A visit to the Hard Assets Investment Conference.

A visit to the Hard Assets Investment Conference.

A visit to the Hard Assets Investment Conference.

Notes from different corners of the world.
May 27 2010 12:13 PM

Golden Opportunities

A visit to the Hard Assets Investment Conference.

Gold Mine.

"A gold mine," said Mark Twain, "is a hole in the ground with a liar standing next to it."

It costs $50,000 to drill 200 meters into the earth. If you are serious about finding whatever you're looking for, you may drill a hundred holes before striking it rich and becoming the better-loved person you always knew you would be.

But dreaming isn't cheap, so the week before last—20 months after the near-collapse of the world's still-fragile financial system—the mining industry came to the Times Square Marriott Marquis' conference floor to discuss the economy and raise money from men who may yet become either bold dreamers or desperate dupes, depending how the drilling goes.

Hundreds attended the Hard Assets Investment Conference, and although some Wall Streeters were Hermèsing about, a nation's greatest dreamers can be its deepest sufferers. There was, you might have guessed, another contingent: Military Channel insomniacs, wandering elderly, those who feel most deeply connected to society when planning for its demise.

"I'm just concerned this is going to be a bunch of sad sacks," my Slate editor had e-mailed.

So I wasn't going to mention the whalish man-child who may spend nights covered in Pringle dust, berating a dead mother. Or the Amish-ish ginger in the conference lecture hall, his friend in the white sateen USA jacket, circa 1984; or the way they thousand-yard stare at a keynote speaker who says that all the economic conditions precedent to the 2007 crash are still there, that America is like some college kid fighting his tequila hangover with rum, and that if you're smart, if you wait for the next crash, then you can buy up the world cheap.

And I think of Laocoon, the Trojan priest, who must have seemed sad-sack, too, warning against the Greek horse. I think how a society's sad sacks may sense the bad thing coming because they exist apart from whatever madness is at large; they see things clearly.

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"Yes, we've rescheduled a bunch of people's mortgages," the speaker says, "So the people who couldn't pay for their mortgages and still can't pay for their mortgages still have mortgages. That means we fixed it, right?"

In the West over the last several decades people have sought to transform sad-sack selves into bright, better selves not by making or even finding wealth but by borrowing it. It's been a psychic Madoff scheme, now failing, and we are its wreckage, sad sacks all. Great Britain? Sad-sack. Greece, too. We're not so far behind them.

Gold, tungsten, copper, vanadium, silver, rhodium.

In chaos people trust what they can touch.

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Across the floor people speak of deep drilling and open pits. The modern liberal cringes, but in the ruins of an age of obfuscation we have no time for morality as lifestyle choice, and much to learn from people who cut through the surface of things, however unpleasantly.

Even the uranium guys.

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On Labor Day of 1954 Dwight Eisenhower went on national television to initiate America's first nuclear reactor, at Shippingport, Penn. Atomic energy would power the postwar world. Uranium boomed through the '70s, people believed in the green metal.

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Most people don't know where their dreams die; "Chernobyl," the uranium guys will tell you, as if recalling some syphilitic hooker, "Three Mile Island."

Steve Khan, President of Strathmore Minerals, has the air of an elementary school principal whose vision of humanity didn't survive some toddler's spree of grisly delinquency. He stands before a trade show panorama of the New Mexico desert; "Developing Uranium Mines in the USA," it reads.

"That's our Roca Honda site," says Steve, of the atomic steppe.
"That's where you take it out of the earth."
"That's where we go down after it."
"People go down after it."
"Sure."
"And the radiation?"
"They wear monitors that tell them when they've had too much."
"Then what?"
"Then they can't work anymore."
"Forever?"
We pause to fathom eternal release.
"No, just for the day," says Steve. "Or until their levels go back down ..."

I think of the men in Strathmore's desert digging through the dark matter of postwar hope, wired to computers that beep when the radiation exceeds acceptable rates.

Across the floor Oro Gold has hired a former bikini model, Tasha, 22, a veal calf beauty, to evoke with flesh all the bullion they're drilling after along Mexico's West Coast, "real close to the resorts," she says, in a voice containing the promise of a million better selves.

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And I think of my father.

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I'd wanted to have lunch with him that day.

We'd meet at the Union League Club beneath a portrait of Herbert Hoover, and I'd flash back to 1986 when, riding Ronald Reagan's atom-backed U.S. Treasury bills, he'd made a little fortune. I'd tell how he bought South African gold, how he'd taken the coins from atop his closet and let me bob them in my 8-year-old hand, palm sweat fogging the gold; "In times of doubt men worship the one God who never dies," I'd say.

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I'd describe the rose bush in the center of his garden and how he took me there and we dug a hole by the roses and put the gold in, and I'd asked why, and he'd said, "Because you don't know," by which he meant the Russians could launch, we could launch, and in the mutative ruin of Gary David Goldberg's America we'd need gold to not be eaten.

I'd tell how he'd shown me the USSR on a map, Asia's port wine stain, and said, "Yes, these anabolic drones wanted us dead, but not to worry, God was terrifically pro-American, and besides that we were sending satellites with lasers up in space"—how to my mind, and I think his, too, the laser-satellites were more reassuring than Yahweh's quiet sympathies.

