$4,000 POG? -- I think we should start lobbying for the adoption of Rothbard's solution of a 100% gold-backed currency and let the next President repeat the FDR gold revaluation thing.
According to Reisman at Mises, that would mean revaluing the Fed's gold hoard to reflect the amount of the currently outstanding monetary base of ~$3.3 trillion, which would reprice gold to about $12,700/oz today (and getting higher by the minute) -- $12,700 ought to make a few junior mining stocks pop
"At the present time, there are approximately $2.5 trillion of checking deposits in one form or another. These checking deposits are those reported as part of the M1 money supply ($625 billion), plus those reported as so-called sweep accounts by the Federal Reserve Bank of St. Louis ($765 billion), and those reported as retail money fund accounts ($1078 billion). In addition to these checking deposits, our present money supply consists of approximately $800 billion in currency outside the banking system. Our total money supply is thus currently $3.3 trillion.
The Federal Reserve System holds approximately 260 million ounces of gold. Accordingly, the book value placed on the Fed's gold holding needs to be substantially higher than $1,000 per ounce, if it is to result in the creation of sufficient bank capital and reserves. The question is, how much higher? The most logical answer to this question was supplied as far back as the 1950s by the late Murray Rothbard, who argued for the establishment of a 100-percent-reserve gold standard by means of pricing the Fed's gold stock at whatever price was necessary to make it equal the outstanding supply of money.
Taking the outstanding supply of money today as being $3.3 trillion, Rothbard's proposal implies a gold price of approximately $12,700 per ounce. At such a price, the Fed's gold stock would be sufficient to provide a 100 percent reserve against all US checking deposits and all US currency" |
