|
22 Jan 08 - 08:56 PM (#2242508) Subject: BS: The Value of Au From: Slag Here's a little meditation I had and if any of you have a nice calculator handy and a weights and measure equivalency, you might come up with a more refined picture than this. Gold topped $900 a Troy ounce the other day and then backed off to end the day at about $898 in most commodities markets and finished the week at $880. At some point today it was at $863. The late Isaac Asimov estimated the the entire world supply of accessible gold would fill a cube about forty feet to a side. This estimation was based on the distribution of elements in the Earth's crust. I don't know how accurate that estimation was but it seems reasonable to me and a handy place to start. Most of the gold in the world is in suspension in the oceans so the ready supply is much less than the above stated but let's work with that figure just for fun. And lets be generous and say that gold is at $1000 an ounce. What do you pay rent at? Mortgage? Groceries and etc.? Again an arbitrary number. Let's say that it costs $2500 a month to get by. Sure some more, some less but you are probably getting my drift. $30,000 a year? a bit much? I think the US average is somewhere around $24,000 but I like the round numbers. If we were on a gold standard and species was minted in the same that would be 300 million (US population in the US numbering system ) times 30 ounces, that's 900 million Troy ounces outlay per annum. Now figure a world economy based on gold: 6+ billion people all using gold in some quantity. How far would that 64,000 cubic feet of gold go? Does today's pricing of gold really reflect it's economic strength? When you figure in it's technical value and aesthetic value and compare it with it's scarcity I believe that gold is way, WAY undervalued. I could be wrong but I'd be interested in what you may think about this. Meanwhile I 'll try to find my slide rule and come up with some more refined data. |
|
22 Jan 08 - 09:41 PM (#2242527) Subject: RE: BS: The Value of Au From: Rowan At the end of an internet domain name, "au" is of inestimable value! Cheers. Rowan |
|
22 Jan 08 - 09:43 PM (#2242528) Subject: RE: BS: The Value of Au From: katlaughing I will be watching for more, with interest.:-) |
|
22 Jan 08 - 10:20 PM (#2242544) Subject: RE: BS: The Value of Au From: Rapparee It would NOT be an annual outlay of 900 million troy ounces per year, because metal coins are used year after year after year. More, there would still be other coinage in circulation and in fact paper money would still be widely used (but would be payable in gold). I've long thought that the monetary standard for any country is actually based in the labor used to produce whatever is arbitrarily decided upon as the basis of the country's currency. Gold was chosen because it is reasonably scarce and yet also easily recognizable and (within limits) easily recoverable. This means that someone has to take the trouble to find it, to recognize it for what it is, and to recover it for use. Panning the gold out of the dirt in my backyard (yes, there is gold in your backyard too) isn't worth doing, but if there were a vein of it or placer pockets then yes, it might be economic. Personally, I suggest that the entire world economy be based upon something more convenient and useful, like potatoes or sugar beets. |
|
22 Jan 08 - 10:24 PM (#2242545) Subject: RE: BS: The Value of Au From: Mrrzy 64,000 cubic feet is how many cubic inches? Is one square foot 12 square inches or 144? Let's say 144. Oh, wait, cubic, so actually 1 cubic foot = 1,728 cubic inches. So 64 cubic feet is 110,592 cubic inches. So 64,000 cubic feet is 110,592,000 cubic inches. Call it 100,000,000 for rounding purposes (I always liked physics profs who let g=10...) For say 6,000,000,000 people, that is 60 people per cubic inch of gold. Isn't there a term for one sixtieth of an inch? An archaic term? Then we each get one cubic (archaic term) of gold. Seems small... |
|
22 Jan 08 - 10:26 PM (#2242547) Subject: RE: BS: The Value of Au From: Bee-dubya-ell Value is determined by demand, not just by scarcity. The demand for gold is not only not universally high, but I think its value is inflated well beyond its concrete intrinsic value by virtue of its use as an investment instrument. Consider a hypothetical scenario: Imagine that trade in gold by investors, including governments, was banned. It could still be sold for use in jewelry, art and technology, but not as an investment. What would its value be in that case? I'd say far less than $1000 per ounce. Probably more like $100. |
|
22 Jan 08 - 10:29 PM (#2242548) Subject: RE: BS: The Value of Au From: Amos I'd go for peanut butter. A |
|
