there may not be as much Gold in 'Fort Knox' as people are led to believe.. If there is a call on paper contracts to deliver...then I have no doubt that the price of Gold will soar..
You would need to have explicit faith in "the system" to believe otherwise. There are just tooo many stories of people holding their own gold in registered depositories who have not been able to take immediate delivery.
That fractional banking has gone back to it's roots and that the modern equivalent of the goldsmiths are rehypothicating other people's gold is beyond doubt. Their right to do so to fund their own speculation has been upheld in the courts. Conceptually it is the same as if you deposit fiat in a bank which we know will be leant out again, otherwise we could not expect interest paid on our balance.
I am agnostic on whether Ft Knox has gold in it's vaults or IOUs in it filing cabinet. It doesn't matter, a run on gold would be as devastating as a run on the banks and for the same reasons, they have lent out many times as much as they own.
