Matt R

Gold - Not the Safe Haven People Think it Is

I'm curious why you elected to only examine gold stock prices to 1933. Wasn't 1933-1937 the period when gold stock prices went exponential, in response to lower operating costs (labor, equipment, energy, etc) and a liquid market for their product?

This is what I'm seeing happen today, when I examine the financials of many of the junior gold producers. Their energy costs (a major expense for mines) are suddenly plunging, they can recruit labor and buy equipment at discounts from base metal operations that have suspended operations, and unlike companies like GM, their product (gold) isn't sitting on a lot, hoping and praying for a buyer to show up. In a nutshell, their profit margins are increasing rapidly - and gold doesn't need to go up in price for them to increase profitability.

I own junior gold producers with no debt, a pile of cash in the bank, millions of ounces of gold in the ground, huge operating margins at today's gold prices, and a market cap that is so low you have to shake your head in disbelief.

M3 Money Supply and Inflation: Got Gold?

Magman and Punk_Ash, I'm worried about all the retirees who blindly move their portfolios over to a heavy weighting of fixed income because that's what has always worked in the past. Given today's low yields, you're already losing out against the real inflation rate. To hold a long term (10 year, 20 year) bond, you'd have to be extremely confident that inflation will remain in check for the next couple decades. I doubt it will. These retirees may find that they have to dump their stock holdings to pay their bills because their bonds' values will be inflated away to near worthlessness. And Hillbill, I think the inflation measure is correct. Check out shadowstats.com for accurate inflation, GDP, and employment numbers. We are all being lied to. My wife's grocery and gas spending has doubled in the last couple years. That's reality.