"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Tuesday, May 17, 2011

Ron Paul proposes that the US sell gold to pay its debt

Those of you out there who believe that Ron Paul can do no wrong, would be well advised to read his comments proposing that the US sell some of its gold reserves to pay its debts.

Chalk up a hair-brained idea from the Congressman from Texas. While we are at it, why not just sell off the Brooklyn Bridge, Yosemite, Yellowstone and the Everglades. And to think that I actually believed he was very solid on monetary matters.

The Republican party, which by the way has control of the House of Representatives, could simply refuse to raise the debt limit and insist on obtaining strict spending cuts to get the US economic house in order but that would require something that most of our elected representatives do not have. AFter all, all spending bills are required to originate in the House. If the House does not approve the spending bill, the money cannot be spent.

Instead the proposal reeks of the same sort of desperation seen by spendthrifts who end up scouring their old dresser drawers and boxes in their closets looking for family heirlooms and other valuables to go hock at the local pawn shop. The very fact that this idea is actually floating around out there fills me with complete disgust and disdain for the political class. These damn fools spent us all into the toilet and now are considering having to sell what belongs to the US citizenry to cover their rear ends.

Study history - the nation with the most gold will be the nation which holds economic supremacy. Here's a bit of advice for the pols in Washington, including Mr. Paul - stop spending money you do not have. It is not your money that you are spending; it is ours and our children's money.

This is one of the few times that I believe the spokesman for the Obama administration makes sense.

If the US was wise, it would be the first to introduce some sort of gold backing to its currency (after significantly upwardly revaluing the official price at which those holdings are currently valued). That combined with serious attempts to rein in the out of control spending and pro-growth policies would enable the US to begin to grow its economy and create the necessary jobs to supply the desperately needed revenues that the policy makers are looking for.

Of course, if they actually did sell it, India and/or China would gobble it all up in one fell swoop.

See the entire article here.


Selling Gold at Fort Knox Emerges as Next Big Question in Debate on Federal Debt Limit

Congressman Paul Endorses the Idea, Amid Showdown Between Congress, Administration
By DAVID PIETRUSZA, Special to the Sun | May 17, 2011
NEW YORK — The next big question on the federal debt limit could be whether to start selling the government’s holdings of gold at Fort Knox — and at least one presidential contender, Ron Paul, has told The New York Sun he thinks it would be a good move.


  1. Its the only way to get an audit.

  2. Would the government be so stupid as to sell its gold? Most definitely. Why? Because it would make the politicians rich. Just think of the many devious ways that the gold can be sold in a way that enriches Wall Street, the politicians and cronies.

    Remember, the gov't is not run for the benefit of its citizens, but for the benefits of its rulers. That is why the gold, if it is even still there, is as good as gone now.

  3. He has to play the media because they don't respect him. He has recommended since 1971 when Bretton Woods fell apart. He has repeatidly stated that there is probably no gold left in Fort Knox, so I believe this is a way that he brings the subject into matter.

    If you get people talking about selling gold from Fort Knox, the people will want to know how much gold is in there... and an audit shall come, most likely exposing cobwebs and a few stragglers.

    Relax on the Ron Paul is a moron train..., there is reasons why he says the things he says. He has to backdoor into main issues because otherwise he will be shut out. Watch him use this as a talking point to push the fact that gold is money and the federal reserve note is nothing. The current talking point the MSM uses is "you want to legalize heroin and prostitution."

    Thank you for sharing your work.

    Yes, the Ron Paul Revolution...

  4. Dan,

    I have really enjoyed your posts.

    I have to agree with Scott on his take of why Ron Paul would say to sell the gold. If you have read his books you will see that he is fully in support of a gold standard and he has never supported the increased spending. He wants to pull it back greatly.

    I believe he is saying what he is saying to draw attention to what is likely a farce at Fort Knox. No one has been allowed in that place, including high ranking senators and representatives to verify the claims of the gold supposedly stored there. I don't think he has any true interest in the US selling any gold it owns, it just doesn't fit with his track record.

