Once an individual locks his or her safe, that gold effectively disappears from the market at large. Unlike bank deposits or stocks, there is no way to tally the total amount of gold held by individual investors.In this way, he introduces his concept of "dark gold" which he relates to dark matter:
Dark matter is a mysterious substance that scientists hypothesize is an essential building block of our universe. All we know is that the universe is a certain size and that a huge amount of its mass is unobservable - this is what we've come to call dark matter.If we view dark matter as exerting gravitational force in the universe without disclosing its presence, perhaps we can see private gold as exerting a certain force in finance and economics.
The whole question of privately held ("dark") gold is, for me, a question distinct from "black gold," with private ("dark") gold sitting still and black (illegal or unaccounted for) gold moving around. "Dark" gold is a useful paradigm but Schiff spoils it by mixing dark and black: he counts as "dark" both the Chinese undeclared mining outputs and the US Fed's German gold (which has disappeared from New York vaults).
Let's thank Schiff for a useful coinage. Behind "dark gold" is a real number, but one that cannot be measured. It is the factual counterpoint to the fictitious model or estimate of "all the gold ever mined." (We are constantly told that all the gold ever mined is still in existence and we are given a number for that. It is nonsense.)
"Dark gold" is a good term for all the private Au squirreled away but still accessible. Let "black gold" remain the term to describe undeclared mining output and illegal mining output. The movements of black gold, I would propose, have a greater financial and economic "gravitational effect" than private gold held in storage.
A tip of the hat to Schiff for drawing attention to this important paradigm. Let's see what he does with it.
