Investing in Conspiracy - Ron Paul Fuels the Hunt for Gold

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COMMENTARY—Prospectingjournal.com—These days, it’s hard not to be a conspiracy theorist, what with the near-collapse of the EU, the teetering of the once mighty US empire, a supposedly dead Bin Laden, 24-hour fear in the news, and the increasingly democratic dumping ground for uncensored ideas, known as blogs. Throw gold into the mix, add the internet, and top if off with GOP Presidential Candidate Congressman Ron Paul and his non-traditional political enquiries, and what you have is a political conspiracy breeding ground.

Dr. Paul’s recent push for an audit of the gold at Fort Knox made headlines in the run-up to the recent GOP Presidential Debate in New Hampshire. This legendary bullion holding ground, though just an imaginary castle in the sky to most, has been silent for years, refusing real audits, reports and basically any information leaks. But to the cheers of conspiracy theorists, an unverified report from 2009, which claimed that the Chinese received a fake shipment of gold from the US, added to the idea that perhaps it’s all just a bluff. Perhaps there’s no gold. Perhaps the US is screwed.

In defence of the government, the Treasury Inspector General claims he “personally observed the gold reserves located in each of the deep storage compartments.” But nobody is buying it. Instead, Paul has been relentless calling for the audit, as well as an end to the Federal Reserve, the Income Tax, and America’s many wars (worth a shot). The problem: auditing the 700,000 bars in storage will apparently cost $15 million, 350,000 man hours and will take six months . . .

Enter the conspiracy theorists. A quick search brings up myriad websites, my favourite of which start their self-help financial Armageddon section with the following: “The US secretly sold off its gold,” “It’s coming for yours!” “Have you bought gold yet?” and “Diamonds are not forever—gold is.”

If the stock market teaches anything, it’s that speculation drives prices—the same goes for conspiracy theories. And with gold at about $1500 and expected to hit $2000 sometime before the fall of the modern world, Paul is fanning the flames for gold miners, gold lovers and gold standard theorists. In fact, Paul’s political weight may equate to dollars for the gold mining industry. According to his 2010 report, the congressman has hundreds of thousands of dollars tied up in several gold mining companies, with rumours pointing to Barrick Gold, Eldorado Gold Corp and others. He is also said to have at least $500,000 invested in Vancouver-headquartered mining company Goldcorp. Just saying . . .

The questions I want answered have probably crossed Paul’s mind at one point: How will a growing call to the gold standard affect gold mining companies? And, are conspiracy theorists the new stock pumpers?

Chris Devauld

Senior Writer