Mostly: Classical

[Canuck Dave]

Boy, gold is really teasing us the past few days....

I saw an amazing statistic on the lunacy that passes for central banking these days. Apparently, back in the days of the gold standard, countries had to settle up their current account deficits in gold. That was what a gold standard meant. You consume more than you produce, and your gold reserves shrink, setting off interest rate adjustments (rises) and recessions.

So... the maximum trade deficit you could run up would be how much gold you had. The US today has a reserve of 5000 tons of gold (I am trying to verify the amount) worth about 64 billion, which was their trade deficit with China in 2002.

One country, one year.