➡ Fortuna Mining has had a successful year, with high gold prices and significant developments. They renewed their share repurchase program, sold two mines nearing the end of their lifespan, and are set to announce their earnings. The CEO, Jorge, has been working to strengthen the company’s balance sheet and they’ve seen record cash flow. Jorge rang the bell at the New York Stock Exchange, indicating a positive outlook for the company.

Pan says, massive treasury stockpile among tools for US trade talks, and basically they are saying that whereas a month earlier, commentary from Japan was that we would not discuss selling treasuries as part that wasn’t an option. And that changed. Well, hello there, my friends. Chris Marcus here with you for Arcadia Economics on an exciting Federal Reserve Wednesday. Obviously, things happening outside of the Federal Reserve, although, as you can see here on CNBC, the S&P 500 little changed as traders await the Fed decision. And we will get to that as well as some fascinating things happening in the gold market that include, you’ll see the reason I have pulled up here is that they’re on CNBC, we’re getting the gold ETF, the VanEck.

Buy an ounce, O-U-N-Z, so maybe that’s a sign of the time that things are changing. Although, as I guess we could say once and then just revisit it five or ten years from now, although to the degree that it’s fun to think about and cover these things as they happen, underlying perhaps everything that one could discuss about this entire situation day after day is that ultimately, if the US treasury stops to function as an effective store of value, especially for the oil market, which, as we’ve talked about, it seems like the dynamics are certainly putting pressure on it heading that way, then if that role has to be filled by gold, and of course, you could even say that maybe that’s a natural evolution.

Actually, you don’t have to say, it seems like Alan Greenspan felt that rather clearly as he wrote about back in the 60s, and then also in 2014, after he was the Federal Reserve Chairman, here he mentions gold is a currency, it is still by all evidence the premier currency where no fiat currency, including the US dollar can match it. Now, in case you think, well, maybe he was getting older and just lost it towards the end, there is also this quote from Paul Volcker, he mentions, it’s a sobering fact that the prominence of central banks in this century has coincided with a general tendency towards more inflation, not less.

By and large, if the overriding objective is price stability, we did better with the 19th century gold standard, and passive central banks with currency boards, or even with free ranking. And the truly unique power of a central bank, after all, is the power to create money, and ultimately, the power to create is the power to destroy. So isn’t just gold or silver bugs saying this, and I would think it’s fair to say that based on this pricing, we’re seeing this play out in the world. Here we have the prices down, rapidly changing today, down about $28, still just a touch under $3,400 an ounce, and then here is silver.

So we’re taking it a little bit hard today, down about 60 cents, whereas stock market’s pretty much flat, and not necessarily a whole lot happening in the stock markets, or the dollar index, or the bond yields, which are in three basis points on the day. Although, as obviously you’re aware, we do have the Fed meeting coming up. If you’re watching this during the debut, you’ll be less than an hour away. Of course, very exciting, where it seems like they’re largely on track to stand put at this meeting. You can see the May 7th, 97.7% chance of a pause.

Wouldn’t that be wild if we got a cut? I guess Donald Trump would be happy. Price didn’t pause for the next two meetings, although keep in mind that in the most recent dot plot here, again, we have Fed funds rate coming down to an average of 3.9% in 2025, which, given that we’re at the $4.25 to $4.50 range right now, to get down to 3%, 3.9%, that means you would have to be significantly below 3.9%, because we’re in May, we’ve completed four months of the year, and if they’re going to pause, or leave rates paused or unchanged, at the next two meetings, that would mean that you would have had that first half of the year at call it 4.35, 4.4%.

So that would mean you’d have to overshoot it to get that by the end of the year and would not rule out that happening. And as you can see, that’s pretty much what is priced in. They’re getting to the $3.50 to $3.75 range is the favorite, with another quarter point cut below that, being the gets you 63% combined there. So anyway, you’ll get a little more clarity from the Fed in just a bit. And then in terms of the international reaction and something that I found rather stunning was a story that came out from Reuters.

We covered this in the Arcadia Gold and Silver Daily sub stack last week, but this was pretty wild because you can see Japan says massive treasury stockpile among tools for US trade talks. And basically, they are saying that whereas a month earlier, commentary from Japan was that we would not discuss selling treasuries as part that wasn’t an option. And that changed over the past month. So fortunately, and as I might add, you get if you’re a subscriber to your Katie economics, gold and solar daily, that I pull out the highlights. So especially if you don’t, if you’re reading a lot of stuff in a rush, we try and make this easy and concise.

