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The cute, skinny woman was in the Arcade Gold and Stamp Galleries in downtown Toronto again this week, after the price of gold topped $1,424 (U.S.) an ounce on Monday. It was her fourth visit in as many months.

On her first, she presented the gold jewellery she wanted to sell in a box. In her 40s and recently divorced, she was having a tight month. "By the fourth or fifth visit," said John Gainor, the coin expert behind the counter, "they're taking it off their bodies in the store." He did not say this with any relish.

This week she handed over two gold chains and a pair of rings, for which Mr. Gainor and Michael Barber, the shop's owner, paid her "melt price" - $500. She's still agonizing about her gold watch.

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Another customer tried to unload a 98-ounce gold bar worth about $140,000. But she wanted cash, and the Arcade, which has been in business for 50 years, doesn't do that. Meanwhile the store has been fielding 30 phone inquiries a day. "Lots of people saying, I want to cash in my RRSP and buy silver or gold, can you help me?" Mr. Barber added.

The shop had also served a steady stream of Americans bearing gold from the vault a block away in the head office of the Bank of Nova Scotia, which still sells bullion. Before 1971, when the U.S. dollar was still backed by gold at $35 an ounce, Americans couldn't own gold privately, so they bought and stored it in Toronto until they were ready to sell. Many of them sold to Arcade this week. "That's the business we're living on today," Mr. Barber admitted.

These scenes were repeated all over the world this week, as the price of gold hit its latest zenith - which, adjusted for inflation, is still 40 per cent below its all-time high in 1980. The price has nearly doubled in the two years since globo-meltdown, and is up nearly 30 per cent since January. The world's financial unease is trying to decide if it wants to become all-out panic. Gold, the smirking devil of capitalism, once again looks hot because everything else does not.

Sucking debt in Ireland and Greece is weakening the Euro. The U.S. Federal Reserve's decision to pressure-inject another $600-billion into the U.S. economy will do the same to its dollar. That ups the odds of a currency smackdown at this week's G20 meeting in Korea.

Gold was booted even higher when Robert Zoellick, president of the World Bank, mused in public on Monday that the global monetary system "should also consider employing gold as an international reference point."

The statement was immediately (mis)interpreted as a call to return to the gold standard, 39 years after it had been abandoned. Just as immediately, Stanford economist Brad DeLong branded Mr. Zoellick the "stupidest man alive." Daring analysts predicted gold at $10,000 an ounce. J. P. Morgan Chase re-opened a bullion vault in Manhattan.

By the time Bank of Canada governor Mark Carney tried to calm everyone's nerves by declaring that gold "has no role to play in the international monetary system," gold fever was blooming like a flu. Money-for-gold ads are popping up everywhere. Sales of small home smelters are booming - really, home smelters.

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Gold has been the financial refuge of last resort, the hedge of hedges, not to mention the lodestar of survivalist crackpots, since the dawn of civilization. The interesting question is why. A visit to a gold dealership like the Arcade can be enlightening.

"Gold is a store of value," Mr. Gainor said. "And people are becoming very concerned that paper money is worthless."

It's not always a pretty scene. Another visitor to the Arcade's coin-filled counters this week was a man with a pocketful of gold fillings - his own.

"We take the gold," Mr. Gainor said, shrugging on his coat to head home after a busy day. "But if it's still on the teeth, we don't like to take it. We don't like to smash the teeth."



A malleable marauder the colour of the sun

At least we come by our gold obsession honestly. Gold is rare, and always has been. Most estimates suggest no more than 160,000 tons of gold have been mined throughout history, most of it in the past 50 years. If you melted and reformed all that gold, it would make a cube measuring 20.2 meters on each side - a shiny block that would fit into about half a hockey rink.

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That's a tiny lump of matter to have created so much fuss in human history. There's more of it in the centre of the earth - 2,000 miles down, where we can't get at it. But that's the thing, right? We can never get enough.

Luckily, a little goes a long way. Gold was first used in jewellery 3,000 years ago because a single ounce of ductile, malleable gold can be spun into miles of fine wire or hammered thin into a sheet of foil many metres square. And it is endlessly melt- able and re-formable. "It's not destroyed," Arcade owner Michael Barber pointed out. "No matter what they do to it, it's fashioned into another form."

Despite gold's many uses - as a medical treatment for rheumatoid arthritis, in computer circuitry and in coffee filters, to name three - wedding rings account for the largest single use today. What and where was your band before it found your finger? Think about that and then think about love.

