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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED
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To: Cactus Jack who wrote (49361)4/2/2002 1:57:35 PM
From: Jim Willie CB  Read Replies (1) of 65232
 
glad to see you weigh in, JP, esp on gold

if gold explodes, it wont be mild
compared to late 1970's...
annual production supply is much smaller
demand is much bigger
India and China are now participants
and Japanese are desperately on a nonstop buying binge

800 gold peak in 1980 is now constant dollared to 1600
but now has a critical additional difference

since 1995 gold has been suppressed, with heavy damage done to mining industry
many shutdowns, many partial cutbacks, some consolidation
it would take (from what I read) between 6-18 months to bring marginal mines into production

a shortage crisis is EXACTLY what I expect
such crises do not sit around and wait for production to catch up
"no paper price would be adequate to fetch new silver"
that is what I read

but still my two central buy signals are powerful
near zero real rate of return on shorterm bonds
this leads bonholders into gold as investment

and gold mining hedged firms are now buying on world market
what incredible irony !!!
hedging is a double-edged sword
it finances with subsidy all mines operating at a loss
so future sales at higher prices are inhibited
it shows poor management decisionmaking
later, when gold reverses, these fools are buyers
incredible, GOLD MINING FIRMS ARE BUYERS OF GOLD
the bull signals are deafening loud
but most are lost on the tone-deaf tech-obsessed public

gold over 2000
silver over 150
expect it
sounds nuts
but how about Naz 5000 ???
how about 10-yr TNote yield under 4.8%
in 1998, each sounded worse than ludicrous
/ jim
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