"Please tell me how much it cost to get 1oz of gold out of the ground, mint it into currency and distribute it on the market and if you think about it, just producing that gold reduces somebody’s purchasing power as someone has to cover the value of producing a coin. So if govt will distribute the money, tax payer will have to cover."
Gold companies have nothing to do with producing coins. They merely produce the gold for whatever purpose the buyer prefers to use it for. As far as the cost to produce an oz of gold, that varies from mine to mine. It all depends on their mine's efficiency. And as far as dilution goes, there is far more dilution to the fiat currencies from printing presses than there is from mines producing gold. Right now, the abilities of mines to produce gold to keep up with demand is at an all time low. And what are your thoughts of Burnanke when he gets the chair and begins turning up the speed of the printing presses? Particularly when (as Buffet has warned) there are BIG adjustments on the way (like China making the next move with the yuan)?
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