Thursday, October 14, 2010
Daniel Webster
Ordinary tyranny, oppression, excessive taxation... these bear lightly on the happiness of the mass of the community, compared with fraudulent currencies and the robberies committed by depreciated paper. -
James Turk - Gold, Silver & What Bulls Dream About
ed note- Is JPM the matador?
With gold and silver strong in Asian and European trading, King World News interviewed James Turk out of Spain to get his thoughts on the price action. Turk commented, “We’re now into the 3rd stage, we are starting to see the panic buying...We are now witnessing the early stages of that short squeeze.”
October 14, 2010
“The metals market was dominated by pervasive fear Eric, when you and I first started to do this series of blog pieces back in the $18 to $19 area on silver. From those levels in the high teens, the market headed higher as many people watched in disbelief. The lengthy 3 year consolidation pattern in silver had simply worn out the bulls.”
“We’re now into the 3rd stage, we are starting to see the panic buying. As I mentioned previously there was going to be a massive short squeeze the likes of which hasn’t been seen since Cornelius Vanderbilt took on Daniel Drew. We are now witnessing the early stages of that short squeeze.”
“I mentioned in our previous interview on October 6th, when we took out 58 on the gold/silver ratio you would see a quick drop to the 50-52 area. What this means is that silver will outperform gold even though gold will be heading higher also. The reason why I expect the ratio to fall so quickly is that I anticipate the short squeeze in silver to be more acute than the short squeeze in gold.”
This type of action is incredibly stressful for the shorts, as only the strongest can hold on to their positions. For the rest of the shorts we saw a bit of disorderly action in early trading as they were margined out of their positions. This is what bulls dream about, a market with enormous short positions that are trapped.
Wednesday, October 13, 2010
Joe Sobran [1946 - 2010]
If you want government to intervene domestically, you’re a liberal. If you want government to intervene overseas, you’re a conservative. If you want government to intervene everywhere, you’re a moderate. If you don’t want government to intervene anywhere, you’re an extremist. -
I guess I'm an extremist.
I guess I'm an extremist.
Tuesday, October 12, 2010
'Gold is the best asset class to be in'
After a 10-year bull run, conventional wisdom says it's too late to join the party. Is it different this time?
By Richard Evans
Published: 5:36PM BST 10 Sep 2010
The trouble with chasing performance is that you often join the party too late. Yet gold continues to defy the odds and if the great and the good of the investment world are to be believed, the gold price has further to go.
Last week, the analyst rated the most accurate forecaster of the gold price said the precious metal would keep rising.
Related Articles
Gold price hits record
Can gold hit $2,000?
Gold is the final refuge against universal currency debasement
Vladimir Putin to step into $450m Kazakh gold feud
Is gold really a safe haven?
Gold demand jumps by 36pc Jochen Hitzfeld, an analyst at UniCredit, the Italian bank, has been rated by Bloomberg, the news agency, as the most accurate gold forecaster over the past three quarters. He reckons the gold price is heading for $1,600 an ounce.
His forecast is the latest in a long line of optimistic predictions. Other gold bulls include George Soros, famous for making £1bn by betting against the Bank of England, and John Paulson, the hedge fund manager who made $20bn by calling the credit crisis correctly.
These expectations that the price of gold will continue to rise come despite the metal already enjoying a decade-long bull market, rising from $253 in 1999 to its current level of about $1,260, a whisker below its all-time high of $1,265 reached in June.
"You can't mine gold," say nervous investors who fear that the massive printing of money by central banks under the guise of quantitative easing can only lead to runaway inflation. Sceptics of gold as an investment point to the costs of owning it and the fact that it produces no income.
Finding an analyst who is bearish on gold is a tough task; most appear to believe that gold is a worthy asset, not least because of the continued economic uncertainty. But four years ago The Sunday Telegraph found one. Nick Goodwin, a much quoted South African mining analyst, warned people against jumping on the bandwagon when the price stood at $600 an ounce.
He said: "I have been following gold for 30 years and gold is a bitch. Why weren't people buying gold when it was $250 but want to buy it at $600? Gold has had a hell of run and it needs to take a breather." Mr Goodwin was proved mightily wrong and today the rationale for investing on gold stands firm.
Mr Hitzfeld said further increases in the price were "preprogrammed". He said factors exerting upward pressure were renewed fears among investors sparked by recent loosening of monetary policy by the US Federal Reserve and reforms in the Chinese market that gave investors there greater access to the metal.
"The Chinese government has encouraged consumers to invest in gold, and with great success. Chinese demand will now increasingly be felt on the global markets," Mr Hitzfeld said.