23 Jan 08 - 01:41 AM (#2242584) Subject: RE: BS: The Value of Au From: Slag Please don't misunderstand me. I am not advocating a return to gold coinage and all the inherent problems it presents. Did you know that reeded edges were introduced to prevent dishonest folk from shaving a little off the edge? Yeah, and copper was added to the mix to help slow down the wear factor. All I am talking about is the value the modern commodities market indicates. Back to square one, or should I say cube one. For that 40' ^3 I come up with 110,592,000 cui. The American Double Eagle is 91.6% gold, 3.0% silver, and 5.33% copper and it's stated value was $20. The US bullion issue of date has the same chemical composition and has a stated value of $50. Go figure as it never had a value of $50 dollars. It was more like $200+ from the beginning and has done nothing but increase. It's an amazing thing about commodities, the volume and mass of the object never changes. What changes is the dollar and the more dollars does not mean that the object (i.e. and eg. the 1 oz troy gold) is "worth" more. It means that the dollar is worth less. When you are carting wheelbarrows full of script to buy a loaf of bread the truth of that statement becomes very apparent. Sermonette aside, there are 16.387 cc in a cubic inch (cui)and the 1oz troy coin has 516 grains in about .5 cc. The coin is 34 mm dia. and about 2mm high at the rim (approx.). Anyhow I estimated the 40 foot cube to hold about 362,454,220,000 oz. troy. That seems like an adequate supply. That is roughly 60 oz for every person on Earth, give or take a few million here and there. Gold concentrations in the oceans amount to about 1gm to .02gm per ton of water depending on the location and the cost for extracting the gold is prohibitive and very detrimental to the environment so this reduces the supply by roughly 75% or a little more. All the easily found stuff is for the most part found. You have to have money and equipment and great information to find whats left. Good luck. Gold usage in the US is 92% jewelry and the arts, 4% electronics, 3% dentistry, and 1% other industrial uses. I imagine US Mint sets is considered part of the arts group. The US exported $8.75 billion worth of gold in it's various forms and imported $5.63 billion dollars from foreign sources in their various forms with a net reduction in home resources of about $3.12 billion dollars worth. Our gold reserve base is about 90,000 metric tons so we are not running out in the near future. True, the market is whatever the demand is. You can compare across the board with other commodities and equate ounces of gold with pork bellies or barrels of oil and that gives you another dimension on the value we place on those "things". The dollars is supposed to be the great mediator of all things of monetary value but I really wonder. Markets have always been volatile for one reason or another and they really reflect the faith or the fear of the participants. |
|
23 Jan 08 - 04:18 AM (#2242616) Subject: RE: BS: The Value of Au From: GUEST,Keinstein 40 feet = 12.192 metres. Volume of cube = 1812.278 m^3 Density of gold = 19300kg m^-3 Total mass of gold in cube = 34976968.91 kg 1kg = 32.1507474 oz Troy Price of gold (BBC) = $875/oz Troy Total price of gold in cube = $9.84^11 or 984 billion dollars. Or approximately the cost of the Iraq war by the time they pull out. Howstuffworks estimates that "the world produces a cube of gold that is about 4.3 meters (about 14 feet) on each side every year." At that rate, Asimov's 40 metre cube would represent about 23 years' production, so, it's probably an underestimate. |
|
23 Jan 08 - 05:09 AM (#2242631) Subject: RE: BS: The Value of Au From: Slag Thanks. That was just a recollection from a book I read many, many years ago and no doubt faulty or perhaps it was based an the best information available at the time. I have a source (which I can't cite at the moment) which states that gold constitutes > 0.000001% of crustal matter. Most plentiful are: oxygen @ 46.6% silicon @ 27.7% aluminium@ 8.1% iron @ 5.0% calcium @ 3.6% sodium @ 2.8% potassium @ 2.6% magnesium @ 2.1% If I remember right titanium falls in the next spot or so right around 2% but it is very abundant in the soil and its accessibility in effect places it about 5%. The light stuff tends to float up. The little list I gave accounts for 98.5% of all crustal matter. Of course the oxygen is chemically bonded to the aluminium and silicon and most other things it comes in contact with and yet there is still around 18% free oxygen in the atmosphere, thank God. It's kinda hard to breath without it! Carbon is fairly rare in the overall scheme of things yet abundant on the surface, kind of like titanium. But it combines so nicely with hydrogen and oxygen and that little benzene ring is such a handy and universal tinker toy you can build just about anything out of it, including living creatures. And C sub 12, H sub 24, O sub 12 is so sweet, I can't live without that either (table sugar)! Gold is so soft and malleable that the coinage wore out too fast to be a good circulator. Historically it was not circulated that much but rather hoarded and mostly by royalty. A commoner with gold was a suspicious character at best. Precious metals were usually in the form of dinnerware, a spoon or fork of silver or partially silver represented the family wealth (portable wealth as Dickens was oft to write). 24 carat gold is pure gold (.999 fine) and 12 carat is 50% gold. That gives you the scale. 10 carat is as low as it goes. Other names apply after that, gold fill being one. If you drag a cloth across gold fill it comes off a black mark. About 2 % gold. 14 to 18 is what you usually find in jewelry in the States. It has a good portion of copper and a little nickle in it to make it harder and last longer. For some reason Europeans like the 20 to 22 carat stuff. Why not! More gold. More portable wealth! |
