Paulson, BlackRock Hire London Mining Analysts as Funds Step Up Coverage

http://www.bloomberg.com/news/2011-08-02/paulson-blackrock-ubs-lead-london-mining-analyst-hiring-spree.html 

The headlines declare there is a hiring scramble for mining industry analysts.  Reading between the lines, many more mining companies will now get analyst coverage, which can only be bullish for certain mining shares whose prices have been manipulated lower by the anti-gold crowd, or have suffered due to a dearth of coverage.

Mergers and acquisitions of junior and mid-level mining companies will undoubtedly increase as major gold producers look to replenish their reserves.  Remember:  a mining site is an always-depleting asset.  Just as investment banks and hedge funds are scrambling for analysts in a "hot" sector, mining companies need to add to their reserves; they're both acquiring assets.  Often, that means acquiring mid- and junior-level mining companies in lieu of exploring and developing their own properties.  Exploration is a high-risk enterprise, and junior explorers are more cost-efficient, without the bloated overhead of major gold producers.

Recall that it takes at least ten years to develop and bring on-line production of minerals--even if an exploration is lucky enough to yield said minerals.  By contrast, it takes a microsecond for Ben Bernanke to create trillions of paper dollars out of thin air (or the digital equivalent entries of 1's and 0's).  That's been our investment thesis for buying tangible assets in the first place:  scarce assets will inevitably rise in price--non-scarce assets will decline.  That's what the top callers don't get:  as long as central banks continue to bailout bankrupt governments and banks with reckless printing of currency, precious metals aren't in any bubble.

Central bankers worldwide are flooding markets with paper currencies in an attempt to artificially prop up sagging economies.  Quantitative easing (or debt monetization, for those allergic to cryptic central banker-speak) has failed to stimulate economies, but it has succeeded in debasing currencies and driving up costs, while reducing the standard of living globally.  But failure won't stop these Keynesian idiot-savants.  Bernanke and his central banking cohorts will continue to austistically bang on the printing press in an attempt to paper over fiscal insolvency.

With the prices of gold and silver continuing to rally, M & A activity will continue to elevate share prices of valuable properties.

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