Will Inflation Hurt Tyhee’s Profits, Even if Gold Skyrockets?

I phoned in this Q-call to Jim Puplava and asked Dave Webb for his thoughts.

“Jim,

So what if the price of bullion goes very much higher?

If hyperinflation really does take hold, won’t the REAL GOLD PRICE decline as rising mining costs INFLATE and eat away at profits?

In other words, is NOW, for the producers, “As Good as it Gets””.

Dr. Webb commented (paraphrased),

Much of the mining costs are tied up in capital expenditures that are incurred once, and at the earliest stages of mining. But these costs, or the debt to finance these costs, might be repaid with inflated dollars. Under this circumstance, a mine would benefit in an inflationary environment.

Zimbabwe may be seen as an example. Their mines did very well and operated profitably in its hyperinflationary market. It was only when government demanded higher taxes did the mines shut down. If let alone, gold mines can do well during inflationary times.

Let’s see what (if?) JP says about this on Saturday.

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