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DMac
7th September 2010, 06:40 AM
Treasury Bills: The New Opium (http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/9/7_Jim_Rickards_-_Treasury_Bills__The_New_Opium.html)

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China’s GDP is about 27% of the combined China+U.S. GDP.  The U.S. has 8,133 metric tonnes of gold and China has 1,054 metric tonnes; giving both countries a combined total of 9,187 metric tonnes.  In order to equilibrate gold in the same ratio as GDP, China would need to receive 1,426 metric tonnes from the U.S. which would leave the U.S. with 6,707 metric tonnes and give China a new total of 2,480 metric tonnes, thus getting to the 27% ratio of combined China+U.S. output.  China holds about $2 Trillion of U.S. government securities to theoretically pay for this gold transfer.  Simply dividing the quantity of gold to be transferred by the face value of the Treasuries yields a gold price of $39,844 per ounce.

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