Isn't the USA the largest sovereign holder of gold?As such,...

  1. 4,941 Posts.
    lightbulb Created with Sketch. 147
    Isn't the USA the largest sovereign holder of gold?

    As such, whilst the US$ may well falter under such a scenario, the US's official holdings of gold will more than make up for this.

    In 1999, the USA held 24.2% of the world's known gold reserves (8132 tonnes).

    In July 2003, this was 8,134.7 tonnes. This was equivalent to 57% of its total foreign reserves.

    With 32,151 troy ounces in each tonne of gold, that makes for 261,538,739.7 ounces (or 261.54M ounces).

    Expressed @$4,500 per troy ounce, makes for US$1,176,924,328,650 or US$1,177 billion in currency terms.

    At the end of 2Q03, US current dollar GDP was US$10,793.9 billion.

    So, on a straight line extrapolation, with no interposing of timelines, changes in currency values, no changes in, or to, inflation, such a move in gold prices would translate to 16.5% direct gold backing for the US economy, and for the US$.

    In contrast to this, the current value of US soveriegn gold holdings (at July 2003) was US$97,292,411,280, or US$97.3 billion. Adjusted, this equated to ~1.0% direct gold backing for the US economy, and for the US$.

    So, far from collapsing, would not a rise of this magnitude in the gold price also trabnslate to a direct and increasing concentration of economic power in the hands of the US and eventually in the US$ (which, irrespective of any forced adjustments would essentially become a de-facto gold backed currency).

    Just some food for thought in an otherwise ever evolvivng debate.
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.