Selling Of Gold Reserves By US Treasury Would Cause Decimation Of Gold Price

May 12, 2011 - PRLog -- Because the government approaches the legal borrowing limit presently set at $14.294 trillion, some have recommended the authorities could market its gold reserves, as well as other property like mortgage-backed securities or student loans portfolio. Hitting the financial debt ceiling would imply the authorities could not borrow much more cash, and selling property would imply an extra income stream with out running up any more financial debt. That might purchase politicians a bit additional time to negotiate and what ever else the financial debt ceiling discussion will carry. Check Out Investing In Gold, Selling Gold, Trade Gold, Invest In Gold Now! http://www.silver-dollar-values.com/Selling-Gold/

However Treasury is currently warning lawmakers that keeping a large lawn sale of authorities property is not a responsible move. Inside a correspondence sent to our elected representatives last month, Geithner stated any "fire sale" of assets would be "damaging to financial markets and the economy" and would "undermine confidence in the United states."

The United States Treasury Department has 261.5 million ounces of gold in its reserves, by far and away the greatest stockpile on earth. Having gold selling at about $1,515 an ounce, which indicates Uncle Sam is sitting on $396 billion really worth. Based on the World Gold Council, the United States retains much more than twice as much gold as the second place gold hoarder Germany. Check Out Investing In Gold, Selling Gold, Trade Gold, Invest In Gold Now! http://www.silver-dollar-values.com/Selling-Gold/

The US Treasury, nevertheless, plans to maintain it within the vault. "A 'fire sale' of the nation's gold to meet payment obligations would undercut confidence in the United states both right here and abroad," Mary Miller, assistant secretary with the Treasury, had written inside a web log post last week. It might also wreak havoc on gold markets, she said. That declaration is echoed by Jon Nadler, senior analyst at Kitco Metals." Releasing even a quarter of U.S. gold reserves would do definite psychological damage to the market right away," Nadler stated. "That's not a quantity that markets could handily absorb ... I don't think they'd find a buyer."

Even when the gold was effectively introduced to market, the federal government's huge borrowing appetite would imply only a short reprieve. The USA borrows approximately $125 billion per month, a tempo that might rapidly erase the proceeds of the gold sale. And once the clock expires, the financial debt ceiling would nonetheless need to be elevated again. Congress would simply be kicking the problem down the street. Check Out Investing In Gold, Selling Gold, Trade Gold, Invest In Gold Now! http://www.silver-dollar-values.com/Selling-Gold/

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