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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (10597)	11/19/2001 12:05:07 PM
From: kodiak_bull	Read Replies (1) \| Respond to of 23153

Tommaso: Thank you for you reasoned reply. Actually I found that article well written and well reasoned, but it is always valuable to question certain assumptions the author may be making, explicitly or implicity. In this case, it was these words, "supply deficit" and "demand increases" which struck me as having not been supported in the text: "that gold and silver, which have been running a supply deficit for over a decade, would suffer from such low prices. You do not find this phenomenon in any other commodity. . . . This condition does not exist in the gold and silver markets. Both continue to run even greater supply deficits and the price continues to languish. It isn’t economically feasible to do this in the long run. When you can’t mine a mineral at a profit, two things will happen. If you continue to mine, you will run out of money and close down. Or, second, what can’t be done profitably is shut down. Both scenarios are happening to today's mining industry. Unprofitable mines are being shut down, abandoned, or sold off. Exploration is being scuttled and mining companies are either being taken over or are going out of business as the industry consolidates. All of this shrinks the supply of gold and silver; while the demand increases year after year." As I said, the text simply posits supply deficits and demand increases without supporting either concept. It strikes me that if gold mines are being shut down as unprofitable, there must be falling demand, not rising demand. The conspiracy explanation was that the Central Banks were conspiring via bullion sales to keep the price of gold down artificially, but no one can defy the laws of economics for very long. George Soros broke the Bank of England, savvy players should be able, given the times we live in, to pull back the seven veils from the conspiracy and make a decent price in and profit from gold. The only possible explanation, imho, must be that there is no supply deficit and there is no rising demand for actual gold at this time. It's a puzzlement. Kb