Gunning Fog Index = 11.35

"Would that gold could have been banished for ever from the earth, accursed by universal report!" - Pliny the Elder, Natural History Book XXXIII, Chapter 3 -

Today's topic is the abundance of gold - in the universe, in meteorites, on the earth, in the oceans - basically everywhere. Why? Because of a blog post from the end of May by physicist William Straub on the www.weylmann.com blog website (1), which Straub writes and maintains. Incidentally, if you're at all on the nerdly side, I recommend this blog. I think Straub's the first person I've run into who can write about Reimann geometry engagingly. But he doesn't write about physics exclusively - he also wanders across stuff like politics and economics and other "soft science" topics. His blog site is actually focused on the theories of the early 20th century physicist Hermann Weyl and how these fit into quantum physics and relativity. If you like knowing about the history of science, this is a blog for you. I really love this guy's blog. There's an entire blog post with the title "A Brief Look at Gaussian Integrals." Sheer nerdly bliss!

Anyway, the following paragraph by Straub from his May 20 blog entry is today's example of being wrong on the internet. The subject of his blog post is asteroid mining and why it's improbable. He makes some really good points based on the estimated costs to mine the asteroid belts. I have no quibbles there. I'm picking on the good Dr. Straub because of this:

"Closer to home are the asteroids that orbit the Sun between Mars and Jupiter, many (if not most) of which are made primarily of primordial iron and nickel, though there's no reason not to think they may also have huge amounts of gold, platinum and other precious metals. All of the gold ever produced on Earth would fit into a cube 50 feet on each side, and a single gold asteroid could easily surpass that amount." (ibid.)

I have differ: this looks to me like a misrepresentation of what we know about gold, elemental abundances and the solar system. We'll look at why I believe this but to do so will cover a lot of ground. As a result, this blog post is the first of two parts on this topic. In this part of "How much Gold," we'll look at some recent journalist writing on the subject of Gold and see who is quoting whom, with varying amounts of journalist sloppiness and lazy internet plagiarism identified. Part two will tackle the deeper subject of how we know what we know about the abundance of gold, even in places that we can't directly sample, like the sun or the core of the Earth.

So what do we know about elemental abundances, including gold? If you think about it, you should realize that there's no direct way to measure the abundance of gold on earth or any other planet. There's no giant scale out in Space where we could weigh all the gold on the planet. Our knowledge of elemental abundances is based on an handful of observations, some conjectures and some scientific arguments. We're going to look at these (mostly in part 2); and when we're done, you should see that this house-sized cube of gold invoked by Dr. Straub is the product of mostly arm waving and some sloppy journalism. Like many other scientific topics, estimating the abundance of gold is not a simple task; however, many journalists won't look at the science even if they can understand it. Instead, most journalists will make a bee line for an expert to quote since it saves them time and effort. The huge downside of journalists relying experts is that some of those experts aren't experts. Often the authority queried or quoted is merely a well-known pundit, celebrity or convenient secondary source - but not a real expert.

Recent Pop Journalism on Gold

I'm not sure when this whole "cube of gold" thing started or who started it. It's been surfacing noticeably for a few years now. The size of the gold cube changes from article to article. True to form, later articles depend on more secondary and tertiary sources than earlier ones, and the excretable practice of internet cut-and-paste plagiarism is certainly alive and well.

So let's talk about stacked-up cubes of gold. Here are some of the estimates of the gold cube based on the length of one side:

  • 50 feet (ibid. (1))
  • 68 feet (Warren Buffett quoted by NASDAQ(2))
  • 21 meters (World Gold Council website(3))
  • 20 meters (Warren Buffett quoted by the BBC (4))
  • 21 m (Thomson Reuters GFMS quoted by the BBC (4))
  • 67 feet (Warren Buffett quoted by Catholic Online (5))
  • 69 feet (Warren Buffett quoted by the NY Times (6))
  • 20 yards (wealthdaily.com (7))
  • 50 meters (Gold Standard Institute quoted by the BBC (4))
  • 25 m (howstuffworks.com (8))

If you look carefully at this list, there are only four unique gold cubes under discussion: the 50 ft cube from Dr. Staub's weylmann.com website, a 21 m cube from Thomas Reuters GFMS, a 50 m cube from the Gold Standard Institute (as quoted by the BBC) and the 25 m cube from howstuffworks.com. How do I know this? Mostly from careful reading and because the BBC article named and discussed its sources. One of those sources, Thomas Reuters GFMS, featured prominently in the BBC article. Thomas Reuters GFMS is a reputable authority on global commodities and its reports often get attention in the business and financial press. What likely happened is that Thomas Reuters GFMS issued a commodities report which was then quoted by various news outlets and business pundits like the BBC and Warren Buffett. After that, other news outlets used the BBC and Buffett as secondary sources for crafting their own articles. From there, we can see the usual slide of sloppy internet journalism towards tertiary sources, cat-and-paste plagiarism, lazy aggregation and minimal-to-no research.