|
23 Jan 08 - 07:17 AM (#2242697) Subject: RE: BS: The Value of Au From: GUEST,Keinstein From Wikipedia: In 2001, global mine production amounted to 2,604 tonnes, or 67% of total gold demand in that year. At the end of 2001, it was estimated that all the gold ever mined totalled 145,000 tonnes. That would make 2001's production only a 5 metre cube, and the total historical production about a 20 metre cube. Maybe the price of gold was low in 2001, and it wasn't worth making much, but that historical figure looks very low in comparison- it's only 55 years' production. Or more likely all estimates are suspect. Don't forget its use in electrical connections and switch contacts- a thin gold plating makes a huge improvement to reliability- thereby allowing an increase of transmissible, sharable, spiritual, wealth such as Mudcat. |
|
23 Jan 08 - 09:05 PM (#2243271) Subject: RE: BS: The Value of Au From: JohnInKansas Cast gold, the most common "trade form," has a density of 19.3 gm/cc 40 feet = 480 inches = 1219.2 cm A cube 40 feet on each side contains 1,812,278,181.9 cm3 One cm3 of cast Au has a mass of 19.3 gm The 40 foot cube of gold has a mass of 34,976,968,910.7 gm 1 troy ounce is 31.1035 grams The 40 foot cube of gold contains 1,124,534,824.3992 troy ounces At the nominal value of $880 (US)/troy ounce given in the first post, the value of "all the gold there is" according to the estimate imputed to Asimov would be: $989,695,365,471.30 (US) But what does that have to do with the worth of everything else? John |
|
23 Jan 08 - 09:14 PM (#2243277) Subject: RE: BS: The Value of Au From: Donuel Russia has huge gold deposits...yet to be mined. Yeah John, I recall Al Gore's chart showing all the omney in the world on one side of the scale and the entire Earth on the the other side. Which to choose, which to choose? |
|
23 Jan 08 - 09:38 PM (#2243287) Subject: RE: BS: The Value of Au From: bobad $989,695,365,471.30 (US) Isn't that about what Bill Gates is worth give or take a few billion? |
|
23 Jan 08 - 09:42 PM (#2243288) Subject: RE: BS: The Value of Au From: Rapparee If I had a cube of gold, say a cubic meter of the stuff, what would I do with it? I can't eat it, and somebody with a bigger yen for it that I have would just come and take it away. I've got rhythm, I've got music, I've got my gal.... Folks with plenty of plenty Got a lock on de door They's always are afraid Somebody's gonna steal it While they're out a-makin' more.... I've got enough money to pay the bills and a little bit over for stormy weather. What more do I need? I still think a economy based on potatoes or something you can eat would be best. |
|
23 Jan 08 - 10:04 PM (#2243305) Subject: RE: BS: The Value of Au From: McGrath of Harlow "Gold production" doesn't mean making gold, it just means moving it from one place to another. The quantity in existence on the planet stays the same, and it's not a very large quantity, as Asimov pointed out. |
|
23 Jan 08 - 10:12 PM (#2243308) Subject: RE: BS: The Value of Au From: Slag As stated some where above, the currency, whatever form, is a trade medium. The worth of some item or service becomes equated with a certain amount of the medium and the medium gets traded. It's very convenient and saves transportation cost, preservation ( of food stuff ) and time, among other things. We could live without it but I'd rather go to market with a few pieces of paper or a couple of slugs of silver or gold than carry potatoes ( I had to check with Dan Quayle on this spelling and there IS an "E" in it ) or hog bellies around in my pockets. |
|
23 Jan 08 - 11:35 PM (#2243355) Subject: RE: BS: The Value of Au From: JohnInKansas hog bellies don't work for trade 'cause they're only traded on the futures market. People trade promises to have them some day and to give ya one someday, but nobody ever actually had one - as far as my finance page reports. Check it out in your own market, of course, but I think they're just some artificical thing some smart-a... farmer made up to sell to city folk. John |
|
