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Gold/Mining/Energy : Pacific Rim Mining V.PFG -- Ignore unavailable to you. Want to Upgrade?

To: Quinn who wrote (9468)	4/9/1998 10:33:00 PM
From: Bill Jackson	Read Replies (1) \| Respond to of 14627

An ill eagle is a sick bird. Peter Munk is a slick bird. Recall the tin monopoly. They did that, bought up tin and made the market higher than it would normally be. In response they found more tin, and more tin, and tin use fell as the replaced tinned cans with assorted plastics and even internal varnishes on the can. It worked for many years and then the buyers ran out of $$ to buy tin. The workers needed to be paid and so a secondary spot market emerged, shortly after that the market crashed. Now with gold it would work up to about $400-450 per ounce. If it went higher and stayed high many marginal areas would make gold. There are 5 billion tons of gold tailings with from .02 opt to .08 opt near all the old gold mines all over the world. At $450 per ton .02 = $9 per ton and .08 =$36 per ton. These are tailings already ground fine enough to pump and the average would be around .05 =$23 per ton. 5 billion tons = $115 billion $ worth =250 million ounces. Gold use will increase and never crater like tin from substitution(unless it goes to $1000+) and so if the central banks have 33 years production in storage and we are 1/3 years production short of useage, then a 100 year pact will allow us to buy all the central banks gold at about the rate of shortfall now.(we can predict with a rise in useage the pact might run for 40-50 years until the CB hoardes are gone) Now some central banks will never sell, and some will sell only a part. So some lesser time, like 10-20 would be the lifetime of the pact. Then the CBs would not sell any more. If the CBs stopped sales instantly the price would run back up to $400 and if they then metered it out to the Munk group at 1/3rd years production we would see stability at $400, and the Munk group could keep it stable and allow an upward creep of an average of GNP growth, in the 1-3% overall area, or $4-12 per year. All the CBs would have to pledge to stabilize the stuff and sell only via that group. "Goldpec"?? as in OPEC. Since it is national governments the US and UK and Canada and a few more would refuse to go along. However collectively they have a finite resource, far more finite than Oil, and so the fllod fo cheap oil can never be replaced by a flood of cheap gold. You need to watch for manipulation attacks via market instruments in the futures markets. So after a while the 'goldpec' group would ammass a hoard, and as long as they had $ they could do it forever. They can get all the money they want, all they have to do is pay interest on it. If the interst burden gets too great they can default as the gold pays no interst and all money comes from gold sales and so a critical poin can be made by speculators who sell so much gold that the goldpec group has to borrow so much they cannot pay the interst and default. Just a theoretical quibble, as they would have the gold and such a thing would force up the price as the speculators would have to buy it to dump on the group. Bill