Recently, the question of selling the nations gold reserves and other assets to pay off our massive $14 Trillion in debt came to the forefront of discussion amongst economists and some legislators. On May 17th, Congressman Ron Paul was asked about the scenario of selling our gold reserves to help pay on the nations debt, and he responded that it would it would be a 'good and moral decision'.
Dr. Paul told the Sun today that he reckoned the sale of gold reserves would be “a good and moral decision. An individual would have to do the same.” The sentiment is echoed by another big name in the debate on monetary reform, Edwin Vieira Jr., who told the Sun he has little hope of the government moving to sound money and would prefer that it coin its gold holdings in pieces marked with their weight and use them to pay off debts, particularly individuals — who might be owed, say, tax refunds. - New York Sun
Unfortunately, the argument to sell our nations assets, in this case, our gold and silver reserves is a short-term solution with very limited reward. At this time, there is 147.3 million ounces in reserve according to government data going back to 1975. At todays spot price, the value if sold would come to $220.95 Billion dollars, which would cover between 2-3% of the national debt.
So, selling our gold reserves would not only leave us without a credible asset to perform as emergency money should the dollar collapse, and the nation starting over, but the Federal government would still owe more than $14 Trillion to debt holders around the world with little to offer as collateral.
Since President Nixon took the United States off of the gold standard in 1971, both America, and the world, have been using a purely fiat currency as the global reserve. It is backed by the 'good faith and credit' of the United States, but in reality, the dollar is simply treading water until the global community has the support to move to a new and stronger world currency that is controlled by an international cartel of banks, with no nationalistic ties to dominate it.
When that eventually occurs, the remaining gold the US has in the vaults of Fort Knox will be the foundation and only saving grace to start over, and allow us not be completely beholden to the dominant economic powers that will emerge after a dollar default.
Congressman Ron Paul has been one of the lone voices in government to both audit the Fed, and to validate what reserves we have sitting in the vaults of Fort Knox. However, his thoughts on the US selling our gold to pay towards the national debt is wrong and seems short-sighted when all analysis is leading to eventual collapse of the dollar, a default of our debt, and the need to have some sort of foundation available should the country need to start over in a new global economic structure.
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