24 Jan 08 - 01:34 AM (#2243381) Subject: RE: BS: The Value of Au From: Slag You make my point, if you are correct. Paper money is a promise issued by our ever-faithful government. It used to have gold or silver behind it but now it only has the blessed assurance of that trustworthy crew in DC. It's called fiat money. Uncle Sugar says "Let it be money" and behold, it's money. In actuality it is worth nothing but the paper and ink upon it. Hog bellies is more graphic than widgets and cumbersome than oil barrels. That is why I used the term, to make a point. Any commodity NEEDS a medium of exchange. It takes us a big step away from the barter system and more important it allows the government the POWER to control the amount of currency that's in play at any given moment. It becomes a way of LIMITING your freedom. Unka Sam uses a lot of misdirection and stick-and-carrot tactics to hold back the population and check revolt. I'm participating in my own thread drift here but ultimately, money is the subject. Worth is the subject. Gold has an INTRINSIC worth whereas currency and species has NO intrinsic value at all. We let our public servants take us off the gold standard in 1933 and the silver standard in 1964 ( both Democrat Presidents, BTW ). We were quietly eased off the last remaining ancient standard, copper, in 1982 when the copper penny was replaced by Zinc with a thin shell of copper plating over it. Zinc! Now they are trying to do away with the penny altogether. We are realistically less than 10 cents on the 1967 dollar and the penny of today would need 1000 or more to buy what that '67 dollar could. Copper is around $3 a pound ( or more ) and it is again cost prohibitive to mint the cent! Clad coinage is a good deal only because it wears so well. That is compensation for the complicated and expensive process used to make it. It has a little intrinsic value but as for the pure metals, you'd have to smelt it to obtain any pure copper or nickle. What they really need to do is what a lot of other countries have already done ( some repeatedly ) and that is to re-value the dollar. And now would be a good time because of the 10 cents on the dollar situation. Slide the decimal one place to the left and issue all new coinage and paper. |
|
24 Jan 08 - 02:50 AM (#2243391) Subject: RE: BS: The Value of Au From: Georgiansilver It seems to me that tyhe best ever currency was 'barter'.....if you hadn't anything to barter then you actually had to do something to earn your bread!...No state handouts! The more you put in...whether it be work or goods..the more you get out. Maybe not as good as I imagine but I am sure someone will put me right. |
|
24 Jan 08 - 03:49 AM (#2243422) Subject: RE: BS: The Value of Au From: GUEST,PMB Barter is just a bit impractical. It takes a long time, and a wander round Tescos with two shopping trolleys (one for the stuff you're buying, one for the stuff you're selling) could take longer than the half hour most people allow. It also has slight problems of localisation- for example, US mid-west farmers might only have wheat to barter with each other, while London City office workers could only give each other promissory notes, which don't make good eating. On the other hand, we'd get back the fun of sailing 2000 miles in an open boat, fending off pirates with the spare hand. But look at gold (and other money) in a slightly different way. There's no need for the value of money to even approach the value of goods in circulation, because it can be used many times over. For example, a car engine might weigh 150kg, but only contain 4kg of oil, because the oil gets circulated many times (my van is 1994, but the oil is a GENUINE 1996). And if you think a copper-plated steel disc is worthless, what about your plastic card? |
|
24 Jan 08 - 04:02 AM (#2243426) Subject: RE: BS: The Value of Au From: Megan L Some folk have way way way to much free time. |
|
24 Jan 08 - 07:34 AM (#2243491) Subject: RE: BS: The Value of Au From: Grab How does gold's "technical and aesthetic value" make it undervalued? Technically, it's useful for corrosion-resistant connectors, both as a plating and as the thin wires inside chips which connect silicon to the outside world. Those are the only major technical uses I'm aware of. Aesthetically it's still good. However there's been a massive drop recently in gold jewellery sales, as white/grey metals (platinum, rhodium and titanium) are out-selling gold. Dentistry has long since abandoned gold as its metal of choice; gold teeth should properly be regarded as jewellery too. In other words, only the "tradeable" aspect of gold is really keeping its value high. And I'm not sure what your argument is. First off you say that we need a means of exchange because barter doesn't work, but then you lauch into an attack on fiat money. The point with any currency is that so long as you're spending it, it doesn't matter how many dollars, pounds, Euros or stones-with-holes-in it takes to buy something, the relative values of two items remain the same. When I was in Italy as a kid, a loaf of bread was 1000 lira, but a car would cost you 20 million lira. Back in Britain, a loaf of bread would cost you 50p and a car would cost you £10,000. The numbers don't matter, because the value of the means of exchance in relation to everything else remains constant. The fact that the dollar numbers are different to what they were in 1967 is immaterial. Graham. |
