Throughout history there have been many opportunities to hoard natural resources such as gold, silver, etc.
Supposing someone was slowly, or quickly, cashing that out, do we have a way of detecting it?
For example, does the total amount of gold liquidity increase faster than some market benchmark measuring public sentiment towards holding onto gold.
And yet nevertheless, the total amount of accounted for gold is not closely tracked somehow.
Alternately, have geologists estimated how much gold has been available to mine, versus how much has been known to have been mined, versus how much gold is known to be held. And are these figures in correspondence?
In other words, in say the last century, has the known amount of gold risen faster than we’ve mined it? The answer MUST be yes. The question then is, by how much?
I’m not clear why you think it might be important if long-hoarded gold was being sold off. Is it going to cause harm?
The “market benchmark measuring public sentiment towards holding onto gold” is the price of gold, surely. Which went up noticeably earlier this year, and which so far seems to be staying near that higher level. I have no proof of why the price of gold went up (although I have opinions), but one common reason would be perceived scarcity of the substance relative to need, which would be the opposite of someone selling off their secret hoard. It would be more like someone buying up gold to enlarge their hoard.
If someone profits from selling gold at a higher price than they acquired it, that’s pretty much the nature of trade. There’s no functional difference in the market whether they’ve held the gold for a week or a decade.
To answer your question, my considered but untutored opinion is that no, we would not be able to detect an increase in the quantity of gold available, except insofar as it affected the price of gold itself, and the price fluctuations of gold are caused by so many factors that I doubt one could be pinpointed accurately.
The “known amount of gold” could mean a lot of things, but I’d suspect that the “total amount of gold liquidity” would on average increase slower than the rate at which we’ve mined it: some gold is used in uses other than trade, and some of that will not be recoverable. (This is of course separate from the issue of people willing to put the gold on the market, which RF has addressed.)
Does not answer the question posed but India holds the largest amount of gold within its borders mainly in the homes of its billion plus residents and the vastly rich temple complexes. This amount of gold accumulated in hundreds of years will never be counted in any future planned measurement as per the OP.
However, I am in disbelief at how little gold has been accounted for. If you generalize that intuition across all valuable minerals and their total supply, we could easily be looking at their total amount being twice what has been reported. Yes, that could absolutely cause harm, especially if one person or group had managed to stockpile it over hundreds of years.
Does not answer the question posed but India holds the largest amount of gold within its borders mainly in the homes of its billion plus residents and the vastly rich temple complexes. This amount of gold accumulated in hundreds of years will never be counted in any future planned measurement as per the OP.
There’s also gold used for industrial purposes which enters the market by being sold as scrap and melted down.
But I agree with Roderick Femm: There’s just nothing all that important about gold. It’s a commodity like crude oil and stainless steel, and it gets traded and priced the same way. If someone, somehow were to dump a massive reserve of gold into the market, the price would drop and the economy would keep on moving the same as ever, perhaps with a few annoyed commodities traders.
(I’d say the goldbugs would be put out, but the goldbugs are the ones who are convinced gold is the sovereign store of value so they don’t understand that its price can fluctuate. They’d interpret gold suddenly becoming cheaper as everything else suddenly becoming more expensive, and crow about their foresight in holding the one true asset.)
There is another reason I am interested in the topic which is that we have managed to produce gold in nuclear reactors, and I believe it is laser technology, specifically IIRC the speed with which we can oscillate the laser off and on, that only needs to increase by a reasonable number of orders of magnitude before we can transmute into gold that is undetectable from naturally occurring gold, crashing the market. In fact, the fact that we will one day be able to do this ought to crash the gold market now.
What harm would it cause? If I have a few hundred tonnes of the stuff buried away somewhere, how would that cause any real harm? Sure, if I started to dump it on the market, the price would drop and some speculators would lose a lot of money - who really cares?
If we have established that we can’t account for how much gold there is, then we’ve also established that if it is leaked onto the market, money is effectively being printed out of gold reserves. The price doesn’t drop because the sale is undetectable. This is, in a way, analogous to the illiquidity of gold in ie Ft. Knox. If that money is not liquid, then it’s kind of like the Queen of England: you can’t prove it has any power over the real world whatsoever because it never uses that power.
In sum, I might argue here that a gold standard simply does not exist. That seems to be based on the idea above that we will never be able to know how much gold there is. How can that possibly serve as a standard?
It seems to follow that money, while perhaps not worthless, has no real measurable basis. Any basis it has is in some bizarre measure of the economy that is ephemeral - changing moment by moment on a whim, with no known characteristic measures.
If and when we have enough cheap energy to crash the gold market using reactors, we’ll have enough cheap energy to completely and utterly reshape the economy in so many ways humanity itself will become transmuted, a sea change the likes of which we haven’t seen since the widespread adoption of agriculture. Possibly even more profound, since we’d have large-scale space travel and completely ubiquitous computing and nth-generation cyborg augmentation as well.
In short: We’d be most of the way to The Culture and you’re worried about shiny rocks.
This was one of the things that got me about the Harry Potter universe.
Supposedly the wizards at Hogwarts would conjure up gold and sell it to the muggles for food and ordinary items because the wizards didnt produce food or anything else. You would think that after awhile some bank examiner would start wondering where all the gold was coming from.
This is exactly backwards. Gold bugs know very well how the price of gold can fluctuate, otherwise they wouldn’t trade in it. And if gold becomes cheaper, a gold bug has less value in his hoard than before, not more. The value of the gold is not what you can buy it for, but what you can sell it for.
You seem to be confused about the current relationship between gold and currency. Gold is a commodity and is not the basis for the value of fiat currency in any country in the world (I believe, anyway certainly not any country of any economic importance). The gold in Fort Knox is, in my opinion, strictly symbolic these days, and the only practical result of the US selling it off would be a depression in the price of gold, and some additional dollars for the US treasury (not enough to solve any of our problems, probably).
Both gold and fiat money have “value” only by consensus. With gold, there are significant industrial uses, but not nearly enough to account for its current price; therefore the extra value is based on people’s desire to own it, above and beyond its practical uses. Fiat money has value only through confidence in the government’s willingness and ability to maintain the conditions where that value will last over time.