Return to the Gold Standard

[Slaphot]

http://www.humanevents.com/article.php?id=43439

[NHsorter]

Great link. With all of the FRN's out there right now, how is this even possible? Anyone have a calculation on where this would put the price of gold if this were to happen?

[Lemon Thrower]

depends on whether you use M1 (FRNs), M2, or M3.

I have seen estimates of the price in dollars from time to time - here is what i recall:1

M1 would be ball park $15,000 an ounce and assuming the U.S. owns the unencumbered gold it claims to own would roughly balance the deficit.

broader definitions of money and the deficit would require a price of somewhere north of $37,000.

fwiw, jim sinclair has suggested that we'll see some sort of loose return to the gold standard where new debt is capped by the amount of gold backing it, but it would not be 100% backed. sinclair has said probably around 40%.

i think something like this will eventually happen but i would not say its imminent.

[John_doe]

depends on whether you use M1 (FRNs), M2, or M3.

I have seen estimates of the price in dollars from time to time - here is what i recall:1

M1 would be ball park $15,000 an ounce and assuming the U.S. owns the unencumbered gold it claims to own would roughly balance the deficit.

broader definitions of money and the deficit would require a price of somewhere north of $37,000.

fwiw, jim sinclair has suggested that we'll see some sort of loose return to the gold standard where new debt is capped by the amount of gold backing it, but it would not be 100% backed. sinclair has said probably around 40%.

i think something like this will eventually happen but i would not say its imminent.

I thought they quit giving out m3 statistics?

[Lemon Thrower]

they did, but M3 can be roughly estimated.

its less relevant these days because so much of what functions as money is outside of M3 - tbills, MBS, CDS, derivatives, etc.

[68Camaro]

Lowest possible number would be to base it off current literal printed cash (~$900B) and it's in the neighborhood of $5000/toz for the current alleged US supply. Go beyond that as your definition of money and it gets larger from there.

[Sheikh_yer_Bu'Tay]

Great idea and I hope it comes true, but I will believe it when I see it.

Libya's leader was making great strides to establish a gold dinar for the Arab/African sphere just before NATO decided to take him out.

[AGgressive Metal]

Great link. With all of the FRN's out there right now, how is this even possible? Anyone have a calculation on where this would put the price of gold if this were to happen?

There are only a couple trillion FRNs out there, its the M2 and M3 that gets you!

[frugalcanuck]

Great idea and I hope it comes true, but I will believe it when I see it.

Libya's leader was making great strides to establish a gold dinar for the Arab/African sphere just before NATO decided to take him out.

And thats why they are trying to kill him and not just take all his assets and lock him up. They dont want his ideas spreading.

[Lemon Thrower]

Lowest possible number would be to base it off current literal printed cash (~$900B) and it's in the neighborhood of $5000/toz for the current alleged US supply. Go beyond that as your definition of money and it gets larger from there.

that is a great way to think about it.