Nice chart huh? Once upon a time in an age long ago the amount of gold held was equal to or more than the amount of debt owed. It didn’t have to be like that, it would have been OK to have more debt than gold as long as the debt got paid off…eventually…and in a currency that remained relatively constant. This of course did not happen; instead the “payable” currency was debased and debauched. And somewhere along the way (probably back to the days of John Connally’s “It may be our dollar but it’s YOUR problem” comment) it was decided that the debt would NEVER be paid off.
What has happened year after year is that new (and exponentially more) debt was issued (borrowed) to fund our lifestyle and payoff (roll) old debt principal and interest. When all of this started years ago…”debt worked” as a gearing mechanism. A $1 borrowed would create more than $5 of GDP growth, this is not the case now. Now, $1 borrowed creates less than .50 cents of growth so we have gone from a very positive gearing to actually a negative gearing. Yes I know, “deficits don’t matter”…until they do. Just ask the various European countries whether deficits matter or not.
The other part to this “nice chart” is the teeny tiny yellow part. That is the current market value of “our gold.” There is only one problem here; this truly and surely “WAS” our gold as of 1956 (the last time an audit was done.) Is the gold still there? If it is, then who really owns it? Have we “swapped” it or “leased” it out? We know for a fact that economic numbers are “massaged” or in plain English bogus and just plain made up. We know that firm after firm pays fines (without admitting guilt) and markets, all markets are rigged to “paint the right picture.” Are gold and silver the ONLY markets not rigged? Is it possible that the U.S. has never sold any gold to keep the price down and thus prop up the value of the dollar? No chance, not even in hell.
So you look at this chart and on its own it has become and is very very frightening. The only problem is that the $16.5 trillion worth of debt is really and actually at least $100 trillion when you add in agency debt, off “budget” debt, loan guarantees and future promises. Then you look at the 8,400 tons of gold and do a little bit of detective work and see that gold exports have exceeded total mining production every year this century to deduce that “some” (maybe close to ALL) gold has been dishoarded. If you reworked this chart with numbers that even resemble reality you get a very ugly picture with only one outcome…we’re screwed and have been for years…we just didn’t know it!
Regarding the chart, it would appear that gold would need to be $100,000+ an ounce!
who knows what the level really is? All I know is that people are freaked out because the price is “down” and don’t really understand what this is all about. Downside $50? $200? $400??? and upside is multiples of current price? Pretty good risk versus reward.
Nice piece, scary, but also it’s the real world. Frankly, I don”t give a damn (to borrow a famous phrase). If the government is broke,I don’t care. I’m a follower of the Miles Franklin “all in” philosophy and I have my PM safely in private storage provided by you all. I will survive thanks to you, Bill and Andrew, David and Andy.
not ALL in but “mostly” all in
Right now; cowboy …. stop writing .. You don’t know anything more than anybody on this planet … sefish loser and people manipulator .. go scoop bull shit
no need to read my thoughts then bataille. because I write common sense and logic makes me a loser? a people manipulator? how so? if you can look at this chart and believe that the debt doesn’t matter then go back to sleeple,