Hi Pezz, on Barbaric Gold and Savage Platinum
<<Gold? Platinum?... Why is it different now than a year ago, two or three years ago? ... Still don't see it ... Maybe someday.>>
Simple answer: because it has been three years, or twenty, depending on the count, and thus that much closer to a day when they shine again.
Slightly more involved answer: because they are potential contra-assets, beautiful to look at, cool to fondle, exciting to contemplate, and scary to many.
Involved answer (all numbers approximate) for platinum:
(a) Rarer than gold;
(b) No CB monetary stockpile worth mentioning;
(c) 3-3.5 mm ounces of platinum mined per year, by a few large entities, some publicly traded, some not, mostly concentrated in two make belief countries (Russia and S.Africa);
(d) 1 mm goes to Japan and is hoarded in the form of bars and jewelry;
(e) 1 mm goes to China and is hoarded in the form of jewelry (from a running start of zero ounces to 1 million, within five years, in an environment of rising prices);
(f) 1-1.5 mm used in auto applications, with more needed as regulations tighten, and with commercial alternatives scarce;
(g) 1.5-2 mm needed for other industrial applications, such as petrochemical processing, glass making, hard disk drive coating, etc;
(h) Excess demand supplied out of Russian stockpile that has been running down for 5 years;
(i) Future applications in many fuel cell technologies;
(j) From a running start of zero, introduced in India for jewelry applications; and
(k) Many platinum mining shares pay a dividend higher than cash and even treasuries.
Involved answer for gold:
Too long an answer, because it is inherently useless, except as some flawed or manipulated store of wealth, is getting cheaper by the day, thankfully, and is hard, to justify.
In short:
(a) It is industrially useless, for all material impact;
(b) The mines are shutting down;
(c) The CBs are selling;
(d) The mines are selling;
(e) The commercials are selling;
(f) The masses are selling;
(g) The existing inventory far outweigh any conceivable production; but
(h) All the selling are balanced by buying, buy some folks.
I do not know, nor care, about the facts, but feel that it will be much easier to make a bullish story for gold in the future than for biotech and i.net e.com, engaged in by many, benefiting the few but early. In other words, I am positioning for the next possible mania. You know …
<<New Bull, new leaders>>
The less convoluted thinking able to be understood by more folks via a future CNBC program is best.
Chugs much, Jay |
