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-- Posted Monday, 8 December 2008 | Digg This Article | Source: GoldSeek.com
The Wallace Street Journal
By David Bond, Editor
Silverminers.com
Wallace, Idaho – We didn't know, growing up on Vancouver Island, that Canada had a pulse. Life to us ended at that fog-enshrouded slab of land the cheery Mainland B.C. chamber of commerce types called the "Sunshine Coast." About as apt a monicker as Nanaimo's late, great mayor, Frank Ney, gave to our home town, which he called, "The Banana Belt." Ever seen snow blowing uphill? If you grew up on the north end of Departure Bay, out by Pipers' Lagoon, as we did, you have. No room for bananas, or even root vegetables, when a southeaster comes in driving 16-foot tides right up to your bathroom floor.
You could predict the weather headed toward Nanaimo by grabbing a good whiff of air. The Harmac pulp mill, 13 miles to our southeast, puked out a healthy blast of SO2 in its daily operations, and if you could smell the pulp mill, weather was a-coming. It was a better forecast than the fuzzy predictions of the Seattle TV stations, which if the tides were high and the moon out of phase you could pick up, if you aimed the aerial just right, on your Packard Bell black and white TV. Which we endeavoured to do, on Monday nights when Huckleberry Hound came on, on Channel 7. "Fun-O-Rama" blew in from the Bellingham channel some afternoons as well, but we weren't allowed to watch on school nights.
Apparently the Internet has pierced the perennial fog across the Straits, whence we watched the snow clouds gathering over the Vancouver Mainland as we sun-bathed on the beach in Nanaimo. Several readers took umbrage at a throw-away line in last week's rant, to wit: "So why are we partying in Wallace? Because unlike Canadians we think long-term."
"(G)ive your head a giant shake," suggested one writer, rising to the defense of Canadian mining companies operating in Mexico. And he went on to suggest that it was American mining companies, not Canadians, who were screwing their shareholders.
Well, in this wrecked market there is plenty of blame to spread around. But it was not our intent, subliminal or otherwise, to disparage Canadian operators, many of whom are struggling despite multitudes of kept promises, goals met, and spectacular operating results. We could devote one rant every week to individual success stories of Canadian companies, many capitalized originally in Vancouver, who've explored, located, and eventually brought into profitable production properties tripped over by their cousins south of the 49th Parallel. We could likewise devote 52 installments to American companies that have squandered brilliant opportunities in North and South America.
Our reference to Canadians in this instance, however, was to the perceived mentality (whether right or wrong) of the "Vancouver investor" who, if he hasn't doubled his money in 90 or 180 days in a mining stock, throws it back in disgust and moves along at precisely the time when said company, be it Canadian- or American-headquartered, needs a little market support to continue its endeavours. And it is to the pump-and-dump newsletter writers playing to the get-rich-quick crowd all of whom seem to think that mining, and mining stocks, are some sort of game – not the lifeblood of civilisation as we know it.
The failure to think long-term in the mining sector is at the root of our current economic and existential angst. Even small mining projects take a half-decade or longer to bring on line, and that's in a mining-friendly place. The multinationals, who think multi-generations, plan 50 years or longer out. There is no room here for quick-buck artists. And the "Vancouver mentality," whether it emerges from that rain-soaked coastal city, or sunny Denver, or gangland Chicago or even wobbly Wallace, Idaho, stalks every bourse in the world.
Our inability as investors to think long-term has brought us to the brink. Mining projects are nearly impossible to finance, because we're not interested in the fortunes of our grandchildren. As a result, mines don't get built and we rely increasingly on imported resources and on the continued willingness of others to accept the green paper products the Fed's printing presses produce in exchange for the real hard assets of gold, silver, copper, lead, zinc and iron they serve up. Another correspondent suggested that we lighten up on Coeur d'Alene Mines, for example, because even Bolivia is a more mining-friendly country than the United Snakes.
