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To: yard_man who wrote (145674)	1/23/2002 5:30:14 PM
From: Tommaso	Read Replies (2) \| Respond to of 436258

No, my point is that the inflation-adjusted (against everything else) cost of producing gold has come steadily down. When the dollar was exchangeable at $20 per ounce, producers were making money, though not a whole lot. When the price of gold went overnight to $35, companies like old Homestake suddenly were enormously more profitable. Since then, labor costs for the most menial jobs have gone from less than 50 cents an hour to well over $5.00, but the cost of producing gold has dropped on an inflation-adjusted basis by 10% or more. There are many ways of figuring this. I just go on annual reports of mining companies, as I understand them. I did not say that the gold production price was static. Indeed, it is declining against many other costs. The "floor" is slowly dropping. The reason is powerful machinery and heap leaching. I readily admit that a financial panic could double the price of gold and that is why I own gold and speculate on gold mining shares. But even more than with energy, such a doubling would spur production, and unlike oil and gas that gets burned up, the gold never goes away. But I guess the subject of gold is like the subject of gun control. You seem to be expected either to be for it or against it. Rational discussion is not acceptable. Like Earlie's friend in Phoenix, I own quite an arsenal of weapons and some ammunition, but I don't think going around with a loaded pistol is a good idea under present conditions. Likewise I own gold but I try not to entertain unrealistic expectations about it.