Discussion forum for those
who love to stack precious metals
You are not logged in.
Bering Sea Gold, Gold Rush, Yukon Gold etc etc . . . . will these miners be unable to economically mine gold with prices now about USD1,400? I've seen varying assessments that $1,200 is the break even price for an average small miner like some of these are. I suppose therefore half will make a profit (above $1,400) and half will make a loss (below $1,400). Interesting to see how it plays out.
This is a very good question.
Since a year or so, I saw on Discovery Channel show after show about gold mining popping up. All small companies, upto even individuals. Mining gold in revisited old mine locations.
In iced rocks.
Even from a small boat on bottom of the sea, as a diver with a sucking tube.
This all is, in todays terms, extremely inefficient. It's a big wonder that they can be profitable in the 1st place, in todays huge mining machines/industrial competition/environment.
The higher price made it easier to make a profit, and thus allowed inefficient/small scale production to revive. If the high price is dumped away by selling the stocks of whose buying caused the high price, then it's logical to see these poor mining methods to again disappear.
And this applies to many others out there. All the new dealers since 2008. Less money in gold means a lower average profit per dealer. The first that disappears is the less efficient small scale ones.
The question then is, for how long?
In order to get out of a crisis, the producing population part has to manage to increase/maintain their output with again shrinking resource usage, more efficiency, larger scale operation, and so on.
The last half century tilted that to near complete automatisation, machines of thousands ton, and worldscale operation.
Without repeating this, depression is next.
Past depressions lasted the periods that the producing population part needed to finally find ways. For ex, the 1930 depression was overcame with the technology and production improvements related to world war 2.
Is such a large leap forward still possible from todays point?
If not, it will look just like in the 1973-1987 period, but with no get out and the rest of the story being an economical detoriation upto the point that machines/devices were cannibalized into the void and we need to burn whatever to just have light.
Because that is what to expect with central planning that refuses to do something about themselves.
Then you will end up with what you have where you live, with nobody to call to defend it.
I found today about the existence of a book that appears very interesting, since it covers centuries of crises/depressions, digging for the fundamental mechanism behind it.
"This Time is Different: Eight Centuries of Financial Folly. Princeton University Press"
It is said to make one thing extremely clear: Times are NEVER different. The very reason for return, and thus cycles, into eternity. Every cycle being an undertable war between organized laziness and market, ending in nothing left to steal and a zero-crossing that finally wipes out the organized laziness.
It may greatly improve insight on the superlevel, and allow to stick time spans to next stages, as to find out 1) if they are in your time horizon, and 2) how far away.
Silver won't save you if you act as clueless and careless as with your bank account.
Get in- not disinformed. Last is easiest, visit www.zerohedge.com & Co and hurry to their bullion shops.
Futures: http://forums.silverstackers.com/topic- … ilver.html #9
Central Banks inflict you less gold and fiat: http://forums.silverstackers.com/topic- … tners.html #19