"Gold and silver are money. Everything else is just credit." J P Morgan 1912
J P Morgan is arguably the most notorious banker in modern times. According to him banking is just credit lending based on a core security of gold. As many now know, banking for years has been based on so called fractional reserve banking. This means that banks can print money out of this air and lend it out at interest.
This means your loan is just a number in a computer somewhere.
China and Russia have large internal production of gold and has been importing large amounts the last years, thus building up their reserves. Rumours has it they soon will launch their own world reserve currency backed by gold and silver.
When will they release such a new currency system? And how much will gold and silver rise as a consequence?
According to usdebtclock.org, the current value of gold and silver are based on M2 money supply divided yearly mining production. A fairly simple model, giving silver a current value of 887 USD. Compared to the COMEX market price of 16.8 USD raises some questions.
The most important question is if the market is manipulated and how much.
If we calculate the total Money supply in the market and divide it with the total amount of gold and silver in the world we end up with a staggering number far above the wildest estimates currently portrayed.
The highest numbers I seen is Jim Sinclar with 50 000 USD per once of gold and the late Adrian Douglas with 65 000 USD.
According to Max Keiser the market reaches its equilibrium at 25 000 USD.
However, I suspect the real number is much higher.
Just consider the massive amount of currency being printed and the staggering amount of credit created by fractional reserve lending.