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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Canuck Dave who wrote (24126)	12/23/2002 5:09:54 PM
From: Jim Willie CB	Read Replies (2) \| Respond to of 36161

gold cover, not gold convertible (that is difference) suppose 10% cover enforced the USGovt must then maintain a balance of $1 trillion in gold reserves in order to offset $10 trillion in money supply as the money supply rises by X amount, the gold treasure must compensate with 10% times X in new additions this makes the USGovt a steady buyer of gold as the trade gap shows Y amount in a given year, our foreign creditors thus obtain a claim of 10% in gold but this addresses the same demand side issue you address the demand, which might not apply I believe the concept addresses collateral supply that is my understand, but I am a babe in the woods here it is all about restoring confidence via collateral in hard asset reserves I also am unsure about the demand side, which is far more relevant to large exporters like China and Japan they are free to bypass the entire issue by converting surpluses into gold or to use a portion for building capex, with rest set in gold which would still encourage the USGovt to act responsibly, since the cost of gold would rise for new required additions as long as the USGovt insisted on a Keynesian Monetarist insane policy, we would see endless gold purchases this is what I expect to see Gold Cover Clause, continued USGovt insanity, and a resultant endless rise in gold in order to promote stability in the world financial system without the anchor of a gold cover clause, no stability, a run on the dollar, economic chaos free release in gold is the necessity here / jim