2012..........a BAD GOLD year

[Mega]

http://www.telegraph.co.uk/finance/c...he-rescue.html

Personaly i think the Bank of England will KILL the £ after the games are over & not give a toss about inflation..
Mike

[DRumsfeld2000]

Re: 2012..........a BAD GOLD year

An interesting read:-

http://seekingalpha.com/article/7382...e?source=yahoo

[globaleconomicollaps]

Re: 2012..........a BAD GOLD year

An interesting read:-

http://seekingalpha.com/article/7382...e?source=yahoo

Imagine a hub cap store. A huge surge in demand causes the price of hub caps to double. The store should logically experience a more than double in after tax profits. This is because the fixed costs don't change much. The workers can ask for a raise, but generally not quickly and not too much. The landlord can ask for more rent, but it is a competitive market and the store can just move. So if you see a business that has a product with a rising price, but the stock price continues to lag the price of the product, something is wrong. This is Barrick vs Gold:


That red line has an R^2 of 0.81.

How is it possible that Barrick is lagging gold? A couple of possibles:
*) fixed costs are rising faster than the price of gold. Gas is shooting up? Skilled miners are difficult to find and are charging top dollar? How about: Barrick is running out of gold and it is cost prohibitive to extract it.
*) Barrick was receiving a subsidy from the US government to suppress the gold price, and that subsidy is no longer being offered.
*) Massive management skim off caused by years of lack of oversight ( possibly facilitated by the above mentioned government money funnel).
*) make up your own theory. I'm out of ideas.

Where can this go? How about back where it came from:

[gwynedd1]

Re: 2012..........a BAD GOLD year

Considering 10 year treasury yields are now closer to 1% than they are to 2%, I'd say gold has held up pretty well. Looks to me like so far the powers that be want a slow malaise. My hedge for this, the junk bond( the better quality in its class) is the best performer. Not sure we should assume the oligarchy is in a panic to print.

[BadJuju]

Re: 2012..........a BAD GOLD year

Not sure we should assume the oligarchy is in a panic to print.

Especially in light of Mr. collapse's recent article about the Fed being hesitant these days.

[globaleconomicollaps]

Re: 2012..........a BAD GOLD year

Especially in light of Mr. collapse's recent article about the Fed being hesitant these days.

Did you think I wrote that? I did include a link to the original.

[BadJuju]

Re: 2012..........a BAD GOLD year

Did you think I wrote that? I did include a link to the original.

Oh, no, I didn't think you wrote it.