Gold Gold Gold!!!!

Before I tell you about the riches in our land here in Panama, let me touch on the subject of one of my favorite metals.

I keep hearing that word “Gold” and the fact that if we don’t buy it we are all going to suffer.  I remember the Hunt brothers who ran up silver years ago and it plunged leaving a l0t of people hoarding a lot of inexpensive metal.  This time might be different however and I like the perspective the writer of an article that I read in a  post on National Public Radio – NPR.org .

The price of gold has been going through the roof lately, and we wanted to know why. You can’t eat gold, or use it to fuel your car. Why do people pay so much for it? So we thought we’d try it for ourselves; we decided to buy gold with the money we had left over from one of our toxic assets. In New York’s Diamond District, a few blocks from our office, we found a place listed on the U.S. Mint’s website. It’s not really a store in the ordinary sense of the word. It’s more like a food court — a room with stall after stall of guys selling jewelry and gold. One stall has two guys, and a piece of paper taped to the wall. The paper says “Gold Standard,” which is the name of the business.  The guy who  runs it, Hank Mendelsohn, has been here since the ’70’s.  He got his start going around to dentists’ offices, buying teeth with gold fillings.  For Hank, the spike in gold prices has been good for business. One time, he says, a hedge fund wired him hundreds of thousands of dollars, then sent an armored car to pick up the gold. After showing us a few things out of our price range — a bar of gold about the size of a chocolate bar ($42,000), a nice one-ounce coin ($1,400) — Hank pulls out shiny thin coin a little bigger than a nickel. It’s ours for $419.  Lots of people have been buying gold lately — the price has doubled in the past three years. And everyone will give you a reason why. A big one is just history. People say gold has been valuable for thousands of years, so it seems like a safe bet that it will still be valuable tomorrow, and next year.  On the other hand, a lot of people say we’re in the middle of a gold bubble. And it’s a weird feeling handing it over a jar of cash for this tiny piece of metal. A few days later, we talked to Dennis Gartman, who manages hundreds of millions of dollars of investments — including some $25 million in gold. Lots of people buy gold because they’re worried about inflation, Gartman says. They’re worried the dollar — and the euro, and the yen — are going to lose value. For those people, gold is like another currency — one that central banks can’t print at will. Who cares if it’s just a metal? If everyone buys gold because they believe it’s valuable, then gold is valuable. But Gartman isn’t betting on inflation. He told us he’s buying simply because the price has been rising, and he thinks it’s going to keep going up, at least for a while. Gartman’s bottom-line advice: “Don’t try to make sense of gold.” Whatever happens to the price, we’ve decided that we’re going to sell our gold in six months. Before then, we’ll be doing more stories about gold, money and the nature of bubbles. Maybe in six months, we’ll know if we’re in the middle of a gold bubble right now.

OK, onto to the story that NPR ran on Paning for Gold here in Panama.  I am headed right out and buying my equipment and heading for the hills!!

Sara Taylor is a Peace Corps volunteer based in Panama. She wrote to us after listening to our first gold podcast.

 …In “ancient” times, so say my elder village members, the Embera tribe panned for gold in the rivers and found it extremely plentiful. So plentiful in fact that it had very little monetary value to them and held more spiritual meaning … All women had extravagant necklaces, earrings, tooth caps, bracelets, etc. made of pure gold …

I currently live in a village of around 100 Embera residents and they still pan for gold in the river. They don’t find a lot, and to be honest it’s against national park regulations to even be doing it, but they recover enough to make a living to feed their many children in the off season.

… at the end of the day the people can take their findings to this gentleman named Aseroy who weighs out the gold and buys it … The scale he uses appears rather crude being made out of two bottle caps he suspends on string from a delicately carved and balanced piece of wood. … The price he sells it for in the city is $34 a gram, and he buys it from the people at $29 per gram. …