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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: croesus1111 who wrote (29021)	3/21/2005 7:57:52 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

This is an important piece, illustrating the Train Wreck that that has occurred in mining and extraction enterprises. The juniors (gold not base metals) play is tied to several relationships that I feel will improve: gold to energy, steel, materials and other input goods. The USD to the SA Rand is another secondary play (GBN and ANO). In otherwords capex and operating costs must improve relative to POG (price of gold). I feel junior golds (well selected) will be a big beneficiary of the China Bust, that's why I hold them, at least at current valuations. I see them as China Bust plays more than anything else. Others will figure that out in time. The other effect that no one has really figured out is that a China Bust will result in a global supply break in finished goods. So the effect will be a bit of a break in commodities, and material prices (loosely the PPI), but much higher CPI ()(the real "Wal Mart" CPI, not that one using rental equivilents as 40% of it's basis). () we are going to see tough yoy CPI comparisons through mid-year that will mask this. CI has a chart on this that perhaps Ild could post. I expect 2H CPI numbers to be shockers however.