Goldfingered

Was it just three days ago that I offered the following observation? "I don't think it's too wild a guess to speculate that, if this [a return to the gold standard] ever occurred, gold would immediately jump to five, six, or even seven figures an ounce." And this was just a wild guess -- I mean, when the range is from $10,000 to $9,999,999, that's a wild guess, right? So here's John Browne, in yesterday's paper, providing actual figures -- and these are pre-hyperinflation figures. He says, "today, each ounce of gold held by the Fed backs about $39,000". Of course, when he says "backs" he doesn't mean "legally backs", since our currency is legally backed by precisely nothing. But if you took all the money presently in circulation, and divided it by the gold held by the U.S. Treasury, you'd get an equivalency of $39,000 per ounce. And what is today's price for gold? $996 per ounce. Which means, gold is undervalued, at present, by around 97.5% -- or, gold is actually worth nearly 40 times its current market value in dollars. Or, we could also say that the dollar is _overvalued_ by about the same amount, and is really worth about 1/40 what it's supposedly worth.

Race you to the gold exchange!