HERE, WE CAN REALLY MAKE A DIFFERENCE
Don’t Buy Fool’s Gold
By Bill Schneider, 3-13-08
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During a bout of insomnia last night, I watched CNBC to see if any of the talking financial heads thought my retirement funds might stop disappearing, and there it was. Perhaps the biggest environmental, wildlife habitat and water quality problem we don’t like to discuss. Yes, it’s touchy, but that has never stopped me, so why start now.
We all need to stop buying fool’s gold.
That night gold was selling at $988 per ounce (hit $1,000 while I was posting this column); silver over $20, and most other metals at record levels. All this translates into more mines, large and small, new or re-opened or expanded, everywhere on our public lands. Mining companies have a dismal record of leaving environmental destruction and economic despair in their wake--poisoned watersheds, massive eyesores on scenic mountainsides, networks of roads into areas where there would otherwise be none, broken communities, and thousands of patented mining claims converted into private wilderness cabins, formerly public land now, usually, posted.
And with the price of gold pushing $1,000 per ounce and with the archaic Mining Law of 1872 still promoting public land giveaway and devastation, something needs to be done.
We could repeal the 135-year law, of course, as I’ve advocated this several times, but there’s also something we as individuals can do, something I haven’t advocated yet. And it seems like a simple solution. Let’s stop buying gold. Even at $1,000 per ounce, it’s fool’s gold.
The real gold is the wildlife, the drinkable streams, the invisible air, and the essence of wildness we’re losing from our society. That’s the 24-karat gold.
And the fool’s gold is robbing us of our real gold.
If we really needed it, this would be a different article. We can live without fool’s gold and not even miss it. But I’m not sure we can live without the real gold. I sure don’t want to try.
A small percentage of the total gold mined goes for legitimate industrial uses, but the vast majority (about 85 percent) goes to make gold jewelry and most of the rest is locked away in vaults as an investment, a hedge against inflation or to prop up the currency of smaller countries.
So if we care about protecting public lands, we should stop buying fool’s gold. I’m positive we can survive without gold chains and earrings, and we have plethora of investment alternatives to buying gold, so there is no need for the vast majority of the gold we mine.
Clean water should be more valuable than gold because we can’t live without it, but it’s almost free in comparison. Go figure.
I’ve hardly a pillar of economic science, but I’m confident that if people stop buying fool’s gold (and silver, platinum, et al), prices will go down, which is precisely what we want to happen.
With falling prices, new mines won’t “pencil out.” To keep prices from falling even more, mining companies will mothball plans for new mines and perhaps close or downsize some we have. Even the weekend prospector with that portable sluice box will be less anxious to be out digging up public streambeds and not cleaning up his or her mess, which is the basic “business plan” for all miners, large and small, leaving reclamation to the taxpayers to pay--even those of us who have already decided to stop promoting the destruction of public lands by not buying gold jewelry.
I’ve recently written about two great examples, the Rock Creek Mine in the congressionally designated Cabinet Mountains Wilderness in western Montana and the massive Pebble Mine in Alaska, which threatens nature’s salmon factory, Bristol Bay. To partially cover this ongoing tragedy, I’d have to write hundreds more articles, all with the same bottom line--we’re giving up the real gold for the fool’s gold.
You’ve heard this before. Let’s be part of the solution, not part of the problem.
Footnote: For more of my articles on hard rock mining, go to The Mining Law Chronology.
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Comments
Seriously, though, I really do suggest investing in land for the right purposes, if for nothing else but to protect. 'Course, Bill is right on with his comments.
The experienced know. Prices will drop like a politicians promises at the very moment the 'fool' dumps all he has in it.
History's path is littered with the legions of loss from every gold rush in existence; yesterday and today. Interest is never sparked in when the purchase is right. The fever only begins when the cost of entry is far more dangerous than wise.
That less than 1% of investors actually retain the gleam of their folly, is testament to the 'foolishness' the aurum of old creates.
Only the purveyors of the lurid dream are the ones to profit. The short list includes lawyers, politicians and those other unscrupulous dealers who seek to wrangle what control remains to protect the fragile lands in the scoop-scope in search of plunder.
My grandmother often compared the value of biting a gold coin and a good steak as a "...no contest action." Her proverb metaphor was not lost on me, even at my young age.
If we bite for the gold and loose the irreplaceable elements of the natural resource our loss will be - as the poets write: inconsolable.
Even if we are too blinded by the glitter today. Our hindsight - we should keep in mind - tends toward 20/20 after-the-fact. But then again ... 20/20 Hindsight and $2.05 will get you a venti bold at Starbucks: at least until black gold hits $120.
