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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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To: Claude Cormier who wrote (63769)2/26/2009 3:50:21 PM
From: Tommaso  Read Replies (1) of 78407
 
The short term moves in gold surprise and baffle me. I think they are mostly "random walk"--the unpredictable outcome of a a lot of simultaneous decisions by thousands of people.

But when I look at the monetary data for the United States and elsewhere, what I see is a exaggerated replay of what happened about 1971. The United States has been wasting immense resources on GWB's Iraq adventure; has been borrowing from other countries (esp. China and Japan, as we all know) at a rate that would have seemed unimaginable a few years ago; and is now now increasing the money supply at a rate not seen since the Revolutionary War--not even in the Civil War.

And what that all spells is very serious and inevitable inflation. And the classic refuge from inflation is gold. And I consider myself a classicist.

So I am going to sit tight and wait for what I consider inevitable.

By the way, my studies of the last few days lead me to believe that is all this "stimulus" (inflation) does succeeed in causing increased economic activity, platinum demand will pick up and investments in platinum may outstrip gold. I did not realize until the last couple of days that Impala (IMPUY) pays out most of its profits in dividends. The dividend will be cut until the metal recovers, I imagine, but it is currently on the order of 12%. You just don't get that kind of return from any North American precious metals miner that I am aware of.
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