 𝐋𝐚𝐜𝐤 𝐨𝐟 𝐎𝐯𝐞𝐫𝐬𝐢𝐠𝐡𝐭: Consistent errors suggest systemic issues in tracking and valuing defense articles. Without proper oversight, these errors could persist, leading to further financial mismanagement. 2️⃣ 𝐈𝐦𝐩𝐚𝐜𝐭 𝐨𝐧 𝐀𝐢𝐝 𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐜𝐲: Mismanagement can delay crucial support to Ukraine, affecting their defense efforts. Timely and accurate aid is vital for supporting Ukraine in its ongoing conflict. 3️⃣ 𝐑𝐞𝐬𝐨𝐮𝐫𝐜𝐞 𝐀𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧: Misaccounted funds can lead to improper allocation of resources, affecting not only military aid but also other critical areas that rely on accurate budgeting and distribution. What do you think about these recurring errors? Should there be more stringent audits? For more details, visit kyivindependent.com

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This week in Barbershop Whispers…Russia, many Western companies continuing to do business in Russia are reconsidering their exit from the market. Some have concluded that preserving their investments in Russia is more important than the moral statement of an exit. However, their decision to stay or go may nevertheless be moot. Putin has signed a decree allowing the Russian government to confiscate Western assets in Russia. The G7 will decide this coming week whether to confiscate the Central Bank of Russia’s (CBR) foreign reserves or not and deploy them to arm and rebuild Ukraine. This decision will trigger a response from Putin. As the modern-day poets—The Clash—once said… “Should I Stay or Should I Go...If I go, there will be trouble…and if I stay, it will be double…”.

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I’ve now completed a detailed review of the BRICS 2024 Summit Kazan Declaration. BRICS has had huge diplomatic and institutional development under the Russian chairmanship. There are now at least 70 multilateral institutions, initiatives, cooperations, fora, publications. Most interesting to me are BRICS Clear (feasibility study for a new International Central Securities Depository) and BRICS Cross-Border Payments Initiative (voluntary and non-binding). The BRICS bilateral cooperation remains impressive. I met the Deputy President and ministers of the South African Government of National Unity here in London a couple weeks ago. The Chinese intervention to stabilise the disastrously inadequate Escom has resulted in 6 months without load shedding, blackouts, brownouts. That is a huge win for South Africa. The list of BRICS institutions from the BRICS Summit 2024 Kazan Declaration will be continued in Comments due to the character limit on Posts. It's a long list! Link to the BRICS 2024 Kazan Declaration: https://lnkd.in/eEiTX88s - BRICS Ministers of Foreign Affairs and International Relations (met 10 June 2024) - BRICS National Security Advisors and High Representatives (met 10-11 September 2024) - BRICS Deputy Foreign Ministers and Special Envoys (met 25 April 2024) - BRICS Counter-Terrorism Working Group and five subgroups with adoption of CTWG Position Paper - New Development Bank new investment platform to boost FDI to BRICS and Global South - BRICS Interbank Cooperation Mechanism - Strategy for BRICS Economic Partnership 2025 - BRICS Cross-Border Payments Initiative to be voluntary and non-binding - BRICS Payments Task Force- New Development Bank new investment platform to boost FDI to BRICS and Global South - BRICS Interbank Cooperation Mechanism - Strategy for BRICS Economic Partnership 2025 - BRICS Cross-Border Payments Initiative to be voluntary and non-binding - BRICS Payments Task Force - New Development Bank new investment platform to boost FDI to BRICS and Global South - BRICS Interbank Cooperation Mechanism - Strategy for BRICS Economic Partnership 2025 - BRICS Cross-Border Payments Initiative to be voluntary and non-binding - BRICS Payments Task Force - BRICS Clear feasibility study (new International Central Securities Depository) - BRICS (Re)Insurance Company - BRICS Contingent Reserve Arrangement - BRICS Economic Bulletin - BRICS Rapid Information Security Channel for financial sector cyber resilience - BRICS Institute of Future Networks Study Group on Artificial Intelligence - BRICS Energy Research Cooperation Platform - BRICS Just Energy Transition Report - BRICS Youth Energy Summit (met 27-28 September) - BRICS Carbon Markets Partnership - BRICS Contact Group on Climate Change and Sustainable Development under BRICS Environment Ministers (met 28 June 2024) - BRICS Geological Platform Continued in Comments . . .

