04-15-2023, 09:01 AM
Is $2000 too much for gold? It isn't, as one simple measure shows.
<!-- SC_OFF --><div class="md"><p>What happens if we divide all the dollars in the world by all the gold in the world?</p> <p>For all the dollars in the world, let's take the M2 Monetary Aggregate, and for all the gold in the world, let's consider the total above-ground stocks.</p> <p><a href="https://preview.redd.it/s3swmi3zfuta1.jpg?width=1186&format=pjpg&auto=webp&v=enabled&s=f6009db5cda2676672e276d0421119afbfe4389e">You can check the chart here.</a></p> <p>According to the World Gold Council's estimate, from the dawn of human history through the end of 2022, approximately 208,874 tonnes (or about 6.717 billion troy ounces) of gold had been mined.</p> <p>At the end of December, M2 amounted to $21,315 billion. Simple division gives us $3,173.39 per ounce. Let's call this the universal gold price.</p> <p>Interestingly, from 2009 to 2012, the universal and real gold prices were much closer. But Quantitative Easing has widened the gap.</p> <p>So would it be a big surprise if, due to a rise in the real price of gold, the gap narrows further?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/bitkogan"> /u/bitkogan </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/12lwctb/is_2000_too_much_for_gold_it_isnt_as_one_simple/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/12lwctb/is_2000_too_much_for_gold_it_isnt_as_one_simple/">[comments]</a></span>
<!-- SC_OFF --><div class="md"><p>What happens if we divide all the dollars in the world by all the gold in the world?</p> <p>For all the dollars in the world, let's take the M2 Monetary Aggregate, and for all the gold in the world, let's consider the total above-ground stocks.</p> <p><a href="https://preview.redd.it/s3swmi3zfuta1.jpg?width=1186&format=pjpg&auto=webp&v=enabled&s=f6009db5cda2676672e276d0421119afbfe4389e">You can check the chart here.</a></p> <p>According to the World Gold Council's estimate, from the dawn of human history through the end of 2022, approximately 208,874 tonnes (or about 6.717 billion troy ounces) of gold had been mined.</p> <p>At the end of December, M2 amounted to $21,315 billion. Simple division gives us $3,173.39 per ounce. Let's call this the universal gold price.</p> <p>Interestingly, from 2009 to 2012, the universal and real gold prices were much closer. But Quantitative Easing has widened the gap.</p> <p>So would it be a big surprise if, due to a rise in the real price of gold, the gap narrows further?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/bitkogan"> /u/bitkogan </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/12lwctb/is_2000_too_much_for_gold_it_isnt_as_one_simple/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/12lwctb/is_2000_too_much_for_gold_it_isnt_as_one_simple/">[comments]</a></span>