- China could purchase the total United States gold reserve (8133 metric tonnes) with 8% of its foreign exchange reserves. - It could purchase the total global gold reserve (31,866 metric tonnes) with 32% of its foreign exchange reserves. - It could purchase all the gold stored by Exchange Traded Funds (+/- 1750 metric tonnes) with less than 2% of its foreign exchange reserves. - At $4900 per troy ounce, the value of U.S. gold reserves would match China's U.S. Treasury holdings of roughly $1.28 trillion. - At $4700 per troy ounce, the value of the world's gold reserves would match China's total foreign exchange reserves of roughly $4 trillion. - To put it another way, China could pay double the current price for the world's total gold reserve and still have nearly $1.5 trillion in foreign exchange reserves. - China sits atop the list of the world's foreign exchange holdings. The United States ranks thirteenth at $133 billion. For the United States to ascend to the top of the rankings, it would need to revalue its $319 billion gold reserve to almost $4 trillion or raise the value to just under $15,300 per troy ounce. Usagold.com
What if they will buy much of the gold in the World? Just awaiting the lower prices for the big buy-up...
There is a weird fact that may be overlooked, if it is still valid. Somewhere I read that the US holds gold reserves to back a certain amount of treasury deposits. These gold reserves are booked at a value of $41.70 an ounce, or thereabouts. So if they were to revalue them to the market price (mark to market) they would suddenly have a lot more zeros on the books. Anyone know more about this?
Well I thought the US gold is largely lent out to the bullion banks or used in operations to suppress the gold price to bring confidence in the US dollar (much like what they did in the 60s during the London gold pool) plus the US will never pay back its debt- ie national debt only goes up even during supposed surplus years under Clinton. also remember how the Germans wanted their gold back? the US said it would take to the end of the decade, and as it turns out their delivery schedule was running way late and delivered way less gold than originally planned and eventually the germans decided they no longer want their gold. given the German example and US track record of not repaying debt (they just borrow more) What makes u guys think the US will pay its debt to China with real tangible gold when they can just inflate the debt away.
Yes and no. If they inflate the debt away enough, no-one will want to hold dollars. Then those dollars come out of reserves and return home. This would not be a good thing for the U.S.
Yea I would like to see this happen tomorrow. Could be just a pipe dream, but all things being equal, it seems a fair thing to do. The debt of the world surely cannot just keep going up and up. This is one way to equalise the debt. Must better than deflation or inflation surely?
Not happening. For the US - I believe China has $3T of USD debt out of about 17T. Why would the US be interested in paying that debt off when we aren't paying anything off? For China - Why take gold at $4-5K when you can buy it more slowly at much, much cheaper prices? More importantly, China needs that money for to buy resources, recap banks, etc. The US Debt is the only investment liquid enough at the $3T level. Revaluing US gold, would have no effect. The US Government has trillions in assets, but few of those assets will ever be sold. US government officials have to publish an income statement every year, not a balance sheet .
Do you really think the US still has 8,000 tonnes of gold? I don't believe that for a second. I think you only have to look at the fiasco a couple of years ago with Germany's repatriation attempt and join the dots to figure out how much gold they really have.
Which reminds me - whatever happened to Rumsfield's missing Pentagon trillion or two? http://www.cbsnews.com/news/the-war-on-waste/
