Bruce,Yeah, gee mate, I must be confused. Thanks for helping me...

Bruce,

Yeah, gee mate, I must be confused. Thanks for helping me out there.

Let's see: Silver sells at, say, $US4/oz and it costs $US1/oz to extract it. Net return of $US3/oz. If the Aussie dollar is trading at $US0.51, that's a return of $A5.88. However, at today's $US0.85 exchange rate, it would be a return of $A3.53.

Now, if you were mining the stuff in Australia, paying Australian workers in Australian dollars: if silver is selling at $US4/oz and it costs $US1 to extract it, at a $US0.51/$A exchange rate, you earn $A7.84 and pay $A1.96 to extract it, for a net of $A5.88. If the Aussie dollar appreciates to $US0.85, at $US4/oz you now only receive revenue of $A4.70/oz, but expenses are still $A1.96/oz, giving you a net profit of $A2.74.

By gosh! You're right! The $A/$US exchange rate doesn't matter at all! Doesn't matter where you mine the stuff, it's all in the local price of silver. How could I have missed it? $A3.53 is exactly the same as $A2.74! You're a genius.

Oh, BTW, you're assertion that the $A silver price has been falling since May 06 is also crap. With the exception of the brief price spike up to $A19.50 in April 06, silver is actually in a nice, consolidating, rising trend for the past year. Don't believe me? See here:-
http://www.hotlinkfiles.com/public/view/full/9041