John:
It is becoming clearer that the gold companies in addition to selling gold forward, are now engaged in selling gold short thru the cb leasing program and investing the proceeds into interest bearing instruments. If this is the case, Barrick and others have a vested interest in keeping the price of gold low.
Unfortunately, the earnings derived from these activities have a negative effect on the price of the stock, while at the same time improving the companies profits. Not only are the producers not representing their true owners, but they have become agents of the central banks to keep gold range. Barrick will prevail. They actively are acquiring the low cost gold properties of the world, increasing their reserves and lowering their overall cost of production to below 200.00 an ounce. By driving the smaller producers out of business, getting new reserves on the cheap, increasing production, and their hedging programs, Barrick's agenda is clear, become the largest gold company in the world. Normally, the shareholder would benefit from an agressive business model like this. Because of the havoc this is playing in the gold market, the shareholder is the loser, and the company becomes the beneficiary.
Sell the companies, and buy the gold when it gets cheap enough, or get out of the market. It is one thing to fight the central banks. To fight an alliance of the banks and the producers makes for a very poor risk reward ratio.
Ken |
