Who Owns the World's Gold

[Munger]

Click for infographic.

http://www.mint.com/blog/trends/who-...e-worlds-gold/

[cjppjc]

Re: Who Owns the World's Gold

Not Ron Insana, who today said Ron Paul was (I think he used the word stupid, or close to it) wrong to hedge against inflation by owning gold. That Ron Paul knew nothing about economics. Ron Isana said he would bet his career that the U.S. would not return to a gold standard. Anyone know how that career is going?

[LargoWinch]

Re: Who Owns the World's Gold

Click for infographic.

http://www.mint.com/blog/trends/who-...e-worlds-gold/

There is an obvious omission to this graph Munger; I do not see JT listed anywhere .

[hayekvindicated]

Re: Who Owns the World's Gold

Who owns the world's gold?

INDIANS!!!

Or may be 15 percent of all the gold held privately.

[blazespinnaker]

Re: Who Owns the World's Gold

I don't think a gold standard makes sense. A basket of commodities maybe, but that even has its problem.

The problem, let's face it, isn't our fiat currencies. The problem is debt. If we could balance our budget people wouldn't be clamoring about a gold standard.

[bpr]

Re: Who Owns the World's Gold

One of the PIGS is not like the others: looks like Italy has been shorting the Euro. :/

[Bearster]

Re: Who Owns the World's Gold

Of all the commodities, gold (and silver) evolved to be money. Look at the ratio of their stocks to flows. Gold is about 80 years. Oil, and everything else is well under one year.

The chief virtues of gold for a monetary system:
1) it keeps the rate of interest stable
2) it can't be printed
3) it does not allow for debt to be built up until the entire system crashes

[grapejelly]

Re: Who Owns the World's Gold

Money can be whatever the buyer and seller agrees upon. No role for monopoly money by government fiat.

[Southernguy]

Re: Who Owns the World's Gold

Who owns the world's gold?

INDIANS!!!

Or may be 15 percent of all the gold held privately.

Two points:
1) Gold cannot, I think be a currency. Do you imagine buying your daily stuff with gold coins. Therefore, some paper or otherwise intrinsically unworthy coin must be used. Someone has to produce such. Then, we come back to fiat money.
2) Though I didnīt check most countries, Venezuela at 35% of itīs reserves in gold is a major gold owner. Itīs more than 350 tons are more than gold ownings of Britain.
Chavez is no stupid.......does he read EJ?

[Munger]

Re: Who Owns the World's Gold

The way I look at it, Gold is worthless if TSHTF. It only has value if the countries _decide_ that it has value; it has no intrinsic value.

So the U.S. apparently owns 1/2 the world's gold, or something like this. So you think in a new currency regime, China will simply say, "Ok, you have half the world's currency, no problem?" Maybe. But maybe they'll say "F**k you, my currency is *the military* and I will take the natural and _useful_ resources I need from the countries close to me."

Now geez -- what is useful and necessary from _that_ posture? It surely isn't gold. Oil comes to mind ... steel ... copper ...

[c1ue]

Re: Who Owns the World's Gold

Interesting graph, but not very useful.

As alluded to in some of the posts above, the percentage of the world's gold isn't that useful for several reasons:

1) Gold isn't directly money anymore
2) There is no historical data. The US used to possess 90% of the world's gold, when it WAS money; 50% of gold w/o gold being money is a huge comedown

Secondly the article speaks of gold as a percentage of foreign reserves.

This is equally interesting but useless.

1) The US doesn't need foreign reserves as the US dollar is a world reserve currency. So both numerator and denominator in the calculation for the US is irrelevant
2) Foreign reserves themselves are a function of economy and government choice. It isn't an objective measure by any consideration

Gold in present value vs. money supply - now THAT means something.

Using the ratio of $ to metric tons of gold of roughly $40M per metric ton Au, the ratio of money supply to gold reserves:

The US: (http://www.federalreserve.gov/releases/h6/current/)

M1: 4.3
M2: 23.8
Stock of domestic credit (CIA Factbook): 47.3

Portugal:

M1 & M2 not relevant due to euro
Stock of domestic credit: 32.1

Russia: (cbr.ru)

M1: 8.96
M2: 21.46
Stock of domestic credit: 16.34

India: (http://rbidocs.rbi.org.in/rdocs/Publ...T_HB150909.xls)

M1: 10.95
M2: NA
Stock of domestic credit: 44.82

China: (http://www.pbc.gov.cn/english/detail...l=6400&id=1487)

M1: 81.22
M2: 228.00
Stock of domestic credit: 131.76

[bart]

Re: Who Owns the World's Gold

Possibly helpful or educational:

[gnk]

Re: Who Owns the World's Gold

Two points:
1) Gold cannot, I think be a currency. Do you imagine buying your daily stuff with gold coins. Therefore, some paper or otherwise intrinsically unworthy coin must be used. Someone has to produce such. Then, we come back to fiat money.
2) Though I didnīt check most countries, Venezuela at 35% of itīs reserves in gold is a major gold owner. Itīs more than 350 tons are more than gold ownings of Britain.
Chavez is no stupid.......does he read EJ?

Isn't this made of paper? Read the words under the President's portrait. People bought their daily stuff with this:

[ThePythonicCow]

Re: Who Owns the World's Gold

Possibly helpful or educational:

Certainly interesting - thanks, Bart.

I am led to wonder two things from this chart:

1. Is the flat-lining of US gold since 1972 correct, or is it just an indication of no more accurate reporting since then? I doubt the reporting, myself, but then I would.
2. Is the decline in holding by major official holders since 1964 likely to reverse at sometime? I'm suspecting it will reverse, with gold moving from us small time holders back to the center, sometime in the next few years.

[WDCRob]

Re: Who Owns the World's Gold

Cow, it looks like it's already reversed slightly in the most recent year. Will be interesting to see if that's a blip, or the start of a trend.