Should Americans Buy Foreign Gold?... - Patriot Gold
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Should Americans Buy Foreign Gold?
May 4, 2018

Most would agree, 'buying American' is good. It helps the economy, and supports American workers. But when it comes to buying gold, Americans often find it difficult to even find gold which has been produced and refined in America --- there's simply very little way to know. When you buy a gold coin or wafer or jewelry, there's seldom any indication where the gold was produced and refined. As a result, chances are very high that the gold you're buying was produced somewhere other than the United States.

But surely it would be a good thing if we could insist on buying American gold. Aside from supporting domestic industry, it would also help support the price of gold, and possibly even help the US move closer toward an implicit gold standard as new US-based deposits would be favored over foreign ones.

Buying American would help keep US mines in business, putting American interests first. Increased demand for domestically produced gold would also motivate gold companies to focus their efforts within the US rather than overseas. It would also support local drilling companies, mining equipment manufacturers, and even US jewelers. Equally importantly, it would spur junior gold companies to spend money for exploration and development within America.

It's a troubling fact that much of the gold being sold internationally is produced in foreign countries under poor conditions. Foreign gold is sometimes produced under violent conditions, through slave labor, serious environmental pollution, state-sponsored theft, unrestrained criminal activity, unsanitary working environments, and so on. As Americans, we object to these things. It is inconsistent to say we are opposed to forced labor yet continue to buy commodities produced under slave conditions.

Some third world countries employ children to work in mines. Several gold producing regions use mercury, cyanide and other harmful chemicals in such a way that highly-destructive environmental pollution takes place. Proceeds from illegal gold production and sales is often used to fund criminal activities, including terrorism and violence against legitimate governments.

The gold produced under such conditions makes its way into the global gold market. According to a Reuters report in 2017, there were over 2,113 licensed garimpo sites in Brazil. But chemicals like mercury, which miners use to separate gold from grit, can leave a large footprint of contamination. Mercury is considered to be a serious health risk - it causes damage to the central nervous system, kidneys, heart and reproductive process. Modern day gold production uses cyanide, which can be used very safely, but in some foreign countries the cyanide is disposed in surrounding rivers and lakes, contaminating the water systems.

While many of us are aware of 'conflict diamonds' there is also something known as conflict gold. Gold and diamonds are valuable commodities which are often used to fund conflicts, violence and terrorism. Diamonds mined during the civil wars in Angola, Ivory Coast, Sierra Leone, Liberia, Guinea and Ghana undoubtedly had a significant role to play in the funding of those conflicts. Reports estimate that as much as 20% of the total diamond production in the 1980s was being sold for illegal and controversial purposes, of which 19% was specifically conflict in nature.

In the 1990s the Ivory Coast became a route for exporting diamonds from Liberia and war-torn Sierra Leone, after a coup overthrew the government of Ivory Coast. The UN Security Council banned all exports of diamonds from Ivory Coast in December 2005. Liberia was engaged in a civil war from 1989 to 2003. The UN accused Liberian president Charles G. Taylor of supporting the Revolutionary United Front (RUF) insurgency in neighboring Sierra Leone with weapons and training in exchange for diamonds. Conflict diamonds created numerous examples of physical and psychological human harm across several countries in Africa. Victims included children and infants.

But it's not just diamonds. About 15 per cent of the world's gold supply is provided by the 30 million workers in the global small-scale and artisanal mining industry. These miners are routinely exploited and vulnerable, unable to get an equitable price for their gold.

In recent years, there have been concerns about potential links between gold and unlawful armed conflict, such as civil wars and militia activity. To promote accountability, the World Gold Council has designed a conflict-free gold standard. This standard is designed to help companies provide assurance that their gold is free from the taint of war or corruption. The goal of the standard is to provide assurance to the gold consumers and other stakeholders that the gold they are purchasing is free from violent conflict or serious abuses or breaches of international law. Gold mining should be a source of economic and social development, not a way to fund violence and bloodshed. If we buy American gold we can be sure that we are not supporting any of the objectionable activities which happen so routinely overseas.

Buying American gold would have the added advantage of making our domestic gold sell at a premium to foreign gold. It's demand and supply. If we reject foreign gold and only buy gold produced and refined in America, we will create a price difference in the international precious metals market, resulting in two-tier pricing. We have a superior product, qualitatively, that deserves a premium.

Besides, Americans take healthy pride in our nation and independence. Relying on another country's gold production is counterintuitive to our sense of economic security. America, which was once a leader in the global gold market, is now facing stiff competition from other countries which don't play by the same rules. We need to end our reliance on the exports of other countries and take back our independence by buying gold produced at home.


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