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Gold/Mining/Energy : Gold's Six Month Base Near Completion
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To: Bill Murphy who wrote (13)5/18/1998 5:42:00 PM
From: Crimson Ghost   of 94
 
Bill; It is becoming increasingly apparent (to me anyway) that one of the big factors holding down the gold price is the structure of the mining industry. Far too many minuscule and financially weak producers. These outfits must borrow heavily and banks often will not lend unless they hedge.

If the industry radically restructures leaving a relatively small number of financially secure players that do not have to hedge at the behest of lenders -- the outlook for POG would greatly improve. This goes double if the major players were financially strong enough to cut production sharply when prices fell. Unless the industry gets the message and takes drastic action like the banks have done -- no telling how long the short sellers and their CB friends will continue to beat the miners brains out. Hard to believe that an industry could be managed so poorly in this day and age.
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