With markets in a panic and investors fleeing to gold, Colombia's armed groups are making out like bandits.
By Elizabeth Dickinson
BUENAVENTURA, Colombia — Over the last three years of economic turmoil, markets have been predictable in one respect: When bad news hits, gold prices skyrocket. So when stock markets around the world plummeted on Monday, Aug. 8, reacting to the sovereign debt crisis in Europe and one rating agency's downgrade of the United States, gold futures hit a record high. By the close of business Monday, they had surged to a record $1,782.50 an ounce, up 4.3 percent -- almost as much as the S&P 500 stock index was down.
Some 2,500 miles away from Wall Street, the gold boom has fueled a different kind of crisis: a crisis of opportunity. From 2006 to 2010, Colombia -- Latin America's largest gold producer since 1937 -- more than tripled its production to 59 tons per year. Next year, it intends to double the amount mined in 2009, attracting investment from top international firms such as AngloGold Ashanti and Cambridge Mineral Resources. But multinationals aren't the only ones getting in on the action: Leftist rebels, drug cartels, and regular old criminals are also edging for a piece of the multibillion-dollar annual trade. As commodity prices have gone up and up, and as drug trafficking has gotten more difficult, gold has become the new cocaine.
Originally posted at www.elizabeth-dickinson.com