Although China is now the world's largest gold producer, this production would be insufficient to meet domestic demand, so China would increasingly import gold, draining supply from the rest of the world and putting upward pressure on the price.
The Chinese government's gold reserves have also risen sharply and there is scope for further increases, as they account for just 1.7pc of foreign exchange reserves, Mr Hitzfeld said. "We are therefore raising our target price for 2011 from $1,250 to $1,400 per troy ounce. For 2012, we now expect $1,600 an ounce."
Analysts from ANZ, the Australia and New Zealand banking group, agreed. Describing gold as "the best asset class to be in", the analysts, Mark Pervan, Natalie Robertson and Andrew McManus, said: "Gold has been the strongest performing and least volatile major commodity and financial asset class in the past 10 years – we expect this trend to continue.
"We see more upside for gold prices as the key drivers of a safe-haven and currency-hedge demand are joined by the emergence of strong demand from China and India. We believe prices could reach $1,350 by early 2012 and stay there for 12 months before investment and safe-haven demand eases."
Charles Morris, who oversees about $2.5bn at HSBC Global Asset Management's Absolute Return fund, has just liquidated his holding of long-dated bonds and agricultural commodities and is backing gold instead.
George Soros, meanwhile, had about $635m invested in a gold exchange-traded fund when he reported his holdings to the US markets regulator in June. And John Paulson's fund holds a gigantic £3.8bn position in gold, again via an ETF, in addition to large holdings in mining companies.
The issue for investors who have yet to invest in gold is whether it is too late. Mr Soros may be a gold bull at the moment, but he still has his reservations. He said in January: "When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold."
The message seems clear: when Mr Soros dumps his gold exposure, the glittering bull run could well be over.
how to Invest in gold
Gold has traditionally been seen as the ultimate inflation-proof asset and the dramatic rise in the price over recent years testifies to investors' continuing faith in the metal during economic turmoil.
As the supply of gold cannot be increased at will, and as industry and the jewellery trade compete with investors, a collapse in its value in the way that currencies can sometimes succumb to inflation is unlikely. But before heading down to a bullion vault, remember that, unless you hedge against currency risk, you are exposing yourself to fluctuations in the US dollar, in which gold is always priced. Last year, British investors taking a punt on gold would have seen the value of their investment fall because of the dollar's slide against sterling.
You can hold gold as a physical asset or in non-physical ways. If you own actual gold, which you can buy relatively small amounts, remember to factor in insurance and storage costs. When you own physical gold yourself there is no "counterparty risk" – your investment does not rely on someone else keeping their promises or remaining in business. Gold jewellery also avoids counterparty risk, but more of its value may be linked to fashion trends.
To avoid counterparty risk as well as the inconvenience and risk of having gold in your possession, an "allocated gold account" might be useful: you pay a vault to store gold on your behalf.
Another option is an unallocated account. You still own gold stored at a custodian's vault but you don't own specific bars and are exposed to counterparty risk – if the custodian goes bust you can't reclaim the gold and will simply be a creditor.
Alternatively, follow Mr Soros and invest via an ETF – "physically backed" ones that own actual gold should be the safest.
By Richard Evans
Published: 5:36PM BST 10 Sep 2010
The trouble with chasing performance is that you often join the party too late. Yet gold continues to defy the odds and if the great and the good of the investment world are to be believed, the gold price has further to go.
Last week, the analyst rated the most accurate forecaster of the gold price said the precious metal would keep rising.
Related Articles
Gold price hits record
Can gold hit $2,000?
Gold is the final refuge against universal currency debasement
Vladimir Putin to step into $450m Kazakh gold feud
Is gold really a safe haven?
Gold demand jumps by 36pc Jochen Hitzfeld, an analyst at UniCredit, the Italian bank, has been rated by Bloomberg, the news agency, as the most accurate gold forecaster over the past three quarters. He reckons the gold price is heading for $1,600 an ounce.
His forecast is the latest in a long line of optimistic predictions. Other gold bulls include George Soros, famous for making £1bn by betting against the Bank of England, and John Paulson, the hedge fund manager who made $20bn by calling the credit crisis correctly.
These expectations that the price of gold will continue to rise come despite the metal already enjoying a decade-long bull market, rising from $253 in 1999 to its current level of about $1,260, a whisker below its all-time high of $1,265 reached in June.
"You can't mine gold," say nervous investors who fear that the massive printing of money by central banks under the guise of quantitative easing can only lead to runaway inflation. Sceptics of gold as an investment point to the costs of owning it and the fact that it produces no income.
