Much has been said about suppressing gold prices in order to keep people in the market and to support the US dollar. On a different slant, depressing the gold price was significant in trying to mask the fact that governments have sold off much of their gold stores. Officials would be red faced to explain when, why and to whom and it seems clear that they never thought that they would have to. Who could have foreseen the subprime situation and it's global impact. There will now be a lot of dirty linen hung out for all to see in every country involved. Some of this linen has nothing directly to do with the subprime but now that the door is open....
In Canada it has been theorized that the selloff of gold during the hot years of the Quebec referendum was part of a conspiracy to rob the future country of Quebec of their share of the wealth should separation take place (author to this I don't remember). What ever the reasons, it is obvious that governments were in positions to rob their countries of a solid base on which to maintain their economies so they could use their gold for whatever projects they would need to fund ..... off the books. It is hard to imagine basing a countries currency on something so flimsy as a GDP, though it may be healthy for decades, when something as nasty as a subprime situation could contribute to toppling an economy. Needless to say, arrogance has a way of contributing to blindness and mitigating judicious action.
So what does it all mean? I guess we are looking at a gold shortage that is perhaps more acute than most realize, at a time when it is most needed. Robert McEwen, when investigating the status of gold supply, was told by a gold vendor that his order could promptly be filled. When he went to secure the deal he was met with song and dance and delays. In checking various websites for gold vendors, many are listing "out of stock" or unavailable on various gold products. Physical gold sales are just beginning. It would seem expedient to make sure there is some in your portfolio.
As for Noront, we have achieved our current value based on base metals and to an extent the Platinum group. We have really received no recognition as yet for Windfall, as has been stated by others. The suppression of the gold price and it's affect on gold mines, assays labs and all related industries is loosing it's grip and we are witnessing it through the recent breakthrough of over $1000 gold value. The industry is gaining ground and that means something very special for NOT. The timing seems to be perfect for a one... two punch, first D.E. then Windfall.
I have no idea how we will weather the world financial problems that are rearing again based on the subprime in the short term so I remain open to flexibility. Everyone will have to play their hand the best they can. Having a small holding of physical gold seems like a reasonable consideration regardless. Wouldn't it be nice for NOT to pop so as to open up more financial options? However, it is equally possible to see NOT's SP drop sharply as the move to take out profits to cover other loss positions would be attractive. We've seen big hits on NOT a couple of times (both with nice recoveries) that surprised many. Ultimately the affects on the SP owing to the present economic dangers would depend on how many investors need to cover compared with how many are moving into NOT as a hedge in bad times. We can only guess and theorize which camp will be the more prominent. How one should respond depends largely on individual needs and trading technique. NOT is a great place to be ultimately, but no place in the market is immune 100%. All considered, I still feel very lucky to be in NOT.
