Investing in precious metals 101

Peak Gold!?!?

Login or register to post comments Last Post 2080 reads   8 posts
  • Thu, Nov 12, 2009 - 03:10am

    #1
    Davos

    Davos

    Status Silver Member (Offline)

    Joined: Sep 17 2008

    Posts: 811

    count placeholder

    Peak Gold!?!?

This “stuff” gets more interesting each and every day.

Peak Gold

“There is a strong case to be made that we are already at ‘peak gold’,” he told The Daily Telegraph at the RBC’s annual gold conference in London.

“Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore,” he said.

Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia. South Africa’s output has halved since peaking in 1970.

  • Thu, Nov 12, 2009 - 04:05am

    #2
    Peak Prosperity Admin

    Peak Prosperity Admin

    Status Bronze Member (Offline)

    Joined: Oct 31 2017

    Posts: 1613

    count placeholder

    Re: Peak Gold!?!?

 

 I think peak gold is strongly suggestive of peak “black gold”…

 along with some convolution function involving mineral depletion…

 I think this also makes silver even more leveraged to the upside (medium term), since the stocks are used up, and from now on mining will be a high cost activity…..

 Gold mining is a waste of precious oil. Silver mining.. less so.. but still a luxury….

 Finite resources need respect.. through the price mechanism…. and oil is THE primary finite resource…

 

 Oil = time = time to replace oil !

 

 

 

 

  • Thu, Nov 12, 2009 - 04:06am

    #3
    Peak Prosperity Admin

    Peak Prosperity Admin

    Status Bronze Member (Offline)

    Joined: Oct 31 2017

    Posts: 1613

    count placeholder

    Re: Peak Gold!?!?

Yep, we’ve discussed Peak Gold loads of time in Australia where production is falling off fast…. like the shares in the mines!

Mike

  • Thu, Nov 12, 2009 - 02:37pm

    #4
    Peak Prosperity Admin

    Peak Prosperity Admin

    Status Bronze Member (Offline)

    Joined: Oct 31 2017

    Posts: 1613

    count placeholder

    Re: Peak Gold!?!?

Thanks for the great dig Davos.  The paradox of a finite world of resources with an infinite money supply and an infinite appetite to consume is breaking at many fronts simultaneously.  Does this mean that from here on out, gold will increase in price?

Larry

  • Thu, Nov 12, 2009 - 04:43pm

    #5
    Peak Prosperity Admin

    Peak Prosperity Admin

    Status Bronze Member (Offline)

    Joined: Oct 31 2017

    Posts: 1613

    count placeholder

    Re: Peak Gold!?!?

From a revealing opinion piece by William Pesek at Bloomberg:

Asia wants assurances that the U.S. can repay its fast-mounting debt and prevent a dollar crash. The reality dawning on Asia is that Obama can’t offer them such a pledge — not with U.S. borrowing so out of control.

Dollar anxiety is reaching a fever pitch. It’s sucking the life out of key issues pertaining to the future, and it’s time to do something about it. Asia needs a plan to scrap its dollar addiction, and it can start in Singapore this week.

The best way to use this [APEC] summit is to discuss an exit strategy. Not an end to government stimulus efforts, but a dismantling of Bretton Woods II. The system of tying currencies to the dollar that emerged after the crises of 1997 and 1998 is doing more harm than good.

In 2009, Asia’s currency-reserve arms race is mostly about risk. The wisdom of amassing huge dollar stockpiles was once clear enough. It was about walling off economies in times of turmoil and not having to go hat-in-hand to the International Monetary Fund. Now Asia is trapped.

The IMF crystallized the problem recently when it said the dollar is still overvalued. Considering the U.S.’s debt load, near-zero interest rates and rising unemployment, the currency is clearly too strong. A weaker dollar makes sense and it’s what the global economy needs. Asia must deal with it.

http://bloomberg.com/apps/news?pid=20601039&sid=a1S_5nNfZ9WM

If the dollar is going down, then the dollar price of gold is highly likely to go up in roughly equal proportion. Bingo — gold equals a dollar hedge which is devoid of credit or devaluation risk. It doesn’t offer any yield — but then, neither do T-bills.

It was just incredibly naive to think that with Helo Ben printing scrip while Timmy Geithner loots the Treasury for Goldman-Sachs, the U.S. dollar would somehow maintain its external value. This will all end in tears for dollar-based bagholders — the tears of a clown. I think we’re all Bozos on this bus … Cry

 

  • Thu, Nov 12, 2009 - 07:11pm

    #6
    Peak Prosperity Admin

    Peak Prosperity Admin

    Status Bronze Member (Offline)

    Joined: Oct 31 2017

    Posts: 1613

    count placeholder

    Re: Peak Gold!?!?

[quote=machinehead]

From a revealing opinion piece by William Pesek at Bloomberg:

Asia wants assurances that the U.S. can repay its fast-mounting debt and prevent a dollar crash. The reality dawning on Asia is that Obama can’t offer them such a pledge — not with U.S. borrowing so out of control.

