Collapse of gold prices wonderful for wildlife; good for economy
Reality squashes the call of the right-winged goldbug-
In recent years the siren call of the goldbug, mostly that of the right winged sub-species, has been heard throughout much of the world.
Infestation by this bug, this pest, is known to create fear of hyperinflation despite an actual condition of deflation, It also produces a delusional belief that the value of the element AU, gold, is the only sure thing of value, and so the diversion of productive assets into both the storage and digging of this unproductive metal.
At one time gold was actually money because it was hard to come by and counterfeit gold is still gold — still money unless mixed with base metals. That was a long time ago. Neverless, there remains is a vast market in the buying and selling of gold, not for its decorative uses or for its useful and often unique industrial properties, but for “money storage” — storage in a form mistakenly thought to be sure hedge against inflation, fear of economic collapse, excessive government spending, and the like.
When the price of any metal rises due to increased demand, there is a stimulus to mine more of it — increase its supply. Rising prices for copper, nickel, tin, iron, the rare earth metals, etc., cause mines to open creating employment but often side effects harming the land, water, and wildlife. The same is true of the rising price of gold. There is one big difference, however between gold and, let’s say zinc, tin, tungsten, or cobalt. Gold and a few other “precious” metals are believed by some to be inherently valuable in a way beyond their use in products and processes.
Mining of any material is always at least a bit controversial because it usually produces many negative side effects. These side effects, unintended of course, usually go hand in hand with a political effort to get bystanders, rather than the owners of the mine, to absorb the negative effects (called “negative externalities” by economists). Regular folks call these negative effects “pollution,” “poisoning of workers and residents,” “destruction of the scenery,” etc..
Negative externalities aside, mined metals are absolutely necessary for anything beyond a stone age economy. More refined metals, side effects aside, generally means a richer economy. Oddly though, this is not so when gold is used as a store of value rather than as a factor of production.
The price of gold, up or down, is set far more by demand fueled by psychological factors than by the supply of the metal, which does increase slowly by mining when its price is rising. Rapidly rising prices of gold have been the norm for some time now, apparently creating a bubble that now is leaking and might go pop.
Throughout the ages gold mining has been the cause of war, land and water destruction, and great harm to fish, wildlife and human health. When the externalities from mining are not fully paid for by the producers of the metal — the externalities are not “internalized” — gold mining is a bad thing and any decrease in mining, which will now happen as gold prices drop, maybe collapse, is a good thing for the environment.
Moreover, as gold investors put their resources back into the real economy, one that happens to be badly depressed, economic growth tends to increase, employment rises, and wages of average people might begin to rise. It should be noted though that there are yet other factors causing the declining wages of most wage workers in America.
As a person drives through the gold mine wastelands of Nevada and reads or listens to stories about the contraction of mining, a smile is in order for most folks, especially those who care about our land, water, our health, and our wildlife.
Photo: a small part of the huge Barrick Goldstrike mine pit north of Carlin, Nevada.
Here’s a toast to gold dropping to $600 an ounce.

Ralph Maughan
Dr. Ralph Maughan is professor emeritus of political science at Idaho State University with specialties in natural resource politics, public opinion, interest groups, political parties, voting and elections. Aside from academic publications, he is author or co-author of three hiking/backpacking guides, and he is past President of the Western Watersheds Project.
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We heard an economist make presentation on mIning in Ely a few weeks back. One of his main points was the extraction of wealth in the form of metals does little for local economies, and are subject to world price fluctuations, thus boom and bust. Towns must look at all aspects of mining, the good and bad, and create their own bottom line, is it worth it for the surrounding area to mine? How many areas that have mining have thriving communities? How many of these mining areas are polluted for generations to come? The obscene wealth is concentrated in the hands of a few in multinational corporations, while the inhabitants of mining locales receive scraps and the aftermath of mining.
Gold price and other precious metal collapse?
I’ll Reciprocate that toast.
More important, and pleasing, has been the big drop in stock prices for the mining majors, down to around 52 week lows, due to overcapacity and over production.
As reported, layoffs at mining companies is increasing, which will have a ripple effect leading to other layoffs. I guess this would be another example of externalities, which from the perspective of those of the pro economic growth view (see above), must be seen as undesirable.
Ergo boom and bust.
Cheers!
I wonder what this will mean for the future of Pebble Mine.