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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: forceOfHabit who wrote (102885)	4/29/2009 1:10:48 PM
From: benwood	3 Recommendations Read Replies (1) \| Respond to of 110194

"How is that different from what the US did in the 1930's, expropriating privately held gold?" After reflecting on the "sacred gold" where say a certain rare isotope was injected, etc.... Gold prices are set worldwide. There is nothing the US can "add" to gold to change what you can buy "regular" gold for elsewhere. Hence, regardless of any silly "plan," your "regular" gold will retain it's worldwide buying power. Confiscating told is not like a currency exchange. If the US confiscated gold (which was a precursor to devaluing the dollar relative to gold), then one could beat them at that game quite easily nowadays: 1) gold is confiscated (you get $900/oz say) 2) take that cash, and put it into a basket of foreign currencies 3) the dollar is devalued. Your foreign monies go bonkers. But the real reason that a 'sacred gold' concept makes no sense is that they already HAVE that. What they have, in effect, is a SINGLE OUNCE of sacred gold worth trillions of dollars. They revalue this every year, adding a trillion or three to the value. Adding a gold isotope or whatever means nothing. The point of having something "back" the money only has an effect if people in OTHER countries believe it (or more literally, FCBs). Adding an isotope and simply declaring that this Sacred Gold is worth a billion dollars an ounce can all happen. But I believe that NOBODY would care. Because if THEY care, that implies they would gladly give the US Treasury the billion dollars (or whatever) for that ounce of Sacred Gold. See... Sacred Gold would be exactly the same confidence game we have now. All that's missing NOW is the one ounce of Sacred Gold worth billions; everything else is the same.