    But, that's just my opinion.


  5. First off Dan, if it were actually the US citizen's gold, then how in the world could they have possibly gotten away with:

    #1 Denying the citizen's access to the gold by outlawing their lawful possession of said metal?

    #2 Delinking the US dollar for the US citizenry but continuing to back it for foreigners until Nixon "closed the window"?

    If that constitutes gold in the US citizenry's possession, than you and I have a very different definition of ownership.

    Second, please see Mr. Paul's voting record. Your telling Mr. Paul "To stop spending money you do not have." is no different than punishing an entire bad class of children.. including the one who is innocent of all counts.

    Third, please see scottj88's comment. He has a pretty good point. I also must add that if the gold even IS there (I want to see an audit before you can claim it is even there!), gold would have to be revalued to the multi-thousands of dollars to the ounce, thus blowing the lid off the seriously devalued dollar.

    One thing I can say.. I do disagree with Mr. Paul's tactics here. If someone as intelligent such as yourself Dan, had such a reaction, I really hate to see what the rest of the public is going to think of it. :(

    With all due respect, sir, thank you for your work.

  6. Yes it is a ploy to get at his question about whether or not there is actually any gold in Ft Knox. He has been trying to get at that for a long time. He's just being sly here, for sure. It looks like a populist move, and if attempted, it would be a back door way of getting at his investigation.

  7. Since they've already sold all the gold to the Fed, how can we do this anyways. It is the most liquid asset the U.S. Gov't has and therefore, if it is going to pay its debts it should sell assets to do so.

    Read the rest of the article where RP talks about selling off the FCC bands, the buildings, the real estate, etc. The gov't shouldn't own most, if not all, of that stuff and yet it does.

    Running up debts that you will not/cannot pay back is immoral in the extreme, regardless of the history. The gov't has been such a piss-poor manager of our money why in the name of all that is decent should they continue to do so?


  8. Dan I think you are way off on this one...

    Paul is making a brilliant move here. He knows that the powers that be either don't have said gold, or they won't sell it because they know that will lead to disaster in the end.

    The brilliant part is that he is forcing them to admit (explicitly or implicitly) that gold is money, because otherwise there is no excuse for holding on to hundreds of billions of dollars worth of this 'barbarous relic' when we are trillions in debt.

    He has them checkmated either way. All they can do is try to ignore him. If he can get others to join his calls, it will be increasingly difficult for the administration and bankers to ignore.

  9. Agree with Is This It.
    He has claimed many times that gold is money, and now he is trying to get the Fed to admit that gold is money as well, not to mention questioning whether Ft. Knox holds all that gold in the first place. I believe the same debt financing was suggested for Portugal a few days ago.

  10. Some of the commenters should stop making excuses for Ron Paul. Did they forget that he is just another politician?

  11. Sorry Dan,

    You've become a victim of shoddy journalism thanks to the New York Sun. It was Ron Utt and the brainiacs at the Heritage Foundation that came up with that one. I wonder how many people were mislead by the Sun, as I watch Fox Business freaking out about the prospect of Ron Paul gaining momentum.

    Robert Wenzel at EconomicPolicyJournal.com has a clearer write up with a link to the Washington Post version - not that their journalism is any better.

  12. I agree with all posters that interpret Ron's "sell gold" proposal as a ploy to show that the US has no gold because all of the gold has been stolen by banksters long time ago.

  13. From a sound money perspective, this makes perfect sense. What better way to support sound money than for the government to sell its gold back to the people? Not only that, but it is one of the most moral things that the government could do to pay its debts. Let me ask, what is more moral, to sell the gold back to the people in order to pay the government debt, or to inflate the currency in order to pay the debt? I think that it’s a pretty easy decision, and I respect Ron Paul for staying completely consistent in his principles.