Finding an analyst who is bearish on gold is a tough task; most appear to believe that gold is a worthy asset, not least because of the continued economic uncertainty. But four years ago The Sunday Telegraph found one. Nick Goodwin, a much quoted South African mining analyst, warned people against jumping on the bandwagon when the price stood at $600 an ounce.
He said: "I have been following gold for 30 years and gold is a bitch. Why weren't people buying gold when it was $250 but want to buy it at $600? Gold has had a hell of run and it needs to take a breather." Mr Goodwin was proved mightily wrong and today the rationale for investing on gold stands firm.
Mr Hitzfeld said further increases in the price were "preprogrammed". He said factors exerting upward pressure were renewed fears among investors sparked by recent loosening of monetary policy by the US Federal Reserve and reforms in the Chinese market that gave investors there greater access to the metal.
"The Chinese government has encouraged consumers to invest in gold, and with great success. Chinese demand will now increasingly be felt on the global markets," Mr Hitzfeld said.
Although China is now the world's largest gold producer, this production would be insufficient to meet domestic demand, so China would increasingly import gold, draining supply from the rest of the world and putting upward pressure on the price.
The Chinese government's gold reserves have also risen sharply and there is scope for further increases, as they account for just 1.7pc of foreign exchange reserves, Mr Hitzfeld said. "We are therefore raising our target price for 2011 from $1,250 to $1,400 per troy ounce. For 2012, we now expect $1,600 an ounce."
Analysts from ANZ, the Australia and New Zealand banking group, agreed. Describing gold as "the best asset class to be in", the analysts, Mark Pervan, Natalie Robertson and Andrew McManus, said: "Gold has been the strongest performing and least volatile major commodity and financial asset class in the past 10 years – we expect this trend to continue.
"We see more upside for gold prices as the key drivers of a safe-haven and currency-hedge demand are joined by the emergence of strong demand from China and India. We believe prices could reach $1,350 by early 2012 and stay there for 12 months before investment and safe-haven demand eases."
Charles Morris, who oversees about $2.5bn at HSBC Global Asset Management's Absolute Return fund, has just liquidated his holding of long-dated bonds and agricultural commodities and is backing gold instead.
George Soros, meanwhile, had about $635m invested in a gold exchange-traded fund when he reported his holdings to the US markets regulator in June. And John Paulson's fund holds a gigantic £3.8bn position in gold, again via an ETF, in addition to large holdings in mining companies.
The issue for investors who have yet to invest in gold is whether it is too late. Mr Soros may be a gold bull at the moment, but he still has his reservations. He said in January: "When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold."
The message seems clear: when Mr Soros dumps his gold exposure, the glittering bull run could well be over.
how to Invest in gold
Gold has traditionally been seen as the ultimate inflation-proof asset and the dramatic rise in the price over recent years testifies to investors' continuing faith in the metal during economic turmoil.
As the supply of gold cannot be increased at will, and as industry and the jewellery trade compete with investors, a collapse in its value in the way that currencies can sometimes succumb to inflation is unlikely. But before heading down to a bullion vault, remember that, unless you hedge against currency risk, you are exposing yourself to fluctuations in the US dollar, in which gold is always priced. Last year, British investors taking a punt on gold would have seen the value of their investment fall because of the dollar's slide against sterling.
You can hold gold as a physical asset or in non-physical ways. If you own actual gold, which you can buy relatively small amounts, remember to factor in insurance and storage costs. When you own physical gold yourself there is no "counterparty risk" – your investment does not rely on someone else keeping their promises or remaining in business. Gold jewellery also avoids counterparty risk, but more of its value may be linked to fashion trends.
To avoid counterparty risk as well as the inconvenience and risk of having gold in your possession, an "allocated gold account" might be useful: you pay a vault to store gold on your behalf.
Another option is an unallocated account. You still own gold stored at a custodian's vault but you don't own specific bars and are exposed to counterparty risk – if the custodian goes bust you can't reclaim the gold and will simply be a creditor.
Alternatively, follow Mr Soros and invest via an ETF – "physically backed" ones that own actual gold should be the safest.
Jim Rickards - Race Between Gold & New Paper Currency
With the currency wars heating up, King World News interviewed Jim Rickards to get his thoughts on the situation. Jim’s clients include private investment funds, investment banks and government directorates in national security and defense, and he is also an advisor to the Committee on Foreign Investment in the United States and Support Group of the Director of National Intelligence.
October 11, 2010
Jim Rickards:
“What is a currency war? What they mean is each currency is trying to devalue against all of the others. They all want to devalue but they can’t, it is a zero sum game. Some people can devalue some of the time, but not everyone can devalue all of the time.”
