Precious-Metal Supplies And The Price Level

The subject of this lecture might well have been assigned to an economist or banker rather than to a geologist, but, as it was deliberately assigned to me, it is to be treated from a geologist's viewpoint. The term precious metals ordinarily includes the platinum group as well as gold and silver. Platinum, like silver, has had a great decline in price during the last few years, but has not been a medium of exchange and therefore has aroused comparatively little comment. Its relation to price level is like that of commodities in general, and will be dismissed without further comment. Of the two precious metals used as mediums of exchange gold, because of its adoption as the basis of most monetary systems and because of its threatened shortage in the near future; has been a subject of general concern to governments, financiers, and economists; silver, on the other hand, which has flooded the market of late has brought forth cries for help, direct or indirect, from producers and to a less extent from the largest users, especially China, whose purchasing power has been greatly curtailed, but it fails to arouse the interest that gold does. Many predictions have been made by economists, bankers, and others regarding future supply of gold and its effect on prices but the differences among these predictions are about as many as the number of prophets. Since gold is the standard by which the value of commodities as a whole is to be measured, it would seem that the greater the ratio of gold supply to commodities the higher the price level and vice