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

To: Malyshek who wrote (21478)	9/20/2006 12:00:43 AM
From: John McCarthy	Respond to of 78419

Hi Malyshek I know I am late responding and I apologize. First off, don't forget how we got started. I asked a question about gold in the USA and you gave me a terrific answer. So thats where we are. Also on your post and the subsequent replies there was a mild reference to the dollar. Your current post which included that article set the context for what your posted with regard to the dollar. Which leads (perhaps) to the question: What OTHER context could the dollar be interpreted as. I'm not certain (think of me as a dim lightbulb) but it could be along these lines. (a) You and I are in partnership in a goldmine in Nevada. The name of the mine is "To the moon Alice" (b) Your the main engineer and finance guy of the mine and I'm the dirt digger. (c) I approach you and say Mal - we gotta buy a bigger tractor thingie ..... This is important .... the tractor we gotta buy is manufactured in Germany. And the german currency is the EURO. (d) You say OK John we will buy it. How much does it cost? I do a google and find out that it costs 1 million EURO's. Well how many USA dollars is 1 million EURO'S. We look in the paper and the exchange rate is: 1 USA dollar = 1 EURO ..... (e) We RUN to the safe, open it, look at our cash and go yippe .... we got $2 million USA dollars in the safe. (f) We order the tractor thingie on google, send them $1 million USA dollars and the tractor comes the NEXT DAY <G> (I own a company that only wishes that could get a machine thingie that quick) (g) Lets summarize we got (1) 1 new trackor thingie (2) 1 million USA dollars left in the bank .... (h) You being a slick finance guy tell me the next day that you hood-winked the auditors and talked them into doing a 5 year straight-line depreciation method on the new trackor-thingie. As such 1 million / 5 = $200,000 ..... we will only have to book $200,000 of depreciation expense per year to our P&L. Neat .... Now the story gets interesting (i) Alan Greenspan is in Paris relaxing and going thru his papers. He opens a folder called - "Remember to tell Ben about this". He realizes he was in such a hurry to leave that he FORGOT to tell Ben. He opens up the folder and says .... "Geez" He picks up the phone and calls Ben. Alan: Hi Ben its Al. Ben: Hi Al. How are things? Alan: Ben, ah, look .... I forgot to tell you something. One of the pentium 3 computers we use to track USA debt Well, the modem on it was broke for awhile so we stopped using it. Just before I left we got it working again. This computer was used to track part of the USA debt. As it turns out Ben, the real USA debt is closer to $18 trillion versus the $9 trillion we have been reporting which means .... USA debt as a % of GDP is closer to 16% versus the 7% we have been reporting to the world. Ah Ben, company just came ... so I gotta go. Good luck. Your doing a great job. Hang in there tiger! (j) The next day Ben tells the world that the USA debt is much higher than we have been reporting. (as describe above) (k) The dollar immediately SINKS. (l) The very next day I come to you and say Mal. I found another gold deposit. Its huge - BUT - we are gonna have to buy another tractor thingie. Recall - two days ago we could buy 1 tractor thingie for $ 1million dollars because the exchange rate was 1 USA dollar = 1 Euro and the cost of the trackor thingie is 1 million Euros .... We run to google to see what the tractor costs TODAY. Phew - it still ONLY COSTS 1 MILLION EUROS .... But then you, being the finance guy, look up the exchange rates AFTER BEN ANNOUNCED TO THE WORLD THE HIGHER USA DEBT .... the exchange rate is 2 USA DOLLARS = 1 EURO that means we will now need 2 million USA dollars to equal 1 million EUROS ...... (m) We both look at each other because we remember we only HAD 1 million left in the bank .... (n) No problem ... we goto Las Vegas and win the other million that we need .... (o) Lets summarize (1) We need a 2nd tractor (2) The price of the tractor thingie has NOT changed. (3) But because of the CHANGE in currency rate between the DOLLAR and EURO (that is the dollar has dropped) we now have to pay $2 million for the 2nd tractor. (p) The next day you come up to me and say "Dang it John" I got the auditors to agree to a 5 year straight-line depreciation method on the 2nd tractor but the annual expense for that 2nd tractor is 2,000,000 / 5 = $400,000 per year IOW - in the course of 2 days our COSTS have DOUBLED simply because of a WEAK DOLLAR. In closing ..... I know you know all this stuff ... so I posted the above for my benefit ..... because if I don't I will forget it by tomorrow ... I hope you will continue to post on this board as you see fit ...... and lurk it .. I prefer to lurk but every now and then I get a bug up my ass to post .... this ain't a good board ... its a great board .... you'll have to trust me ... there ain't 1 or 2 good posters - the number is closer to 20 to 30 good posters. the Off Topic posts may confuse you - its really very simply ..... many of the posters here know their shit so well that it would be impossible to just focus on one subject matter .... mining ... hour after hour after hour ..... smart minds seek knowledge .... opinions, and primarily growth .... and thats really succintly sums of the whys and wherefores with respect to the off topic stuff ... awhile back I posted about a minor medical thingie problem in minutes I got no less than 4 posts about yada .. yada .. yado .... none of these posters pounded they table; rather they just pointed out their thinking about product so and so .... I was very grateful lastly, should you happen to know Ben or any of the boys and girls on the Fed .... would you please tell them to stop dicking around with the price of gold Christ - am I full of hot air or what? <g> regards, John