Not so long ago, November of 2005 to be exact, we stated here that the value of all the gold ever mined in the world since the beginning of human history was some $1.89 trillion dollars. At the time, that number was fairly accurate, given our round estimate of some 140,000 tonnes extant of the shiny yellow stuff, and the then-prevailing spot price.

But since that time, a lot has happened to the dollar/gold equation.

In February of this year, when it took about six hundred and fifty dollars to buy an ounce of gold, we reported that the US federal budget for 2007 was almost exactly the same dollar figure as the value of AGIW (all the gold ever mined in the world since the beginning of human history). By this time, AGIW had swelled in value to approximately $2.95 trillion (2,950,000,000,000 US dollars).

But today, with gold costing about $100/ounce more than it did eight months ago, the value of all the gold ever mined in the world since the beginning of human history has now grown to $3.35 trillion.

Call it a gold rally, a dollar slump, or both. Did gold go up, or did the dollar go down?

If we look at it strictly as a gold rally, then it can be said that the past 23 months have enriched the value of all the world’s gold holdings by some $1.46 trillion (that’s 1,460,000,000,000 US dollars). If you still own gold today that you've had since February of 2005, then congratulations on your share of the winnings!

On the other hand, it can also be said that US dollars holders have been robbed, in less than two years, of $1.46 trillion, measured by the most time-honored monetary constant in the world, gold. So if you still own today some of the dollars that you owned in February of 2005, then you shared in the very big haircut that all owners of US dollars have suffered over the past two years.

Which brings us to the big point, which is that the actions of our government, in its infinite powers and finite wisdom, define what our money is worth. We would all be better off realizing that the dollar is a necessary transactional medium, but not a very good store of value. It’s best to think of dollars as equivalent to frequent flyer miles, subject to degradation and rule changes by the arbitrary fiat of its issuer, whether Washington DC or the marketing and promotional team at your favorite airline.

SO IN THE INTEREST OF FUN AND ACCURACY, we are considering adding a page to this website, giving the world daily updates on the value, stated in US dollars, of all the gold ever mined in the world since the beginning of human history. It wouldn’t be much of a task for our database-proficient webmaster. Simply start with a defensible number for the amount of gold ever mined in the world since the beginning of human history (138,000 metric tonnes works for me), periodically add the annual mine production number (currently about 2,500 tonnes per year), run a continuous gold spot price update, and there you have it.

Please forward any suggestions that you might have on this Big Number project.