The earliest gold references date back to around 4000 B.C. where Egyptian hieroglyphics described gold as being as prevalent as sand. Egyptians were also the first civilization known to smelt gold and utilize the lost-wax technique still used today in jewelry making.
The Egyptians And King Tut
One of the most iconic and enduring images of gold extravagance is the King Tutankhamen archeological find and world museum tour, followed by the song “King Tut” by Steve Martin, and his world tour. The mask alone, formed in the image of the Egyptian king, is an exquisite piece of art made from 24 pounds of gold. The ancient Egyptians made the mask to do more than show the king’s wealth. On a practical level, using gold ensured that the mask would not deteriorate or tarnish and that it would be preserved throughout time.
Christopher Columbus was the famous Italian explorer who was financed by Spanish monarchy to sail to the West Indies to establish an alternative trade route to the East and return with riches including gold and silver. Instead, he got lost and discovered the American Indians. Contrary to popular belief, Columbus wasn’t actually the first European to sail to the Americas, having been preceded by Norse explorer Leif Ericson back in the 11th century. He did, however, begin a period of European exploration, conquest, and colonization that lasted for several centuries. On his famous 1492 voyage, Columbus had promised a reward of gold to whoever saw land first. A sailor named Rodrigo de Triana was the first to see land on October 12, 1492 when he spied a small island in the present-day Bahamas that Columbus named San Salvador. Mr. de Triana never got the reward, as Columbus chose to keep it for himself, telling everyone he had seen a light the night before. He had not spoken up because the light was indistinct. To make up for the injustice, there’s now a nice statue of him sighting land in a park in Seville.
No discussion of the history of gold would be complete without a good look at the role of pirates in stealing gold, burying gold and drawing colorful maps to find it again. The period from 1690 – 1730 is known as the Golden Age of Piracy, and gave rise to the likes of Edward Teach, Calico Jack, Black Bart, Captain Kidd and the infamous Johnny Depp. Typically, the pirate got killed, leaving a motley crew of British soldiers to hunt for the treasure chest. More often than not, they had the map upside down, wandered into the jungle, got captured by natives and were eaten. The smart money back then was in the fake treasure map industry.
The American Revolution
During the American Revolution, the British had a fairly easy time setting up finances for the war. In stark contrast, America had to delay payments to soldiers and suppliers, promising they would be repaid after the war. The colonies had at most, 12 million dollars in gold, which was hardly enough to handle transactions from day to day, much less finance a war. On top of that, the British cut off almost all imports and exports to and from American ports. It wasn’t until 1781 that Robert Morris took charge of the finances for the United States, and used a French Loan to start up the private Bank of North America. The Bank held deposits of gold, silver, and bills of exchange from France and the Netherlands, using these to provide a sound backing for a new continental currency. In 1783, many soldiers and officers who weren’t paid for their service were given land grants to supplement what money they were owed. Nobody ever pays people in land anymore.
Gold Miners and The Gold Rush
Ancient gold miners used water to wash gold bearing sand across sheep’s hides. The heavy gold flakes and dust, 19 times heavier than water, would settle in the fur. Miners would hang these “golden fleeces” out to dry and gently shake out the gold. Other methods of extracting the valuable mineral from the ground include panning, sluicing, dredging, hard rock mining and underground mining. The world’s deepest hard rock gold mine is in South Africa and runs 12,800ft underground. They have to pump in air conditioning because at that depth, it’s actually too hot for humans to exist, much less do heavy mining work. The California Gold Rush of 1848 and the South Africa Gold Rush of 1885 were two major periods where gold was discovered, and miners quickly flocked in eager anticipation of being a part of the discoveries, blazing their own trails and getting filthy stinking rich. John W. Marshall in California and George Harrison in Johannesburg were a couple of mining rock stars who struck gold, causing an immense flow of people looking for the same luck. By the end of the gold rushes, some miners uncovered enough gold to lead wealthy lives, while the majority didn’t, and either returned home or went in pursuit of other career paths.
