John Kaiser - Cambridge House

The impetus for higher gold prices is low interest rates that have fallen behind inflation. Not geopolitics. If anything, geopolitical events tend to decrease the price of gold. John Kaiser is completely wrong about that one. He makes far too much an issue about geopolitics as if it were an absolute certainty.

I also don't believe John Kaiser when he says that markets will re-evaluate gold mining prospects solely out of having got it wrong. The markets are right, but they are now based on money and leverage going massively into derivatives, sapping value and fixing prices.

Mining stocks are caught in a bind where Canadian regulators have hung an 'open hunting season' sign around their necks subordinating their share prices to delta hedging strategies using the Black Scholes model, and gold miners themselves operating under false assumptions have shot themselves in the foot assuming investors would herd into the stocks due to higher gold prices and aggressively diluted shares and ore grades to the point of stupidity.

Everyone has it wrong. The gold miners that win in this scenario are the ones that recognize finally that they will have to pay a dividend yield, because that will change the assumptions in the Black Scholes model, introducing arbitrage risk into share prices. The ones that don't recognized this are probably going to face shareholder hostility if not a hostile buyout and get picked off.

I have serious doubts that GBN.V management and investors in the company have even the slightest clue. GBN.V management are clearly withholding information critical to investors, such as reporting production rates for Q4 and providing only the most opaque, unreadable financials.

http://youtu.be/xtyxjmD2uL8

-F6