Estimates for a Gold Cube

I have no idea where Dr. Staub got his 50 ft gold cube. He didn't cite a source but given that his topic was asteroid mining and not elemental abundance, there's really no need to wax anal over this. Still, it would have been nice to know...

Sources 2,3,4, and 5 from the above list all lead back to Thomas Reuters GFMS. The BBC quoted the Thomas Reuters GFMS figure for "gold above the ground" as 171,300 metric tons (a.k.a. "tonnes"). Since the density of gold is 19300 kg/cubic-meter, it's simple to calculate the length of the cube sides as ~21 m. I would like to see the original Thomas Reuters GFMS commodities report on gold myself - but that information is not free. Those commodities reports are valued information and are sold as such. Since I can't afford something like a paid news service subscription like Thomas Reuters GFMS, I have to rely on good secondary sources like the BBC. Reliable news is not free.

It's good that respected news outlets like the BBC care about their sources but not even the BBC cites its sources in detail. This is true of all news media that either earn their money through advertising or get their funding from governments. Academic publications are really the only ones that care about listing a trail of references. This is germane since I tried to hunt down the reference to the Gold Standard Institute, finding several different organizations that call themselves by that name. Searching the websites of both the so-called international Gold Standard Institute and a Gold Standard Institute in the US, I could find nothing on how much gold there was in the world or how much had been mined to date. We know nothing about their 50 m gold cube because the source could not be traced. I suppose I could try to contact the reporter from the BBC but I think I'll be lazy and skip that since my conclusions for this blog post do not depend on the source for the 50 m gold cube. I suspect I'm an oddity in that I often track down journalistic sources when some journalist has been kind enough to cite them.

The source of the 25 m gold cube from howstuffworks.com was calculated assuming that all the gold ever produced could be approximated by mining 50 million troy ounces of gold per year for 200 years. That's not a bad way to approach the problem. The current yearly production of gold is around 50 million troy ounces, according to this website. The howstuffworks.com gold article didn't say this explicitly but modern mining methods that can completely dewater a mine are about 200 years old. Before then, mining stopped at the water table, greatly reducing the amount that could be removed from the ground compared to now. The author of this howthingswork.com webpage is assuming that gold produced earlier than 200 years ago is small in comparison to the amounts produced since then. I wouldn't have done a gold estimate this way, but I understand the logic behind this approach. It really is a lovely back-of-the-envelope calculation.

Variations of Cube Size

It's screamingly obvious that famous rich person Warren Buffett is quoted in four times in the above list. It doesn't matter that Buffett was probably quoting Thomas Reuters GFMS. Journalists love to quote someone with celebrity status. Invoking a famous rich person as an expert will sell more news compared to dry stuffy primary sources. In the for-profit news business, deadlines, circulation and ad revenue will always trump careful writing and research. With his iconic status as a financial wizard, Buffett may look like an expert source on gold but I doubt he generated his own numbers. Like a lot of other really smart people in finance, Buffett likely consulted one or more authoritative sources on commodities for his info on gold.

It looks like Warren Buffett - as quoted in the Nasdaq article (2) - used an approximation of the Thomas Reuters GFMS figure of 171,000 metric tons, saying that:

"If all of this gold were melted together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.)"

It's mildly amusing that the BBC article misquoted Warren Buffett with a 67 ft cube side and the New York Times misquoted him with a 69 ft cube side..

If you look up the density of gold (19.3 g/cc or 19300 kg/m^3), you can calculate the volume of the Thomas Reuters GFMS gold figure:

So: 171 300 tonnes x 1000 kg/tonne x 19300 kg/cubic meters = 8875 cubic meters. Taking the cube root, we get 20.70 m for a cube side. Converting from metric to neolithic units we get 20.70 m x 3.281 ft/m = 67.92 ft. If we round up, that boils down to 21 m or 68 ft. So where did the 20 m or 67 ft come from? Probably from someone writing an article on gold who got sloppy with their rounding. I'm guessing that someone used 20 m after rounding down from 21. As for 67 ft, I'm still scratching my head over that one - I'm guessing it's probably a typo.

I suspect that something similar happened with the figure of 20 yards from wealthdaily.com: someone probably rounded from 21 m to 20 m and then got really sloppy, equating 20 yards with 20 meters. Now if you care about this sort of thing, one yard is only about three inches less than one meter, so yards and meters are close enough for a rough approximation; however, that difference grows when you're talking more than a couple of meters. That 20 yards is not even close to 20 meters - 20 yards is really about 18.3 meters. Numbers get a lot of abuse in the news.

One of the most annoying aspects of internet is cut-and-paste journalism which shows up a lot on news aggregation sites. For example, if you bother to look at the article on gold from Catholic Online, it's clear it was lifted the BBC article through a mix of paraphrase and non-attributed direct quotes. As a rewrite of someone else's journalism without permission or attribution, it's technically plagiarism. But cut-and-paste plagiarism is pandemic to the internet - and the costs of trying to combat the theft of one's writing is more than most writers can bear.

