Gold stocks of the 30's vs. today

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#1 Sat, Nov 26, 2011 - 8:57am
jmsvett
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Solana Beach, CA
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Gold stocks of the 30's vs. today

For those getting discouraged/need a pick-up about gold mining stocks - I thought this was a very interesting article by Paul Kasriel . . . who I think a lot of people who are familiar with his work would greatly respect.

https://www.safehaven.com/print/16985/gold-early-1930s-vs-early-2010s

The type of deflationary pressures coming to fruition now, with a relatively steady bid of gold of $1600+ applies now.

His takeaway from the article (I don't think I am violating any rules here):

"U.S. gold mining stocks were strong performers in the 1930s not because investors gravitated to gold as a hedge against future inflation or because of a loss in the faith of fiat currency. U.S. gold mining stocks were strong performers in the 1930s because the U.S. Treasury was guaranteeing gold miners a steady or rising price for their production as their production costs were falling"

Edited by: jmsvett on Nov 8, 2014 - 5:20am
Mon, Nov 28, 2011 - 6:23pm
bobby
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jmsvett wrote: His takeaway

jmsvett wrote:

His takeaway from the article (I don't think I am violating any rules here):

"U.S. gold mining stocks were strong performers in the 1930s not because investors gravitated to gold as a hedge against future inflation or because of a loss in the faith of fiat currency. U.S. gold mining stocks were strong performers in the 1930s because the U.S. Treasury was guaranteeing gold miners a steady or rising price for their production as their production costs were falling

and you have raised a critical point

the market back then was a less complex one

the market today is much more complex

there will be, IMNTBHO, billions upon billions crowding the PM trade, if only as a pair to some other sector, or maybe as a position in and of itself

either way, I am encouraged to believe that my stake in junior miners and explorers and developers is a sound one

I hope.

randomness