This is wild speculation, but I've been thinking lately that gold is in fact still highly valued by the big bankers, they just aren't direct about it. Historically, the dollar has been highly valued due to worldwide policies after WWII, so it's no surprise that a lot of countries keep dollars in their foreign reserves. But with the economic situation in Europe, why is it that people are selling Euros and buying dollars en masse when they know we aren't doing any better at balancing our budget. And the dollar is constantly being deflated in value also. Yet the federal reserve has the most physical gold of any national bank (nearly twice that of the second largest, Germany). So, is it possible that big banks are less concerned about our debt because they believe in a worse-case scenario, they would be paid in gold??
Perhaps there has always been an "understanding" among the central banks, off-the-record, that the United States could never really default because they would have the gold to back it up. Which if the Dollar became worthless, gold would be the only other reasonable storage of wealth anyhow! The most likely solution is that there is a de facto backing of the debt by gold. After all, we know that many banks and reserves value gold because they keep so much of it. The question is, how much is it valued??
It all ties into the meeting Paul had a few months back where he was grilling the federal reserve over how much physical gold was in the United States. They didn't want to give a direct answer, and it's because we are effectively backing the debt with gold, and if they acknowledged it, then it would be to admit that gold is still highly valued by nations and banks.
Perhaps there has always been an "understanding" among the central banks, off-the-record, that the United States could never really default because they would have the gold to back it up. Which if the Dollar became worthless, gold would be the only other reasonable storage of wealth anyhow! The most likely solution is that there is a de facto backing of the debt by gold. After all, we know that many banks and reserves value gold because they keep so much of it. The question is, how much is it valued??
It all ties into the meeting Paul had a few months back where he was grilling the federal reserve over how much physical gold was in the United States. They didn't want to give a direct answer, and it's because we are effectively backing the debt with gold, and if they acknowledged it, then it would be to admit that gold is still highly valued by nations and banks.
