Gold: Octopus in a Blanket

In the past nine years, while playing its problem-loaded role of banker and Santa Claus to the free world, the U.S.

has run up deficits totaling $24 billion in its international accounts. And be cause the U.S. permits foreign countries to exchange their dollars for U.S. gold, the balance-of-payments deficit has severely eroded the U.S. gold stock. Today, in the unlikely event that all foreign governments decided to cash in all their dollars at the same time, the Treasury's $13.1 billion store of the precious yellow metal would simply disappear. Last week that unlikely possibility prompted the nation's two largest...

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