The American Civil War
The Legal Tender Act of 1862 outlawed privately minted gold and silver coins, allowing the Federal Government to issue paper money that was not backed by silver or gold for the first time. However, due to a lack of confidence in these new banknotes, it led to many people hoarding the coins that were still in circulation. The Confederacy had very few gold reserves even before the war began, and they were forced to issue paper money backed by “good faith” to the sum of almost half a billion dollars. That’s a lot of good faith. The North saw fit to encourage the counterfeiting of Confederate currency as an economic weapon as well, which helped turn that good faith into not so good faith.
The Olympics Founded
The first Olympiad was in Olympia, Greece circa 765 BC. The Sanctuary of Zeus, also in Olympia, housed a 13-metre-high (43 ft.) gold and ivory statue of Zeus that had been sculpted by Phidias circa 445 BC. This statue was actually one of the ancient Seven Wonders of the World. The 1896 Summer Olympics, officially known as the Games of the Olympiad, was a multi-sport event held in Athens, Greece, from April 6th – 15th, 1896. It was actually the first international Olympic games held in the Modern era. Because Ancient Greece was the birthplace of the Olympic games, Athens was considered to be an appropriate choice for the Games. The city was unanimously chosen during a congress organized by Pierrede Coubertin, a French pedagogue and historian, in Paris on June 23rd 1894. The International Olympic Committee (IOC) was also instituted during this congress. For these games, the total cost came to 3,740,000 gold drachmas, which was the currency for Greece until it was replaced by the Euro in 2001. The United States won the most gold medals with 11, but Greece won the most overall medals with 46.
The Great Depression
A “promise of gold” is not as good as “gold in the hand,” yet in 1933, at the height of the Great Depression, the U.S. Government, under the Gold Confiscation Act, confiscated gold money from its citizens and replaced it with paper Federal Reserve Notes. It actually became illegal for individuals to own gold, except for small quantities that coin collectors and dental practitioners could hold. This alone eliminated the public’s capacity to hold government inflation of the money supply in check; they could no longer redeem inflated paper money for gold.
World War II
By the end of World War II, gold was no longer money. Gold was merely a government-rigged commodity because it could be sold at a fixed price to the U.S. Treasury for money. On the opposing side, the Germans transferred what was called “Nazi Gold” to overseas bank accounts that they had seized from their victims, in order to help finance the war. In the Pacific war, many believe that tons of gold, allegedly stolen in Southeast Asia by Japanese forces at the behest of several of Japan’s highest ranking princes, was hidden in underground vaults in the Philippines. The buried treasures are known as “Yamashita’s Gold,” named after the GeneralYamashita Tomoyuki. One story has it that as the US forces closed in, the chief engineers of the vaults were given a farewell party, drank sake, and sang patriotic songs as Yamashita and the princes slipped out and set off dynamite charges in the access tunnels, keeping the vaults a secret. The legend goes that sometime in 1945, American intelligence agents learned about the location of some of the vaults and recovered billions of dollars in gold bullion, platinum, and loose diamonds.
Gold In The Modern Day
The world consumption of new gold produced is about 50% in jewelry, 40% in investments, and 10% in industry. Currently, the nations with the largest gold reserves are The United States” 8,133.5 tonnes, Germany: 3,395.5 tonnes, Italy: 2,451.8 tonnes, France: 2,435.4 tonnes, China, 1,054.1 tonnes, Switzerland: 1,040.1 tonnes, Russia, 918.0 tonnes, Japan: 765.2 tonnes, Netherlands: 612.5tonnes and India: 557.7 tonnes. Whether gold is seen as currency, an investment, an Olympic medal, or an expensive way to say, “I love you,” it holds power and significance. Having such an impressive history, stability and current standing in the world, gold gives investors confidence year after year. The history of gold is a work in progress, and gold holds a more prominent place today than ever before.
Investing in Gold Today
For individuals looking to invest in Gold, American Bullion specializes in adding gold and other precious metals to Individual Retirement Accounts. The process is tax-free, hassle-free and the experts at American Bullion are available to help answer any of your questions. To speak with a Gold IRA expert about the benefits of owning physical gold or to request our complimentary Free Gold Guide, call American Bullion at 1-800-326-9598 today.