Mining's Fimbul Winter

Ok, ok already.  You want to talk about gold.  So here is some late night thoughts on the mining sector for you insomniacs.  Feel free to talk about anything you want about gold and silver but I'm going to talk about the miners.  Sentiment is at an all time low and I gotz a feeling things could start turning around soon.  I'm not predicting, I'm just saying. 

In the Norse mythology, the world experiences a devastating winter that last three years without any sign of light or life.   Investors in gold and silver miners are in the midst of their own fimbul winter as we continue to experience a cyclical decline, with occasional glimmers of hope. 

As you all know,  Barrick and Kinross are closing properties and curbing production, cutting dividends, and writing off billion dollars of loss.  Many small and mid tier miners are laying off workers and selling higher-cost operations. We are now experiencing the beginnings of a very painful consolidation period that has been talked about and anticipated for the previous three years.  Is anybody surprised?  Shouldn't be. 

Unlike the 2008 crash, where speculative money quickly rushed back into the sector along with generous portions of liquidity from Washington, QE3 has not provided the impetus for investors to run back into the sector.    

Those who have been investing in the miners for any time, remember the previous bust cycle, 1997-2002, when nobody cared about the junior market as investors were focused on high tech and large broader market shares just as many investors are finding more appeal in riding the trend in the broader equity markets over focusing on severely beaten resource stocks.    

However, those who remained focused on the resource mining sector during the dark nights, continued to seek out economic deposits through out the decline found themselves well positioned when the cycle turned around.

Barrick Gold

Shed no tears for this bunch of scoundrels.   Barrick has a long history as the bad guy.   Barrick and it's bullion bank buddy JPM, were sued in a combined lawsuit of actively manipulating the price of gold and making $2 billion in short selling for profits.  They have been called the "Darth Vader" of miners with a long nefarious history of hostile take-overs, and the forerunner of hedging it's production at the expense of it's investors and other miners.

Gold miners protect against falling gold prices by agreeing to sell gold at a fixed price in the future to protect themselves against falling prices.  Barrick like many other producers began de-hedging their production back in 2009 to profit from rising gold prices.

According to Zerohedge back in early June,  Barrick lost $6 billion of shareholder equity hedging it's production prior to 2009.   Yamana, Kinross, Newmont and Goldcorp also did no favors for their investors during the 2001 to 2009 upswing in the price of gold.   This is why I've rarely plopped my money into big producers and have opted for more pure gold plays in the junior's through the discovery process. 

There is as much disagreement about the effect of miners hedging their supplies on the price of gold as there is the meaning of GOFO and backwardation means for short terms gold prices.     I won't be resolving that debate here in this article. Feel free to go at it.  

You might consider going back to ZeroHedges article written in June on the great hedging debate http://www.zerohedge.com/contributed/2013-06-27/selling-low-and-buying-high-hedging-gold-miners   Briefly:  Tyler Durden at Zerohedge makes the case that even if all the gold miners in the world hedged all their production that it would do very little to increase the stock piles in existence. Gold mining production is less than 2% of the annual stock piles of gold in existence.  Others contend that hedging future productions is rarely conducive to higher future prices.  

As Durden points also points out, that you might imagine that the world's largest gold producer with a board of directors that reads like the characters out of a Dan Brown novel would have employed a hedging strategy that would accommodate both advancing prices in gold as well as the declining cycles. Most of you saw this coming, why didn't the gold producers? 

History Repeats.  A Looong History

The cycle we are experiencing in the mining sector is as old as the hills.    If we consider the history of mining over the centuries especially after the introduction of fiat currencies, gold mining has more often than not been a very unprofitable endeavor.  And anybody that has endeavored to understand the nature of junior mining discovery realizes that the odds of an economic grade discovery are extremely low.

John Kaiser made a predictions that we would see around 500 juniors go into extinction. And even more with very little capital to withstand the consolidation phase.

