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

To: kayco who wrote (62691)	1/4/2009 9:08:45 AM
From: E. Charters	Respond to of 78426

I think the far greater part is gold will stay good in deflation as it did in the last depression. It was not entirely because of fixing that gold attained its higher price in 1934. It was higher on the London market, falling slightly in 1932, and then climbing as the US bought gold before fixing. You can view it as all artificial, but the point is the deflationary environment supported a high gold price, because it is money/gold that is in demand at this time. What this means is gold should stay good. And gold mines and any industry running on costs, should improve in deflation, even given the much rougher financial market. When the market comes back it all depends at that time on gold price as to how gold and gold share markets will prosper. I think there will be a lift for all boats on that tide, but over say, ten years, the inflationary cycle will hurt mines, but not exploration prospects as people seek to protect their money from inflation. It is a trade off between banks, bonds, and shares in in-flatory cycle, but higher bond yields benefit the miner as he can debt finance. EC<:-}