Wall St Journal-Gold worth only $800/oz

Boston University Economist Mark T. Williams predicted $10 Bitcoin about now. That worked out well.

If all these economists/professors/journalists are so good at predicting things they should be independently wealthy. It's funny how most of them missed the 2008 crash, and virtually every other financial catastrophe throughout history.
 
He is treating a spot commodity market like a currency market. There are just more things to consider then just CPI and consumer sentiment and bond markets. I think gold could potentially go to $800 but it would be because of bloated out western extraction costs and the gold laden emerging markets. To be at par with extraction cost to spot ratios in the 1990s gold should be $1100 or there-about.
 
BiGs said:
He is treating a spot commodity market like a currency market. There are just more things to consider then just CPI and consumer sentiment and bond markets. I think gold could potentially go to $800 but it would be because of bloated out western extraction costs and the gold laden emerging markets. To be at par with extraction cost to spot ratios in the 1990s gold should be $1100 or there-about.
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The fact is, if we were to see $1100 gold now most micro caps would go bust unless they were taken over by bigger fish. I know some rave on that they will do fine @ even $1000 but the reality would be very different. If you consider the hedging by the juniors & that recent thread on here quoting a big fish stating even $1300 is not very workable (if you believe the explanation) just don't see it working out too well
 
GOLDPIRATE said:
BiGs said:
He is treating a spot commodity market like a currency market. There are just more things to consider then just CPI and consumer sentiment and bond markets. I think gold could potentially go to $800 but it would be because of bloated out western extraction costs and the gold laden emerging markets. To be at par with extraction cost to spot ratios in the 1990s gold should be $1100 or there-about.
Click to expand...

The fact is, if we were to see $1100 gold now most micro caps would go bust unless they were taken over by bigger fish. I know some rave on that they will do fine @ even $1000 but the reality would be very different. If you consider the hedging by the juniors & that recent thread on here quoting a big fish stating even $1300 is not very workable (if you believe the explanation) just don't see it working out too well
Click to expand...

Despite technological efficiency improvements and CPI extraction prices have risen in proportion to history. The truth is that western mining companies have had a cooshy 5 years, during which extraction costs have been bloated out. I think their extraction prices on paper could be tested and yeah, some will fall. BDR is a gold miner in the ASX200 and they are kicking arse at under $600 extraction costs. One of their high yield pits in Brazil is around the $150 mark. If you take the massive overheads away from these big miners, you get a much lower production cost indeed.
 
BiGs said:
......Despite technological efficiency improvements and CPI extraction prices have risen in proportion to history. The truth is that western mining companies have had a cooshy 5 years, during which extraction costs have been bloated out. I think their extraction prices on paper could be tested and yeah, some will fall. BDR is a gold miner in the ASX200 and they are kicking arse at under $600 extraction costs. One of their high yield pits in Brazil is around the $150 mark. If you take the massive overheads away from these big miners, you get a much lower production cost indeed.
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For sure! This other thread I spoke of was demeaning the importance of the AISC being reported. I feel this is still very important ;)

Incidentally, BDR was always on my radar & was the pic of my juniors until I decided to go with an oily @ present. Just bit disappointed with the yo yo sp....
 
BiGs said:
He is treating a spot commodity market like a currency market. There are just more things to consider then just CPI and consumer sentiment and bond markets. I think gold could potentially go to $800 but it would be because of bloated out western extraction costs and the gold laden emerging markets. To be at par with extraction cost to spot ratios in the 1990s gold should be $1100 or there-about.
Click to expand...
You are correct IMHO.
He is treating a spot commodity market like a currency market - but then again, it is a strongly favoured supposition by both the Baloney/Moregone-type permabulls, and the average stacker, to assert the belief that "gold is money". So I'd guess not many here would argue this line.
Given this perspective, he has probably nailed it, because, unlike the Baloney/Moregone's, he actually has a model, as opposed to just a hunch based on monetary base.

Back to reality, gold is (IMO) but a mere commodity. However, the cost of extraction does not act as a floor price. While the long term average will likely follow the average cost of extraction, it will fluctuate above and below this price to various extents and time periods.

In short. He could be right. He also may be wrong. His pricing model, which to his credit actually exists, may seem a little questionable.
 
They have to print something...............................The journal it self generates profit.

Give it till September and the title will be "Wall St Journal-Gold worth more than $5K/oz"

These days no one takes responsibility or is accountable for what is written anywhere.
 
How amazing in retrospect.
In the late 90's I remember an "expert" insisting that gold would NEVER hit USD $400.00 and the Dow Jones would NEVER hit 10,000.
 
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