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Central Missouri | We could back the dollars in circulation with gold at 6k possibly.but the debt is still there. The problem with gold going up is that for gold to go up the dollar will probably go down. Dollar going down enough to prop gold to 6k probably means we have lost another 1/2 of the purchasing power of the dollars each of us have in savings. It may also mean we have gone to hyper-inflation. If we go to hyper-inflation then all of the people on unemployment and welfare won't be able to buy the food, clothing, power, gas, cable, smokes, medicine and all the other things we need to live. Think of what will happen in the inner-cities if that occurs.
There is also a group of thinkers that believe that the treasury and fedewral reserve have loaned-out a large portion of their physical gold to a number of large banks and financial institutions. I.E. the physical gold isn't there it is only on the balance sheet of the fed and treasury as an asset because the banks owe it too them. I don't know if that is the case but that is one reason for the push to audit the fed.
From Bob Chapman ... The fiscal debt overhand is so onerous that a ¾% rise in interest rates would mean the Fed would have to monetize another $150 billion and a 5% increase in interest rates would increase debt service interest by $600 billion additional dollars.
Edited by ehoff 12/1/2009 22:50
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