  14. Jaffi Joe - so how much gold do you want the US to dump on the market? How much of our gold should be sold? All of it? We have over $14 trillion in debt.

    Assuming we could get $1500 an ounce and assuming that the gold is actually there, the US could obtain approximately $392 billion if it sold all 8134 tons of its gold. that will not even begin to deal with the mounting debt. The interest payment on the national debt will exceed the entire Defense Department budget of 2010 by 2016 if thinks are left unchecked.

    Next, who gets first claim to the proceeds? The Central Banks of the World who hold it or the US citizens, through personal ownership, mutual funds, and pensions?

    Who determines who is first in line to get paid? Do you think the Chinese would sit by and watch other holders of US debt get paid in gold and they get nothing?

    The proposal is insane and there is nothing consistent with wasting our precious gold to pay off debts which should never have been incurred in the first place.

    If the US is to retain and semblance of its economic leadership around the globe and if the Dollar has any chance of remaining the reserve currency, the US needs all of its gold which will need to be upwardly revalued on the books at a market price and not the ridiculously insanely low price of $42/ounce.

    Only by backing the Dollar with some sort of gold certificate ratio clause will the Dollar survive as the sole reserve currency. Without a gold backing (note I am not saying direct convertibility) the Dollar's days as the sole reserve currency are numbered and with it, so too is the US place of economic superiority.

  15. Trader Dan,

    Ron Paul never said "sell the gold". Ron Utt did. The article was complete taken out of context and made a spelling error:

    "The next big question on the federal debt limit could be whether to start selling the government’s holdings of gold at Fort Knox — and at least one presidential contender, Ron Paul, has told The New York Sun he thinks it would be a good move.

    The question has been ricocheting around the policy circles today. An analyst at the Heritage Foundation, RON UTT, told the Washington Post that the gold holdings of the government are “just sort of sitting there.” He added: “Given the high price it is now, and the tremendous debt problem we now have, by all means, sell at the peak.”"

    I'm sure an apology will be coming soon from the New York Sun.

  16. Take it on the chin, and think of the traffic spike! http://globaleconomicanalysis.blogspot.com/2011/05/ron-paul-says-sell-gold-no-chance.html

  17. Has to be a mistake. Historically, Ron Paul has called for Gold backed currency. He is not a flip flopper.

    Even so, hopefully we won't see more politicians calling for this. Ron Paul one of the only politicians we have to defend and educate the people about sound money.

  18. Patung - take what on the chin? the article from the Sun is very specific and I have no reason to believe it is erroneous. They referred to Dr. Paul on more than one occasion throughout the body of the article. There is a huge step of the imagination being taken by those who dislike the gist of the article in stating that the Sun confused Dr. Paul with Ron Utt. They must have believed Ron Utt was running as a presidential contender and that Mr. Utt was also calling for an audit of the government's gold reserves. That is most unlikely. Additionally they quoted Vieira and Lehrman in the context of the discussion of gold sales with Vieira favoring the sales out of resignation that gold backing of the currency woudl never happen while Lehrman took my side of the argument.

    Unless the Sun retracts the story, the post stands as is with my comments as there are.

    The onus is on the those who got upset over the story the Sun ran and the comments therein. They can take up their beef with the Sun. I frankly could care less as my points have been made - namely - the US should not be talking about selling any of its gold and should instead stop spending all of my children's future earnings and destroying our nation. They should also revalue the price of gold from the ridiculous $42/ounce and then provide a gold backing to the Dollar.

  19. Dan,

    Mish is calling the story bogus and has referenced your quick reaction. He also believes this ron utt character is the real source.

  20. right on paisan ... we are in complete agreement on this one!

  21. Ron Utt of the Heritage Foundation, not Ron Paul.

    Time to issue a retraction for jumping the gun.

  22. Dan I continue to be inspired by an intelligent and knowledgeable guy who stands up for what he believes is the truth.

