Shelton: Is it time for safe money? Arguments for gold🔠🔠🔠🔠1️⃣
Gold is back in the spotlight, and this time it's more than just a safe haven. With the country's financial future in doubt, investors are keeping a close eye on how gold can play a crucial role in future growth. Over the past 12 months, the price of gold has increased by more than 40%, outpacing the growth of the S&P 500 index over the same period. This is part of a larger conversation about how we manage our monetary system, and it looks like we may need to make a change."
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Reliable moneyDr. Judy Shelton, a senior fellow at the Independent Institute and former economic adviser to President Trump, has been one of the most vocal opponents of our current monetary system. It warns that government debt and dollar instability pose serious threats, and calls for a return to "
safe money".
So, what is reliable money? In essence, this is a return to the gold standard, when the value of the currency was pegged to a fixed amount of gold. This setup provided stability, predictability, and limited supply, which helped keep the value of money under control. Shelton believes that pegging the dollar to gold can help stop inflation and limit excessive government spending.
"The dollar used to be as good as gold,"
she says.
Shelton's big idea? Issue long-term Treasury trust bonds, where investors can choose to receive either the dollar value or a fixed amount of gold when the bond is redeemed. This will link the dollar's value to gold, helping to maintain its purchasing power."
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Driven by debtThis proposal is attracting more and more attention, especially given that our national debt now exceeds $ 36 trillion. And the cost of servicing this debt is only growing. Fifty years ago, the national debt was "
only" $ 400 billion. The Congressional Budget Office predicts that from 2024 to 2033, debt servicing will cost $ 10.6 trillion — double what was predicted just a few years ago.
3️⃣ Shelton believes that the main problem stems from the"
unlimited " powers of the Federal Reserve. They can buy unlimited government debt. Therefore, they make decisions based on the financing of government bills, and not on improving the country's economy. She is concerned that if the Fed continues to use this uncontrolled power, they may stop the new president's economic program before it even starts." In addition, the US government may try to inflate the debt, undermining the purchasing power of the US dollar.
The $ 800 billion question is a revaluation of gold reserves?But it's not just what the Fed does with debt — there's also the question of how we value gold. The United States has the largest gold reserves in the world. There are more than 8,100 tons of gold in the vaults of the Federal Reserve and Treasury. But here's the rub: these reserves are still valued at $ 42.22 an ounce, the price set by the 1973 agreement. And gold is currently trading at over $ 2,900 an ounce. This is a huge discrepancy, and if we were to price gold at the current market price, it could mean almost $ 800 billion for the US Treasury.
PART 2#gold #US #money
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