TOTAL WORLD GOLD & SILVER PRODUCTION: Fact vs Conspiracy

Unfortunately for precious metals investors, there continues to be a great deal of misinformation about how much gold there is in the world.  The biggest culprit that confuses precious metals investors is what I call, LOUSY CONSPIRACIES.  Those who promote these unsound conspiracies aren’t able to differentiate between FACTS and FICTION.

This will be a short post, but it is important as it will lay some ground work for articles to come out over the next several weeks in comparing the new Bitcoin-Crypto currency market to gold and silver.

While conspiracies do indeed take place, they are based upon sound reasoning and evidence that either proves a conspiracy has occurred, or proves the official story is bogus.  On the other hand, lousy conspiracies are easy to dismiss when facts and sound evidence are brought forward.  Unfortunately, even when the facts or the evidence is presented step by step, those who either promote or believe these lousy conspiracies… continue to do so.

This has to be one of the most frustrating areas of my research, writing and analysis.  Why?  Because, I receive emails at least once a week bringing up one of my favorite LOUSY CONSPIRACIES.

One of the more insane conspiracies in the precious metals community is the notion that the world has 1-2 million tons of gold hidden in secret vaults.  Some of these vaults are the infamous Yamashita’s Gold Treasure, Nazi Gold Vault, Bank of Hawaii Massive Gold Holding and etc.

You see, conspiracies, especially LOUSY CONSPIRACIES, are a great way to make a buck selling a newsletter or book.  Because people don’t take the time to do the research and fact check, it’s much easier and a great deal more fun to believe in the hype of a conspiracy.  This is quite a shame because lousy conspiracies give the few sound conspiracies a bad reputation.

Even though I wrote about this back in April, CONSPIRACY vs FACT: How Much Gold Is In The World??, it seems necessary to discuss this once again as an introduction to why gold and silver will still be better quality stores of wealth versus crypto currencies over the medium to longer term.  This goes against some of the recent analysis put out in the Alternative Community suggesting that gold will no longer have value in the future due to crypto currencies taking over the role as a new digital monetary system.

Anyhow… the production of silver and gold are extracted out of the ground at a certain ratio.  Recently, it is approximately 9 to 1, silver to gold.  Let’s take a look at the following two charts:

As we can see in these two charts, most of world gold and silver production has been extracted since 1900.  For gold, the world produced 91% of all gold since 1900, and 81% of all global silver production.  According to the best sources (shown on the bottom of the chart), there have been approximately 173,000 metric tons (5.5 billion oz) of gold produced since 1493 and 48.5 billion oz of silver.  This turns out to be a 9 to 1 ratio, which is the same as the ratio of silver to gold in the ground.

NOTE:  I did not convert the gold chart to million oz because world production figures are normally reported in metric tons.  Furthermore, the accounting of total gold holdings are also published in metric tons.  Also, this conversion should help:  (1 metric ton = 32,150 oz).

Now that we know that, it is also true that the world produced a great deal more silver in relation to gold from 1493-1600.  This was due to the huge new silver discoveries in South America by the Spanish during that time period.  There was 747 million oz of silver produced from 1493-1600 versus 714 metric tons (23 million oz) of gold…  32 times more silver production than gold.

Furthermore, the silver to gold production ratio increased even higher in the 17th century (1600-1700).  World silver production jumped to 1,272 million oz versus 897 metric tons (29 million oz) of gold.  This pushed the silver to gold production ratio to a staggering 44 to 1.  The increase in ratio was due the huge ramp up of Mexican silver production during the century.

Okay…. some of you might think… well, what if some of the world gold production was missed during those earlier centuries because the silver-gold ratio was so high?  Even if we apply a 9 to 1 silver to gold ratio for each century, this would be the result:

Adjusting World Gold Production To 9-1 Silver To Gold Ratio Each Century

1493-1600 = 83 million oz Gold

1600-1700 = 141 million oz Gold

1700-1800 = 209 million oz Gold

1800-1900 = 566 million oz Gold

1900-2016 = 5,077 million oz Gold

Grand Total = 6,076 million oz Gold  (189,000 metric tons)

Even if we applied a 9 to 1 silver to gold production ratio for each century, it would still only amount to 189,000 metric tons versus the 173,000 metric tons of actual world gold production since 1493.  If we include all gold production prior to 1493, I doubt it would push that figure above 200,000 metric tons.

So, we can plainly see, it was physically impossible for the world to produce more than 200,000 metric ton (6.4 billion oz) of gold in the history of mankind.   Thus, the notion that the world holds 1-2 million tons of gold in the world, is completely ludicrous.

For the life of me… I am completely puzzled as to why people can’t comprehend the obvious when it comes to the true amount of gold in the world.

