LETTERS TO THE EDITOR - Buying government debt not way to protect reserves

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Since 1789, the U.S. has accumulated 8,000 tons of gold. U.S. gold reserves are currently valued at about $400 billion.

The U.S. government spends that much money in just six weeks (this fact doesn't even phase most Americans).

The price for gold during the time the U.S. accumulated its gold was, on average, $20-$35 per ounce. Based on an average price of $27.50, and a current price of $1,600, the U.S. has earned a 5,700 percent return on its gold reserves since 1971.

I didn't arbitrarily pick 1971. I used 1971 because that's the year we went off the gold standard and the price of gold was then determined by the free market and not the government.

In 1971, the year Nixon took us off the gold standard, the dollar was worth 1/35th of an ounce of gold. Just 40 years later, the almighty dollar is worth 1/1,600th of an ounce of gold. Furthermore, 97 percent of the national debt has been accumulated since we went off the gold standard.

I retired at 54 with no pension or government check (I saved and invested). However, if I did rely on a private or government pension, I sure would be asking some questions.

The majority of pension reserves, both private and public, are not invested in equities or gold, which are backed by tangible assets, but are invested in government debt and cash, which are backed only by the so-called full faith and credit of the U.S. government (cash is basically Federal Reserve notes and money market accounts).

If someone looked at the fact that the federal government has borrowed $4.5 trillion in just the last three years, and we have structural high unemployment, one would have to admit the full faith and credit of the U.S. government really isn't all that great.

A few years ago, many people were saying the same thing about Europe, that there's no way it could go bust, but that's exactly what's happening.

Like in Europe, Americans are just going to wait until it all blows up.

If I was depending on Social Security, or a public or private pension, on top of demanding more fiscal restraint from the politicians, I would be asking the people who are responsible for managing the pension reserves exactly what they're doing to protect the reserves? And they had better not say, "Buying government debt."

Richard Strozinsky

Walla Walla

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