Oldtent Archives 2007 - 2008

….never mind…..Some people will NEVER get it….
….Maybe He is John Nadler…..from Kitco….hehe
….thanks for the story though…shaking my head

Thanks for the update. Kinda been wondering what ya’ll got accomplished today?

Best to you and the whole gang down there, Farmy

Well, finally got around to making a little trip today. Some folks rented the closed Wal Mart store and opened a ‘flea market’ about 5 or 6 months ago. Someone at the feed store mentioned there was a coin dealer who had a booth there. Just had to drop by and check it out today.

The sign on the front of the former Wal Mart proclaimed, ‘800 Booths’. Figure at best there were maybe a hundred. Mostly junk. Not even good junk. Seen one or two antiques, but way overpriced. (Even in inflation adjusted dollar terms) Mostly, was a lot of rap music, used CD/DVD’s, boom boxes and car stero components, and clothing. Disappointed at the lack of arts and crafts, homemade items, stuff that used to make up the ole ‘flea markets’.

The coin dealer. Probably one of the best booths in the whole place. Had quite an inventory….guessing around 75-100 grand. (About 90 percent Silver though). Guessing the owner was in his 60’s age wise, and seemed to have acquired over many years, quite a large inventory. Got to talking with him, he thought gold was way too high, and would see 500-600 range in the near future.??? He thought the US Dollar would soon take off to higher levels, and gold would go back down. ??? Asked him what he thought about the hiding of the M3 figures? He had not a clue what I was talking about. Asked him, his opinion, of what the ‘inflation adjusted’ price of gold …what figure he thought it should be….he had not a clue, and thus offered no opinion.

Guess I was somewhat shocked, even disappointed a little, with a man who had spent thousands of hours acquiring a very well rounded collection of ‘Precious’, but who had little understanding of the ounces, the value, or why his collection was increasing in value. ??? Found the whole visit left me feeling …confused I guess is a good word to describe it. Confused, and perplexed, that a man, a serious coin collector, dealer of sorts, did not know, understand more about, the barbic relics he had so proudly displayed.

Ended up our little conversation by asking him if he was pretty sure gold would see 500 again. He replied with an emphatic ‘No Doubt About it”? Well, I figured if he was that sure about it,….I asked him if he wanted to part with any gold eagles today at the 500 price? I guess he was not all that fired up for sure….he just smiled. And so did I.

Will have to go back one of these days, when I have more time to peruse his collection with a more careful eye. Figure we might haggle over some of those 1800 Era Silver Dollars he had.

Passed out a few Ron Paul CD’s in the parking lot when I found a few folks admiring all the Ron Paul bumper stickers on the ole pick up. (grin) I tell ya, they look much better than the ‘Alabama Chrome’ (Duct Tape) I had holding the old Ford together. (Grin)

Farmboy., who seems more often than not, to be amazed these days. At a lot of things.

Without taking much time here ,I would like to say that I am stunned once again. Stunned at the abilities of tenters to overcome when confronted with the rigors of a complex set of circumstances. As many of you know,timing,choice of words,delivery,body language ect.,can change the atmosphere in a corporate meeting in a split second. Everytime a tough moment approached today ,someone else took the lead and moved right through it like soft butter. I have never seen the likes of it before. I simply held on to the reigns an guided along softly as the tenters diplomatically sliced through situations that would have normally collapsed a meeting into chaos. Not us ..victory was ours today
We have a cleared landing pad ….God bless ya all On to Dangriga tomorrow as a unified corporate entity.
No words can fittingly describe how proud I am of the Tent

“In any case, whether or not the hedges are off-loaded to newly acquired juniors, or simply kept on the books, the larger concept is possible if one imagines what one might do to acquire control of the gold mining industry if one had the means to do so.PMfever…  JS is a data mine, as are many other writers, and provide ideas that I have fun with.”

——————————-

Here is the problem I see in what you posted, also stated, above.  The original concept is “How” ABX could be a consolidator of Gold mining production?  In the earlier post and above you suggest the answer is that ABX off-loads hedges onto “newly acquired Juniors”, where in reality JS is saying that ABX as controlled by the Bank couterparties to development deal hedges will use those hedges to eventually own/ control mining companies.   When you state that you are talking about mines that ABX has “already acquired”, not a means “to acquire” or consolidate new Gold mines.  Yes, once ABX owns a property they have every right to match up their hedges with a property in anyway they wish, just like the average business person can use any asset as collateral for a loan.  But that was not the question.

