~*~Mining and Metals Du Jour~*~

[the cork]

18) WHAT HAS GONE SO HORRIBLY WRONG WITH GOLD MINING STOCKS ??

Excerpted From: Gritty Questions on the Historic Collapse
By: Jim Willie CB, GoldenJackass.com

Several serious flaws and shortcomings to mining stocks exist.

The big hedge funds short them heavily with Wall Street help like credit lines. Other hedge funds short the smaller mining stocks and go long the majors, a spread trade. The majors are working with Wall Street on hedged forward sale programs, a grand collusion. The Goldman Sachs GDX fund shorts the entire group, just to keep them suppressed.

The brokerage house Canaccord is involved in naked shorting of mining stocks. After acting as partner to raise cash in a very large number of finance deals for Canadian junior mining firms, they keep selling shares with the collusion of the Alpha Group, far more than they own. The mining firms themselves are in deep trouble, with rising costs, a shortage of engineers, hostile foreign governments, and difficult projects. The mining firms are printing new shares in heavy dilution (like the USGovt on USDollars), which is inflation.

Under pressure, the mining firms will soon begin to renege on their covenants, as some will be forced to sell their properties to the banks.

Eventually the USGovt and other Western governments might force sale of mining companies for pathetic low prices under law in order to replenish their Gold reserves in the central banks.

The recent extreme challenges for the mining firms relates to hostile labor unions and resource nationalism that prompts confiscations.

Distress for mining firms will result in continually lower metal output, resulting in supply shortages which favor owners of physical metal, not the mining stocks.

The global assault on paper wealth includes mining stocks. The Gold & Silver metal prices have vastly outperformed mining stocks since 2008, when the Hat Trick Letter subscribers were urged to dump the paper and to buy the metal. Expect the trend to persist.

http://news.goldseek.com/GoldenJackass/1361998800.php