Gosh,this is another junior ride full of pain,currently.
PZG is far better than most juniors out there.
It has control of one prime property,San Miguiel,plus lots of adjacent land.That of course excludes the desirable looking Mexoro deal.(Fine assays that side of our fence too.)
I am down too much to laugh about on my juniors so my opinion might well be discarded.
I would make a couple of comments though.During the great 1970s precious metal's bullrun,gold and silver were not on a nice,straight,stressfree climb.There were down years.Do look back to those historic charts.I do not know how the juniors reacted to those downturns,year long as some were.I do know,at the later stages of the run of runs;finding a cheap junior was mission impossible.
The medium term future of the juniors I still believe,resides in the underlying metals.That thought invokes a plethora of questions.
Is there good reason to more believe gold will be valued as money?
Will mining gold costs continue to rise?
Will wars,civil instability,draw people to gold?
(No depression has ever occured without accompanying war)
What might happen to paper money?
How many bank-type shocks are still coming?(I think of the coming ARM crisis,the coming superannuation fund write downs)
Away from PM.Will the BRIVCs world keep the huge infrastructural spending currently occurring,going?If so,copper,cement,iron ore,zinc,chromium et al,will be needed and marginal demand may increase(As opposed to decrease)
Then an underlying question.To what extent are commodity price moves now a product of hedge fund and investment bank games,as opposed to supply and demand factors?
Is deflation or inflation running the game?Personally I fear massive deflation more than inflation,but that could be a little naivety by me.For example,moderate inflation will make currently overpriced houses become reasonable-maybe over a 4 year period.With serious deflation,when does the ball stop riolling?For example,in the 1930s,house prices in the USA were worth about 70% of an inflation adjusted housing index.That suggests deflation could halve USA housing from her.That is frightening.
Frightening as that % figure is, figures exclude the demand destruction,the other assett value destruction,the compounding job losses.
In Australia the housing scene is as bad.In the UK,possibly worse,in Spain,in Italy!Budget deficits in the west,and trade shortfalls ,are common,too common.
Inflation or deflation,or a mix of both?Either way,some insurance in the precious metals seems wise.Heck,even Jim Rogers suggests having gold insurance.
AI
