Chris’ full commentary can be seen here.
Below we show our two favorite charts as well as Chris’ commentary in regards to those charts
What has been a constant theme this decade is that the supply of gold has dramatically trailed the growth in fiat currencies all over the world. This was not the case by the end of the secular bull market in gold in the 1970s and early 1980s run in which the USD was more than 100% backed by gold as the price of gold (and thus the value of USD gold reserves) increased well above the rate of the US monetary base. For a 100% backing of the USD by gold, the price of gold would have to rise to $6,888 an ounce! Looking at the percent backing of the USD by gold reserves helps to indicate which is a greater value, the value of the greenback or the value of gold. As shown below, the percent of USD currency backed by gold is currently below even the low point of the 1970s secular bull market starting point, this even with gold now in triple-digit territory and at an all-time high near $1,200 per ounce! Using the same type of analysis on a global perspective, all of the international reserves of the world are only backed by gold in the low double-digits, requiring a gold price of $7,321 per ounce for 100% backing.