The Treasury Is Sitting On A $750 Billion Gold Hoard–Officially Valued At $11 Billion

Core Viewpoint - The idea of revaluing the U.S. government's gold reserves to generate funds for strategic initiatives, such as creating a bitcoin reserve or reducing national debt, is gaining traction as gold prices have surged over 40% in the past year, prompting a reconsideration of this long-dismissed concept [2][5]. Group 1: Gold Valuation and National Debt - Gold prices have increased from under $2,400 to over $3,400 per ounce in the past year, contributing to discussions about revaluing gold reserves to raise cash [2]. - The U.S. national debt is nearing $37 trillion, creating pressure to explore alternative funding sources [2]. - The U.S. Treasury currently values its gold at $42.22 per ounce, a price set in 1973, which values its total gold reserves at approximately $11 billion, while the current market value exceeds $750 billion [5]. Group 2: Federal Reserve Research and International Examples - A recent Federal Reserve research note titled "Official Reserve Revaluations: The International Experience" outlines how five countries have successfully utilized gains from gold revaluations to raise funds [3][4]. - Countries such as Germany, Italy, and South Africa have tapped into hidden value from gold reserves to reduce debt or cover central bank losses without raising taxes or issuing new bonds [4]. Group 3: Mechanism of Revaluation - The U.S. Treasury could adjust the value of its gold reserves through bookkeeping changes, potentially creating significant new funds without physically selling the gold [6]. - The process would involve retiring the current gold certificate and establishing a new official price for gold, allowing the Treasury to gain billions or trillions in new funds [6]. Group 4: Policy Implications and Political Context - The potential cash infusion from revalued gold could be used for debt reduction or new spending initiatives, including proposals for a sovereign wealth fund or a strategic bitcoin reserve [7]. - Concerns exist regarding the impact on the money supply and inflation, with critics labeling the idea as a form of "accounting manipulation" [8]. - Historical precedents, such as the 1934 gold revaluation, have led to increased scrutiny of the Federal Reserve's independence, which may hinder progress on this idea [9]. Group 5: Current Stance of Treasury Officials - Treasury Secretary Scott Bessent has publicly stated that the Treasury is not considering revaluation of gold reserves, indicating a cautious approach to the idea [10]. - Despite this, the publication of the Federal Reserve's research note suggests that discussions around gold revaluation may be gaining some legitimacy in policy circles [11].