All this seemingly fiscally responsible talk about utilizing a gold revaluation to current FMV ($3,000/oz) levels, is disingenuous and sadly doomed to failure if implemented as discussed.
While an Austrian step in the right direction, a target price of $3,000 (signifying potential proceeds of $800 billion) is infinitesimally small when compared to the outstanding U.S. Treasury debt of $36 trillion, which is growing logarithmically. Similarly, interest on the debt approached $1.2 trillion last fiscal year and is currently running exponentially higher.
Against this veritable tsunami of debt/interest payments, a meager 2.2% reduction of current outstanding debt ($800 billion/$36 trillion), as well as a similar 3.3% reduction in interest payments ($800 billion (x) 5% = $40 billion/$1.2 trillion) - are both equally insignificant and truly performative.
And that doesn't include future contingent liabilities, nor the quadrillions of derivatives that the system is on the hook for. As they say: all noise no signal/all hat no cattle/a veritable "pissing in the wind".
To be significant, a MINIMUM 60% debt reduction down to a still staggering level of $14 trillion would probably be required - correlating to a gold price revaluation approximating $84,000/oz (which the powers that be will never consider, let alone pursue). Sadly, I believe we are doomed to a near-term collapse and all that that signifies.
As such, forget about rescuing the current disaster of an economy, it's too far gone for that - best to sit back, pass the popcorn, and enjoy the show!
About deciding the price at which to set the gold price on its books, I have some questions.
First of all, was it a coincidence that forecasts several months ago by the leading banks targeted $2900 for gold in 2025? and more recently $3000 since the revaluation discussion emerged after Bessent's press conference in the oval office? It would speak to the ease with which the banks can set the price where they like.
Second, suppose they go ahead with the plan at $3000. What happens to the price after the event? does it trade freely on demand and supply factors? do the artifical supplies of gold gradually get retired from the market? Does the Treasury care if the price of gold rises or falls after it has reset its balance sheet at a fixed price? Does it matter at all what the price is if the treasury is borrowing at 0%? And after the reset, does it have an incentive to cease naked shorting of bullion?
Thanks in advance for the time you have spent explaining the concept through various articles. It has been very useful.
All this seemingly fiscally responsible talk about utilizing a gold revaluation to current FMV ($3,000/oz) levels, is disingenuous and sadly doomed to failure if implemented as discussed.
While an Austrian step in the right direction, a target price of $3,000 (signifying potential proceeds of $800 billion) is infinitesimally small when compared to the outstanding U.S. Treasury debt of $36 trillion, which is growing logarithmically. Similarly, interest on the debt approached $1.2 trillion last fiscal year and is currently running exponentially higher.
Against this veritable tsunami of debt/interest payments, a meager 2.2% reduction of current outstanding debt ($800 billion/$36 trillion), as well as a similar 3.3% reduction in interest payments ($800 billion (x) 5% = $40 billion/$1.2 trillion) - are both equally insignificant and truly performative.
And that doesn't include future contingent liabilities, nor the quadrillions of derivatives that the system is on the hook for. As they say: all noise no signal/all hat no cattle/a veritable "pissing in the wind".
To be significant, a MINIMUM 60% debt reduction down to a still staggering level of $14 trillion would probably be required - correlating to a gold price revaluation approximating $84,000/oz (which the powers that be will never consider, let alone pursue). Sadly, I believe we are doomed to a near-term collapse and all that that signifies.
As such, forget about rescuing the current disaster of an economy, it's too far gone for that - best to sit back, pass the popcorn, and enjoy the show!
About deciding the price at which to set the gold price on its books, I have some questions.
First of all, was it a coincidence that forecasts several months ago by the leading banks targeted $2900 for gold in 2025? and more recently $3000 since the revaluation discussion emerged after Bessent's press conference in the oval office? It would speak to the ease with which the banks can set the price where they like.
Second, suppose they go ahead with the plan at $3000. What happens to the price after the event? does it trade freely on demand and supply factors? do the artifical supplies of gold gradually get retired from the market? Does the Treasury care if the price of gold rises or falls after it has reset its balance sheet at a fixed price? Does it matter at all what the price is if the treasury is borrowing at 0%? And after the reset, does it have an incentive to cease naked shorting of bullion?
Thanks in advance for the time you have spent explaining the concept through various articles. It has been very useful.
Who is the counter-party for the near 0% loan.