Dirty Gold

Gold is viewed as a safe place for people to park their money during unstable times. But it can also be its own engine of instability. When the price climbs high enough, all sorts of sketchy characters are drawn into a shadowy industry where laundering illegally mined gold into legal bullion is as simple as melting and mixing it.

And when the price is as high as it is today — almost $5,000 an ounce — even the most prestigious players in the gold industry can get sucked into indirectly doing business with drug dealers and dictators. Today, my colleague Justin Scheck writes about the remarkable investigation he and other colleagues published this week, on how the U.S. and Canadian mints ended up buying gold that comes from a Colombian drug cartel.

At this point, we’re 25 years into a gold frenzy.

It’s fanned by media personalities like Tucker Carlson — who is now selling gold — and by more staid institutions like central banks and big investment managers in wealthy countries. They’re selling to customers who are all buying for essentially the same reason. They’re afraid everything else — stocks, bonds, even dollars — might lose value in the face of various forms of instability, like war or terror attacks.