 Rethinking history
David Bond
Editor, Silver Valley
Mining Journal
May 28, 2004
Wallace, Idaho - They say in the journalism trade that plagiarism
is the sincerest form of theft. Having a touch of larceny in
our soul, we proceed to plagiarize thoughts and facts uttered
by others, but with attribution where appropriate.
The 911 World Trade Centre catastrophe and aftermath have been
beaten to death and deserve no further comment from us (we reserve
the right to change our minds on this subject before the end
of this rant) but whilst awaiting restoration of our tail-light
functions at D&R Auto in Osburn, Idaho, a bi-monthly chore
attributed by our faithful mechanic to the perfidies of 1983
Chevrolet pick-up trucks, we stumbled across the following entry
in the January 1, 2000 "Commemorative Issue" of Time
Magazine.
(We must note at this point that Daryl, our faithful mechanic,
is rumoured to be a failed physician: We offer as proof that
the January 1, 2000 "Commemorative Issue" of Time is
the most recent magazine available for our perusal in his waiting
room. We must further note that it is far preferable to have
one's tail-lights periodically checked by one's mechanic than
by the Idaho State Police. Attention to this detail has spared
us many years of fines and jail-time).
On Page 33 of this millennium-inspired "Commemorative Issue"
of Time Magazine, the lower half of the page, is a submission
by an unnamed Time editor entitled "Winners & Losers"
of the just-concluded previous millennium.
Amongst the winners is former Russian PM Boris Yeltsin, who "gets
immunity, leaves thankless job and, best of all, no longer needs
to hide Stoli flask." (Seeing this we thought about old
Boris, who stared Mikhail Gorbachev down on the steps of the
Russian White House in Moscow whilst Soviet soldiers on a nearby
bridge over the Golden Ring fired bullets into the throngs of
Yeltsin's supporters - the USSR's crude prototype of America's
Homeland Security, one supposes. The Soviet Army's bullet-holes
in the White House are patched over but still visible to a tourist).
Amongst the Losers as detailed by Time Magazine in its January
1, 2000 "Commemorative Issue" is a citizen of Saudi
Arabia, the country which is our closest ally in the Arab world,
one Osama Bin Laden, about whom Time wrote: "Terror suspect
has quiet New Year. Resolutions? Lose 10 lbs, balance checkbook,
endorse more attacks."
Well, to believe the mainstream media, Bin Laden certainly followed
at least one of those resolutions.
While Daryl resolved our tail-light wiring problem, we paused
to reflect, ex-post-facto, the tackiness of Time's tongue-in-cheek
pre-911 prediction. But there is more to this issue than tackiness.
It is a first-order revelation that the mainstream media are
utterly incapable of illuminating future events, or of appreciating
our evolving mores and sensibilities 21 months - or even 21 days
- hence.
We don't mean to pick on the individual responsible for Time's
(in retrospect) faux pas. We even, after spending several days
with a GQ magazine writer punctuated by frequent trips onto Coeur
d'Alene Lake in search of more Kokanee salmon (they seem to thrive
on lead and zinc from our mines up here), and ever more frequent
trips to town to re-supply our Evan Williams stash, developed
a sympathy for Janet Cooke, the Washington Post writer who created
from whole cloth a story about a black urban junkie's addict
child that quickly won a Pulitzer and then was blasted to bits
for the fabrication that is was by fact-checkers, and the Pulitzer
was revoked. The guy who interviewed and misquoted me for GQ
was her boyfriend. He painted a heart-rending picture of her
faux pas.
As saith Kurt Vonnegut, so it goes.
The lesson here is that the trade of mainstream journalism rarely,
if ever, gives you the bigger picture. If you're betting the
markets based on what you hear from Bloomie's or Time, you're
walking into an ambush. Hear us out: We don't buy butter very
often, so were shocked to discover its price doubled since the
last time we bought it, probably before Easter. Gasoline of course
seems well on its way to $3 or even $5 despite increasingly credible
evidence that crude oil reserves worldwide may be underestimated
by a factor of 100 - that oil may not be dinosaur blood after
all but a naturally occurring, and plentiful, inorganic phenomenon.
But you haven't read much about these things in Time. One learns
of them only at the local pub from someone who has confronted
the cash register, or when one confronts the cash register oneself.
In the Silicon Valley they are paying close to $10 a pound for
flank steak or extra-lean ground round. Even the price of chewing
gum has jumped a nickel this year.
