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Gold at $3,000 an ounce is here, but it is not there. And by “there,” I mean over at the US Treasury. But that is about to change. And although it may seem like a very good thing, there are some huge problems that lie ahead with this. And we’re going to talk about them in this video as we explore it.
It’s been an amazing ride for gold for sure, reaching $3,000 an ounce. Many people feel that it has a whole lot more room to move to the upside. And whatever it does, it’s going to continue to preserve our wealth; that’s for sure. You know, when I buy gold, I always think about it in the long term. I buy and hold. Whenever I make a purchase, I want to make sure that I fully own it. I’m not going to lease it out or play accounting tricks in order to, uh, make it, uh, to make it work for me. I just like to have it in my possession and know that I’m holding it and owning it. And that’s why the folks at Summit Medals makes it very simple for you to buy gold. Although it is expensive now, they have some of the lowest premiums out there. So if you’re in the market for gold, check out summitmedals.com.
So what’s going on here? Well, a senator from Wyoming has just made a very massive bill that she has put forward here that is quite something. Cynthia Lumis from Wyoming introduced legislation to revalue gold under the guise to create a strategic Bitcoin Reserve. And this will essentially codify President Trump’s executive order. But there are some differences here. President Trump’s executive order didn’t mention gold, but this one will. And it will revalue gold. And actually, I’m looking at the bill right now. I’m going to read to you exactly what is going to be happening here. It is, it is very fascinating to see what’s going to be happening with this. But the Federal Reserve system gold certificates—not later than 180 days after the date of enactment of this act—the Federal Reserve Banks shall tender all outstanding gold certificates in their custody to the Secretary of the Treasury. That’s right. The Federal Reserve hold certificates, which are essentially represent gold at $42.2222—all the way to nine decimal places over cents—that’s what you see here on your screen: $42.22. It’s crazy. So not later than 90 days after the tender of the last such certificate, the secretary shall issue new gold certificates to the Federal Reserve Banks that reflect the fair market value price of the gold held against such certificates by the Treasury as of the date specified by the secretary on each new gold certificate. Upon issue by the secretary, each Federal Reserve Bank that receives a new gold certificate shall remit the difference in cash between the old and new certificates to the secretary for deposit in the general fund within 90 days. Boom, there it is. And that sounds like a good—you know, we’re going to be essentially, uh, taking this thing and, um, and adding a bunch of money to our Treasury, which will obviously—some of it will be used to buy gold—what will happen to, or to buy Bitcoin rather, which is known as digital gold that they kind of refer to.
Well, we have 81,335 tons approximately, and that accounts for nearly a quarter of the global gold reserves. While if we accumulate 1 million Bitcoins—which this legislation is requiring—that’s 200,000 a year, that’s 1/12 of the entire Bitcoin holdings around the world. I don’t know of any other nations that have a Bitcoin Reserve, so we may be the first. I think we already have about 200,000 of them already that have been seized from crime. Almost seems like we don’t need much more, or others could be purchased in some other way. But this sets up to be able to use those gold certificates to buy Bitcoin, and to me that’s a problem. Yes, indeed, it is a big problem for sure, because that means we’re essentially selling off our gold now. This readjustment about the reevaluation—it refers to the revaluation of the gold reserves held by the Treasury from the legal price of $42.2222 an ounce to the current market price, which is about $3,000 an ounce right now.
