US Treasury's Gold Valued: US Gold Reserves Total $288 Billion, But Not Really

Washington Post / Big Money:

Buried in the Treasury's International Reserve Position report is an intriguing bit of math. The document details the total amount, by weight, of the Treasury's gold reserves, plus a dollar value for said metal. But some fast division reveals something interesting: The Treasury marks the value of its gold at $42 an ounce, the price settled on in 1973...

Read the whole story: Washington Post / Big Money

Comments

[Hopalongpoppyseed]

The sky is falling.

[dadw5boys]

Gold is dug out of the ground processed and put in bank under guard.

So what is the point ?

[Go5000K]

It's mine I tell you! All mine! Mine, mine, mine!

[Rand]

Relax, Daffy!

[Durango]

It is a shame that all that gold is piled up in storage somewhere.

Like the ancient Egyptians knew, the value of gold is in the beautiful objects that can be created in a metal that is easily worked and will never tarnish.

The death mask of King Tutankhamen is the most beautiful object ever produced.

That gold should be used to produce more objects of art. Not sit around unseen in bars generating nothing but dust.

[goodnews7]

Beware of Fool's Gold
We wrote a whole series on scams that target seniors and financial resource scams accounted for about $2.6 billion a year stolen from unwary victims. We’ve noticed a huge increase in the number of adverts encouraging people to exchange gold items for cash or to buy gold as an investment recently, so we decided to find out why that’s happening. [...]
http://bit.ly/1tEFj2

[stargazer13]

monetary system has created an illusion !

and I am not buying it any more !

Gold is what I am digging for back breaking work ! I tell you

but with job loss a year ago ! and no job to take it,s place !

it is all that people like me can do ! and still be honest !

we have so many Americans who are out of work do to no fault ! of their own

so many million,s losing every thing they own, house, car, credit rating ! you name it we have lost it !

where did it all go ? down a dark magic hole is my guess ? over rated over speculated over inflated

and since I was not a lucky bailout recipient !! because I am to small to succeed I guess ?

I am in deep debit along with other good folk,s who have worked all our life,s for what ! nothing zilch

zero

and now I am deemed undesirable by my society,s standards to live fifty years as productive and have it come to this really make me just want to bawl my eyes out !!

Yeah ! I am over their monetary game of illusions

[jerrygarcia1]

I'm sorry to hear about the tough times you have been going through. Your post clearly demonstrates why the general public is flocking to gold. Trust has been broken and people are not going to just "leave it to Wall St." anymore. The media is lying now about the future of gold. When it spikes to 2,000 an oz. is when people will get back the money they lost. Wall St. knows it and is doing everything to discourage an obvious play and get you roped back into them controlling your money. It's not working.

And in my opinion the undesirables in this society are the morally bankrupt money hounds that cause nothing but misery and economic hardship for their fellow countrymen. If you want to put Wall St. in it's place keep buying gold and silver. Let them figure out how to keep Citi and BOA afloat without the "suckers" money. Don't be so hard on yourself and know better days are ahead. The game was rigged and the only thing most people are guilty of is misplaced trust and having a sense of decency, which unfortunately is non existent on Wall St. Good luck.

[fijisailor]

If a major economic melt down occurs you're better off with producing agricultural land than a pile of shiny metal. What will you eat? That's the bottom line.

[stargazer13]

70 % of what we eat now is food that other countries won,t touch with a ten foot pole

genetic engineered food is what will eat !!!

can not grow real food or Monsanto will take you to court . many of our small farms have been put out of biz

because of there Gestapo like practices like buy our seed,s or else !!

[stargazer13]

sorry my comment is pending !!

[jerrygarcia1]

The U.S. is the only country in the world that constantly talks down gold. China is now giving their citizens the option of being paid in silver. Everytime it reaches a new high the talking heads come out and say it will never last and then it goes higher. These were also the same talking heads perpetuating the myth of "Too Big To Fail". Take their advice with a grain of salt. The real gamble is letting any of the Wall St. firms control your retirement money, which the returns clearly demonstrate with the average 401k losing value when gains are adjusted for inflation over the last decade.

[31BlueDog]

Wow - they are really wrecking the dollar!

[fijisailor]

the way I see it is that prices for goods across the board will increase without a corresponding increase in US wages. This will lead to increased US production as the US becomes more competitive world wide. This in turn will stabilize the dollar. I believe the value of the dollar is heavily dependent on productivity, not 1 particular metal.

[cd789]

Considering that modern mining techniques leave behind an environmental disaster, isn't it irresponsible to hold onto 'reserves' if the economy is no longer based on them? Why can't the reserves be mined instead by releasing them to the public over a period of 50 years? It shouldn't have a dramatic effect on prices if it is replacing gold that would otherwise have been mined during that time.

[Amalek]

An excellent point. Gold mining is one of the most damaging things we do to the earth. Many techniques involve pouring cyanide over the tailings, polluting ground water, rivers and lakes. All for a product that is essentially useless. Release the stocks in Fort Knox to meet the industrial and jewelry needs.

But, there is a romance around gold that makes logic hard to apply.

[jerrygarcia1]

No wonder this country is in such big trouble, when you have economics professors saying gold is a bad investment. They also advertise gold on Air America and I remember Rachel Maddow used to advertise gold on her cable show when she first started airing on MSNBC, so your attempt to paint it as a right wing thing is laughable.