UPDATE:  Additional Information On Ancient Egyptian Gold Production

I have received some emails and tweets suggesting that a lot of ancient gold production has not been accounted for.  While this is true, it really doesn’t amount to much if we use logic and quantitative statistical modeling.  We must remember, the ancient peoples were using simple mining techniques to produce gold.  While Ancient Egyptians did produce a lot of gold, estimates show that it really didn’t amount to much compared to modern times.

Here is a excerpt from a study on Ancient Egyptian Gold Mining:

Archaeological and historical sources suggest that Egyptian metal-workers as early as 4,000 B.C. had developed remarkably sophisticated gold-smithing skills. In the millennia prior to the beginning of the Christian era, Egypt was in all likelihood both the largest consumer and producer of gold in the Eastern Hemisphere. During this period, estimates show that Egypt consumed four-fifths of the gold production of the ancient world. By 1,500 B.C. Egypt’s production of gold reached an estimated 1.4 million pounds.

Estimates of Ancient Egyptian gold production up until 1,500 B.C. were 1.4 million pounds, or 635 metric tons.  This was 635 metric tons over a 2,500 year period.  According to the 2017 GFMS Gold Survey, the world produced 3,222 metric tons of gold in 2016.  Thus, the world produced five times more gold last year than the total the Ancient Egyptians mined for approximately 2,500 years.  And as the excerpt above stated, Egypt was the largest producer and consumer of gold in the Ancient world.

If we consider gold production from other ancient time periods, such as the Roman Empire, Ancient Indian Empires and Asia, we still don’t come up with the sort of gold that was produced since 1900.  Again, I doubt the world has produced more than 200,000 metric tons in the history of mankind.  Hell, I would even go as far as say 225,000 metric tons.  But, this is still a great deal less than the 1-2 million tons suggested by those who seem to be unable to do simple math.

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35 Comments on "TOTAL WORLD GOLD & SILVER PRODUCTION: Fact vs Conspiracy"

  1. Not another lousy conspiracy?(wink)

    • The only thing that matters is demand exceeding supply. Only when people realize that PMs are hard to acquire from dealers, can the real bull market begin. Currently prices are driven by electronic transactions rather than the availability of PMs. If conspiracy theories are true, in the course of time it will turn out that the so called “cartel” lied about the amount of PMs and the claims on gold acceed several times the existing stocks.

  2. As it stands, Bitcoin requires 16 TWH a year, or about as much as Tunisia to operate. Up 1 TWH since the fork half a month ago. But when energy prices rise and mining and transacting Bitcoin becomes more energy intensive, will investors be ready to chase the price higher to make mining profitable and keep the coin secure? High energy prices will kill crypto currencies because they need cheap energy to keep mining,transacting and ledger verification profitable to the machine holders who chase cheap energy around the world hence most mining being done in the east or maybe on Iceland. It needs perpetual growing energy consumption to operate where gold and silver prices are set by cost of production, but doesn’t need perpetual mining to keep what your holding from disappearing. Less mining because of increased energy costs for crypto leads to lower prices and less secure coins. Less mining due to the same factor for gold and silver means higher prices due to increased cost of production, and is not brought down by its cost to operate and secure.

    • Shane,

      You actually bring up a good point. Furthermore, a lot of gold and silver that has been mined can be used as a STORE OF VALUE because it doesn’t take anymore energy to produce or use it. This is much different that crypto currencies that need a lot of energy in a high tech system to function.

      steve

      • I’m confused as to how you can ‘mine’ a crypt currency, I’ve seen the rooms of PC’s in South America ‘mining’ on TV and my brain still refuses to accept the concept😃 Surely all ‘coins’ could be made easily traceable in the digital realm for authenticity assurance (I assume mining is not stealing other people’s coins) if the system is not traceable then I predict that with the advent of quantum computing just coming ‘online’ this will effectively kick the legs from under the current security, a quantum PC might appear expensive but should pay for itself many times over probably within hours if applied to mining… hmmm crypto might not be as safe as some would like to assume if it can be carved open by a old standard PC

        • Ok excuse my ignorance on this topic, a bit of research has revealed bitcoin to be effectively a golden digital Easter egg hunt for predefined code, with ‘value’ being attributed by the collective community, nope another very clever financial instrument clearly making people exchanged real money which doesn’t make sense to me, although marvelous if your were on the inside…😃 However the advent of new technology will indeed make guessing that code a lot easier…

    • I will be the first to admit, I know very little about crypto currencies BUT have raised an eyebrow because of the attention they are getting at the moment and I do understand the power a digital currency could have and their inevitability.

