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Glad to hear some positive comments when so many seem so cautious. While I know the mining shares have been a real disappointment for many (and certainly not indicative of mania-like sentiment in the metals, by the way), gold and silver are still among the best performing assets over the past three and five years. It was just three short years ago that we were looking at something like 850 dollar gold and 12 dollar silver. We have come a long way in a relatively short period of time and the fact that the metals can hold these levels (yes even as silver is down over 35% from its peak) says a lot in and of itself. Keeping a longer term view is a must in these markets and when you do, you realize how positive both the fundamentals and the longer term technicals are for assets that too few people understand or own.
Boy, Ryan –
I think you ABSOLUTELY nailed it on the head!
All the best,
I concur completely with Marc, you have nailed it on the head.
Your perspective is excellent! Good writing! Clear and concise.
argentina nationalizes an oil producer are gold mines next? is this why extorre is tanking so badly? is it time to throw out the baby with the bathwater? or is it time to load up?
Argentina, Bolivia, Peru, Ecuador are all geo-political risks for miners. When the dollar begins to devalue further and the credit derivatives start to collapse, you can bet your last red cent that those countries listed above are going to nationalize very productive mines/assets. That is one of the reasons I am VERY selective with the mining companies I will be investing in. Who knows, though, a great management team MIGHT be able to overcome the obstacles….but I wouldn’t hold my breath.
Mark, Aurico poured their first bar of gold at the soon to be opened Young-Davidson mine. We should see accretive earnings by the end of the 3rd quarter.
PERFECT timing too! Wuuuu Huuuuu! I am sticking with miners in Canada, U.S., Mexico, and Chili.
Speaking of watching paint dry, AUQ has gone nowhere for 6 years, and is still down 50% from it’s 2006 high. Investors should finally be rewarded in this cycle.
Evening Mark A,
We have to look at each individual situation case by case.
Of course, Big Al. But I am just a little conservative now with all the heat getting turned up. There are some great companies out there but each person has to determine their own risks
I agree with you. I have written on this issue in the past and my sentiments line up with yours exactly. People, regardless of stripe or station, are ethno-centric and survivalist by nature. If and when the proverbial ‘meltdown’ occurs, nations who are small, relatively isolationist, and potentially threatened, will hunker down, circle the wagons, and go into survival mode, securing all capital producing assets and resources they have. It’s instinctive, not necessarily nefarious. It’s what they will have to do to survive. Investors need to understand human nature in order to know how people/nations will react in times of emergency and crisis.
I will be meeting with Extorre in Vancouver on either Thursday or Friday and will have an opinion on the Weekend Show.
Best to you dw,
A big hearty thank Big Al
As a “newbie” shareholder, I would really appreciate that…keep us the great work!
Hey, Al, I agree long-term that gold is in a bull market. To try to draw a correlation to oil may be difficult. What’s interesting is that the ETF USO is at a critical juncture right now. We’ll know if the correlation of gold to oil will stick in the next 2 weeks. The 200 week MA of the USO is dropping like a stone and is just above the close of the high of oil today. Oil is also filling a gap currently at these levels. In fact it wouldn’t surprise me if oil is up in the morning to completely fill that gap and then move down. If oil closes over that 200 MA in the next 2 weeks I’m a believer; if not then you guys may have to wait a while for that gold move. However, I am becoming positive in gold stocks for the first time in a long time. We won’t need gold to move higher for the stocks to do well. Usually the stocks do well when gold holds and after the stocks do well then it’s time for gold to move.
You have some very interesting and insightful observations.
That’s what my wife tells me.
HI AL, I like the price of gold though I`m just selling it after I`ve produced it from an ore that most mining guys couldn`t get a red cent out of it, like so what. Been heating my finely divided precipitates in my furnace to about 1900 degrees actually got a bit too hot and had it started to melt the metal to that nice gold color inside the crucible well there is more where I got that, heating in the stove to dry out the precipitates. Have to have dry weight before I send them to the refinery. Even if I produced 24K gold and Pd, Pt sponge I`d still have to send it to a refinery then have them certify that it good to go. The Patriot Act makes it near impossible to deal with a major refinery. Can`t wait to see Obummer out of office. Some day I`ll have to see you guys in person and I`ll have to bring some real good wine with me. Oh that`s a thought what are your favorites in wine or whatever Roger drinks I don`t drink that stuff just sofl drinks, so that`s why I want your wine list. Also when I`m in the area possibly to look at a mining property with you guys for myself I hope I`m not being forward with you guys.
You are real interesting guy!
All the best,
Over at Kitco.com:
Good piece authored by Eric McWhinnie entitled, “Do Central Banks still love gold”. Hey, over 440 tons of gold were purchased by the CB’s. The most in 50 years. Hey, just follow the money….or in this case the gold! Pretty simple.
Roger and Al: I agree with both of you. Al, when you say people just don’t know what to do, that is correct but the trend Roger points out on the charts and most importantly oil is telling us that a new trend is shaping up. This new trend is the result of unintended consequences that James Grant is referring to when speaking about actions taken by the Federal Reserve and other Central Banks.
