phar lap and subarus, page-4

Ctindale

Gold is now at $USD1211, not bad for something that is dying. This translates to $AUD1418, which is great for our miners. Meantime the oil price is falling, at least in USD.

Lets say Europe and China both have major economic problems and our commodity exports get a big hit.

I think that when the poop finally hits the fan the AUD/USD will be at 45 cents, oil will be at $USD30/barrel, and gold at its lowest will be $USD750. I reckon our gold producers will be pulling in huge profits. The only downside is that the whole market is correlated so our goldies share prices will get pulled down when the general market PE fall back down to perhaps around 8 in a major bear market.

Gold in USD terms could do even better if the US govt tries to monetise its debt. At present the gold price is being pushed up mainly by European and some Asian/Arabs buying it as an investment out of fear of what their governments might do. This issue could easily get traction in the US over the next 12-18 months with the end for further stimulus and massive deficits. Obama is not going to let the system fail - he will print his way out of this asset deflationary mess.

Just think positively.

loki