golden thoughts

GOLDEN THOUGHTS
Of course, all thoughts that emanate from my keyboard are golden, it goes without saying, but today’s gold thoughts are on the precious metal. Yes, I’m still raring to go on the devolution of the size of government. But still need a few spare seconds to devote some thought to it. Some articles I can write with one half of my brain tied behind my back, others I need to think about for awhile to connect the dots. Some just pop in to being in a Eureka! moment and others are like giving birth. I did notice that my e-book sales were up about 50% last month. I don’t know if this was my loyal minions feeling all generous in the holiday spirit or a few more paper book sales from Amazon ( the Frugal Survivalist book ). I’ll have to look into that. If it was you, thanks.
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It is never a coincidence when the mainstream press publishes something. It isn’t just the need to fill pages ( or minutes ). It might have been a political con job once upon a time, but that was long before the mega-corporations ran the business into the ground and have since turned to info-tainment to save money ( why have a foreign correspondent overseas when you can run a story about last nights American Idol? ). Now, you have the banks pulling the strings of the government and the government with its hand up the wazoo of big business. It’s kind of a sex train, but some “members” are bigger than others ( yuk,yuk! ). It’s not a central run conspiracy, but certainly there are a lot of backroom deals, back scratching and favors being done. You are on the verge of bankruptcy, and you know you need a loan soon, so how hard is it to print the articles favorable to the banking interests? But let’s not get too side tracked on motivations. My point is that when you see some smoke, look for the fire. Gold prices shoot up, and suddenly there is an article on gold production stagnating. Look, they seem to be saying, the dollar is still wonderful. Gold is only going up because of shortages.
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It simply makes sense that if gold production is down, prices will rise. Supply and demand. But, while decreased production will slow the flow of new gold being introduced, it will only marginally affect the total supply of gold and its price. I forget the exact numbers, but new gold being mined only adds a percent or two a year. If that is cut in half, it only affects prices to a small degree. On the other hand, if everyone knows the US Dollar blows farm animals, the price of gold goes up ten percent in a week or two. Here are the numbers. In 1950, for every ton of ore processed, there was 12 grams of gold produced. Today, even with increased technological innovations, the yield is 3 grams. The only reason more mines aren’t closed is that the cost of production is falling. Which speaks volumes for the employees of mines in the future. Your job is not secure. You might be Union now, in the future the excuse to cut your wages and bennies will be the increased costs of energy, equipment and loans. Enjoy it while you can. South African production has halved since 1970. Yes, some is electrical juice availability being problematic and some politics/taxes and whatnot. But I think the area is simply playing out. Everyone seems surprised when mined resources disappear. What!!! You mean I have to replenish the soil? You mean the oil doesn’t last forever? You can’t kill the Golden Goose?
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Okay, production of gold peaked in 2000. Future costs of production will soar as oil goes up. But that is all a very small side dish for the main course. Which is, the dollar is being inflated ( perhaps never hyper-inflated, although American history is full of examples where the locals inflated at hundreds of percent in just a few years, but 6-16% a year will get you in trouble pretty darn quick ) as well as being dethroned as the global currency. No, I don’t think any other currency will replace it as the end of the Oil Age will upset all paradigms, be they Empires, supreme currencies, Industrialism, etc. The propaganda trying to blame production declines for the huge increase in gold prices is just another bit of smoke pointing to the fire of the coming of PODA ( Peak Oil Dark Ages ). Who cares about 2012 ( I refuse to pay good money on the movie, as it looks like another “government will save us” disaster movie- I’ll reevaluate when it’s a buck at Redbox )? Worry about oil imports being down 25% and airborne barnyard flu in Eastern Europe. And watch gold shoot up as the dollar destructs. It isn’t too important in the great scheme of things, but it is amusing to view.
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