How much is gold worth?
The value of all above ground gold is about $1.8 trillion. This compares to the US government's sovereign debt of $6.9 trillion, which until 1971 was part-backed by gold. The US Gold Reserve is just over 8,000 tonnes, which is about 6% of the total gold ever mined. It is worth about $100 billion, or 1.5% of the US national debt.
$1.8 trillion is about one fourteenth of the paper based international bond markets, which themselves, at about $26 trillion, are about two thirds composed of western government sovereign debt almost all of which has appeared, co-incidentally, since 1971 and the declared supremacy of paper money, which was what allowed governments to borrow without caution.
The total gold content of the world would pay at current values about 7% of the international bond market's sovereign debt. But 75% of the world's gold is not available to governments, being held privately as jewellery, bullion and coin. In fact only about 30,000 tonnes, about 1% of the world's sovereign debt is what is held in central bank gold reserves.
Meanwhile the entire gold stock of the world - including the privately held bulk - is much less than one half of one percent of the underwritten risk in the global financial derivatives markets. The world has placed absolute trust in paper currency denominated assets. Investors have shunned gold for about twenty years while the notional value of paper based financial assets has exploded.
The following table compares kilogram quantities of gold with monetary values, spatial volumes, and meaningful human measurements, to get a feel for the numbers.
|Kilograms||Value @ 390$ / Oz||Litres||How much|
|0.008||$100||0.00041||British Sovereign coin|
|0.031||$390||0.00161||US Eagle / Canadian Maple coin|
|1||$12,539||0.0518||1 kilo - a golf ball sized sphere|
|6||$75,231||0.311||A can of Coke|
|12||$156,000||0.645||A standard 400 oz bullion bar|
|20||$250,772||1.04||A litre bottle of water|
|100||$1,253,858||5.18||A deposit box|
|10,000||$125,385,802||518||Half a cubic metre - fits in a corner of a small bank vault|
|1,000,000||$12,538,580,000||51,813||A small living room - and more than twice Britain's gold reserve|
|8,139,000||$102,051,504,000||421,710||The US gold reserve fits into a town house. Fort Knox is mostly empty space|
|30,000,000||$376,163,190,000||1,554,404||The world's total financial reserve of gold (central banks + significant global financial institutions)|
|100,000,000||$1,253,858,024,000||5,181,347||The approximate total of all privately held jewellery, bullion and coin|
|140,000,000||$1,755,401,234,000||7,253,886||All the gold in the world - A block with 19 metres edges|
Who owns the gold?
About 30,000 tonnes of the world's gold [20-25% of above ground inventory] is held in central bank vaults.
|Major Central Bank Reserves (2000)||Nations & institutions Reserves (Tonnes)|
The totals for other central banks tail off rapidly after these main holders. Most only hold a few hundred tonnes, and together they make up a bit over 30,000 tonnes in all.
The rest is held by individuals in the form of gold jewellery [approx 70,000 - 80,000 tonnes], coin and privately held bullion [combined at 20,000 tonnes].
90% of the gold above ground has been mined since the start of the California gold rush in 1848. Modern power machinery and chemicals have steadily lowered the price at which gold can be extracted. The average production cost of the world's biggest producer - South Africa - is about $238 per troy ounce. 1997 industry estimates by the Federal Reserve Board suggested an average production cost worldwide of $300 per ounce.