LETTERS TO THE EDITOR — Price of gold naturally ebbs and flows

Pierre Lassonde, in his recent commentary (T.N.M., Nov. 24/97), seems to be suggesting, in hindsight, that previous industry campaigns of “studying, understanding and communicating the financial value and role of gold, as well as that of central banks, to the financial community” could have helped save the gold mining industry from the ravages of the recent plunge in the metal’s price.

That proposition is questionable. As Lassonde comes close to admitting in his first paragraph, and as numerous economic historians and other analysts have repeatedly observed, the generational span of 20 or so years naturally and relentlessly rules human perspective. This, in turn, rules aggregate economic decision-making and behavior.

Judging from the history created by this “average human perspective,” it is more likely that the macro-economic contraction that is beating on gold mining and Asian financial markets will have to finish its work everywhere before there can be a change for the better. When this ongoing spasm relaxes, and the massive amount of money that constitutes “someone else’s debt” has deflated, then, and only then, will gold’s monetary benefits be “re-discovered” here in the West. According to economic precedents, that turnabout won’t occur for at least another four or five years.

To live by the sword is to die by the sword. Gold’s current turmoil is the flipside of the prosperity it has brought to the mining industry (as well as the whole of the industrialized world) for the past 20 years or so.

Larry Turner

Geologist

Palisade, Colo.