“What is the solution? The solution is to identify a store of value that everyone can devalue against all at once. And there are two obvious candidates. First is gold, and second it is to invent a currency.”
“The preference of central banks is to invent a currency such as the SDR or the Bancor. But, the market’s preference seems to be for gold. So the currency war comes down to a race between gold and the new paper currency. Who will win?
Central planners are using the currency crisis as an opportunity to move forward with a renewed push for a global currency. As I said yesterday, as the currency wars escalate, it is wise for individuals to have a presence outside of the system by owning gold. The entire King World News interview with Jim Rickards will be available later in the week.
October 11, 2010
Jim Rickards:
“What is a currency war? What they mean is each currency is trying to devalue against all of the others. They all want to devalue but they can’t, it is a zero sum game. Some people can devalue some of the time, but not everyone can devalue all of the time.”
“What is the solution? The solution is to identify a store of value that everyone can devalue against all at once. And there are two obvious candidates. First is gold, and second it is to invent a currency.”
“The preference of central banks is to invent a currency such as the SDR or the Bancor. But, the market’s preference seems to be for gold. So the currency war comes down to a race between gold and the new paper currency. Who will win?
Central planners are using the currency crisis as an opportunity to move forward with a renewed push for a global currency. As I said yesterday, as the currency wars escalate, it is wise for individuals to have a presence outside of the system by owning gold. The entire King World News interview with Jim Rickards will be available later in the week.
Manipulated Markets Can Cause Ruin
Saturday, 9 October 2010 at 13:52, By Ron Robins, Founder & Analyst - Investing for the Soul
Market manipulations eventually led to Soviet economic collapse. Though not as overt as the Soviets, it is the manipulation of currencies and interest rates by major economic powers that has mostly led to massive misalignments in investment and consumption that pose extraordinary dangers to global economic health.
Ask anyone if they believe that the Chinese currency, the renminbi, is manipulated. Almost everyone agrees that it is. Are US interest rates manipulated? Again, everyone knows they are. (Not too long ago it was only the short term rates that were controlled. Now the US Federal Reserve [the Fed] is buying longer dated US treasury bonds to bring their rates down too.) Countries all over the world are manipulating their currencies lower to gain export advantages and maintaining near zero interest rates to spur domestic demand and cheap government borrowing.
It is basic economics that where markets are manipulated, supply and demand are distorted. And one distortion creates the need for a further distortion, and so on. The longer the distortions continue the greater the possibility of total market failure. We are near that point today with currencies and interest rates.
The Chinese have scored a major mercantile advantage by pegging their currency, the renminbi, at a relatively set and undervalued rate to the U.S. dollar. Not only have US exports suffered, but the exports of many other countries have suffered as well. Under US law, the Chinese should probably have been labelled a ‘currency manipulator.’ However, by bowing to Chinese demands that they not be labelled a currency manipulator, President Obama’s administration is losing credibility everywhere.
So, Americans are waking up to find that not only does China dictate U.S foreign exchange policy, but China indirectly influences its domestic economic agenda as well. Everything from employment policies (export expansion) to government funding needs (requiring Chinese funding) are all partly defined by the present exchange rate policies.
Increasingly, Americans realize that on the foreign exchange front they have been ‘checkmated’—as in the game of chess—by China. Should difficult economic times continue, or worsen, increasing American anger is likely at this arrangement. It could pass the breaking point and encourage America to act unilaterally against China. Currency turmoil might then embrace the globe.
However, one never discussed but possible reason why the US government has been afraid to label China (and Japan previously) as currency manipulators may be because the US itself may be acting covertly to manage the dollar exchange rate.
According to the US government’s own legislation, it can act secretly in currency exchange markets to affect the dollar’s exchange rate using the Treasury’s Exchange Stabilization Fund (ESF). The US Treasury says that the ESF, “with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities." The ESF was established by the Gold Reserve Act of 1934 and then amended in the late 1970s.
Also, the Fed engages in opaque currency ‘swaps’ with other nations, and there is significant evidence of U.S Treasury and Fed engagement in gold price suppression. Gold is the ‘anti-dollar’ and barometer of confidence in the dollar. (See my August 24 column, “The Ethics of Gold,” at http://english.alrroya.com/node/54671 and gata.org)
Another manipulation of the Fed is its control of short term rates—and now possibly long term ones as well—to smooth out the booms and busts of the economy. However, we see the falsity of this argument. After almost two years at a near zero per cent federal funds rate the US economic quagmire continues—or worsens.