The question was “How ABX will acquire or consolidate a decent portion of the Gold mining production industry?”  To that end, JS has clearly warned of clauses in a Senior/ JV percentage agreement where the Senior producer will be responsible to take out a loan to build infrastructure  for a mine and the Senior will NOT be willing to put up all its mining assets for collateral.  Thus, the Senior producer will put the whole of the potential mine and its reserves into the contract as collateral against a hedge clause that is required by the bank making the loan.  The JR is required to sign off on the same agreement.  This specific hedge clause in the project loan can become toxic as the price of Gold rises since  only the one project itself is collateral against the hedge, and since there is insufficient production from the developing mine to deliver into the hedge (short term) if Gold rises substantially.  Thus, if the price of Gold rises too fast, then the counterparty bank to the specific development hedge clause would come calling.  The Senior Gold producer still would not want to risk its ongoing mines by subjecting them to the hedge clause so it would simply give up some percentage ownership in the mine to the Bank.  The Junior would be required to also give up the same percentage ownership, also, but since that project might be the only project the Junior has (or a high percentage of its assets), the Junior would be potentially losing a good portion of its assets.  Rinse and repeat.

Separately, for other Senior Producers that have extensive hedges (not necessarily tied to clauses in mine development loans- pure speculators), JS has also suggested that the same banks that “indirectly control” ABX because they own the large toxic hedges that ABX has signed off on………also are the counterparty to any other Senior Producers that have outright hedges (other than a clause in a property development loan).  As these hedges blow up the banks that are the counterparties to ABX’s hedges, thus controlling ABX, would direct a deal where ABX would essentially take over/ control that Senior producer (or certain of its properties) once the hedges blew up.  Thus, JS has suggested that ABX due to its control by certain banks through hedge deals would be used as the “warehouse” or consolidator of any and all producing assets tied to hedges gone bad, or potentially any hedge clause of mining development loans gone bad, since ABX is now controlled by the counterparty banks to all of the hedges in the PM sector.

Thus, the counterparty banks to all of the Gold hedges have a large interest in a major Gold Bull market.

This is all separate from whatever ABX does internally as a company in assigning its personal hedges to different ABX owned companies.

 I know, it is as clear as mud……….but I think an important concept to get one’s head around.

Always a pleasure to see you posting, wieghing in with your well thought and spoken views.

Just wanted to shout a ‘Howdy’ out to you this evening, Best, Farmboy

Amazing aint it? How da rules get changed to favor the ‘privileged & guilty’ these days.

Best to you this evening, and keep up the ‘great reporting’ of the news, Farmboy

I don’t think she was quite up to date on Ron Paul’s positions.  <g>   It’s so refreshing to see a politician that always has the same views and policies.  Almost a miracle. 

Fascinating.  I didn’t know that.  I’m blue-eyed, and I learned that it is a recessive gene trait.  It takes two blue-eyed parentst to have a blue-eyed child.  Presumably, the brown will again reassert dominance.

I guess watching your world almost come to an end, and a pole shift, is enough to scare the brown out of your eyes!   

How about the bimbo that wanted to know if as president would

he use tax money to subsidize her birth control pills.  Or sum

such.

Auric

Well I wouldn’t go so far as to say I decipher things the same as anyone else - especially one whose posts I briefly scanned. The only point that I was trying to make is that I do agree with the idea that there are better investments from time to time than pm’s and it might be worthwhile to look at all possibilities. As far as my tea reading abilities, while I do have confidence in them (or I wouldn’t be able to trade off them), still you are absolutely correct in that they are worth what they are worth and could well be wrong. I have obviously been wrong from time to time in the past and will no doubt be so in the future. Still I have not yet changed my mind on any of the positions that I have posted about over the last several months.

aurum

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2386283

Outstanding! 

Snip:

‘Japan’s bust started with a real-estate boom, lax lending and the propping up of financial firms — and its recovery took a decade, says MSN Money columnist Jim Jubak. The Fed’s rate cuts keep the US on the same path.  ‘

articles.moneycentral.msn.com/News/TheEconomyDyn.aspx?cp-documentid=6123216