At one time South Africa was the world's biggest producer of gold and held that spot for 101 years,from 1905 to 2006. Also 40% of all gold ever mined on this earth came from the Witwatersrand area in South Africa.
Currently we ranked number 4 according Dr Thomas Chaize's Energy and Mining Newsletter,behind China,Australia and the USA. Dr Chaize reckons that China's output will exceed 400 tons a year in 2013. He also says "South Africa's gold production has been in decline for some 40 years now and the most productive years mining the commodity were in the late 1960's and 1970's.
It came at a price though because according to the International Labour Organization ± 9000 people had been killed looking for gold during those years. A grim reminder of the high price that was paid in human life loss mining gold!
The worse single disaster was the fire at Kinross mine that killed 117 miners including some that came from Botswana,Lesotho, Malawi and Mozambique. Gold has a high price tag indeed for a hazardous occupation.
Is gold really that important and why? The Financial Times of London says its in high demand for foreign investors,hedge funds and any of the central banks and for monitoring a country's trade deficits.
The higher the price of gold,the lower the confidence in paper money. When there is economic difficulties or crisis like we see in Europe at the minute and the Euro bailouts for Greece,Portugal,Spain etc,or when inflation is rising higher and higher,then funny enough it's the price of gold that can tell us the real importance of the situation.
Gold prices stop governments and put limits on their spending or borrowing. Like America for example all you ever hear from Ben Bernanke(America's chairman of the Federal Reserve) up until recently is quantitative easing this and quantitative easing that,which means printing and pumping more and more paper money into an economy that has enormous debt levels and spiralling out of control.
Gold prevents that from happening cause unlike paper money,you can't just "print more "to get your country's debts out of trouble.It has also been said by the FT,that gold holdings are the clearest signs of a country's economic strength on the world stage.
Hence the phrase "the international scramble for gold" and the demand for it, rises all the time more so as the economics in Europe don't look like going away very soon.
Especially is the demand for South Africa's gold coin,the Krugerrand,the most popular gold coin there is in the world. When all else fails,gold is seen as the last resort and a save haven for all people, most notably big investors.
US Congressman Ron Paul,wrote in his book Gold, Peace and Prosperity:"Paper money facilitates a governments' attempts to inflate, control and boost their economy, run up deficits and fight senseless wars. My beef is with the paper money. All the problems we’re having today were destined to happen. Gold plays an important role in the monetary system because it restrains government spending."
With an economic Armageddon looming its no surprise that most people are turning towards gold for security. Still the price of gold gets manipulated my the markets and therefore we should not be badgering high street metal dealers to acquire or sell the precious metal should we have or need some.
South Africa is still the biggest producer of gold in Africa,although some of its mines have become deserted in recent years for whatever reason. Is South Africa's ANC partly to blame for this because the stance it took on mine nationalization,general negative perception of the country by investors since then and its inflexible labour laws and frequent unnecessary strikes by Cosatu among others?
Still Bloomberg news reported yesterday that South Africa's gold and foreign reserves had risen most in two years at the same time as its unemployment levels has also dropped to 23.9% which is not bad.
What about Rooibos tea?
A report from the BBC says that South Africa favourite anti-oxidant tea is in decline because of droughts in the Bokkeveld region where this tea is grown. Even prominent and fashionable places like Starbucks were selling Rooibos tea. A famous coffee company selling our South African tea,was that the first? Can you imagine that. I always believe you should drink rooibos tea while the teabag was still in the cup and then as you finished your tea,you drain that teabag really well and get the most out of it.
Infact you could smell rooibos tea as soon as you walked into someone's house in South Africa and know it was there going to be on the table ready to be served. Some people reckoned that rooibos tea could even help you get rid of a fat gut,that it produces less of a shock to the nervous system,that its very stimulating and that it relieves hypertensions. Now it looks like it might be ending soon because of climate change problems. What a pity to see that happening hey!
Reference:
1.Financial Times of London.
2.BBC News.
3.Rocky Vega,from The Daily Reckoning
4.Chamber of Mines of South Africa
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