Part 1: The World’s Cumulative Gold and Silver Production By David
Zurbuchen Free Silver Stock Investment Newsletter This
is the first installment of a planned 7-part series: Part
1 – The World’s Cumulative Silver and Gold Production. Documenting the total
amount of silver and gold produced since recorded history. Part 2 – The Silver Deficit. Documenting
the silver production/consumption deficit since 1939. Part 3 – The Real Silver Deficit. Answering the
questions of “How much silver has been consumed by industry?” and “In what
potentially marketable accessible forms does it remain?” Part
4 – The Illogical Performance of the Gold to Silver ratio Since
1848. Looking at silver and gold’s production growth since 1848,
and contrasting both this measurement and that of
their shrinking ratio of comparative rarity to the ever-widening market price
ratio between the two. Part
5 – Why the Depressed Prices? A brief look
at the amount of silver stockpiles held in the early 1900’s, as well as some
interesting quotes dating back several decades that made the bullish case for
silver, unwittingly or not. Part
6 – What Happened in 1980? Did production
increase? Did extraordinary amounts of
scrap silver come to market? -- What to expect in any future stratospheric
price rise. Part 7 – The Future of Silver. An overview of silver’s fundamentals, focusing in on industrial usage and it’s growing number of applications. Also included will be my own short and
long-term outlook, together with price predictions for 2006 and beyond. Preface I’m a relatively new
face in the gold and silver bug community, and while attempting to conduct
research of my own I found it frustrating that there did not seem to be any
sort of comprehensive data source dealing with the subjects of silver and gold
production and consumption. In an effort
to change this, I’ve spent several hundred hours this past month perusing
through thousands of pages of documents (namely, the Minerals Yearbooks (1933-2004)).
It is my hope that this series of articles will serve as reliable
reference material for all future writers, researchers, believers and skeptics,
saving them all much time and effort better spent breaking new ground in the
ever thickening plot behind… Those precious two, Of gold and
silver hue, “You missed
them too?” “Boy, how they flew!” Cumulative World Silver Production Source 1 USGS ( http://pubs.usgs.gov/of/2004/1251/2004-1251.pdf “Total silver
production from pre-history till 2001 is estimated by the U.S. Geological
Survey (USGS) to have been about 1.26 million metric tons (Mt), one half of
which was mined in the last 62 year period.” (Page 8) 1.26 Mt x 32,150.75 ounces/ton = 40.51 billion ounces + 2.46 billion (production from 2001-2005) = 42.97 billion
ounces Cumulative Silver Production = 42.97 billion ounces
Source
2 (multiple) The History of Silver (3000BC-1493AD)
Bureau of Mines Minerals
Yearbook (1493-1930) (Billions of Ounces)
Bureau of
Mines Minerals Yearbook
(1931-1993) The
Silver Institute (1995-2004) (millions of ounces)
*Free World: In the years
1939-1991, total world production numbers are not exact in nature due to a lack
of data coming from the communist world: ¨ Listed in order of estimated silver production, the Communist World consisted of: U.S.S.R, ¨ ¨ ¨ ¨ ¨ Beginning in 1991 All these numbers are
added to the above total, I just wanted to make this issue more clear. In truth, I wouldn’t be surprised if the
above world cumulative total should actually be a little less due to a possible
over estimation of communist Compiling All of the Above Data…
Cumulative Silver Production = 47.64 billion
ounces Source 3 (multiple)From: “Silver
Products and Production”. Encyclopedia Britannica, 1974 Ed.
“Total world
production up to 1970 was just under 30 billion
accumulated ounces.” (Let’s use 29.5B) If we add to this the 15.25B ounces that were produced since then
(1970-2004) based upon the data from Source 2 then… Cumulative Silver Production = 44.75 billion
ounces Source 4 (multiple) The History of Silver (3000BC-1492)
Continuing
from The
History of Silver (1493-1900)
United States Geological
Survey (USGS) Data (Link) The Silver Institute (1995-2004)
Compiling All of the Above…
Cumulative Silver Production = 48.87 billion
ounces Source 5: Marion Butler estimated in 1999 (Link) that a total of 40.4 Billion ounces of
silver had been produced since 3000BC.
