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Gold/Mining/Energy : Silver prices

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To: Claude Cormier who wrote (2016)	7/7/1999 5:19:00 PM
From: David R. Schaller	Read Replies (1) of 8010

Claude, Miners can easily find themselves in the same position as farmers. Weather may not be a factor, but environmental issues can arise. Underdeveloped countries can tighten controls. Labor unions can strike. Prices can drop below production costs. Third world countries can lay claim to the property & its assets. Etc. What constitutes a short position in your mind? When Barrick borrows & then sells $4,000,000,000 worth of gold it seems intuitively obvious that they don't expect to replace it with gold at a higher price than they received. They want the price to go down ..not up. You might say they are "banking" on it. This to me is exactly analogous to an investor borrowing securities, selling the shares and then hopefully replacing them at a lower price. I don't fault Barrick for pulling every trick they can come up with to make a buck. But lets agree as to what it is they're doing. 2/3rd's of their profits come from interest earned on the sale of a borrowed asset. Mining is almost a sideshow to their real operation. Dave

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