Meraglim Blog

We’ve Got Plenty of Gold, but We’re Running out of Cash

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

 

Generally speaking, well-managed gold mining operations have never had much difficulty getting the dollars needed to begin and sustain their efforts. Gold is highly liquid and easily turned into cash, so getting cash loans by pledging future gold production is a straightforward financing technique. But nothing is ever quite so simple in Zimbabwe.

The Zimbabwe currency was turned to scrap paper years ago through hyperinflation. Since then, Zimbabwe has financed itself through a hybrid of dollarization and Chinese direct foreign investment. But that still leaves local businesses under the thumb of the central bank, which controls who receives whatever dollars might be available.

This article reveals the extent of corruption and shortsightedness in that process. The Zimbabwe gold miner RioZim had an understanding with the central bank that dollars received from its gold sales would be available to RioZim — 50% by direct deposit to a RioZim account and 50% upon application to the central bank for good cause shown. Instead, RioZim received only 14% of the dollars available.

As a result, RioZim cannot pay its bills and has now had to shut down three mines. Of course, this only makes the situation worse because the gold from those mines is no longer available to generate dollar proceeds for anyone.

Zimbabwe is in desperate condition and no doubt needs every dollar it can lay hands on. But depriving your top exporters of working capital is like cutting off your nose to spite your face. It seems the likely outcome is that China will provide the needed working capital — in exchange for shipping the gold produced straight to China.

Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

 

IF THE SCIENCE IS NOT ON YOUR SIDE, JUST TRY THREATS

It’s clear that good science does not support the extreme claims of the climate alarmists. Yes, there is such a thing as climate change, but it’s slow, difficult to predict and almost impossible to model because of the complexity of the process. The climate alarmists have grabbed most of the headlines for the past ten

Read More »

WHY TRUMP WILL WIN REELECTION: NOT POLLS OR PUNDITS; JUST COMMON SENSE

Political analysts use polls, betting odds, historic trends and other inputs to make their (usually wrong) political predictions. We all remember that “experts” said Hillary Clinton would win the presidency in 2016 (they gave her a 92% chance on the morning of the election), and that the UK would vote to “remain” in the EU

Read More »

HERE’S ANOTHER ELITE WITH ANOTHER PLAN TO TAX AWAY YOUR WEALTH

The elites never rest when it comes to devising new ways to take your money through taxes, inflation or outright confiscation. The latest Trojan horse the elites are riding to take your money is climate change. The climate does change over long periods of time for reasons that are not well understood except that they

Read More »

KRUGMAN SHOWS HE KNOWS LITTLE ABOUT ECONOMICS AND LESS ABOUT FINANCE

We already knew that Nobel Prize winner Paul Krugman knows almost nothing about economics. Now, we see from this article that he knows nothing about banking either. Krugman claims that the repeal of Glass-Steagall and the actions of banks in general were not the cause of the 2008 financial crisis. The conventional wisdom is that Lehman Brothers,

Read More »
Scroll to Top