If we have so much gold stockpiled in Fort Knox, then why doesn't our gov't just pull out a bunch and pay off this huge deficit we're stuck with? Doesn't it make more sense to pay off the deficit today instead of waiting until doomsday? Just wondering. :thumb:
There is no way near enough gold in fort Knox to pay off a 15 trillion debt, According to Wikipedia only 278 billion worth. http://en.wikipedia.org/wiki/United_States_Bullion_Depository
This gold was once used to pay off USA debt. Gold was being sold off, mostly to Europe, to pay for the over printing of money by the Federal Reserve from the end of WWII to 1971 when Nixon closed the gold window. As you note from that article, the gold supply in Ft. Knox was reduced from 20.2 metric tons of gold to 4.78 metric tons. In other words, the USA gold supply was reduced by 76% to pay off USA debts. Nixon was afraid we would run out of gold so he simply told the rest of the world, no more redemptions. Though it occured over generations, this represented a massive transfer of private wealth to the federal goverment and its bankers as all the gold in Ft. Knox was taken from the people in the first place. We went 100% fiat after that with no restrictions on money printing. Not surprisingly, 98% of the US Debt on the books now was runup in the 40 years since. Endless wars, military buildups, vast expansion of federal powers and programs, etc etc are all responsible for it. I've heard different figures for it, depending upon what is counted, but gold would have to be re-valued to something more than $50,000/ounce to cover it now. (Interestingly a little more than a 1/3 of that gold never left the USA. It's sitting in the basement of the NY Federal gold vault and tagged as being held for other countries. Germany is the biggest "owner". It was only when Charles DeGaulle decided to move France's portion of this to France that Nixon got annoyed and shutdown the gold window.)
The national debt grows exponentially because of compounding interest (there seems to be a possible correlation here between what the price of gold is doing), where as the production of a nation grows in a relatively consistent upward trend if not a flat or even downtrend at times. This is probably why usury used to be illegal. So it really is impossible to pay off the debt with the current policies unless they're willing to monetize to infinity and hyperinflate. We are currently adding over $200 billion per month to the overall debt just from interest on existing debt, so selling the gold would only cover 6 weeks at best without even making a dent in the original debt. The realistic solutions are either to cut spending to a responsible level (no more socialism, entitlement programs, welfare state, wars, bloated bureaucracy, bailouts, stimulus, etc.) to stop the accumulation of debt combined with very high interest rates to pay off the existing debt, or the more likely scenario which is debt forgiveness as a last resort after overstimulating until it is no longer effective. Technically we have a form of debt forgiveness already because people who don't pay end up getting bailed out by people who can, it's just a bit more selective. Cleaning the slate won't do any good if the rules continue to go unenforced though.
The debt can't be paid off under the central banking system. The money is the debt and the debt is the money and if the debt held by the Federal Reserve went to zero, the money supply would shrink so drastically that the economy would plunge into depressions. The way around this is to return the money-issuing function to the US Treasury Dept so that we can have debt-free money, but that isn't going to happen. So embrace the horror.
I guess we have no choice but to embrace this madness. I guess D. Carr says it best with his new silver token. http://www.dc-coin.com/hardtimestokens.aspx
