Now that platinum coin rhetoric has been called out as BS, Political Calculations is/was out with a great piece playing with the math involved with platinum. The article reads, in part....
Using the spot price for platinum of $1,629 per ounce at the close of business on 11 January 2013, we estimate that it would take just over 613,873,542 ounces of platinum to make the coin, which works out to be about 38,367,096.4 pounds, or a bit over 19,183.5 tons.
That seems like a lot, but physically, that much platinum would only occupy almost 21,427 cubic feet of space, just enough to fit inside this modest home design of "rare beauty".
Now, here's where it gets interesting, because all the platinum that has ever been mined on Earth would fit in a room that's just 25 cubic feet in volume. That would leave the U.S. Mint about 21,402 cubic feet of platinum short of what would be needed to do the job properly.
This got me thinking about the unstated questions never addresses. First and foremost, would not the discrepancy between the available supply and potential demand that could be derived if the metal was used as a medium exchange (here only using $1 trillion as a base vs. an estimated world economy producing over $50 trillion and debt estimated to be over $150 trillion) force the price upward? In my mind the answer is yes. However, the amount of any potential rise in this scenario is uncertain, as a discount factor would likely be employed to account for annualized turnover.
It also got me think thinking about gold, as gold is the historic, barbaric metal of monetary. And yes, the same dynamics are out play. Assuming a $1,600 per ounce price in gold, all the gold ever mined would amount to just $8 trillion in value. See my previous post on All the Word's Gold.
Using the spot price for platinum of $1,629 per ounce at the close of business on 11 January 2013, we estimate that it would take just over 613,873,542 ounces of platinum to make the coin, which works out to be about 38,367,096.4 pounds, or a bit over 19,183.5 tons.
That seems like a lot, but physically, that much platinum would only occupy almost 21,427 cubic feet of space, just enough to fit inside this modest home design of "rare beauty".
Now, here's where it gets interesting, because all the platinum that has ever been mined on Earth would fit in a room that's just 25 cubic feet in volume. That would leave the U.S. Mint about 21,402 cubic feet of platinum short of what would be needed to do the job properly.
This got me thinking about the unstated questions never addresses. First and foremost, would not the discrepancy between the available supply and potential demand that could be derived if the metal was used as a medium exchange (here only using $1 trillion as a base vs. an estimated world economy producing over $50 trillion and debt estimated to be over $150 trillion) force the price upward? In my mind the answer is yes. However, the amount of any potential rise in this scenario is uncertain, as a discount factor would likely be employed to account for annualized turnover.
It also got me think thinking about gold, as gold is the historic, barbaric metal of monetary. And yes, the same dynamics are out play. Assuming a $1,600 per ounce price in gold, all the gold ever mined would amount to just $8 trillion in value. See my previous post on All the Word's Gold.
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