Submitted by Tyler Durden on 09/21/2012 - 11:08 default Ray Dalio
Moments ago, a stray headline crossing Bloomberg was the catalyst for violent selling across the precious metal complex. The headline in question is this:
- SOUTH AFRICA GOLD PRODUCERS TO CONSIDER BRINGING FWD WAGE TALKS
The reason for the puke in PMs is the goalseeked as follows: since miners are willing to negotiate wage hikes, the miner strike may soon be over. Well, they said that last week, when the Lonmin Maricana mine strike ended. All that happened next was for every other miner in South Africa to demand equitable terms, making the strike even worse than before. What it will mean, if indeed passed, is that a broad swath of PM miners will face default sooner rather than later, as they will be completely unable to pass on 20% cost surges to consumers, and many will file for bankruptcy sending capacity far lower in the long-run than currently, even with the mine strike. What is most funny, however, is the response in silver, which plunged in sympathy with gold and platinum as can be seen on the chart below. There is one small detail: please point out in the table below of the world's largest 20 producers of silver, just where is South Africa.