      In terms of their (crypto’s) longevity it is still early days (very early days)and I am prepared to go on record in saying it still feels like a Tulip or Daffodil moment as far as I am concerned.

      Having said all that I watched an interview on RT “Boom & Bust” during the week with “John McAfee”. he stated it now cost around $1,000.00 (One Thousand Dollars)to create 1 (one) Bitcoin (in computer power and energy) and it would not surprise him if Bitcoin’s value rose to $500,000.00 per coin (One Half Million).

      That my other eye brow and got my attention even more so because I have a lot of respect for his opinion!

      • Typo!!! Last sentence…

        That raised my other eyebrow! 🙂

      • GrahamB,

        Oh my…. you finally see some merit in cryptos. Yes, all it takes is a movement of funds out of debt based fiat money and into cryptos to push their prices to insane levels. Furthermore, there ISN’T A MASSIVE AMOUNT OF DEBT ATTACHED TO CRYPTO CURRENCIES as there are in Fiat Currencies.

        steve

        • Lol Lol… Best of luck for next week

        • What’s why USD has survived so long Sir, they are backed by sweat of US slaves…

        • They can be controlled ,eliminated , banned in the blink of an eye.You can’t hold one , hide it bury it carry it with you anonymously, it’s a fad.When confidence is shaken by any one of the above or something else occurs (myriad things can go wrong)a rush to see will be epic.I got in early made and got out, simples.

    • Virginia in Eastern Oregon | August 20, 2017 at 2:45 pm | Reply

      Thanks, Shane, I have been wondering about the Crypto energy costs.
      Certain gold coins must be in short supply, at least. Bought some 1/10 oz. American eagles in 2010 when gold was around $1340/oz. Buyback price is now more than I paid then with gold $50 lower.

  3. You do great work Steve, much appreciated. Yes there are many conspiracies out there and strangely enough I have a hard time listening to Bix Weir. Bix can come across as sounding very intelligent but when he says California has “millions of tons” of gold I have to question his sanity, hence you now know where so much of these conspiracies originate. Why does he go out on such a limb?

    • Jeffrey,

      I have no idea. I have corresponded with Bix in the past and he just won’t consider the FACTS. Furthermore, I am a bit troubled by the supposed Web-Bot expert, Clif High, who agrees with some of Bix’s outlandish gold conspiracies.

      steve

      • How much silver has been used up?

        • Scott Benzing,

          Quite a bit of silver has been consumed via Industrial Usage. According to the best sources, there are approximately 2.6 billion oz of investment silver in the world versus 2.2 billion oz of gold. So, there really isn’t that much more silver in investment form than gold.

          steve

  4. It is confusing and difficult to compare the amount of gold mined and silver mined when you measure gold in metric tonnes and silver by the ounce. If you use the same metrics of comparison it would be easier to grasp the difference between the two metals.

    • Dan,

      Yes, it becomes difficult when production amounts are shown in two different figures. Unfortunately, this is the way the it is done in the industry. I provided additional information on why I published the figures in million oz and metric tons:

      NOTE: I did not convert the gold chart to million oz because world production figures are normally reported in metric tons. Furthermore, the accounting of total gold holdings are also published in metric tons.

      I also added the following:

      1 metric ton = 32,150 oz.

      steve

  5. question….since silver is used in so much technology today, wouldn’t one consider the Corporations and Wall Street as the ones who are keeping the price so low, and make their hefty profits holding shares of these corporations? who cares whether they make it holding gold,silver in physical form or shares from the coroporations that use silver..ie APPLE?

    • MICHAEL,

      You bring up a good point. However, the price of silver is being traded close to its cost of production. The same with gold, copper, zinc and lead. However, gold and silver should be valued differently because they have not only been monetary metals in the past, they are the top two INVESTMENT METALS.

      The Fed and Central Banks have propped up STOCKS, BONDS & REAL ESTATE because this is where 99% of investors have their money. Furthermore, the Government gets a great deal of its tax revenue from STOCKS, BONDS & REAL ESTATE. In addition, Federal Income Tax is supported by a healthy rising economy or at least rising asset prices.

      So, it has been the focus of the Fed & Central Banks to prop up these assets while it keeps the value of gold and silver tied to their cost of production, rather than their TRUE STORE OF VALUE or WEALTH properties.

      This will all change when the Energy Industry disintegrates.

      steve

  6. Richard L Shropshire | August 20, 2017 at 1:23 am | Reply

    From your conversion factor, it looks like the ratio Ag to Au current production is approx. 7.8:1.

    • Richard Shropshire,

      Yes… if we consider all gold and silver production since 1900, it is closer to the 8 to 1 ratio. However, the more recent figures of 890 million oz of silver production versus 103 million oz of gold, turns out to be 8.64 to 1. So, I rounded it up to 9 to 1.

