Putting It In Perspective: In 2013 The Fed Will Conjure Enough Paper Money To Buy 11% Of All Existing Gold

Tyler Durden's picture

When people throw around "trillions" (and in the case of Yen-denominated Japanese debt and/or total outstanding gross derivatives, quadrillions) with the facility that mere billions was being dispensed with as recently as 5 years ago, it is easy to lose sight of the big picture.

So what is the big picture? Well, recall the following quote from Warren Buffet's letter to investors:

"Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion....You can fondle the cube, but it will not respond."

Gold is now 7% lower, and even when netting incremental mining production in the interim since this letter was written, one can roughly say that the total value of all gold in the world is ~$9 trillion. In other words, in 2013 the Fed, alone, excluding all the other central banks, which as we pointed out earlier is vary naive, will conjure out of thin air enough 1s and 0s, equivalent to $1 trillion, or enough money to buy 11% of all the gold in existence in the world. Add all the other central banks, all of which are now engaged in "unlimited easing", and this number will likely rise to about 20% of total.

In 3 years of unlimited easing, which at this pace looks quite possible, after all all Chairmen have made it clear there will be no end to the global paper printing until 2015, enough electronic money will have been created to buy more than half of all god in existence.

In 5 years? All of it.

So, once again, which is the scarcer commodity?

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JustObserving's picture

All the gold bullion in the world is about 2 billion ounces (best estimate).  Some say 3 trillion ounces.  Others say 1 billion ounces.

2 billion ounces are worth $3.28 billion at current prices.  So the Fed printing $1.02 trillion a year can buy 31.4% of all the available gold bullion in this world.

US debts and unfunded liabilities rise at $8.37 trillion a year - fast enough to buy all the gold bullion in this world every 143 days


ParkAveFlasher's picture

Hey BS, you were right.  I'm begging YOU to sell me your metal.  Name your price.

JustObserving's picture

Perhaps. you can cite a reference instead of pulling out figures out of your ass ("arse" for the english english fans)?  Everyone agrees that about 5.3 billion ounces (upper limit) mined in world history and 40% available as bullion.  That is about 2 billion ounces.  Cite your reference or shut up.

"Official estimates indicate that total world gold production since the beginning of civilization has been 4.97 billion troy ounces"

Wiki says under 5 billion ounces of gold produced in human history

Clowns on Acid's picture

No worries The Fed is going to rehypthecate inflation. Carry on young man, carry on.

That tingle you feel in your legs is just the "Chris Mathews" syndrome. Go buy a can of Obama solar kool aid and it will feel better.

Glass Seagull's picture

Well, that is the plan isn't it? 


Alchemy:  gold produced from something of relatively little value.

Fed conjures digital currency (at almost no cost) to buy gold.

Thus, Fed is an alchemist.

Bastiat009's picture

Soon, buying all existing gold won't requite much money printing. Gold is getting cheaper by the minute and when priced in euro it is getting really really cheap.

The irony is that gold is now cheaper than it was before QE3, let alone QE4 was announced.

And funny how the "media" are only keen on talking about the future, which is by definition unknown, but are totally unable to understand the present of analyze the past.

ekm's picture

I've been saying over and over:

The central banks are CONFISCATING GOLD by buying it.

A. Magnus's picture

Interesting point...and they're also manipulating the price down so they can stack their PMs at will. Where's Ted Bulter with a RICO lawsuit against the Fed when you need him?

mdtrader's picture

It's a shame they will be buying MBS instead.

F. Bastiat's picture

Currency, not money.  Slovenly language leads to slovenly thinking.  Break out - use precise words.

youngman's picture

I think the "they" is the Chinese.....I don´t trust em...they have computers too..they have government backing...they want gold and silver...

fresno dan's picture

The matrix -

Oracle: I'd ask you to sit down, but, you're not going to anyway. And don't worry about the vase.
Neo: What vase?
[Neo turns to look for a vase, and as he does, he knocks over a vase of flowers, which shatters on the floor]
Oracle: That vase.
Neo: I'm sorry...
Oracle: I said don't worry about it. I'll get one of my kids to fix it.
Neo: How did you know?
Oracle: Ohh, what's really going to bake your noodle later on is, would you still have broken it if I hadn't said anything?

