Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: jackjc who wrote (18040)	8/11/2006 1:39:08 AM
From: koan	Read Replies (2) \| Respond to of 78412

That was a good post jack. Yes, that is how I see it and I can even be presumptiousness enough to say onepath sees it that was too. I have read lots of his posts and he is into the new paradigm theory-lol. And, he is good company to have. I always think of marcos and onepath if we were hiking in the high Sierra, they would be great company and guys that could hold there own and do what is needed. Yes, China, I know people bakc from China and they say what you said. In fact I am selling a womens house right now who moved to china to open a tour company. Real smart women! I am pretty sure about this metals market strength jack? I htink it is a monster secular bull market. I agree with Kaiser. He is so smart!

To: jackjc who wrote (18040)	8/11/2006 8:01:11 AM
From: Mr. Aloha	Respond to of 78412

Yes, Roulston seems to get more bullish on base metals every time he visits China. Here's what he said last month about this "cyclical bears vs. structural bullss" debate: Message 22693937 "Nobody expects today's base metal prices to continue rising forever. But, the long-term forecasts that are being used are totally ludicrous. The big brokerage firms, the engineering firms, even the mining companies are showing long term metal prices that start well below the current levels and then drop back to so-called long term averages within about two years. I keep asking the people who are working with those figures: What are the new mines that will come into production in two years that will bring the prices down? The answer, from as many knowledgeable mining industry people as I have been able to put the question to its always the same: There are no big new mines that will come into production in that time frame. But, they argue, metal prices have always gone in cycles, and therefore they are imposing the historic cycles on the present situation. The last cycle ended when economic growth slowed at the same time that several big new mines came into production. At that time, there was not a massive horde of wealth in the hands of oil exporting nations that we have now with $70 oil. China was not a factor. India was not a factor. While analysts use the so-called long term averages for metal prices, the forecasters insist on using today’s energy price, based on $70 oil, for the life of the projects. Not too many new mines look attractive with costs at the present level and revenues based on historical figures. We will never see those historical prices again. Those historic figures are measured in dollars that had an entirely different value than today or in the future. In other words, even if demand for metals suddenly evaporated and an abundance of new mines started producing, the equilibrium in the markets would come at metal prices that reflect the fact that the dollar is worth substantially less now than it was a decade ago or two decades ago. The handful of smaller mines presently under development won't come near to offsetting the older mines that will be shutting down as they run out of ore. The biggest copper mine in the world, Freeport’s Grasberg mine in Indonesia, has just seen yet another reduction in forecast production. Instead of building new mines, the mining industry remains totally obsessed with buying, acquiring, merging, consolidating and otherwise shuffling the ownership of existing production. It takes many years to bring new mines into production and there are nowhere near enough new development projects under construction, or anywhere near construction, to come even close to offsetting depleted mines, much less catch up to rising demand. The demand side of the metals markets is gaining strength. Copper's recent run to $4 was driven by speculators. After many of those speculators were washed out of the market, the current strength is coming from the fundamental demand for metals. Many investors remain fearful of a sharp decline in the US economy. Certainly, the US economy has serious problems, including consumer debt, government debt, the on-going government budget deficit and the enormous trade deficit. That situation is clearly unsustainable. There is no question that there must be a readjustment. I dare say that many investors seem to be missing the point that a process of adjustment has been happening for years… and will continue in a way that results in a gradual realignment of the US economy with the rest of the world. That process of adjustment is based on the fact that the value of the US dollar continues to erode, having already lost 30 or 40% of its value against other major world currencies. The dollar has lost a substantially greater value when measured against hard assets, such as gold. Many Americans, who are living comfortably within their own borders, are not even aware of how much of their wealth they have already given away. Those people will have a rude awakening if they ever venture abroad. Many places in the world now have a level of wealth and grandeur that makes American cities look old and tired – and comparatively cheap. Nevertheless, the US remains a great country. Brilliant business minds and innovators and entrepreneurs will continue to overcome the best efforts of the government to wreck what remains the most powerful nation in the world. In spite of years of forecasts by economists and would be economists about the imminent demise of the US economy, the country continues to enjoy strong growth. The economy will likely slow from this level, yet only a handful are predicting a situation as bad as zero economic growth. Those dire predictions, for the most part, are coming from the same commentators who have been making the same predictions for at least as long as the nine years that I have been following the markets as a newsletter writer. (Those predictions of doom and gloom likely go back even further, but in my previous life as an exploration company president, I wasn't following the market commentators.) In short, even if a disaster case were to unfold, and the US economy were to plunge to zero economic growth, then America would merely consume the same amount of metals as in the previous year."