You are here

What's crazier than creationism and gold? It's in your wallet

Section: Daily Dispatches

5:32p PT Saturday, February 11, 2012

Dear Friend of GATA and Gold:

Lawrence Summers, former U.S. treasury secretary and president of Harvard, is reported to have remarked the other day that "the gold standard is the creationism of economics":

Of course Summers meant the worst sort of disparagement, to liken gold standard advocates to religious crazies. And yet there are various creationisms and various gold standards.

What is called young earth creationism may have begun in 1650 with the Anglican bishop of Ireland, James Ussher, who famously calculated from his biblical research that God had created the universe in October 4004 B.C. Old earth creationism doesn't attempt to pinpoint the moment, arguing that the Creator's time frame is not man's and that His day as recounted in Genesis cannot be known to man. Old earth creationists may consider the issue settled by God's rebuke to Job: "Where wast thou when I laid the foundations of the Earth? Declare, if thou hast understanding." Despite their vast presumption to knowledge, even presidents of Harvard weren't around then.

... Dispatch continues below ...


Sona Discovers Potential High-Grade Gold Mineralization
at Blackdome in British Columbia -- 13.6g over 1.5 Meters

From a Company Press Release
November 22, 2011

VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling.

"We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company."

Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.

For the company's complete press release, please visit:

The historical gold standard pegged a currency to a fixed amount of gold and made the currency convertible. Essentially the money was gold and gold was the money, often with silver thrown in, though never at a very satisfactory ratio. Thus currency devaluations were obvious; there was no fudging them, as when the London Gold Pool, the gold price-rigging mechanism of the Western central banks throughout the 1960s, a coordinated and public scheme of gold reserve dishoarding meant to keep the value of the U.S. dollar at one 35th of an ounce of gold, collapsed in March 1968.

Then there is the more flexible sort of gold standard operating behind today's dollar, in which the U.S. government and the central banks of its allies undertake largely surreptitious gold sales, leases, swaps, and derivatives operations, essentially short sales of gold, to maintain the value of their currencies.

Gold trader, market analyst, and mining entrepreneur Jim Sinclair has been anticipating implementation of a gold standard without convertibility, what he calls a gold cover clause, in which the U.S. government would pledge to keep its money supply in a fixed ratio to its gold reserve. Of course such a mechanism might require of the U.S. government a lot more transparency with its gold reserve and international agreements, formal and informal, than it lately has permitted, the Federal Reserve in particular having recently been forced by GATA to acknowledge that its has many impossibly sensitive gold-related secrets:

And then there might be still another gold standard, a system in which currencies are simply always judged against each other in freely trading markets, much as was proposed by the Austrian school economist Friedrich Hayek in 1977. Gold inevitably would be one such currency, and given the world's traditional and renewed enthusiasm for it, probably the leading measure of all the rest. At least the many decades of Western central bank intervention in the gold market, both open and surreptitious, suggest that central banks know damned well what their primary competitor is.

Of course GATA may incline toward something like the latter gold standard, insofar as restoration of a traditional gold standard would have the government rather than the free market again determining the price of gold.

If all these gold standards are indeed crazy ideas, what can be said of the current international monetary system, in which only one country issues the world reserve currency, a boom-bust cycle is injected into most economies, the world is expropriated through the reserve currency-issuing country's chronic trade deficits, big and parasitic financial institutions are enriched and rescued by governments at the expense of the working class, and more and more government intervention is required to prevent markets from manifesting themselves and restoring some democracy and transparency to the planet?

Of course until very recently Summers himself was a primary architect of this system, and yet he presumes to mock both creationism and gold's monetary functions. Now that's crazy.

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

* * *

Join GATA here:

California Investment Conference
Sunday, February 12, 2012
Hyatt Grand Champions Resort
Indian Wells, California, USA

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

Or by purchasing a colorful GATA T-shirt:

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

To contribute to GATA, please visit:


Prophecy Coal (TSX: PCY) Wins Positive Feasibility Study
for the 600-MW Chandgana Power Plant in Mongolia

Company Press Release
January 17, 2012

VANCOUVER, British Columbia, Canada -- Prophecy Coal Corp. (TSX: PCY, OTCQX: PRPCF, Frankfurt: 1P2) has received a positive feasibility study for the company's 600-megawatt Chandgana Mine-Mouth Power Project in central Mongolia. The report was independently prepared by Ralf Thomsen, project manager at Steag, a German firm specializing in the planning, financing, construction, and operation of highly efficient thermal power plants for fossil fuels.

The study covers technical specifications, deployment, and financial analysis of a 4x150-mw thermal power plant to be built adjacent to Prophecy's Chandgana Tal coal deposit, which contains 140 million tonnes of measured coal. Last year the power plant received a construction license and the coal deposit received a mining license. Engineering, procurement, and construction management selection and project financing discussion have begun and are expected to be concluded this year.

Construction is planned to start in April 2013, with the first 150-mw unit being commissioned in October 2015 and subsequent units to start in April 2016, October 2016, and April 2017. With proper maintenance the project will have 30 years of commercial operation.

For the complete statement from the company, including maps and charts, please visit: