tag:blogger.com,1999:blog-6089228851855763774.post3329478342955610028..comments2024-02-05T17:24:09.663+08:00Comments on Gold Chat: The Squirrel and the GrasshopperBron Sucheckihttp://www.blogger.com/profile/00530576934994289879noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-6089228851855763774.post-62778730848194826552011-12-09T14:58:51.542+08:002011-12-09T14:58:51.542+08:00Miners don't produce 99.9% bars, so to do what...Miners don't produce 99.9% bars, so to do what Sprott suggests they either just hold/stockpile their dore bars and only send them to refineries when they need actual cash or refine the metal and hold 99.9% bars.<br /><br />In either case the problem is that miners can't hold physical, they don't run vaults, so they would have to store it with someone else. Refiners aren't set up for this, they just turn stuff over, so it would have to be shipped to bullion banks to be held as allocated (with storage costs) pending sale.<br /><br />As to the value add of refining, it is not much because refining is a dog of a business - worldwide there is over capacity so very competitive.Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-53985549897419547992011-12-07T01:19:04.490+08:002011-12-07T01:19:04.490+08:00Bron,
Thanks for the insight. Much appreciated.
...Bron,<br /><br />Thanks for the insight. Much appreciated.<br /><br />Even with all the information available on the internet these days the gold and silver business just seems so opaque. Maybe because of the value of the material, participants (governments, banks, investors) want to keep everything as confidential as possible.<br /><br />Maybe you can enlighten me on another subject... concerning Mr Sprott's proposal to mining companies to keep a chunk of their cash in physical silver. That makes a lot of sense from an investors point of view, but isn't the final product of most miners just a silver concentrate or maybe a concentrate smelted into dore bars? I thought most sell their production as unrefined ore to refineries who then turn it into 999+ silver. I wouldn't think holding back silver concentrate or dore bars would be a very good substitute for cash as it's not really a liquid asset like 999 silver or gold. But then, if the cash is not needed for the foreseeable future and is not going to be returned to the shareholders in the form of dividends, it would probably be best for the invertors if held by the company as dore bars. Are there many miners who actually own the whole process of turning rock in the ground into finished 999 gold and silver?<br /><br />One more question. What is the general value of gold/silver in dore bar form? If the spot price reflects refined 999 metal, I assume a dore bar generally goes for spot minus a certain percent. In other words, how much does the refining process tack on to the price of 999 gold/silver. Of course minting into coins/small bars and marketing them to the public adds an additional premium over the refined 999 metal value. <br /><br />OK, I'm done. No more questions. Thanks for your input.Marknoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-1978670986021121502011-12-06T13:28:12.830+08:002011-12-06T13:28:12.830+08:00I think this is just buyers thinking they can cut ...I think this is just buyers thinking they can cut out the middlemen and will save money, with no understanding of the industry and that miners don't produce saleable (internationally recognised) metal as the economics of 99.5% plus purity refining don't add up at the volumes individual mines put out.<br /><br />We get tyre kickers coming to us wanting physical, but often they want it on 180 day terms backed up with letters of credit from nobody banks.<br /><br />As a result they might say they can’t get physical, but that’s because they don’t want to pay cash upfront. I’d like to know more detail from Mr Cutifani as to the terms he was being offered to buy his gold.<br /><br />If you listen to the interview, he says that he only supplies to refineries, which means he rejected the buyers.Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-6839218626961112002011-12-06T10:19:25.245+08:002011-12-06T10:19:25.245+08:00Bron,
RE: Exclusive – Mark Cutifani CEO of $16B ...Bron,<br /><br />RE: Exclusive – Mark Cutifani CEO of $16B AngloGold Ashanti: “Major Buyers Are Finding It’s Hard To Get Physical Gold”<br /><br />http://bullmarketthinking.com/mark-cutifani-ceo-of-anglogold-ashanti-major-buyers-finding-its-hard-to-get-physical-gold/<br /><br />I'd love to see your comments on this phenomena from a Perth Mint point of view.<br /><br />Per Mark Cutifani: "People are coming directly to us,” for large gold purchases he said. “People who want tonnes of physical gold, people with serious financial muscle…because they’re finding it’s very difficult to secure the volume of gold they want…That’s something we’ve noticed over the last 18 months, and it’s been increasing in the last 6 months. I think people are finding its hard to get physical gold.”Marknoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-20166504735155304192011-11-30T09:39:19.245+08:002011-11-30T09:39:19.245+08:00decrypt_era, as I said above, I didn't write t...decrypt_era, as I said above, I didn't write the story so the "clever or funny" tone is not mine.<br /><br />In any case I don't see how you interpret the story as saying rich 1% people are freeloaders. All the (admittedly cliched) modern version is saying is that the grasshopper (who could be rich or poor) wastes their income and doesn't save and that modern soceity doesn't ask whether the grasshopper caused their own misfortune and just hands out help to all. This creates moral hazard.Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-35103461097503268482011-11-27T15:58:11.940+08:002011-11-27T15:58:11.940+08:00Wow. You do such a fine job of debunking the many ...Wow. You do such a fine job of debunking the many irrational theories which abound in the PM market, calmly, objectively and clearly, yet here you are regurgitating hoary old knee-jerk political cliches without blinking. There is even a tone that indicates you feel you're being clever or funny, as opposed to unimaginative. Why not stick to the subjects on which you're well-informed?<br /><br />Rather than argue endlessly with your articles of faith, I'll try to reduce this down to a few bottom-line questions: Does the average dollar-a-day free-trade-zone sweatshopper work harder and longer than you? Where is their winter store? Does Bill Gates, say, work thousands of times harder than you do? Aren't the greatest freeloaders those gatherers of others' brow sweat lately known as the 1%?decrypt_eranoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-36249755374614562182011-11-26T22:01:59.105+08:002011-11-26T22:01:59.105+08:00The fable as I understand it is actually meant to ...The fable as I understand it is actually meant to be the Ant and the Grasshopper:<br /><br />http://en.wikipedia.org/wiki/The_Ant_and_the_Grasshopper<br /><br />Same premise, different animal kingdoms. Comparing two different insects is better ;)<br /><br />Socialism isn't a problem until the country starts running out of money. Then the Govt starts by squeezing tax from the most productive, reducing the incentive to produce at all.<br /><br />From there it's a downward spiral to pointlessness.<br /><br />So far Australia has been very prosperous on the back of Chinese bubble blowers and enormous private debt. Once that stops growing it's a real problem. A bit like trying to unwind a ponzi scheme.Petenoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-20661040648723730282011-11-25T11:43:49.289+08:002011-11-25T11:43:49.289+08:00"[loopholes] sometimes made it possible for m..."[loopholes] sometimes made it possible for millionaires to pay nothing, while a bus driver was paying ten percent of his salary, and that’s crazy. [...] Do you think the millionaire ought to pay more in taxes than the bus driver or less?"<br /><br />Ronald Reagan, 1985.<br /><br />A hedge fund manager, who produces *nothing*, is not more worthy than my grandmother, crippled by arthritis after a life of hard work, who got a pittance from Social Security.<br /><br />Let's be completely clear on who's getting welfare (banks) and who's working (workers).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-8571936487008234402011-11-24T19:05:32.350+08:002011-11-24T19:05:32.350+08:00Then there's the old aphorism "People who...Then there's the old aphorism "People who live in gold mines shouldn't throw stones".Welfare Chislernoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-56076833335092577232011-11-24T18:30:01.817+08:002011-11-24T18:30:01.817+08:00I prefer the grasshopper & the octopus - All s...I prefer the grasshopper & the octopus - All summer long the grasshopper buried acorns for winter, while the octopus mooched off his girlfriend & watched TV. But then the winter came & the grasshopper died, the octopus ate all of his acorns & also got a race car. <br /><br />Is any of this getting through to you?Justinnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-23122109895880282772011-11-24T08:40:37.125+08:002011-11-24T08:40:37.125+08:00Love your work Bron.
In Australia the grasshopper...Love your work Bron.<br /><br />In Australia the grasshopper would've had 10 children to collect multiple baby bonuses and child allowance payments. And then taken out a 400,000 AUD loan to collect the first home owners grant on a town house in Campbelltown.<br /><br />Meanwhile the squirrel puts off having kids for 10 years until he finally pays off the mortgagesquirrelnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-50742857222350384212011-11-24T07:01:31.989+08:002011-11-24T07:01:31.989+08:00Anonymous, I didn't write the fable, it was a ...Anonymous, I didn't write the fable, it was a chain email which I edited down.<br /><br />Anonymous 2 - agreed re drug taking, just presenting it as it was emailed to me.Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-86540014953112939022011-11-24T05:35:01.291+08:002011-11-24T05:35:01.291+08:00I liked it until it got to the drug-taking part. ...I liked it until it got to the drug-taking part. After all, many (most?) welfare recipients in society, including the big corporations, are not drug takers. Adding that part allows people to dismiss it as not being analagous, where as up to that point, I think, it is a pretty devastating indictment on our society today.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-2656265909652249252011-11-23T18:55:39.033+08:002011-11-23T18:55:39.033+08:00Sad but true Bron.
Australia has become a disgra...Sad but true Bron. <br /><br />Australia has become a disgrace for this sort of thing. <br /><br />The world will eat itself in due course.Zebedeehttps://www.blogger.com/profile/05115890276589637833noreply@blogger.comtag:blogger.com,1999:blog-6089228851855763774.post-41323171147485040762011-11-23T17:45:42.880+08:002011-11-23T17:45:42.880+08:00hilarious... shall we call this forum "Aesop...hilarious... shall we call this forum "Aesop's Gold Chat"?<br /><br />The fable is slightly too long imo, but agree with the point. <br /><br />Social Welfare is way out of control. It's essential in a compassionate society, which is what we must truly be, but sadly there are way too many cheats.<br /><br />Good work Bron, but you're not at Aesop's level yet :-)Anonymousnoreply@blogger.com