Because people can’t save money in bonds or traditional investment vehicles, they are being pushed into alternatives. Some are chasing yields with lower risk, others seeking long term strategies to offset short term risks and some still trying to figure out what to do. Oil stocks with yield are moving up, along with any other yielding stock with perceived lower risk. The unintended consequence of this is that money exits the dollar and the US, which leaves only the Fed to buy the increasing Federal Debt. This is the reason the Fed is saying they will not do additional QE for the simple reason they already are, and to say otherwise would mean they have to admit they already have been. Catch 22 situation for the Fed and Federal Government which is why we see increasing day to day manipulation of the markets including gold and silver.
Just imagine this country being the USS Enterprise, and the captain at the bridge is asking Scotty to increase engine power when it is already at 120%. She is going to blow Captain, can’t take it anymore, but the Captain says the ship can take it because the election is coming up. Unintended consequences between now and November may well blow something up or at very least fuse the Di-lithium matrix of wealth in the country into a fractured lump of slag. This country however is not a television series with another episode next week, and there is no guarantee the ship can hold until election time, so something will have to be disposed of if the mad engineers at the Fed want some kind of ship left after the election. I look for the Fed to dispose of Obama and I am sure the plan is already under foot.
Clay, a couple of your comments are very interesting. This economy is levitating along with the conventional markets. Your last sentence is very interesting. Why would the Fed back off from QE at this time if not for the reason to undercut Obama. I believe the conventional markets will be well south of here by the election. However, I’m bearish on oil and we’ll know in 2-3 weeks if I’m correct. I put my money where my mouth is—-if I’m wrong I’ll cut my losses short and move on. However, I believe I’ll be right.
Richard: You are right about whats levitating the market and remaining economy. For the Fed to actually back off treasury purchases or stop in June at end of Twist (Which might have started up as Twist by selling short term and buying long, but has developed into stealth treasury purchases across the curve, another unintended consequence), rates will rebound very fast. For this reason the Fed can’t stop QE, not now, not in June and not this year if ever and thats what I mean about the real economy blowing up.
Logically and ethically I think it would be best if the market and economy plunged south before the election, so much so that not one person is re-elected. And yet I ask myself, am I crazy? do I really believe the Fed won’t continue QE and let things attempt to reach equilibrium? Can’t say because these people are crazy, mad, insane, lunatics, but more than all that They are dangerous beyond my imagination which mean I must be prepared to expect anything.
There are so many good interviews, discussions and opinions about whats happening and going to happen that I can only assume coalescence. The very fact that Fed officials in NEW York asked James Grant to come give a speech with list long in scolding demerits of Fed failures and explaining why Gold will be their solution to problems tells volumes about the fractured unity and worries therein.
Clay, I don’t believe the Fed will back off “operation twist” at the end of June. They can’t afford to. I just don’t believe they’ll make an announcement of another huge QE3 apart from the “twist”.
Big Al and Rog…. One of your Great FANS and you guys are the best!! The Channel is the Eye of the Storm waiting to break out- and I agree Bull run all the Way. This whole thing with media is Just an illusion/cover up! the longer it stirs the bigger the storm!! The shields ie../ Gov/ Fed Banks will fail in their attempt and the back side of the storm will be something we have never seen our lifetime. Need to see the forest threw the trees not trees threw the forest on this one! it will never be this cheap again for a long time….. look at the world in general Epic setup for all this to go down like it was plan too Hum!! How else to write the dept off but with a globle currency battle. Love to hear your thoughts? High regards! RL Hillsboro, Or
Well the media scare mongers are out in force today. HSBC and BNP Paribas are out touting how gold will reach $1750 an ounce with a possible high of $1900 by year end. New highs not to be expected until mid 2013. HUH???
Is anyone else noticing all the negative news coming out regarding precious metals investing, or is it just me? Wow! There must be some REALLY, BIG, FAT, GARGANTUAN BLACK SWAN coming in for a landing if all I am seeing is gold/silver negativity. Where’s the dump truck? I need to get some more physical!
By the way….
stay frosty….stay REALLY frosty.
Mark, you don’t sound so frosty. I’m afraid watching the PMS for awhile will be like watching “paint dry”. I don’t anticipate any big move for some time. I’m more positive on gold stocks then on the metal right now. The precious metals will have their day again sometime but I would be surprised if it is in the near future.
Oh no, I’m really frosty! Buying physical now is better than buying two months from now! Besides, I am already positioned in my favorite miners. Been dipping several toes in since last Monday. Already have some call options up big.
Yeah, Mark A.,
Typical stuff coming out of the ignorant MSM stiffs…..I ain’t budgin” one bit,,,,nope….nada.
All the best,
Mark, remember our conversation the other day about the USO and the 200 week MA. Well, we’re getting very close. We’ll know in the next 2-3 weeks about oil.
Yes, I’ve been watching this and just now, I went and looked at the crude Open Interest. I still see $110 soon. We’ll see.
Question for everyone! Suppose everything is at risk, having dollar cash in a bank, owning treasuries, stocks, corporate bonds, even gold and silver, nothing actually goes up in value nor holds even. Suppose everything in next couple years goes down in value, a real deep and bad World depression worse than ever before.
What should a person own or do? In this case it is like Marc Faber suggests, those who loose the least come out the winners. OK, but that depends on timing and term of value in things decline when and where, so those things that survive and are needed most when coming out of the depression will be winners. Again timing, because who is to say the Greatest Depression won’t last more than 20 years or more. So perhaps it is best to plan for those things a person needs during a terrible depression, with only scant concern about the things valuable after. This is what Chris Martenson is thinking about, wise advice.
I’m already prepped!