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Kuppy Profile picture
@hkuppy
Apr 10, 2024 • 7 tweets • 3 min read • Read on X
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1- In a functioning economic system, Brent Oil is the Central Banker. 2’s follow oil around on the screen and then the CBs reluctantly follow the 2’s around. But what happens if the President dumps a few hundred million bbl from the SPR and destroys the signal??
2- Then gold becomes the Central Banker. Except, we’ve been interfering with the gold price for years. So then, who becomes the Central Banker?? What if it is copper, or the Tin Barons, or Uranium, or some other minor metal?? Can’t play whack-a-mole on the whole periodic table…
3- That’s what we’re seeing today. CPI is raging, and that’s with all the doctoring they do. Bonds are melting, as is SPZ. Meanwhile, look at oil/silver/copper/gold!! They have bids. Rapidly shaking off the CPI print. They’re the Central Banker now…
4- But shouldn’t gold be following rates…??

Not if it’s “Project Zimbabwe” and we’re entering a fiscal crisis. In that environment, gold gets a bid as everything else gets outflows. It’s the only neutral asset.
5- A lot of Portfolio Managers have never read up about this. They are gonna be lost over the waterfall. I’m ready. We’re all in Zimbabwe now. Get used to it…
6- My book is yoked out long inflation. Go to and read my blog. I’ve been writing the rule-book for this environment. It’s all there. A lot of us will come out the other side, hopefully as winners. Some won’t make it. That’s unfortunate. So far, markets are going with my playbook…Pracap.com
7- How am I playing?? I own assets that are at a huge discount to replacement cost and spitting cash or about to (VAL/TDW/JOE). Own mission critical assets in short supply that are hard to ramp supply (Uranium). Own the exchanges that people will use to leave the fiat system and buy self-custody metals (AMRK). That’s basically my book. Got some other stragglers, some Event-Driven stuff, but they won’t really move the needle. Wish I had more ideas. Wish I could find another AMRK. After 4 years of thinking it through, that’s the best I’ve got. It’s gonna be a rough period. Survive…

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More from @hkuppy

Kuppy Profile picture
Dec 8, 2024
1) I keep adding to $VAL on a scale like a proper baggie… This is by far my largest position...

~20% of the world’s 7G floater fleet in a sector that has consolidated to 4 core players + a massive high spec JU fleet at ~$4b EV just seems wrong.
2) They have almost $2b of contractual EBIT in backlog. They own half of ARO which is a fleet of modern JUs in Saudi. In a firesale, this is worth maybe $1b or $100m a rig?? Kingdom 2 just cost $200m to build. ARO also owes them a few hundred million.
3) Add it all up (backlog EBIT + ARO receivable + 50% of ARO) and you almost cover the whole EV. That’s my downside protection. Then I get the world’s largest offshore fleet for free…
Read 8 tweets
Kuppy Profile picture
Mar 27, 2024
1- Has anyone else noticed the spikes in gold that have peaked at around 7am EST this week…??

What could be causing this rally during European hours, only to be reversed when NYC wakes up…??
2- Pet theory of mine. So bear with me here…

When the West buys gold, we think of it as another CUSIP in the portfolio. Something you buy and sell for trading gains. Something that you can use to hedge other portfolio positions.

When Asians buy gold, they buy for keeps…
3- This is important, b/c they keep buying, and the rate of buying is accelerating. Over the past few months, we’ve seen divergences between COMEX and Chinese gold exchanges. Divergences that should have been arbed. Eventually, the arbs closed, but they then diverged again…
Read 8 tweets
Kuppy Profile picture
Oct 3, 2023
1) Much as I predicted, markets are starting to waterfall. It has a very December 2018 feel to it. Difference is that in 2018, markets got cranky that JPOW pushed Fed Funds too tight with a bit of excess QT. This time is different…
2) This time, markets are watching the 10-year melt away and they’re starting to panic as 10s are the collateral for the whole financial system and there are now hundreds of $$ billions of MTM losses suffered through the collateral stack…
3) Besides, everything funds off the 10-year, so cost of capital is up. Issue is that JPOW cannot just tweak Fed Funds and fix it. 10s are in a panic bc fiscal is running at 8 on the way to teens. Despite the panic, they’re still inverted. What can JPOW do..???
Read 6 tweets
Kuppy Profile picture
Sep 23, 2023
1) Assets sometimes undergo a sudden phase shift. Just like a liquid can become a gas when you add heat, the same can be said of public assets. It seems that uranium has now undergone a phase shift. The personality of the trading changed dramatically…
2) Think back to earlier this year. Uranium would rally a few dollars, then pull back. The spread stayed tight. It sometimes went weeks without moving a full dollar.
3) After WNA something changed. Someone panicked and stopped acting price conscious. Someone just wants pounds. Suddenly uranium is gapping a few dollars at a time. The pullbacks are rarely more than a few ticks and the bid/ask spreads are frequently a few dollars wide.
Read 6 tweets
Kuppy Profile picture
Sep 7, 2023
1) This is VERY bullish for SPUT, but there’s nuance: (conference chatter)

-Limited redemption is designed to ensure that the discount cannot permanently widen past a certain threshold (say 5%) + is limited to industry players + only certain limited windows of redemption/size
2) This is designed so that the trust never overwhelms the physical market with selling. I believe this will help to build liquidity while providing a release valve during times of market stress.
3) During periods of selling in SPUT, a physical trader can short physical and buy SPUT and then settle that trade either by unwinding in the market or one of the limited redemption windows. This will better tether SPUT to physical, by creating arbitrage opportunities.
Read 8 tweets
Kuppy Profile picture
May 15, 2023
1) OIL THREAD - In April, we were drawing roughly 2m+ bbl/d with an expected expansion to roughly 4m bbl/d as OPEC+ cuts began in May. The question was - why was oil trading so sloppy. SPR was selling a few hundred thousand a day, but that wasn’t enough to move the needle.
2) A lot of oil traders frantically asked each other - what the hell are we missing? We looked under every rock, and we found a few wrinkles, but not enough to smash the price. Effectively, the only bear thesis was “recession, bro.” Then we started looking at the spec positioning
3) Over a 3 week period, specs flooded the market with ~10m bbl/d of paper supply. It was one of the most rapid net position liquidations ever, with a massive buildup of spec shorts. Suddenly, we had our answer. The market was overwhelmed by the supply of paper barrels. twitter.com/i/web/status/1… Image
Read 7 tweets

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