U.S. owned gold bullion
Geckster109
Posts: 231 ✭✭✭
As we approach the $20 trillion debt mark, I thought this stat might startle some folks. The United States government is the largest holder of gold bullion in the world among other governments....by far. It holds some 8,100 tons of gold and has as much as the next 3 nations in order COMBINED! Just a few decades ago, all that gold backed all the currency issued by our government. However, the 237 million ounces of gold we hold would now not even pay for 1 year's worth of interest on our national debt! That 8,100 tons (or 237 million oz) is currently worth around $300 billion.....the annual interest on our debt....JUST THE INTEREST...is close to $450 billion now! We have gone from backing all our paper money with it, to spiring so far into debt that all that gold wouldn't even pay a year's worth of interest. Very sad indeed!
Comments
That is a very eye opening statistic!
We may hold a lot of gold but do we own it? I suspect most of it has been leased or is being held for someone else.
Maybe someone should ask for an audit. LOL
Note that when it did back the currency there was 20,000 tons of it. Redemption for gold bled that down quick enough for the US to say "no more gold exchanges for currency." The biggest orders came from foreign governments that dumped dollars for US gold. Good thing US bonds are backed by gold, otherwise they wouldn't be stuck with our debt.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
If you can create fiat money out of thin air, who needs gold
those who can see past tomorrow.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Everyone... well almost everyone, knows, Tomorrow never comes ...
I'd be surprised if we 'owned' more than 2/3 of what we hold.
I'd also be surprised if less than half were wrapped tungsten.
We could own it all if we wanted to.
Knowledge is the enemy of fear
"I'd also be surprised if less than half were wrapped tungsten."
If that were ever discovered to be true - and published - it would be the greatest scandal ever and could bring down the government and - possibly - the country. Cheers, RickO
Would never bring down the country. You think the USA is nothing more than a pile of shiney rocks? I'd advise you to travel this country son.
Knowledge is the enemy of fear
I too was wondering how such an event would bring down the government and possibly the country....can you explain your rational rickO please?
I am thinking if such events as Nixon impeachment procedings, the Clinton presidency sex scandal, the great recession etc did not topple us then how could missing gold do it?
Inquiring minds want to know!
Especially such an insignificant amount of gold that it would cover just 1.5% of our total national debt.
Faith in the system and those that control it affect confidence. Confidence affects markets. Us financial system is a pile of shiny confidence.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
As derryb said.... the financial house of cards could collapse on such news.... there is no predicting the impact such an event could have on the economy, the government - and by extension - America as a whole. The great depression literally brought the country to it's knees... though we did survive it. The United States is really a keystone of the world's finances...and severe damage would impact the world finances... I will not pretend to know the detailed results of such an event... however, I am sure that such an event, combined with the fragility of the market, dollar, debt etc. could well be devastating.
@cohodk..... 'Son'...I do not know you, and would not try to guess your experiences...however, I have traveled this country extensively.... lived and worked in nine states, and visited all the rest. I lived and worked in three other countries and traveled to many more. So, 'son', be more careful when assuming things of others that you do not know. Cheers, RickO
I do know your experiences Ricko, and is why I said what I did.
So much America bashing and lack of confidence in this country...it's pathetic. I'll excuse the younger folk on this forum, but you older guys should know better. All you've seen, yet you still doubt. The founding fathers would not be happy with the lack of optimism and spirit displayed on this forum.
Knowledge is the enemy of fear
.> @cohodk said:
The problem is that you assume criticism on misguided policy and leadership is an attack on the heart of America when in fact it is what made America great. Go back and read the warnings and wisdom of your founding fathers.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Ok....going on all you just stated above, what is YOUR best guess as to how much national debt we can issue and still be regarded as the "financial center" of the world? At what point does hyperinflation occur? At what point does debt default occur? And most importantly, at what point do other nations begin to refuse payment in dollars? All 3 of the above MUST occur at some point based on our current trajectory. When do YOU think it will occur?
Simple math dictates what has to happen. Once the debt payments can't be covered by the usually amount of debt issuance, the rate of debt issuance increases. At some point, it has to increase asymptotically. cohodk knows this too.
I knew it would happen.
"The greatest shortcoming of the human race is our inability to understand the exponential function."
Albert Allen Bartlett
Surely. Some see the point as being much farther away than others. No need to be at the airport a week before the flight departs.
Knowledge is the enemy of fear
"We'll see what happens over time."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The difference is that you place more influence and power on the govt while I place it in the hands of the people. Go back and read about govt induced crises and how the people fixed it.
Knowledge is the enemy of fear
Long after you and I are 6ft under.
Knowledge is the enemy of fear
Servicing our current debt now requires approximately 14% of total government income. And that just expresses the interest portion (no principle reduction). The only way to lower that 14% is to either raise revenues (increase taxes) or lower the principle (increase taxes and/or cut other spending). If neither of these is accomplished, then our debt service costs to total revenue ratio will become a runaway train.....which will result in either the debt being paid by hyperinflation, or by discharging debt through default. Both of those outcomes would spell certain death of the stranglehold on the financial sector this nation has enjoyed for decades. Those "shiny rocks" you so easily dismiss may be one of just a few ways to weather the storm/reset.
There are not only 2 ways to meet debt payments. Can you think of a third?
