By Money Metals News Service
There still seems to be some doubt in many investors minds on how much gold there is in the world. I continue to receive emails from individuals who read articles stating that the amount of gold in the world is much greater than the official estimate. Recently, I have received a spike of emails questioning the amount of gold in the world due to all these supposed “SECRET GOLD STASHES.”
Due to this, I decided to write an article to set the record straight… once and for all. I actually wrote about this in a previous article early last year. However, new information as well as additional data should help provide more FACTS vs the LOUSY CONSPIRACIES.
Before I provide this information, I would like to say the following… I mean no ill will or disrespect for analysts that I disagree with. That being said, I find it quite frustrating when individuals are being misled due to faulty or incorrect information put out by these analysts. Some analysts even state their “Conspiracy Theories” are not conspiracies, but rather…. FACTS. This is even more erroneous than providing a faulty conspiracy.
For example, some precious metals analysts suggest the Fed and Central Banks can push the price of gold anywhere they see fit. This is totally false. There is some method to their madness. This chart, republished from a previous article, shows the gold market price versus the cost of production from the top two gold miners (Barrick & Newmont) 2000-2012:
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From 2000 to 2012, the total production cost for these top two gold miners increased from $243 an ounce to $1,386. Thus, their cost of production in 2012 jumped 5.7 times higher than it was in 2000. Interestingly, the gold market price increased 6 times from $279 in 2000 to $1,669 in 2012. Thus, the overwhelming increase in the market price of gold was a result due to a much higher gold production cost.
Moreover, we can see that the production cost of gold was $1,116 in 2015 versus a market price of $1,160. Which means, the gold market price in 2015 was approximately 4% higher than the cost of production from these two top miners. The Fed and Central Banks cannot push the price of gold down too far below its cost of production, or SAVVY TRADERS will come in with both hands and buy up as much as they could. Smart traders understand this cost of production-market price relationship.
Okay, let’s get back to the notion of all this SECRET GOLD being hid in the world. A few years ago, Antal Fekete and Karen Hurdes did an interview where Karen spoke about acquiring all this hidden gold in Hawaii and using it to back the U.S. Dollar. I have a great deal of respect for Antal Fekete, but for him to be sitting next to Karen as she spoke about this… makes me wonder how much he regretted it later on.
Regardless, for being a very bright individual, Karen Hudes is guilty of not fact checking her assumption that there is 170,000 metric tons (mt) of gold hidden to be used to back the Dollar. I came across an excellent article titled, Karen Hudes & Wolfgang Struck Using Myths To Muddle Global Financial Reset:
There are multiple parties that have been using the fabled Marcos Gold, Yamashita Treasures, and bogus Maharlika land titles for extracting “membership and processing fees” from unwitting victims.
As of late, personalities like Karen Hudes and Wolfgang Struck, both claiming to have worked in the World Bank, and UBS, respectively are advertising their collective efforts to cause a global reset through the “Global Debt Facility”.
The problem with what these two self-confessed experts on global finance is that they are supporting their claims with spurious historical data, some even strayed too far from alternative accounts now beginning to surface here in the Philippines.
There’s a lot of good reading there as well as documented proof that many of the claims made by Karen Hudes are completely unfounded. I don’t want to waste too much time on the specifics as the article does an excellent job. Those with doubts, please take the time to read that article.
Then we have the work of Bix Weir at Road To Roota. While I agree with Bix that the value of gold and silver will rise in the future, we are world’s apart on the LOGIC and FACTS. Bix provides his thoughts on the amount of gold in the world in his section of his site called, GOLDEN SECRETS:
Fair Warning! What follows may scare the Dickens out of you gold bugs but will make silver bugs fall over themselves to swap even more of their gold for silver. Refresh yourself on the benefits of swapping gold for silver here: http://www.roadtoroota.com/public/136.cfm
The mainstream gold world wants you to believe that in the entire history of gold mining there has been just over 180,000 tons of gold mined from the ground. On top of that, with all our latest seismic and exploration technology, we have only found about 100,000 tons of underground gold reserves that could be economically mined in the future. That is what “they” want you to believe but…
THIS IS A BOLD FACED LIE!
