E-GOLD DOES NOT GLITTER
Electronic gold might not glitter but it is a favorite tool for bankers. Not because it is wealth but because it is control and power. How a useless derivative constitutes wealth is a fun and frightful fact we get to soon enough. Since the advent of modern technologies and fuels there has been more gold mined in the last two centuries than in all of history combined, and by a wide margin. Just the large fertile strip down in South Africa constitutes 40% of all gold EVER mined ( it is largely played out, now. The remaining big mine is THREE miles underground and consumes the electricity of a city of forty thousand. It takes a lot of blown air to ventilate and it takes thousands of tons of ice a day to lower the temperature to tolerable levels. Interestingly, illegal miners picking at the areas no longer commercially viable must stay down in the old shafts for weeks and even months at a time because of such complex series of tunnels the transport times are too long. They develop grey skin- a fun filled fact you never read about in relation to fallout shelter stays in fiction ). Yet, today’s population is fifteen times the solar carrying capacity of pre-industrial economies and even with so much more gold available with that many people the demand is even greater than the new supply. The price of gold should be much higher.
China looks to be on her way to being the next gold backed currency. Gold purchases are high and unrelenting, a strategic move. China also recently became one of the globes top gold producers ( given the long history of banned mining by every other government, there was a lot of untapped potential compared to other areas ), yet given her long history of production it was a short lived phenomenon that without Mongolian mining would have already been over. China is not about a single large gold mine but about many smaller ones adding together. Given that the surge in production is short lived, and given that nationally she is stockpiling physical gold to protect against western manipulation, the price of gold today should be much higher. Now add in global peaking of production ( still a lot left, and unlike petroleum this gold was always hard to get to and extract, so the stuff still there isn’t any harder to get than it was for the last hundred years. But the total amount mined is going to decrease ). This too should be increasing the price of gold. Increased general demand, increased Chinese strategic demand, general supply contraction. Gold should be much higher. Add in the obvious American economic troubles, AND the move away from the Petro-Dollar and gold should be thousands of dollars an ounce, not hundreds ( as in three to five thousand, not thirteen hundred ). Just to match the price spike in 1980 gold should be $2500-$3k adjusted for inflation. And the world was in no where near as sorry shape then as it is now. $3k is low balling the minimum price.
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