Page 2 of 2

German businessman Thomas Geissler unveiled what he says is the world’s first “gold ATM” - a bulletproof bullion vending machine called “Gold to Go”- last year in Abu Dhabi, United Arab Emirates. Since then, he’s installed more than a dozen of the contraptions around Germany and the United Arab Emirates. In Las Vegas, there’s one at the Golden Nugget Casino. Another arrived July 1 at the Westfield shopping center in London, where it stands alongside a cash ATM and a soft-drink machine, to the bemusement of shoppers.

Mr. Geissler hopes small amounts of gold will replace chocolate or flowers as commonplace tokens of affection. Two-thirds of his buyers are gift-givers, he estimates.

“When you watch the people buying gold at the machine, they’re smiling, laughing,” he says.

In the United States and Britain, the newest spin on Tupperware parties has a golden hue. Dozens of businesses, bearing such names as “Party of Gold” and “Golden Opportunities,” encourage consumers to host “gold parties,” where friends sell their old jewelry to a broker while making small talk over drinks and snacks.

Goldline International, the US-based bullion vendor known for retaining the former Fox News talk show host as its enthusiastic pitchman Glenn Beck, has seen its fortunes rise along with the global appetite for gold. At the beginning of the financial crisis in 2008, the company had more than 300 employees and boasted $525 million in annual revenues. Now it has more than 400 employees and expects revenues to reach $800 million for the fiscal year ending later this month, says chief executive Mark Albarian.

“People are worried about paper, and gold is the opposite of paper,” Mr. Albarian says.

As prices rise, so does the worldwide interest in gold recovery and recycling. In Iraq, jewelers have long worked with salvagers’ help to recover “tayeh,” or missing gold.

“Salvaging gold dust or very small pieces of gold that might be lost during manufacturing at the goldsmith’s workshop is an ancient practice,” says Mousa El Aradhi, a Baghdad jeweler. “There are people specialized in recovering gold from the dust on the floors, on the workshop tools.”

Recently, salvagers have been striking out on their own, scouring Baghdad sewers for trace amounts of gold that has escaped down jewelers’ drains.

Recycling is big in Japan, where workers extract growing quantities of gold from “urban mines”: dumps of old electronic equipment and industrial waste. At one waste facility in Nagano, near a cluster of electronics factories, workers recover 70 ounces of gold each year from industrial sludge emitted by neighboring electronics factories. Experts believe that, if all the opportunities to salvage and recycle gold were exploited, natural resource-poor Japan would be among the world’s top five gold-producing nations.

The high human cost of gold

In 1511, King Ferdinand of Spain famously declared, “Get gold, humanely if possible – but at all costs, get gold!”

His conquistadors glutted themselves with gold in the New World, but at a heavy cost that included, in the words of 19th-century American historian William H. Prescott, “the most atrocious acts of perfidy on the record of history.”

For all its luster, gold’s past is paved with bones. In the 1st century BC, Greek scholar Diodorus Siculus described the suffering of Nubian miners under the Egyptians. “[T]hough by their labor they enriched their masters to an almost incredible extent, [they] did it by toiling night and day in their golden prisons,” he wrote. “They were compelled by the lash to work so incessantly that they died of the hardships in the caverns themselves had dug.”

Gold’s glimmer still lights a trail of devastation. Extracting a single ounce from the earth generates an estimated 30 tons of waste, more than any other metal. Cyanide and mercury are often used to leach gold from ore, a process with toxic consequences. In 1995, hundreds of thousands of gallons of cyanide-laced waste water broke through a dam at a gold mine in Guyana, tainting the Essequibo River, the nation’s main water source. Five years later, a gold mine in Romania leaked cyanide into a Danube River tributary. The poison flowed all the way to the Black Sea. It killed 1,000 tons of fish.

