The total amount of gold in the world, according to easily googleable information sourced at How Stuff Works (http://money.howstuffworks.com/question213.htm), is, say, 10 billion ounces (other sources may site less, but 10 billion is an easy number). The total amount of silver in the world, according to David Zurbuchen (http://www.silverinscripture.com/articles.php?id=38), is about 40 billion ounces, as a generous estimate.
The total value of all the world's gold, therefore, is 10 billion ounces x today's spot market price of $1333, or $13,330,000,000,000 - say 13 trillion dollars. However, this is ALL of the world's gold, including that used in jewelry and industry. According to the utmost of reliable sources, Mr Wiki (http://en.wikipedia.org/wiki/Gold_reserve), 52% of the world's gold is already in the form of jewelry. 30000 tons, or 981 million ounces, is used as central bank reserves, which are largely unaudited and simply "officially reported" numbers - which may or may not actually mean anything. 981 million ounces x $1333 = 1.3 trillion dollars in "total" central bank gold holdings. The total value of all the world's silver is 40 billion oz x $23, or 920 billion dollars. Of course, these numbers for total existing amounts are probably overestimated, so in reality we can revise the total value of the world's precious metals as even less than these numbers, though the amount of the reduction is fairly meaningless to the end point.
I will now use my mathematical geniusness to divide the total amount of gold and silver in the world by the entire world's population (http://www.google.com/publicdata?ds=wb-wdi&met=sp_pop_totl&tdim=true&dl=en&hl=en&q=world+population): 10 billion oz of gold / 6.7 billion people = 1.5 oz per person. 40 billion oz of silver / 6.7 billion people = 6 oz of silver per person.
This means, to reach worldwide parity with per capita gold and silver, every person in the world needs to buy 1.5 ounces of gold and 6 ounces of silver. However, this is parity with total worldwide existing tonnage. In actuality, what is commercially available is far less, so the effort to own a directly proportional amount of precious metals will take far less energy to achieve. If we took all of the holdings of all governments (981 million ounces), and divided by only the US population, we would get about 3 ounces of gold per US citizen for America's general population to own all of the existing bullion reserves of every government of the world.
So, now that I have broken down a bunch of easily calculated numbers, what does this mean? It means it doesn't take much in the way of gold purchases to own enough gold to put yourself ahead of the average man. It means that commercially available gold and silver is in very short supply, especially in terms of the broader US money and debt markets.
According to one Joe Kennedy, when the shoeshine boy gives you stock tips, you know the market is in a bubble. There are a number of people who claim gold/silver, currently hitting all-time highs, is in a bubble. However, this number of bubble-proclaimers is very small, and some of them may have vested interests in saying such things. So, is gold/silver currently in a bubble? Well, how many shoeshine boys are telling you to buy gold? How many people even own a single one ounce coin?
I think we are a ways away from gold being a technical bubble. How will we know when gold is in a bubble? Try driving down a strip mall in your town. How many jewelry shops are saying "We buy your gold! Turn your gold into CASH CASH CASH!!!" Probably all of them. Here is when we will know that gold is a bubble. That day will be when all the jewelry shops change their signs into "We sell gold! Buy gold here!" At that point, paper money may or may not be worth anything. We are far from a bubble, though. The bubble, or overvaluation of gold, will only happen AFTER it is too late for you to personally go out and buy any. It is already difficult to get any physical gold at a reasonable market price even now.
That, in short, is my case for gold and silver. Total worldwide supply is tiny. Total worldwide digital/paper money is being created with wild abandon. Many money managers will tell you to go long on gold and silver, with a portfolio allocation of perhaps 10 to 15% of your net worth as insurance. My minimum recommendation is to reach par for the world course: 2 oz of gold, 6-10 oz of silver. That is an amount even a normal American can achieve. If every American does it, Americans will own the same amount as the world's total government holdings. In the future, I expect gold and silver to appreciate at the same rate of the worldwide dilution of paper currency - at least. When demand for real money, ie gold/silver, starts to awaken in the public's mind, the appreciation will accelerate. Depending on how many people wake up at the same time, the appreciation will get ridiculous. In the end, it will probably be worth a disproportionate amount to what you paid - even if you paid at the current all-time highs.
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