Does the USA have a Gold reserve?
The US does have a gold reserve. The main reserves are held at Fort Knox but there is even more gold, mostly owned by other countries, stored in the basement of the New York Federal Reserve Bank (Think Die Hard 3). The United States Bullion Depository, often known as Fort Knox, is a fortified vault building located adjacent to Fort Knox, Kentucky, used to store a large portion of United States official gold reserves and occasionally other precious items belonging or entrusted to the federal government. The United States Bullion Depository holds 4,578 metric tons (5046 tons) of gold bullion (147.2 million oz. troy). This is roughly 2.5% of all the gold ever refined throughout human history. Even so, the depository is second in the United States to the Federal Reserve Bank of New York's underground vault in Manhattan, which holds 7,000 metric tons (7716 tons) of gold bullion (225.1 million oz. troy), some of it in trust for foreign nations, central banks and official international organizations. Source: Wikipedia According to the US Mint, the Government does still have a gold reserve stored mostly in Fort Knox in Kentucky, but there is some in New York and Colorado too. Some facts from their site:    That last point is an interesting one. They are basically saying, yes we have it, and no you can't see it. Some conspiracy buffs claim no one has been allowed in there to audit how much they have in over 50 years leading them to speculate that they are bluffing. Although the dollar is no longer tied to the gold standard, throwing that much gold into the market would definitely add fuel the volatility of the finance world, which already has it's share of volatility and isn't hungry for more.The impact on the price of the dollar would be quite complicated and hard to predict. The United States is no longer on a gold standard, and the value of its currency is solely founded on the productivity of its economy. So I don't think there's any practical reason for the United States government to explicitly sell off a lot of gold to force the price to crash. In fact I would expect that the price of gold has very little interest for the Fed, or anyone else in a position of economic power in the government. I believe that we still have large reserves of it, but I have no idea what they are intended for, aside from being a relic of the gold standard. Best guess is that they'll be held on to just in case of an international trend back towards the gold standard, although that is unlikely on any time frame we would care about.
No. The value of the dollar will continue to decline, in turn adding to the value of gold. The current prices are not high for metals, although not rock bottom prices. Especially given what central banks are going to do. (QE).  We are nowhere near a gold bubble. The U.S. economy has seen some very difficult economic times centered around poor fiscal policies and fiscal irresponsibility.  The Great Depression represents a good example and is a reminder to us of where the U.S. and the world can end up.  In this exclusive article we revisit the policies and economic indicators that led to the Great Depression and whether we are in the midst of its return.  Register Today for all the exciting news and discussion groups we have to offer! @ http://www.igoldpost.com/register-today/ I can see a long-term existence for it. I doubt it will replace national currencies but I also think there is some value. Gold is purely speculative as well but it's thrived for a very long time. I see this as basically a digital version of gold. Silver and gold are money. They always have been. When the Euro collapses (soon) and dollar inflation enters the steep part of the parabolic curve of death please remember this conversation. Please remember that by trying to look smart you didn't invest in gold and silver. "[There's about 10 trillion in gold](http://en.wikipedia.org/wiki/Gold_reserve) and about [2.8 trillion of US cash](http://visualeconomics.creditloan.com/the-value-of-united-states-currency-in-circulation/) in the world. Neither of these is anywhere large enough to be used for all the transactions in the world. For example, about [4 trillion a **day**](http://en.wikipedia.org/wiki/Foreign_exchange_market) changes hands in the currency markets alone - if that were required to be cash or gold it would be impossible to do so, and you'd suffer from more poorly priced goods since markets could not adjust as quickly, so vendors would charge more premium to handle the risk.  Yes, there is not (and has not been) enough cash in circulation to run the world economy. There is also vastly too little gold, unless you want to strangle commerce due to not being enough money to trade.   &gt; ""posing as the money supply""  All money is debt, and always has been. Money is a placeholder that you can trade for goods *later* meaning someone owes you a thing. The value of that money is the debt they (or society) owes you for something you already did to get that money. So there is no posing, just most don't understand money, how it originated, why it exists, or why it works. They never ask the question ""how does money come into existance"".  &gt; Does defaulting on ones debt create inflation since that money is still in the system and not being paid off?   Probably not much. Loans are made expecting some default, so the interest others pay on their loans helps offset the defaulted ones. If loans become riskier, the interest demanded increases, so the lender still (if they do their risk analysis well and no external events break their expectations) makes money.  When you pay off a debt, that money, as you're paying it, is likely being lent in other loans, so paying it off does not do much. If you could pay off about 100 trillion in debt into the US economy in one payment you might break some things :)" This is exactly what they are doing.  Examples would be the BRICS trading bloc and the ASEAN equivalent.  Along with the trade agreements that many countries have made with Iran, all of which completely bypass the American Dollar.    America needs to recognize that for many countries in the world, dumping their excess reserves in US Treasury Bonds is not in their best interest any longer.  Especially considering the fiscal situation in the US, and the policies that are used to manipulate bond rates.  (These policies are cross aisle, this is not a political statement)  American Imperial might is finite.  Americans ignore this at their own peril.  Edit: I would also add the regulatory and legal uncertainty in the US is also a problem.  By that I mean things like MF Global, Peregrine Financial, Knight Capital among others. The previous answers have raised very good points, but I believe one facet of this has been neglected. While it's true that the total accessible supply of gold keeps growing(although rather slowly as was mentioned earlier) the fact remains that gold, like oil, is a non-renewable natural resource. So, at some point, we are going to run out of gold to mine. Due to this fact, I believe gold will always be highly valued. Of course it can certainly always fluctuate in value. In fact, I expect in the reasonably near future to see a decline in the price of gold due to investors selling it en masse to re-enter the stock market when the economy has recovered more substantially. Money is no longer backed by gold. It's backed by the faith and credit of the issuing government. A new country,say, will first trade goods for dollars or other currency, so its ownership of gold is irrelevant. Its currency will trade at a value based on supply/demand for that currency. If it's an unstable currency, inflating too quickly, the exchange rate will reflect that as well.  