Should the United States sell its gold reserves?

[Mopsus]

I recently read that the federal government owns $370B in gold, and since it no longer uses the gold standard, it's all just sort of sitting there. What say you?

[dead0man]

no

[Mopsus]

no

Why not?

[King]

no

Why not?

Because it would only temporarily cover our debts, is one time, and would result in further devaluation of the US dollar as we wouldn't even have any gold reserves to fall back as an option. 

[Mopsus]

no

Why not?

Because it would only temporarily cover our debts, is one time, and would result in further devaluation of the US dollar as we wouldn't even have any gold reserves to fall back as an option. 

Sure it's temporary, but options currently being discussed (eliminating federal funding for Planned Parenthood, eliminating tax breaks and subsidies for oil companies) are pocket change compared to the federal debt. Also, I don't think anyone's seriously discussing reverting to the gold standard.

[King]

If we're going to do something "drastic," how about paying taxes?  Or curtailing defense spending?

Or is that too insane for this "crisis?"

[Mopsus]

If we're going to do something "drastic," how about paying taxes?  Or curtailing defense spending?

Or is that too insane for this "crisis?"

No, both those proposals sound perfectly reasonable.

[John Dibble]

No, as mentioned it's one time. If it's only $370 billion worth it wouldn't even cover most of the $14 trillion plus debt anyways. If selling it were to be considered an option, I'd say that it should be sold with funding some specific project in mind.

[Mopsus]

No, as mentioned it's one time. If it's only $370 billion worth it wouldn't even cover most of the $14 trillion plus debt anyways. If selling it were to be considered an option, I'd say that it should be sold with funding some specific project in mind.

I understand that it won't eliminate the debt, but what's the point of owning it if we don't do anything with it?

[John Dibble]

No, as mentioned it's one time. If it's only $370 billion worth it wouldn't even cover most of the $14 trillion plus debt anyways. If selling it were to be considered an option, I'd say that it should be sold with funding some specific project in mind.

I understand that it won't eliminate the debt, but what's the point of owning it if we don't do anything with it?

Already answered. Also it might be good to have it around for a rainy day.

[Mopsus]

No, as mentioned it's one time. If it's only $370 billion worth it wouldn't even cover most of the $14 trillion plus debt anyways. If selling it were to be considered an option, I'd say that it should be sold with funding some specific project in mind.

I understand that it won't eliminate the debt, but what's the point of owning it if we don't do anything with it?

Already answered. Also it might be good to have it around for a rainy day.

The 'specific project' would be reducing the deficit. As to your second point, fair enough. Although one might consider now a proverbial 'rainy day'.

[John Dibble]

No, as mentioned it's one time. If it's only $370 billion worth it wouldn't even cover most of the $14 trillion plus debt anyways. If selling it were to be considered an option, I'd say that it should be sold with funding some specific project in mind.

I understand that it won't eliminate the debt, but what's the point of owning it if we don't do anything with it?

Already answered. Also it might be good to have it around for a rainy day.

The 'specific project' would be reducing the deficit.

In a sense, but it wouldn't be a project that involves normal running of the government - it could be building some new important piece of infrastructure or some kind of emergency project needed to resolve some unforeseen problem where we need the money immediately and can't borrow it.

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In a sense, but again it's not a solution to the long term problem nor does it make anywhere near a significant enough dent in the debt that it'll make a difference. The debt problem requires that we have the will to be fiscally responsible.

[Mopsus]

No, as mentioned it's one time. If it's only $370 billion worth it wouldn't even cover most of the $14 trillion plus debt anyways. If selling it were to be considered an option, I'd say that it should be sold with funding some specific project in mind.

I understand that it won't eliminate the debt, but what's the point of owning it if we don't do anything with it?

Already answered. Also it might be good to have it around for a rainy day.

The 'specific project' would be reducing the deficit.

In a sense, but it wouldn't be a project that involves normal running of the government - it could be building some new important piece of infrastructure or some kind of emergency project needed to resolve some unforeseen problem where we need the money immediately and can't borrow it.

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In a sense, but again it's not a solution to the long term problem nor does it make anywhere near a significant enough dent in the debt that it'll make a difference. The debt problem requires that we have the will to be fiscally responsible.

Ah, I see, so you support measures which will significantly reduce the debt and deficit both in the short-term and in the long-term, such as tax reform or spending reduction. As to that, I suppose I have nothing to say, except that I do, too, but this would help reduce the deficit in the short-term while we wait for other, more significant reforms to take effect.

[Lambsbread]

No for every reason mentioned above.

[Liberté]

We're never going to return to a gold standard. While we may eventually regain 'hard' currency (though even the hardest of hard currencies is still nevertheless a fiat currency), gold is too insoluble for the desires of business, who prefer easy consumer credit to nonexistent inflation. Even Ron Paul champions the pegging of the dollar to a commodities basket and not to a wholesale return to gold.

