My son sent me an Elon Musk tweet this morning claiming that there was an estimated $771 trillion of gold in the oceans. He is far too conservative!
I wrote this some years ago as a follow-up to How Much Gold Stock is There Really? I never published it because my maths was so clumsy.
Here it is below. Do bear in mind that, because of the Stock-to-Flow Ratio, money is not affected by Supply and Demand (the tweet underneath).
Clumsy article, but it’s brief and the numbers (if correct) are fascinating…
A search of the Internet for the amount of gold in the oceans finds estimates ranging from 1 million tonnes to 10 billion tonnes. That is a bit too loose to be useful. Can a figure be arrived at that isn’t a complete guess? So much to do with both the gold stock and the gold flow, past, existing and potential, is already just that, a guess.
“The United States Geologic Survey (USGS) estimates there to be 326,000,000 cubic miles of water on the planet. A cubic mile can hold a little more than 1.1 X 1012 gallons. The USGS also estimates that 96.5% of that water is in the planets oceans.”
Gold is found at concentrations of approximately 13 ppt (parts per trillion) in the oceans. In some parts it reads higher (Baring Sea next to Alaska for obvious reasons), but the average is around 13ppt with a fairly even distribution throughout the oceans of the world. As a matter of interest, because the ocean’s gold is so microscopic it was not possible to accurately measure the concentrations until the 1980s.
That means for each trillion bits of ocean, only 13 are gold. The question firstly then is how many trillion bits of ocean are there? Following this are my clumsy mathematical constructions, so if you want to avoid this bit scroll on down. I did have a mathematician run through the figures and he agreed with them (though he rolled his eyes at my methods).
If there are 326,000,000 cubic miles of water (see top) and 96.5% of that is seawater then there are 314,590,000 cubic miles of seawater.
To make the sum simple I multiplied that by one million. That equals: 314,590,000,000,000
That is 314.59 trillion. Therefore if there are 13 parts per trillion then there are 314.59 x 13 = 4089.67.
Now, divide that last number by the million again to return it to the real number…. = 0.00408967 cubic miles of gold in the oceans.
0.00408967 cubic miles equals 601,991,048 cubic foot of gold in the oceans.
1 cubic foot of gold weighs 1208 pounds. Therefore, the total weight is 727,205,185,984 pounds.
That equals 330,000,000 tonnes.
Assuming the correctness of all the above figures* (mine and the USGS), there are three hundred and thirty million tons of gold in the world’s oceans. That is a large, but fairly meaningless figure.
Obviously, extraction will be extremely difficult; it is not all going to be dumped into the world’s money supply in one fell swoop. However, it is entirely possible that commercial extraction will begin at some point.
There are 32,150 ounces of gold in a tonne. Therefore, there are 10,609,500,000,000 ounces of gold in the oceans. In the implausible to the extreme scenario that it was all extracted this would be 1537 ounces for every man, woman and child on Earth, on top of current holdings.
There is also a lot of gold on asteroids and other planets. It could well be that they are more easily mined that the Earth’s oceans. For those worried about the laws of supply and demand, rest assured that they only apply to goods – not money. Adding to Gold’s stock will increases its stock-to-flow ratio and, hence, its stability of value.
Philip Barton 1st October 2011
* If anyone can see a flaw in the above figures would they please contact me and explain where I have gone wrong. I cannot get my head around the ‘fact’ that 0.00408967 cubic miles equals 601,991,048 cubic foot. I triple checked it, but am still not convinced.
Postscript – January 22nd, 2023
If you multiply 10.6 trillion by 1900 you will get the approximate US$ value of the gold in the oceans. My calculator won’t go that far. At $2k an ounce (round numbers), it would be around US$20 quadrillion.