Locked down but looking up, I am still working on getting back into my very own website, from which I have been barred by a spate of captchas and a dreaded HTML 500 error message. So we will again talk about non time-sensitive ideas, starting with … the barbaric relic, gold.

As black holes are revealed in the accounts of formerly popular companies like many Chinese outfits with dodgy accounting, Theranos, Wirecard in Germany, or Banco Espirito Santo in Portugal, or Belgian Lernout & Hauspie, or Tyco or the worst of the lot, Bernie Madoff's investment scam, there is an argument for alternative investing outside the stock market. Bonds or savings accounts have no appeal as they pay virtually no interest.

This week the yellow metal hit a historic high. This was despite a decade when inflation seemed to have been wiped out, recent measures by our Federal and the European Union, plus lots of other government bodies. They have all learned from the gold-based contagion during the Great Depression when the US New Deal broke the floating gold exchange rate mechanism. President Franklin Roosevelt ultimately fixed the dollar price of gold at $35/ounce.

In 1971 President Richard Nixon took the US off the gold standard, but before then I accumulated lots of lovely gold coins (illegal here but legal in France where the mint just simply pumped them out and sold new coins at the price of historic ones). When Nixon did this, we were on the ocean en route to Washington from Paris with our two kids and my husband, I.F. Stone, and William F. Buckley, all of them on board the French Line ship, lined up to report to their editors. We were in 2^nd class and Stone and Buckley were in first class but ceded their edge to Paul who was the only one working for a daily paper, the Financial Times.

Today people can buy T-bills paying fractions of a percentage point in various currencies. As always you can buy Swiss franc paper with a negative yield. You will make money only if even lower payouts follow because the price of fixed income investment goes up if interest rates fall, something unlikely now.

Our contributor, Harold Geisel, comments on the present day situation:

“For the first time in my long investing career I've bought shares in gold-mining companies. Gold has not soared compared to equities overall. Moreover, other 'safe haven assets' like US Treasury securities pay virtually no interest, so the tiny dividends on gold equities bother me less than they used to. I am stunned by the enormous amounts of credit being pumped into economies by legislation and central banks to ameliorate the economic harm of Covid-19. The pump-priming is fine as it usually works short term. But I want to have a precious metal edge.

“I bought three Canadian miners whose production is growing but which would profit even if the gold price falls. One is Kirkland Lakes Gold (KL).” There are two more which he mentioned but which I have not looked into. KL was added to the model portfolio after it was written up by BofA-Merrill Lynch where I have my brokerage account.

Today I am considering adding a second more risky gold miner to the portfolio. It is Trans-SIberian (TSG.L).

Gold which has the low-cost functioning Asasha mine on Kamchatka Peninsula, in Far Eastern Russia. This is part of the Pacific Rim Great Wall of Fire.

Its founder was an Englishman and its listing is in London but of course it complies with laws in Russia where it operates. The Russian government assays the gold and has pre-emptive rights for buying it. Right now Russia is not buying so TSG sells to commercial banks. It does not hedge its gold, a key appealing factor.

It had a poor level of output in Q1 but reversed in Q2. Its gold production rose 66.5% sequentially to 11,419 ounces of gold despite the fact that it is digging deeper. The Asacha mine is also producing higher gold grades from a new vein, 46.9% gold grade and other new sampling is continuing. Of course it is getting 8.7% more per ounce of gold than in Q1 because the world gold price is rising so sales rose 111.5% in Q2 from prior quarter, to $19.7 mn.

My main reason for investing in Far Eastern Russia is the protests against the Regime after the arrest of the governor of Khabarovsk, now for over three weeks. Their slogans are “Freedom” and “Putin Resign” after Vladimir Vladimirovich Putin ran a referendum last month allowing him to run the country until 2036 and continue stifling civil rights, mismanage the corona virus, and engage in corruption and emoluments which make our President look like an angel.

To get to Kamchatka, you need to fly or sail from Khabarovsk, the center of the protests.

I have just put an order in with my bank to buy TSG in London at up to GBX 98, the high it reached Friday. GBX stands for pence in which London trades. Its high for the year was GBX 126 last August 30, so it is also not bounding up with the metal. It has no ADRs.