Gold 75% Underowned In 20 Years, Or Exter's Pyramid For Gen X/Y

Kedrosky has posted an informative chart from JPM’s Michael Cembalest indicating that ownership of gold in dilutable terms (aka dollars), as a portion of global financial assets has declined from17% in 1982 to just 4% in 2009. And even thought the price of gold has double in the time period, as has the amount of investible gold, the massive expansion in all other dollar-denominated assets has drowned out the true worth of gold. Were gold to have kept a constant proportion-to-financial asset ratio over the years, the price of gold would have to be well over $5,000/ounce.

Of course, the chart above pales in comparison with the true Exter pyramid, which incorporates all those wonderful JPM/Goldman inventions known as derivatives, amounting to $1.8 quadrillion, which certainly did not exist in 1982. If one were to factor the above table  to include this Exter securitized credit money as well, then the true constant worth of gold would be well north of $10,000.

Five Laws

The Law of Value
Your true worth is determined by how much more you give in value than you take in payment.

The Law of Compensation
Your income is determined by how many people you serve and how well you serve them.

The Law of Influence
Your influence is determined by how abundantly you place other people’s interests first.

The Law of Authenticity
The most valuable gift you have to offer is yourself.

The Law of Receptivity
The key to effective giving is to stay open to receiving.

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