December 3, 2017
December 3, 2017


Writing from frigid Ulaanbaatar, Mongolia….

great work on TITN…now can you get gold off of its ass…thank you…

Thanks on TITN. As for gold, you should be emailing Bernanke about it–not me… VBG

is there an active ETF for the retail investor to purchase the russian ruble?

Energold – I have been surprised by the constant selling day after day, week after week, month after month with no rallies, obviously someone is stuck with part of all of the offering from last year…any idea when they might be done? I assume no one is selling short..


I don’t know if there is a Ruble ETF. I bought cash Rubles as they pay a nice little yield.

I think that some of the brokers in the bought deal are stuck still. This is why I hate bought deals so much. This doesn’t always happen, but it happens more often than you would think. That said, Major Drilling just had a pretty awful quarter–so there are sector issues at play also.

It would certainly have to be a gold crazy to recommend investing for anything other than short-term in the Russian ruble. As they say in Russian, eto sovsyem chutka. Dude, do you seriously claim to know anything other than BS about Russia? My family is Russian and I lived there. Zolota durak govorit’ yerudu. Translated gold nut speaks stupidity.

I apologize that I don’t speak Russian and have never been to Russia. I’m not at the stage that I would invest in the shares of a company there, but I think the Ruble is at least less flawed than most other currencies. (though it’s a pretty low bar).

How does one buy the ruble? Does it have to be paired vs another currency? Im in the US so just curious if I need to open a futures account and even if i do, do i have to pick a currency pair? thanks, love what you do! and watching gold closely for a real breakout, not yet though

I played cash Rubles vs USD. You can do futures also, though they aren’t terribly liquid. You can get fancy in your currency pair, but I’m an American, so I did the USD cross.

Your article talking about Russia potentially being the country that wants to retain a strong currency. I was wondering about if some of the same things applied to South Africa or some of the other African nations that are not tied to the dollar and that you have talked about in the past?

I wouldn’t touch a thing tied to South Africa. Individual countries can have appreciating currencies and I think that quite a few countries in Africa are in great shape, however, none of them want appreciating currencies. Putin might actually prefer a strong Ruble. It’s an anomaly.

You are missing out on Japan’s motivation for lowering the value of the yen. Japan went through many years of being the low-cost manufacturer for the world, something China is doing now. Eventually Japan stopped being an export power and developed enough of a domestic market to sustain itself while its exports plummeted. Along came China. China exported stuff to a fare-the-well, and at low prices Japan cannot compete with. Japan opened many factories in China to take advantage of the low wages. China grew so wealthy that within the last year or so it started bashing Japan. Abe got elected because he promised to stand up to Chinese bullying. One thing a lower yen does is make Japan a better competitor against China in the high-end market, something Japan is good at and China is only starting. If a high-end computer or camera or sound system made in Japan can compete in price against its equivalent product made in China, who will get the sale? People are much more comfortable buying a Japanese product than buying a Chinese product. The meaning of the lower yen is to cut off China at the knees before China develops profitable high-end products.

I agree with you–I just don’t think that the Chinese or Koreans will let the Yen get too much further before they also intervene. In the world of currencies, a 10% move in a few weeks is just a huge move. There’s easier investments at this point. I hate playing against something political.

Dear Mr. Kupperman,

It’s my understanding that the depreciation benefit is being continued. See below link:


Thanks for that. Seems that I missed it. That’s the danger of running around the world focused on too many things… I guess that leaves one less reason to sell.

I mainly exited simply because the whole market is a story of money printing and I want exposure to just that theme and little else. It’s a shame, because my investing passion is growth companies like TITN. It feels very strange to go for over 2 years with more than half of my money in cash (mostly made up of gold and my currency basket) while I wait for something interesting to happen.

Thank you, Kuppy, for your insights. I am grateful for your willingness to share your expertise with novice investors such as myself.

1. Given that reckless worldwide money printing creates a frightening, unstable investment environment, cashing in on TITN makes sense. Why, however, are you holding on to AYR and MERC? Are you looking for a slightly better spot to unload them as well? Or are you more confident that their stock prices will weather the volatility?

2. Am I correct to assume you view EGD as a money printing beneficiary that is still likely to be a 5 in 5? If so, does this strike you as a good spot to start a position? Are you still as high on EGD now as you have been in the past?

Thank you for everything you do.

1. On AYR, money printing will make existing more aircraft more expensive to replicate. It’s sort of like investing in a hard asset that should be somewhat immune to inflation. I also get the advantages of a moderate ROA where gold pays nothing, and also the advantages of growth in frontier markets–which is a theme that I really am a fan of. Ever since 2008, the frontier markets of the world have been cut off from cheap capital and AYR fills that void, but the collateral is substantially more secure than most frontier lenders. MERC is a similar story. The cost to replace their facilities goes up every year and eventually, there will be a bull market in NBSK due to supply and demand imbalances. Thus far, I have been quite early on MERC unfortunately.

2. I own EGD as it is a play on miners needing to drill and that’s clearly a result of money printing driving up the cost of various commodities. I have recently added more at these prices, but have no conviction in near term earnings ability.

Hi Kuppy,

I was reviewing a MERC investor presnetation form Sept, and I see a lot of things going right. I see majority of debt (Stendal) as non-recourse, repurchase of $15.6m outstanding Restricted group notes, and 10.9% cagr in electricity exports since 2007.

Management believes the NBSK market is bottoming. I looked at managment’s chart of NBSK Pricing and Global Supply. In most instances, after 3 quarters of falling nbsk/ton, supply shot up, followed by price. However, the longest period of demand decreases we from 04-06, and then after demand shot up prices lagged for several more quarters. Either way, I’m continent to wait, since after 3 quarters of falling prices and slight uptick in demand, hopefully prices will follow soon. But even if they don’t history indicates that prices will come back and the business is not permanently impaired, eventhough the stock price has languished.

My question is, am I reading this correctly? Management seems shrewd. What do you think of the recent shelf filing they did?

I’m not sure if management is shrewd, but they haven’t done anything stupid yet and NBSK is a sector with almost no new investment for decades. I’m willing to wait and see how it all plays out. Demand is set to grow materially in the next few years and supply isn’t. I don’t really have an opinion on the shelf. Lots of shelfs are filed that are never used.