Mainstream and Internet media sources are increasingly, or so it seems, addressing near-term (and perhaps longer-term) problems and prospects faced by resource explorers, developers and producers in circumstances of:

• the ongoing economic problems faced by many of the developing countries, and signs of a slowdown in Chinese GDP growth;

• escalating plant construction and operating costs; and,

• escalating country risk issues that are becoming ever more transparent.

While these things ought not to be discounted at the broad resources companies level, consider what may prove to be the 'flip side' of that negativity, which at a macro level arguably is aimed largely at base metals producers:

• the price of physical gold broadly is believed to be sensitive to global economic risk;

• not all gold exploration, development and producing companies are created equal from the point of view of their comparative attributes, only four of which are:

  • 'quality of management',

  • balance sheet strength,

  • ability to obtain financing if necessary, with reasonably balanced resultant share dilutions) in what is clearly a down financial market, or

  • project location in the context of political and societal stability and related risk; and,

• if the world economy sours further from here in a manner that:

• negatively affects the supply of physical gold over time, while

• positively affects the demand for physical gold

the 'best of breed' gold explorers, developers and producers may well reward their respective shareholders in what may prove to be 'bad economic times', particularly where those shareholders exhibit patience and hold their positions as investments, and not as trades - where a good investment result likely would be longer than shorter term in nature.

That said, carefully consider the view expressed in the previous paragraph in the following contexts:

first, as a general observation, commentators and 'stock pundits' often fail to reference overall financial markets conditions and directions when recommending specific companies and investments, as trades, or as both. Importantly, they often seem to make a general unstated assumption that the financial markets are not going to generally go up or down over time as in world and country specific economic conditions change. If you agree with this observation, consider its implications carefully, and carefully consider when making your investment and trading decisions what you think will be the likely near-term direction of the financial markets.

Remember that a commentator could be exactly right with respect to the underlying 'positive attributes' of a particular company, but those 'correct thoughts' could well lead to investment or trading losses if the overall financial markets drop in the near term following a specific company recommendation; and,

• second, if you are an investor consider carefully:

  • that in the end, the financial markets largely are driven by world and country-specific economic prospects, and

  • a very large component of the current financial market activity is driven by algorithmic trading.

Accordingly, if you are an investor and make 'investments' in today's financial markets environment, be prepared to accept what might be serious ups and downs in the price of a given security through your 'hold period'.

Consider also that:

• contrary to the opinions of some, not every human financial advisor is completely self-interested, heartless, and uncaring of his/her clients; but,

• computers run programmatically on 'logic boards embedded with mechanical computer chips'. No computer has a heart.

Topical Reference: Little left to stoke mining stocks, from The Globe and Mail, Kevin Allison, July 16, 2012 - reading time 2 minutes; and Gold mines face radical downsizing, from Miningmx, David McKay, July 16, 2012 - reading time 3 minutes.