Enron''s victims preparing lawsuits against big investment banks


3:25p ET Tuesday, March 26, 2002

Dear Friend of GATA and Gold:

Part of an exchange I had this week with a newcomer
to gold investing raised the issue of its morality.
Maybe it will interest you, so it's below.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


Dear Chris:

An essay titled "The Morality of Gold Jewelry," written
under the name "Pitcher," was published at
www.TheMiningWeb.com on January 10. It concluded
with this observation:

"Encourage men to drill, blast, and scrape tons of rock
4 kilometers underground in a 60-centimeter tall stope
for the sake of extracting a few grams of gold. When they
die finding that gold, do we prefer that their obituaries
salute a contribution to the Paris Fashion Show, or
reinforcing reserve currencies?"

This is what I've been thinking about too, as I'm
deciding what I'm going to do about investing in gold.
I've seen on television how they're getting the gold in
South America and Africa: sluicing, pouring horrific,
caustic chemicals on the open wounds they rip into
our planet, devastating the environment, indeed, for
these "fashion shows" and "currency reserves."

How do you handle this most basic aspect of gold
investing? As the friend you told me about did, half
of me wants to take a deep breath and hock the house
to invest in gold shares, even as the other half is
screaming, "Whore! Whore!" Or, worse, screaming at
me that I'm selling my mother.

There's GOT to be a responsible thread here
somewhere. Where are you with this?

-- I.M.

* * *

Dear I.M.:

You raise a question that was thrust at me soon upon
GATA's founding. It came from a young woman in
Australia who was a leader of a left-wing environmental
organization that wanted to shut down gold mining
all over the world. I turned their own ideology against
them a bit by noting the developing world's economic
dependence on mining for gold and other minerals,
and by explaining how Wall Street was using the gold
price suppression scheme to expropriate the developing
world. That seemed to open their minds and calm them
down a bit.

Of course none of that nullifies the environmental
damage done by mining. But:

1) That environmental damage can be mitigated
by certain mining practices, and in any case much
mining takes place in largely uninhabited desert and
mountainous areas, like Nevada. With all due respect
to Nevada, most of that state could be dug up pretty
good without bothering anybody. That's why it's such
a wonderful place for mining.

2) ALL human development begins by exploiting the
earth, much of it very crudely, and only the more
prosperous countries can afford a lot of environmental
protection. It is callous and hypocritical for us in the
West to lament and condemn environmental exploitation
in developing countries, for that is how our own
countries operated until we found ways to get other
countries to produce our basic commodities for us
while leaving us and our betters with cushy office
jobs, jobs like those that manipulate currencies and
exchange rates.

3) For the time being -- and probably for the long term
-- the environmental price of extracting gold is simply
the price of having an independent form of money to
compete with government-issued money. That is, the
price of extracting gold is the price of economic liberty.
What besides gold has a chance of putting the bankers
in their place? Yes, gold's countervailing power has a
price, particularly an environmental one. But then the
power of what William Jennings Bryan called "the few
financial magnates who, in a back room, corner the
money of the world" comes with a price too -- a price far
heavier than the environmental price of extracting gold.

4) Some people get rich by monopolizing markets
and stealing the retirement savings and even the
subsistence of great numbers of people. This is the
economic system that increasingly prevails in the West.
A few others seek to prosper by investing in gold, a
substance that, despite the environmental damage
sometimes done in its extraction, is a guarantor of
individual economic liberty and a crucial restraint on
government and oppressive power generally. To me
the moral balance of all that overwhelmingly favors
gold -- or at least what might be called gold's right
to life, which is what GATA struggles for.

None of this is to rationalize any mining company's
particularly bad practices. But it is to accept, in
general, as compelling, the need for gold, and thus
its price, and to defend those who invest in it.

I hope this helps you get rich with a clear conscience!

With good wishes.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.



Centennial Precious Metals
3033 East 1st Ave.
Suite 403
Denver, Colorado 80206
Michael Kosares, Proprietor
US (800) 869-5115
Canada 1-800-294-9462
European Union 00-800-2760-2760
Australia 0011-800-2760-2760

Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
Don Stott, Proprietor

Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889

Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
Ed Lee, Proprietor

Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
Dr. Fred I. Goldstein, Senior Broker


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