I'd offer this to show 1) how the old Gods died in World War II, whose horrors they couldn't explain and might have caused and 2) how we replaced them with new Gods, consumerism and technology, mistress-shaped Cadillacs and GE-designed fission reactors, which weren't much but did beat Dachau and Dresden, and 3) I'd suggest a connection between uranium and gold, the postwar era as born in the technological promise of the former, now ending in fearful rush to the latter.

I'd describe his bow-tie, softening gray hair, I'd tell how when he was in the National Guard, someone put a rifle to his head and pulled the trigger, and although the gun wasn't loaded, he'd had his first panic attack, thought he was dying; and he's had them ever since; he had one last year when a man died in his spinning class, then a doctor gave him a heart monitor which for weeks pulsed his vital rhythms through satellites to experts unknowable to be sure he wasn't dying. Except he couldn't do lunch that day.

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So I ate at a French place off Times Square whose hostess, Aurora, said she left college last year, had run out of money, has been teaching herself French by changing the language settings on her iPhone. She told me the gorgeously clichéd music playing was the "Flower Duet" from Delibes' Lakmé. They use it in car commercials, she said; Natalie Dessay sings it on YouTube; if you give me your e-mail I'll send you the link.

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Fathers, sons, and gold—

Vaguely Zoolanderish, Joel Adams stands before the booth of his family's Sandspring Resources. There's a picture of a gaping hole torn in virgin jungle: "Introducing Guyana," read letters beneath the environmental nightmare, trees clear-cut around an ochre clay pit, chasmic earth, primal burrowing; Guyana needs no help with apocalyptic imagery.

"Is that near Jonestown?"
"Everyone asks that."

Adams' family sold out of uranium in the '80s; then his father bought 240,000 acres of jungle beneath which may lie 1 million ounces of gold. "Ten years ago he went down there, built a camp, built a road all the way in, I don't know how many miles into the jungle," says Adams fils, of père."A lot of people, they called my dad crazy at first."

Abraham Drost is Sandspring's president; he looks as James Spader's character from Pretty in Pink might if all his dreams had come true. And has reason to be pleased: On the second day of the conference, gold hits a new all-time high, $1,249.40 an ounce—

"The upside to gold is strong," says Spader, "But we don't want to see a world at $5,000 gold. It's anarchy, it's complete anarchy."

Lunatics talk about anarchy, but in Greece, people told they must give up endless summers and youthful retirement have rioted and firebombed police. What keeps America from Greek crisis is the ability to print dollars, a perk of Normandy that can't continue forever.

"The budget deficit in the United States is about 12% of gross domestic product (GDP) and the federal debt is 84%," Blackstone's Byron Wien will write that week. "Greece has a budget deficit of 13% and the total debt is 113%. The numbers are not that different."

"How 'bout a nice balance somewhere?" Spader says, as if we're not discussing apocalypse. "Maybe there needs to be a default, maybe we should be in default."

If you have Skeeter Davis' The End of the World, you might play it now. As you realize this John Hughes villain is calmly proposing the death of Almighty Dollar, God Supreme, and that the day's record gold price suggests others—the Chinese, the Indians, both buying gold—agree with him. As you realize that the postwar world, birthed in uranium glow, is now collapsing in on the West, and that as it does, we all become sad-sacks, even the Athenians, who once beat Persia and now lay siege only to each other.

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And as we lay siege to the earth, as we drill uncertainly toward uncertainty, we fathom the planet's own sad-sack being.

Bald and squat like some Coolidge-era prize fighter, Mickey Fulp teaches Geology for Investors, a workshop that concludes the conference; "Geology," he informs, "is the study of the history of the earth."

Fellow attendees include a Hasidic Gandalf who nods during discussion of the Mesozoic as if those were good times and a mining executive whose toupee seems made of real poodle. We take notes as Fulp relates the history of the planet upon which we've existed for a geologic nanosecond.

And my iPhone doesn't buzz with the YouTube link from Aurora, and I don't play it loud, and Natalie Dessay's voice doesn't mysteriously fill the room, and the"Flower Duet" doesn't somehow shed car commercial cliché as Fulp says the earth is in no way a loving mother—

It is in fact a giant nuclear reactor, and all the things we make up here on the surface, out of everything from gold to uranium, into everything from cars to satellites—it all starts as magma formed by radioactive processes blasting deep below, so that if civilization should end in atomic fire, well, it began there, too.

The earth is 4.6 billion years old; for 800 million years it was lifeless; we divide its life into eons, eras, and periods: "The two most important time boundaries on the earth are marked by mass extinctions," Fulp says, explaining how geologic time is lately collapsing in on itself, periods shortening, approaching some terminal point with terminal velocity.

Now his PowerPoint projects a picture of Utah's Bingham Canyon mine, a necrotic void giving men copper since 1903. "This thing will go for all of our lifetimes, provided the planet doesn't economically crash and we all go back to hunting and gathering," Fulp says, and only one of these sad-sacks laughs.

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