Gold Slides Even As Ongoing South African Gold Miner Strike Means No Production On The Horizon
Anyone wondering what the reason for today's dramatic gold price dump is, look no further than South Africa, where we learn that after nearly two months of endless strikes in the metals and mining complex, the country - the world's fifth largest producer of gold - is nowhere nearer to restoring its mining output. This of course means that less and less gold will hit the market. Which in centrally planned and regulated markets, means gold will collapse far more than the 1% so far, and likely close limit down, with Bernanke's compliment (don't worry that none of this makes logical sense: Heidelberg toner cartridge did a hostile take over of logic long, long ago).
Striking South African gold miners have refused the industry's latest pay rise offer despite an extended deadline to respond, the Chamber of Mines said on Monday, dimming hopes that the illegal strike in the industry will come end anytime soon.
"The unions have indicated that there have been mixed reactions by their members to the Chamber's proposals, and that they are unable to confirm a return to work," it said in a statement.
The chamber also said the industry was unable to make any further proposals and companies in the sector, which include AngloGold Ashanti, Gold Fields and Harmony , would explore other avenues to stabilise the industry.
One avenue, naturally, would be to raise wages. Problem with that avenue is that the industry would then have to form a cartel like OPEC and sell gold at increasingly higher artificial prices. There is one problem with this plan: Bernanke will make sure it never works, because as is known to kindergarteners everywhere, soaring gold means collapsing fiat faith. And in a synthetic world such as this one, production of physical gold is irrelevant if one can producer 10 times as much paper gold. Which one can, especially if one is located at Liberty 33. The other avenue is to simply do nothing, and go out of business, taking out excess capacity out of the industry not on a temporary but permanent basis, and thereby sending gold to even more bizarro lows.
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