The FED can conjure enough money to buy ALL THE GOLD.  At that time, the FED will not be able TO BUY ANY GOLD...


ProtectiveFather's picture

"more than half of all god in existence." Paging Dr. Freud.

cranky-old-geezer's picture



So the Fed could print enouch "money" in one year (one month, or one day), to buy all the above-ground gold in existence. 

Forget the printing press, they could do it in one minute with a few computer keystrokes, and poof, $9 trilllion added to somebody's account.

What do they give the Fed for that $9 trillion?  Just a promise to repay it.  Or some so-called "securities" they printed up on THEIR printing press.

It's just like Monopoly now.  The bank can print "money" and each player can print "securities" to exchange for "money" from the bank.

Ok, not every player, just certain "primary" players. They can print "securities" on their printing press, "sell" them to the bank for freshly printed "money", then go buy real stuff  with it, like all the gold in existence.

The monetary system of the world's #1 superpower is just a game now.  Make-believe "securities" printed on a printing press exchanged for make-believe "money" printed on a printing press, used to buy real things.

Americans might not be able to do anything about it, but it amazes me the rest of the world has put up with it this long. 





Radical Marijuana's picture

Another way of seeing the magnitude of fiat money creation is to ask how many other smaller countries could that buy. For instance, during the last five years, the Fed has created enough money out of nothing to buy everything that could be sold in Canada a few of times. Enough fiat money was made out of nothing to buy a couple of Canadas. Privatized fiat money is simply symbolic robbery. Being able to legally make money out of nothing, while the government forces everyone else to accept that, is astronomically sized fraud. This is a runaway process of the best organized gangs of criminals taking over the government, and using that power to rob and defraud everyone else of everything.

This will probably end in genocidal world war, along with democidal martial law, because the international banksters are systematically destroying every country that has not already been assimilated into their system. To finish that process, it appears they would finally have to try to destroy Russia, etc. ...

cranky-old-geezer's picture



To finish that process, it appears they would finally have to try to destroy Russia, etc. ...

America's make-believe monetary game will come to a sudden embarrassing (and catastrophic) end when east Asia introduces a gold and sliver backed currency.

Or better yet, declares gold & silver as official money.  Currency would still be allowed as long as it's fully redeemable for gold and silver on demand.

That's where America started out.  Gold and silver were the official money.  Currency was allowed as long as it was redeemable for gold and silver on demand.   It was called gold and silver certificates.

East Asia will go back to that system.  When they do, America's make-believe money game will be over, suddenly, embarrassingly, and catastrophically.

And yes they have plenty of thermonuclear backup to thumb their noses at America's make-believe money supporting military (mercenaries).

Look for China (and Japan?) to start selling US treasury holdings for gold and silver.  That's your que to get out of US dollars.

And you China-bashers here on ZH can give it a rest.  They'll help bring an end to the gigantic monetary scam you also bitch about.

Antifederalist's picture

I am just waiting for the music to stop.  I don't see a lot of golden chairs hanging around.

How can people be so easily brainwashed?


Stuck on Zero's picture

The total amount of gold in the world corresponds to about 1/4 ounce per person.  If you own more than a quarter ounce you are a horder.


DowTheorist's picture

Today a primary bear market signal has been signaled for paper gold:




Of course, such primary bear signal only affects paper gold. Secular investors in physical gold heeding the advice of FOFOA will sleep peacefully tonight:




TrulyStupid's picture

Sorry, I can't conceptualize a baseball infield any more than the euro bedwetting 20.5 metres... could you convert to the good old USA NWO unit of measure.. the football field... how many cubic football fields are we talking about here?