Monday, November 17, 2008

Gold standard, anyone?

Here's a very interesting short article about how worthless our paper dollars...I mean, how much gold would cost if we went back to the gold standard - presuming we actually have any gold, that is. It's interesting.

The Market Oracle
Gold at $14,172 an ounce?
Commodities / Gold & Silver
Nov 14, 2008 - 04:17 PM
By: Brian_Bloom

...So let's take a leaf out of the BCA's book. Just for the hell of it, let's assume that the USA 's liquid assets today equal its liquid liabilities excluding US Dollars in circulation. It would follow, therefore, that the price of gold would need to be the number of dollars in world currency reserves divided by the number of ounces of gold in the official US bullion reserves. (This assumes that the gold is still there. No verification audits have been done for decades.)...

Eye-opener, to say the least. This is what your money is really worth, class - $14,000 and some for an ounce of gold. This hidden inflation has been hobbling the whole financial system for some time now, and it's going to be painful to work out of the system. Given a choice between asset devaluation and monetary hyperinflation, though, class, you should definitely choose devaluation. Hyperinflation is not anything you want to experience, trust me.

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