The ratio of U.S. gold reserves to federal debt has fallen to a historic low of 3%
The Kobeissi Letter posted on platform X, stating that the ratio of U.S. gold reserves to government debt is at a historical low. Currently, gold reserves account for only 3% of U.S. federal debt, one of the lowest levels on record. Despite the U.S. holding 8,133.5 tons of gold, the largest reserve in the world, and gold prices rising to historical highs, this ratio remains low.
In contrast, in 1980, the ratio was about 18%, six times the current level. To reach the reserve level of 1980, gold prices would need to rise by 400%, reaching $26,000 per ounce. In the 1940s, the ratio of gold reserves to federal debt exceeded 50%. To match the ratio of the 1940s, gold prices would need to rise by 1,340%, reaching about $75,000 per ounce. The data on gold reserves highlights the growth of U.S. debt levels.
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