So it cost about 3-400 to pull and oz of gold out of the earth. Why why are people willing to pay 1,200-1,400 per ounce? Effecient markets..yeah right. 2 year leap put anyone? Hard asset prices are just dumb dumb right now...the buyers are probabally the same one's who bout AAA rated subprime CDO's. This trade looks to easy.
So let me understand your logic...........
If it costs many millions upon millions to explore. It then costs many millions upon millions to develop a mine. You only count those cash costs that you have to actually mine & smelt while in production?
.............therefor no logic and you do not understand.
Cash Cost is merely an accounting term to denote how much outflow at ounce of production cost with inflow from sales of product. It dioes not take into account how much cash ahs been consumed to date to explore and develop.
dumb dumb's also sell and crazy low prices. Go back and read my early 09 posts about the upside down bubble...fyi market is not overpriced buy hard assets are and it's not even close.
lol...GLD is a commodity and very different than iphone. There is a large premium in gld copper and many metals right now. Ignoring the cost is no different than saying csco at 1000 p/e was still a good buy. dumb dumbs no appreciation of value...i'm going to write a book on bubbles they are everywhere..spot them and be patient and yu can get rich. What does 150 oil, florida condo at 3m, nasdaq 5k, csco at 1000 pe have in common, CDO's at 5% yield... Dumb dumb's buy at with no appreication of value. My theory...emotions trump logic and US markets are full ego maniac't thinking with emotion and not even knowing it.