But even in an astronaut's visor, gold is insepar- able from the history of human longing. It reflects our vanity and flatters us at the same time. Cleopatra wore a golden face mask to bed every night: The metal never aged. When a Scythian ruler (in what is now Ukraine) died, his wives and servants were killed as well, and buried in mass graves packed with beautiful golden objects.

So perhaps gold was bound to become the global medium of exchange. By the time Alexander the Great had ravaged Persia in search of the metal, his marauding face was imprinted on gold coins (staters) across Greece and the rest of Europe, one of the earliest examples of a financial gold standard. A coin bearing the face of his father, Phillip II, can fetch $16,000 today.

But you can't have something everybody wants without a lot of people having none of it, which is why the history of gold mining shadows the history of slavery, beginning with the Nubian mines that supplied the pharaohs of Egypt. When the Spanish conquistador Francisco Pizarro conquered Peru, the Inca emperor Atahualpa tried to bargain for his life with gold - he brought Pizarro six tons of priceless objects. Pizzarro melted them down and then strangled Atahualpa in public.

By 1735 there were already 145,000 African slaves mining gold in Brazil. South African gold mining led directly to the policy of apartheid.

That is a lot of misery to have come out of the ground. We worship gold's graven image regardless.

Wherever gold was discovered, havoc ensued. Less than a year after James Marshall spotted yellow flecks in the American River near Sacramento in 1848, 100,000 newcomers had crammed into what had been a placid farming community. The Californian, the San Francisco newspaper that announced the discovery, went out of business two weeks later because no one was left to write stories - the reporters were all prospecting.

California was instantly transformed from a Catholic and Latin culture into a Protestant, Anglo-Saxon madhouse. The cost of a slice of bread rose to $1 (formerly the average daily wage), and hundreds were murdered in San Francisco.

What drove the prospectors? "It's the yellowness," Michael Barber explained. "And people know that. Yellow is gold."

Gold - the colour of the sun, the dawn, hope, riches, catastrophe, the future.

We glorify even the word. We have gold cards, gold hearts, gold members, gold medals and golden silences, anniversaries and rules - all associated with pleasure or privilege. But if you own real gold, someone else does not, an equation built into its scarcity. Gold is capitalism's yearning and its shadow, the ultimate in self-centredness, the thing you stash to survive when everything else crumbles.

The name of that game is every man for himself - the golden rule, so far, of 21st-century capitalism.



The eccentric allure of gold panics

What grabbed the world's attention when the president of the World Bank revealed he had been thinking about gold? It's that sober bankers seldom mention the stuff. It was as if staid old Dad arrived home from work and said, "You know, kids, I think I'd like to try some of that crystal meth they're always talking about."

Gold bugs have always had a reputation as conservatives and eccentrics, pessimistic outliers obsessed with one idea (the end is nigh, buy gold!) to the detriment of all others.

George Soros, one of the world's savviest (and more left-leaning) investors, called gold "the ultimate bubble" a month ago, when it was $80 an ounce cheaper.

"It may go higher," he said, "but it's certainly not safe and it's not going to last forever." He's not alone in that opinion.

On the other hand, Glenn Beck, the ultra-right-wing Christian buzzsaw and radio host, touts gold endlessly on his radio show (he likes the slogan "Gold, God, Guns") as the moral and political antidote to liberal economics and the Obama White House his supporters despise. One in 20 self-proclaimed Tea Party supporters bought gold in the past year.

The danger is that if enough people take the bait and cash out their retirement funds into gold, the panic could become a self-fulfilling prophecy. Then it won't matter if gold goes up or down, because there still won't be enough to go around.

The Makuna tribe of Colombia had almost no contact with the outside world before gold was discovered on their territory in 1987. They spoke their own language, followed their own customs. Within three years, 200,000 miners had invaded the Makuna's land and obliterated their way of life.

The irony was that the Makuna had gold, gathered gradually over many years, and they valued it. The Makuna believed, as anthropologist Kaj Arhem put it, that "gold contains the light of the stars and the sun. It is the stars of the earth."

The Makuna believed that the light gold contained within itself - that lovely, wanton glow - allowed the tribe's shamans to see into the meaning of things.

Gold was a means to a deeper understanding, the Makuna believed. They were wrong.

Ian Brown is a feature writer for The Globe and Mail.

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