And so, even if a regime came to power looking to price the dollar to some externality, gold would probably be the absolute last recourse it chose. And so the gold will remain sitting there, doing nothing except taking up inventory space.

Sell it.

[True Federalist (진정한 연방 주의자)]

I wouldn't mind seeing us exchange our gold reserves for more needed reserves such as an augmentation of the strategic petroleum reserve.

[Cincinnatus]

Why?  So that the global market can dump the dollar for supply in gold?  Rather not

[Liberté]

Why?  So that the global market can dump the dollar for supply in gold?  Rather not

The amount we're talking about would barely be a trickle towards that end.

More broadly: the global market has less of an interest in returning to the gold standard than it does in remaining on the dollar standard. You do not have goldbuggery movements in, say, Britain the way you do in the States. Which is in itself interesting, as Britain had a far longer history with the gold standard than the United States ever did.

[Cincinnatus]

Why?  So that the global market can dump the dollar for supply in gold?  Rather not

The amount we're talking about would barely be a trickle towards that end.

More broadly: the global market has less of an interest in returning to the gold standard than it does in remaining on the dollar standard. You do not have goldbuggery movements in, say, Britain the way you do in the States. Which is in itself interesting, as Britain had a far longer history with the gold standard than the United States ever did.

300 Billion worth of gold enters the market.  Thus, gold prices fall.  Precious metals become more attractive with that having happened.  Whose going to want American bonds when silver and gold are ripe for the picking?

[Liberté]

Why?  So that the global market can dump the dollar for supply in gold?  Rather not

The amount we're talking about would barely be a trickle towards that end.

More broadly: the global market has less of an interest in returning to the gold standard than it does in remaining on the dollar standard. You do not have goldbuggery movements in, say, Britain the way you do in the States. Which is in itself interesting, as Britain had a far longer history with the gold standard than the United States ever did.

300 Billion worth of gold enters the market.  Thus, gold prices fall.  Precious metals become more attractive with that having happened.  Whose going to want American bonds when silver and gold are ripe for the picking?

I think you grossly overestimate the extent to which those prices would actually fall - and underestimate the extent to which the government would put conditions on its sale to keep that from happening.

Not that I have any qualms with gold falling, though doubtless it might make some of its newly converted fans rather itchy once they realize the government has foreclosed on their apocalypse.

[🐒Gods of Prosperity🔱🐲💸]

it wouldn't reduce the deficit. we'd find a way to spend it and then some.

[angus]

I understand that it won't eliminate the debt, but what's the point of owning it if we don't do anything with it?

That argument really only works for non-durable goods.  Like, a head of lettuce.  If you own a head of lettuce, but aren't eating it, and aren't feeding it to your rabbit or using it to line the bottom of the steamer while you make bean buns for the Lunar New Year's Day celebration, then what's the point of owning it?  Better to sell it off, otherwise you have wasted the one dollar and fifty-nine cents that it cost.

But gold won't wilt.  Also, it's not as though Uncle Sam went out to a supermarket and spent 370 billion on that gold one day, on a whim.  No, it has been there for a long time.  It's not part of the flow, but part of the stock.

Moreover, unlike lettuce, which doesn't get more valuable with time, gold stands a good chance of getting more valuable.  If you sell it for 370 billion today, you may regret that you don't have it tomorrow when it's worth 600 billion.

Moreover, dollars grow on trees.  They can be printed.  You can pull them out of a hat or out of your ass.  Not so with gold.  It has taken the universe 13.7 billion years to produce whatever gold exists today, so it's far more precious than the 370 billion dollars that you'd get in a trade.

Gold is also more useful than dollars.  It's pretty.  It conducts electrons.  Can a dollar do that?  And it'll be around long after all of us are dead and the US dollar is an obsolete currency. 

No, I say keep the gold.

[Mopsus]

I understand that it won't eliminate the debt, but what's the point of owning it if we don't do anything with it?

That argument really only works for non-durable goods.  Like, a head of lettuce.  If you own a head of lettuce, but aren't eating it, and aren't feeding it to your rabbit or using it to line the bottom of the steamer while you make bean buns for the Lunar New Year's Day celebration, then what's the point of owning it?  Better to sell it off, otherwise you have wasted the one dollar and fifty-nine cents that it cost.

But gold won't wilt.  Also, it's not as though Uncle Sam went out to a supermarket and spent 370 billion on that gold one day, on a whim.  No, it has been there for a long time.  It's not part of the flow, but part of the stock.

