WC Varones

Don't lend your hand to raise no flag atop no ship of fools

Gold: do you have your share?

(photo HT: IP Freely)

How little gold there is in the world can be illustrated in interesting ways. For instance,
All the gold mined in the world in history would fit in a cube 60 feet on each side, that is to say, it would fit in the space underneath the Eiffel Tower.

I prefer to think of it in terms of gold per person. Estimates for all the gold ever mined in the world are around 165,000 metric tons. A metric ton is 32,150 troy ounces, meaning there are only 5.3 billion ounces out there -- or less than one for every person on the planet! Do you have your ounce?

Now assuming that most inhabitants of third-world nations don't have a lot of gold, how much gold is there per developed-world inhabitant? The OECD countries have a population of about 1.2 billion, meaning there are about 4.4 ounces per developed-world citizen. Do you have your share?

Gold mine production is running about 2,000 - 2,500 tons per year, an increase to the total stock of between 1% and 2% per year, roughly inline with population growth, and well below long-run GDP growth.

With citizens in the developing world gaining wealth and sure to want their share of gold at some point, do you really want to be underweight gold the next 10, 20, 30 years?


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