In addition, we are experiencing factors that have historically been bearish indicators. Alexander Del Mar in his book "Money and Civilization" which you can download for free in Google books writes

"Previous to the introduction of paper notes for money the history of prices was one of irregular periodical rises, between which were long intervals of gradual falls, the falls being due to the cumulative stocks and therefore diminishing value of coins of the precious metals, and the rises to new and systematic resorts to mining."  

The same factors that brought mining operations to their knees in previous cycles have returned where we are seeing an under-valuation of gold and silver in dollar denominated terms and paper notes flood the market. Del  Mar points to 3 basic reasons why mining became unprofitable:

1) Over drilling and exploration beyond the limits of profit 

2.)  Periods of gold inflation where large quantities of gold were discovered or plundered and put into the market suddenly.   I'd point to the period when the Spanish plundering of Incan gold.  And this is where I might diverge with Zerohedge in that there have been documented times in history where the market didn't absorb a glut in gold supply.  However, this little bullet point is a topic of multiple posts.  

3.) Gold and metal prices were manipulated through the issuing of paper notes, credit systems, military conquest and slavery.

Another lesson we learn from Del Mar was a feature of the 1970's bull market. That significant profits in mining do not come until there is a significant inverse relationship between paper money and the price of gold. In the 1970's junior bull market, inflation was a serious concern as we entered a state 2 inflation. It was not until gold reached it's peak levels when the bull market in the junior mining sector began it's historic run. Through fed's intervention and capping of the flow of liquidity into the market, the bull market came to an end but not until investors reaped unprecedented profits.

What makes this bear phase different from the rest? Declining grades of deposits, and an extreme dirth of mines that are positioned to withstand financially the consolidation phase and an incredible demand for the metals by consumers and central banks that screams any sort of discovery in the junior minings could potentially turn into a speculative fervor.

We have yet to see the beginning of the next discovery phrase. Rick Rule, among others, have been talking quite a bit about the 9 year discovery phase. The theory is it takes 9 years of working an area before miners in that area begin seeing discovery. Well, we are in year 10 and there is nothing that says the next discovery phase will be a 10 or 11 year cycle. Once it begins we will certainly know because discovery has a strange way of coming in groups.

Let's examine the flip side of the coin and some of the factors historically that have been attributed to bull markets. Whenever the value of the metals exceeded the value of money astonishing wealth was created as result of mining discovery especially when gold or silver were coin of the realm.    This fact alone has sustained an industry through the rise and fall of civilizations where abandoned mines would be reopened and mined for resources that were unrecoverable whether for geological challenges,  war or suppression of metal prices.  

An important point that Del Mar also makes is known resources in the ground will be mined despite the valuation of the metal even if the mine must change ownership and the price of the metals is suppressed by banks manipulating the prices of the metals.  Often this is done through military aggression and slavery but right now I believe we are beginning to see the beginning of the acquisition phase.

The Red Bull In The Mining Sector

On Friday, reports came out that China's inflation only rose 2.7% lower than market expectations. The reports paint a rosey picture of a country that is experiencing a slow down .  Well you can trust the official numbers from the ChiComms just as much as you can trust the words flapping out of Bernanke's mouth. Many analysts including Kyle Bass has China coming in for a hard landing and many questioning whether China has the goods to take away the title of world dominance from the Western Anglo elite.

The issue is not whether or not China is a model for fiscal restraint and healthy monetary policy. It's no secret that China operates under a tolitarian political regime and currently sports a very loose lending policy. A debtor nation is a debtor nation by any other name would smell as fusty. However, China has discovered the wonders of capitalism, economic trade and now have become the masters of bargain hunting especially in the resource sector.

It seems China is using Del Mar's historical survey of mining as a playbook. Norton Gold, owned by China mining giant Zinjin announced that it would be seeking to double it's gold output and seek out acquisitions. Folks, those closed mining fields won't be inactive too long if the Chinese have their way. 

http://articles.chicagotribune.com/2013-08-04/business/sns-rt-us-australia-mining-zijin-20130804_1_barrick-gold-gold-production-australian-miners

Rio Tinto is reporting a 71% decline in profits in the 1st half much of it attributed to China's slowdown. Well clearly, China's consumption might have experienced a slow down, but their response to Rio Tinto's lagging profits was going shopping back in late July. China Molybdenum offered Rio Tino $820 million for a majority stake in one of Rio Tinto's Australian Copper and gold fields.