O'fieldstream
But, I don't want to throw the baby out with the bathwater in the mining deal. I absolutely oppose mining where it impacts vast watersheds and the only intact salmon runs left in the world. Or in wilderness now protected. However, to keep our country viable, we do need minerals. We do have to mine those materials that are essential to our economic well being.
I have a friend who dabbles in mining around the world. He is a penny stock kinda guy who does all right for himself. He told me last month that China has 80% of the working geologists in the world. In particular, China is the destination of 75% of the tungsten in the world, has now forbidden export from China of tungsten, and with prospects out there now, will soon have 80
% of the tungsten. The rest of the world will have to exist on the other 20% available. That is not a good economic position for all but China. There are many minerals that we need to harden steel to make the machines that make the goods, transport the goods, to consumers. Vital and strategic. Tungsten is one. Nickel another. I often proposed that hydro power excess in high water times should go into aluminum, where most of the expense is the energy needed to extract it from bauxite. Aluminum ingots are congealed hydro power, and bankable. But our economy does not have those kinds of nationalized ideas yet. I do see them coming, and not all are "a good thing," Martha.
I could give a damn if Khalid has a gold chain or Ling Ng has a gold horde, or if Tiffany has to melt old silver to make new. Electronics can be salvaged for the precious metals they contain. Much of the steel now used is recycled material. But there are still minerals that are needed as catalysts, hardeners, for changes in nobility, for carriers of electricity. We have to have them to run the vaunted technical economy that is so trumpeted as clean, high wage, and green. Green mining might be an oxymoronic statement to some, but without it there is no green in some areas, there is no catalytic convertor for the auto without platinum.
I agree with you Bill, that mining excesses are bad for all, but no mining is not an option. Again, we have to protect the strategic interests of the country, if that is possible in a country in such political disarray as ours. Zealots abound, and radical is chic. I can see the hair getting longer, the clothes drabber, the eyeglasses more frumpy, the shoes more like jack boots. Sometimes urban tv news looks like the movie Cabaret.
In a deal like Pebble, the govt should give the "owners" or "prospectors" some sort of right to exploit when the govt deems it needed and necessary to our national defense or survival. They have the right to profit at that time. A chit, as it were, for that place. A title to the mineral rights, but not the abiltiy to operate without a clear and present national need imperative arrived at by recognition by Congress and signed by the President. A stockpile of opportunity to be exploited only as the last resort.
The value of gold will always be with us as it is portable wealth, recognized the world over. Poor people understand, and the rich also. It is disaster money. It is survival money. It buys your very life, perhaps. The currency of despair. And I suppose its value at this time represents an undercurrent of economic fear across the world. That, not the mining of it, is the real danger to the world. The very idea that gold has appreciated so much in value should scare the crap out of thinking people. That kind of unrest, distrust in banks and currencies, seems to go hand in hand with great loss of life, great dislocations, in the near future.
If not buying is a good thing, would selling be even better? Am I helping the environment (as well as my budget) if I round up all the bits of gold around the house and cash it in?
I guess the problem is that sellers need buyers, though. "Don't buy virgin gold."
China is also buying all the oil futures they can, combined with our debt which they own...they're about to own us!
The smallfarmersjournal.com values horse powered farming above greed, corporations, industrial farming and oil-based enterprises.
Me? I remember the Romanian guy walking alongside his horse drawn wagon, telling an interviewer that all the wealth in the world could not buy his way of life.
Here here.
As for useless jewelry, I remember few years back when Babbitt came to Great Falls for his Breaks dog and pony. I enjoyed seeing Gloria Flora take her star turn. My enjoyment wasn't from listening, but from looking at an anti-minerals advocate who had enough silver and turquoise adornment to keep Idaho's old Silver Valley booming for a month.
But the perception of gold as a "safe" refuge in troubled times is a bit of a mystery when major trends of energy and climate portend changes that no number of nuggets can divert.
I have always avoided gold, and the gold sector, as a matter of principle. It serves no useful function beyond being ornamental and somewhat rare.
So why is polysilicon not as valued as gold (polysilicon is "purified" sand used in computer chips and solar panels)? Why is water, in its relative rarity of "potable quality" or even termed "fresh water", not as valued (traded in the same realm as gold)? I mean, even uranium, which presents at least as significant cost to the environment as gold (mining/refining/"recycling"/disposal after use/potential weapons use), holds more value for actual energy production than gold presents.
Silver? There are so many things that have tangible value, why does gold always get a spotlight when credit and paper money are less valued? Because it is pretty... and we always like shiny things. Oh, and pirates. We like pirates.