What If Everyone in the World
ksammut
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What If Everyone in the World Wanted a 1-ounce Gold Coin?
By Jeff Clark, Senior Editor, Casey’s Gold & Resource Report
If we’re right about where the price of gold is headed, the general public will someday clamor to buy all things gold. While gold stocks will be where the real leverage is, the rush will start with gold itself. As a gold editor, I have a very natural question: is there enough to go around?
According to the U.S. Census Bureau, there are 6.783 billion earthlings. Meanwhile, CPM Group, a highly respected industry organization, estimates there are 4.8 billion ounces of above-ground gold in the world. And this includes jewelry, electronics, and dental. So, even if everyone around the world volunteered to have their chain, cross, or tooth melted into a coin, we’re already short. Those towards the end of the line are out of luck.
However, it’s worse than that. Of all the physical metal ever mined...
2.1 billion ounces, or 43%, is found in jewelry, decorative, and religious items.
Private stock – gold already held by various private parties – accounts for 1.1 billion ounces.
Official reserves (central banks, IMF, etc.) stand at 1 billion ounces.
Industrial use accounts for 530 million ounces.
Very little of this is likely to come available for purchase in coin form. After all, you’re not selling any of your gold, and neither are many banks or institutions. Most everyone is buying.
So for those who don’t yet have a gold coin (or you greedy investors who want more than one), this pretty much leaves us with mine production and scrap sources.
CPM forecasts that total new supply in 2009 will be around 122 million ounces. Only a small percentage of this is made into gold coins and bars, but if all of it were, it would amount to less than two one-hundredths of an ounce, or about half a gram, for every man, woman, and child on earth this year. A product of this dimension is about half the size of that small button on your shirt collar.
Since this supply is only available annually, it means 0.018% of the global population – one in every 55 people – could buy a one-ounce gold coin this year. Or, said differently, it would take 55 years before everybody had one, assuming the population never increased (it is) and supply never decreased (it is).
But it’s worse than that. Actual 2009 coin production will be around 5 million ounces (excluding medallions or “rounds”), leaving two one-hundredths of a gram of gold (or 0.3 of a grain) available this year for each of the planet’s inhabitants. This is about half the size of the sesame seed that fell off your hamburger bun at dinner last night. It means that only 0.0007% of earth’s citizens – or one in 1,356 – can buy a one-ounce gold coin this year, and it would take 1,356 years for everyone to get one.
How’s that for a supply squeeze?
But it’s worse than that. Demand continues rising. Gold is more frequently in the news, attracting more customers every day. Hedge funds, which never before considered gold, are now buying physical metal (Greenlight Capital actually sold $500 million of GLD and bought physical gold). Central banks are net buyers of gold for the first time in 22 years. China is running TV ads encouraging its citizens to buy gold and silver. Last month Russia bought more gold than they actually produced. In a recent survey, 20 out of 22 fund managers bought physical gold for their personal investments. In other words, some investors are already scrambling to get it… and in big quantities.
But it’s worse than that. Most of the ramifications of the money printing and dollar debasement haven’t even surfaced yet. How will the general public react when the dollar is crashing and standards of living are threatened? What will they do when milk and gas prices surge to twice what they are now? How will the greater collective respond when they lose faith in government interventions? Where will they invest when they see gold and silver prices screaming upward and don’t want to be left behind?
The panic into gold by the general public hasn’t begun yet. Available supply is scarce and will get smaller. There won’t be enough.
Better get your speck while you can.
By Jeff Clark, Senior Editor, Casey’s Gold & Resource Report
If we’re right about where the price of gold is headed, the general public will someday clamor to buy all things gold. While gold stocks will be where the real leverage is, the rush will start with gold itself. As a gold editor, I have a very natural question: is there enough to go around?
According to the U.S. Census Bureau, there are 6.783 billion earthlings. Meanwhile, CPM Group, a highly respected industry organization, estimates there are 4.8 billion ounces of above-ground gold in the world. And this includes jewelry, electronics, and dental. So, even if everyone around the world volunteered to have their chain, cross, or tooth melted into a coin, we’re already short. Those towards the end of the line are out of luck.
However, it’s worse than that. Of all the physical metal ever mined...
2.1 billion ounces, or 43%, is found in jewelry, decorative, and religious items.
Private stock – gold already held by various private parties – accounts for 1.1 billion ounces.
Official reserves (central banks, IMF, etc.) stand at 1 billion ounces.
Industrial use accounts for 530 million ounces.
Very little of this is likely to come available for purchase in coin form. After all, you’re not selling any of your gold, and neither are many banks or institutions. Most everyone is buying.
So for those who don’t yet have a gold coin (or you greedy investors who want more than one), this pretty much leaves us with mine production and scrap sources.
