by Steve St. Angelo, SRSrocco:
Unfortunately for precious metals investors, there continues to be a great deal of misinformation about how much gold there is in the world. The biggest culprit that confuses precious metals investors is what I call, LOUSY CONSPIRACIES. Those who promote these unsound conspiracies aren’t able to differentiate between FACTS and FICTION.
This will be a short post, but it is important as it will lay some ground work for articles to come out over the next several weeks in comparing the new Bitcoin-Crypto currency market versus the Gold and silver.
While conspiracies do indeed take place, they are based upon sound reasoning and evidence that either proves a conspiracy has taken place, or proves the official story is bogus. On the other hand, lousy conspiracies are easy to dismiss when facts and sound evidence are brought forward. Unfortunately, even when the facts or the evidence is laid out step by step, those who either promote or believe these lousy conspiracies… continue to do so.
This has to be one of the most frustrating areas of my research, writing and analysis. Why? Because, I receive emails at least once a week bringing up one of my favorite LOUSY CONSPIRACIES once again.
One of the more insane conspiracies in the precious metals community is the notion that the world has 1-2 million tons of gold hidden in secret vaults. Some of these vaults are the infamous Yamashita’s Gold Treasure, Nazi Gold Vault, Massive Bank of Hawaii Gold Holding and etc.
You see, conspiracies, especially LOUSY CONSPIRACIES, are a great way to make a buck selling a newsletter or book. Because people don’t take the time to do the research and fact check, it is easier and more fun to believe in the hype of a conspiracy. This is quite a shame because lousy conspiracies give the few sound conspiracies a bad reputation.
Even though I wrote about this back in April, CONSPIRACY vs FACT: How Much Gold Is In The World??, it seems necessary to discuss this again as an introduction to why gold and silver will still be better quality stores of wealth over crypto currencies over the medium to long term period. This goes against some of the recent analysis put out in the Alternative Community suggesting that gold will no longer have value in the future due to crypto currencies taking over the role as a new digital monetary system.
Anyhow… the production of silver and gold are extracted out of the ground at a certain ratio. Recently, it is approximately 9 to 1, silver to gold. Let’s take a look at the following two charts:
As we can see in these two charts, most of world gold and silver production has been extracted since 1900. For gold, the world produced 91% of all gold since 1900, and 81% of all global silver production. According to the best sources (shown on the bottom of the chart), there have been approximately 173,000 metric tons (5.5 billion oz) of gold produced since 1493 and 48.5 billion oz of silver. This turns out to be a 9 to 1 ratio, which is the same as the ratio of silver to gold in the ground.
NOTE: I did not convert the gold chart to million oz because world production figures are normally reported in metric tons. Furthermore, the accounting of total gold holdings are also published in metric tons. Also, this conversion should help: (1 metric ton = 32,150 oz).
Yes, it is true that the world produced a great deal more silver in relation to gold from 1493-1600. This was due to the huge new silver discoveries in South America by the Spanish during that time period. There was 747 million oz of silver produced from 1493-1600 versus 714 metric tons (23 million oz) of gold. Thus, there were 32 times more silver production than gold during that time period.
Furthermore, the silver to gold production ratio increased even higher in the 17th century (1600-1700). World silver production jumped to 1,272 million oz versus 897 metric tons (29 million oz) of gold. This pushed the silver to gold production ratio to a staggering 44 to 1. This was due the huge ramp up of Mexican silver production during that century.
Okay…. some of you might think… well, what if some of the world gold production was missed during those earlier centuries because the silver-gold ratio was so high. Even if we apply a 9 to 1 silver to gold ratio for each century, this would be the result:
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