Mailbox

Alex,

History suggests that nationalization, while always a short-term possibility, is never sustainable over the long-term. Will the same individuals that run the post office for billions in losses be asked to manage exploration, development, and operations of highly-specialized assets?

What's the objective of a nationalized mine once the profit incentive has been removed? Will the refilling of Fort Knox, capping of gold, or some other official or unofficial reason motivate private capital to invest in nationalized interests? If not, can the inevitable disinvestment be overcome by investments from the printing press as some suggest?

If panic drives the government to nationalize resources what does that say about “king dollar” rhetoric. All actions have consequences. Any attempt to nationalize resources will only serve to redirect capital, the lifeblood of investment and economic growth, towards nations or regions that adhere to free market principles.

The collective answers to the questions above, unique to every investor, will direct capital as a whole.

Regards,

Eric

Dear Mr. Eric De Groot,

I am a very long term reader of Mr. Sinclar and also your website, which I find extremely informative. I would be very grateful to you if you can comment or give your opinion on news that are coming out from different writers, especially lately, that gold and silver miners will be nationalised when price of both metals shoot substantially higher and Western countries experience huge budgets deficits. I posess quite some TRE shares and am concerned about that.

Although on the other side I think that most miners are domiciled in West and have mines in developing countries. If Western countries nationalize them they may triger the nationalization of the mines one by one by their home countries. Many of those miners actually do not possess the metals under the earth, but have royalties to extract that metal - therefore no need for nationalization. Also developing countries would have no interest to nationalize as they mainly have no technical know how to safely and efficiently bring metals to the ground. So I somehow belive that I may be quite sure that US and Canadian mines wont be nationalized, at least not in widespread nationalization, when gold and silver will march very high.

That is my take, and would be very kind for your opinion on your blog if you belive that is of some interest for other readers?

Thank you, Alex