Moreover, unlike lettuce, which doesn't get more valuable with time, gold stands a good chance of getting more valuable.  If you sell it for 370 billion today, you may regret that you don't have it tomorrow when it's worth 600 billion.

Moreover, dollars grow on trees.  They can be printed.  You can pull them out of a hat or out of your ass.  Not so with gold.  It has taken the universe 13.7 billion years to produce whatever gold exists today, so it's far more precious than the 370 billion dollars that you'd get in a trade.

Gold is also more useful than dollars.  It's pretty.  It conducts electrons.  Can a dollar do that?  And it'll be around long after all of us are dead and the US dollar is an obsolete currency. 

No, I say keep the gold.

Now there's something to be said for keeping the gold until its value inevitably begins to decline after years of it increasing, but I fail to be convinced to keep it by such arguments as "it's pretty", and again, I must reiterate that the government is currently using it for no purpose at all, and is unlikely to use it in the future.

[angus]

But the fact that it's pretty is what originally gave it vaule.  Okay, "pretty" is unscientific, but it's another way to say "doesn't easily oxidize."  The Europeans like it, the Inca loved it, and the Asians have always been wild about gold, with Indians often preferring to invest in gold rather than savings accounts or CDs once the get a little money.  They wear their savings around their wrists.  Sure, gold goes up and down, but population grows geometrically, food supplies grow algebraically, whereas the amount of gold just stays constant.  Unless you mastered what the Arabs spent most of the period from about AD 700 to 1500, then it's a limited commodity.  And, with the discovery of the electron by Thomson and others in the late 19th century, we have found even more applications for which gold is the best material available. 

I sold a pound of gold in 2006 for 700 dollars per ounce.  I'd bought 12 krugerrands for 260 dollars each in late 1999.  It was during the Y2K Bug hype.  There would be worldwide bank failures, our security systems would go haywire, planes would fall out of the sky, and general chaos would ensue.  I never really bought into it, but I figured, what the hell?  Gold was 250 per ounce and you could buy Krugerrands for spot plus ten dollars per coin, and I collect coins anyway.  Worst case is that I'd sell them in mid-January 2000 for what I paid for them.  But if all hell broke loose, I'd at least have something to trade while folks were fighting for the last loaf of bread on the shelf.  Anyway, it turned out to be a good investment.  Gold just kept going up and up.  When it broke 700 I thought, I'd better not be greedy.  Sell it now.  So I got 8400 dollars on a 3000-dollar investment.  If I'd hung on to those 12 krugerrands, they'd be worth about 1500 dollars each by now. 

But even that's not the point.  Surely gold will fluctuate, but it will never be worthless.  You cannot say that about dollars.  We're not broke.  If we're overextended, then we need to cut programs.  If we want infrastructure, then we should collect revenue and build it.  In my opinion, raising taxes or cutting spending would be preferable to having the government sell off its gold. 

[CitizenX]

I understand that it won't eliminate the debt, but what's the point of owning it if we don't do anything with it?

That argument really only works for non-durable goods.  Like, a head of lettuce.  If you own a head of lettuce, but aren't eating it, and aren't feeding it to your rabbit or using it to line the bottom of the steamer while you make bean buns for the Lunar New Year's Day celebration, then what's the point of owning it?  Better to sell it off, otherwise you have wasted the one dollar and fifty-nine cents that it cost.

But gold won't wilt.  Also, it's not as though Uncle Sam went out to a supermarket and spent 370 billion on that gold one day, on a whim.  No, it has been there for a long time.  It's not part of the flow, but part of the stock.

Moreover, unlike lettuce, which doesn't get more valuable with time, gold stands a good chance of getting more valuable.  If you sell it for 370 billion today, you may regret that you don't have it tomorrow when it's worth 600 billion.

Moreover, dollars grow on trees.  They can be printed.  You can pull them out of a hat or out of your ass.  Not so with gold.  It has taken the universe 13.7 billion years to produce whatever gold exists today, so it's far more precious than the 370 billion dollars that you'd get in a trade.

Gold is also more useful than dollars.  It's pretty.  It conducts electrons.  Can a dollar do that?  And it'll be around long after all of us are dead and the US dollar is an obsolete currency. 

No, I say keep the gold.

As I stated in my previous post gold has only very limited real value.  Only 10% of gold consumption is for industrial purposes.  The other 90% is for jewelry and hoarding.  If 90% of homes were just for show or speculation what would the housing market look like?

If the world were to end tomorrow I would much rather have lettuce than gold.  You can't eat gold.  One day people are going to come to their senses and gold is going to trade at a fraction of what it does now.  Gold has no earnings.  It has no dividends.  It is an inanimate brick that you have to pay someone to store for you.  Basing your economy on gold is ludicrous.

The dollar has value because people believe in it.  Gold has value because people make believe it has value.