The US dollar has fallen 20% against the Canadian dollar since March, 15% against the Australian dollar since August and 7% against the euro in the past 7 weeks, according to an article carried in the ResourceInvestor. Com, so should the US sell gold in order to reduce their deficits?

It’s true that gold is approaching a 28-year high so why not cash in and reduce some of the debts. This article quotes the World Gold Council, who reckons that the government of the United States of America holds gold reserves in the order of 8,133.5 tonnes or 262 million ounces, which at today’s gold prices is worth around $200 billion. The article goes on to state the value of gold reserves held by various countries and also to argue the case for unlocking this store of value for other purposes. If you can find the time please read it by following the link above.

The article also mentions the Gold Anti-Trust Action Committee (GATA) who have on a number of occasions challenged the US government to do a public audit of their gold reserves to prove that they do actually still have these huge quantities of gold in Fort Knox. To our knowledge an audit has not been carried out for a number of years.

Now can you imagine politicians having the discipline not to put their hands into the cookie jar and use this store of value either through sales of small quantities or some form of leasing to alleviate the pressure that the US Dollar is currently subjected to? We can argue that such a large amount of gold would be traceable and we would be aware of such trades. We can also point to gold not keeping up with inflation, which would see it trading at approximately $2200/oz when the price is adjusted for inflationand wonder why. Without a public transparent audit of these gold reserves we don’t know if the Sword of Damocles hangs over our heads or not.

Have a good one.

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