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Fitch Assigns MLP Group First-Time 'BB+' IDR; Outlook Stable On 30 Sep 2024 Fitch Ratings has assigned Polish real estate company MLP Group S.A. a Long-Term Issuer Default Rating (IDR) of 'BB+' with a Stable Outlook. Fitch has also assigned MLP a senior unsecured debt expected rating of 'BB+(EXP)' with a Recovery Rating of 'RR4' for its planned EUR300 million benchmark unsecured bond. The assignment of the final rating is contingent on final documentation conforming to information already received. The ratings reflect MLP's quality portfolio of logistic assets, primarily in Poland. The portfolio is modern, with good transport links and mostly green-certified. This has aided tenant demand as reflected in the portfolio's low vacancy rate and tenant churn. Fitch forecasts the group's net debt/EBITDA leverage at about 10x during 2025-2027 and EBITDA interest cover at 1.7x-2.0x. MLP's portfolio uses mostly secured funding leaving limited income-producing unencumbered investment property assets. The planned unsecured bond is part of MLP's strategy to progressively fund itself with unsecured debt. #fitchratings hashtag #Realestate hashtag #creditrating

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In this week's Barbershop Whispers...Russia, the Pied Piper is on the horizon to collect his due on the artificial market distortions created by the Kremlin’s war economy. His price will be both financial and political, and it will be determined by economic and battlefield performance. The economy is overheating but not on the verge of collapse. The technocrats who manage the day-to-day operations have delivered on keeping the economy together. However, the economy faces formidable challenges in the next 12 months.  https://lnkd.in/es-dEwV8

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19 September 2024: Excerpts from my article with former special operator Andy Yakulis in the Wall Street Journal: The wars in Ukraine, Gaza, and the Red Sea have revealed a pressing reality: Innovative, low-cost technologies are changing how nations wage war. This highlights the urgency with which the U.S. must overhaul its defense system, from operational concepts, structures, and training to weapons systems, procurement and manufacturing. The U.S. [needs] to replicate the achievements of Ukraine—a country that has sunk a third of Russia’s Black Sea fleet without a meaningful Navy and held off major ground assaults despite being outnumbered and outgunned. Cutting-edge technologies, produced rapidly and at enormous scale, have enabled Ukraine’s successes. Warfare is at an inflection point. Some senior U.S. military officials are paying attention. Adm. Samuel Paparo, head of the U.S. Indo-Pacific Command, intends to turn the Taiwan Strait into a “hellscape” if China attempts to invade the island. The plan reportedly features the mass application of unmanned systems on land, in the air, on and under the sea, and presumably in cyberspace. But the vision is still mostly conceptual. The Pentagon needs to rethink its fighting doctrine, force structure, training, and processes for producing, procuring and using weapons fit for such combat. The status quo won’t suit... There is no procurement process set up to buy enough of the systems needed to make the “hellscape” a reality. Nor is the industrial base currently capable of producing these systems at the scale needed. Pentagon and industry leaders have begun to undertake some impressive efforts to capitalize on the private sector’s innovative capabilities. Most notable is the Replicator Initiative, , to provide a mechanism to procure large amounts of cheap drones. But it will likely take years for the initiative to field one of its prized systems: a more than $100,000 one-time-use loitering munition. This is a long way from the cheaper but very capable suicide drones that Ukrainians are producing and employing in the thousands every day. The goal of Ukraine’s “People’s Drone initiative,” as we’ve learned in Ukraine, is to produce one million drones per year that cost between $300 and $1,000 a unit. If Replicator is any indication, the U.S. still doesn’t understand how speed and volume must take precedence over exquisite capability when it comes to unmanned systems. Our military isn’t providing its soldiers with the concepts, training and weapons to fight effectively. Technology is moving faster than our ability to harness it. [We must] escape the cycle that too often delivers the technology of yesterday to tomorrow’s battlefield. To succeed, the Pentagon can’t tinker around the edges. It must seriously transform its processes, from military doctrine to weapons acquisition. If it does, we will be well-positioned to win the 21st century. If it doesn’t, the hellscape may well be brought to us.

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No confusion here. We know with 20 /20 vision that Russia in its current iteration is dangerous to our interests and must be countered with finesse and force. While not groundbreaking, this analysis nicely explains how the "Russian message" is an ideological take on the need to erase American influence. "Russian propaganda insists that it is the idea of ​​individual freedom that leads to chaos, uprisings, revolutions, and the destruction of stable societies." The role of the global evil that Russia opposes is assigned today to liberal democratic values ​​and, accordingly, to the West, especially the United States, as the bearer of these values. It is Russia’s self-declared mission to oust the United States from Europe and its duty to save Europe from the harmful influence of liberalism.

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💰 #Russia's likely retaliation might not match the volume of Russian assets frozen in Europe and the US. 🔦 However, the risk of individual firms being cut-off their assets in Russia is rising. #Russia #Ukraine #Europe #assets #geopolitics #expropriation

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