So let’s take a step back and think about this. How did we get to $42.22? The Treasury—they just have not updated it since then. Well, it all began under Executive Order 6102 under Franklin Delano Roosevelt, who, under his order, required the US citizens to forfeit their gold, and that’s exactly what they did under that executive order under penalty of, I think, $10,000 and maybe some jail time. And really started with this, and these coins here were the largest gold coins produced by the US Mint at the time. And so, the—this is $20, which, which is based off the $20.67 per ounce. This is not quite an ounce, and all that is derived from the Mint Act of 1792 that set the weights and measures for the dollar in gold and as well silver. But after, after that, I think the next year or the year after, gold was revalued to $35 an ounce. Everybody got the hoodwink on it; that’s for sure. They were only able to keep five of these coins in their possession, otherwise anything else had to be turned in. And then after that, it wasn’t long after that the gold was revalued to $38 a troy ounce according to the holdings of the Treasury, and then finally $42.2222. If it’s a snapshot of the market price at the time of acquiring those certificates, and what are these gold certificates? Well, they were issued to the Federal Reserve Banks back from the 18—mid-1800s or just after the Civil War all the way to 1934. But as of December 2013, holding 11,037,000,000 of these certificates, the Treasury backs these certificates by holding an equivalent amount of gold at the statutory exchange rate of $42.22222 cents per troy ounce of gold. Though the Federal Reserve does not have the right to exchange their certificates for gold, this will be changed in the legislation that has been presented by Lumis. As certificates are denominated in dollars rather than a set weight of gold, any change in that exchange rate towards a much higher market would result in a windfall accounting gain for the Treasury. That windfall accounting gain will allow them to use some of it to buy Bitcoin with it, and that’s a trouble. That means our gold is being held as collateral. Do we really own it? We’re using it and equating it with Bitcoin. I don’t know that I’m in favor of that.
I guess, you know what they say: He who owns the gold owns it, or he who holds the gold owns it. We would still hold the gold, and we would still own it. And maybe just the whole thing about having about the faith and the full faith and credit of the United States of America is enough, but I don’t know. This just kind of makes me nervous, and so we’ll see how this plays out. A member of the community let me know about this in, in, in a recent live stream, and I just found it quite fascinating and sent me the information about it. And I, I just—it makes me nervous thinking about this, because especially if, if the, if the things—if this gets revalued and down the line and what’s going to happen. You know, we have the largest gold reserves, that means in a sense if we’ve got it tied up in Bitcoin as collateral, then do we truly have the, you know, that actual backing of the gold for our dollar down the road, especially if we were to move to a, to a, to a gold standard again? I think in a sense this takes us further away from a gold standard, which is a problem in my view, because it’s now tying it to the current market price, and that money is being taken and spent on the Bitcoin, of which could rise in price and then fall after it’s been accumulated. You know, a lot of it is supply and demand. Taking 200,000 Bitcoins a year is meant to not disrupt the market as much; however, it is a big deal, and you would think that would probably cause the price to rise. We’ll see. But nonetheless, there is—looking at the supply and demand analytics with Bitcoin and then also looking at also the situation with quantum computing, artificial intelligence—there’s supposed to be only 21 million Bitcoins ever mined ever. Could that be hacked? Could it be changed in some way, shape, or form? I think it’s a legitimate question to ask right now, honestly, considering the blockchain and the quantum computing and artificial intelligence, machine learning—all of those technologies pose a threat. And, you know, in this it talks about different stores, locations, and cold wallets. Well, you can have cold wallets everywhere, and they can be extremely secure, but if the foundation and the network is at risk—the blockchain network—then that creates a big problem. Gold, you just store it; it’s safe. In fact, I believe the gold is in Fort Knox. I know that’s a controversial statement to make in this community, but nonetheless, keeping it physically safe, I think, is something—it just comes down to all the things we’ve been doing and beefing it up using technology, which has made it all the, the, the more safe I think over the years. I don’t—I think the longer Bitcoin is in existence with the advent of technology is going to make it much more difficult, I think, to try to keep up with the criminals to protect it, to protect your nation’s Bitcoin supply. Because if it—even if you do protect your nation’s Bitcoin reserve, if the rest of the Bitcoin network and everything tied to the blockchain from which it runs is a threat, you pretty much just taken the bottom—you pulled the rug out of all of it, and then that means that your Bitcoin Reserve has got some issues.
There’s a lot here that makes me concerned about this, and the revaluation and the motivation for that revaluation. Let me know what your thoughts are down in the comment section below. Hope you found this video informative, insightful, and educational. I’d like to extend a multitude of gratitude to each and every one of you for taking the time to watch and to encourage you to please rate, share, comment, and subscribe. [Music]