Amador’s Gold

Over the weekend I posted an article (http://www.birchgold.com/news/is-golds-rally-just-beginning) on various local Facebook pages with the following comment: Is there a lesson here for Amador County? Battle Mountain, Nevada has 3,665 residents. “Yet as many towns of similar size grew dilapidated, CNN’s Jeff Simon reports that Battle Mountain was able to build a new football field, a new hospital wing and even a courthouse…Battle Mountain sits on several large mines that reap billions in annual revenue, but the miners have to pay a tax called “net proceeds”. This tax on mining companies brought the town $20 million in 2014 alone, down from $60 million in 2011 when all of America was stockpiling the metal…Aside from securing generous proceeds, gold also brings in the jobs: The average annual salary of a worker at a nearby mine called Newmont’s Phoenix amounts to a respectable $90,000.”

Katherine Evatt replied: “Sutter Gold was approved decades ago. Where are all the jobs, Mark? The revenues? One reason people like me are so skeptical of claims like yours is that for decades, we have seen projects approved based on the promise of jobs and revenue that never materialize.” Since these are important questions I have decided to answer at length in this blog post.

Aside from Sutter Gold, I don’t know what projects she is referring to aside from residential development, so I will respond with the assumption that they are residential developments. Demand here for this type of housing comes from primarily three areas: Economic growth, including household formation, retirees and commuters. Retirees and commuters are fickle markets which respond to almost all the quakes in the economy. Locally, it appears that the market cycle for those types of housing is vastly shorter than the litigation ridden approval process. Projects are stalled and Amador County has told potential investors that they’re not wanted. The remaining category of housing demand, economic growth including household formation, is stagnant or in decline given our County’s current situation.

A few years ago I wrote in favor of Sutter Gold and noted that there is at least a billion dollars of gold in Amador County with much more throughout the Mother Lode. The map in the mineral resources element of the proposed General Plan shows the extensiveness of the Mother Lode. Little if any of this has been surveyed and mapped with state of the art technology. The unrealized potential is unknown.

I also stated at that time that much of the demand for gold was about a billion people in India, China and elsewhere making it from the peasantry into the working class and from the working class into the middle class. They are buying gold in their fluctuating local currencies, often in the form of jewelry. This trend has not only continued, but has expanded. Also increasing is the sales of high tech products which all use some gold. But gold is priced in dollars, and we’ve all seen the dollar price drop and stall out Sutter Gold. This didn’t happen as a coincidence.

The United States is technically insolvent considering the national debt plus unfunded liabilities. The Treasury Department literally sells our debt securities through shady intermediaries in the Grand Cayman Islands and Belgium as if we were a criminal organization. But we are in the best house on a bad street situation compared to most other nations. So the dollar remains strong. And given out trade imbalances China now holds oodles of our dollars. Those in charge there understand our fiscal predicament far more precisely than most Americans. They have our dollars and know their potential worthlessness. A deal was made to drive down the price of gold and allow the Chinese to trade their dollars for cheap gold. Goldman, Sachs advised everyone that gold was going down. What appeared to a self fulfilling prophesy was orchestrated by them and their allied traders. This then became a crowded trade with many others climbing aboard. Much of the world’s gold has now gone to China. Even today as gold rises, Goldman, Sachs is predicting a declining price while buying for their own account. But you can’t fool all the people all the time, and the market always rules: above ground, underground or simply unseen. So gold is now finally rising in dollars. Negative interest rates and invited Muslim invaders have added many Europeans to the buyer’s side.

Despite our vocal anti-business coterie that they subjectively and deceptively redefine as selective business and not anti-business, Amador County should receive renewed interest if the gold price continues to increase. The economic benefit could be staggering. As with housing subdivisions and Sutter Gold, my greatest fear is that again the permitting process will exceed the market cycle and he will have lost another opportunity. Look at the possibility of a future Trump Administration beginning massive infrastructure projects over the next few years. Will Newman Ridge have ready product for anything but the obstructionists and lawyers?

Copyright 2016, Mark L. Bennett