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June 22, 2011
the article is more than the distant, and mostly academic... Default by the USA Treasury in some future..
of more immediate and practical concern to me is the current state of Gold mining stocks. (which this article with P. Schiff adresses in the top 2
the current PE ratio of miners is around 10 insteads of the 30-40 that was considered normal when gold was a lot less than $1500. plus oz.
Mr Schiff points out that the extremely low PE indicates a wall-of-worry is now stronger than greed & profits among the gold mining stocks
What might be the cause of this worry?
could it be a nationalization of the gold miners all around the globe?
could it just be that it is expected that bullion will plummet back to $800-$1000
i think neither is the whisper reason...
it may be that gold mining stocks are so cheap because the next stage of 'costs' has not been built into the price--- i would expect that stringent
security and minute detailed production records will be instituted because Gold & PM will be designated a Strategic Resource and will be coveted to a
greater degree than oil from the well head is now...
with these new expenses of very secure storage and transport added to the present mining infrastructure
...there will be a major refiguring of the value of these prominent miners and the stocks.
Expect big name like Barrack Gold to not trade at the current 10X forward earnings but nearer to 40X forward earnings as the new balancing point of
unless the miners are required to divert all their gold production to the Fed and Treasury vaults, then the gold miners stocks will be almost
just a heads up from my POV.... to any of youse interested, thanks