I bought into Chesser on the strength of Rick Valenta's record,...

I bought into Chesser on the strength of Rick Valenta's record, the stability and mining friendliness of Turkey, nearology, the easily worked nature of Chesser's deposits (that is, shallow overburden, and being able to scrape it downhill), and the grades and exploration blue-sky potential of the orebodies.

I'm disapppointed by the downdrift of the price, but see no reason to sell. I'm guessing that gold explorers generally are doing it tough for now for three inter-related reasons:

1. Yield and security are the current priorities for investors.

2. Pundits expect intractable world debts to be expunged with vast amounts of freshly printed money, resulting in dilution and devaluation of currencies, in turn causing gold to triumph as the premier store of wealth. Thus far, though, people continue to prefer paper currencies. However, I'm still hoping that the rate of devaluation of paper currencies will eventually accelerate to intolerable levels.

3. Excessive squeamishness, grandstanding, moral indignation, ignorance of realities, lack of workable mechanisms, party politics, or dithering, could stop debts being printed away at a fast enough rate. That is, there has to be at least some risk of the world tipping into runaway deflation. For example, I believe that Germany has been encouraging a deflationary climate globally, and that this has affected higher-risk equities like Chesser. (Germany's anti-inflationary strategy is far too late to work, and hopefully the Germans will realise this, and change tack.) I'm also surprised at how slowly governments like that of the USA are changing their ways.

The bottom line for me is that creditors don't generally allow debtors to keep putting things on the tab forever. Eventually they throw away the worthless IOUs (such as USD) and start cornering hard assets - like Chesser.

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