So anyway, promotion done. Here we go. Japan could use its $1 trillion plus of US treasuries as a card in trade talks with Washington finance minister said on Friday, raising explicitly for the first time its leverage as a massive creditor to the United States. So obviously we know what’s happening with China. We’ll touch on a note from Iran in a couple moments, but here now in Japan, one of the allies explicitly mentioning leverage it holds as one of the massive creditors to the United States. The other equally massive creditor to the United States also voicing its displeasure.

Although while prime finance minister Katsunobu Kato did not threaten to sell holdings, his remarks touch on a critical concern global investors have about what Japan and China, the two largest owners of US government debt might do in seeking tariff concessions from the Trump administration. Kato said in an interview that the primary purpose of Japan’s US treasury holdings largest in the world is to ensure it has sufficient liquidity to conduct yen intervention when necessary. By the way, I mean, at least we finally get confirmation of that. It’s often been speculated. That’s what they do. And at least according to Reuters coverage of that, he said as much there.

Then mentions, but we obviously need to put all cards on the table and negotiations. It could be among such cards. He said when asked whether Japan and trade talks with the US could reassure Washington that it will not sell its treasury holdings in the market. Kato’s remarks contrasted with those he made last month when he ruled out Japan’s using treasury holdings in trade negotiations. So here again is the title if you want to take a look and read through that yourself. But finance minister of Japan saying now, all right, we have our trade deal. And depending on what the terms are, we may change our policy as one of the two largest holders of your treasuries.

So you’re seeing these things happen right in front of us day by day. Meanwhile, something else that I have not seen mentioned very many places elsewhere is that there was a meeting regarding resolutions of the Russia Ukraine war. And just interesting you had this quote where seems like Trump was quite upset with Putin said makes me think maybe doesn’t want to stop the war. It’s just tapping me along and has to be dealt with differently. Through banking or secondary sanctions too many people are dying. So that certainly the last part I would agree with it’s tragic the stunning numbers of people anytime I see an estimate.

How many are dying and that is tragic from the financial perspective that we’ve seen what happened when Russia was sanctioned in 2022 that led to the start of the record central bank gold purchasing. I would imagine that we probably wouldn’t get to this point where Trump is sanctioning Putin and Russia again. I would say if we did, then I would certainly expect the trends we’ve seen of central banks and governments turning to gold instead of treasuries would probably be accelerated quite significantly. Here we also see last week Trump saying that any country that buys oil from Iran will not be allowed to do business with the US which I mean these countries start to add up and we will see how that goes.

Although interesting you did get an announcement from Scott percent Treasury Secretary last week that the United States Ukraine Reconstruction Investment Fund has been established to help the people of Ukraine yet here we see US Ukraine signs mineral deals deal was inked that will give the United States preferential access to the Ukrainian minerals deals and fund investment. In Ukraine’s reconstruction, which at least seems somewhat prone to abuse yet other case will be fascinating to see what happens in the next couple months between the negotiations that will hopefully end that war. Although anyway, in terms of things that have been going better fortunately has been quite a great year for for tuna mining so far, who actually does have their earnings coming out tonight after the close.

And obviously this is covering the first quarter where we once again had an elevated gold price, as well as a few other developments from for tuna during the quarter where two weeks ago they renew their share repurchase program, something that they were active with last year, and where he knows of the CEO of for tuna who does a regularly call for these earnings, and we’ll be joining us tomorrow at 430 Eastern on Thursday live here on the Arcadia channel. He’s talked before about how he wanted to strengthen the balance sheet and that’s one of the ways they’ve done that.

They also did announce the sale of the year moco mine which had been nearing the end of his life of mine. So that was announced in April and also they did finally complete the sale of the San Jose mine which had also reached the end of life of that mine. So there will be plenty to go over and talk about we’ll be looking forward to catching up with Jorge and our dear friend Dave Transler will be joining us as well. And perhaps one last note here is that Jorge was actually up there ringing the bell at the New York Stock Exchange this morning and fortunately we found a clip here so going to play a minute of that before we wrap up.

We’ve seen gold prices absolutely on a tear and many people who have joined our show market watchers investors they anticipate the price to continue to rise. How is your company benefiting from that? You know we are set up to harvest at a time like this in a way we have been counter cyclical before the general market starting started paying attention to gold. We have been investing in the business. You know over the last four years we’ve been investing in the business heavily and we come at a time where we can harvest. Last quarter we generated record free cash flow.

This quarter we are on track. We’re going to be reporting results tomorrow. So you know we expect also a record quarter. So you know we set up the company over the last few years for a time like this. Well congratulations to Jorge and for Tuna and thank you as always at home for watching. Do hope you’re having a great day out there. Thanks for tuning in and we will see you again tomorrow. Thank you. [tr:trw].

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