I do believe you are an economics prof. who has been brainwashed into believing that stocks and bonds are where it's at. That has some validity but to advise people not to have a portion of their retirement in gold to protect against inflation is foolish. If you are following that advice yourself you will know how wrong you were in a year or two.

Wall St. lost it's trust from Main St and the gold spike is a reaction to that. Opec soon will be requiring oil payment in gold. You have no idea what you are talking about and it's a shame you continue to perpetuate myths to your students. If you were my professor I would drop your class. You are way behind the curve professor and when gold hits 2,000 an oz. I guess you will still be convincing yourself how right you are.

[Durango]

And gold mining is essentially frivolous.

While there are uses for the metal in electronics and other applications, most of the mined gold is destined to sit in a safe somewhere for no particular purpose.

We have to trash our mountains and more importantly our rivers for that?

Out here in Colorado we have not even begun to clean up the mess mining made over 100 years ago. (Granted there was more silver than gold mining)

[fijisailor]

I think I would invest in some other useful metal like Copper instead of Gold. Gold is in a bubble and I pity those joining this bandwagon.

[Amalek]

For all you gold bugs on this thread (and now I see why one of Glenn Becks remaining sponsors sells gold)

GOLD IS A HORRIBLE INVESTMENT (that is why they have to sell it on the Glenn Beck show)

Here is the proof.

If you bought five ounces of gold in 1928 you would have paid $100. Today that gold is worth $5,500. Pretty good huh?

Ok, but if you put that $100 in US treasury bonds you would have $6013. And, if you put it in the stock market, you would have $112,968.

Gold is for fools. That is why they sell it on Glenn Beck.

[fijisailor]

In other words, If every Joe Shmo is buying gold then it's the wrong thing to do.

[jerrygarcia1]

Now buying it is risky but buying it at 300 an oz. was a wise investment. Depending how high it goes you might be looking at gold at 1,000 oz. permanently. It will never be 300 an oz. again guaranteed.

[siasina]

Nobody said it's a good investment, of course there are better things to invest in, but with gold, the value will never go to 0, and it's a good physical commodity to hedge yourself in a inflationary market. It's just for your financial security.

Of course you shouldn't keep your gold forever.

[striderMan]

In terms of purchasing power, which is all we are concerned with really, your 112,968 is valued at about $4000 after inflation.

Place $100.00 and 5 oz of gold in a drawer in 1928 and the purchasing power of each will be about 2 cents and $5000 respectively.

[Amalek]

Oh my, and what is your 5,500 of gold worth after inflation?

You cannot see that your analysis is completely flawed. We are comparing current values. Would rather have $5,500 of gold or $112,968 of stock? How many comic books can you buy with each?

What has homeskooling done to us?

[Durango]

i counted three or four different adds for gold on the Beckerhead hour.

Including gold being shilled by G Gorden Liddy.

Now there is someone whose investment opinion I could trust!

P.S. If gold is at an all time high, now is NOT the time to buy.

[xrepublican]

@2:45 AM EST you're seeing an upward line from market open in Asia to 1108 - another new high.

But we REALLY want a 'strong dollar' - right?

The parallels to Great Britain post WWII are a bit frightening... empire on the decline, huge debt levels, a military we can't afford and massive social welfare spending we can't afford...... and look at how Britain ended up........

[BigBagel]

Asset classes are up across the board. With interest rates at zero there's no cost in holding gold.

[xrepublican]

Would be worth $288,000,000,000 at current spot prices- using $1100 per oz, then we're talking about 262,000,000 ounces - 262 million ounces. IF you wanted to back the US dollar with gold, what would the value of gold have to be?

In an admittedly simplistic analysis:
with M1 at roughly 1,675,000,000,000 (1,675 billion) the price of gold is $6,400 an ounce
with M2 at roughly 8,400,000,000,000 (8,400 billion) the price of gold is $32,000 per ounce
with M3 at an estimated 14,500,000,000,000 (14,500 billion) the price of gold is $55,000 per ounce

With TRILLIONS of dollars of debt being accumulated, it seems clear that the US gold reserves are woefully inadequate as collateral.
We've come along way from $35 an ounce no matter how you want to look at things.

If the US government dumped all its gold on the world markets tomorrow, it would be bought up IMMEDIATELY by the central banks of China, India, Brazil and every other nation holding US paper dollars. At $1100 and ounce, gold seems awfully cheap compared to mere paper - especially when that paper is backed by a mere promise to pay and a national economy that has a limited capacity to produce real wealth.

[siasina]

Which is why it would be a HUGE mistake for US to even think about getting rid of its gold. The US needs to buy more gold as the means of financial security. Recently, India bought 7 billion worth of gold off the world market, to hedge against the US dollar.

[ReelBusy]

Interesting point in the article is that all the world's governments only control 20% of all the gold in the world.
It' is the only eternal evergreen valued currency worldwide and right now I know a lot of folks still buying the stuff from grams and ounces up.
Gold is selling for $1096 as of Friday's close and that's $39 a GRAM.
IMHO I think it's heading towards $1500 and ounce in 12-24 months.

[fijisailor]

Sounds like you bought in.