Freeport's Grasberg mine, the second-largest copper and largest gold mine in the world by reserves, has been temporarily shut down for up to three months. The Indonesian government is conducting an investigation into why a collapse last month led to the deaths of 28 miners.
Minister of Energy and Mineral Resources Jero Wacik said the entire investigation could take up to three months, others say the inspection won't take as long.
Freeport briefly resumed open-pit mining production on May 28, but after a worker was killed in a separate accident, the government asked the company to suspend operations until a government investigation was completed.
This would be one of many reasons gold backed currency won't work.
ReplyDeleteAnd your evidence of this is...?
DeleteAn alternate view is that gold could very well serve as money if one assumes its price reflects supply and demand. We don't have legitimate price discovery for gold and any other meaningful market when funny money is being created from nothing in staggering amounts.
As for the mine shut-down, this sudden lack of supply would involve an increase in the price of what's available. Problem solved.
So because a mine closed for a little while, a gold backed currency wouldn't work? Considering mines have always opened and closed and gold was a stable currency for thousands of years, explain how this is a problem.
DeleteLet me guess CNBC, this MUST be bearish for the price of gold...
ReplyDeleteNice troll post Wenzel!
ReplyDeleteU will get both sides of it, but some people will start crowing about a gold shortage and HUGE bump up in prices because of that.