Banksters Help Miners on Cash-Costs

As much as investors in gold and silver bullion are seething after the banksters' latest criminal operation in the silver market, investors in the gold and silver miners have even more reason to be experiencing frustration (if not rage). As is always the case, it is the holders of these equities who have ‘taken it on the chin' much more than bullion-holders themselves.

This is, in part, a natural consequence of the fact that (as commodity producers) these companies provide “natural leverage” on the commodities they produce. As all experienced investors understand, leverage “cuts both ways”: boosting gains on the way up; exaggerating losses on the way down.

The other half of this equation is that it is easier for the banking cabal to manipulate the prices of (paper) equities than it is to manipulate the bullion-market – where their lying/cheating/stealing requires at least some “physical bullion” to conduct their ambushes. Inevitably, many (impatient) investors simply give up on the miners.

While part of the failure of these investors to stick with these winning investments relates to impatience, the other problem for these investors is that they don't understand “the big picture”. Just as the bankster raids on bullion markets are what “set up” these markets for their strong moves higher to new price levels, so too do the bankster attacks on the mining sector ultimately pave the way for new, massive rallies for these stocks.

To illuminate the “big picture” for all of these investors we need only look back to the “Crash of ‘08”: the most massive market-manipulation by the banksters in the history of markets. While the holders of bullion were hammered throughout the summer and fall of 2008, those holding the miners were absolutely slaughtered – especially those of us holding the high-growth “junior miners”.

Let's review the relevant parameters for that episode. First of all, as everyone knows it wasn't only precious metals which the banksters took-down in 2008, but the entire commodities complex (much like what occurred with the current ambush). Of greatest importance to the miners, this included a greater than 75% plunge in the price of crude oil.

The reason that the oil market is of such importance to precious metals miners is that (second only to labour costs) energy costs are the largest, single element of the “cash costs” of these miners in extracting (and refining) their silver and gold. What we saw with the Crash of '08 was that not only did the price of crude oil get pushed down even further than gold and silver (in percentage terms), but it was much slower to bounce back in price than gold or silver.

This is to be expected, for two reasons. First of all, in terms of any kind of “fundamentals” analysis, gold and (especially) silver are much more under-priced than crude oil. This means that they will always tend to outperform oil on any/all up-legs. Secondly, as much as the banksters want to manipulate gold and silver prices (to hide their destruction of our currencies), they need to manipulate the cost of oil as low as possible.

Indeed, contrary to the lies of the propaganda machine, a “cheap dollar” can never boost the U.S. economy through exports, because for every $1 dollar in extra exports which the U.S. gets from a falling dollar the cost of imported oil increases $2. And that is with the U.S. manipulating the price of oil lower with all of its might. Equally, higher energy costs cripple every segment of the U.S.'s oil-gluttonous consumer economy.