Bad News for Gold Holders

[SteadyMercury]

If you want a battle of insults, prepare to lose and lose BIG.

lol I might have typed something like this in 6th grade

 

[HenryBHough]

I've read that it costs about $1,200/ounce to mine and process gold. Izzat right?

I don't know if that's true or not.

Last number I heard was ~$950, but that might just be the cash costs. I don't follow it anymore.

Ten years ago, when I was following it pretty closely, the cost of manufacturing gold was $350-$400.

The cost is highly variable. Industrial scale mines have huge fixed costs, money tied up in equipment. Smaller sacle mining is extremely variable. At the simplest comes "recreational" mining which requires but a shovel and a proper gold pan plus one's own labor. If it's truly recreational then the assumed labor cost is zero. Carried to the extreme, such a miner can honestly say he/she is unemployed and collect a horde of free benefits, not the least of which is a free Obamaphone to check with your under-the-counter buyer when you have a little to sell.

I personally know several who mine for gold. Those who run solo operations make a nice personal income; those who hire others find their costs usually outrun their income and give it up. Those who do it mostly for fun use metal detectors in shallow stream beds and occasionally cop a good size nugget. Thing is, the mortality rate from a variety of accidental causes is somewhat on the high side.

 

[Kevin_Kennedy]

From the illustration above it is impossible to determine being the fact that those are stock prices in mining companies.

So look at the price of gold from when he started buying it to what it is today and tell us how much he's lost.

You're not making any sense. The list shows prices of mining company stock. Not futures prices for gold.

Maybe read the rest of the post.

Ask Ron Paul.

Dude loaded up his investment portfolio with as much gold, gold mining stocks as he could while pushing for a return to the gold standard and predicting economic collapse and hyperinflation around the corner. Now look at him:

Ron Paul Is Personally Losing A Fortune Because Of Gold Tanking - Business Insider

Newmont Mining Company: –37.29%
Goldcorp Holdings: –34.64%
Barrick Gold: –48.17%
Agnico Eagle Mines : –35.78%
Allied Nevada Gold Corp: –68.48%
Alumina Common: +6.32%
Anglo Gold Ashanti Ltd. –44.13%
BrigusGold Corp. Com MPV: –39.18%
Claude Resources Inc: –56.39%
Coeur D'Alene Mines Corp: –47.21%
Hecla Mining Co: –47.74%
El Dorado Gold Corp: Not Listed
IAM Gold Corp: –65.40%
Kinross: – 44.11%
Lexam Explorations Inc: – 57.57%
Mag Silver Corp: –-40.50%
Metalline Mining Co: Not Listed
Pan American Silver: –35.97%
Silver Wheaton Corp: –37.50%
Virginia Mines Inc: —16.48%
Vista Gold Corp. –53.9%
Viterra Inc +0.81%
Wesdome Gold Mines Ltd: –43.29%

At time of article he had lost over 40% in just six months. Quite the economics wizard.

 

[thereisnospoon]

No. You are complaining that Paul made bad investment because the stock price of the mining stocks he owns has fallen.
This has ZERO to do with the commodities exchange value of gold.

Wow you really believe the value of what they are pulling out of the ground has zero impact on their profitability and thus stock values? It isn't an exact correlation (mainly because they lock in future prices) but they are certainly related.

I have investments. I have an index fund tied to the S&P 500. In 2009 the index was around 900. It's around 1600 now.
All of the stocks in the portfolio of my wife's 401k were down back then. The values have recovered and those are actually ahead of where they were before the drop.
Where's the issue here?

I'm aware of the recovery of the stock market since 2009, thanks.

I'm honestly baffled at what point you're trying to make here. From what I can tell you seem to believe the fact that his stocks may recover someday means a 40% drop in six months isn't so bad. That isn't the case, he had a shitty poorly diversified portfolio that took a dump regardless of speculation on future economic cycles.

Over the last 10 years and any 10 year period show a net ROI of 12% in the stock markets.
You've no clue. Stop posting about this.

Really? Any 10 year period shows a net ROI of 12?

Like say 2000-2009?
1966-1975?
1929-1938?
1906-1915?

Kinda ironic the whole "you haven't a clue" thing in there isn't it?

What's your point?
Are you implying the stock market is a losing investment?

 

[thereisnospoon]

If you want a battle of insults, prepare to lose and lose BIG.

lol I might have typed something like this in 6th grade

Go for it.

 

[thereisnospoon]

So look at the price of gold from when he started buying it to what it is today and tell us how much he's lost.

What difference in the mining stocks does the price of gold make?
This is that equivalent to oil stocks. Just because the commodity price of crude oil is roughly double what it was 4 years ago did not translate to proportionately higher oil company stock prices..
Commodities and securities markets are mutually exclusive of one another.

The claim that Ron Paul's investments are bad wasn't based only on mining stocks, however, but also on actual gold.

Nobody posted Pauls' gold futures holdings.

 

[SteadyMercury]

No my point is not that the stock market is a losing investment, about 70% of my retirement holdings are in the stock market, with most of that in simple broad index funds (both domestic and intl) similar to you mentioned you hold. The rest is usually in bond funds but given current economic conditions that is temporarily stashed in a stable value fund until the whole fed/interest rate thing shakes out.

My point is Ron Paul had a very poor portfolio, his beliefs in gold/currency/inflation were so strong he ignored the fundamentals of diversification so he got raped when it all went south at once.

 

[Kevin_Kennedy]

What difference in the mining stocks does the price of gold make?
This is that equivalent to oil stocks. Just because the commodity price of crude oil is roughly double what it was 4 years ago did not translate to proportionately higher oil company stock prices..
Commodities and securities markets are mutually exclusive of one another.

The claim that Ron Paul's investments are bad wasn't based only on mining stocks, however, but also on actual gold.

Nobody posted Pauls' gold futures holdings.

And nobody's talking about them now. This is a little old, but it makes my point.

For the record, Ron Paul first served as a member of Congress in 1976. He has stated that the reason he initially ran for Congress was because of the government policies that he feared were destroying the dollar. So it is not a large jump to conclude that Dr. Paul was buying gold and gold stocks back then.

What was the price of gold in 1976? At it's peak that year it was $137.65. So yeah, he is probably "still above water" on his gold investments, given that even after the recent pullback gold is at aprox. $1,350.

EconomicPolicyJournal.com: Business Insider: "Ron Paul Probably Still Above Water"

 

[skookerasbil]

All the markets are rigged, including precious metals......all manipulated by the big banks >>>

Big Banks Manipulated Gold and Silver Markets | Washington's Blog

 

[skookerasbil]

Anyway.....when the 1.2 quadrillion dollar derivitives market bubble bursts, all the discussion in here will be drivel >>>


The Armageddon Looting Machine: The Looming Mass Destruction from Derivatives | Washington's Blog