Induced low rates over the past ten years or so created a massive real estate boom and bust, discouraged savings, led to inordinate financial risk taking and moral hazard, unsustainable consumer debt, and now excessive, possibly uncontrollable government deficits and debt.
In their seminal work, “Growth in a Time of Debt,” published January 2010, Professors Carmen M. Reinhart and Kenneth S. Rogoff found that when government debt/GDP ratios exceed 90 per cent, economic growth rates fall considerably. According to the BIS, U.S. government debt/GDP will be 92 per cent by the end of 2010 and 100 per cent in 2011.
Furthermore, on September 1, the International Monetary Fund said, “general government debt in the G-20 advanced economies surged from 78 per cent of GDP in 2007 to 97 per cent of GDP in 2009 and is projected to rise to 115 per cent of GDP in 2015.”
Unfortunately, the present and future private deleveraging of debt in the U.S. and some other developed countries means potentially continued high—or higher—government deficits as economic growth is retarded or declines further. The Fed has said that to counter any renewed softness in US economic activity it will significantly expand its purchases of US government bonds and possibly other assets. This has the potential for fuelling a huge expansion of the money supply and creating high or even hyperinflation.
The U.S. and some other countries are following a path whereby every manipulation begets further manipulation, and which then begets even further manipulation. With China, perhaps Japan again soon, and other countries controlling their currency values, the U.S. may be forced overtly or covertly to counter their currency manipulations. And with continuing economic difficulties, with interest rate policy having created a debt nightmare and becoming increasingly ineffective, the Fed may institute money proliferation policies that have the possibility of leading to high or even hyperinflation.
If a vicious circle of manipulations by US authorities and other countries occurs, given time, it might rival some aspects of the Soviet command economy—and with a possibly similar tragic outcome. Hopefully, Americans and others will wake up before it is too late and realise that manipulated markets can eventually cause ruin.
E-mail the writer: r.robins@alrroya.com
Market manipulations eventually led to Soviet economic collapse. Though not as overt as the Soviets, it is the manipulation of currencies and interest rates by major economic powers that has mostly led to massive misalignments in investment and consumption that pose extraordinary dangers to global economic health.
Ask anyone if they believe that the Chinese currency, the renminbi, is manipulated. Almost everyone agrees that it is. Are US interest rates manipulated? Again, everyone knows they are. (Not too long ago it was only the short term rates that were controlled. Now the US Federal Reserve [the Fed] is buying longer dated US treasury bonds to bring their rates down too.) Countries all over the world are manipulating their currencies lower to gain export advantages and maintaining near zero interest rates to spur domestic demand and cheap government borrowing.
It is basic economics that where markets are manipulated, supply and demand are distorted. And one distortion creates the need for a further distortion, and so on. The longer the distortions continue the greater the possibility of total market failure. We are near that point today with currencies and interest rates.
The Chinese have scored a major mercantile advantage by pegging their currency, the renminbi, at a relatively set and undervalued rate to the U.S. dollar. Not only have US exports suffered, but the exports of many other countries have suffered as well. Under US law, the Chinese should probably have been labelled a ‘currency manipulator.’ However, by bowing to Chinese demands that they not be labelled a currency manipulator, President Obama’s administration is losing credibility everywhere.
So, Americans are waking up to find that not only does China dictate U.S foreign exchange policy, but China indirectly influences its domestic economic agenda as well. Everything from employment policies (export expansion) to government funding needs (requiring Chinese funding) are all partly defined by the present exchange rate policies.
Increasingly, Americans realize that on the foreign exchange front they have been ‘checkmated’—as in the game of chess—by China. Should difficult economic times continue, or worsen, increasing American anger is likely at this arrangement. It could pass the breaking point and encourage America to act unilaterally against China. Currency turmoil might then embrace the globe.
However, one never discussed but possible reason why the US government has been afraid to label China (and Japan previously) as currency manipulators may be because the US itself may be acting covertly to manage the dollar exchange rate.
According to the US government’s own legislation, it can act secretly in currency exchange markets to affect the dollar’s exchange rate using the Treasury’s Exchange Stabilization Fund (ESF). The US Treasury says that the ESF, “with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities." The ESF was established by the Gold Reserve Act of 1934 and then amended in the late 1970s.
Also, the Fed engages in opaque currency ‘swaps’ with other nations, and there is significant evidence of U.S Treasury and Fed engagement in gold price suppression. Gold is the ‘anti-dollar’ and barometer of confidence in the dollar. (See my August 24 column, “The Ethics of Gold,” at http://english.alrroya.com/node/54671 and gata.org)
Another manipulation of the Fed is its control of short term rates—and now possibly long term ones as well—to smooth out the booms and busts of the economy. However, we see the falsity of this argument. After almost two years at a near zero per cent federal funds rate the US economic quagmire continues—or worsens.
