- Illegally mined gold, quantities unknown
- Undeclared production in states like China, Russia, Kazakhstan, etc.
- Missing state hoards (Libyan, Iraqi, etc.)
- Understated central bank reserves (we tend to focus on overstated, re-hypothecated gold)
- Gold privately owned in large quantities
- Disguised holdings (i.e. industrial inventory, museum artifacts. etc.)
- Small holdings of unknown provenance
The first two categories here are in continuous production, feeding into pools 4-7. Item 3 may be part of some state's item 4.
Consider the effect on world gold supply of a continuous production that is large and unknown and lasts for decades.
There is also a folkloric category or two which critics of black gold tend to focus on:
- Lost treasure
- Secret (private) discoveries/mines
Those ideas gather more scorn than they deserve.
Here is a further more difficult concept: black gold reserves.
Everyone is familiar with the national strategic oil reserves. The U.S. federal government has a stated amount of oil that it owns and holds for emergencies. But what if the stated amount is not the full amount?
Moreover, what if the government holds known undeveloped discoveries under designated parks, test ranges or federal land restricted from mineral development? The feds hold over 60% of Utah and Idaho, to name just two mineral rich states.
We flatter ourselves that we know the levels of international gold production and the amount produced in history. This false knowledge will lead many traders to grief and many political forecasters into expectations that do not correlate to reality.
