As a Canadian, I am appalled at the fact the Canadian government owns no gold. Back in 1960, Canada held an impressive 1,000 tons but through the years, successive governments have stealthily sold it all off bit by bit to cover deficit spending. By 2016, it was all gone. While central banks around the world, including Hungary, Poland, Russia, China, Korea, Thailand and Brazil have increased gold holdings, Canada's central bank continues to buck the trend. So far, in the first half of 2021,  central banks purchased 333 tons of gold, 39% higher than the previous 5 year average while Canada continues to maintain zero ounces of gold in reserves. If the Canadian dollar crashes, we're in serious trouble.

Moving over to the USA, things are dire there as well. The federal debt just surpassed $29 trillion and soon will surpass $30 trillion for the first time ever. While the US dollar is backed only by confidence, the US Treasury does have some backing in the form of 258.66 million troy ounces (approx. 8,000 tons) currently being stored at various locations across the US. The world famous Fort Knox holds the largest amount of these locations.

Fort Knox holds 56% of the total with 147.37 million troy ounces. West Point has 54.06 million ounces. Denver, CO., has 43.85 million ounces while the New York FED hold 13.38 million ounces in their super secure vaults. While gold is valued at about $1780 per ounce on the open market, most people are not aware that the US Treasury's gold is still valued at $42.22 set in 1973.

At $42.22 the total value is about $10.9 billion. At today's price of $1780, the market value comes to about $460.4 billion. That got me thinking, "What would the price have to jump to in order to cover $29 trillion of federal debt". Well known author and advisor, Jim Rickards has suggested numerous times that to balance the system, gold would have to jump to at least $8,000 per ounce or higher.

Well, I did my own calculations. Even if gold was priced at $10,000 the total would come to $2.586 trillion. We'd need more than ten times that amount to cover the total federal debt. In fact, gold would have to be priced somewhere around $112,000 an ounce to cover federal debts.

Some people might think they would get rich if the price ever got that high with just a few ounces of gold but be careful what you wish for. If we were to ever reach this point, it would mean the dollar is officially toast and its status as the reserve currency will be no more. At this point, a new era would begin and a new financial system installed. There is always turmoil before and during these times and the two world wars are great examples.

Changing of financial systems is nothing new and we should expect another change and much sooner than most people realize. We've had three financial systems in the 20th century alone with the end of the British Pound as reserve currency after WWI, Bretton Woods in 1944 (during WWII) which established the American dollar as reserve currency and finally, the dollar standard after August 1971, when President Nixon uncoupled the dollar from gold (after going broke funding the Vietnam War).

Many will say it's impossible to repay the federal debt and at this point, I have to agree. Even the IMF (International Monetary Fund) issued a dire warning earlier this week that debt loads on some 73 impoverished countries has approached critical status and must be addressed. They are suggesting wealthier countries (ex: USA and Canada) offer debt relief to these countries or a worldwide economic collapse is imminent.

Our own countries are so deep in debt we're barely keeping our heads above the water and here's the IMF telling us we should write off some other country's debt. Meanwhile, the source of international debt can be directly attributed to the IMF, infamous for lending ridiculous sums of money to poor countries, knowing full well it can never be repaid. Feels like enslavement doesn't it? Of course, all their money was created out of thin air just like every other central bank around the world has.

Two years ago, in December of 2019, gold was around $1,300 and has risen about $500 an ounce since then. In August 2020, gold hit $2,170. I fully expect gold to surpass this number in 2022 as more people realize the growing debt issue. I also believe the 'Evergrande' (and Kaisa) crisis evolving in China will be a spark that ignites the gold price fuse. They and Kaisa just missed an interest payment which puts them in official default. Their debts total more than $300 billion and they've just been downgraded by ratings agency Fitch.

Do you think $112,000 for one ounce of gold is outrageous and impossible or do you believe it is attainable? A look at 1920s Weimar Germany suggests it's very possible. In 1918, at the end of the Great War, one ounce of gold could be purchase for 170 marks. 5 Years later, after explosive hyperinflation in an attempt to cover wartime reparations, an ounce of gold shot up to 87 trillion marks. An ounce of silver shot up to 544 billion marks.

While I say, "careful what you wish for", having an ounce or two of gold or silver during these times would definitely come in handy. That mortgage would be payed off instantly and would offer no doubt that gold is a fantastic hedge against inflation. Also, look for Basil III rules to be fully implement in January, 2022.

Update December 30, 2021: A King World News reader sent an email to KWN suggesting gold would have to go to at least $56, 800 per ounce if we scrapped all fiat and went for a central bank digital currency. In order to gain trust, the digital currency would have to be backed by gold and at this price. Whether using mine or his interpretation, gold must go much higher. Click here to read the article.

What are your thoughts on this subject? Your comments and suggestions are welcome. More links are below for reference purposes.

Other cool tidbits:

Fort Knox opened in 1937 and covers 42 acres and the first gold shipment was delivered by U.S. Mail. Entrance to Fort Knox is forbidden.

Each bar at Fort Knox weighs about 400 ounces or 27.5 troy pounds and dimensions are 7 X 3.625 X 1.75 inches.

Franklin D. Roosevelt is the only President to ever enter Fort Knox.

Fort Knox would not be opened again until September, 1974 when suspicions grew over missing gold. A congressional delegation and some journalists were allowed in for inspection.

Fort Knox would not be opened again until 2017, when President Trump sent Secretary of The Treasury Mnuchin along with Kentucky Governor Matt Bevin and congressional representatives. Afterwards, Mnuchin simply stated, "the gold is safe". No other information was released.

During WWII, Fort Knox was used to safely store the Declaration Of Independence, Constitution and Bill Of Rights and even an original copy of the Magna Carta.

There are several combinations to open the vault at Fort Knox. No two persons hold the same combination which helps make it the most secure vault in the world.

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