(Thanks, O. :)

Reader O. writes:

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Re: Reader: 'Why the collateral account sizes ....

The amount of refined gold in the world is, in reality, approximately 3 million metric tonnes of minimum 995.0 fineness, inclusive of all objects made inclusive of gold such as jewelry, relics, other art.

The current price of 995.00 fineness gold is, at the moment of this writing, is $40,330 bid @kilogram. With 1,000 kilograms in a metric tonne, such equates to $120.77 trillion. This presumes, correctly, that the world's market pricing is correct and efficient as to all known gold, inclusive of in-ground reserves that cost $x @kilogram to mine, extract, and refine as well as melting all gold content down to minimum 995.0 fineness.

When the banks fractionally reserve an asset, they can take the value of $1 and make $9 more out of it, and charge interest on each extra dollar, re-deposit, issue more, in near perpetuity. Hence, the gold, if was all and only bullion, can have a near unlimited total value, though whose value can create a demand push inflation scenario wherein too much currency, i.e., deposits representing the money being gold, chases too few goods and services, resulting in an $89 loaf of bread. So such is the natural control mechanism, the governor, over monetary fiat expansion if being a gold backed central reserve currencies backed system.

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