      Either way, we can still plainly see that it is impossible for the world to produce 1 million tons of gold versus 1.5 million tons of silver since 1493.

      steve

  7. Geeze Steve. Must we wait for the energy industry to crash? Some predictions put that out to 2050+. Your friend Tom Cloud said we’ll run out of silver by 2020. Is he to be believed? You see the problem? All of you article writers are smart, with data to back up your statements, but for the average guy like me, whom should I believe?

    • Joe, you have brains do you? We aint gonna throw you the fish. You should learn fishing yourselves.

      Enjoy life, read, talk, look. And prepare, save, step by step. Its life. Its great, until its not.

  8. That 175000 +/- estimate has been around for maybe 10-15 years. So at 2500 +/- Tons per year of production, we might want to update the total to around 200000 tons. Otherwise I agree with you completely. In ancient times there were a LOT fewer people, and yet they were digging up millions of Tons of Gold??? When did they have time to plant crops and build pyramids?

    • Ed,

      Correct. However, my analysis only provides world gold production from 1493-2016. If we include gold production prior to that time period, then the estimates are something closer to 187,000 metric tons.

      However, I have stated that it could be closer to 200,000 metric tons. Either way… there is no way the world has produced anything close to 1-2 million tons.

      steve

  9. I seem to have missed something in this article. It’s obvious you don’t think 1;2 million tons of gold remain on the planet not yet mined of did i get that wrong?) So, in order to gauge three absurdity of worthiness of the claim, I need to know what your estimate is for the amount of gold remaining? This help me determine the value of your judgment and the worth to me of your newsletter. Tks!

    • Al Mitchera,

      You bring up a good point about remaining reserves. However, the global gold reserve figure depends on your understanding of the U.S. and Global oil industry and the negative impact of the Falling EROI – Energy Returned On Investment. We can prove up millions of tons of gold in the ground, however, we still have to extract it.

      According to the USGS, the world has approximately 57,000 metric tons of Gold Reserves. These are reserves… not resources. Resources are not currently economic. When the gold price increases significantly, then more gold reserves would be available.

      Unfortunately, I see serious trouble with the Global Energy Industry within the next 5-10 years. So, we may only be able to extract a portion of remaining booked reserves.

      If you are new to this blog, then I gather you are not fimilar with my work on ENERGY and the FALLING EROI. These are the main factors that will impact everything going forward.

      steve

  10. Virginia. In eastern Oregon | August 20, 2017 at 10:48 pm | Reply

    Steven Leeb has an article at kingworldnews.com discussing China, bitcoin mining and gold backed crypto currency. Evidenty China has very low energy cost due to hydropower. Majority of bitcoin mining done there.

  11. Gold and silver is not going anywhere until JP Morgan wants to. Let’s face it, JPM and the other bank cartels own the silver and gold market and they can do whatever they want with the price. When they will let go of their naked shorts, they will go Long and make profit as well, but that may happen 20 years or 30 years from now lol.
    The doom, gloom and doom is getting old and very boring as I might say. I lost a lot in silver and gold and not funny at all. There are a lot of other things in life to enjoy and wish lots of luck to everyone here hoping that your conspiracy dreams come true.

  12. cueris from canada | August 22, 2017 at 5:40 am | Reply

    Very interesting article and comments! It’s amazing how difficult it can be to find a solid answer to such a basic question – how much precious metals exist in the world? If the total for gold is aprox 190 thousand tonnes above ground and aprox 60 thousand tonnes below ground, can you also provide an estimate for how much silver exists below ground? This is important because of silver’s vital importance to industry. Pricing it very low implies it can be thrown away, as new supply is endless. Pricing it much higher would mean it is a precious commodity and must be conserved and recycled. So, how much silver is left in the world to be mined at very low prices? And, also, what price would it take to have all silver recycled (so that the world’s supply could not run dry)?

  13. More of the same.
    Misinformation.

    It does not matter how much gold or silver there is in the world.
    It is the value and need for such metals.

    2500 years of appreciable growth in value must gauge gold at least $3500USD and silver at $800USD and still appreciating.

    • @Rafael, I agree with you, but unfortunately the bank cartels keep depressing prices. Silver should be at least 1/10 the price of gold, but since JP Morgan bought the failed Bear Stearns in 2008, they control the silver market and wish to put whatever price they desire. This is really sickening and our crooked government is colluding with them. One day, all this will all end, but I might be dead of old age by then.

  14. Roger Lagerfeldt | September 2, 2017 at 4:22 am | Reply

    As long US can borrow money for free,,and print to pay. FED will do everything to keep silver/gold down ,especially silver because. China and Russia buys gold

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