Are Gold and Silver gonna keep going down?

[drdarrin@sbcglobal.net]

I agree...Gold to $1,200 and Silver to $20...possibly lower over the next month or two. I see a bottom at the end of May early June.

Crystal balls are great, aren't they?

[Armando de la Guerra]

smashycrashy doesn't seem to understand that dozens of countries have hyperinflated themselves into collapse simply by printing too much worthless fiat currency. The U.S. is soon to join the club.

Those who do not learn from history are doomed to repeat it.

[sfbay]

The worlds largest gold mining country, China, produces 400 tonnes a year with slave labor and communist rule, yet they choose to purchase 600 tonnes more of over priced bullion on the world market at a huge premium. Gee I wonder why they are so foolish?

Smashy, you could sell them some at $250 an ounce?

With all their Ghost cities and huge debt...


they need a lot of help....










.

[smashycrashy]

The worlds largest gold mining country, China, produces 400 tonnes a year with slave labor and communist rule, yet they choose to purchase 600 tonnes more of over priced bullion on the world market at a huge premium. Gee I wonder why they are so foolish?

Are they buying coins for investment or jewellery for consumption? (hint: it's jewellery)

It's a reflection of a growing middle and upper class trying to be d-bags and display wealth. Not a SHTF gold is the ultimate currency play.

Now if you want to make a case regarding china growing d-bag population as supportive for the price of gold, you have could have a case.. but not a very compelling one.

Smashy, you could sell them some at $250 an ounce?

Did you ask yourself how they were supplying 100 million troy ounces when a troy ounce was $250? That wasn't very long ago.......

Fact is there are a lot of overleveraged miners in the world who made a bunch of decisions that look smart at $1900 an ounce.. their equity (hint: Don't hold their stocks) and bond holders (another hint: Don't hold their bonds) will be paying for that. When the smoke clears you'll see even the cash cost drop as the industry is consolidated and operators of scale take over small scale mines. You'll still be wondering how they could possibly be producing at such a "low" price.

[smashycrashy]

smashycrashy doesn't seem to understand that dozens of countries have hyperinflated themselves into collapse simply by printing too much worthless fiat currency.

Of any major country that you claim has hyperinflated themselves.. go get a wheelbarrow full of their currency. Should be a trivial exercise as their currency is worthless.

You'll be unable to and you should ask yourself why...

The U.S. is soon to join the club.

Same as above...

Those who do not learn from history are doomed to repeat it.

You're right... You might want to read your history books and learn some metrics to determine exactly where we are relative to that. Because I believe the mistake you're making lies there...

[cudakidd]

When Silver is say, $15.00 per ounce what would be the Mark up on Morgans? I don't mind circulated...

[sixoclockhold]

Are they buying coins for investment or jewellery for consumption? (hint: it's jewellery)

It's a reflection of a growing middle and upper class trying to be d-bags and display wealth. Not a SHTF gold is the ultimate currency play.

Now if you want to make a case regarding china growing d-bag population as supportive for the price of gold, you have could have a case.. but not a very compelling one.



Did you ask yourself how they were supplying 100 million troy ounces when a troy ounce was $250? That wasn't very long ago.......

Fact is there are a lot of overleveraged miners in the world who made a bunch of decisions that look smart at $1900 an ounce.. their equity (hint: Don't hold their stocks) and bond holders (another hint: Don't hold their bonds) will be paying for that. When the smoke clears you'll see even the cash cost drop as the industry is consolidated and operators of scale take over small scale mines. You'll still be wondering how they could possibly be producing at such a "low" price.

I did a little investigation as I don't think your theory holds much water. Consolidation has always been happening in the mining industry over the last 20 years. Everyone wants a get rich scheme and is willing to toss other peoples money at it.

I went back and looked at Barrick in 2000/2001, they were profitable at $340 gold price. They also had tremendous proven and probable reserves. They forward sold their reserves, thus gaining price appreciation. They ate companies who couldn't make the grade. BUT their property plant and equip has ballooned from those days almost 10 fold, from 3.9 bill to over 30 billion. I will let you figure out why but I am here to tell you, you cannot even think of having the same expenses managing small vs huge. Production costs, environmental costs, employment costs, merger & acquisition costs to name a few will be ever increasing on your bottom line.

Plus there is always a wealth effect in business. When businesses grow you can be damned sure the boys at the top go from lunch at Marie Calenders to having Kobe Beef and Ahi tuna flown in to their favorite watering hole. Nobody's driving Caddie's anymore, that's success.

I doubt there is one miner today who could survive at $250 gold for more than a few years without huge debt. I will conceed I did see one small mine that could produce an oz. at $30 in 2000 at Barrick. You can bet it was one helluva vein where even I could swing a pick and grab dee GOLD.

I think today you are mostly looking at 1 ton of dirt to crush and chemically extract 1 gram of gold. Don't injure yourself, workers comp claims are expensive. Have at it my brother, Gold is worth the price of admission imo.

[smashycrashy]

I did a little investigation as I don't think your theory holds much water.

You clearly didn't look very hard.

There is cash cost per ounce.

Lets say for a single mine that is $600

There is "all-in" cost per ounce..

Lets say that is $1200.

Many of the "all-in" cost can almost go to zero in bankruptcy.

