I mentioned global debt of $250 trillion in my “Anything but Paper” Blog on May 15th. Since then I came across this graphic below from Visual Capitalist https://www.visualcapitalist.com/. Exploration Geologists love images and drawings that make numbers concrete. We try to visualize the third dimension and what lies beneath from a map of only two dimensions. Anyway, I thought that it was interesting to compare global debt in four stacked blocks on the left in the graphic below and compare it directly to gold above and below ground on the right.
On the debt side governments account for 27.4% and households for 24.3% of global debt. Gold above ground comes to 197,576 tonnes at a value of $10.9 trillion if you take a gold price of $1,715 per ounce, just a bit above today’s current price. The reserves of gold below ground are also based on this gold price and expanding these reserves will as always depend on exploration and discovery of deeper and harder-to-find gold deposits. In short and keeping it simple, the future looks bright for gold if the demand holds and governments are successful in debasing the world’s currencies. On the supply side tier-one gold discoveries are becoming as rare as hens teeth. It appears that the price of gold has not yet risen to a point where greed conquers fear and reward pins risk to the canvass and properly incentivises exploration.
Incidentally the value of all silver stock above ground is worth $43.9 billion at a silver price of $17.20 per ounce, just a bit below today’s price. That would represent just one tiny cube or brick in the above graphic. If investor sentiment turns to silver then even a relatively small wall-of-money will have a much more exaggerated effect on the price. Of course the contrary is also as highly leveraged.
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