Despite this creeping, and we think soon to be rampant inflation
- which everyone but Alan Greenspan and Time Magazine seems to
have noticed - gold and silver have turned into remarkably docile
deflationary vectors. CPM Group's Jeff Christian was quoted by
Mineweb the other day thusly: "A (gold) price over $400/oz
is not sustainable in the long run unless the world goes to hell
in a handbasket. The average long-term clearing price of gold
is between $320/oz and $380/oz," Christian told Mineweb.
(Silver, we believe, having shed its yoke-leash to gold earlier
this millennium, will fare better even if one accepts Christian's
bearish analysis).
Ah, but there was that magical caveat: "unless the world
goes to hell in a handbasket."
Well, duh. Plenty of evidence exists that the world already is
going to hell in a handbasket.
The U.S. Army, reports the Financial Times, is running out of
bullets. Even the REMFs in Afghanistan and Iraq need to chamber
a round from time to time to avoid ambush, and the Army says
it will need to, ahem, outsource its bullet supplies to make
up for an estimated 300-500 million shortfall Lake City Ammo
can't make up in each of the next five years. More of these little
55-grain lead rocks - which totes up to several thousand tonnes
of lead - won't come from the U.S. because the EPA has outlawed
lead mining in this country, so we will have to buy them from
the Chinese company Norinco, but the Chinese may need more bullets
for themselves as we waltz inexorably together into a confrontation
in the Straits of Formosa over the sovereignty of Taiwan. (The
Chinese, you may recall, offered some trade concessions to Europe
last month if Europe would lift its Tiananmen Square-inspired
small-arms embargo against China).
Hang with us here, but if one takes the time to study Southeast
Asia history as pertains to U.S. relations, one quickly learns
that President Harry Truman declared to the Chinese in 1950 that
whoever owned Taiwan was not America's business. So forgive the
mainland Chinese their confusion as to U.S. foreign policy whilst
we send a carrier group their direction. Going to hell in a handbasket?
Fifteen thousand tons of lead were depleted from the LME recently,
and not by U.S. bullet makers. We have partied and splurged our
way into make-believe prosperity by means of asset inflation,
which may be the most insidious inflation of all. Whilst Fannie
Mae and Freddie Mac utter death throws so loud even Greenspan's
thugs heard them, we've gleefully hocked our houses for three
times their worth, and a collapse in the housing market is now
almost a given. The newfound "equity" we peed away
on digital cameras, motor-homes and Carnival cruises is now gone.
All this spending gave an illusion of prosperity but it will
not last. Real prosperity comes from just two things in the only
two basic sectors of the economy: productivity on the farm and
new mineral discovery and recovery on the ground. Anything else
goes up and down with the tides, and the water is definitely
receeding.
Going to hell in a handbasket? Consider that the EU is now bigger
than us; that China exceeded the U.S. last year in foreign investment;
that India's silver-grounded economy is catching up as fast as
the Chinese; that we lost our moral bully-pulpit utterly in Europe
with the Baghdad prison abuse scandal; that the Arab world, also
devotees of gold and silver standards as alternative to U.S.
reserve currency hates our guts; that Mexico might soon start
chasing out bad money (U.S. fiat currency) with good money (silver
coinage); that Russia is busy sucking up every molecule of gold,
silver, nickel and PGMs on the planet.
No fun, predicting doom and gloom. So we retreat to our silver-,
lead-, and zinc-laced rocks here in the Silver Valley, ever hopeful
that someone at Hecla, Coeur, Sterling, Mines Management, New
Jersey or Bunker Hill or Trend will find the will to keep mining
them and keep the bill collectors at bay before the Army runs
out of bullets.
Going to hell in a handbasket? Only the Fed, Bush's Council of
Economic Advisors, and a handful of single-cell amoebae seem
not to have noticed that we already have.
Five dollar butter? No inflation? Gimme a break.
May 27, 2004
David Bond
David Bond covers gold
and silver mining equities for a number of national and international
publishers, including Platts Metals Week, a division of McGraw-Hill.
He lives in Wallace, Idaho, heart of the planet's richest silver
fields, the Coeur d'Alene Mining District. He is former editor
of the Wallace Miner, and holds regional and national firsts
in investigative journalism from the Atlantic City Press Club
(National Headliner) and from the Society of Professional Journalists
(SDX/SPJ) and has edited or written for newspapers on both coasts,
Canada and Alaska.
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