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Market Watch: "In 20 years, the world may run out of minable gold"...when will the coin wo
Goldbully
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Do I have to wait long for my modern gold bullion coins to appreciate now?
Market Watch, March 31, 2015
Myra P. Saefong
Markets/commodities reporter:
In 20 years, the world may run out of minable gold
SAN FRANCISCO (Market Watch) — In another two decades, rare commodities may become seriously scarce.
According to Goldman Sachs, the world has about 20 years’ worth each of known minable reserves of gold GCJ5, -0.22% diamonds and zinc. Platinum PLJ5, +2.23% copper HGK5, -1.38% and nickel reserves only have about 40 years or less left.
“The combination of very low concentrations of metals in the Earth’s crust, and very few high-quality deposits, means some things are truly scarce,” Eugene King, European metals and mining analyst at Goldman Sachs, wrote in a recent research note.
“Gold has been used as a measure of wealth for more than 4,000 years, as the ancient Egyptians soon worked out that gold was not only shiny and heavy, but rare,” he said.
All told, their “relatively scarcity and the market’s belief that new discoveries will be limited, is what drives the price of these super-rare commodities,” King said.
Making gold rarer still, production of gold may also hit a peak this year.
A Goldcorp GG, -0.66% slide show last year revealed a gold-mining-industry forecast that 2015 would be the year that production would peak in the mining industry, according to a piece in ZeroHedge, dated Friday.
“Peak gold is not a new concept at all,” said Peter Grant, an analyst at precious-metals dealer USAGOLD. “Mining output has been fairly flat for years, but new discoveries of gold have been falling rapidly.”
Still, “if we do reach peak gold in the near future, one would logically expect this to be broadly supportive to the price of gold for years to come,” said Grant.
Market Watch
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Market Watch, March 31, 2015
Myra P. Saefong
Markets/commodities reporter:
In 20 years, the world may run out of minable gold
SAN FRANCISCO (Market Watch) — In another two decades, rare commodities may become seriously scarce.
According to Goldman Sachs, the world has about 20 years’ worth each of known minable reserves of gold GCJ5, -0.22% diamonds and zinc. Platinum PLJ5, +2.23% copper HGK5, -1.38% and nickel reserves only have about 40 years or less left.
“The combination of very low concentrations of metals in the Earth’s crust, and very few high-quality deposits, means some things are truly scarce,” Eugene King, European metals and mining analyst at Goldman Sachs, wrote in a recent research note.
“Gold has been used as a measure of wealth for more than 4,000 years, as the ancient Egyptians soon worked out that gold was not only shiny and heavy, but rare,” he said.
All told, their “relatively scarcity and the market’s belief that new discoveries will be limited, is what drives the price of these super-rare commodities,” King said.
Making gold rarer still, production of gold may also hit a peak this year.
A Goldcorp GG, -0.66% slide show last year revealed a gold-mining-industry forecast that 2015 would be the year that production would peak in the mining industry, according to a piece in ZeroHedge, dated Friday.
“Peak gold is not a new concept at all,” said Peter Grant, an analyst at precious-metals dealer USAGOLD. “Mining output has been fairly flat for years, but new discoveries of gold have been falling rapidly.”
Still, “if we do reach peak gold in the near future, one would logically expect this to be broadly supportive to the price of gold for years to come,” said Grant.
Market Watch
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Comments
The largest known gold resource not yet being mined is Alaska's Pebble project. It's within 75 miles of a fishing watershed and it doesn't look like the project will ever get built. The project has been known about for 30 years. Last time I estimated its mineral resources it was in the $300 BILL range (copper and gold). The company that owns the project has a market cap of $35 MILL and could be headed to bankruptcy. There are other big projects like this that may be on the shelf for years. None of the big boyz want to risk any money on them in this environment. Considering that miners are digging as deep as 3 miles down and 2-1/2 miles in the mountains to find gold, the easy pickings and high density deposits are pretty much gone. Gold production tends to peak 3-5 years after a peak in the gold price as the last of the projects planned during the last gold boom come on line. Last production peak occurred in the mid-1980's and then fell off until 2000. Time to mine asteroids and seawater.
Isn't this the point where the fiat bugs cue up the Twilight Zone episode where gold becomes so common it has no value?
