From $35 to $40,000!

Money PileHow vulnerable is the US to financial ruin?  I say it is very vulnerable, and here’s the reason.  At the Bretton Woods Agreement in 1944 the US had promised to redeem gold at $35 per ounce, which meant that it could not increase outstanding dollars unless it received more gold to back the issue.  Keep that number in mind as I go over some vital monetary statistics.

The US owns 261.5 million troy ounces of gold.  M1, the narrowest measure of the US money supply (checking accounts and cash held outside bank vaults) stood at $2.523 trillion at the end of April 2013.  M2, the broader measure of the US money supply (which adds savings accounts and short term CDs to M1) stood at $10.526 trillion.  Now just do the math.  For the US to redeem M1 in gold without running out of gold, the price would have to be set at $9,648.  For the US to redeem M2, which I consider to be the true US money supply–since savings accounts can be transferred into one’s checking account at the click of a computer from home–, the price would have to be $40,252.  So, just think about that…since the Bretton Woods Agreement in 1944 the US has inflated the dollar by over one thousand times, from $35 per ounce to over $40,000 per ounce!

The US has been papering the world with its unbacked money to placate its growing dependent welfare class–eleven million on government disability and forty million receiving government issued food stamps, just to name two completely corrupt programs–and fund its worldwide military machine.  (The US just sent the Colorado Air Guard, which flies F-16s, to Jordan, just so you are not surprised by some future intervention.)

The implications of this massive act of irresponsibility are for all of us to ponder.  But who would deny that the US is extremely vulnerable to financial ruin, which can lead only to geopolitical chaos.  Patrick Barron

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