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Jason Hommel''s silver stock valuation report and commentary
By Jim Sinclair
Friday, April 30, 2004
http://www.jsmineset.com/home.asp
I am still receiving questions about what an economic
implosion in China would mean to gold.
Why are gold shares so soft?
What will increasing interest rates do the gold price?
The market action of gold is a war between COT on the
bear side and Asian/Islamic interests on the bull side.
The Gold Community is not a factor at present but will
grow and become one in 2005.
Disinformation has always been a tool of war. In fact,
the first casualty in most wars is the truth. So please
don't just read the following; post it to your chat groups.
Please copy and email this to those gold writers who
are creating false concerns regarding these topics.
I have largely answered these already but let's review:
1) China is not going to implode economically without
the United States, Asia, and Euroland imploding first.
Before you could have an economic contraction in
China, the derivative and politically driven Western
markets would fight off the problem just as they are
now but with expanded liquidity and therefore more
inflation-building fuel. That scenario is just the stuff
a positive gold market is made of. So please do not
attach yourself to the glib opinions now being
promulgated that China threatens the commodity
world and gold. Quite to the contrary. The Chinese
external manufacturing demand equation strongly
supports the gold price now and into the foreseeable
future.
2) Gold shares have been assessed by general
equity analysts employing the methodologies of
multiples of cash flow for sale and earnings per
share value. Both are totally false because the
mining industry is an asset-based entity. This
industry does not make its final selling price but
rather has to take what prices the market gives.
Hedging has been disqualified by the bankruptcy
and near-bankruptcy it has caused. Both these
misconceptions will evaporate as the gold mining
industry consolidates by acquisition. It will be seen
that the a gold mining or exploration and
development trades solely on its underlying asset
value.
3) Rising interest rates -- when they represent central
bank catch-up action to market reality -- support the
gold price. In 1980 it took 14 7/8 percent interest on
10-year money before the rate of interest became
supported to the value of the U.S. dollar, and this
marked the end of inflation.
Please keep faxing and emailing me your concerns and
I will confirm or deny them based not on bias but on
history and firm fundamentals.
Have a good weekend. Gold is acting well and the bear
line in the sand will, like all sand writing, quickly
disappear into bullish market movement.
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RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS
Free sites:
http://www.cbs.marketwatch.com
http://www.capitalupdates.com/
http://www.silver-investor.com
http://www.thebulliondesk.com/
http://www.goldismoney.info/index.html
http://www.minersmanual.com/minernews.html
http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html
http://www.investmentrarities.com
http://www.kuik.com/KH/KH.html
(Korelin Business Report -- audio)
http://www.plata.com.mx/plata/home.htm
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm
(In English)
Subscription site:
http://www.lemetropolecafe.com/
Eagle Ranch discussion site:
http://os2eagle.net/checksum.htm
Ted Butler silver commentary archive:
http://www.investmentrarities.com/
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COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS
Centennial Precious Metals
3033 East 1st Ave.
Suite 403
Denver, Colorado 80206
www.USAGold.com
Michael Kosares, Proprietor
US (800) 869-5115
Canada 1-800-294-9462
European Union 00-800-2760-2760
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cpm@usagold.com
Colorado Gold
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Don Stott, Proprietor
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El Dorado Discount Gold
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Harvey Gordin, President
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Greg Westgaard, Sales Manager
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Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
and
620 Cathcart, Suite 900
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Toll-free:1-800-363-7053
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Ed Lee, Proprietor
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leecoins@aol.com
Miles Franklin Ltd.
3015 Ottawa Ave. South
St. Louis Park, Minn. 55416
1-800-822-8080 / 952-929-1129
fax: 952-925-0143
http://www.milesfranklin.com
Contacts: David Schectman,
Andy Schectman, and Bob Sichel
Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
http://www.mocoin.com
Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com
Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
http://www.swissamerica.com
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com
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