Today, the world's gold stocks reach about 6.5438+700 million metric tons. If all the gold reserves are melted together, a large cube with a length of about 68 feet on each side will be formed (imagine that this cube can just fit into a baseball field). At the price of $0/.750 per ounce of gold when I wrote this letter, its market value should be $9.6 trillion. Let's call this cube the first asset.
We now use the same value to create the second asset. To this end, we can buy all the farmland in the United States (* * * 400 million mu, with an annual output of about $200 billion), plus 16 Exxon Oil Company (the most profitable company in the world with an annual income of over $40 billion). After the acquisition of these assets, we still have about $65,438+0 trillion as working capital (we should not feel penniless after purchasing these assets). Can you imagine an investor sitting on $9.6 trillion choosing A over B?
Coupled with the incredible valuation of the existing gold reserves, the current gold price has led to the annual output of gold being controlled at around 654.38+060 billion US dollars. Buyers-whether jewelry and industrial people, or fearful individual investors or speculators-must constantly absorb this extra supply to maintain the balance point of the existing gold price.
A hundred years later, this 400 million mu of farmland will produce an amazing number of crops such as corn, wheat and cotton-and no matter how the currency depreciates, this farmland will continue to produce crops and become its cornucopia. Exxon may pay trillions of dividends to shareholders and may hold assets worth more than trillions of dollars. (And, think you have 16 Exxon Oil Company). The size and shape of 654.38+700,000 metric tons of gold have not changed at all, and nothing can be produced. You can fondle the cube affectionately, but it still doesn't move and doesn't respond at all.
It is true that after a hundred years, once people are worried, they will still compete to become gold speculators. However, I am confident that in a hundred years' time, assets A, now valued at $9.6 trillion, will earn far less than the value created by assets B in terms of compound interest.