Also hyperinflation raises asset values. Do you think the banks own any assets?
For the millionth time...I'm not anti gold.
Knowledge is the enemy of fear
@cohodk.... I am not America bashing.... I look at issues with a cold, dispassionate and calculating perspective. I realize there are many ways and tricks to employ before total devastation occurs. That is, unless something happens so quickly that financial maneuvering cannot be employed. It is reality that we - and much of the rest of the world - are treading a narrow path economically. Cheers, RickO
there's only one way to meet debt payments. Amount due and on time. Anything less is a non-payment.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The concern is the ability to pay, of which this really is not an issue for mamy, many years.
Knowledge is the enemy of fear
"We'll see what happens over time."
Adding fuel to the fire is a growing number of entitlement recipients and a declining number of contributors. Declining revenue will become an issue along with growing debt.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
There is a larger > @derryb said:
There will be a larger demographic of contributors and increased economic activity will increase revenues.
I'm not a fan of increasing taxes, but there is A LOT of potential.
Debt is easily serviceable.
Knowledge is the enemy of fear
If that debt is so easily serviceable, then why do we continue to add more at record pace?
Ah... because it is so easily serviceable...
I had an ex once who had over $8,000 in credit card debt, yet kept using her card for nonsense. I asked her why she kept using it instead of paying it down. Her response was because the $54 monthly minimum was nothing to her to pay. She filed chapter 7 bankruptcy about a year after we broke up.
This really is the answer.
Knowledge is the enemy of fear
Yepper, just keep raising the limit. Gonna give Visa a call right now. LOL
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
...until it isn't.
Honestly, gentlemen, just because it is wildly counter-intuitive to say that amassing exponential debt is no big deal, does that make it wrong to be concerned??
Here's a warning parable for coin collectors...
Be concerned, be prepared. Another important downside is what exponential debt does to the value of the currency. For the FED to continue to buy growing debt more money has to be created. We all know what new money does to the value of old money.
Amassing exponential debt is a big deal. The bigger the debt or the bigger the borrow the bigger the bust. Debt remains the biggest threat to the world wide economy.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Yes of course be concerned. But first realize the debt is not growing exponentially and the USA is not strained or constrained in its payment.
Own a little gold AND other assets.
The end of the USA is grossly exaggerated.
Eventually wages will rise and inflation will take hold. All asset classes will benefit. The rich will get richer and we will rehash this discussion for years to come.
Knowledge is the enemy of fear
Its not growing exponentially? Really?
Sorry cohodk, but that doesn't look like a linear function to me!
Wow! That graph is quite sobering.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
You might want to look up the definition of exponential.
Then you will realize the limitations of the presentation of the graph. Its a very common mistake that most people make, and is why folks can't read them properly.
Knowledge is the enemy of fear
Let's go back to the Reagan years--the good old days in the eyes of the baby boomers.
if the US National debt truly grew exponentially from Reagans first year in office thru this year, the debt would be $103 Trillion.
Now put that into your chart above. That WOULD be scary. And speaking of scary--based on the emotion of fear--all is relative. An inch of snow on the road is a nightmare for a driver from South Carolina, but can be jubilation for a driver from Upstate NY. Fear is a powerful emotion and used by "them". Dont let them control you.
Knowledge is the enemy of fear
Now if I could just shorten the x axis and increase the height of the y axis-----OMG....it's the same chart!!!!! Gasp!!
Knowledge is the enemy of fear
Then why is the y-axis expressed in linear scale?
Knowledge is the enemy of fear
Funny and sad, people are actually afraid of snakes, grown men also...
@cohodk 15,000 seats on your Y axis is impressive
Nice sleight-of-hand there, cohodk.
However, when I scale the x axis from the 2nd chart to the x axis of the 1st chart, I get a ratio of 1.6 to 1.0. When I scale the Y-axis of the 2nd chart to the Y-axis of the 1st chart, I get a ratio of 8.67 to 1.0. So the 2nd chart is not a comparable chart to the 1st chart when you "just shorten the x axis and increase the height of the y axis-----OMG"
Your only off by 5 orders of magnitude............OMG!
I knew it would happen.
At least its not expressed in terms of "seats" .
What in the hell is a GDP "seat" anyway?
Besides, GDP is as much an indicator of inflation as it is of output. And even IF the GDP was not such a manipulative number, our debt....which is a REAL number is still outpacing your GDP. But you probably think its all sustainable long term, right? As long as we keep paying the minimum on those "credit card" bills, we'll be just fine. What I'd love to know is how much of our new debt is acquired from borrowing from the FED these days as opposed to traditional borrowing? When you begin to borrow from yourself, the end of the game is VERY near!
Jmski, WTF are you talking about? One chart goes from 0 to 15000 and the other from 0 to 15000 in same time frame. What kind of math do you use?
Purpose of the chart is to show the flaws of visualization without context.
And the only reason I posted the chart I did was because it was all I could find on short notice.
I can't believe you guys don't know what seats are. Sheesh!! Lol
GDP is also a real number, Geckster and i think your understanding of debt issuance and maintanence is not complete.
You guys can continue to fret over the collapse of the world's economic system if you like. For me though, it's not a concern for a long time. My fear, yes I have them, is that your insurance policies will not pay off as promised.
Knowledge is the enemy of fear