CPM forecasts that total new supply in 2009 will be around 122 million ounces. Only a small percentage of this is made into gold coins and bars, but if all of it were, it would amount to less than two one-hundredths of an ounce, or about half a gram, for every man, woman, and child on earth this year. A product of this dimension is about half the size of that small button on your shirt collar.
Since this supply is only available annually, it means 0.018% of the global population – one in every 55 people – could buy a one-ounce gold coin this year. Or, said differently, it would take 55 years before everybody had one, assuming the population never increased (it is) and supply never decreased (it is).
But it’s worse than that. Actual 2009 coin production will be around 5 million ounces (excluding medallions or “rounds”), leaving two one-hundredths of a gram of gold (or 0.3 of a grain) available this year for each of the planet’s inhabitants. This is about half the size of the sesame seed that fell off your hamburger bun at dinner last night. It means that only 0.0007% of earth’s citizens – or one in 1,356 – can buy a one-ounce gold coin this year, and it would take 1,356 years for everyone to get one.
How’s that for a supply squeeze?
But it’s worse than that. Demand continues rising. Gold is more frequently in the news, attracting more customers every day. Hedge funds, which never before considered gold, are now buying physical metal (Greenlight Capital actually sold $500 million of GLD and bought physical gold). Central banks are net buyers of gold for the first time in 22 years. China is running TV ads encouraging its citizens to buy gold and silver. Last month Russia bought more gold than they actually produced. In a recent survey, 20 out of 22 fund managers bought physical gold for their personal investments. In other words, some investors are already scrambling to get it… and in big quantities.
But it’s worse than that. Most of the ramifications of the money printing and dollar debasement haven’t even surfaced yet. How will the general public react when the dollar is crashing and standards of living are threatened? What will they do when milk and gas prices surge to twice what they are now? How will the greater collective respond when they lose faith in government interventions? Where will they invest when they see gold and silver prices screaming upward and don’t want to be left behind?
The panic into gold by the general public hasn’t begun yet. Available supply is scarce and will get smaller. There won’t be enough.
Better get your speck while you can.
American Numismatic Association Governor 2023 to 2025 - My posts reflect my own thoughts and are not those of the ANA.My Numismatics with Kenny Twitter Page
Instagram - numismatistkenny
My Numismatics with Kenny Blog Page Best viewed on a laptop or monitor.
ANA Life Member & Volunteer District Representative
2019 ANA Young Numismatist of the Year
Doing my best to introduce Young Numismatists and Young Adults into the hobby.
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Comments
The average global income is $7,000. But that's the total global income/the total global population.
The median income--the middle of the road--is actually only $1,700. Per year.
http://www.boston.com/news/world/articles/2007/10/07/average_earnings_worldwide/
So for billions of people in the world, an ounce of gold @ $1k represents most of a year's income--money they scrape and beg just to get enough to survive. And that's the lucky ones.
An ounce of gold is a pipe dream for billions of people. If they could afford a pipe. Or even a dream.
--Severian the Lame
us sardines have for investments, is balls of string,
and balls of gum wrapper tin foil, and savings bonds.
Camelot
<< <i>It's a fun 'what if' game. But it's worse than that.
The average global income is $7,000. But that's the total global income/the total global population.
The median income--the middle of the road--is actually only $1,700. Per year.
http://www.boston.com/news/world/articles/2007/10/07/average_earnings_worldwide/
So for billions of people in the world, an ounce of gold @ $1k represents most of a year's income--money they scrape and beg just to get enough to survive. And that's the lucky ones.
An ounce of gold is a pipe dream for billions of people. If they could afford a pipe. Or even a dream. >>
I agree with you that it is a dream for so many.
The author should have used silver in his story. More affordable to everyone in the world and with a good percentage going for industrial use, the price of silver would go much higher than gold on a percentage basis even if only 5% of the world population went out and bought just a few ounces each.
Maybe China knows something the rest of the world may or may not be waking up to?
Instagram - numismatistkenny
My Numismatics with Kenny Blog Page Best viewed on a laptop or monitor.
ANA Life Member & Volunteer District Representative
2019 ANA Young Numismatist of the Year
Doing my best to introduce Young Numismatists and Young Adults into the hobby.
<< <i>It's a fun 'what if' game. But it's worse than that.
The average global income is $7,000. But that's the total global income/the total global population.
The median income--the middle of the road--is actually only $1,700. Per year.
http://www.boston.com/news/world/articles/2007/10/07/average_earnings_worldwide/
So for billions of people in the world, an ounce of gold @ $1k represents most of a year's income--money they scrape and beg just to get enough to survive. And that's the lucky ones.
An ounce of gold is a pipe dream for billions of people. If they could afford a pipe. Or even a dream. >>
cars,
Thanks! Been busy and a stranger to the forum recently, which should have made some folks happy