If you add to this the amount of silver produced between 1999 and 2004
(3.05B) you get… Cumulative Silver Production = 43.50 billion
ounces A Complete Summation of the Silver Data
Average Cumulative World Silver Production
= 45.546 billion ounces Cumulative
World Gold Production
http://minerals.usgs.gov/minerals/pubs/usbmmyb.html Pg. 88 Minerals Yearbook 1942 “Normally, 5 to 10 percent of world gold output is
consumed by industry; the remaining 90 to 95 percent is used for monetary
purposes.” http://minerals.usgs.gov/minerals/pubs/commodity/gold/
(Look under: Mineral Commodity Summary) “Of the estimated
150,000 tons of all gold ever mined, about 15%
is thought to have been lost, used in dissipative industrial uses, or otherwise
was unrecoverable or unaccounted for.” Therefore,
the average amount of gold consumed by industry or lost = 11.25% based upon the above sources. Source 1 provides it’s own percentage of attrition (i.e. lost gold), so this
value of 11.24% will only be used to evaluate Sources 2 and 3. Source 1 (multiple): Click HERE
to View the Pie Chart From Above Chart (Link): “113,571 tonnes
historical production less 10,854 total attrition = 107,717 tonnes.” (Year-end 1996) Below: Production numbers obtained from http://www.dailyfutures.com/metals/
107,717 tonnes x 32,150.75 ounces/tonne = 3.4632 billion ounces 3.4632 billion ounces + (651.7 million ounces x 90.846%%*) = 4.06 billion ounces *100% - 9.154%
attrition (calculated from the text within the above pie chart). Cumulative Gold Production = 4.06 billion ounces Source 2: http://www.gold.org/value/markets/supply_demand/mine_production.html “The best estimates available suggest that the total volume of gold mined over history is approximately 153,000 tonnes, of which around 63% has been mined since 1950. The upward trend in annual production is now leveling off, due not least to a considerable slowdown in exploration spending in the late 1990s. Independent analysts are of the belief that mine output will remain flat for the next few years and may even drop slightly.” (Year-end 2004) 153,000 tonnes x 32,150.75 ounces/ton x .8875* = 4.37 billion ounces *100% - 11.25%
attrition. Cumulative Gold Production = 4.37 billion ounces Source 3:
http://minerals.usgs.gov/minerals/pubs/commodity/gold/gold_mcs05.pdf “Of the estimated 150,000 tons of all gold ever mined, about 15% is thought to have been lost, used in dissapative industrial uses, or otherwise was unrecoverable or unaccounted for. Of the remaining 128,000 tons, central banks hold an estimated 32,000 tons as official stocks, and about 96,000 tons is held privately in coin, bullion, or jewelry.” (Year-end 2004) 150,000 x 32,150.75
ounces/ton x .8875 = 4.28 billion ounces Cumulative Gold Production =
4.28 billion ounces Source 4 (multiple): From: http://www.gold.org/discover/knowledge/aboutgold/gold_prod/index.html “World production at
this time climbed to 280 tonnes in 1852 and thence to
almost 300 tonnes as
Minerals Yearbook 1932-1933
USGS Data
(1933-2002)
GFMS Data (2003-2004)
Since an estimated
90% of all the gold ever mined was mined after 1848 (Gold History): 4.36485 billion ounces/.90 = 4.8498 billion ounces x .8875 = 4.30
billion ounces Cumulative Gold Production =
4.30 billion ounces A Complete Summation of the Gold
Data
Average Cumulative World Gold Production = 4.25 billion ounces Ratios: What Nonsense they RevealWe’ll deal more
extensively with the silver to gold ratio in Part 4 of this series, but
just for fun let’s find out what the ratio is in terms of the total amount of
silver and gold ever mined in the history of the world: 44.55 billion ounces
of silver/ 4.25 billion ounces of gold = a
10.5 to 1 ratio Hmmm…This says nothing of the silver deficit and yet the ratio already reveals that at today’s prices ($9/ounce vs. $540/ounce) silver trades at an 82.5% discount to gold, or conversely, it could be said that gold is overvalued by about 570% in terms of silver. Of the two ways of looking at the comparative price, I’ll most certainly choose the former as I believe both silver and gold will be going up wildly in price in the coming years. Most would agree that neither gold nor silver is overvalued in terms of the dollar, so the only way to look at this situation is to say that silver is undervalued in terms of the dollar and gold. This means that I expect silver to far outperform any gains seen in the price of gold, even if gold doubles or triples in price within these next 2 years. The ratio will shrink, and silver will rise much faster, drawn up, as if by a vacuum in space, a vacuum created by the long-term market manipulation, short selling, and government dishoarding. Don’t believe
me? Well then, you’ll just have to wait
until next time when we’ll be stumbling into the “Silver Zone”, and taking a
much closer look at the much-lauded silver
deficit. Contact: david@silverinscripture.com I offer a FREE Silver
Stock Investment Newsletter for which you are invited to subscribe. At present, there are over 850 subscribers
from 25 different countries. To join,
please visit: www.silverinscripture.com
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