[ak_111]

I always wonder why gold going this high is seen as bearish to the dollar as the US currently holds 8,133.46 metric tons of gold, more than the next three top holders combined (Germany, France and Italy) and almost twice as much as China and Russia combined (although no one really knows how much China holds).

So I would be far more concerned on the impact of gold price going high on other currencies that are not backed by as much gold before worrying about the US.

[kipchak]

The risk to the dollar is a flight to gold causing an decrease in interest of buyers purchasing treasuries, resulting in higher rates paid to buyers of this debt. To give a sense of scale the US issues something like 1-2 Trillion in new treasuries a year, which is roughly the value of all 8,133.46 tons if sold at current market price.

For example a 2% increase in rate on 1T in 30Y treasury issuance over 30 years is $600B.

[carlosjobim]

The US dollar is in no way, shape, or form backed by gold.

[ak_111]

I know, my point is that it is not directly backed by gold, but indirectly you can make the point there astronomical gold reserve comes into play if gold prices go insanely high.