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Gold Reserves in the World

[1]

Analysis of the official gold reserves reveals very interesting results, which are detailed here to familiarize the reader of the amounts of gold that different countries in the world have set aside as reserves. In addition to these gold reserves, many countries add foreign currency reserves. The following is a summary of some observations about the per capita gold reserves[2] of central banks around the world:

■ Switzerland has the highest per capita gold reserve (1,040 tons), at 4.6 ounces of gold for every Swiss citizen, followed by Lebanon at 2.19 ounces of gold per person. This is followed by the following groups:

a. The Eurozone countries: 1.16 ounces of gold per citizen (total reserves of 10,866 tons)

b. The United States: 0.86 ounce of gold per citizen (8,133.5 tons)

c. Japan: 0.19 ounce per citizen (765 tons)

d. Russia: 0.11 ounce of gold per citizen (523 tons)

e. China: 0.02 ounce per citizen (1,054 tons)

■ Both Canada and Mexico have negligible official gold reserves per capita (each has 3.4 tons).

■ The oil-rich Gulf countries' reserves range from 0.84 ounce of gold per citizen (Kuwait — 79 tons) to 0.28 (Qatar — 12.4 tons) and 0.18 (both Saudi Arabia — 143 tons, and Bahrain — 4.7 tons).

In many of the countries with a growing RF (Islamic) banking presence, we find the following reserves in tons and in ounces of gold per capita. (See Exhibit 5.7.)

EXHIBIT 5.7 Gold Reserves in Middle Eastern Countries by Tons and by Tons per Citizen (per capita)

Approximate per

Tons of Gold

Capita Oz/Citizen

Lebanon

286.8

2.19

Algeria

173.6

0.16

Iran

302.3

0.14

Jordan

14.8

0.08

Turkey

116.0

0.05

Malaysia

36.4

0.04

Egypt

75.5

0.03

Indonesia

73.1

0.01

Pakistan

65.4

0.01

Bangladesh

3.5

Negligible

Does the official per capita gold reserve reflect — along with other currency reserves — the economic affluence of a country? This is a question that should be researched in terms of many factors, such as the countries' monetary policies, the contents of the reserves in foreign currency, and the nominal gross domestic product of the countries in terms of their local currencies and how they relate to the exchange rates.

It is believed that the solution to the monetary challenge of defining real value in pricing is not returning to the gold standard, as some may advocate, but to reflect on the purchasing value of the convenient paper (fiat) money in each of the local economies by using the Shari'aa-based Commodity Indexation Discipline presented in this book.

  • [1] Javier Blas, “Gold Sales Cost Europe's Central Banks $40 Billion.” FT.com, May 6, 2009.
  • [2] World Gold Council, Gold Research and Statistics website: gold.org/reserve-asset-management.
 
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