Thursday, January 10, 2008

S.African Nov gold output falls 12.7 pct yr/yr

Although this is not a gold-bug hangout, all this stuff is connected. The person who sees the connections, walks away with the gold.
(or the fiat currency of your choice, or a Fiat, whatev)

From Reuters:

South Africa's annual gold output fell in November by its biggest margin in seven months, while total minerals production declined 6.4 percent compared with the same month the previous year, data showed on Thursday.

Gold production dropped 12.7 percent year-on-year in November, according to figures from Statistics South Africa, further tightening supplies in the world's biggest producer of the precious metal.

Gold production has been on a downward slope in South Africa, tumbling by over 50 percent over the past decade, as high-grade mines run out of ore and firms grapple with more difficult and high-cost underground operations.

In 2006, gold production fell 7.5 percent to the lowest levels since 1922, industry group the Chamber of Mines has said....More

I had a gold related comment at the WSJ's MarketBeat blog yesterday and they are blogrolling a post from Teresa Lo today:

Oh Great and Powerful Oz,

Far be it for a humble subject to dispute you but gold is not a hedge against deflation.
This proposition gained currency because of the performance of HM between ‘29 and ‘37.
Proponents confuse correlation with causality.
HM was high-grading, starting in ‘27.
Roosevelt’s confiscation and devaluation meant their labor costs were fixed while their received price went up $20.67/$35= 68%.
Trust me on this. After the mine closed, I went out to Lead. I was probably the last person to go through the records from the ’30’s before the archivists boxed ‘em up.
Gold does tend to be a pretty good store of value.
See: “The Golden Constant”.
Yr. Hmbl. & Obt. Svt.

Comment by Climateer - January 9, 2008 at 6:57 pm

That last sentence should continue “…under fiat currency regimes”.
Still humble.

Comment by Climateer - January 9, 2008 at 7:06 pm


...Teresa Lo sounds fed up with those who believe gold is forever going higher. “If this sort of price action were to be seen in the Dow Industrials or the S&P 500 index, the move would certainly be labelled a bubble, a prelude to disaster,” she writes. “But the permabear priesthood never sees it like this for gold. No, ‘gold is the new currency’, ‘the return of sound money’ or ‘the new world order’. Furthermore, there is always a conspiracy amongst the central banks against the little guy. Gold is the ultimate Robin Hood trade.”