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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: ggersh who wrote (5948)	4/7/2008 5:23:44 AM
From: Real Man	Respond to of 71475

en.wikipedia.org Well, you can see our foreign currency reserves are $73 billion, our gold reserves are $11 billion. However, the Fed counts gold as if it were valued at $42 per oz. At $900 per Oz, these gold reserves are $236 billion. Some say all this gold is long gone (lent out to banks for a song). Now the treasuries, most of the Fed balance sheet that is backing the currency, are 50% gone as well (lent out). The Fed can purchase some more from the treasury or through coupon passes at any time, but that would be monetization of bad debt it now holds, and very inflationary. However, some weird stuff - Fed holds gold for European CBs as well, so... if it's not really gone, rather, some paper certificates are issued against it. We might say we are not giving it back to ya, or giving it back to ya in dollars, just like we did in 1971.