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Let's imagine that the U.S.A. wanted to back the currency with gold. Let's use M2 money supply to estimate how much money is actually in circulation. M1 doesn't include bank reserves. M2 is the standard used to estimate how much money is actually in circulation.

 

Money supply - Wikipedia, the free encyclopedia

 

M2 for July 2011 was 9313.6 billion dollars.

 

FRB: H.6 Release--Money Stock and Debt Measures--August 25, 2011

 

But here is something more interesting: The total U.S. debt is 54 trillion dollars.

 

U.S. National Debt Clock : Real Time

 

A trillion has 12 zeros behind it.

 

trillion - Definition of trillion at YourDictionary.com

 

So just the U.S. debt alone is bigger than the entire M2 money supply. So what should we base the needed gold reserve on? M2 money supply? The total U.S. debt? The total U.S. debt plus the M2 money supply? How much physical gold should there be in reserves? Let's use a really, really small number. Let's say, 20% percent of M2 money supply. That's about 1,863 billion dollars.

 

Okay, so we need 1,863 billion dollars worth of gold. How are we going to pay for that gold? Let's see, we could draft U.S. citizens to work in the gold mines for long enough to cover their share of the gold reserves. Hey, that's a great idea. I've just solved the problem of how to acquire all that gold. Everyone reading this, please phone and/or write your local, county and national political representatives and tell them that you want to be drafted to work in the gold mines to contribute your share to the gold reserve.

 

Or we could just buy the gold. Oh wait! Just a second. How are we going to buy the gold? Where is the money coming from? Okay, let's see. We could raise taxes by 1,863 billion dollars. That will bring in the revenues to buy the gold. Okay, this is a great idea. Everyone reading this, please phone and/or write you political representatives and let them know that you want your taxes to go up by 1,863 billion dollars. Okay, problem solved.

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hiiii...........

.....................

Folks receive it, for the reason that they trust in its quality. They have confidence the $20.00 they appropriate has a certain buying force which will remain handy for a long time of time.

 

They'll quit tolerating fiat cash if the inhabitants present loses confidence in it.

................

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paraphrasing

Faber To Shiller: ?You Keep Your U.S. Dollars And I?ll Keep My Gold? | Zero Hedge

 

In response to a question from Yale University’s Robert Shiller querying the recommendation to hold gold, Marc Faber said: “I’m prepared to make a bet, you keep your U.S. dollars and I’ll keep my gold, we’ll see which one goes to [worthless] first.” Shiller, who is the co-creator of the S&P/Case-Shiller index of property values, responded "I'm inclined to think gold prices after this crisis might return to a lower level" ...

 

I'm confused :confused: after what crisis ???

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I'm confused :confused: after what crisis ???

 

the new normal crisis - until we find another crisis.

 

One thing about Gold that Faber makes that many forget - it too will likely massively decline, it just wont go to zero

"“I’m prepared to make a bet, you keep your U.S. dollars and I’ll keep my gold, we’ll see which one goes to zero first.”

 

Now if the SHTF - none of this is relevant - a can of baked beans and a squirrel for dinner might be more valuable than gold.......

If the SHDoesNotHTF then diamonds are the way to go. Easier to transport, people with money and chicks love them

 

I saw some folks saying guns and ammo will be worth a lot - yep - not much thought gone into that one - imagine scenario....

SHTF - Man A buys guns from Man B for the price of his daughter, 5 goats and a car . ...Man A shoots man B and takes said possession back.

Its valuable not because you want to sell it, its valuable cause no one else has one :doh:

Edited by SIUYA

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