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At the mercy of the central bankers

July 10th, 2013 No comments

Central Bankers

Despite all the fiscal and monetary stimulus, this is the most tepid recovery on record. Eventually, the cumulative effects on overstretched complex adaptive systems can be unpredictable, disproportionate and undesireable.

If printing money was the pathway to prosperity, Zimbabwe would be the world’s most prosperous economy.

Maurice Newman is a former executive chairman, Deutsche Bank Group Australia & New Zealand, a former chairman of the Australian Stock Exchange, the Australian Broadcasting Corporation and a former chancellor of Macquarie University.

His opinion piece published 05 July 2013 in The Australian Financial Review highlights the Federal Reserve system which he argues, confers too much unaccountable power on a few who have used it to tilt the economic system in favour of the banking cartel that owns it.

At the mercy of central bankers

 

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Gold Crashes Through Production Cost Levels

July 8th, 2013 No comments

Gold Mining

Gold fell to its lowest level since 2010 on Friday 28th June to under $1,200, which is what it costs many miners to produce an ounce of gold, and analysts tell CNBC that miners will be “severely” impacted if prices stay here.

Andrew Su, CEO at brokerage Compass Global Markets said the average cost of producing gold in Australia, home to some of the world’s biggest gold miners, has jumped from $500 an ounce in 2007 to over $1,000 an ounce this year.

“What I believe is that the official costs, the costs in reality, are significantly higher than $1,000. So we’ve had quite a few gold mines close in Australia,” Su said on Friday. “We’ve had some companies actually go bust and we’ve also got significant job cuts by big miners like Newcrest, Barrick, and Silver Lake Resources.”

Su adds that fixed costs like paying workers are actually rising quite significantly while gold prices have fallen, adding more pressure to miners’ operations.

According to industry experts, the total cost of production varies between $1,000 and $1,200 an ounce depending on the scale of a miner’s operations.

Gold prices should start to stabilize once there’s a significant reduction in supply as miners cut back, Su added.

“This fall in the price of gold is not truly based on supply and demand – It’s based on expectations of what the Federal Reserve is doing,” Su said. “I think that somewhere along the line the gold prices will simply start rising, because production will reduce supply significantly.”

Gold Crashes Through Production Cost Levels

 

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