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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: Amark$p who wrote (132044)	9/29/2008 2:36:20 AM
From: Amark$p	Respond to of 312268

Per Capita Gold Trends... Production: Since the process of mining gold is extremely capital- and time-intensive, supplying the markets and meeting demand has been a challenge all throughout history. And since mankinds lust and desire for this rare and precious metal is unwavering, people in all ranks of society have and will demand more and more of this beautiful metal. And history can do a fine job illustrating gold’s supply crunch. For example, in 1900 when there were only about 1.6 billion people roaming the earth, a whopping 13 million ounces of gold was mined to meet demand. This equates to about 0.008 ounce per person on the planet mined that year. It took about 65 years for the world’s population to double from there. During that time the global mined production of gold nearly quadrupled to a 1965 volume of 47 million ounces. This equates to a 75% increase in the per-person quantity of annual gold ounces mined. And more gold per person makes sense as a number of studies have revealed that since 1800 per capita income has grown at a 50% faster rate than the population growth rate. So since wealth grows faster than the population, it makes sense that more people with more money want more gold. Well in just the last six months or so the world population has achieved another double from 1965 to a global population of about 6.6 billion. And in 2006 mined gold supply is expected to come in at around 77 million ounces (using true production data provided by the World Gold Council and GFMS for the first three quarters of 2006 and projecting full year using simple average), which is an 18% decrease in annual gold ounces per person. Is this decrease a supply dilemma, a demand dilemma or just a healthy balance? Confused yet? Now I know this is hardly a standard metric, comparing the world population with annual mined gold supply. But stick with me here because this does help paint a partial picture of what we may be faced with in the years to come. It is indeed a fact that the world today is a lot wealthier than it was one hundred years ago. Vastly more money per person is floating around today than ever before. It is also a fact that over 60% of today’s global population resides in the fastest growing economic region of the world, Asia. One hundred years ago the fractional gold demand that came from poverty-stricken and economically-weak Asia was from a handful of aristocrats that squandered the wealth of their nations. But today the 4 billion people in these growing economies, those taught by their parents to save big and store their wealth in gold, will command a sizeable share of today’s and tomorrow’s gold demand. This long-repressed Asian populace will participate in a greater share of global wealth. And the Asians are not the only ones who will be plowing more money into gold. The Middle East petrodollars pouring in from this 21st century oil bull will also need to continue to find refuge. Middle Easterners are culturally attuned to gold investment and simply adore the shiny-yellow metal. So as the world grows not only in population but industrially, technologically and economically, this wealth is and will be distributed among a portion of the world that has historically had little opportunity to buy gold. In fact, the per-capita growth rate mentioned above had very heavy weightings from the US and Europe with insignificant growth from Asia. So as per-capita growth rates now rise faster driven by the Asian people, there could be a huge market impact on gold demand. To put this in perspective, people that earned say $500 per year in the expanding Asian economies can sustain a large year-over-year income growth rate for an extended period of time. Even if only a small fraction of this income growth transfers into gold investment, it will surely be felt. More gold per person will be demanded. Now in order to meet growing global demand, mined supply must continue to rise. When the world reaches a population of 8 billion people, projected for 2025, just to sustain the 2006 per-person consumption of mined gold, over 93 million ounces will need to be mined. And if per-person demand rises as expected, even more ounces will need to be produced. These are lofty figures for the gold miners to achieve, and I suspect gold will need to be priced much higher in order for them to have a shot at this. zealllc.com

To: Amark$p who wrote (132044)	9/29/2008 11:05:01 AM
From: Nevada9999	Read Replies (1) \| Respond to of 312268

Why not consider US dollars vs. US gold reserves. In 1934 there were 35 US dollars outstanding to one ounce of gold reserves. The last number I saw was several years ago and my recollection is that it was about 35,000 dollars per ounce of gold reserves. I suspect the ratio would now be more like 50,000 dollars per ounce of gold reserves. The US claims to have about 8,000 tonnes of gold reserves, or about 260 million ounces. Today the Fed passed out 225 billion dollars. I don't think this trend is very sustainable. We have a very serious banking and financial crisis. I don't think there are any historic examples of gold's value decreasing in this type of situation. The value of the US dollar in light of all this is based purely on confidence, or perhaps at this point, denial.