http://online.wsj.com/article/SB10001424127887324809004578634572567640236.html

http://www.nytimes.com/2013/07/30/business/global/rio-tinto-agrees-to-sell-copper-mine-to-chinese-company.html?_r=0

Western media as all but called the bull market in gold and silver over. Recently, Forbes ran an article about the dismal prospects of investing in the mining sector. http://www.forbes.com/sites/ycharts/2013/08/07/buy-the-miners-a-gold-myth-debunked/

With the headlines screaming that the miners are bleeding and more consolidation, my guess is investors who have exited the mining sector will be waiting for some kind of extended upward trend before deploying any amount of reasonable cash back into the sector.  However, it seems that the Chinese are not too concerned about the re-establishment of a trend.  Larry Roulston sent out a mining update and said that we could see some miners’s start popping while investors are waiting for a trend.  Well, it’s a good thought although not sure it’s so but if you are a bargain hunter, you should be having a party.

69 Comments

Stock_Canines's picture

First - on the outside

How about that 

Silverivalist's picture

Secund!

Darn, thought I had my first furst!

Now to go back and read the article.

¤'s picture

Puck: Now let the lion beware! ~ 1894

Thanks GL....

I'm going to make this my last read of the night as I'm about to crash on the couch shortly with a late snack and my tablet.

I definitely want to get in the miners a little bit and you could just see about 2 weeks ago they showed signs of turning off their bottoms. I wish I could've got in then but I still hold  a bunch of SLW calls so I remain hopeful.

29055v.jpg

         Title: Now let the lion beware! 

  • Creator(s): , Louis, 1866-1905, artist
  • Date Created/Published: N.Y. : Published by Keppler & Schwarzmann, 1894 November 14
  • Summary: Print shows Henry C. Lodge playing a horn labeled "Discrimination Against England", Benjamin Harrison playing cymbals labeled "Bimetallic Standard", Thomas B. Reed beating a tub labeled "Bimetallism" with a club labeled "Speech", and Whitelaw Reid playing a trumpet and holding a paper labeled "Tribune"; they are on a wharf labeled "U.S." and raising a bimetallic clamor with silver and gold instruments, against the British Lion who is smugly reclining on a bit of land labeled "England" and holding papers labeled "Free Trade", with ships along the shore labeled "To Japan, To India, To S. America, To Australia, [and] To China".

http://www.loc.gov/index.html

boomer sooner's picture

Great read GL

Got into GDX/J when HUI was ~400.  Been waiting for the turn and looking at doubling down, little DCA.  Since I do not have time/knowledge to do in depth studies on individual stocks, I like to place 'bets' on baskets.  Any one know of a good Sprott/Rule mining play?  Already in PSLV & PHYS.

What if any risk/reward by just owning SLW?  as I understand they have bullion owed to them at cheap prices.  Only risk I could see is if mining cos. closed shop and could not supply future physical (I could be completely mistaken).

zman's picture

Miners

I think a major issue for the miners is that even with a higher gold price ($1400-1700) in the next 12 months, it might not be high enough to repair the balance sheets, and to replace the reserves that were mined at a break even or loss the past 2-3 years.

Oil at 107 is also a issue, gold needs to trade 17-20 times the price of oil, at around 13 today, this Gold/Oil ratio must improve.

Base metals prices also need to move higher down the road, copper, zinc, lead, and silver are not helping.

I think the CEO of Barrick said a few months ago that $3000 gold was needed to advance many of the projects down the road, I think he is correct.

What mining company wants to start a project and then have the PM price crash -40 (gold) to -60% (silver) for the next 2-4 years?    There is no margin of error at these prices, these corrections are massive sucker punches to the gold/silver miners.

I agree, I think these companies really need $2000-$3000 plus gold for many years in short order, mining at break even is really losing money when you consider the lost of the reserves.

When you think about it, a high gold price and low expenses is really a hard thing to happen for any length of time, or at all, and add in the massive corrections, it's not good.

