Gold at AU$44,000/oz, page-3

This is from

https://marketsandmoney.com/smoot-hawley-2006/


BY THE MOGAMBO GURU
BILL BONNERMOGAMBO GURU POSTED
AUGUST 14, 2006

If you want to know how high gold will go, then you are asking the wrong guy, but perhaps my old buddy Phil S. can help, as he makes the interesting calculation of valuing the Fed’s hoard of gold. He first multiplies the number of ounces of gold said to be in the vaults of the Federal Reserve (according to them) times the rough, going-price of gold. “260,000,000 oz X $650 = $162,500,000,000.

Then, he adds the fact that the “2005 deficit, including accruals, was $3.5 trillion!!” Editorially, note the rare double exclamation point, the use of which becomes apparent when he divides this real, accrual-based deficit by the number of ounces of gold ($3,500,000,000,000 divided by 260,000,000 oz) to derive the startling conclusion that “$13,462 per Treasury oz equals 1 year’s deficit!!!” – which brings us to a perfect example of the extremely rare triple exclamation point. And rightfully so! Perfectly done, Phil!

So, the next time somebody asks you how high gold could go, since $13,462 is just the dollar value of the 2005 government budget deficit alone, anything up to $100,000 per ounce is not too unreasonable to suit me!