Currency Wars Keep Global Gold Miners In Good Shape

Summary

While the US dollar gold price has fallen over 40% from its 2011 peak, the same is not true in major gold producing nations' own currencies.

With most gold mining costs incurred in domestic currencies and revenues in US dollars, the economics of mining in most of the world's top producers are not nearly so negative.

In Canada and Australia for example the gold price is only down 15% and 13% respectively from the 2011 peak.

In Russia - the world's No. 3 gold miner - the current gold price is close to an all-time high.

In South Africa (the world's sixth largest producer) and Argentina (world No. 14), the gold price is comfortably at an all-time high.

DYI Comments:  When the going gets tough governments will devalue currencies in a race to the bottom in an attempt to export their way back to prosperity.  Only when the excess manufacturing has been eliminated through plant closings and consolidation is when profitability will return.  For those who are devaluing it is hoped that the other guy(nation) will have to close down their excess manufacturing.

With precious metals mining companies off by 80% it is an excellent opportunity to dollar cost average into your favorite precious metals mutual fund awaiting for the turn around for this industry.

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AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION -  1/1/16

Active Allocation Bands (excluding cash) 0% to 60%

80% - Cash -Short Term Bond Index - VBIRX

20% -Gold- Precious Metals & Mining - VGPMX

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