I borrowed this idea from Jason Hommel's most recent post.

The following is a link from his post...

http://www.reuters.com/article/ousiv...

the key part of which I will paste in next...

(Reuters) - U.S. banks and money managers borrowed a record amount from the Federal Reserve in the latest week, nearly $188 billion a day on average, showing the central bank went to extremes to keep the banking system afloat amid the biggest financial crisis since the Great Depression.

Jason then worked out the math using 7 days in the week (which may be what the writer intended - I do not know). Using the more conservative figure of a 5 day business week we have

5 X $188B /day = $940 billion

Kinda dwarfs the "rescue package" doesn't it?

Now $940,000,000,000 divided by the 261,000,000 ounces of gold supposedly held by the U.S. Gov't = $3600 and change.

So just in the past week alone the value of gold in terms of U.S. dollars should have increased by $3600/ounce making the real price close to $4500/ounce. That's based on just one week of what the FED did (assuming that money stays in the economy and is not repaid and canceled out - which is a reasonable assumption).

Obviously this kind of calculation cannot be applied to the world market for gold but other nations are doing similar things so a huge rise in the price of gold is not just fantasy.

P.