In January 1959 US M3 money supply was $288.8 billion, and the Official Gold Holdings of the United States was then 17,335.1 Tonnes, or about 557 million ounces (there are 32,150.7 Troy Ounces in a Tonne). That means that in 1959, there were $518 in circulation for every ounce of gold reserves held by the USA. Although the theoretical price should then have been $518 per ounce, the actual price, as fixed under the gold standard was only $35 an ounce.
By August 2005, the US M3 money supply had risen to $9,873.9 billion, whilst at the same time the Official Gold Holdings of the United States had fallen to just 8,133.5 Tonnes, or about 261 million Troy Ounces. This means that today, in 2005, there are $37,831 in circulation for every ounce of gold held by the United States.
The above numbers show the falling influence of gold in the monetary system of the world today. Goldbugs believe, or even hope, that one day gold's importance will return as the printing of paper money gets out of control and we end in a hyper-inflationary fiat money collapse.
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