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<p>[QUOTE=&quot;fatima, post: 1264629, member: 22143&quot;]On second thought I should have given a better answer than this.&nbsp; In the context of 1933, FDR&#039;s presidential order to seize gold only applied to residents of the USA.&nbsp; He was powerless to do anything about international trade settlements, US obligations overseas, etc.&nbsp;&nbsp; In that case banks in other countries could still redeem their Federal Reserve and US dollars for gold.&nbsp;&nbsp; This is how the world worked then.&nbsp;&nbsp; So if a central bank wanted redeem their excess Federal Reserve notes, then it was an obligation of the Federal Reserve.&nbsp;&nbsp; They in turn would &quot;sell&quot; their certificates back to the USA which then handed over the equivalent gold that went to the foreign entity.&nbsp; This really wasn&#039;t an issue until after WWII when the world moved to the USD as the reserve currency and the USA stopped being a net exporter of goods.&nbsp;&nbsp; Nixon closed this window in 1971 so the Federal Reserve no longer redeems these certificates for this purpose.&nbsp; </p><p><br /></p><p>The other theoretical purpose for those certificates would be in the very unlikely event that congress decided to close the Federal Reserve and went back to issuing US currency.&nbsp; This would happen, for example, if the world went back to a gold settlement standard that existed prior to WWII.&nbsp;&nbsp; (now you know why countries are so keen to own gold)&nbsp;&nbsp; In that case, theoretically, the redemption rate would be at $42 to the price of gold in FRNs.&nbsp;&nbsp; So if this happened today, it would be ~$42/$1850.&nbsp;&nbsp; Or in other words, if you had a bank account with $100,000 in it, it would now have $2270.&nbsp; &nbsp;&nbsp; There would also be blood in the streets when this happened so that is why, at the moment, it&#039;s nothing more than a theoretical discussion.&nbsp;&nbsp; Of course, those holding the physical gold would be protected from such wealth destruction in such a scenario.&nbsp; (assuming you could keep it hidden during until the resulting madness settled down)[/QUOTE]</p><p><br /></p>

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