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Let Taxpaying Americans Buy the Government's Gold at $42.22 per Ounce
by 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 coins.

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 be sold.

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?

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