Gold pushed at $1240 today (spot market) as the Dow Jones Industrials were down 800 points in early trading after closing down 800 points Tuesday. Stock markets were closed Wednesday in honor of President George H. W. Bush’s passing.
Since November 15, gold has risen $25 in a “lackluster move.” I say lackluster because I’ve seen next to no mention of gold’s move in the media. All the attention has been on the stock market’s volatility, and perhaps appropriately so.
Total value of all stocks in the US is about $30 trillion, while the total value of all the gold ever mined is just short of $7.5 trillion. Take in to account that “all the gold ever mined” is dispersed around the world, and some of it lies in ship wrecks on the bottom of the ocean, while the $30 trillion in stocks is in the US only.
As stocks sink, not all of that money will move to gold, but $30 trillion is only a fraction of all the money that potentially will pursue gold as its price moves higher and stocks move lower. The US bond market is something like $40 trillion, and the market capitalization of the world’s stocks is between $75 trillion and $80 trillion. The value of the world’s bond market is probably another $80 trillion.
Add in checking accounts, savings accounts, money-market accounts, and the global money supply total is in excess of $80 trillion. We’re getting up to numbers that are hard to fathom, and there is still more to consider.
According to demonocacy.info, a relatively small amount of gold and silver is available for investment purposes, $2.5 trillion for gold (at $1250/oz). For silver, they have no specific numbers but say that the amount of investment silver available to the public is a surprisingly small amount. They further note that governments do not hold significant silver reserves, unlike with gold.
As the world’s economies roll over (declining stock markets are often the first warning), there will be a rush to gold and silver. At least a portion of your investments should be in the metals as insurance against a really severe economic downturn.