Some say a massive revaluation higher in physical gold will bring about massive investment in gold mining activity, there will consequently be a flood of new mine supply … which will depress the price in classic fin de siecle, bubble-bursting fashion.
If desperate governments will, as FO/FO/A suggest, not allow private miners to simply dig up the nation's under-foot buried treasure and keep it all for themselves, but instead will either heavily "windfall tax" it or perhaps insist that the miner must provide it under contract to the Treasury at a subsidised rate... for the good of the hungry collective. (All of which, to me, seems like a more than plausible scenario. Does this say anything to you about the future valuation of gold miners? Maybe it explains that recent under-performance of miners compared to their product?) What will happen to the "skim" that said desperate governments receive? Are they not spenders? They're desperate for a reason. Their boosted spending will end up as a yet-larger surplus for the surplus-producers to save.
Unmined gold is useless until it's above-ground and on the market for sale. The State will take their slice when this happens. The usual suspect producers will end up receiving the State's additional spending, then they will exchange the additional surplus from that spending, into the additional gold that was mined.
To summarise the point: more mined supply will simply enable greater consumption, and greater surpluses, than would otherwise have been the case. The additional consumption and saved surpluses will net out.
Additionally, all of this assumes there is a significant amount of undiscovered gold in the ground waiting to be identified and extracted. Given the size of the existing above-ground stock, quite a lot will need to be found in order for it to become significant — pencil me in for now under "unconvinced".
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