What is more likely to happen is that all-in costs are reduced as the price lowers.. but they hit a limit on things like interest costs. Those will have to be defaulted and/or renegotiated. New equity (diluting existing shareholders) may be issued in lieu of payments, or just bondholders take haircuts because getting something is better then nothing.

I doubt there is one miner today who could survive at $250 gold for more than a few years without huge debt

Again, you clearly only look for facts that match your little world. For some mines gold is merely a by-product of doing business.

http://www.cnbc.com/id/41058173

There has been massive capital poured into gold mining and exploration.. not all those people who poured the money will be getting their money back (bondholders, shareholders, owners/management, suppliers)... that all cuts the cost of gold. Meanwhile the capital expenditures still have happened..

[Ripon83]

600 tones

The worlds largest gold mining country, China, produces 400 tonnes a year with slave labor and communist rule, yet they choose to purchase 600 tonnes more of over priced bullion on the world market at a huge premium. Gee I wonder why they are so foolish?

Smashy, you could sell them some at $250 an ounce?

Is about $20-25 billion in today's market. Their economy is annually about 12-15 trillion? This isn't even a sneeze fest. Maybe they buy it to keep the slaves fed?

[Ripon83]

Worn Coins

When Silver is say, $15.00 per ounce what would be the Mark up on Morgans? I don't mind circulated...

Pre 64 silver US coins are almost always a little worn and as such even loose a tiny sum of weight (silver). This is why you see companies putting up signs saying "buy gold / silver" and they pay 50/70% of the spot value. I have numerous times posted ads on craigslist offering to buy pre-64 silver coins for 80% of coinflation value and almost always have more sellers than I have cash - but then I never keep a lot of cash for that purpose. Still you can buy pre - 64 coins and morgans for probably 80-85% of bullion spot value if you try.

[sixoclockhold]

Is about $20-25 billion in today's market. Their economy is annually about 12-15 trillion? This isn't even a sneeze fest. Maybe they buy it to keep the slaves fed?

China's trade surplus with the US runs $25 billion monthly and could lock up all the worlds produced Gold for 1/3 of that per month. I don't expect them to take a loss on the reserves of Gold they have been accumulating these last several years. On any given day they can absorb everything and send Gold prices to the moon with little financial strain should they choose. It is a weapon of mass destruction for the dollar and a financial windfall once prices rise and they retain top world producer. The vaults being built in the east and purchased here are for a reason, to hold the WORLDS Gold !

Today it's said China is encouraging it's population to purchase Gold. With supplies the way they are it isn't going to take many months before you just can't get much without huge premiums. India is now back on board also as the Government is loosening Gold taxes and laws.

While we recently printed over 4 trillion in funny money, China printed 12 trillion. The flood of Yuan is coming and looks to be backed at least in part by Gold.

The real question in all this is whether China is going to be a partner in the Bankster heist or be the lone banker replacing the Fed.

[Ripon83]

Ok and please think

You just nailed it. China could drive the gold market place wild and double or triple its price.

Guess what else they can do - they can cut it in half by flooding the market with it too. Now why would they - just to buy more of course. So lets go back to your original China post - are they buyers or not?

Having a few ounces of SHTF is a good thing, having silver even better, but investing in this stuff is only going to get people hurt and encouraging people to invest in something to which they can't control or read a stock report on is silliness.

China's trade surplus with the US runs $25 billion monthly and could lock up all the worlds produced Gold for 1/3 of that per month. I don't expect them to take a loss on the reserves of Gold they have been accumulating these last several years. On any given day they can absorb everything and send Gold prices to the moon with little financial strain should they choose. It is a weapon of mass destruction for the dollar and a financial windfall once prices rise and they retain top world producer. The vaults being built in the east and purchased here are for a reason, to hold the WORLDS Gold !

Today it's said China is encouraging it's population to purchase Gold. With supplies the way they are it isn't going to take many months before you just can't get much without huge premiums. India is now back on board also as the Government is loosening Gold taxes and laws.

While we recently printed over 4 trillion in funny money, China printed 12 trillion. The flood of Yuan is coming and looks to be backed at least in part by Gold.

The real question in all this is whether China is going to be a partner in the Bankster heist or be the lone banker replacing the Fed.

[glockman19]

Ripon83's argument makes more sense. Think diamonds and DeBeers. They only have the value because supply is controlled. Release the true supply of diamonds and the price collapses to $100's from $1,000's a carat.
China could do more damage by dumping worthless dollars than dumping precious metals. Finally, we really don't know what internal Chineese gold production is.

[sixoclockhold]

Gold has always been a viable vehicle for investment portfolio's. The rewards out weight the risks.

The percentage one uses should be discussed with their investment counselor. No where have I ever heard that ammo should be treated as an investment vehicle and I don't recall ever being trained that diamonds were either.

I believe PM's are a vital part of one's preparedness in case of calamity.

[smashycrashy]

Gold has always been a viable vehicle for investment portfolio's. The rewards out weight the risks.

The rewards outweigh the risk below a certain price...

We are way above that price.

Buying PM's only makes sense if you buy below avg cash cost for all mines (it can stay below that price for very long periods of time)

In times when it goes ballistic because people are insane.. is the time to sell.. not buy.

This is still a fantastic selling opportunity!