The Gold Club

How much space is needed to store various amounts of gold?

We do not normally quote the thickness of coins, as this varies depending on where you measure, the edge, the field (the flat parts of the design), or the rim. However as a guide to storage space, we can tell you that a roll of 25 Krugerrands is about 3 inches high, as is a roll of 50 sovereigns. From this it is easy to estimate that about 37,000 sovereigns or 9,000 Krugerrands would occupy about 1 cubic foot of space. These would be worth about £2 million at current prices. A house brick would take up a similar space to 2,500 sovereigns or 600 Krugerrands.

You can see from this that gold is a very compact store of wealth.

Volume of Gold

• The density of gold is 19.32 grams per cubic centimetre (gm/cc), so a cubic metre would weigh 19.2 tonnes.
• One tonne would have a volume of 51,760 cubic centimetres, or a cube 37.27 cms square (approximately 15 inches).

Right now, as many have watched the meteoric rise of gold, many have acted and bought gold.

Many, however, ask the very wise question:

“if gold is the highest it has ever been, shouldn’t I stay out? After all, if it is at its records, it might fall. If I invest now, I might lose money! I know about bubbles and how they work. Surely gold is a bubble about to burst since it is the highest it has ever been! Should I stay out of gold since it’s so high?”

This type of thinking is important. It is so important to question everything you read, see, and hear. Therefore, I commend this questioning. However, there are important gaps in this line of thought that also must be considered logically.
For instance, gold is at its all time highs. This is true. However, this is only one small fact taken out of context. Why is gold at its all time high? Why is it gaining, on average, daily? These questions–in order to be answered–require expanding the scope of your economic analysis.
Also, bubbles have happened in the past. This is true. However, that doesn’t answer the question of whether or not gold is at the top of its bubble, or whether it has still to gain. The bubble could be now or it could be in a hundred years from now.
Also, bubbles can be small or large, short-term or long-term. An important thing for an investor to realise is that there will be fluctuations. Change is a constant in gold markets and in life. At the same time, it is crucial to recognize an opportunity when you see it. The dynamics that have got gold where it is right now have only begun.
The most important thing to consider is that gold is only at its high at this current time. This demands a long-term, objective type of thinking and a bit of something akin to philosophy or maybe Zen. It demands a certain way of viewing time.
Time, of course, continues to move irreversibly. The future will come. These are facts that must be held in mind as you consider buying gold at an all time high. If you focus your mind too much on the present and the past, you then cancel out the reality that the future will also come. Even though the future has not yet come, it will come. This, I must stress, is obvious but this is precisely what is being forgotten when you only look at a few facts taken out of the historical context in which they reside.

Instead, you should be paying attention the dynamics of the global economy and making your best informed predictive decision regarding likely paths that the future will take. In a way, this is a type of prophecy, an art and science of prediction. However, all prophecy is incorrect. There is too much information contained in the world economy to perfectly predict the exact outcome.
Instead, you should look for the important trends and the big moves that are happening. These can be analysed and data of predictive value can be extracted from them. Let’s look at some of these big moves:

• The United States is losing momentum as the pre-eminent world-power. Students of history should not be surprised at this. Empires have a rise and they have a fall. The United States is no longer rising. This leaves the other option.
• Their economy, while powerful, is suffering from huge amounts of governmental debt. Consumer spending and the housing market are very low. The high price of oil puts an uncounted tax on everyone in oil hungry America. Quantitative easing programs lower the value of the dollar.
• The European Union, too, is not without its own crises. In fact, they appear to be more serious than that of the US; Greece, Italy, Portugal, Spain, Ireland, Iceland, and who knows what other countries are requiring bailouts. The common currency shows cracks. This prompts a flight into gold because gold is a safe haven. It retains value far better than struggling and failing currencies. This is because gold has an objective and finite backing, whereas fiat currencies (paper currencies) can be printed indefinitely, destroying their value.
• China and India have been exploding in terms of annual economic growth. In the future, they should continue. Vast amounts of human potential are being freed from the shackles of pre-industrial society. Booming middle classes are forming. These middle classes and the wealthy entrepreneurs of China and India are investing in gold. Why? Most economic analyses points to it going higher in the long-term. Also, China and India’s booming gold market increased demand on gold, driving the price higher.

These large scale facts are why gold is likely to continue to rise. As currencies and stock markets stutter, people will look to the tried and true in order to preserve your wealth. In order to take advantage of these long-term trends, you should consider investing in gold.