Back in the 19th century Thomas Malthus predicted that the world would run out food, and that a large portion of the population would die of starvation. His high sounding rhetoric was summed up by this declarative statement: "The power of population is indefinitely greater than the power in the earth to produce subsistence for man". His theory even got a fancy sounding name, "Malthusian catastrophe."
Aside from isolated incidents, largely in the backward countries of "the third world" mass starvation has not occurred. Why? There have huge advances in technology that have increased the productivity of farmers. Now it takes a far small portion of the population dedicated to agriculture to feed the world than it did in Malthus' time.
Actually we will never run out of any commodity. Economics will take care of that. As supply shrinks the price will rise. Perhaps the last ounce of gold in the ground will be worth $500,000,000,000,000 and no one could afford to buy it.
Coins for sale at link below
https://photos.app.goo.gl/TyJbuBJf37WZ2KT19
Which means that even if supply is constrained, which results in upward price pressure, rising
prices will act to mitigate demand. Bottom line: Warren Buffett has it right. Gold is not an
investment. It's a hedge against inflation. Or something to collect because you like the way
it looks...
<< <i>Here's what I wonder about. There must be a VAST quantity of gold in the form of discarded semiconductor chips and motherboards discarded in landfills. At what price point will people begin mining landfills to recover it? Any thoughts? >>
I have heard that there are companies trying to by the rights to mining landfills right now.
Just where do the estimates of "above ground" precious and non-precious metals come from? It has long been my suspicion that the actual supplies may be far larger than these estimates say.
Records of mining production have been well kept since 1900...where 90% of the world's gold has been mined. While the records from the Egytians to 1900 might not be so accurate, there are some pretty good estimates of that production based on mining techniques of each era. The estimates just assume that any gold ever mined, still exists above ground. There are pretty good records kept of what the Spanish mined in the new world and brought back to Spain in the 1500's and 1600's. It's generally estimated the 5.3 BILL oz of gold have been mined throughout history + 50 BILL oz of silver. The difference with silver is that the majority of that production has been lost. Silver is currently mined at 9X the quantity that gold is.....so no surprise that the ratio of silver to gold mined throughout history is 9X to 10X.
Bottom line: Warren Buffett has it right. Gold is not an investment. It's a hedge against inflation. Or something to collect because you like the way it looks...
WB has a way of talking out his az$. This is the same guy who stock piled 120 MILL oz of silver from 1994-1999.....a quantity similar to what the Hunt Brothers had in the late 1970's! You can't say uncle Warren hates precious metals. Do as he does, not as he says. He may have been the 2nd largest individual silver hoarder of the past 50 years.
Here's what I wonder about. There must be a VAST quantity of gold in the form of discarded semiconductor chips and motherboards discarded in landfills. At what price point will people begin mining landfills to recover it? Any thoughts?
You're going to need a consistent 1 gram/tonne to make it even potentially worthwhile. And there will be numerous environmental issues with digging up old waste out of landfills (methane gassing, odors, vectors, sanitation/disease control, etc.). Now if people start discarding electronics into segregated piles that can be mined at a later date that should have potential. Metal prices are so low now that I doubt the metal recyclers are doing all that well with recycled iron, copper, and aluminum from residential and industrial waste streams. Recycled gold from consumer gold products (coins, bars, jewelry, etc.) has dropped from 1500 to 700 tonnes per year. And those are world wide numbers. If you look at the 10% of world gold demand used in industry each year (300 tonnes), and assumed it was ALL electronics, and 100% of it was recycled on the back end...it still would be only a small part of the amount of gold mined each year. Significant, but not VAST.....and miniscule compared to the 170,000 tonnes already above ground.
Assuming one obtains mining rights to municipal land fills to get them reopened after $millions were spent to safely cap and monitor them......what happens to the 99.44% of waste that is left over? There aren't enough facilities around the country to reburn all that material. Figure at least $75-$125/ton to push that material through a MSW combustor and then rebury it again (figure 3 grams of gold per ton to break even). It can't be a simple process to extract minute quantities of gold. It's hard enough to sift out an aluminum can. Gold melts at 2,000 deg F which is close to the temperatures that municipal combustors burn at (1850-2050 deg). If you melt it, recovery is more difficult.
<< <i> In 1999, having lost a power struggle with Henry M. Paulson, Corzine left the firm. After his departure from Goldman Sachs, he earned what has been estimated to be $400 million during the 1999 initial public offering of the company. >>
Obviously their forecasts work out well for their upper echelon.
