Silver Sector Shrinking
Sean Rakhimov| Thursday, August 23rd
Silverseek.com
It has been a while since we had this nagging feeling that we’re witnessing something profound taking place before our eyes and the market doesn’t seem to grasp it yet. We are not talking about the smorgasbord of events effecting markets all over the globe that is receiving ample coverage elsewhere in the media. As readers might know, our particular interest is in the silver space, and that is where we see an elephant in the room that hasn’t made headlines yet.
No doubt most readers are aware of the recent developments in countries like Argentina, Bolivia, Peru and others, with respect to what can be broadly classified as “resource nationalism”. Our general views on the subject were detailed a few years ago, here. As discussed by this writer and others, such developments are not new and certainly not limited to silver or even the mining sector. However, in our opinion, it is in the silver space that these events should have the most profound effect.
Why? Because the silver sector is so small and the above mentioned countries collectively make up a big of chunk of it.
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In summary, we don’t suggest that countries presently stepping up resource nationalism are a complete write-off, or the situation could not change in the future. Companies neck-deep with operations in such places will try to make the best of it and rightfully so – they owe it to their shareholders. Even when projects are nationalized, they usually continue to operate – though history suggests that government-run industries eventually work themselves into the ground (no pun intended). At that point, they start to look to private business to right the ship and the cycle starts over. In the meantime, as Jim Dines puts it, the overall trend is “southward” – towards more government control – and capital will flow wherever it is treated best. Jindal Steel exit from a $2.1 Billion iron or project in Bolivia is a manifestation of that.
More: http://www.silverseek.com/article/silver-sector-shrinking-5826
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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