A Melman Minute
By: Leonard Melman
July 23, 2008
What a difference a day makes! When we completed our
MM yesterday and left to catch our plane, the financial markets were lower, gold
was higher, crude was higher and pessimism had returned to the conventional
investment community. By the end of the session, all of those markets had
reversed with gold closing (all prices US$) $20 lower, crude falling sharply and
the Dow Industrials posting yet another 100+ point gain.
As this is written (6:00 AM PDT), early indications point toward another higher
opening on Wall Street, crude has fallen even further to the $126 level and gold
is recovering somewhat (now near $940) after falling to $931. The other precious
metals have fallen even further in terms of percentage losses with silver down
almost 70 cents during the past twenty-four hours to the $17.78 area and
platinum has reached the lowest price in several sessions, down to $1,750.
However, our focus remains on the long-term price movements and, as can be seen
on the multi-year chart for crude oil, that long-term up-trending bull market
remains intact despite the setbacks of the past week. It is also worth noting
that periodic price declines inside this ongoing bear have been the norm, not
the exception.
Like yesterday, we have to make this an abbreviated
MM this morning since we have a 7:00 AM flight into far northern BC to catch,
but we did want to make a comment about mining in particular.
During our many visits to various mining operations nationally and
internationally, we are constantly amazed by the dedication of mining
professionals and the astounding talent and knowledge it takes to transform a
simple observation of an interesting out-cropping by a prospector and move from
that starting point along a path toward a producing mine. The complexities of
deposit geology, the intricacies of drilling, the science of metallurgy, the
construction of production facilities, the manufacture and distribution of
literally thousands of different pieces of equipment - they are all truly
wonders of achievement and, in our opinion, deserve the greatest possible
support from the general community, instead of earning opposition and frequent
derision from hostile special-interest communities.
Until tomorrow...
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