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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: ild who wrote (20120)10/17/2004 5:42:50 PM
From: Condor  Read Replies (2) of 110194
 
If there is significant CDN $ appreciation against the US $ then canadian gold miners with costs in CDN may not do well. Just look at SoAf gold companies. Just a remark as I do have PDG.

Before I address the specifics of your hypothesis please remember that the original discussion was to preserve capital in the event of a meltdown in the US by way of diversification.
So...capital preservation was the goal not simply maximizing profits.

However....your point is valid but I feel that a US $ meltdown will reflect in higher gold prices without a doubt. So if we get a $ 150 price rise in the price of gold then is a 20 % change in currency relationship and consequently a max 20% increase in production costs of concern? In the event I am wrong, then a meltdown of 20% should reflect in a 20 % rise in gold price at least. If you or anyone can't subscribe to this then I'd suggest they needn't even consider capital preservation because they ain't buying the Armageddon scenario anyhow. What think you?

I will mention that IMO SA gold miners suffer from apartheid correction (higher wages) and a higher Rand along with deposits becoming less attractive. (Grades and widths and depths). I wouldn't want to pin it all on currency exchange.

In defence on my rationalization of costs and profits and currencies, I would point out Nickel. Just watch Inco and Falconbridge and $ 6 + nickel. Their costs could increase 20 % and they wouldn't give a sh*t cause their profits are and are going to be astronomical. Just watch their quarters.

What do you think about all my blather?

Regards
C
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