Loading ...THE 1 TRILLION DOLLAR QUESTION
Can anyone tell me WHY the US Gold reserves are Still On the books as being “Valued ” at $42.22 an ounce ?
SERIOUSLY WTF ? IS THAT ALL ABOUT
And Do you think Trump and Comp will soon Value the Gold ( If it’s there) at Present market Value ?
It is claimed that the USA has approximately
8,000 metric tons × 32,150.7466 ? 257,205,972.8 troy ounces
Actually the number listed is a little more than 8,000 Tons
so rounding off …say 270,000,000 Ounces X $3,000 and ounce
= 810,000,000,000 ( Eight Hundred and Ten Billion)
This wouldnt put a dent in the Deficit …BUT revalue the Gold price X 10 and now you’re talking
In 1925 the Bank of England mis-priced (over valued their gold) and paid a price. World trade imbalances must be considered when determining a ‘sustainable’ price for gold. I don’t know what that amt. is but there are pitfalls.
https://fee.org/articles/winston-churchill-s-gold-standard-folly/
“The problem with the Churchill plan was not restoring gold’s place in the monetary system; it was fixing it at the pre-war rate instead of a rate that reflected the paper pound’s deterioration. Inflation cut the pound’s value, but Churchill was too proud to admit it, so he restored gold convertibility at a rate that pretended the government had never inflated. That translated into pegging the pound against the American dollar at £1 = $4.86 instead of the free market rate of £1 = $4.40.”
“We know the rest of the painful story. Much of the currency and credit expansion—and the artificially cheap interest rates and Roaring 1920s boom that set us up for the Great Depression—was prompted by the Churchill blunder and the Fed’s efforts to paper it over. (See Great Myths of the Great Depression for more on this sad saga of failed interventions.)
The proper policy for Britain in 1925 would have been to recognize the pound’s real value and stabilize it by restoring gold convertibility at the market rate. The Great Depression might never have happened were it not for the monetary mischief of the British and American governments in the 1920s (and in subsequent years as well).”
My take would be instead of fixing the price of gold, wait for the (world) market price to approach what is needed to stabilize the economy / clear debts and then lock it in at a price say 10-15% BELOW the (elevated) market rate (to be conservative) – gold can always stabilize at a price HIGHER than locked in but you don’t want to price gold too low or you end up with France taking it all in arbitrage. Also, regarding the ‘locking in’ – allow the price of gold to fluctate with in a band that grows at the rate of supply, approx. 2% annually. Michael Maloney’s book Guide to Investing in Gold and Silver had some charts on this and I believe there were opportunities to return to a gold std. in the early 80’s and to a lesser degree 2011-12. Another thought is to ‘back’ the currency with a % of gold. Jim Rickards has written quite a bit about that scenario. I’d like to see him involved in any Gov’t level discussion about revaluation.
Your explanation and history lesson(thanks for that) ties in with my post this morning about any gold price revaluation needs to come along with a return to the gold standard. Bessent might have been reading the Tent since I saw on ZH this morning he said his recent comments about monetising the US balance sheet were not about a gold revealuation. So either he is trying to tone down the gold price reaction since then, or it is just that a lot has to be done before they are ready to do both a revaluation and a return to a gold standard. I would think 2026 is a more likely timeframe.