Sunday, February 12, 2012

the secret that'll keep you sane about gold

For my three more long-term readers, see if you can figure out which of the following is closest to my personal thesis on gold:

  1. Blah blah fiat blah blah Zimbabwe blah blah gold standard blah blah Ron Paul;
  2. Blah blah monetary policy blah blah M3 expansion blah blah stealth devaluation;
  3. Blah blah societal collapse blah blah smoking ruins blah blah Mad Max;
  4. It's a secular trend that's all about the developing world.

Now go read the Wikipedia article on Gold, esp. the section on consumption.

Can't read? Okay, take a seat... are you sitting comfortably? Then we'll begin....

50% of yearly gold consumption goes into jewelry. In 2010, over half of jewelry consumption was driven by China and India. (Incidentally - go fuck yourself if you're an "analyst" and you didn't notice gold's drop happened at the same time as the Rupee became unstable, instead blaming it on some unseen shadowy elite or something.)

Other significant consumers include Turkey, Saudi Arabia, the UAE, Egypt (oops) and Indonesia.

Then 40% goes to investment demand. Betcha most of that is in India, China, Turkey, UAE, Saudi Arabia etc....

So... ahem.


  1. So you think gold is a commodity? How quaint.

  2. I don't have to think it. The fact's existence is verified independently by the data publicly available.

    Ooh, zing! I'll have to remember that for the next time I get into an argument with a fundamentalist, conspiracy theorist, or Ayn Rand follower.