|
24 Jan 08 - 08:07 AM (#2243510) Subject: RE: BS: The Value of Au From: Mr Red As to the mass of gold available in the earth's crust - there has been quite serious scientific speculation about a recent gold quarry and how gold is being leach-out of some pretty gold-free rocks. Something to do with the suddenness of finding gold in one spot in Java or Borneo or that area. And it's abundance (relative term). Hot steam and pressure from really deep down was the conclusion. Whatever - the price of gold reflects the nervousness of money markets. And is producing just the same over-confidence in what is just a very heavy, untarnishable noble metal. Heavier than lead (density wise) in case you didn't know it. When money can be made from money - gold will find a lower level. But for now it is safer than houses - or loaning money out. |
|
24 Jan 08 - 09:01 AM (#2243543) Subject: RE: BS: The Value of Au From: Rapparee Actually, it would take $6.04 in 2006 (last year for data) to purchase what $1.00 would in 1967. In the UK, in 2006, £1 0s 0d from 1967 is worth £12.55 using the retail price index. |
|
24 Jan 08 - 10:05 AM (#2243594) Subject: RE: BS: The Value of Au From: GUEST,PMB Using the Pint of Bitter Index UK inflation is somewhere between 15 and 25 times (1400-2400%) since the late 60s. House price inflation is something like 30-40 times. |
|
24 Jan 08 - 11:32 AM (#2243652) Subject: RE: BS: The Value of Au From: Georgiansilver Just resurrected a thread I started in 2004 on Scrap Gold prices. You might be interested. Best wishes, Mike. |
|
24 Jan 08 - 12:40 PM (#2243700) Subject: RE: BS: The Value of Au From: Rapparee Why would I happen to have scrap gold? |
|
24 Jan 08 - 03:17 PM (#2243852) Subject: RE: BS: The Value of Au From: Slag Grab! Only making a point as to "fiat money". It has nothing behind it...but the entire US economy and system of doing things financially!!! I do resent our government's intrusive manipulation of the free markets and whatever the means of commerce any government will seek to control it. It's a stability issue. Consider it an aside.. If we were to revalue our currency the penny would have ten times it's value and once again merit its continued existence. Otherwise it looks like the nickle or maybe even the dime will be the new penny. And what happens to all those rounded off numbers? They go right into Uncle Sugar's pocket. AND I would imagine that we would be in for some new pricing of things (higher) over the demise of the cent. But I do appreciate your input. I do want to see what others may think about this topic. |
|
24 Jan 08 - 03:56 PM (#2243882) Subject: RE: BS: The Value of Au From: Georgiansilver Rapaire...Many people have gold jewellery and if it becomes broken or unwearable they dump it in a drawer and leave it there as a useless item. At £5.29 per gram......approx $10 a gram..it might be worth trading in for cash. However, some buy gold as an investment from bullion dealers and if they had done so a few years ago they would have at least doubled their money by now. Best wishes, Mike. |
|
24 Jan 08 - 05:10 PM (#2243950) Subject: RE: BS: The Value of Au From: Rapparee So my gold teeth would be worth.... |
|
24 Jan 08 - 05:42 PM (#2243973) Subject: RE: BS: The Value of Au From: Georgiansilver Would depend on the carat and the weight friend. |
|
29 Jan 08 - 11:12 AM (#2247858) Subject: RE: BS: The Value of Au From: Donuel These links probably stem from brokers who want to sell gold but if there is a grain of truth you might want to know... http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=59935 http://www.theinternationalforecaster.com/item.php? |
|
29 Jan 08 - 06:05 PM (#2248208) Subject: RE: BS: The Value of Au From: The Fooles Troupe In Oz we dumped the copper 1 & 2 cent pieces ages ago - prices still in those incremental values, but 'rounded up and down' according to rules issued - and all cash registers now have the rounding built in. |
|
29 Jan 08 - 06:55 PM (#2248232) Subject: RE: BS: The Value of Au From: Slag Foolestroupe, I have several of those large Kangaroo cent pieces given me by some expatriates friends, who escaped to Down-under. There was a heck of a lot more copper in those than the US small cent which came into circulation in 1858. |
|
29 Jan 08 - 09:47 PM (#2248321) Subject: RE: BS: The Value of Au From: Rowan Slag, those large Kangaroo cent pieces are predecimal pennies and not cents sensu strictu. If you have two of them and athin 6x1" piece of timber, you're set up for a swy game; "two up" is what it's officially called but it's illegal in Oz unless you play amongst some diggers on Anzac Day. Cheers, Rowan |
|
29 Jan 08 - 10:05 PM (#2248327) Subject: RE: BS: The Value of Au From: Slag And cheers right back at you! I'll get me friends in their Wee Wah cotton station to translate that for me! Sounds like it might be some risky fun! |