Politics Magazine

Forbes: “Link Dollar to Gold Or Face Great Depression II”

Posted on the 06 June 2014 by Adask

Steve Forbes [courtesy Google Images]

Steve Forbes
[courtesy Google Images]

Forbes Magazine

If that’s true, we’re going to have another Great Depression because government can’t link the current fiat dollar to gold.  Why?  Two reasons:

1) There are reportedly up to $17 trillion of our current fiat dollars being held offshore.  What do you suppose would happen to those $17 trillion if Obama announced that they were backed by gold at, say, $5,000/ounce or even $20,000/ounce?

Those intrinsically worthless $17 trillion would come flying, pouring and stampeding back into the US to be redeemed for physical gold.   The influx of $17  would cause US Inflation to go hyper.

Our 8,200 tons of gold (less than 300 million ounces) would be disappeared. Why?  Because, even at $20,000/ounce, 8,200 tons of gold is only worth $5.7 trillion–about one-third of the $17 trillion allegedly being held offshore.  Anyone holding that $17 trillion would know he had only a 30% chance of redeeming his fiat dollars for gold and so would try to instantly send his fiat dollars into the US trying to beat all other competitors.  The instant influx of most of $17 trillion into the US economy might precipitate instant hyper-inflation.

2)  It is conceivable that the US might try to keep the existing fiat dollar and also create a second “dollar” that’s backed by gold and run both “dollars” are the same time.  There’s a problem with starting a new, gold-backed dollar:  the last time the US Treasury’s gold was audited was A.D. 1953.  It’s unlikely that the US Treasury and/or Federal Reserve still has the 8,200 tons that they claim to have had about 60 years ago.  Odds are, the US Treasury and/or Federal Reserve have secretly sold much of those 8,200 tons into the commodities markets in order to hold down the price of gold and maintain the illusory value of the fiat dollar.

Evidence of these secret sales can be inferred from the fact that, in January, A.D. 2013, Germany asked that the 300 tons of German gold held by the US and/or Fed be returned.  By January of A.D. 2014, the US had reportedly returned only 5 tons of gold to Germany.  The clear implication is that the US gold treasury may have already been massively depleted–perhaps by 80%, 90% or more.

Point:  There’s no way to back the current dollar with gold, or even an alternative gold-backed dollar, if there’s little or no gold in the US Treasury.

So, if Forbe’s dilemma–1) back the dollar with gold or 2) suffer the Great Depression II–is correct, we’re going into the depression because we can’t back the current fiat dollar with gold because the outstanding debt is too great, and we probably can’t back a new “dollar” with gold because we don’t have any.

•  The only way the US can return to a gold standard and once again back US dollars with gold is if:

1) The current fiat dollar is allowed to die in hyper-inflation–complete with an economic collapse, massive poverty and political instability probably lasting for several years. Why?  Because once the current dollar dies, the $17 trillion held overseas becomes worthless and can’t be redeemed for gold.  Then,

2) The US creates a completely new dollar that is backed by gold at some extremely high price–but is not exposed to the $17 trillion hoard currently held overseas.


1) Don’t expect to see a new dollar backed by gold in less than 3 years (if then);  and

2)  We can’t return to a gold-backed paper or digital dollar until after the current fiat dollar dies, collapses our economy and subjects us all to suffering and instability of the Great Depression II.

We might we see a serious attempt to back a new paper dollar with gold, but only after we first suffer an economic collapse and another Great Depression (or worse).

•  Here’s a video commenting, in part, on Forbe’s warning:

video               00:08:09

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