The gold rush is back on in California. On my way back from Lake Tahoe recently, I saw that every bend of the American river was dotted with hopeful amateur miners, looking to make a windfall fortune.
Weekend hobbyists were there panning away from the banks, while the hardcore pros stood in hip waders balancing portable pumps on truck inner tubes, pouring sand into sluice boxes. A sharp-eyed veteran can take in $2,000 worth of gold dust a day. The new 2012’ers were driven by a price of gold at $1,700 and the attendant headlines, but also by unemployment, and recent heavy rains last winter that flushed huge new quantities of the yellow metal out of the High Sierras.
They were no doubt inspired by the chance discovery of an 8.7 ounce nugget in May near Bakersfield, worth an impressive $10,000. Local folklore says that The Sierra’s have given up only 20% of their gold, and the remaining 80% is still up there awaiting discovery. Out of work construction workers are taking their heavy equipment up to the mountains and using it to reopen mines that have been abandoned since the 19th century.
The U.S. Bureau of Land Management says that mining permits in the Golden State this year have shot up from 15,606 to 23,974. Unfortunately, the big money here is being made by the sellers of supplies and services to the new miners, much as Levi Strauss and Wells Fargo did in the original 1849 gold rush. Of course, they could much more easily buy the Spider Gold Trust Shares ETF (GLD), but it wouldn’t be as much fun.
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