Gold on Earth vs. Gold Removed from the Earth

There was something I found interesting in reading all these various blogs and articles about gold. It's a tendency to conflate the amount of gold that people have removed from the Earth through mining and the total amount of gold on the planet. Here's a compilation of how various articles and blogs phrase their statements on gold:

  • Dr. Straub (1): "All of the gold ever produced on Earth would fit into a cube 50 feet on each side."
  • Warren Buffett (2): "Today the world's gold stock is about 170,000 metric tons."
  • World Gold Institute (3): "All of the gold ever mined would fit into a crate of 21 metres cubed."
  • Prior/BBC (4): "How much gold is there in the world?"
  • Prior/BBC (4): "the total amount of gold in the world - the gold above ground, that is - could fit into a cube with sides of just 20m"
  • Prior/BBC (4): "Their latest figure for all the gold in the world is 171,300 tonnes"
  • Prior/BBC (4): "The US Geological Survey estimates there are 52,000 tonnes of minable gold still in the ground"
  • Prior/BBC (4): "All the gold that has been mined throughout history is still in existence in the above-ground stock."
  • Catholic Online (5): "Their latest figure for all the gold in the world is 171,300 tons"
  • Catholic Online (5): "(One expert's) figure for the overall amount of gold in the world is 155,244 tons"
  • Catholic Online (5): "(This expert) makes only minor adjustments to the GFMS figure for the amount of gold mined since 1492"
  • Catholic Online (5): "The Gold Standard Institute believes that if the world emptied our bank vaults and jewelry boxes, we'd find no less than 2.5 million tons of gold"
  • Kitcomm misquoting Warren Buffett (9): "If you took all the gold in the world, it would roughly make a cube 67 feet on a side"
  • wealthdaily.com (7): "a specific measurement of how much gold is in the world"
  • Mankiw/New York Times (6): "if all the gold in the world were made into a cube, its edge would be only 69 feet long"

I confess that I ordered the quotes to show a progression from describing "gold produced" or "gold stocks" or "gold mined" to describing "all the gold in the world." The folks who used terms like "gold stocks" or "gold mined" got it right. The folks who used expressions like "gold mined" intermingled with expressions like "the total amount of gold in the world" were sloppy. The folks who said only things like "all the gold in the world" were just dead wrong.

All the gold ever mined is not the same thing as all the gold on Earth.

Before we proceed, let's stop and ask how do we know how much gold there is anywhere? The trivial answer is that we don't. It's the whole giant scale in Space dilemma. There's no way to make a direct measurement so we have to look elsewhere for clues to solve this problem. A lot of what we know about the amount of gold anywhere comes from relative elemental abundances measured from meteorites - and that takes us back to Dr. Straub's original statement about the amount of gold that might be in an asteroid. We're not going in circles yet, but before we do we're going to pause for now. This is the end of part one of "How Much Gold."

Part 2 will be an examination of the evidence that researchers have used to estimate that amount of gold in all kinds of places: the sun, the asteroids, the core of Earth, and other places that we can't sample directly. If you think about it, you'll realize that it's impossible to get a sample of the something like the gasses in the sun or the iron thought to be in the Earth's core. It's obvious that direct measurements based on actual physical samples have never taken place for these places and yet, you read about the size and composition of things like the sun or the core of the Earth or asteroids out in the asteroid belt all the time. When we're done, not only will we have calculated a compilation of gold amounts for all sorts of interesting places, we'll also have laid out the evidence behind those numbers so you can see a typical thought process behind the construction of scientific knowledge.

References

  1. Staub, W (20 May 2014), "The Money Pit Syndrome, or It's Time to Grow Up — Posted Tuesday, May 20 2014," www.weylmann.com (accessed 6 June 2014).
  2. Anon, (15 Aug 2014), "Why Warren Buffett Hates Gold," http://www.nasdaq.com/article/why-warren-buffett-hates-gold-cm267928 (accessed 19 June 2014).
  3. World Gold Council, "Facts About Gold," http://www.gold.org/history-and-facts/facts-about-gold (accessed 19 June 2014).
  4. Prior, E (31 March 2013), “How much gold is there in the world?” BBC News Magazine, http://www.bbc.com/news/magazine-21969100 (accessed June 18 2014).
  5. Catholic Online, "Could the world's entire gold supply be melted into cube, 67 feet on all sides?" http://www.catholic.org/news/business/story.php?id=50370 (accessed 20 June 2014).
  6. Mankiw, G. (27 July 2013), "Budging (Just a Little) on Investing in Gold," http://www.nytimes.com/2013/07/28/business/budging-just-a-little-on-investing-in-gold.html (accessed 20 June 2014).
  7. Anon., "How much gold is in the world?" http://www.wealthdaily.com/resources/how-much-gold-is-in-the-world (accessed 20 June 2014).
  8. Anon., "How much gold is there in the world?" http://money.howstuffworks.com/question213.htm (accessed 20 June 2014).
  9. Anon. (18 April 2013), "Thread: Top 7 Warren Buffett Quotes on Gold Investing" https://www.kitcomm.com/showthread.php?117711-Top-7-Warren-Buffett-Quotes-on-Gold-Investing (accessed 20 June 2014).