Silverivalist's picture

PNW - LCS Report

I am currently visiting the Pacific North West area for the summer and have been visiting some of the smaller coin and pawn shops here. I'm quick to learn which shops to stay away from by their unrealistic pricing, but have found a few good shops to do business with. The owner of  the one shop I most frequent is getting to know me and likes to shoot the sheet. He is strictly a numi-guy, but he buys small amounts of bullion when it comes through the door. 

Today he had 3 rounds in the case. An '85 Engelhard Prospector (beautifully toned), a '84 Libertad, and a completely tarnished '91 ASE. I pulled these out of his junk silver bin and asked "how much?" He said "$23 each."  Thinking to myself "wow, that's spot price"  I couldn't get the money out of my bill fold fast enough! Left there happy as a lark. It was a great start for the day but I was looking for a larger amount of shiny so I took a 1 hour drive into a larger bullion store in Portland Oregon. Sorry I can't reveal the location of my first stop, I have found so many great deals on cool and unusual stuff there in the last 2 months, I must protect my honey hole (small potatoes anyway)

My next stop was a shop named Gold & Silver Supply in Portland. I had found a few online ads with decent prices so I decided to give them a try. From reading their ad it seemed they would have tons of gold and silver maples and ASE's, but I was somewhat disappointed in what I found. They had about 4 total ounces of gold in one of the cases, the rest of them were partially full of  appx a dozen Koala silver Kilo's, quite a few America the Beautiful 5 oz rounds, and a few 10 and 100 ounce bars (not what I was looking for.) I soon found a case with silver 1 oz rounds and 1 oz bars.

I first asked if they had any Silver Maples, he pointed down "only 2 left" I asked any ASE's?  He pointed next to the maples "that's all I have left" (about 12 @ $3.50 over) I asked what do you have in one oz rounds, he said he had plenty of Buffalo rounds and OPN's in stock for $1.50 over.  Somewhat disappointed, I took what he had of the Maples and ASE's and bought some generics too. 

Talked to the owner a little bit and asked if he had been busy this week, he said no, not really. More buyers then sellers. He said he thought people were waiting for the price to come down before buying. I laughed and said "that's probably not going to happen" He said "yeah I know, but they will be back in droves when the price keeps rising" I said, Yes, I think you're right!

Green Lantern, 

Thanks for opening up the thread to other metal related discussion. While I enjoy reading about the many aspects of market trading, I am still just a stacker at heart!

Stock_Canines's picture

@silverivalist

Try AJPM in DT Portland. Usually have plenty of silver and gold bullion. Decent prices.

ReachWest's picture

The Miner Game is Brutal.

Thanks for the article GL.

I've suffered quite a bit on my mining investments over the years. It's a brutal business and I must agree that we need to see substantially higher Gold pricing before we see a change. I know Santa has always said good companies with no debt and good resources will thrive and be good ultimate investments. I believe that's probably true - except we need to get substantially higher Gold prices before that can even begin. If the economy goes into serious collapse before Gold takes off, then I don't see the appreciation in the miners ever happening. It's a zero sum game at that point.

I suspect that a number of the smaller explorers will vanish over the next few months. Many of them are out of cash and the propects for raising any further money in the markets is non-existant. The Fed and the goons that control the price of PM's have destroyed the miners. An un-intended consequence of their interference in what should be a free market. Lots of little investors like myself hurt in the fallout - hope the Bankers got some nice homes in the Hamptons and other good shit for their efforts. Bastards.

I hold one junior miner that I do have some hope for - it still sits on around $20MM cash and they have a pretty significant near surface discovery with a NI 43-101 resource estimate of about 2.3 Million ounces. It's the only one I have continued to hold. I was always hopeful that these guys would get bought out by one of the majors (Goldcorp is nearby) before the SHTF - but - If the economy goes totally into the tank before they get a buy-out, then who the heck knows. 

RationalMind's picture

Miners and leverage

Most of my 401K is either in mining stocks or phyzz bullion ETFs like Sprotts/CEF. The metals price increase this week have been reflected in a higher increase in miners. Given the 401K is for the long term, I am not too bothered that it's in the red since I went into miners over past 12 months. 

