us monetary base vs gold
The 5-year average annual shortfall based on GAAP has been $5.2 trillion. This flow of gold reversed its course beginning in the late 1950s until the gold window was closed – and Dollars were no longer swapped for Gold Bullion – on August 15th 1971. Please check your download folder. The chart reveals a compelling argument that Gold Bullion is presently undervalued.
This is a change of -2.87% from last month and 52.74% from one year ago. Even backing 40% of the US monetary base the price of gold would need to be $3,898 per ounce. Backlinks from other websites are the lifeblood of our site and a primary source of new traffic.If you use our datasets on your site or blog, we ask that you provide attribution via a link back to this page. For more details, see the FRED Announcement. That is sharply above the $1.1 trillion officially reported budget deficit. Remember also that gold is not an industrial metal but mostly a monetary metal. QE3 was announced in September 2012. The following chart shows data going back to 1918. From that date onward, aside from some sales in 1975 and 1978, the US official gold reserves have remained steady. This report is not to be construed as an offer or solicitation to buy or sell any security. Fed Balance Sheet vs Gold Price. Gold has now been in a ten-year bull market beginning at a low of $251.70 per ounce in August of 1999 to over $1200 an ounce in December 2009. Gold and Monetary Base The fundamental analysis of gold often emphasizes the importance of the relationship between the money supply and the price of gold. Gold to Silver Ratio. The additional deficit includes unfunded liabilities in social programs such as Social Security and Medicare. Jovian is a TSX Exchange listed company and as such, MGI Securities is an affiliate of Jovian. [ In 1934 the new price of $35 offered by the US monetary authorities resulted in a multi-year inflow of gold to the United States from the rest of the world. As the debt limit is increased, the price of gold should rise accordingly. If the US were to use the gold to back the US monetary base, the gold price would have to be $9,745 per ounce. Not only is the US using QE as a monetary tool but Japan is pursuing QE quite aggressively. All material presented in this document may not be reproduced in whole or in part, or further published or distributed or referred to in any manner whatsoever, nor may the information, opinions or conclusions contained in it be referred to without in each case the prior express written consent of MGI Securities Inc. Even though the monetary base is not the biggest element of the money supply as a whole, it still is important as its aggressive expansion may cause the whole money supply to explode.
The above chart shows the ratio of the US monetary base to the US population. There are several standard measures of the money supply, including the monetary base, M1, and M2. This chart shows a comparison of the valuation of the US gold reserves against M1. As noted above the price of gold has gone up faster. Since October 2008, the US monetary base has gone up 194% from roughly $949 billion to $2,796 billion. Long term Gold & Silver Price Forecasts thus have climbed too. Many have called for an audit of US gold reserves. Information may be available to MGI Securities that is not reflected in this report. The following chart shows data going back to 1918. We have provided a few examples below that you can copy and paste to your site:Your data export is now complete. Under QE3, the Federal Reserve is to purchase monthly $85 billion of mortgage backed securities (MBS) and US Treasuries until such time as the unemployment rate falls to 6.5% while keeping inflation under 2%. The UK Monetary Base is usually defined using M1, meaning it includes common currency coins and banknotes, plus money deposited with commercial banks and financial institutions. In other words, the ratio of cash in circulation plus the value of all publically held checking/savings accounts to the official US gold reserves is 28.5 to 1.
We have provided a few examples below that you can copy and paste to your site:Your image export is now complete. This interactive chart shows the ratio of the gold price to the St. Louis Adjusted Monetary Base back to 1918. Is U.S. currency still backed by gold? However, MGI Securities makes no representations or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions contained herein and accepts no liability whatsoever for any loss arising from any use of, or reliance on, this report or its contents. $6.6 trillion is 42% of the US GDP.
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