There is insufficient gold in the world to back fiat currencies with gold, at gold’s current price. The USA government deficit is worth more than all the gold in the world already! Gold would need to increase it price considerably to be worth more than all the fiat currencies in the world… I’m talking 10,000 plus usd an ounce and probably much more.
I suggest these facts make it difficult to have fiat currencies backed by gold.
Future trade could occur in gold and countries could keep more trade surpluses in gold … rather than USA treasury bonds. That’s bullish for gold.
There’s no easy alternative to the usd as the basis of the world’s currency system.
It is a very very complex problem. If we had the answers we’d already be rich.
GML Price at posting:
6.8¢ Sentiment: Buy Disclosure: Held
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