Abstractionist
$GLD $SLV
Just thinking 🤔 about Judy Shelton’s appointment and a gold collateralized bond.
If Treasury issued $500 billion of bonds at 125% collateral coverage and gold were $4,150/oz, it would need approximately 150.6 million ounces of gold, or 4,685 tonnes.
That is roughly 58% of the United States’ official gold reserves. Those reserves would remain physically held by the government but become legally encumbered.
The interesting feedback mechanism is that rising gold prices increase Treasury’s effective borrowing capacity without requiring it to sell gold or acquire additional reserves.
It would seem to me that this would be very attractive to the Treasury 🇺🇸 to pursue.
Any thoughts 💭?
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