Induced low rates over the past ten years or so created a massive real estate boom and bust, discouraged savings, led to inordinate financial risk taking and moral hazard, unsustainable consumer debt, and now excessive, possibly uncontrollable government deficits and debt.
In their seminal work, “Growth in a Time of Debt,” published January 2010, Professors Carmen M. Reinhart and Kenneth S. Rogoff found that when government debt/GDP ratios exceed 90 per cent, economic growth rates fall considerably. According to the BIS, U.S. government debt/GDP will be 92 per cent by the end of 2010 and 100 per cent in 2011.
Furthermore, on September 1, the International Monetary Fund said, “general government debt in the G-20 advanced economies surged from 78 per cent of GDP in 2007 to 97 per cent of GDP in 2009 and is projected to rise to 115 per cent of GDP in 2015.”
Unfortunately, the present and future private deleveraging of debt in the U.S. and some other developed countries means potentially continued high—or higher—government deficits as economic growth is retarded or declines further. The Fed has said that to counter any renewed softness in US economic activity it will significantly expand its purchases of US government bonds and possibly other assets. This has the potential for fuelling a huge expansion of the money supply and creating high or even hyperinflation.
The U.S. and some other countries are following a path whereby every manipulation begets further manipulation, and which then begets even further manipulation. With China, perhaps Japan again soon, and other countries controlling their currency values, the U.S. may be forced overtly or covertly to counter their currency manipulations. And with continuing economic difficulties, with interest rate policy having created a debt nightmare and becoming increasingly ineffective, the Fed may institute money proliferation policies that have the possibility of leading to high or even hyperinflation.
If a vicious circle of manipulations by US authorities and other countries occurs, given time, it might rival some aspects of the Soviet command economy—and with a possibly similar tragic outcome. Hopefully, Americans and others will wake up before it is too late and realise that manipulated markets can eventually cause ruin.
E-mail the writer: r.robins@alrroya.com
Saturday, October 9, 2010
How Many People Have Ever Lived on Earth?
by Carl Haub
"How Many People Have Ever Lived on Earth?" is the most requested Population Today article. It first appeared in February 1995.
(Population Today, November/December 2002) The question of how many people have ever lived on Earth is a perennial one among information calls to PRB. One reason the question keeps coming up is that somewhere, at some time back in the 1970s, a now-forgotten writer made the statement that 75 percent of the people who had ever been born were alive at that moment.
This factoid has had a long shelf life, even though a bit of reflection would show how unlikely it is. For this "estimate" to be true would mean either that births in the 20th century far, far outnumbered those in the past or that there were an extraordinary number of extremely old people living in the 1970s.
If this estimate were true, it would indeed make an impressive case for the rapid pace of population growth in this century. But if we judge the idea that three-fourths of people who ever lived are alive today to be a ridiculous statement, have demographers come up with a better estimate? What might be a reasonable estimate of the actual percentage?
Any such exercise can be only a highly speculative enterprise, to be undertaken with far less seriousness than most demographic inquiries. Nonetheless, it is a somewhat intriguing idea that can be approached on at least a semi-scientific basis.
And semi-scientific it must be, because there are, of course, absolutely no demographic data available for 99 percent of the span of the human stay on Earth. Still, with some speculation concerning prehistoric populations, we can at least approach a guesstimate of this elusive number.
Prehistory and History
Any estimate of the total number of people who have ever been born will depend basically on two factors: (1) the length of time humans are thought to have been on Earth and (2) the average size of the human population at different periods.
Fixing a time when the human race actually came into existence is not a straightforward matter. Various ancestors of Homo sapiens seem to have appeared at least as early as 700,000 B.C. Hominids walked the Earth as early as several million years ago. According to the United Nations' Determinants and Consequences of Population Trends, modern Homo sapiens may have appeared about 50,000 B.C. This long period of 50,000 years holds the key to the question of how many people have ever been born.
At the dawn of agriculture, about 8000 B.C., the population of the world was somewhere on the order of 5 million. (Very rough figures are given in the table; these are averages of an estimate of ranges given by the United Nations and other sources.) The slow growth of population over the 8,000-year period, from an estimated 5 million to 300 million in 1 A.D., results in a very low growth rate — only 0.0512 percent per year. It is difficult to come up with an average world population size over this period. In all likelihood, human populations in different regions grew or declined in response to famines, the vagaries of animal herds, hostilities, and changing weather and climatic conditions.