He may have a point. The main reason for our $7 trillion, $70 trillion or $700 trillion or whatever debt is that we don't anymore make things in this country, other than the Fed's paper issue and over-priced, over-roasted coffee that is itself an import. The gimme mentality of the Boomer generation has come home; trying to get a young person to show up steadily even for the 40 hours' mandatory safety training prior to putting him underground where he can actually make himself and the company a little money is a fool's errand. He'll make better money graduating from law school and suing mining companies to prevent new projects than he ever would making something useful. And he will get accolades from the tea-sippers on Granville and Park avenues, east and west coasts.
That the mining industry was not even on the political radar screens down here in the U.S. during a presidential election – except some off-hand promises to keep the production of essential minerals from disrupting the sleep patterns of grizzly bears – speaks volumes about our inability to "recover" from the full-blown recession we are driving toward in our SUVs. We are being asked, those of us who are getting by, barely, to subsidize the moribund Detroit auto industry's blue-collar and executive wages which already are the fattest in the nation. (Presumably we will do this by taxing not only ourselves but foreign auto makers who built huge factories in this country and are, while not as many as they'd like, making automobiles profitably, and paying decent wages.
Our favourite curmudgeon, Fred Reed, asked the other day, "What Have the Bastards Done To My Country?" We have indeed, as he proposes, becoming a proto-Soviet surveillance state here in the U.S. A place where the Transportation Security Agency's lackeys have the temerity to ask us, during a "routine" body-cavity search in Minneapolis coming back from Zurich a few weeks ago, "Do you have any problems with authority?"
Wishing to appear to be the good little Nazi, we replied "Of course not." But in fact we have a huge problem with authority. We have a huge problem with a dictatorship that forces us to accept debt scrip in exchange for honest labour and punishes those who would use silver as money; that forces us to subsidize at our own expense failed, lazy Detroit industrialists and their lackey unions; that will carbon-tax our purchasing ability based on a weather report 1,000 years out when even tomorrow's forecasts are iffy in the name of that new religion, Global Warming; that sees a new mine only as a liability, rather than as a source of wealth that might propel us out of current economic malaise.
There is precedent for joy ensuing from the discovery of new mineral and resource deposits. Finds of gold and silver in the New World financed Europe's empires and kept them from defaulting to China. The Bank of England was rescued from a money shortage when gold was discovered in Australia during the latter part of the 19th Century. The North Sea oil discovery again rescued Britain during the 1970s and 1980s from its unpaid World War II debts that were crushing Old Blighty's economy. Gold and silver finds in California and Nevada in that century financed Abe Lincoln's destruction of the Confederacy. Him with the gold, rules.
But a miner in this era finds himself opposed on all fronts. He is not a saviour of the peace, the creator of fortunes. He is the enemy of the Harvard School of Law and big "endangered" wolves and grizzly bears everywhere, and in his desperation turns to the MBAs of Yale and Columbia for guidance. And the Boomer generation turns for fresh oxygen not to the creation of wealth, in which every able-bodied Vancouverite and Wallaceite would love to partake, but to the beastly bailout. (The trouble with bailouts is, you're just pouring piss back into your own boots.)
I know miners who have had 80 consecutive financial quarters worse than Detroit's last. Yet they persevere, without ever whining, or thinking about turning their palms up toward Washington, D.C. Many of use down here, below the 49th, look to Canada for money and opportunities. If we could relocate the Osburn Fault to the Cadillac Fault in Quebec, we would. There is a culture in Val d'Or that respects mining as a generational enterprise.
But we've got to give quality miners their time and our patience. This is not a Vancouver thing, or a Toronto thing, or a Denver or a San Francisco thing. America's crumbling Empire is not Canada's fault, or China's fault. It is entirely our own doing. As Walt Kelly's Pogo said long ago, "We have met the enemy and he is us." The planet still needs miners, and right now, miners need faith. And the policy question we need to answer is, where can our miners work? And when?" They kind of skipped over that question during the presidential debates. That's hardly Canada's fault, crappy as Vancouver's weather is.
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David Bond
Wallace, Idaho USA
Editor, www.silverminers.com
Author, The Silver Pennies
-- Posted Monday, 8 December 2008 | Digg This Article | Source: GoldSeek.com
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