More than that your question kind of mixes a number of issues, loosely related. First is the gold question, second, the question of currency exchange rates and they are derived, with an example of a new country. Both interesting, but distinct processes. Are you going to South Africa or from?  (Looking on your profile for this info.) If you're going to South Africa, you could do worse than to buy five or six one-ounce krugerrands.  Maybe wait until next year to buy a few; you may get a slightly better deal. Not only is it gold, it's minted by that country, so it's easier to liquidate should you need to.  Plus, they go for a smaller premium in the US than some other forms of gold. As for the rest of the $100k, I don't know ... either park it in CD ladders or put it in something that benefits if the economy gets worse. (Cheery, ain't I? ;) ) "Because most of the posters have disparaged the pursuit of silver without a reflection upon what you wrote in the question - your concern about Hungary and its government, I'll weigh in it.  In a stable and solid political and economic environment, this advice against silver would be generally correct.  As you commented, though, this has not been the case and thus it is difficult for some to understand this. Given your concerns, here's a question to reflect upon - what can the government of Hungary not confiscate?  Or what have they not confiscated in the past?  If silver is on that list, then very few people here will understand because statements like, To be honest, I think a lot of people on this site are doing you a disservice by taking your idea as seriously as they are, are completely predicated on an environment that has been relatively stable over the years.  I know my fellow Americans (and some Europeans) don't get this, but some countries have seen disasters - for instance, Brazil has been hyperinflation even when interest rates with insane interest rates (over 1000%). So this answer won't be popular, but depending on your environment, silver may be an excellent choice.  If the government of Hungary has confiscated silver in the past (or you suspect they might), though, I'd stay far away from it.  In reading and listening to people in these environments, citizens typically want something the government does want to take inventory of that tend to hold their value or rise during times of crisis.  Most Americans (if they were honest) really can't relate to this and the few that can would agree.  Another popular item to have, which doesn't physically exist, is a rare, but valuable skill that will be needed in a crisis.  For instance, being highly skilled at negotiation and knowing the right people both come in handy at difficult times.  Can you pay for learning or increasing those skill sets now?  Never forget that self-investment can go far. And as a financial note and word of advice from someone who's been a financial adviser for over half a decade, a good financial adviser always seeks to get the person's information before providing advice and almost never says that a particular choice is always bad or always good; I would seldom say that a person should do one thing and it will always be good advice because that may not work in their country/state/environment/situation/etc.  As they say in the SQL Server community - ""it depends"" and that holds true for finance.  In the long run, those items which we may not think of as good investments or stores of value may end up having their day.  To paraphrase Solomon, ""There's a time and place for everything under the sun.""  Even in my short life, I've witnessed a period of gold and silver routing the stock market and the stock market routing gold and silver.  I suspect I'll see both again if I live a few more decades. tl;dr" &gt; Arguably, the dollar today is essentially backed by oil i.e. as economists say the 'petrodollar'.  This isn't really true. The exchange rate between USD and a barrel of oil floats with the market whereas it was fixed with gold.  Also by the nature of the way oil is consumed it doesn't make sense to think of it this way - gold retains state when used whereas oil is burnt up never to be seen again. At present, Australia is looking like a good bet.  I'll need to find a new job as part of the move.  The problem with waiting until after things fall apart to move is that it may no longer be easily possible, and even if it is possible to leave, it may not be possible to take wealth out of the country.  It would not surprise me at all for instance, to discover after high double digit inflation starts, that it was difficult to move precious metals out of the country.    There is a distinct possibility that the government might choose to seize precious metals even from people not leaving.  It wouldn't be the first time in US history that it was illegal for US citizens to own gold and silver (for those owning coins minted after 1933, the government could instead choose to redeem them at face value - i.e., a $20 gold piece for $20). Currently many countries (and non-government bodies) hold dollars to facilitate trade. If the dollar is no longer used in their trade, then they no longer have a reason to hold those dollars. If every other country starts to dump their dollar holdings into the world currency markets, the number of dollars floating around in those market would shoot up. The massive supply increase of dollars (we're assuming these other countries are holding massive amounts of dollars) would lead to a large drop in value of the dollar - lots more dollars chasing the same amount of goods. Every purchase will become much more expensive for anyone still buying with dollars, including the American government trying to buy expensive military equipment - unless the US government also switches to using something else to purchase military supplies. Yes it is. The government already controls the banks. The fed sets reserve amounts. It is about 20% but they can make it 99% if they wanted. A bank that doesn't meet its reserves loses its charter and is seized. I believe it is Office of Thrift Supervision or something. The president appoints the Fed chairman and congress oversees the Fed. The Fed gives 90%+ profits to the Treasury. People normally hold precious metals as a protection against the whole system going down: massive inflation, lawlessness, etc.  If our whole government and financial system broke completely and we returned to a barter economy, then holding silver would likely turn out to be a good thing. However, precious metals are not very good hedges against individual calamity, like losing your job.  They are costly and inconvenient to sell and the price of these metals fluctuates wildly, so you could end up wanting to sell just when the metal isn't worth much. I'd say having some precious metal isn't unreasonable, but it should not make up a major portion of one's total net worth.  If you want protection against normal problems, especially as a person of limited means, start with an emergency savings account and paying down debt.  That way fixed costs will be less likely to turn an unfortunate turn of events into a personal catastrophe.