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Thomas Kelly

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  • Eric Sprott's Gold Analysis Deconstructed: What The Gold Bulls Still Don't Get [View article]
    we ought to also talk about production costs which provide a natural economic floor. we are talking about $1000 avg cost per oz, probably more like $1200 to bring new projects online. that is sort of a hard stop for gold. so anything within about 15% of there is probably going to look good long term.
    May 3 02:17 AM | 2 Likes Like |Link to Comment
  • Measuring The Acquisition Prospects Of Junior Gold Miners [View article]
    Thanks...it was a fair bit of research to compile.
    Jul 1 11:03 PM | 1 Like Like |Link to Comment
  • Yamana's Post-Acquisition Bounce Shows The Way To Value In Gold Miners [View article]
    $1600/oz vs. $300 cash costs on 250koz per year. Granted they won't get to 250koz until sometime in 2015 at the earliest.
    Jun 21 05:47 PM | Likes Like |Link to Comment
  • Yamana's Post-Acquisition Bounce Shows The Way To Value In Gold Miners [View article]
    Of course there is fear of seizure...hence the low valuation. But Yamana operates in Argentina already and felt comfortable with the purchase. Perhaps they feel they have more leverage as they are larger and their investment dollars more important. Argentina's not my cup of tea either but at the right price the political risk is worth taking.
    Jun 21 05:46 PM | Likes Like |Link to Comment
  • Gold Mining Stocks Undervalued - For Good Reason [View article]
    Interesting read although I don't entirely agree with the idea that you should avoid the sector entirely. There are a number of miners that are already producing, that are not significantly exposed to rising labor costs or resource nationalism, and that are trading at historically low levels. The key is to pick the right stock. The sector as a whole might have been thrown out, but the ones who bounce back will be in stronger position than ever as mine supply is sure to grow slowly with capex costs surging and financing hard to come by.
    Jun 20 11:53 PM | 3 Likes Like |Link to Comment
  • Despite the resurgence of Keynesian economics and the popularity of Nobel Prize winner Paul Krugman, MarketWatch's Howard Gold sees some chinks in his armor. Gold makes the following counter-argument: Much of today’s unemployment is actually structural, the European crisis shows that countries’ long-term debt really does matter and Keynesian economics track record is more hyperbole than substantive reality.  [View news story]
    The notion that Keynes espoused the idea that debt does matter is utterly false. In fact Keynes was well aware that debt does matter and he advocated running a surplus during a time of economic growth for this reason. The idea that our policies right now are following the Keynesian model is intellectual dishonesty.
    Jun 17 08:24 AM | 1 Like Like |Link to Comment
  • Facebook's new high-growth market: kids? Facebook (FB) is apparently developing technology that would let the under-13 set use the site with parental supervision, a move that could explode Facebook's user base while outraging some privacy advocates. It's unclear when or if FB will roll out the service.  [View news story]
    I can see a Joe Camel lawsuit coming soon...
    Jun 4 07:46 PM | Likes Like |Link to Comment
  • 4 Questions For David Einhorn [View article]
    Pointless article.
    May 16 12:31 AM | Likes Like |Link to Comment
  • Gold Bull Market In Question With First Break Of 200-Day MA Since January 2009 [View article]
    Its not really enough to say M2 has not decreased. It has trended up over time for 20 years. What is much more important is that in the last 3 months the rate of increase in M2 has slowed dramatically. Second derivative is what really matters.

    http://bit.ly/rsTWKo
    Dec 16 02:20 PM | Likes Like |Link to Comment
  • Aurico/Northgate Tie-Up To Create Cash Flow King In 2012 [View article]
    indeed.
    Sep 6 08:29 PM | Likes Like |Link to Comment
  • Measuring 15 Junior Gold Miners by Cost of Resources [View article]
    Indeed it is. That was a mistake.
    Jan 29 11:47 PM | Likes Like |Link to Comment
  • Measuring 15 Junior Gold Miners by Cost of Resources [View article]
    Yes, the ANV mkt cap is supposed to be a billion. Typo. Still researching all of these but reader comments are correct that NAK, NG, and EGI also have huge copper reserves that make them much cheaper than this chart makes them seem. I'm still looking to see which others are in that situation. Haven't done one for the silver miners yet but I could try to put that out next week probably.
    Jan 28 02:32 PM | 5 Likes Like |Link to Comment
  • ECB's Bond Buying Is No Easy Fix: Debt Issuance Looms Large in 2011 [View article]
    Whether or not the money goes back into the banking system depends on who the ECB buys the bonds from. When they buy directly at auction, the money goes directly to the governments in question. These governments don't loan the money back out...they use it to pay for obligations. This money is never loaned out and therefore not subject to the money multiplier (if you don't know what that is, you need to read a primer on how fractional banking works). But even more important is the act of sterilizing the bond purchase by sucking up bank reserves. This action is affected by the multiplier (so if you take away a dollar of reserves that is 10 less dollars the bank can loan out). Thats where the asymmetry comes in. A dollar goes out but M3 will contract as the overall amount of available credit shrinks by 9 dollars (the 1 dollar that comes out, multiplied by 10, minus the dollar that originally went out to buy the bond). If you still don't understand, just go to wikipedia and fractional reserve banking or pick up a macro 101 book.
    Jan 27 10:26 PM | Likes Like |Link to Comment
  • ECB's Bond Buying Is No Easy Fix: Debt Issuance Looms Large in 2011 [View article]
    Italy's gold holdings of 2450 tons are worth about $112 billion using $1400/oz. Italian debt outstanding at 125% of GDP is about 2.5 trillion. Frankly, I find the argument that Italy is safe because it has 5% of its debt in gold a bit like the argument of a banker who, in the middle of a bank run, tries to proclaim the soundness of his bank by saying, don't worry, we are 'adequately capitalized,' because we are holding 10% of everyone's deposits at the bank. If capital starts to flee and the central bank tries to put up a fight by deploying its gold, that gold will be gone in an instant. It's just not a large enough position to stem the tide. For examples of just how fast one can lose their gold in a crisis, pick up "Golden Fetters" by Barry Eichengreen (one of my favorite economic historians).

    And on a separate note, Italian debt has really traded badly the last few days. We are very close to yields breaking out to levels that haven't been seen since 2002. I think I'm going to start monitoring the Spain/Italy credit spread since we know the ECB is supporting Spain, and looks less proactive on Italy. My guess is that the market will plug away at that spread until Italy gets put on the dole as well.
    Jan 26 09:56 PM | Likes Like |Link to Comment
  • ECB's Bond Buying Is No Easy Fix: Debt Issuance Looms Large in 2011 [View article]
    It sometimes find it ironic that Germany is so against the printing press even though the German export machine has been the primary beneficiary of weakness elsewhere in the eurozone that has driven the Euro lower. The Germans have a privileged status within the EMU because when a crisis hits, the euro goes lower and kicks the German export machine into high gear. Not unlike the US's privileged position in having the world's reserve currency...during a crisis, money floods back into dollars and that causes Treasuries to head lower across the yield curve. Germany and the US have built in stabilization mechanisms for their economies. In contrast, peripheral Europe, as well as Asia in '97 and Latin America before that, suffers from the opposite phenomenon--capital flight at the appearance of a crisis. This is unfortunately a distinction most Keynesian economists overlook. It's impossible to run countercyclical monetary or fiscal policy if capital is fleeing. To be fair, Keynes himself didn't make this error which is why he argued for governments to run a surplus in good times. But that ship has already sailed...
    Jan 25 08:25 PM | Likes Like |Link to Comment
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