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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: craig crawford who wrote (111271)7/5/2001 4:08:19 PM
From: Arik T.G.  Read Replies (1) of 436258
 
Craig,

You raise good points, and I am willing to cut you some slack and instead of saying pipe dream I'll downgrade to extremely unlikely.

On the issue of mines being closed
All big producers have mines with different cash costs ranging from $120 to $230. They will halt production on the higher cost mines as soon as the price they recieve for the product is lower then the cash cost. Unfortunately they will be losing money way before that, as total cost includes fixed costs. Producers will happily cover their hedges with the lower cost mines. If production from those mines is not enough, hey Economics 101! price has to go up.

On above ground gold
Governments have been dumping their reserves by the tons for years, and still the '99 low held. I will calculate the reserves vs yearly production and we'll argue better with the facts in front of us.

On the effects of worldwide depression
Industrial and ornamental demand will probably drop, but monetary demand will skyrocket as soon as the Dollar will lose some ground. Also when rates on currencies drop to depression levels, most shorts on Gold will have to cover.
Bot 1st Aug Gold contract for 266.0 (I dumped my position last week at 272-275). Looking to add around 262.5

The '99 low held for one more session ;->

Good trading

ATG
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