The Logic of Auditing America’s Gold

The Sun is happy to endorse the legislation introduced in the House in respect of America’s gold. The measure — the Gold Reserve Transparency Act — would create an audit of gold held at Fort Knox and other sites where America’s monetary metal is supposed to be stored. It’s the latest measure inspired by the work of Congressman Ron Paul, when he was a member of the lower chamber.The measure was reintroduced last week by four Republicans — Thomas Massie of Kentucky, Troy Nehls of Texas, Addison McDowell of North Carolina, and Warren Davidson of Ohio. H.R. 3795 would require “a full assay, inventory, and audit of all United States gold holdings,” its backers say in a release. It would also “require full disclosure of all transactions involving America’s gold,” dating back 50 years.The measure is meant, Jp Cortez of the Sound Money Defense League tells us, to “help restore confidence in the U.S. Dollar” at a time when many countries and central banks “all over the world are reducing” their holdings of dollars “and countries are actively repatriating their gold out of the U.S.” Adding to the anxiety over the health of America’s currency, the dollar’s value has collapsed to less than a 3,300th of a gold ounce in the markets today.The dollar’s plunging gold value stems back to 1971, when President Nixon severed the greenback’s historic ties to the monetary metal. At that point it was valued at, by law, a 35th of an ounce of gold. That’s the context in which Sound Money Defense League reckons that the “inquiry into America’s sound money stockpile is more relevant than ever,” pointing to “an inflationary environment where $37 trillion in U.S. federal debt looms large.”Plus, too, the league points to the accumulation of gold reserves by central banks around the world in recent years. That seeming renewal of interest among central bankers in the monetary metal underscores the need to ensure public confidence in America’s own reserves. “As gold is the ultimate form of money recognized the world over,” Mr. Cortez says, “safeguarding the U.S. Treasury Department’s holdings” is “very much a national security issue.”Mr. Cortez avers that “Only a thorough audit, not a public-relations stunt such as the ‘live walkthrough’ as Elon Musk and others proposed, will suffice.” The push for a proper audit comes amid skepticism in the liberal press over the need for a closer look at Uncle Sam’s gold holdings. A recent Times dispatch noted the “Convenient Return” of what it skewered as the “Fort Knox Gold Conspiracy.” The Times even suggested that comments by Mr. Trump and his aides expressing doubts over the gold reserve were an attempt by “Trump-Allied Investors” to “Cash In” on the dollar’s plummeting value in terms of gold. That underscores a discrepancy seen in the liberal press, noted by the former Fed chief, Alan Greenspan: “If gold is such a worthless metal, then why does the U.S. Government, and all other major governments, hold so much of it in storage?”Passage of the latest measure will no doubt have long odds. Let us mark, though, that it is only part of the monetary reforms for which Dr. Paul — father of the Senator — pursued during his heroic years in the House. He wanted not only an audit not only of Fort Knox but of the Fed itself. He sought to empower the Congress to inspect all aspects of the Fed’s operations in respect of monetary policy. So we see the current bill as part of a broader agenda of reform.Far from fomenting paranoia over America’s money supply, Mr. Massie frames the legislation as an effort to assuage public concerns. “Americans deserve transparency and accountability from the institutions that underpin our currency,” he avers. Once the audit is finished, an even better way to bolster confidence in America’s currency would be to define legally the greenback in terms of specie, restoring the dollar’s historic link to gold.

The Logic of Auditing America’s Gold

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