sp will rocket up 10-25% over the coming days!, page-21

Lets bring back oil at $USD30/barrel

And the cost of making the mining equipment on the basis of what their inputs used to cost - steel inputs where iron ore was $40 tonne, coal $40 tonne?, rubber?, Chinese wages less than half their current levels, etc

Local wages back at pre-commodities boom level - i think there will be a retracement of wages in Oz (it has probably already started as mine workers are let go).

Average grade of mined ore is now much lower. Means you need to increase all inputs to get the same level of output, and hence costs are much higher.

The AUD back at 50-60 cents also made a huge difference to Oz miners profitability.

If they want a POG back at USD800 then expect world gold production to plummet from its current 2700 tonnes per year - perhaps back to 1000 tonnes.

An USD800 POG would also result in less secondary metal going on the market as people would hoard their gold in anticipation of higher prices.

Of course if you get a worldwide depression/deflation than a much lower POG (ie under USD1000) would be reasonable. All input costs would fall and people would sell their gold to meet debt commitments.

This adjustment process is painful. It has been made a lot worse by the action of the Indian govt to stem gold imports.

loki