gold forcast of below 800, page-110

I am supprised you remember that, in 2008. How do you remember that??

Calling BHP at $20 was reasonable back then. There is so much interference with stimulas packages its hard to predict now.

For memory I called BHP to hit $20 but it stopped at around $22 from $34, that is close enough for me.



If you look over the last week Barclays and others seem to have been tangled up in some interest rate fixing scandal.
This to some extent probably sums up the real problem with world debt.

Institutions/govenments/banks want their returns and are very impatient. They want 6% for high risk and as loans have become more risky the rates have increased.

Rates will need to be low for 10yrs or more. This will be deflationary for economies but it will allow them to grow and pay down debt. The Euro will need to break up in the interest of long term stability.

BHP is very hard to predict. I think the Chinese are very smart and will continue buying commodities in the recession and stockpile. When they have enough stockpiles for 8 months they will spook the market by slashing iron ore orders. Prices will probably drop fast as market panics.

The falling Iron ore price could wipe 30% from BHP share price. If you combine that with coal, 45% off the share price.

The worst case scenario $17.60 share price, $23 a share is quite reasonable.

Meantime China will continue to develop other assets and use them as a market maker so it has an advantage when negotiating for supply contracts.

This type of enviroment will be deflationary for all metals including gold.