Regardless of whether they are using options or buying/selling forward, what they should be doing along with the other producers, is cutting production and shifting the heat to the bankers to produce the increased deficit from the vaults of the cb's. We are not talking about cartels, we are talking the fundamentals of a commodity based business. If you cannot produce at a profit, remove production until you get an adequate return for your finite resource. It has happened with oil, copper, etc., and it should happen with gold. As I have previously written, during the auction of the BOE gold, the only bids that were received were from parties interested in driving the price of gold lower. Consequently, the bids received for the most part were below the market price. Not one producer stepped to the plate and in fact with the resultant price decline, stalwart NEM surrender and has no joined the cartel of bankers, producers, and speculators.
Today, the dollar is declining along with the price of gold. The producers should be selling gumballs instead of ingots.
Ken |
