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Windchasers

Windchasers
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  • Silver Sheds Light On World Economy And Outlook [View article]
    "My understanding is that the cost to produce silver is about $22, so it makes little sense for it to go much below that."

    So... we weren't producing any silver back when the price was only $15 or $10/oz?

    There's actually a huge range of costs for silver production, depending on the mine, labor markets, cost of oil, etc., etc. If silver goes up to $50 and stays there, I guarantee you that more mines will come online that are only profitable above, say, $40.

    The point is, if demand for silver drops, then the price will drop, and some mines will close. That'll continue as long as demand stays low.
    Jul 3 02:47 PM | Likes Like |Link to Comment
  • Why Are Premiums On Physical Gold And Silver Rising Even As Futures Crash? [View article]
    Probably that there isn't an ever-increasing demand for physical gold. That demand has certainly been dropping lately, at least compared to supply.

    Focus on the whole world, not just China.

    But even if you *were* going to look at just China, you'd note that their demand for copper and iron ore is expected to drop. And the prices of those commodities have dropped quite a bit over the last few years, and there are considerable worries about oversupply of commodities and China.
    So I wouldn't be so confident about their planned purchases of gold, either. China's economy is just a big bubble in the process of popping.
    Jun 27 04:39 PM | 1 Like Like |Link to Comment
  • What Next After Another Gold And Silver Sell-Off? [View article]
    "Price" refers to the amount of gold that a dollar can buy. So, yeah, gold does change price.

    But, yes, the dollar and gold and all other assets change in price all the time. It would also be complete nonsense to say that the value of gold is not changing: The prices of houses, food, and gas aren't dropping nearly so quickly as that of gold, so gold has recently become cheaper in real terms. That's a verifiable fact.
    Jun 26 07:26 PM | Likes Like |Link to Comment
  • What Next After Another Gold And Silver Sell-Off? [View article]
    "In other words, don't you think if we continue liek this all mining companies will go bankrupt? "

    No. Different mining companies have vastly different costs for producing the metals, even varying quite a bit from mine to mine.

    If prices increase, then new, marginally-profitable mines will come online, so there will *always* be mines that are just barely running. If (or when) prices drop, these close. That's the way it is, and always has been.
    Jun 26 07:19 PM | Likes Like |Link to Comment
  • Dr. Doom Has Gold Going Below $1,000: Why His Thesis Is Spot On [View article]
    It's complete nonsense to talk about "buy and hold" and fluctuations over months in the same paragraph.

    "Buy and hold" is a strategy that should be applied over years, nay, several decades.. over which time it most certainly beats gold handily (or has always done so in the past).
    Jun 20 02:00 PM | 1 Like Like |Link to Comment
  • Dr. Doom Has Gold Going Below $1,000: Why His Thesis Is Spot On [View article]
    A completely fair point - over the short term, equities are a horrible store of value. You shouldn't put money into stocks that you might need within a few years. Keep some savings in cash for emergencies; for short-term liquidity needs.

    Over the long term, however, stocks are an excellent store of value, and outperform pretty much everything else (bonds, commodities, currencies, etc.).
    Jun 20 01:56 PM | Likes Like |Link to Comment
  • Dr. Doom Has Gold Going Below $1,000: Why His Thesis Is Spot On [View article]
    Maybe I just have less belief that the government is going to be acting wisely than you do. =p

    I don't have enough trust in government to take the Fed's gold holdings as a positive sign.
    Jun 6 11:55 AM | Likes Like |Link to Comment
  • Dr. Doom Has Gold Going Below $1,000: Why His Thesis Is Spot On [View article]
    Well, yes - over the long run, commodities have done markedly worse than stocks. So I don't really see any position for gold in a long-term portfolio, compared to stocks/bonds/RE.
    Jun 6 11:53 AM | Likes Like |Link to Comment
  • Dr. Doom Has Gold Going Below $1,000: Why His Thesis Is Spot On [View article]
    I can't make sense of this argument, typically.

    Do you think the Fed acts wisely/smartly?

    If the Fed is smart, then QE is smart. (You probably don't like that).
    If the Fed is dumb, then you shouldn't look to them for examples about holding gold.

    Which is it?
    Jun 5 01:16 PM | Likes Like |Link to Comment
  • Dr. Doom Has Gold Going Below $1,000: Why His Thesis Is Spot On [View article]
    How could Beanie Babies be in a bubble when so few people owned any? Or tulips in 17th century Holland?

    Bubble = irrational exuberance, and that's all. It doesn't matter how many people own it.
    Jun 5 01:12 PM | 2 Likes Like |Link to Comment
  • Dr. Doom Has Gold Going Below $1,000: Why His Thesis Is Spot On [View article]
    Yeah, but who actually invests in the *dollar*, either? That'd also be a strawman.

    People keep some savings in cash in case of emergencies or short-term needs, but otherwise, most investments are kept in bonds, stocks, real estate, etc.

    So, yeah, Doug's point is right: The dollar is a lousy investment. And everyone knows it. So why do people keep harping on the long-term trends of gold vs the dollar?
    Jun 5 01:10 PM | 2 Likes Like |Link to Comment
  • Dr. Doom Has Gold Going Below $1,000: Why His Thesis Is Spot On [View article]
    Very little of the produced gold is "consumed", so, yes, the price can fall below under production price for quite a while. It's not like oil in that regard, there's quite a large amount of 'inventory' sitting around that can be sold.

    Besides which, there isn't just *one* price for production, but a whole spectrum of prices.
    Jun 4 06:13 PM | 3 Likes Like |Link to Comment
  • Gold Is Not Money [View article]
    Well, yes, but that applies to all monies. If people lost belief in gold, gold would also lose all the qualities of money.

    Gold, however, can't be "printed". That's why we've stopped using it, to be honest.

    It does help that the dollar has the backing of the US economy and government. It means it's that much less likely that we'll ever lose belief in it.
    Apr 18 12:36 PM | Likes Like |Link to Comment
  • Gold Is Not Money [View article]
    "Only 1,000 oz bars were selling for near spot in 2008 really. "

    So in other words, you can get the physical at spot price, provided you pick the size of the bars wisely.

    There's no shortage of physical, only of coins and small bars.
    Apr 17 06:26 PM | Likes Like |Link to Comment
  • Don't Get Caught Up In Panic Selling And Capitulation In Precious Metals [View article]
    If you want to buy 100,000 ounces, you can probably get it at spot.. the premium comes from the time and effort it takes to mint and sell individual coins and small bars.

    There's also a time delay - when paper prices drop, premiums for coins and small bars often rise. That's because the price drop is caused by selling in bulk silver (big bars at warehouses), but the new demand is coming from small investors (coins and small bars), and it takes time to convert these from one form to the other, to catch up with demand.
    Apr 17 11:48 AM | 1 Like Like |Link to Comment
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