In March, three men were burned alive by a vigilante mob in La Rinconada, a mining town in southeast Peru. The victims were accused of stealing gold from a local storage facility, police told the EFE news agency. Gold is the nation’s top export, but it’s also led to no shortage of problems, as illegal miners blast away tons of earth with high-pressure hoses, creating brown gashes visible in satellite photographs.

Victor Zambrano, who heads a nonprofit group supporting Peru’s Tambopata Reserve, said the high price of gold and failure of Peruvian authorities to crack down on illegal mining in the southeastern Amazon is causing massive and irreversible destruction there.

“We are losing forested areas at an alarming rate, which has not slowed despite moves by the government,” Mr. Zambrano says. “The people involved in illegal mining know that the government may act, but that any action will be shortlived and things go back to normal quickly.”

Illegal mining is inching toward the Tambopata Reserve, which was created in 2000 and famed for its biodiversity. Covering 678,484 acres, it is home to 7 percent of the world’s bird species and 4 percent of mammals, according to the World Wildlife Fund.

There’s growing pressure to make gold greener and more humane. The environmental advocacy group Earthworks is stepping up efforts in its “No Dirty Gold” campaign. In June, the World Gold Council released a draft of production and refining standards for “conflict-free gold” in an effort to keep gold from financing war, particularly in the Congo.

The global economy, however, isn’t cooperating: The higher gold’s price, the more extreme measures people will take to get it.

Gold’s standard-bearers

“I think, within the next five years, the dollar will be relinked to gold,” says Steve Forbes, publisher of the magazine that bears his family name. “In this imperfect world, gold is the thing that has the most stable, intrinsic value.”

But going back to the gold standard, Mr. Forbes acknowledges, is a somewhat heretical notion. “You don’t want to be seen as a kook, so it’s still in the closet,” he adds.

The gold standard acts like a financial straitjacket. It restricts a nation’s economic flexibility by limiting regulation of the money supply. Keynes called it a “barbarous relic.” Most modern economists agree.

In recent months, however, returning the dollar - the keystone currency of the global economy - to a gold standard has become a cause célèbre for tea partyers and others disaffected by American government. They envision gold as a harsh disciplinarian, a schoolmarm menacing the Federal Reserve with a paddle. Binding the currency to the rare metal, they argue, would curtail spending, restore fiscal responsibility, and ward off inflation.

In a gesture of support, legislators of more than a dozen states have pushed to make gold an alternative currency for a variety of transactions. In Utah, US-minted gold and silver coins became legal tender in May, though it’s commonly understood that their market worth greatly outstrips their face value, which means no one will actually use them to buy anything. That seems almost fitting, since gold’s value has always been more symbolic than tangible.

Though it’s hard to picture gold as the future economic compass, the metal readily points to past lessons: When people lose faith in their fellows, they reinvest it in gold.

Back in California, Philip Mike Murphy was prepared for that new world order. Four weeks after the entrepreneur and former mine foreman from Tehachapi, Calif., brought to market his invention - the Mine-Tech Ultra Gold Processor, a dry washer that strains gold from dirt – he said he’d already sold two for $1,495 apiece and had at least a dozen potential customers lining up for more. Two of the battery-operated contraptions juddered and chugged beside his RV during the prospectors’ outing, where he said five miners had approached him to buy. When asked why people like gold, Mr. Murphy paused. Then he said, “I don’t know, to be honest.

“If I were around during the gold rush I’d probably be the storekeeper or the bar owner,” he added. “Those guys made the money.”

Note: Ben Arnoldy in New Delhi; Lucien Chauvin in Lima, Peru; Peter Ford in Beijing; Sahar Issa in Baghdad; and Gavin Blair in Tokyo contributed to this article.

Page One | Page Two

Similar Posts:

• MF Global tanks in pre-market trading
• Looking for a quick job this Holiday Season? Top 8 Companies Hiring for Holidays
• Gold price hits record high on inflation fear, dollar slump
• How the Value of the Dollar Affects Average Consumers
• MBA Graduates: The Next Generation of Employers

Tags: Gold, Gold Influential