Great transactions with oih82w8, JasonGaming, Moose1913.
<< <i>By then they will discover the worlds largest previously unknown minable reserves of gold.
This will happen after all the players make their money.
Great transactions with oih82w8, JasonGaming, Moose1913.
<< <i>Goldman Sachs....LOL.... The former head was the ex-governor of NJ. From Wikipedia:
<< <i> In 1999, having lost a power struggle with Henry M. Paulson, Corzine left the firm. After his departure from Goldman Sachs, he earned what has been estimated to be $400 million during the 1999 initial public offering of the company. >>
Obviously their forecasts work out well for their upper echelon. >>
I think that the people who make the most money from Wall Street are the people who WORK on Wall Street, not the people who INVEST IN Wall Street.
<< <i>lol .. someone must be buried with a lot of gold, at a high price......gold prices have dropped ,so that some dealers can't even sell their graded gold eagles at prices they paid
Then they're very stupid dealers.
When I was open, I bought whatever I sold and sold whatever I bought. Each DAY!
Stayed "flat" and profitable in EVERY market.
Only thing that varied was my inventory "value."
Which I didn't care about because all I wanted was.... "spread."
Some dealers are too dumb to be IN the bizz.
Sad to say, but correct. There's a guy I've been TRYING to lead by the nose to figure out HOW to be a dealer, but it isn't "taking."
I've given up on him.
He's one of the fools who only have bullion in stock IF they've recently bought some. No dumber move in the industry.
It's time to start mining garbage dumps.
<< <i>[Bottom line: Warren Buffett has it right. Gold is not an investment. It's a hedge against inflation. Or something to collect because you like the way it looks...
WB has a way of talking out his az$. This is the same guy who stock piled 120 MILL oz of silver from 1994-1999.....a quantity similar to what the Hunt Brothers had in the late 1970's! You can't say uncle Warren hates precious metals. Do as he does, not as he says. He may have been the 2nd largest individual silver hoarder of the past 50 years. >>
According to this link, your history is a bit revisionist.
Buffett amassed a huge silver position in 1998 because he (correctly) saw that economic trends
favored a large price increase. According to the article, he liquidated way before the price peaked.
In any case, it appears to be a one-time anomaly in his loooooong career investing in the stock
market. Furthermore, at less than $1 billion invested, it was a very small percentage of his assets.
Ted Butler tends to lean towards the conspiracy side when it comes to silver. I'll go with Martin Armstrong's version that shows Buffet buying as early as 1993 on his first try at silver. Some suggest that he unloaded by early 2006. Not sure where Armstrong says he was out by 1999. I suspect WB had something to do with front-loading the SLV silver fund through JPMorgan. Where else where they going to get 130 MILL oz of silver on short notice to begin manipulating the markets? It would be very difficult to build a 130 MILL position in < 1 yr. That was around 20% of world production at that time....it would have been missed. Similarly, the Hunts built their silver position from 1973-1980....though they might have started even earlier. SLV was established in 2006 and funded with at least an initial load out of 50-70 MILL oz of silver. If not from Buffet's hoard then where? Buffet may have been given an offer he couldn't refuse to get him out of the game to allow the bankers to play it. In return he may have been given a sweetheart deal with the banks, Treasury, and FED. After all, you can't have American's poster boy for capitalism being a precious metal's bug....lol. Even if it were true. These days WB makes fun of that like it never existed.
No one would have needed to liquidate a long silver position in 2006 with prices rising from August 2005 ($7) to $15 in April/May 2006. After watching the trend in silver from 2003 to 2006 who the heck would have sold out for $7.50 in a strongly rising market? Buffet mocks the gold business by saying they dig the stuff out of the ground and then rebury it in a "vault" with a guard watching it. What could be dumber? If that's stupid to him....that what do you call digging $1 BILL in silver out of the ground and paying others to vault that for him? 120 MILL oz of silver takes up a lot of vault space. Can't have it both ways Warren.
another reference
In 1997-1998, Warren Buffett purchased 130 million troy ounces (4,000 metric tons) of silver at approximately $4.50 per troy ounce (total value $585 million). On May 6, 2006, Buffett announced to shareholders that his company no longer held any silver. In April 2006, iShares launched a silver exchange-traded fund, called the iShares Silver Trust (NYSE Arca: SLV), which as of November 2010 held 344 million troy ounces of silver as reserves..