    I use blogs like yours, JSMineset, Turd Ferguson because the authors are mostly right in analysis but more importantly have integrity.

    You must have known as you wrote your comments that there would be heat. And you are right of course selling the gold would be a mistake on so many levels.

    IF the story turns out to be some kind of error then Ron Paul can make that clear easily enough.

    Keep up the great work!

  23. This comment has been removed by the author.

  24. Dan,

    I greatly appreciate your analysis and commentary, which you make available to anyone without charge. You are an inspiration.

    I actually worked to get Ron Paul elected in 2008, but quickly realized that working within the GOP is a waste of energy. If Dr. Paul wants to continue working within the party that has nothing but contempt for him, I won't be able to help him this time around.

    I have a hard time believing that Dr. Paul really does support selling the gold in Ft. Knox (if it still exists in the form of solid gold and not gold plated tungsten bars). If it turns out to be a political ploy designed to get people thinking as some commenters claim, it would be just another bad campaign idea probably cooked up with the help of his not-so-savvy political advisors.

    No matter which candidate you want to talk about, politics in the USA as we know it is a complete fraud. To think that the answer to our current fiscal trouble lies somewhere in the political process is foolish. I'm not sure what it's going to take to get us out of the mess we're in, but I believe that the current political process will only take us deeper into the dark void. We need a revolution a la Thomas Jefferson, not Ron Paul.

    Thanks for all you do and share with us.

  25. Most people in the world, being ruled by governments, and especially Americans, have the infantile belief that 'somehow' their leaders will be able to pull them out of any mess without having to suffer any pain.

    In our current financial mess (it's more a mess of integrity and personal responsibility at the root of it all. The financial part is merely a symptom of the lack of integrity and personal responsibility!) the hard fact is that the United States is BANKRUPT!

    Sell the gold...keep the gold...it will matter little as our DEBT is greater than our ASSETS.

    In the end, our standard of living is going down soon, and drastically so.

    We may not even live through what's coming, nor even want to if we find it too difficult to feed and shelter ourselves if we have not prepared ourselves for a long siege of many years.

    If we haven't joined up with others whom we can depend upon to cover our backs when the chips are down, there is little likelyhood that any of us will be able to survive alone.

    None of us will survive what's coming without realizing that we NEED one another in the context of a nurturing society.

    Man is a social animal and MUST be able to trust his fellow man and work in co-operation with him to survive.

  26. Alright! a controversial topic on TraderDan's blog...

    Look, I don;t subscribe to Ron Paul as the 2nd coming, but I do believe that he is a proponent or fairness, justice, and liberty.

    Dr Paul is no idiot. His statement was that the Treasury should consider selling Gold, and the Treasury immediately rebuffed his statement as lunacy. Ask yourself why.

    If Gold is only "worth" $44 bucks an ounce, as the Treasury portends, then why are they paying the storage fees?

    Ron Paul's statement was deliberately intended to bring into the light the complete hypocricy of governemtn officials (Summers, Bernanke, Geithner) who refuse to publicly acknowledge that Gold is both currency money and a valuable asset, while the Dollar is just barely one of the two.

    This is also the reason Ron Paul has been going after the Treasury about the fact that the Mint has not been producing Eagle coins in "quantities sufficeint to meet public demand"- which is one of their legal mandates.

    The law suggests that if demand for Eagles is high, and there is refinable gold sitting in Government vaults, then that gold SHOULD be used to fill the Mint's coin demand.

    Ran Paul knows that money (Gold) is power, and he wants the government to return that power to the people, where it belongs.

    Therefore, selling government Gold into the Eagle coin program is a valid, ethical agenda, and has a valid legal basis behind it (the requirement to meet public demand for bullion coins)

    Where, exactly is the controversy?