Dollar anxiety is reaching a fever pitch. It’s sucking the life out of key issues pertaining to the future, and it’s time to do something about it. Asia needs a plan to scrap its dollar addiction, and it can start in Singapore this week.

The best way to use this [APEC] summit is to discuss an exit strategy. Not an end to government stimulus efforts, but a dismantling of Bretton Woods II. The system of tying currencies to the dollar that emerged after the crises of 1997 and 1998 is doing more harm than good.

http://bloomberg.com/apps/news?pid=20601039&sid=a1S_5nNfZ9WM

[/quote]

I’m not betting against gold, but it seems like old habits die hard. It’s not just the Wall Street/Washington crew who seem to think we should all just go back to business as usual. Apparently the paradigm that we all view as failing, still works fine for the people calling the shots. William Pesek’s piece makes perfect sense, of course, but It doesn’t look like Asia is ready to “scrap it’s dollar addiction” any time soon.

From the Wall Street Journal front page headline today:

[quote=WSJ]       

World Tries to Buck Up Dollar

Thailand, Korea, Russia Seen Buying U.S. Currency; Pressure on China to Boost Yuan

By JOANNA SLATER, WILLIAM MALLARD and BOB DAVIS

Governments around the world stepped up efforts to stem the U.S. dollar’s slide, as officials grow increasingly concerned about the impact of the weak greenback on their nascent economic recoveries.

Thailand, South Korea, Russia and the Philippines have been snapping up dollars this week in order to hold down the value of their currencies, traders said Wednesday, as the U.S. currency wallowed near 15-month lows.

In Latin America, Brazil’s finance minister said the country’s currency remained too strong, sparking speculation that the government would intensify recent efforts to curb the real’s ascent. On Tuesday, Taiwan banned foreign investors from parking time deposits in the country in an effort to ease upward pressure on the local currency.

[/quote]

 

http://online.wsj.com/article/SB125798819587744477.html

  • Thu, Nov 12, 2009 - 07:15pm

    #7
    Peak Prosperity Admin

    Peak Prosperity Admin

    Status Bronze Member (Offline)

    Joined: Oct 31 2017

    Posts: 1613

    count placeholder

    Re: Peak Gold!?!?

Instead of an arms race, we have a printing press race and the rest of the world is printing enough money to raise the dollar well off it’s lows today.Laughing

  • Thu, Nov 12, 2009 - 08:47pm

    #8
    Peak Prosperity Admin

    Peak Prosperity Admin

    Status Bronze Member (Offline)

    Joined: Oct 31 2017

    Posts: 1613

    count placeholder

    Re: Peak Gold!?!?

[quote=GregSchleich]

I’m not betting against gold, but it seems like old habits die hard. It’s not just the Wall Street/Washington crew who seem to think we should all just go back to business as usual. Apparently the paradigm that we all view as failing, still works fine for the people calling the shots. William Pesek’s piece makes perfect sense, of course, but It doesn’t look like Asia is ready to “scrap it’s dollar addiction” any time soon.

From the Wall Street Journal front page headline today:

[quote=WSJ]       

World Tries to Buck Up Dollar

Thailand, Korea, Russia Seen Buying U.S. Currency; Pressure on China to Boost Yuan

By JOANNA SLATER, WILLIAM MALLARD and BOB DAVIS

Governments around the world stepped up efforts to stem the U.S. dollar’s slide, as officials grow increasingly concerned about the impact of the weak greenback on their nascent economic recoveries.

Thailand, South Korea, Russia and the Philippines have been snapping up dollars this week in order to hold down the value of their currencies, traders said Wednesday, as the U.S. currency wallowed near 15-month lows.

In Latin America, Brazil’s finance minister said the country’s currency remained too strong, sparking speculation that the government would intensify recent efforts to curb the real’s ascent. On Tuesday, Taiwan banned foreign investors from parking time deposits in the country in an effort to ease upward pressure on the local currency.

[/quote]

 

http://online.wsj.com/article/SB125798819587744477.html

[/quote]

Indeed, the world’s crackhead dollar junkies are unlikely to give up their sordid habit without the intervention of a higher power. And no, DollarHolics Anonymous hasn’t been founded yet … although if it ever is, members will confess that “I’m a friend of machinehead …” Laughing

There’s an important consequence of all the dollar buying by foreign countries, in an effort to hold down the exchange value of their own currencies. When foreign central banks ‘pay’ for these dollar purchases, they are creating fresh baht, rubles, won, reais, yuan, pesos, and so forth out of thin air. This is unquestionably inflationary.

If Bretton Woods II isn’t phased out in planned fashion, then it will blow out in chaotic fashion via a massive inflationary wave in ALL paper currencies. Methadone or overdose — pick your poison. The empty sky could care less.

 

Viewing 8 posts - 1 through 8 (of 8 total)

Login or Register to post comments