Lights, Camera, Action....Show Us the Gold!
by "farfel"
I have long contended that the key to a raging gold bull market revolves
around the day when the gold industry creates its own special "New Paradigm" in the manner of the tech industry, circa 1990-2000.
What that means is the gold industry must stop operating in a brain-dead
rut; instead, it should re-invent its tactics and methodologies in a most
unorthodox manner. If necessary, I advise all the major executives in
the industry to band together and create a seven day symposium in a secluded wilderness area. Within such a new, peaceful environment.... liberated from the constraints of their humdrum work routines...the gold honchos can let down their hair, inhale some mind-altering substances,
and create innovative "castles in the air" designed to free gold from its
chronic servitude to the anti-gold interests of the bullion banks.
I nominate MR. ROB McEWEN, head of Goldcorp, to chair the special gold
industry symposium. As one of the most creative, bright, ballsy figures in the world of gold...as a man who genuinely wishes the price of gold to increase (unlike some of the superhedgers who so obviously desire the opposite trend)...Mr. McEwen would be the perfect man to launch a meeting of the golden minds. Although some old school gold types might worry about potential antitrust implications (since cartels designed to raise commodity prices are illegal in North America), I would counter that analogous symposiums held within the tech industry have never resulted in the authorities leveling conspiracy charges against the Dells, Ciscos, Amazons, Oracles, etc. of the world.
The construction of a "New Paradigm" in the gold industry is essential and any risks of thinking outside the box are far outweighed by the upside potential. After all, let's face facts: there is something drastically wrong with an industry whose most radical shift in conceptualization and strategy over the past two years consists of closing hedges instead of increasing them. If that is the extent to which the gold industry can innovate, then it is truly in trouble.
Not only must the gold industry conceive of proactive strategies to increase the gold price, equally important it must brainstorm proper reactive methods to any number of possible anti-gold tactics utilized by its antagonists.
For example, here is one to consider: if a perfect financial storm occurs and flight to safety monies begin to pour into the XAU, thus creating a state of verticality within the gold mining sector, how does the gold industry react to a super-hedger (acting in cahoots with one of the bullion banks) suddenly trying to kill the momentum of that XAU verticality by instigating an environmental crisis, spilling huge amounts of cyanide into a lake or river. In such a scenario, the public backlash against gold companies would be instant and tremendous, resulting in a potential, severe reversal in the XAU.
Does the gold industry have a proper "castle in the air" response devised for such a negative event? Somehow I doubt it.
In any case, it is in the realm of proactive conceptualization where the industry would benefit most. Once again, I point to Mr. McEwen of Goldcorp fame as a gold industryfigure who simply excels in that intellectual skill.
I especially like his idea of testing the market with a hypothetical purchase of some 40,000 ounces of gold, a purchase in which he would take delivery of the physical. In proposing this purchase to the COMEX, apparently, he learned it would take some two weeks to obtain delivery of the metal. No doubt that was a pretty shocking discovery, a true indication of the tightness within the physical market despite the spin purveyed by gold antagonists that there is enormous availability. Yet, here you have this electrifying news...and the gold industry has not utilized it for the purposes
of benefiting the gold price??? Instead, the amazing revelation remains a "word of mouth" topic within the small cloister of goldbugs whilst the general public remains oblivious to the news. Unfortunately, it is yet another example of an "Old Paradigm" response to a sensational discovery within the gold industry.
Let me repeat: when will the gold industry invent a New Paradigm that liberates it from the tyranny of anti-gold bullion banks -- and allows it to control the negative media spin aimed toward the precious metals?
Well, allow me to get the ball rolling with a "castle in the air" proposal of my own. I would like to propose to Mr. McEwen that, rather than utilize the exploration budgets of the gold mining companies to open up even more mines for a metal that remains off the radar screens of most investors, why not use a fraction of the exploration funds to create a compelling propaganda vehicle on behalf of gold?
Right now, one of the most successful films in America happens to be Michael Moore's docu-feature, "Bowling for Columbine," a film that examines America's attitudes towards guns and regulations designed to control them.
Why not hire an audacious renegade like Mr. Moore to create a docu-feature surrounding the attempt to buy one ton of physical gold and take delivery? In the pursuit to discover whether or not one ton of physical gold is readily available, no doubt such a film would have as much drama, pathos, and humor as Mr. Moore's current hit -- and it would serve to educate the public about gold and its impending real shortage.
In effect, the mission to find a ton of gold could become the feature film equivalent of the tremendously successful TV special (1986) featuring Geraldo Rivera's search for Al Capone's Chicago vault. In creating a docu-feature surrounding the attempt to take delivery of one ton of gold, who knows where it might lead and what unexpected surprises might result? Imagine the tremendous impact if the film's narrator were to provide the same kind of revelation as Geraldo's shocker sixteen years ago. Imagine if the entire film project were to lead to a discovery that America's major repositories of gold are effectively empty, maybe even the great Fort Knox (which has not been audited formally since the days of Eisenhower).
Although I am merely positing a hypothetical scenario, I believe it is one worth exploring -- and it is a project that would likely cost no more than a fraction of the expenses required to open a single gold mine. The gold industry makes huge, super-expensive gambles every day so why can't they throw a single roll of the dice on an effective, relatively low cost
propaganda vehicle for the shiny yellow?
Regardless of whether or not this particular idea resonates with Mr. McEwen, nevertheless, I do strongly urge that the gold industry devise a litany of novel approaches that will prevent it from remaining a bullion bank victim -- and that will allow it to take proper control of its own destiny.
Isn't it time for the gold industry to leave its state of self-imposed "infancy" and learn how to become the adult it once was many many many years ago?
*****
If you feel this particular essay has any compelling points, then I would request you email the message to Mr. Rob McEwen:
info@goldcorp.com
Att: Mr. Rob McEwen
November 26, 2002
Email this Article to a Friend 
Printer Friendly Version