In any case, life was short. Life expectancy at birth probably averaged only about 10 years for most of human history. Estimates of average life expectancy in Iron Age France have been put at only 10 or 12 years. Under these conditions, the birth rate would have to be about 80 per 1,000 people just for the species to survive. Today, a high birth rate would be about 45 to 50 per 1,000 population, observed in only a few countries of Africa and in several Middle Eastern states that have young populations.
Our birth rate assumption will greatly affect the estimate of the number of people ever born. Infant mortality in the human race's earliest days is thought to have been very high — perhaps 500 infant deaths per 1,000 births, or even higher. Children were probably an economic liability among hunter-gatherer societies, a fact that is likely to have led to the practice of infanticide. Under these circumstances, a disproportionately large number of births would be required to maintain population growth, and that would raise our estimated number of the "ever born."
By 1 A.D., the world may have held about 300 million people. One estimate of the population of the Roman Empire, from Spain to Asia Minor, in 14 A.D., is 45 million. However, other historians set the figure twice as high, suggesting how imprecise population estimates of early historical periods can be.
By 1650, world population rose to about 500 million, not a large increase over the 1 A.D. estimate. The average annual rate of growth was actually lower from 1 A.D. to 1650 than the rate suggested above for the 8000 B.C. to 1 A.D. period. One reason for this abnormally slow growth was the Black Death. This dreaded scourge was not limited to 14th-century Europe. The epidemic may have begun about 542 A.D. in western Asia, spreading from there. It is believed that half the Byzantine Empire was destroyed in the sixth century, a total of 100 million deaths. Such large fluctuations in population size over long periods greatly compound the difficulty of estimating the number of people who have ever lived.
By 1800, however, world population had passed the 1 billion mark, and it has continued to grow since then to the current 6 billion.
Guesstimates
Guesstimating the number of people ever born, then, requires selecting population sizes for different points from antiquity to the present and applying assumed birth rates to each period (see table). We start at the very, very beginning — with just two people (a minimalist approach!).
One complicating factor is the pattern of population growth. Did it rise to some level and then fluctuate wildly in response to famines and changes in climate? Or did it grow at a constant rate from one point to another? We cannot know the answers to these questions, although paleontologists have produced a variety of theories. For the purposes of this exercise, it was assumed that a constant growth rate applied to each period up to modern times. Birth rates were set at 80 per 1,000 per year through 1 A.D. and at 60 per 1,000 from 2 A.D. to 1750. Rates then declined to the low 30s by the modern period. (For a brief bibliography of sources consulted in the course of this alchemy, see "For More Information.")
This semi-scientific approach yields an estimate of about 106 billion births since the dawn of the human race. Clearly, the period 8000 B.C. to 1 A.D. is key to the magnitude of our number, but, unfortunately, little is known about that era. Some readers may disagree with some aspects — or perhaps nearly all aspects — of the table, but at least it offers one approach to this elusive issue. If we were to make any guess at all, it might be that our method underestimates the number of births to some degree. The assumption of constant population growth in the earlier period may underestimate the average population size at the time. And, of course, pushing the date of humanity's arrival on the planet before 50,000 B.C. would also raise the number, although perhaps not by terribly much.
So, our estimate here is that about 5.8 percent of all people ever born are alive today. That's actually a fairly large percentage when you think about it.
"How Many People Have Ever Lived on Earth?" is the most requested Population Today article. It first appeared in February 1995.
(Population Today, November/December 2002) The question of how many people have ever lived on Earth is a perennial one among information calls to PRB. One reason the question keeps coming up is that somewhere, at some time back in the 1970s, a now-forgotten writer made the statement that 75 percent of the people who had ever been born were alive at that moment.
This factoid has had a long shelf life, even though a bit of reflection would show how unlikely it is. For this "estimate" to be true would mean either that births in the 20th century far, far outnumbered those in the past or that there were an extraordinary number of extremely old people living in the 1970s.
If this estimate were true, it would indeed make an impressive case for the rapid pace of population growth in this century. But if we judge the idea that three-fourths of people who ever lived are alive today to be a ridiculous statement, have demographers come up with a better estimate? What might be a reasonable estimate of the actual percentage?
Any such exercise can be only a highly speculative enterprise, to be undertaken with far less seriousness than most demographic inquiries. Nonetheless, it is a somewhat intriguing idea that can be approached on at least a semi-scientific basis.
