the ridiculous prophecies, page-92

Referring to Bernanke’s scaling back QE talk: “If you say that he means what he says, then you believe in Father Xmas”
Fair comment although to be fair to Bernanke, he did emphasize that any scaling back would be conditional on the economy improving.
That gives him all the leeway he needs to continue QE endlessly.
Worth watching this 8 min Faber interview for his thoughts on equities, bond and gold markets and at around 1.15min mark, his reaction to the comment “if in fact Mr Bernanke means what he says”

http://goldsilver.com/video/marc-faber-likes-gold-more-than-equities/

Here’s a chart to consider- the AUD. Before the start of the commodity bull, it was 50c. Before that it averaged around 65-70c.
If the commodity bull is over which is what the POG might be implying if it stays down for a long period, then there is no reason why AUD will not drop back at least as far as 65c.
POG has dropped much further from its highs than the AUD despite the fact that above ground gold supply is not increasing beyond a rate of around 2% per year and the AUD is being printed at a rate more in line with the USD. So while there has not been any good reason for POG to drop this far with all the money inflation (printing) to date (and very likely to continue if commodity cycle is over as world growth will be very weak), the AUD might have good reason to fall much further.
Assume a bear scenario where POG drops to $1100 and stays there because the commodity cycle is thought to be over. If that is correct then the AUD could easily continue to fall to 65c. That would give a POG for our producers of $1690 for very high margins. Sound far fetched? In the year 2000 when US producers were dealing with $280 gold, our producers were enjoying $560 gold with AUD at 50c. My Hill 50 gold was on a fully franked div yield of 10%. Certainly not struggling despite incredibly low USD POG at that time.
However if gold stays at $1100, most US and European based producers (and many others with currencies roughly pegged to the USD) will be cutting back heavily on production putting upward pressure on the POG so its not likely to stay at $1100, especially as printing is likely to continue causing cost inflation for the overseas producers not offset by a lower currency that we are getting and should continue to get.
Our gold producers are now likely to be the best placed to ride out current weakness assuming the AUD continues lower.
If the commodity cycle is not over and prices rise again (seems wishful thinking for now) the POG should recover as well.
The POG should recover long term regardless to allow for money printing to date.