Continuing . . .
If average production is about 2,400 tonnes of gold, then by the end of this year there might be a total of something like 145,000 tonnes of gold mined in all history. But the monetary part of it, using earlier estimates, would be about 102,000 tonnes.
If monetary gold in 1956 was 50,000 tonnes, and if the world population has increased by 2.21 times, then a population-adjusted gold supply for 2002 would be about 110,000 tonnes.
Since the actual monetary gold supply is lower per person, if we take 1956 as a norm (and I have no good reason for doing that except that I chose it to start with--and maybe because it was a kind of pivot point between deflation and inflation, then we might adjust the price of gold up by about 8% for increased scarcity.
But that only takes the price of gold, inflation-adjusted and adjusted for scarcity, from $35 in 1956 to about $250 today.
I was truly hoping to end up with a figure more like $350.
But $250 does seem in line with current mining costs.
I am going to continue to hold my rather considerable position in NEM LEAP calls for a while because of the terrific monetary inflation that has been occurring and because of the possibility of terrible financial disruption by the collapse of something like Morgan Chase. But I am not at all confident of making myself the posessor of unlimited wealth as a result of a huge rise in gold prices. |
