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<p>[QUOTE=&quot;Tejas, post: 7841226, member: 84905&quot;]I agree, there is no smooth path to a gold standard. The only situation in which a return to a gold could possibly be contemplated is a US dollar crisis. Since 2007 the Fed has increased the US dollar supply from around 900 billion to over 8 trillion at present to fight off economic crisis and stabilize the financial markets. To back the 8 trillion the Fed has taken assets (bonds) of the same value on its balance sheet. </p><p>If these assets would lose value, for example as a result of a sharp rise in yields (high yields mean low bond prices), people could loose trust in the dollar and try to convert their dollar holdings into other assets. In this situation gold could play a role in reestablishing trust in the currency. However, I don&#039;t think this is likely to happen.[/QUOTE]</p><p><br /></p>

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