How Much Gold Could a Goldsmith Smith, If a Goldsmith Could Smith Gold?

There is somewhere in the vicinity of 120,000 to 140,000 tonnes of gold above ground. (A tonne is equal to 1,000 kilograms). Picture, if you will, a solid gold cube a little smaller than the size of a tennis court. Believe it or not, that is all the gold that has ever been produced. If the gold were dispersed to each person in the world, your share would only be about twenty-three grams. At today’s prices, that would mean somewhere between $250-$350.

So all those tonnes of gold add up to about $1.8 trillion dollars, which is far short of the United States debt of $6.9 trillion. Even if the United States government owned all the gold in the world, it still would not be enough to pay off the American debt.

The United States has in its possession only about 8,000 tonnes, or about $100 billion dollars, in the gold reserve. Up until 1971, the U.S. dollars were partly backed by gold.

Coming in second for the largest amount of gold in the world, is Germany, with just over 3,400 tonnes. The International Monetary Fund owns a little over 3,200 tonnes and France has just slightly more than 3,000 tonnes of gold in their reserve. Switzerland comes in fifth, with about 2,500 tonnes followed by Italy, with just over 2,400 tonnes of gold. There are other central banks around the world with much smaller amounts, some holding only a few hundred tonnes. The rest of the world’s gold is owned by individuals, holding jewelry, coins and bullion.

Thanks to modern mining techniques and machinery, ninety percent of the world’s gold (above ground) has been mined since the start of the California gold rush of 1848. Because of the relative ease of mining these days, it also means the cost of extracting the gold is less. In South Africa, the cost is about $238 per troy ounce (troy ounce=31.1035 grams).

So, what about the gold still left to be mined? Well, South Africa still owns fifty percent of the un-mined gold in the world, which are known as ‘reserves.’ Experts say that it takes approximately five years to get a gold mine up and running productively, not to mention the dollar value of such an undertaking.

Studies show that during boom times, such as that in 1979/1980, there is an increase in production all over the world. During that time, gold production went from 1200 tonnes per year, to over 2,600 tonnes by 1999.

The problem is that while production may start out fairly high, it levels off, then dips down, as some mines become exhausted and others begin to produce poorly. And fewer new mines have opened up in the last few years. For now, there are still almost 2,600 tonnes of gold being mined per year, so that tennis court sized cube of gold is going to expand somewhat over the next couple of decades.

This is not a renewable resource, so hang on to those South African Krugerrands!

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