Doc 224899

What's Shaping Gold Price

Events that shape the price of gold? Like an attack on military and civilian personnel at Fort Hood by an Islamist physician holding the rank of Major in our army, shouting "Allahu akbar" before he opens fire? Like the fact that the army cannot discuss Nidal Malik Hasan’s active shooter event as an act of jihad by a self-appointed “shaheed” because political correctness prevents the generals from using the words “Islamist” or “jihad” or “shaheed” in a sentence that could be interpreted as critical of Islam, as evidence that pro-Muslim political correctness has a greater influence on army policy than the mandate of protecting our constitution or our nation?

Exploring Gold Miner Stocks: Mid-Year 2009 Analysis

Go to the Lihir Gold web site, and look at the maps and photos of the PNG Lihir Island mine. It looks like the ocean is going to pop through a thin barrier and flood into a huge open pit that is much lower than sea level. And that's on a day when the weather is calm......

South African miners aren't undervalued. They are appropriately valued, based on the inadequate power grid they rely upon that shows no hope for being improved.

NEM is so big, bulky, numb and stalled that it is unerringly boring to investors.

BVN is in Peru, and Peru is a difficult place to operate gold mines.

EGO is in Turkey (a ferocious Islamist government that may nationalize the mines any day to finance a military push into Kurdish Iraq) and China (whose government has no qualms about changing corporate operating conditions in a heartbeat to suit its self-serving agenda).

KGC has mines in Russia (you can't trust 'em), and three states in the USA (over-regulated, too many lawyers and lobbiests). Brazil is the one good place to mine they are set up in now. If they buy Yamana Gold they'll have a pipeline for future production with low costs of production.

Barrick may beat Kinross to the punch and scoop up Yamana first.

So it's shaping up to be a nice year or two if you're long AUY.

Jeffrey Christian: Foreseeing Bright Days for Metals

Apex Silver (SIL)was recently described (Christopher Amberger, October 17, 2008, Seeking Alpha) as likely to file for bankruptcy because it's only realistic source of cash was San Cristobal Mine, and it looked like Apex was going to have to settle obligations by granting or selling San Cristobal to Sumitomo (which would leave Apex with no cash and no chances for obtaining credit). Since then, Apex shares have been diving. It would seem that Jeffrey Christian either knows of some reasons for confidence in Apex Silver that haven't been discussed, or isn't aware of the San Cristobal Mine situation.

Countdown of Manipulated Gold Price Running Out

GOLD PRODUCERS LIKE BARRICK AND KINROSS COULD SELL THEIR GOLD DIRECTLY to buyers who want physical gold, not paper. If that were done, Joe Blow would be bidding against central banks and options traders for real gold, and the market for physical gold would overwhelm the paper market. THIS WOULD RESULT IN GOLD BEING TRADED AT THE REAL PRICE FOR PHYSICAL GOLD RELATED TO SUPPLY AND DEMAND.

Rather than buying CREDIT SUISSE or ENGLEHARD bars of gold or silver, the gold producers could refine and "package" their gold, and you could then buy BARRICK 0.9999 PURE GOLD BULLION bars with a Barrick stamp on them. Kinross and Gammon and Yamana could do the same thing.

If this were done, the profits and share prices of gold miners would skyrocket, and gold would be trading at $2500 to $5000 an ounce during this market crisis. It would also make paper option trading in precious metals obsolete, to the advantage of the entire world economy. Eventually, a similar end to paper trades influencing the value of of other commodities, like agricultural products and housing products that we all have a real need for, to everyone's benefit.

The safe haven in precious metals would be a real safe haven, and the ultimate result would be that corporations that actually did or made somethig with intrinsic value would survive while "money-for-nothing corporations" would be weeded out.

The ultimate end that this market crisis must eventually wind up with is a contracted US economy and a contracted world economy that assigns value to resources and commodities that satisfy basic needs, and devalues things that people don't actually need. The US economy has, since the 1970's, been based on consumers spending money on shoddy foreign-produced products that satisfy no basic needs, at the same time that excessive regulations and ridiculous liability exposure chased most corporations trying to do or make anything with intinsic value overseas to escape the impossible challenges of operating in a country with too many trial lawyers and too many elected lawyer politicians. The direct sale of gold from gold producers to gold buyers would start the process of correcting the misguided path we've been on for 40 years.