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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (100858)	8/15/2009 11:54:34 AM
From: Sunny Jim	Read Replies (1) \| Respond to of 116555

<gold is infinitely divisible, at least for practical purpose> I may be dense, but I don't understand what you mean by infinitely divisible. Does it mean that there is enough of it? The money supply, M1, is $1.65 trillion. The total amount of gold produced is something like $5 trillion. There would be major major disruption in the world gold market (and I would add financial markets) if the US were to try to purchase 1/3 of the total gold available to back it's currency. To get enough you would have to dip into the jewelry market, and there's a world of people that aren't going to give up their jewelry for the US dollar. No way. In fact once the US decided to back the dollar with gold, there would be a rush to buy gold worldwide. From a practical standpoint it's hard to see backing the US dollar with gold IMO. Any money supply, as long as it is divisible, is sufficient