God and Gold have been with us from the earliest of time and both connote power. Even The Bible in Genesis mentions this precious element. Gold was sacred in what today are Iraq and Iran 7000 years ago, and till today remains as the universal standard of trade. It says something that the Aztec word for gold, is teocuitlatl, meaning excrement of the gods. At least one society had it right, or at least a sense of humor.
The first Gold Rush in the U.S. occurred—no not San Francisco—but in the State of Georgia. That was in 1828, with the last frenzy occurring along the Klondike River in Canada during the end of the 19th Century. Centuries before Columbus, though, the Incas and Aztecs refined goal, leading to the mythical Lost City of Gold, El Dorado, which hasn’t been found, yet. Then there is the tale of General Tomoyuki Yamashita, who commanded the Japanese army in the Philippines during World War II. It is said that he buried gold worth many tens of billion dollars. The American CIA, Emperor Hirohito and Ferdinand Marcos weave into the intrigue. Much of gold lore has been well mined by the media.
Gold has the atomic number 79, does not corrode and is the most malleable and ductile of metals. The density of gold is twenty times that of water and almost double of lead. One pound can be drawn into 50 miles of 5 micrometer (one-tenth that of human hair) diameter wire. When beaten into a thin sheet, the translucent color is greenish blue, and in glass imparts an intense red color. Placed in nitric acid…nothing happens. This was early on referred to as the acid test. A liquid suspension treats rheumatoid arthritis, for this element somehow acts as an anti-inflammatory. Contrary to popular scientific opinion, base metal can be transformed into gold, as in the natural process of particle accelerators or nuclear reactors. John Bockris insisted he did (see his religion section).
The measurement of gold is arcane. Read the following only with trepidation:
o One troy ounce (toz) = 1.097 ordinary or avoirdupois ounce = 480 grains = 31.1 grams.
o There is also the tael, a Chinese measurement of gold, where one tael is 1.2 ounce. Thus, one tael has about 10% more gold than one toz, which has about 10% more gold than one ounce.
o Further, 24 karat represents 100% (really, 99.9%) gold, making 18 karat only 75% gold, but this is popular in jewelry because the other metals make the piece stronger.
o Finally, the carat (note, this starts with a c) applies to gems like diamonds, where 1 carat = about 0.2 gram. Thus, a 5 carat diamond weighs about a gram. A 24 karat gold bar has a value depending on the weight.
o For the record, platinum is about twice as expensive as gold. (Well, that was true when this book was written. As of the end of 2009, platinum is now only about 30% more expensive than gold.)
o Anyway, gold is measured in toz, except, to further confuse you, it might still be referred to as oz, although they really mean toz, unless they don't know what they mean or are trying to trick you.
The price of gold was maintained at $19.39/toz from 1800 until:
○ 1814, when it jumped a few dollars, but returned to
○ $19.39 in 1817, spiked to
○ $57 in 1864, dropping to
○ $20.67 in 1878, jerking upwards to
○ $35 in 1934, when the U.S. Congress devalued the dollar, holding steady at
○ $35-$44 until 1971 when the price floated upwards when President Richard Nixon ended U.S. dollar convertibility to gold, until it reached an all-time high of
○ $850 on January 21, 1980, when the Soviet Union invaded Afghanistan and the Islamic Revolution occurred in Iran, then further to $875, but declining to the
○ $300-$700 range over the next quarter century, until there was a spike to
○ $730 in 2006, floating up into the
○ $800/oz realm in 2007
○ $900+ in 2008 and up to $1226 this year.
The scary part about ($1226)/toz gold is that knowledgeable people buy this precious metal in anticipation of a severe economic downturn. In 2008, with rising unemployment, a continuing downturn in the housing market, malfeasance of a French trader and growing car repossessions, plus the prospects of Peak Oil and Global Heating, one can only hope that the R (recession, which occurs about every 6 years when the stock market drops by about 25%, with the previous one being after 9/11) word does not become a D (depression, and there have been six since record keeping began in 1867, with 1937-8 being the previous D). Of course, the Federal Reserve System and congressional stimulus packages will help to forestall the economic downturn, but the combined pressure of all the above will not be overcome. (The Great Recession occurred after this section was written.)
I thought $800/toz would do it, but $900/toz is ominous. Of course, compared to the $875/toz peak of 1980, which today, would have a value of $2,250, this is certainly not monumental. However, the year 2012 is, indeed, looming as a fateful year, especially if the value of gold continues rising.
Approximately a fourth to a third of the known gold is kept in the Federal Reserve Bank of New York, having a rough value of $250 billion today. The U.S. Geological Survey says that there are about 160,000 tons (a little more than 5 billion troy ounces) of gold circulating today, but the ocean has 10,000,000,000 tons.
While sprinkled on fine cuisine and flaked in sake, it nevertheless can be toxic to the human body. Bacteria might well be responsible for concentrating this metal into veins. All the mined goal can be shaped into a 20 meter (66 feet on each side) cube and a ton of gold would be about 37 centimeters (1 foot three inches) on each side. Most of gold today comes from South Africa. Three parts per billion of the Earth’s crust is gold, while the ocean is at one-tenth part per billion, and could well someday become a major source of this precious metal.
There is a richness and a sacredness associated with gold. Thus, the ultimate Golden Evolution might well be a religious one.
The Dow Jones Industrials struggled up 4 to 10,469, while world markets also all went up. The Japan Nikkei is at 10,378. Gold increased $2/toz to $1089 and crude oil is at $76/barrel.
Tropical Cyclone David at 55 MPH seems now headed straight for Mauritius, but should weaken over the next few days.