Gold is awesome. A single cubic foot of gold weighs almost 600 kilograms, a cubic metre an amazing sixteen tonnes. Artisans can hammer gold to a thickness of a millionth of an inch, and a single once of gold can be stretched into a length of wire some fifty miles long. Above all, gold is valued, hoarded, stolen and faked for one reason only: It is rare.
The most widely quoted estimate of how much gold exists is around 160,000 tonnes of above ground gold. This includes everything from teeth, coins, bars, jewellery, religious and archaeological icons. From what I understand, these figures are based on a National Geographic article from the 1970’s that extrapolates mine data. If those figures are correct, there is not much gold to go around. This explains the “Tulip Mania” that attached to gold. It causes a collective mind set to of “Gotta get me some at any cost”. It is this that can send prices sky rocketing. The lucky few, generally the insiders, get to make huge fortunes by leveraging (borrowing) $10 for every $1 they have in the paper gold market.
