The Western U.S. Dollar based monetary system is headed for a train
wreck. This isn’t a matter of IF, it’s a matter of WHEN. Investors
lulled to sleep by the low paper price of gold are losing out on the best
buying opportunity of a lifetime. The precious metals will be one of
the best insurance policies to own when the U.S. Dollar finally catches on
fire and burns down the entire system.
There are several gold theories circulating around the alternative media
on how the global financial situation will play out going forward.
While it’s impossible to really know how events will turn out in the future,
there are some that I can guarantee, WILL NOT TAKE PLACE.
I will not get in to the particulars in this article, but provide two
charts and a bit of common sense that will destroy some of what I label as
FAULTY GOLD CONSPIRACIES.
There’s this notion put forth by some very intelligent people that the
world has a great deal more gold than official sources stashed away, hidden
in vaults around the world. All we have to do, is wait for the right
time and take this gold and back the U.S. Dollar…. and then everything will
be OKAY.
I have read estimates from 500,000 to 1,000,000 metric tons (mt)
of gold stored in different vaults throughout the world. I find this
claim simply astonishing as a bit of 3rd grade math would totally destroy
this lousy conspiracy theory. Let’s take a look at the next
two charts:
According to the figures put out by the U.S. Bureau of Mines in their 1930
Summarized Gold Production data, the world produced 714 mt of gold from
1493-1600, 897 mt from 1600-1700, more than doubled to 1,904 mt during the
next century, and went completely exponential from 1900- to 2014 at a
staggering 151,482 mt. Thus, 98% of all the gold mined since
1493 came after 1900.
Some readers may think this information was manipulated by the so-called
POWERS THAT BE. However, if governments were manipulated gold
production data prior to 1930, I would imagine they were INFLATING the
figures, rather than underestimating them. Why? If you read over
some of these older U.S. Bureau of Mines reports, you will see just how
detailed and meticulous they were.
We must remember, gold was still the King Monetary Metal prior to
1930, and countries with high production almost found it as bragging rights
to share this data. So, I believe the estimates of world gold
production put forth by that report is very trustworthy… even though the
figures may not be 100% accurate.
In addition, there just weren’t many places in the world that had a great
deal of easy to find and extract gold before 1900. It wasn’t until
Americans expanded to the west of the country did we find a lot of gold and
silver. One such place and event was the Great California Gold Rush.
This following chart came from the article The Bakken
Boom: Modern Day Gold Rush, which compared peak production during
the California Gold Rush to what would take place in North Dakota Bakken oil
production:
Gold production in California started in 1848 and peaked just four years
later at 3.9 million ounces (Moz). Production continued to decline,
even with using high-tech techniques of hydraulic mining by using massive
water to wash away mountain sides to get the gold.
The California Gold Rush from 1848 to 1888 yielded approximately
57 Moz of gold. How much is this in metric tons? It
turns out to be 1,773 mt. This was one of the biggest gold
discoveries in the world at the time, but it only accounted for 1.1% of all
the gold mined in the world between 1493 at 155,000 mt.
Folks, there just weren’t that many big gold discoveries in the world
prior to the 1900’s. Of course the huge gold discovery in the late
1800’s in South Africa was another, but again… these were few and far in
between.
It wasn’t until oil was discovered in the late 1800’s were we able to
seriously ramp up gold production. Here is the breakdown since 1900:
1900-1960 = 47,242 mt
1960-2014 = 104,240 mt
In the first six decades, the world produced 47,242 mt of gold, but it
more than doubled in the next 54 years to 104,240 mt. I discussed this
in a recent interview titled, “Mad Rush Out of Paper Assets Coming “The Data to
Prove It!” You can find this topic in PART 2 towards
the last third of the interview.
The official sources such as GFMS state there were a total of 170,000 mt
of gold mined in the world, and this to me is pretty accurate assuming about
15-20,000 mt were mined before 1493. I say this is pretty accurate
because if we make a plot on a chart over the past 2,000 years and input
world population, gold, silver, lead, copper and oil production, they will
all look flat up until the 1700’s. Yes, of course oil production did
not come in the picture until the late 1800’s… but you will catch my drift
here in a minute.
By the 1800’s world population, gold and silver production started
to move up higher and it wasn’t until the 1900’s did ALL OF THEM GO
EXPONENTIAL. Why? You can thank the exponential rise in
oil production that impacted the same rate of increase in world population,
gold, silver, lead and copper production.
So, don’t count on some group to magically save the system by taking the supposed
100,000’s mt of gold hidden in vaults around the world to back the soon to be
worthless Dollar. There’s a hell of a lot less gold in the world than
we realize.
And….. when the Dollar finally does die, I would imagine there will even
be a great deal less to buy.
