So I buy into the 80/20 rule. That is thatb80% of the wealth is controlled by 20% of the world. I have done the calculations to determine what a person would need to own to be in that 20% for gold and silver but the numbers seem off to me. So I was wondering if someone would do the calculations also to see how close to mine. I come up with 3.5oz of gold and 40oz of silver. Thanks for the thoughts.
The gold to silver ratio is currently 75.94 . (You can buy 75oz of silver for every 1oz gold) Not sure what your strategy is - but with a GSR ratio like this, I would personally be choosing far more silver than gold. Something like holding 1oz gold for every 75-100oz silver owned is pretty balanced ((in my opinion)). BUT HONESTLY - holding ANY amount of gold and silver puts you ahead of 95%+ of the population. People are having a very hard time saving these days. Gold & silver just make sense as a hedge against inevitable inflation. Keep stacking those OZ!
+1 Very well said, I have a similar view. It's basically half your money into gold and half into silver which equals the ratio. Overtime we have seen above a ratio 60:1 favors silver, below 40:1 favor gold. But, that does not mean it will always be the case in the future. At this point you have to consider how old you are... the older, the more gold. The younger the more silver. Also it depends on how much you are investing.
I believe the question is what is the total number of grams of gold and silver above ground per person in the world and how much you would have to own to get into the section of people in the top 20%. Unfortunately that doesn't really work for gold and silver the way it works for fiat currency since the major holders are central banks and a very few institutions. The 80/20 rule really isn't representative of the PM situation. If course it isn't really representative of the currency situation either, I think you'd find the figures much more skewed towards the high net worth individuals.
Interesting question! Here's my analysis: Lets say total above ground gold is 170000000 kg And the global population is 7200000000 people Then 20% of global population is: 1440000000 people And 80% of global gold reserve is: 136000000 kg Therefore, The Gold holding for the top 20% of the population is: 0.09444 kg/person, assuming an even distribution Which is equivalent to: 94.44 grams -------- Looking at that from being in the "top" 1% of the global population perspective... Lets say total above ground gold is 170000000 kg And Global population is 7200000000 people Then 1% of global population is: 72000000 people And 80% of global gold reserves is: 136000000 kg Therefore, Gold holding for top 1% of the population is: 1.89 kg/person, assuming an even distribution Which is equivalent to: 1888.89 grams
Stop worrying about the math. Worry about a world that has rediculous fiat currencies that have "No" back-up except for a printing press. Todays fiat is based on nothing! There's no gold standard, there's nothing to make countries accountable for the money they print and...to be honest... to "not" own, platinum, gold or silver in a world sit like we have is just dang silly. Sure...it's difficult to find the bottom and of course there are those who buy and average down. That's not a good idea if you already have a few ounces. Just look at the USD. Look at the charts and tell me if there is a substantial break-out??? There isn't. Greece is no different to Spain, Portugal, Ireland or Italy, they all owe massive debt to countries who also have debt. Broke countires lending to broke countries that are part of a broke union. And...who is going to invest in Europe when there's every chance of an EU melt down? Where will the money flow to? China...nope...they are due for a massive realesate correction. So...rule out, Europe, China, Australia (The quarry of the world) and all you have left is the good old USA which is in debt to their fing eye balls, but they can print and print and print until they print away their and the worlds wealth. They...The USA are broke and it was only last year that congress passed BS to allow more money to be printed just so that the defence force and gov could be paid. Truly...anyone who thinks the world is a great place at the moment or you are all thinking you are "Investors" think again! Sure...we all try to pick the bottom to buy a bit of metal but...there are no geniuses on this forum but there are those who are intelligent. After the next run-up...have a look at the world debt and...ask yourself what will happen? Ask your self...how and where will I put my life savings and if you feel ill or have butterflies or are just absolutely dumb founded...I ask you this? How will you save your wealth? The answer is...history! Hard assets!
Thank you Critical for verifying my math. I understand that the majority of gold is held by banks and the ultra elite. The concept I was pointing out is how easily it is currently to get yourself into that top 20% group. In other words if someone said hey I want a list of the people that own 80% of the gold in the world. If you own 4 oz your name would be on that list. (that is a crazy thought to me). So, even if a bank owns 900 million oz of gold and I own a measly 4 oz of gold. My name still shows up on that list. I would be very curious as to if someone could verify my math on the silver side as well. Just for clarification I am not trying to debate a GSR.
Around half of the world population earns less than 2$ a day, why are you surprised that 80% might not have even a gram of gold?
I mainly wanted to try and find flaws in my train of thought. Your comment doesn't help sway my point it solidifies it more in my mind. So, assume that 1/2 the population of the world is out of the equation. It now only means 7 oz of gold would get my name on the top 20% wealthiest people if we went back to a gold based monetary system. My point again is that 7 oz while twice as hard to obtain as 3.5 oz is still very attainable. I again find it interesting and wonder if any one thinks critical or my number is an inaccurate guess of the number? I also found it interesting that it required significantly less silver to achieve the same goal than what I would have speculated. This is assuming no one shows my numbers to be off base.
I can tell you right now what the flaw in your argument is. Gold is not a measure of wealth You could have 1000 ozt of gold and still not be anywhere near the top 20% of wealthy. Wealth is determined by the amount of fiat you have , and even more so the amount of fiat you have once converted into USD. If gold was a measure of wealth then it would not be mined and sold, it would be mined and held
Very interesting thought process. I think you are spot on. I want to make sure I understand what you are saying. Gold can not determine wealth. Fiat is the only thing that can determine wealth. Gold can be a storage of wealth much like anything else of value can but owning those things of value do not make you wealthy. What makes you indeed wealthy would then be having assets that produce fiat. So, with that train of thought the goal for someone would be to develop assets that could buy these storages of wealth first. In other words focusing on fiat producing assets and using that fiat to buy storages of wealth would be a smarter move than buying the storages of wealth prior to having the fiat producing assets.
That depends on what you think is currently undervalued, overvalued, or fair value. Could be any combination: Gold is OVERvalued, Silver is OVERvalued Gold is UNDERvalued, Silver is UNDERvalued Gold is FAIRvalued, Silver is FAIRvalued Gold is FAIRvalued, Silver is UNDERvalued Gold is FAIR valued, Silver is OVERvalued ... and all the other combinations. You could be in silver and the GSR could plummet, but silver could still go nowhere (or even down as well!), in which cash you'd be better off in cash or something else if the GSR plummets in that way. And likewise any other combination. Instinct might say a high GSR means it's safer in silver but that doesn't have to be the case
Maybe this would apply to jewellery. Ie to be in the top 20% your wife should have over Xxx oz of gold jewellery in her jewellery box. The question then is what is the total weight of gold jewellery in the world? Which means: A) get a wife B) buy her more jewellery so you can show the poor 80% that you are better than they are. ...
Correct. One of the problems with PM's is that they don't produce any income for you. Even cash produces at least some compounded interest. Just like cash, PM's, are also fairly useless at getting you a line of credit. e.g. an investment loan. So if you are looking at using your PM store of wealth to build more wealth by way of investment loans, banks only care about what regular income you have in order to service the loan. They don't really care is you have $100k of metals sitting in a SDB, they may as well not even exist.
A bit everywhere, like here: https://en.m.wikipedia.org/wiki/Poverty_line I've read somewhere that 80% of the world population may be living with less than 10$ a day. Good luck buying gold in those conditions, and even if they had some (like family jewellery) they would have sold it already. Edit: like here: http://www.globalissues.org/article/26/poverty-facts-and-stats Oh... Most probably those people don't even know what a McChicken is (maybe this is the only positive thing for them)