I started going into NUGT and it's Call options (after reading about this in another thread on TFMR). That has done well for me this week, given the price increases. Will look into AGQ tomorrow after hearing that mentioned in Turd's podcast.

TREACHEROUS CRETINS's picture

From Pailin's Corner

Strawboss wrote: Hey Pailin - there was a suggestion on Pain Street that you should be one of the contributors as you used to post more there in the old days...

If you were so inclined - I would suggest a scathing post on the dangers of blindly following uber-bulls... :-)

Well I can see that, but I'd have reservations. The sort of posts I made back on the old blogspot and even up until about a year ago here are not where I am today. My brand of -now even further distilled- tough love isn't for everybody and I don't have much sympathy for those that hear and agree with my truth but are too weak to act. All that probably equals much backlash in comments, against me, against Turd? Yeah whatever, that happens here every time I spout a bit of off-trading bitchery. But it's microcosm of what would happen if the same was posted front page. So if Turd asked that's what I'd tell him. But for those with ears to hear...I'm always willing to fill dead air :)

I would love to hear what Pailin has to say [ and I really miss the input of Atlee

and JoeKa ] - although a trader, his perspective and experience is sufficiently 

global, that it would make fascinating reading. Pithy " tough love " would be a

healthy counter-weight to the confirmation bias that this site sometimes suffers

from.

mac's picture

run for cover -

Rick Santelli yest talked about the massive dump of US Treasuries by foreign holders in the latest 2 months....govt's are bailing on the US fiasco...cuz they don't watch and believe what Bloomberg spews.

Ben buys what, 70% of new US debt? And when foreign countries are dumping, Ben must have to step up to the plate and buy more!

Hammer's picture

This will end

tonyw's picture

The Miner Game is Brutal.

Sounds like your "junior miner" isn't doing any actual mining but is sitting on about 2.3 Million ounces. To my mind the key question is can they or do they even have enough money to turn this into a profitable mine? You said Goldcorp is nearby so maybe the necessary infrastructure is not going to be too expensive but $20MM cash doesn't go far.

SIlverbee's picture

Please Turd

Can you open a new thread which is just for metals talk. Whilst I am sure the guest posts are a bonus it would still be the core to keep a main street thread alive. Its sort of the point of the site?

Monedas's picture

It's all paper roses !

Miner's in the old days .... were a purer play .... today .... rots of ruck .... too many hands .... get their hands .... on the gold .... before the stockholders get paid .... in paper .... not to say some money can't be made in trading them .... but, it is a very public way of hoarding .... in a sick socialist world .... make your money .... if you can .... then convert to phyzz .... and get out of Dodge city .... before they lynch you !       Monedas      1929     Comedy Jihad Avoid The Middle Man By Direct Hoarding World Tour    devil

Green Lantern's picture

Re: From Palins Corner

I'm not sure what your point is other then we needs some confirmation bias to the downside to balance the confirmation bias to the upside.    Yeah?  And Palin is that man?  He can be my guest anytime.  Of course, I'd have to ask my boss for permission but he's got mine.

Of course, I didn't mention anything about 500 plus miners biting the dust.   Not dark enough for that group?  Or the fact that a company has more chance making money selling lemonade that digging holes in the ground looking for metal?  Or in the last week, you haven't read anything about stagflation, sterilized QE biting the dust which brought the histrionic posters out calling me a schmuck.    Yeah, people will say nasty shit when they don't like what you say but sometimes ya gotta man up and just say what you think. 

And I really didn't take the time to write the scathing article I wanted.  Like how people pump specific properties  and investors jump aboard and pump those properties around the blogisphere.   like the International Tower Hill story where there is a mad investor frenzy for God knows what reason.  Now that's a good story on confirmation bias.  Even Doug Casey had to apologize to his subscribers telling them to sink their hard earned money in a loser.   I see awful picks being pumped all the time but it ain't my business.    I don't do how to select mining properites 101 for people.  If you don't know, you shouldn't be in that business.

