SEarle, you may call it "conspiracy", but the CB's job here and in the rest of the world is to attempt and maintain economies that a re growing steadily in conjunction with minimal inflation. Maintaining the price of gold within certain bounds is part of that Job. I think that the problems in Africa are not the result of steady prices for gold at all (calculate it yourself, what is the "GDP" of the gold producing countries and what percent of that is gold. I do not have the numbers, but i would be surprised that even in the most "gold dependent" country, gold amounts to more than 5% of that country GDP (I think that gold total production account for just around .1% of total world GDP).
I would say that the main reason for the economic calamity in sub Saharan Africa is not gold, but AIDS, it impacts their economies much more than even doubling of the price of gold could compensate for, IMHO. It has turned a huge proportion of the population to be non productive. What will save that part of the world is an effective AIDS vaccine. Unfortunately, they cannot depend on the large pharmaceutical companies of the western world to develop such a vaccine for them (no incentive, the total world market for a vaccine might be $3 B, and a single AIDS drug bring in that much year after year). They have to marshal their resources and develop such a vaccine on their own, just like the western world developed the polio vaccine, when it became clear it was going to be an economic calamity if not arrested (and much smaller than AIDS, mind you).
Zeev |
