The Likelihood of a New Gold Standard
JH Kunstler via ZH, December 22, 2014
"What an opportunity for a country with an already foundering currency, to introduce money partially backed by gold. Could happen"
Where to begin...
You mean a country with the fiscal track record of a stoned sailor on permanent shore leave?
And by "partially backed", what does that mean? I'll assume nothing, since no definition was provided, more importantly, we see below the likelihood of this occurring:
Gold Reserves by Country
http://globaleconomicanalysis.blogspot.com/2014/03/gold-reserves-top-20-countries.html
http://globaleconomicanalysis.blogspot.com/2014/03/gold-reserves-top-20-countries.html
The value of U.S. gold holdings at current gold price, relative to the Dollar Money Supply:
In $Billions:
In $Billions:
I think we all see where I'm going with this
No country has nearly enough gold to back its modern day bloated fiat money supply, under the current configuration. The only scenario under which the U.S. could get its money supply back in line with its ~$300 billion supply of gold, is via money supply collapse aka. EXTREME DEFLATION. That implies global debt collapse, at which point who knows what would be the price of gold, but we know with certainty that oil would not be "something that even an economically depressed global industrial economy desperately needs", as Kunstler breezily asserts.
It could happen, indeed. Just not the way the gold hoarders need it to happen.
"Dollar collapse" visualized. Highest level since 2006
DEFLATION in broad daylight: "Least expected", hence most devastating
