Business: Waging the Gold War

Fort Knox last week bore an uncomfortable resemblance to a besieged stockade on the plains of the Old West. The fort was under attack not by redskins but by sharp-eyed and pin-striped foreign bankers. In the past fortnight, U.S. gold reserves have fallen by $80 million, now stand at a 23-year low of $16.7 billion. This is $2 billion less than total short-term foreign claims against the dollar. While U.S. officials rightly insist that foreigners will scarcely call all their claims at once, the fact that U.S. gold reserves could theoretically be wiped out on call is a threat to confidence...