Jim has been preaching this message for a while now.

Dear CIGAs,

The ratio spread is limited in time. The ratio spread of short gold shares and long gold futures will end when the spread and results thereof go negative.

Do you have any idea what $1200 means to gold producers at all levels? As the impact of gold at these levels filters through the production process, future earnings are truly golden.

$1200 means 1,000,000 mineable ounces is worth $1.2 billion less the cost of mining.

Even today the hedge fund sellers of future gold are finding it hard to cover the gold share shorts placed when paper gold was purchased.

What a way to chase your tail. Can you imagine if Egon is right and gold goes to $6000-7000?

Every 100,000 mineable ounces would have a value of $600,000,000 less the cost of production. To the earnings statement 1,000,000 ounces would be worth $6-7 billion.

The future of the ratio spread between paper gold and gold shares becomes increasingly difficult when covering the naked shorts on gold shares as you think about what $1200 means to any producing company. Do the math!