And semi-scientific it must be, because there are, of course, absolutely no demographic data available for 99 percent of the span of the human stay on Earth. Still, with some speculation concerning prehistoric populations, we can at least approach a guesstimate of this elusive number.
Prehistory and History
Any estimate of the total number of people who have ever been born will depend basically on two factors: (1) the length of time humans are thought to have been on Earth and (2) the average size of the human population at different periods.
Fixing a time when the human race actually came into existence is not a straightforward matter. Various ancestors of Homo sapiens seem to have appeared at least as early as 700,000 B.C. Hominids walked the Earth as early as several million years ago. According to the United Nations' Determinants and Consequences of Population Trends, modern Homo sapiens may have appeared about 50,000 B.C. This long period of 50,000 years holds the key to the question of how many people have ever been born.
At the dawn of agriculture, about 8000 B.C., the population of the world was somewhere on the order of 5 million. (Very rough figures are given in the table; these are averages of an estimate of ranges given by the United Nations and other sources.) The slow growth of population over the 8,000-year period, from an estimated 5 million to 300 million in 1 A.D., results in a very low growth rate — only 0.0512 percent per year. It is difficult to come up with an average world population size over this period. In all likelihood, human populations in different regions grew or declined in response to famines, the vagaries of animal herds, hostilities, and changing weather and climatic conditions.
In any case, life was short. Life expectancy at birth probably averaged only about 10 years for most of human history. Estimates of average life expectancy in Iron Age France have been put at only 10 or 12 years. Under these conditions, the birth rate would have to be about 80 per 1,000 people just for the species to survive. Today, a high birth rate would be about 45 to 50 per 1,000 population, observed in only a few countries of Africa and in several Middle Eastern states that have young populations.
Our birth rate assumption will greatly affect the estimate of the number of people ever born. Infant mortality in the human race's earliest days is thought to have been very high — perhaps 500 infant deaths per 1,000 births, or even higher. Children were probably an economic liability among hunter-gatherer societies, a fact that is likely to have led to the practice of infanticide. Under these circumstances, a disproportionately large number of births would be required to maintain population growth, and that would raise our estimated number of the "ever born."
By 1 A.D., the world may have held about 300 million people. One estimate of the population of the Roman Empire, from Spain to Asia Minor, in 14 A.D., is 45 million. However, other historians set the figure twice as high, suggesting how imprecise population estimates of early historical periods can be.
By 1650, world population rose to about 500 million, not a large increase over the 1 A.D. estimate. The average annual rate of growth was actually lower from 1 A.D. to 1650 than the rate suggested above for the 8000 B.C. to 1 A.D. period. One reason for this abnormally slow growth was the Black Death. This dreaded scourge was not limited to 14th-century Europe. The epidemic may have begun about 542 A.D. in western Asia, spreading from there. It is believed that half the Byzantine Empire was destroyed in the sixth century, a total of 100 million deaths. Such large fluctuations in population size over long periods greatly compound the difficulty of estimating the number of people who have ever lived.
By 1800, however, world population had passed the 1 billion mark, and it has continued to grow since then to the current 6 billion.
Guesstimates
Guesstimating the number of people ever born, then, requires selecting population sizes for different points from antiquity to the present and applying assumed birth rates to each period (see table). We start at the very, very beginning — with just two people (a minimalist approach!).
One complicating factor is the pattern of population growth. Did it rise to some level and then fluctuate wildly in response to famines and changes in climate? Or did it grow at a constant rate from one point to another? We cannot know the answers to these questions, although paleontologists have produced a variety of theories. For the purposes of this exercise, it was assumed that a constant growth rate applied to each period up to modern times. Birth rates were set at 80 per 1,000 per year through 1 A.D. and at 60 per 1,000 from 2 A.D. to 1750. Rates then declined to the low 30s by the modern period. (For a brief bibliography of sources consulted in the course of this alchemy, see "For More Information.")
This semi-scientific approach yields an estimate of about 106 billion births since the dawn of the human race. Clearly, the period 8000 B.C. to 1 A.D. is key to the magnitude of our number, but, unfortunately, little is known about that era. Some readers may disagree with some aspects — or perhaps nearly all aspects — of the table, but at least it offers one approach to this elusive issue. If we were to make any guess at all, it might be that our method underestimates the number of births to some degree. The assumption of constant population growth in the earlier period may underestimate the average population size at the time. And, of course, pushing the date of humanity's arrival on the planet before 50,000 B.C. would also raise the number, although perhaps not by terribly much.
So, our estimate here is that about 5.8 percent of all people ever born are alive today. That's actually a fairly large percentage when you think about it.
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