RE:RE:RE:RE:Change of plan….maurizion wrote:
Why not Gold to $500 $300 $100
That's why.
There is a value and a bottom to everything.
The value of the commodity may go from 100 down to 40-30-20-10 but never zero like oil however the companies that are producing oil can go to zero as the company/business is only viable at certain prices, such in the case of long run and other junior oil producers that is highly indebted vs say a shell or bp that can and has access to capital and withstand prolong low oil prices - they can and will have access to the debt markets at lower rate vs a long run or an lts.
That goes for gold, silver and other commodities/companies - I'm not saying gold cannot fall to 100 sure why can't it - but the company that's mining it can and will go to zero if that happens. When that happens and it goes for oil the value of commodity stabilizes and goes up the only left standing however will be those that has access to capital and with a clean balance sheet (low/no debt).
A stock in a company is simply paper but if you own the actual commodity like the saudis or the russians you care not for these junior public companies in the world, they'll pump oil at the same rate while one by one junior oil companies in the US, Canada or the world goes away - the boomerang effect is real.
We can all debate til the cow comes home on which companies will be left standing when prices stabilize or gets back to "norm" but I guarantee you that companies such as lts or lre will have a tough time - something is gotta give.