Not Enough Gold to Pay All Holders of Gold Obligations

"Below, is a chart (from macrotrends.com) that shows the ratio of the gold price to the St. Louis Adjusted Monetary Base back to 1918. That is the gold price in US dollars divided by the St. Louis Adjusted Monetary Base in billions of US dollars. So, for example, currently the ratio is at 0.28 [$1 125 (current gold price)/ $4 019 (which represents 4 019 billions of US dollars)].

Historically when this ratio was going down, then there are more claims on gold than what was actually being held by the Federal Reserve or US Treasury (for more on this ratio). At some point after the ratio is going down there would be pressure to fulfil gold obligations due to the shortage of physical gold compared to claims on gold. This pressure often comes after a significant change in conditions such as after a stock market peak. Just like financial fraud is often discovered when business is slow, as was possibly the case with Bernie Madoff..."

at http://www.marketoracle.co.uk/Article52472.html