In summary, gold and silver mining is a wretched business filled with pot holes and unscrupulous executives.   If you don't know what you are doing ya gonna loose money.   And even if you know what you are doing, you are still gonna loose money.    But if you get lucky, and some people will, when the metal prices do come around, and the consolidation period is over, the demand for the shiny metals and the lack of good properties suggests that somebody gonna make a fortune!!!!!!! Oh yeah buddy.   Will it be me?  Couldn't tell ya.  But I got my chips on the table.  Like I said, I ain't a trend investor.  I'm a value investor.  The more stuff goes on sale, the more I buy. 

Markets come around.  They always do.  Unless you make a good case that the end of the world is coming and then who cares if you loose everything.

Green Lantern's picture

@Silverbee

WTF silverbee?  I told you talk about whatever aspect of the metals that you want.   Like how the stuff comes out of the ground isn't related enough for you?  Since when has anybody felt obliged to stay on topic in the last two years?

Post whatever is on your mind but for  &^*( sake stop bitchin' and moaning.  You wanna talk about price action?  Start writing.    All the people that keep saying talk about the metals don't seem to have anything to say about the topic they want to talk about.   I'm going to open a thread and call it Drinking Scotch and Scratching Your Ass so people can bitch and moan to their hearts content.

John Galt's picture

@ Monedas

That was one of the wisest utterances you have posted in some time.

I would only add that Dodge City had Wyatt Earp and Bat Masterson to enforce some semblance of a rule of law. 

Bart Chilton and the CFTC, by comparison....(cough, cough).

Green Lantern's picture

@Mac

haven't watched Santelli's rant's recently.  But something tells me that nobody is going to start dumping US treasuries tomorrow.  That's an end game scenario that will invite missle and bombs bursting in air.   And of course, there is the theory that all the gold moving west to east is to make sure nobody dumps the dollar.   Chiina ain't gonna be dumping the dollar tomorrow to reboot the system.  And that is only one of many scenario's that could happen.

WineGuy's picture

Miners ...

I truly believe we will have a one time reset of the gold & silver price. What do you think will happen to the quality miners? IMHO, holding miners in a 401k / RRSP will make said retirement much more enjoyable. 

Monedas's picture

I have a miner .... well .... on ore body !

Galt !  I bought some Mines Management .... just to play around with .... I bought some at $1.60 .... then cost averaged down to $ .62 .... average buy price is about a buck .... Scottrade doesn't permit quick turn arounds .... on stocks under $4.00 .... my trading theory .... is to look at the miners on the Kitco site .... and watch their price action .... Seabridge and Endeavour and others .... look pretty hot .... and they are over $4.00 !         Monedas      1929       Comedy Jihad This Site Would Be Pretty Boring With Only Hoarders Like Me I Have To Admit World Tour   devil

John Galt's picture

@Wineguy re: Miners

You ask what will happen to the value of mining stocks in your 401K when gold and silver reset higher?

Let's just say that I hope your portfolio is well stocked with fine vintages to drown your sorrows. Once PMs reset higher and physical is in high demand you'll need a lot of luck reaping the benefit of your gains. If you're lucky enough that your mines don't get nationalized outright you should at least expect to be targeted with near 100% taxation for windfall capital gains.

But no worries - your case might get tied up in the courts for a few years and the judge might even rule in your favour. Your check, minus legal fees, will be mailed soon enough.

sengfarmer's picture

GL on dumping treasuries

Does not the TIC data contradict what "something" is telling you?

http://www.treasury.gov/press-center/press-releases/Pages/jl2143.aspx

This dumping of treasuries has been picking up speed over the last several months.

edit:  These are the June numbers, July comes out on September 17.

Turd Ferguson's picture

Monkeys

MODERATOR

Attacked right on schedule at 2:00 am EDT. So predictable...

Btw, 52 total August deliveries yesterday. 47 went directly into the JPM house account.

This brings the monthly total to 2,965 with 2,151 into JPM house and 263 into JPM customer.

mac's picture

green lantern

It is a good time to sell US Debt...before it is too late, bonds are crashing as yields rise, and if Ben doesn't Taper just who is gonna buy the debt instruments...??

