heck, miner shares should fire upward as long as their mine properties are safe, able to deliver gold/silver to the markets, either now or in foreseeable future
so Latin American seizure, or South African marxist actions might interfere
this is a real risk in my opinion, so I love North Americans even though their cost structure is higher
if desperate, and in a couple years I expect USGovt to become increasingly desperate, the US might actually take over US-hqed mining firms in order to replenish the US Treasury reserves
that is why I wont buy a US-based miner stock, and hesitate to own a stock with US-based mines
Novagold falls in this latter category, with mines in Nome Alaska, but their story is so compelling
the other undercurrent risk is to individual miner stocks owned by investors who are loaded with margin, and underwater in their other non-miner stocks
those investors will be selling willy nilly to erase the margin debt
this is a debt collapse issue, and margin is debt, a real issue
this seems a risk only for bigger stocks like NEM, SIL, and others with a goodly sized mktcap and a price over $10/share
Canadian juniors selling for under $10 cannot be margined, but their owners might carry loads of over margin debt that must be cleared out
my guess is that miner stock investors invest in gold stocks because they are aware of debt risk of all kinds, including margin, and are probably less exposed to margin
but one never knows
the final risk is from heightened extreme illiquidity in the stock market, but miners have shown considerable evidence of inverse price action with S&P, so liquidity will fly out of mainstreams and into miners
make sense?
I have no final word on risk though, just some thoughts
I hope this helps
it was Sinclair's email to me that pointed out margin debt on stock shares held
so many investors actually still believe the USGovt is in control
I do not believe they are in control at all
soon their lack of control will be crystal clear
their bluff maneuvers will soon be seen as transparent
they can flex muscles, but much like a big boxer in the 15th round with blind eyes, bloody face, and six bullets in his chest
if the USGovt makes gold ownership illegal, then the USDollar will forfeit 30-40% of its value overnight !!!
if the USGovt seizes US-hqed mining firms, then gold will skyrocket and the USDollar will cave in
if the USGovt seizes foreign owned miners inside our borders, then gold will skyrocket and the USDollar will cave in
the USGovt is hostage to our Treasury debts
you lose control and muscle when you are indebted
if you dont believe it, then go to your Mastercard Bank and order that what to do with your $10,000 balance
/ jim
AI
