With the US Congress now having “suspended” the Treasury’s debt “limit” until May 19, the last feeble constraint is gone. In January 1980, when the Treasury had yet to rack up its first $US 1 TRILLION in funded debt, Gold reached $US 850. Today, it’s expected that when the “temporary” suspension of the debt limit has reached its mandated end on May 19, Treasury debt will be at or very near the $US 17 TRILLION level. Yet right now, Gold has not quite doubled that 1980 level in nominal terms.
The above quote is all you need to know. Think about what Bill Buckler is saying here in such a simple , short and completely factual statement. The last time that the U.S. Treasury and Fed were losing credibility, U.S. debt was 1/17th what it is now (not even including all of the other guarantees and unfunded promises) yet Gold was only half the price it is now. Back then, there was only the “threat” of potential “insolvency” whereas now the potential or should I say “probability” of insolvency is pretty much carved in stone. If the market (left to its own) were to value Gold like it was back in 1980, it would need to trade somewhere in the $15,000 range.
But even this figure would not be enough! If you added in all of the guarantees, agency debt and unfunded liabilities you would need a figure well north of $50,000 per ounce and this is assuming that no “bankruptcy” would occur as it did not after 1980. The point is this, Gold (and Silver) are grossly undervalued yet they are the target of Washington, Wall Street and the main stream media for warnings that they are in unsustainable bubbles. Gold (if you understand the math involved) is not only NOT in bubble territory, it is the “anti bubble” and the most UNDERVALUED asset on the planet (with the sole exception being Silver).
I know that I have written on this subject many times but it is important that it be reiterated. In order to “refinance” or to make the system solvent again, gold MUST be revalued higher. The central banks and sovereign treasuries will thus come back into “balance” with a much higher gold price. The U.S. Treasury and Fed are in the same boat… IF and only IF we have the gold that we claim to have. This is a very important “minor detail,” whether or not we have the gold. It is very simple. If we do have it, the holdings can revalued and “balance” the previous errors of our ways and if we do not…
…if we do not then we have only one thing left, the world’s largest military power. This is a very scary scenario because economically we will be in a shamble. We (the citizens) will see a massive (35% at absolute minimum) drop in living standards. “Handouts” will necessarily be cut and in general people will be pissed off. I bring up this facet because of the recent “drills” in both Miami and Houston.
Army Drill Terrorizes Houston Neighborhood
I cannot ever remember anything like this before. I also cannot ever remember any agency outside of the military ordering over 1 billion rounds of ammunition or the IRS ordering 7,000 assault rifles. Something is definitely coming to a head and it just may be that gold gets revalued internationally which will leave us far behind if the vaults are truly empty! Protect yourself; no one else will!