Taxpaying Americans Buy the Government's Gold at $42.22 per
Gary North | September 28, 2015
Everybody has a
scheme for reducing the federal deficit. Here is my plan.
Because the present value
of the unfunded liabilities of Social Security and Medicare
is now in excess of $200 trillion, there is nothing relevant
that could be done by the federal government to increase
revenues sufficient to avoid the great default. In short,
forget about it. There is going to be a great default.
I would like to take steps today to reduce
my vulnerability to the great default. I think you should,
too. So, here is my plan.
The U.S. government can sell assets. The
assets that I would like to see it sell, above all other
assets, are its gold holdings.
This gold was confiscated from the American
people by Franklin Roosevelt in 1933, and the American people
ought to have a right to get back these confiscated gold
I want to see the United States Mint take
all of the gold holdings of the federal government, which
are stored mainly by the privately owned Federal Reserve
Bank of New York, and convert the gold into quarter-ounce
American Gold Eagle coins. This would involve an increase
in the size of the Mint, but that would be a reasonable
expense. It can be paid for by the sale of the gold coins.
The federal government maintains the illusion
that this gold is valued at $42.22 an ounce, so I believe
that the federal government should be compelled to sell
this gold back to American citizens in the form of quarter-ounce
gold coins. The price of these gold coins will be $42.22
per ounce, plus a small minting fee. At $42.22 per ounce,
a quarter-ounce gold coin should cost about $10.55, plus
minting, postage, and handling. Let’s say $15 per coin.
At $1100 an ounce, one of these coins would
sell for about $275, plus a minting fee, or somewhere in
the range of $300.
I ask you: would you spend $15 to buy a
gold coin that is worth $300? I know I would.
Only American citizens who have reached
the age of 18 years old will be allowed to buy these quarter-ounce
gold American Eagle coins.
There are a couple of ways these coins could
They could be sold to anybody who could
bring evidence of his American citizenship to some regional
location, and collect his coins. It is clear that the very
rich would be the great beneficiaries of this system. They
would buy most of the coins. The average American citizen
would not participate.
I would like to see a more democratic approach
to distributing these coins. That is because I would like
to see American citizens become familiar with gold coins.
In other words, this would be an educational program. I
would not set it up so that the wealthy would get most of
the coins. I want to see a wider distribution of the coins.
Here is my plan: allow Americans to buy
these coins when submitting their IRS 1040 form in April.
Any American would be able to buy, say, up to 2.5 ounces
of these coins for a price something around $15 per coin.
According to the latest figures, the government
has 261,498,926.230 troy ounces of gold. There are approximately
100,000,000 households in the United States. That means
2.5 ounces of gold per household. So, I would put a limit
of 10 quarter-ounce coins per household. This limit would
apply for the first two years of the coins — two April 15ths.
I would certainly submit my 1040 form on
that basis. I would certainly buy 10 coins at $15 each.
Their market value would be $3,000.
After two years, meaning after two April
15 filings, the remaining coins would be made available
to any American citizen on a first-come, first-served basis.
They could buy these coins at a regional Federal Reserve
Bank. They could buy as many coins as they wanted.
You know the phrase: “Act now! Supplies
are limited!” This would be true.
Would this balance the budget? Of course
not. Nothing will balance the budget. Nothing will reduce
the debt. So, as long as the federal government can sell
off assets at official prices, it should be required to
do so. As long as a gigantic deception has been going on
for over 40 years -- $42.22/oz -- let American citizens
participate in the benefits associated with this deception.
The fact of the matter is this: the vast
majority of Americans would not understand any of this today.
They have no interest in gold. They have never heard of
American Eagle gold coins. They are utterly ignorant.
I think my program would make them quite
alert to the basic economics of gold. I think the opportunity
to spend $15 to buy something worth $300 would catch the
attention of tens of millions of Americans. I cannot imagine
a better educational opportunity to explain the gold standard
and how it was made illegal.
Americans would begin to inquire as to why
the federal government would have an asset on the books
at $42.22 that is worth over $1100. I think Americans ought
to ask this question. For that matter, I think Congressmen
ought to ask this question. They obviously never have.
My attitude is simple: there ought to be
a return of the stolen goods. American citizens who are
income taxpayers should get first dibs on the money. What
do you think?