gold chat, page-6

Interesting to me that commodity stock prices do not track real LT demand, rather the perception of it.

For instance, we need to keep bringing new copper mines on-line regardless of slow down in China. Even a major political collapse over there and a world wide recession will not see people stop consuming things. It would create a major lag, a correction and then more consumption than ever. Cu prices would fall through the floor, but come back strong again after the correction.

With this thought in mind, seams to me that the market has a very short term view, perhaps now more so than ever.

The other stupidly obvious thought I have is about inflation. If 5% of the population really do consume 25-30% of the resources while our media drives home visions of the good life, then discontent will grow rampant in the 95% left.

Governments printing more money and handing it out to the 95% through cheap building and welfare programs is effectively redistributing the wealth.

An agonisingly slow unwinding is what we need, however, will the voting world and the rioting world allow the leaders to remain in power while that happens?
If so, then not great for the useless metal, if not and endless stimulation is on the cards, then PMs will probably slowly escalate, making producers very profitable. Trying to guess which way it will go is just that - a guess.

You'll have to work out for yourself if these simplistic thoughts are accurate or relevant to gold prices. In the near term it is almost a matter of fashion IMO

I will be building lots of small positions in lots of big Jorcs - I probably should be buying 6% div plays, but wheres the fun in that...