Don’t get me wrong… I’m a gigantic gold buff but we need to understand the truth to ever reach a point where gold can take it’s rightful place in our corrupt monetary system…
WHAT THE PUBLIC KNOWS
There are two widely accepted gold statisticians that are followed religiously by the gold mining companies, central banks, governments and investment community:
Above Ground Gold: GFMS, Ltd. is the above ground gold market prognosticator and claims that the total amount of gold ever mined in the world is 180,000 tons (5.8B oz). Historically, this measure rises only as gold is pulled from the ground as reported by global gold mining companies around the world. Any “mystery gold” that suddenly appears on the market in ETF’s, on the LBMA, in the COMEX warehouses or in Government coffers is assumed to come from the unreported gold held by private individuals so that their historical figures never have to change.
In many of Bix’s interviews, he states that the above-ground gold figure was originally stated by Harry Oppenheimer in the 1960’s. What Bix is suggesting here is that the gold market and mining industry is just taking one individual’s analysis for the basis of all the gold mined to date. This is akin to providing ONE SOURCE when a student is writing his PhD dissertation. If a student did that, the teacher would look at him straight in the face and say, “ARE YOU INSANE or STUPID??”
Unfortunately, some analysts do not do enough fact checking. While they may provide additional supposed sources, they do so from the same area. However, to provide accurate analysis, you must provide data and sources from many different areas. That is what I try to do to make sense of it all.
For example, the 2017 GFMS Gold Survey stated that total historical gold mine production is estimated to be 187,500 mt, with a current value of $7.7 trillion. I can assure you, GFMS did not pull that figure out of thin air, or take the word of one Harry Oppenheimer, more than 50 years ago. Rather, the historical data on global gold mine production has been done by several sources over 100 years ago.
Here is a table from the U.S. Bureau of Mines Summarized Data On Gold Production, published in 1929:
In the U.S. Bureau of Mines report, there were plenty of older sources quoted. Here are a few:
I would also imagine these sources above would likely quote even older sources. So, as we can see here, there is AMPLE FACTUAL data going back 150 years (or more) that provides reasonable estimates of historic world gold production. While the estimates are not EXACT figures, they can be relied upon as a good approximation.
I took the data from the U.S. Bureau of Mines 1929 report as well as more current data from the USGS – U.S. Geological Survey and GFMS to create the chart below of world gold production to date:
My figure of 173,000 mt only uses data from 1493-2016 and may be a bit different due to using USGS figures for certain years rather than GFMS data. So, if we include gold produced prior to 1493, my 173,000 mt figure is quite close to GFMS estimate of 187,500 mt.
Now, the reason world gold production surged in the 1900’s was due to the advent of oil. A barrel of oil equates to thousands of energy slaves. Thus, as global oil production increased exponentially after 1900, so did gold production. Matter-a-fact, 91% of all gold produced since 1493 came since 1900 and 70% of all that gold was produced since 1950.
Which brings us to this LOGICAL conclusion…. How can there be 1-2 million tons of gold in the world hidden in these supposed underground vaults if the world was only able to produce less than 200,000 mt???
Some people believe the ancient peoples, such as the ancient Roman Empire, produced a lot more gold than we give them credit. Well, I have looked at some research that provided good estimations of ancient Roman gold production. I provided this information in my previous gold article:
Estimated Ancient Roman Gold Production
According to information from the ancient book, Naturalis Historia by Pliny the Elder who died in 79 AD, annual gold production in the Roman Empire was estimated to be 9 metric tons per year (Production in Asturia, Callaecia, and Lusitania (all Iberian Peninsula) alone – Wikipedia)
That 9 metric ton figure is not for the entire Empire, so lets attribute 15 mt per year. If we assume the Ancient Romans produced 15 mt of gold for 500 years, that would equal 7,500 mt. I doubt they produced that much, but if they did.. it still won’t change the total 170,000 mt figure all that much.
Regardless, most of the ancient gold produced may be lost forever. Which is why GFMS states that 170,000 mt is a good ball park figure. Now, could they have missed some… sure. So, let’s add another 30,000 mt to get a total of 200,000 mt. That is still ten times less than the 2 million ton figure that Bix Weir and Karen Hudes claim.
Folks, it is just physically impossible for ancient peoples to produce the amount of gold that can be extracted by massive haul trucks that can move 400 mt of ore in a single trip. These trucks average about 0.3 MPG. I spoke with someone who worked at a large open-pit mine and he told me that these huge haul trucks go through five sets of tires a year. Some of these tires are 13 feet high and cost $50,000+ a piece.