  27. I'll exchange my FRNs for our gold! That was confiscated in 1933 and exchanged for FRN, with a number 20 printed on it per ounce. Heck I’ll give the Feds two FRN 20s :^)

  28. Somehow the New York Sun confused Ron Paul with someone named Ron Utt, or the Sun misrepresented a statement Paul made.


  29. Looks like it was a Ron Utt:


  30. Encourage everyone you know, to back by whatever means at their disposal, the Gov selling of their gold.

    The boys in the beltway are bright they would never sell. This movement would hasten a gold standard for the USA.

    Use a little reverse psychology on them, lord knows they have on use for years.

  31. Please check before blaming Dr. Paul. It was some stupid from Heritage Foundation, not Dr. Ron Paul.

  32. Vik - the story stands as it is. The Sun has issued no retraction and I have no reason to believe that they confused the scholar at the Heritage Foundation with the man who is a "presidential contender" and the man who wants to audit the government's gold holdings.

    What is it about you Paulites that you cannot accept a newstory for what it is.

    If you disbelieve the story, that is fine. You have a problem with the Sun, not me. I simply posted the article as is without doctoring it in the least.

  33. This comment has been removed by the author.

  34. http://globaleconomicanalysis.blogspot.com/2011/05/ron-paul-says-sell-gold-no-chance.html

  35. Vik - Ah yes, The proprietor of the said blogsite that you referenced is now the apparent sum off all truth and veracity and we can now all dismiss the story in the Sun as completely inaccurate thanks to his cogent analysis which consists of the following: "It cannot be true because I do not want to believe it". Yep, that does it for me. I am now convinced. The next thing I will be waiting for is for this insightful scribbler to tell us all that the sun now rises in the West merely because he says so.

    As I have said before and will say one more time - The Ron Utt whom is quoted is not a "presidential contender" nor is he the man who has been trying to audit the government's gold reserves for some time now. When Mr. Utt runs for president and begins clamoring for an audit then and only then will I believe that the NY Sun has the two Rons confused.

    Unless or until the SUn issues a retraction, the story is being viewed as accurate. Perhaps Ron Paul will issue a statement contradicting the story in the Sun but to date I have not seen one. If he does, then that will be definitive. If he does not, then we can only surmise that the Sun's quotations attributed to him are indeed real.

    If the Sun does issue any sort of retraction, I will be more than happy to post the link up at this site. All I did was to report what they reported and issue my scorn against the idea.

    I did not ask for the foolish politicians to bury my children and grandchildren in a mountain of debt and then sell off our national assets to attempt to pay it off.

  36. gred - thanks for posting that. At least a few folks out there also believe the story. The Paulites are venting their wrath against the messenger instead of questioning their hero.

  37. I think you are right. Please accept my apologies. Hopefully, we will hear a little more from Dr. Paul himself.

  38. Gary North hits this one out of the park.


    Maybe this will clear up some confusion.

  39. who should have the gold? The government or the free people? Which gold standard do you believe in; the one the government can mandate, or the one the market provides?

    Where do you stand?

  40. The discovery that Fort Knox has no gold would alert the world to how rare gold is and rocket the price to the moon. Those currently holding gold would be instantly rich beyond comprehension.
    Bring it on!

  41. Dan, I also want to thank you for your generous contributions.

    I'm a little sad that you use the pejorative "Paulites" but I understand your frustration. I've been an admirer of Ron Paul for a few years but many of his followers do him more damage than good.

    The reason Paul's followers don't accept this one newspaper report is that it's incongruous with everything Paul has stood for for over 30 years. It'll be a shame if the one article your post is based on turns out to be a misrepresentation. If the article is accurate you will find me dining on my hat.

    Thanks again for sharing so much.

  42. This is a great article. I am glad you have shared it with us. There are theories of this, but no one knows how far its true.
    sell gold

  43. This depends on which side you are. But I don't this could be a good idea. This is only for those in the position not for the people.

    sell silver

  44. I think you are right..they have to think about to sell gold. i am also deal in so they can contact to sell gold in toronto.


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