Reply #1: Market WrapUp: The Best Case Yet for Gold

[ozymandius]

BY ROB KIRBY

Despite continuing assertions from officialdom to the contrary, inflation is alive, well and unfortunately – flourishing.

Continued claims that we live in a 2 – 3% inflationary environment fly in the face of broad money growth rates (M3) of 14% in the U.S. and annualized growth rates in excess of 27% in countries like Russia:

-see chart-

And Here’s Why We All Should Care

When record keepers insist that official inflation rates are lower than reality, these distorted numbers are typically used as “benchmarks” – not only for indexing purposes , but these same faulty numbers are also used as inputs to assess the economic viability of capital intensive projects going forward:

Teck Cominco, NovaGold step back from Galore Creek plan
JOHN PARTRIDGE
Globe and Mail Update
November 26, 2007 at 3:23 PM EST

……The two companies said Monday that an evaluation of the Galore Creek project by an independent engineering firm, along with their own review, concluded that the capital cost of the project “could approach as much as $5-billion,” while adding 18 to 12 months to the construction schedule.

This is fully $3-billion higher than estimates in the initial feasibility study just over a year ago, an increase that clearly shook some analysts who took part in a conference call held by the mining companies…

http://www.financialsense.com/Market/wrapup.htm