If we had $2.5 trillion of gold bars in the social security vault we wouldn't be discussing it's

[dkf]

Insolvency.

Instead it would be one of the hugest depositories of wealth we had ever seen.

We have been robbed by the geniuses who decided to put these funds in the general bank account and who spent it.

[kentuck]

1. And the gold bars are backing the $2 trillion we owe the Chinese??

What's the difference?

[daleanime]

3. They intend to continue doing business with the Chinese...

their business with us is over.:hurts:

[dkf]

5. You can sell gold. You can't sell non negotiable SS bonds.

And the US is not about to turn over it's entire gold supply to pay off bonds. The gold we currently hold gives confidence that in the end we have at least that liquidation value.

[kentuck]

6. So, what's the difference?

Between what we owe the Chinese and what we owe the SS fund??

[alc]

12. what we owe the Chinese is officially part of our debt

What we owe the SS is not. To pay the SS we need to get the money from somewhere. We will likely borrow it (with real bonds instead of "special bonds") and our official debt will increase by $2.5 trillion and our on-the-book liabilities will go up and credit rating could go down which increases the cost of the debt.

[fasttense]

2. The funds are NOT in the general bank account.

No more or less than someone buying savings bonds puts their money in the general bank account.

Those funds are in Super Special Social Security Treasury bonds getting 5.5% interest. It sounds like a loan to me.

If the US government defaults on Baby Boomer American's Retirement funds, they should default on all American's treasury bonds.

[lumberjack_jeff]

4. Indeed. Why not default on the Chinese first?

Oh, that's right. They have guns.

[dkf]

7. Because the Chinese own bonds that pay cash interest payments and mature

With the entire face value paid out on that date. Our SS bonds are special non negotiable bonds that no one will buy on the secondary market that does not pay interest in cash but in more bonds. They never mature. That kind of bond can never default because it never promises payment.

[Ozymanithrax]

8. Yes, but that means we would be on the gold standard, or owe Beck's advertiser...

a lot of money.

What if we have it as stock. Dooh! Mabe Tulip bulbs would be a good investment.

Social Security still takes in more than it spends. No matter what form of collateral you have in a vault to symbolize that amount, there is always a chance that the market for that particular sum will fall and suddenly we are holding on to worthless crap. The solution is to fix the U.S. economy so it is worth something. To do that, we ought ot cut something that is a real drain on the economy, say National Defense which is the single largest expense.

[anaxarchos]

9. "We" would have invented alchemy...

... because that is more than all of the easily monetized gold in the world and just under half of all of the gold ever mined in human history.

So, maybe, you could supplement it with silver... but... but... that would lead to the dreaded "bi-metalism".

And, then in a few years, maybe we could have somebody give a "Cross of Gold" speech and we would have successfully cycled through an entire century with Ron Paul as our traveling companion.

The form of money, whether currency, debt or GOLD, doesn't matter.

[dkf]

10. No that would have pushed the price up.

But having a hard asset would have shut this argument down.

[jobycom]

11. Why wouldn't we?

Gold is only worth as much as someone thinks it is, just like paper money. If the economy declines, the value of gold declines along with it, and the money is worth less. Worse, when the economy grows, money is worth less, and deflation drives real wages down.

And gold is just an intermediary. It only has value because labor has value, anyway. Labor is the real base of money anyway, so putting gold between the value of labor and the dollar doesn't stabilize the dollar, it just limits the value of labor.

[Art_from_Ark]

14. Tell you what, I'll trade you

My 100 trillion dollar note from Zimbabwe, for your 10 ounces of .9999 fine gold.

[Orsino]

13. That's exactly how the rich old men see it...

...and it's why they continue to steal from it.