$1 Trillion in Gold Down, $36 Trillion to Go
The US Treasury claims it owns $11 billion worth of gold. They also value that gold at $42.22 an ounce.
But if they were to suddenly revalue gold at the prevailing all time high market price of $3,845/oz, the Treasury is really sitting on $1 trillion worth of gold.
That’s obviously a nice chunk of walking around money, but in order to stand up to the massive debts the US government has accumulated, gold would need to be worth another 37X more per ounce, to a whopping $142,000/oz.
The US debt clock is spinning past $37.5 trillion as I write this, though if you’re reading tomorrow or a month from now, the number will certainly be higher.
In fact, according to the Cato Institute: “Over the next 75 years, US taxpayers face over $73 trillion in long‐term unfunded obligations.”
So, even if the Trump administration manages to revalue gold 37-fold to balance out today’s debt, we’ll still have another $73 trillion to deal with.
These numbers are so absurdly large… and it puts the $1 trillion worth of gold into context. The US Treasury owns the largest amount of gold of any country on earth, and it’s not particularly close:
But even 8,000+ tonnes of gold is nothing compared to US debt today, let alone in the coming decades. The gold market is responding to this out of control debt by hitting new all time dollar denominated highs. The price rise is not surprising to people who follow gold.
I’m sure I’m not alone in believing this kind of move in gold was coming. But now that we’re in this gold bull, I know it can be easy to start to take it for granted.
I hope you’re taking this opportunity to put money to work in gold positions. I believe we’re still in the early innings of this bull, but every bull market ends. This should be a time when you’re making the most of what appears to be the strongest bull market ever.
Don’t take it for granted!
Years from now, it may be that $3,800 was an ideal time to invest in gold stocks. We know that most people still don’t own gold or gold stocks. We know that there are still massive deals and discounts in the world of gold stocks.
That’s not going to be the case forever.
At some point, the pendulum will swing, and most gold stocks will be overvalued instead of undervalued. When that day comes, I don’t want you to be wishing you had bought more gold stocks as we’re closing out winners.
Because remember: outside of a handful of gold royalty stocks that you might not mind owning forever, we’re going to want to take profits. The time to take profits is coming - probably years from now, but in order to take profits, you have to be invested.
I hope you’re taking time to think carefully about your gold holdings. I’m giving you permission to be bold now, so that you can reap bigger profits later.
This is the time… Be bold!
If you’re not putting money to work now, I don’t know if you’re going to have a better opportunity. It’s always a possibility that we’ll see some kind of correction - but that’s far from a certainty.
I know that if you put money to work today, you’ll be very happy with the results down the road.
And if we do see a correction, I’ll be the first to tell you.
Best,
Garrett Goggin, CFA, CMT
Chief Analyst & Founder, Golden Portfolio
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