In addition, gold production wasn’t the only metal that increased exponentially with oil… so did copper and silver (just to name a few):
Here we can see that all three metals (copper, silver and gold) increased exponentially along with oil. Thus, if we assume the majority of most metals increased the most since 1900, especially since 1950, the majority of production of these metals have come more recently. Using logic, we can plainly see that the official estimate of 187,500 mt of gold produced in the world is likely a very realistic figure.
Now, the reason I bring this up again is to try to inform individuals who have been mislead by LOUSY CONSPIRACY THEORIES, that while conspiracies do take place and are real, not everything is a conspiracy theory.
Bix Weir also mentions there is all this gold hidden in the Grand Canyon due to some 1909 article on the Arizona Gazette. I suggest you all take a look at this article, Canyonitis: Seeing evidence of ancient Egypt in the Grand Canyon:
The original story goes that the team found an underground network of tunnels, high above the Colorado River, containing various ancient artefacts, statues and even mummies. A major discovery, no doubt about it. Impossible to slip off the archaeological radar. Still, the Smithsonian Institute will report it has no records on the subject. So what happened? To find out, there is only one guide: the article itself. Though the article was anonymous, it did identify some of the archaeologists involved: “under the direction of Prof. S. A. Jordan”, with Smithsonian-backed adventurer G. E. Kinkaid, who then relates his findings.
But the story gets weirder when the Smithsonian stated that it had no Kinkaid or Jordan on record. In one enquiry from 2000, the institution replied: “The Smithsonian Institution has received many questions about an article in the April 5, 1909 Phoenix Gazette about G. E. Kincaid and his discovery of a ‘great underground citadel’ in the Grand Canyon, hewn by an ancient race ‘of oriental origin, possibly from Egypt.’ […] The Smithsonian’s Department of Anthropology, has searched its files without finding any mention of a Professor Jordan, Kincaid, or a lost Egyptian civilization in Arizona. Nevertheless, the story continues to be repeated in books and articles.”
The article goes on to say that the truth is somewhere in between CONSPIRACY and FACT based on hidden Egyptian treasures… not a huge gold reserve. That being said, there are these folks called “INDEPENDENT GEOLOGISTS.” They can look at mineral and oil deposits and aren’t being paid by the corporations and the Elite to keep the supposed truth from Americans that there is all this HIDDEN GOLD and CAPPED OIL WELLS.
I still come across people who tell me that the United States has all these uncapped oil wells and when we want, we can just open up the spigot and let the oil flow. I can tell you from talking to several oil geologists that NO ONE ever wants to shut in an oil well… only if there are problems with the well. Why? Because once a well is shut in, when it is opened later on, its production never returns to what it was before. Shutting in an oil well normally destroys the productivity of the well in the future. Again… the oil industry does not want to SHUT IN AN OIL WELL… only if it has to, and not because of waiting for higher prices in the future.
Furthermore, I have also spoken to some gold geologists, and they tell me that if there was all this hidden gold in the United States, we would have gone after it already. Because, the economic model of resource extraction is that we go after the BEST FIRST, then mine the lower quality ore as time goes by.
Analysts who continue to talk about the hidden stashes of Hawaiian Gold, Yamashita’s Gold, the Nazi Gold and so on and so forth do so because people who don’t fact check are completely gullible. Moreover, those analysts who focus on what I call, LOUSY CONSPIRACIES can make money peddling this to their unsuspecting subscribers.
Folks… LOUSY CONSPIRACIES can be financially rewarding for analysts as it is addictive to their readers. And to keep the money flowing using this business model, more and more LOUSY CONSPIRACIES have to be promulgated. It is a sad and viscous cycle.
I hope this clears up the notion of 1-2 million tons of gold floating around in the world. Those who continue to believe it after they have read this article… you have my sympathies. Why? Because the Falling EROI – Energy Returned On Investment, not even known by those who peddle lousy conspiracy theories will push our modern society over the edge to collapse… a collapse we can never grow back out from.
Lastly, those analysts who promote a story that when the markets crash and the financial institutions are finally allowed to go bankrupt, that we can rebuild… are doing serious harm by misleading individuals. When the collapse comes, we won’t be able to grow out of this one. Rather, we transition to something more regional and local… at best.
The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.