The perfect solution
Today's blog uses the GMO 1Q market commentary to start the ball rolling (readers can read the full commentary through the link): (https://www.gmo.com/europe/research-library/1q-2022-gmo-quarterly-letter/)
Here is the Executive Summary: "Commodity prices have soared, and inflation has hit levels not seen since the early 1980s. Due to long-term supply/demand dynamics in commodity markets, we may have to get used to high prices in the years to come. Resource equities trade at deeply discounted levels and offer investors both a chance to benefit from high commodity prices and to protect their portfolios from inflation. While there are always risks in the resources sector, we believe investors are likely to be rewarded with a compelling mix of strong returns, inflation protection, and diversification." Obviously, we would concur with the idea, and as stated frequently we see our natural luxury collectible commodity as the perfect inflation hedge, one that has proved up in that role over centuries! But instead of, paraphrasing the idiom, "sucking on that egg" again we will instead highlight a positive aspect of our digital ruby offering on the underlying real-world market as well as the demand and supply situation. As we have explained (as detailed in blogs, the WP, etc) when we transmogrify the ruby into its digital format the gem is effectively "frozen" in place. What does that mean? The Ruby is placed in a legal trust forbidding its sale in perpetuity, the gem is held forever (at FIX00's expense) in a fully secured depository (this can be verified at any time via the link on our website and the ruby is fully insured (again at FIX00 expense). Thus the ruby and any future gemstones for our F-NFT offerings are held in this frozen state forever. This means that supply has been taken out of the market, which naturally helps if not bolsters the price for rubies (the more gems we digital the more that is true). A net positive for the value of the underlying gem and its market. Structures, especially financial structures do not work in this way. They are inherently complex and convoluted. And this is especially true in difficult, remote financial fields - commodities. For example, placing an ETF structure over an illiquid market (as most resource markets are) gives the illusion of improvement but brings difficulty when markets are stressed. “Narrower funds, especially those with relatively few constituents — such as the ones flagged in the metals and mining, silver, and nuclear and renewable energy sectors — may present larger challenges in finding willing buyers for their portfolio securities. Likewise, authorised purchasers may have fewer options for hedging these specialised portfolios,” (Source: Elisabeth Kashner, director of ETF research and analytics at FactSet). The argument that ETFs provide a liquid framework for such markets, installing not only order but regulation, is disingenuous. The underlying market remains unchanged, the exact opposite of what is offered by the investment vehicle. That is an inbuilt risk.
For more on this topic here is a link to a free FT article: https://www.ft.com/content/fa3aa0bf-ed90-40e6-ac56-ca97d21856d3 Our offer, its market-based structure is clearly the single best way to attack and improve something that is not only archaic and opaque but exclusive and user-unfriendly. This scribbler has 100% conviction and knowledge to know that is true. This scribbler is happy to die on this hill because the structure we have put forth is pure and simple, and thus robust, and the time-honoured way of seeking price disclosure (not dislocation or fee gouging). Our products, our markets, our way!
For a short overview of the FIX00 project 🙂 please use this link: The Start of something new
If you still have questions, we are happy to have you join us. We take great pride in our company and the revolutionary change it heralds. Please feel free to contact us if you need further information or have further questions:: Contact Us
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