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America’s Gold Backs Record Low % of Monetary Base

Assuming the US really does own its reported gold reserve of 261.5 million ounces – at $1,203.35 per oz gold, America’s gold reserve is currently worth $314.672 billion compared to the current US monetary base of $4.15 trillion. America’s gold reserve currently backs a record low 7.58% of the US monetary base.

From 1918 through 2015, the US gold reserve has backed a median of 48.75% of the US monetary base. Back when the US was on a gold standard, it was required to back at least 40% of the monetary base. For the US gold reserve to once again back 40% of the US monetary base, gold prices must rise 428% to $6,349.01 per oz. For the US gold reserve to once again back 100% of the US monetary base, gold prices must rise 1,219% to $15,872.52 per oz.

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Russia is much closer to being able to implement a gold standard than the US. Russia’s gold reserve currently backs 36.79% of its monetary base, only slightly below the 40% requirement that was widely used worldwide. Sweden and the Philippines already own enough gold to implement a gold standard today.

goldreservevaluepercentmonetarybaseThe average country would currently require a gold price of $4,048.24 per ounce to meet the standard requirement of a 40% backing of their monetary base. A gold price of $10,120.61 per ounce would be needed to fully back the average country’s monetary base.

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