WHy Gold is looking better every day

Dear friends and readers,

My dear friend JP has offered a sensational piece which shows some insight on why you need all the gold you can get your hands on. A good friend said that Wal-MArt was running out of personal safes as Americans are hoarding the metal. I deplore the Chinese's thinking that they need to keep a couple of trillion fiat dollars to keep their economy going. BIG MISTAKE! So without any more gibberish on my part , please read on the dire predictions of our esteemed colleague JP. ( name witheld by request)

I Took the $7.7 trillion of bailouts. donations or guarantees and with the help of my trusted abacus, calculated that the US currency was backed with Gold sitting at Fort Knox and West Point (if there actually is any) but only if gold traded at $35,000 an ounce.
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At current prices concensus seems to be China's Gold hoard is worth approximately $3billion. In total reserves of $1.9 trillion at last official count. It would seem China is seriously - if not imprudently - underweight Gold.
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The only reason the USD isn't trading at new lows it is because China and Japan still continue to hold on to it. According to IMF (http://www.imf.org/external/np/sta/ir/802P816.pdf)
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Obama - with Geitner appointment - does not seem to understand that he needs to deal with the CDS (Credit Default Swap) ponzi scheme and exterminate it. An honest solution would be to allow companies to go into bancruptcy, payoff the CDS at face value and outlaw speculators and be made thankful they are getting out alive. Obama appointing the likes of Geithner is a signal of more of the same. President-elect Obama has choice:

a) adopt financial sanity, safety and soundness by deflating the remaining (and biggest) speculative bubble by letting free-market bancruptcy mechanism do its function.

b) elongate and deepen the economic stagnation (à la Japan method) wading pool for the next 5-10 years by continuing the Paulson / Geithner method of hiding true value of assets and nationalize the banking system and allow the CDS to persist waiting for the inevitable day of reckoning.
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US Code
§ 3910. Audit authority of Government Accountability Office
http://www2.law.cornell.edu/uscode/12/usc_sec_12_00003910----000-.html

is forbidden from:

(3) Audits of the Federal Reserve Board and Federal Reserve banks may not include—

(A) transactions for, or with, a foreign central bank, government of a foreign country, or nonprivate international financing organization;

(B) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, or open market operations;

(C) transactions made under the direction of the Federal Open Market Committee; or

(D) a part of a discussion or communication among or between members of the Board of Governors of the Federal Reserve System and officers and employees of the Federal Reserve System related to subparagraphs (A) through (C) of this paragraph.

JP