
The U.S. government holds 261.5 million ounces of gold.
Now, a government holding gold is not all that unusual. Lots of them do, all over the world.
This is: Uncle Sam doesn't mark to market!
It just carries the stuff at the nominal value of $42 an ounce, which is about 3% of its market value.
So it pretends that it's not worth much. The U.S. Federal Reserve shows its gold holdings are "worth" $11 billion - enough to cover any hiccups that might arise from its once-radioactive, still-vulnerable mortgage-backed securities.
But at current market prices, the U.S. government's gold reserve is worth close to 30 times as much as the books show - about $329.5 billion.
I guess that's the government's "insurance policy."
Me? I see gold not so much as an insurance policy but as a store of value, similar to any other investment. We know it can't go bankrupt. It's nobody's liability, but it sure does fluctuate in price.
In that respect, gold is just like any speculative investment. There's potential reward, and there's risk.
Timing is everything. And gold timing should not be a mystery.