Yesterday the FOMC added another billion to the Fed balance sheet. A KingWorldNews blog by Michael Pento puts the Fed Balance Sheet at a Shocking $6 Trillion.

 

Compare these numbers to the gold and silver production stats for all of the TSX/TSXv gold and silver mining companies. These companies reported production of 30.57M ounces of gold over last 4 quarters -- that is less than 52B.  If you look at the enterprise value of these same companies at today's close it adds up to less than $230B. These gold stats figures are from www.goldminerpulse.com  and are current as of today's close.

 

When one governement, in just 1 year is adding 1 trillion of new paper money, money not worth the paper it isn't printed on, there is no way that anything like a gold back currency can happen at current gold prices. Will the US stop printing? I doubt that. Extrapolating the growh in the Fed balance sheet it isn't unreasonable to talk about 100 trillion balance sheet. Clearly not a sustainable option. So, maybe a gold back currency is not that outrageous an idea. Of course that would require repricing gold at a five figure level.

 

Either way, a low cost  virtual producer like Sandstorm has to be worth its weight in gold in future months/years.