The world is changing fast and to keep up you need local knowledge with global context.
JOHANNESBURG — As a kid, one of the highlights of visiting the corner cafe was a few cents spent on chappies. And while the cost of these pieces of chewing gum has spiralled, the did you know facts are still good enough to throw into conversation. Gold fundi David Melvill has applied the same principle to his passion, and created the chappies of gold. A fun read for those with an interest in the yellow metal. – Stuart Lowman
By David Melvill*
- Did you know that the gold rush of 1886 in the Witwatersrand area gave rise to the city of Johannesburg? Johannesburg’s other name, “Egoli” means City of Gold.
- Did you know that the world has mined 170 000 tons of gold of which almost half came from South Africa in the early years?
- Did you know that the Rand Refinery was established in the 1920’s, it is the biggest in the world? It purifies to 99,9%, producing gold bars, Krugerrands, and medallions.
- Did you know that Krugerrands (the one ounce coins) were the first gold coin to be minted in 1967? There are now more than 65 million in circulation.
- Did you know that gold is used primarily for jewelry (43%) Exchange Traded Funds (ETF’s) (22%) Investment: bars and coins (20%) Central Banks purchases (8%) and Industry: electronics and dentistry (7%)?
- Did you know that in the height of SA gold mining industry they produced 1 000 tons per year in the 1970’s? Today they barely produce 140 tons.
- Did you know that SA used to employ 600,000 workers in the gold mining industry? Today it is barely 100,000.
- Did you know that China is the world’s biggest producer of gold? They produce 426 tons last year. SA is now ranked the 8th biggest producer, after Australia, Russia, USA, Canada, Peru and Indonesia.
- Did you know that China is also the biggest consumer of gold? They encourage their citizens to acquire gold, it even makes up part of their pay packet.
- Did you know that SA still has the world’s best gold reserves? It has roughly 50% of the world’s gold, a lot of it is very deep and not viable to mine at present prices.
Gold as money
- Did you know that gold was fixed at $20,67 an ounce in 1900 and remained so for many years as there was no inflation?
- Did you know that being on the Gold Standard meant every country had to have gold reserves to match every piece of paper money they issued?
- Did you know that in the USA, in 1933, it was a crime to be in possession of any form of gold coins? The penalty was 10 years imprisonment or $10,000.
- Did you know that eight months after this law was implemented, President Roosevelt announced that the price of gold would go up by 75% to $35? He used this inflation to get the US out of deflation, caused by the Great Depression.
- Did you know that in 1971 President Nixon closed the “Gold Window,” this was the ability to swop dollars for gold, because of soaring inflation? As a result there was a massive boom in the price of gold, it went from $35 to $850 over nine years, a yield of 42% per annum.
Gold and politics
- Did you know the highest price achieved for gold was $1,921 in Sept. 2011? This was a build up after the Great Financial Crash of 2008.
- Did you know the US has the world’s greatest gold reserves of over 8,000 tons? It is stored in New York at the Federal Reserve Bank and Fort Knox, Kentucky.
- Did you know that the world went off the Gold Standard in World War 1? They needed their gold to purchase armaments and provisions.
- Did you know South Africa used to earn 25% of their GDP through gold sales?
- Did you know today Russia’s Central Bank is the biggest buyer of gold for six consecutive years? Despite their good reserves in Siberia they are fascinated by the shiny metal and seem to have an insatiable desire for it.
Score card – How well did you fair?
0 –5: You need to brush up on your gold knowledge.
6 – 10: You have a fair understanding of the gold industry.
11 – 15: You will make a good ambassador for the gold industry.
16 – 20: You have an excellent command of the gold industry and can apply for the chief economist position at the Chamber of Mines.
- David Melvill lives in Montagu and can be reached at [email protected].
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