Now the USD has been strong lately and another good reason to sell Dollar Debt...And can this childlike Fed speak and bogus data fool everyone all the time?

There is No Debt Ceiling in USA - that means unrestrained spending with no cap - a real adult-like attitude, eh what...?

sengfarmer's picture

John Galt

I know there are a lot of strong feelings, both pro and con about Santa and his company, but he has addressed both of your concerns about nationalization and taxes.

He has partnered with the government to allay the nationalization fears and has said he will pay dividends in physical.

No cash changing hands means no tax until you sell it?  I'm not sure about this part.

John Galt's picture

@Sengfarmer re: Santa and Sprott et al

I have tremendous respect for both Santa and Sprott.

However, I disagree with the comfort level both of them have with their faith in paper claims to their physical investments, be they physical metals in the ground via mining shares or receipts for bars stored in RCM vaults.

BWTFDIK....I merely listened to the guys who said: "get out of paper".

The only paper I stack is TP.

Turd Ferguson's picture

Was planning to add this

MODERATOR

Was planning to add this today and then I saw GL's excellent and timely post. Well done!!

How bout dem miners! EXK has gone from under $3 to $5.50! WOW!

First of all, NOW might be a good time to go back and review this, from exactly one month ago today: http://www.tfmetalsreport.com/blog/4841/stuck-miners

And here's your updated HUI chart. The area around 290-295 will be sticky BUT, if the HUI gets back above where it was before the mid-April beatdown, watch out! This would portend great things not just for the miners but the metals, in general.

Green Lantern's picture

@Sengfarmer

Yes, China and Japan have been selling US treasuries for the last five months.   But they have also been selling US Stocks. Foreign money yanked out $26.841 billion out of equities in June.   In the 70's gold bull market a rapid sell off in US treasuries corresponded with a steep rise in the price of gold.  Yet this time no such relationship.

One would have to make a case this is the beginning of a massive currency war scenario or is it the old game of currencies moving in and out of fashion, making money off of speculation off the dollar as fed continues it's ridiculous taper talk?  

I'd definitely be interested in a good analysis behind the motive. If it's the beginning of the end, what happened to gold?

ag1969's picture

So many complaints about free

As a small businessman who used to sell lots of stuff and made every honest and fair attempt to service my customers in the best way I knew how, I have found this site to be very similar to a pattern I noticed in my old business.  The people that that bought from me at fair but profitable prices were my best customers.  They were pleasant to work for, they introduced me to their friends and gave me referrals, and if they had a complaint, they did not whine, they gave me a reasonable phone call and expected a wrong to be righted, and it was usually justified.  The customers that beat me up on my price and got me to drop my drawers were a nightmare.  They chiseled me to a point where profit was questionable, and then they would expect a service crew at their home once a week, for stuff that had nothing to do with our work, they wanted this service for free, and when you proved to them that they were wrong, they would respond by telling everyone they knew that I was an asshole.

I learned over they years that about 2% of customers, no matter how good you are, you will never make happy because they just... don't.... want.... to be happy.

Some serious and unexpected financial difficulty has forced me to stay on this side of the paywall for now.  I don't need to do anything drastic like sell my phyzz at this point, but I do need to watch every penny until I can right the ship.  I already miss some of the posters that have gone to the other side and I am not seeing like before, like Ancientmoney for example, but I am not going to start lashing out at Turd for my shortcomings.

Is "Free Main St." what it used to be?  No, it has changed, but life is 10% what happens to you and 90% how you react to it.  Where others hate the change, I see opportunity with this new format as I, for one, appreciate the cast of characters here more than the metals talks.  There are people here whose opinions of things other than metals I value and want to hear.  In other words, I enjoy the off topic stuff as long as it is in some way related to TEOTGKI.

Sometimes you just gotta use what they give you.

Thank you to all of Turd's "Columnists" who have been very dilligent at making sure Main St. is on track here in Free Turdville.  I appreciate your efforts to ensure my free entertainment value.

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