Transcription
What if the US had to back its promises with gold again? That future might be closer than you think. Right now, economist Judy Shelton is pushing an idea that's gaining serious traction, a 50-year US Treasury bond backed by physical gold. But while some believe that this is the answer to a failing dollar system and a return to sound money, others believe this is the latest ploy in a long line of US rugpulls.
But the real question is how would this idea impact you? Could a goldback treasury really prevent inflation and restore confidence in the US debt? And how would this affect gold's price and role in the new monetary system? Well, to answer these questions and to understand what comes next, we first have to understand why this is even being considered right now.
The US isn't just running a deficit, it's running out of buyers. Foreign demand for US debt is declining. Confidence in the US dollar is collapsing. And this year, a huge chunk of US debt is rolling over and needs to be refinanced at today's higher rates. Meaning the US Treasury doesn't just need buyers. It needs lots of buyers.
But at the same time, central banks around the world aren't interested in fiat currencies. They're interested in a true store of value, physical gold, which is why they're moving out of US debt and into gold at the fastest pace in modern history.
But the last time the US debt was backed by gold was in 1971. Back then, nations could take their dollars and convert them into physical gold at a fixed price. But as gold demand continued to grow and pressure built, President Nixon was forced to delink the dollar from gold, defaulting on the US's promise, ushering in rampant monetary expansion, inflation, and a huge reduction in purchasing power for everyday Americans.
Fast forward to today, and the US is once again facing a crisis. Since the dollar isn't backed by anything but trust and credit in the US government, in order to have buyers of US debt, you have to have believers. This brings us back to Judy Shelton's proposal. She calls them Treasury Trust bonds, and they work like this. The government issues a long-term bond, in this case, 50 years. You give the US government money today, in 50 years, they pay you back.
"United States savings bonds are the most widely held securities in the world. Their shares in America, United States savings stamps and bonds."
So far, a normal bond. But here's the twist. With the Treasury Trust bonds, you have a choice. You could choose at the end of the 50 years when that bond matures to be paid out in US dollars or in a fixed amount of gold. To be clear, this is not a return to the gold standard, but an integration of gold back into the system.
But here's why it matters to you. Should the US move forward with this, it is a clear admission that the dollar system as it is today is failing. You and I both know that gold is real money, whereas the dollar is not. It's a currency. The primary difference between the two being that gold is a store of value. So, should gold be linked to US debt in any capacity, it becomes a monetary asset in a completely modern way. This has big implications for the US and for you.
Historically, every time gold is reintroduced in the system in a new capacity, it has to be revalued at a higher price point. You can't back trillions of dollars in US debt at outdated gold prices. Today, one ounce of gold on the US books is valued at $422 an ounce. If we revalued to today's prices, it would lift the value of America's gold from roughly 11 billion up to over a trillion dollars. But many believe that to do an official gold revaluation, likely the price would be set even higher than today's spot price. This would create an effective floor for gold that would be well above today's spot price. Meaning, if you have savings or retirement in dollar denominated accounts, well, they would be worth far less. Whereas, if you were to hold physical gold, well, the price on this is going to go significantly higher.
But this brings us to inflation. Now, advocates of a gold back Treasury bond say that it would significantly reduce or stop inflation. This is because in theory it would change the incentives. Right now, the US can overspend. The Fed can print and there's no immediate consequences. But a goldback treasury creates those consequences. Overspend and investors shift away from dollar only treasuries to goldback treasuries, meaning yields would rise and borrowing costs would increase if the US was fiscally irresponsible. You also can't just inflate away the debt the same way, knowing that at the end, investors could opt to be paid out in gold instead of dollars. This also would increase buyer demand because they know they'd be protected against an inflation or a failing dollar at the end opting to be paid out in gold.
But this is where it starts to get tricky. 50 years is a long time. Promises can be broken. Let's go back to World War I when the US was running the Liberty Loan Program, issuing Liberty Bonds that could be redeemed for physical gold. Since they promised redemption in gold, these bonds were extremely successful, raising billions in wartime effort. But can you guess what happened when it came time to honor that promise?
Well, in 1933, President Roosevelt signed a little something called Executive Order 6102, commonly referred to as gold confiscation, which required that American citizens turn in their gold bullion. Now, rare and unusual coins were exempt, which I always call out because this is why it's so important to make sure when you're buying gold, you understand gold laws, and you work with someone you can trust who understands gold history around confiscation. But everyone who had bullion was required to turn it into the US government in exchange for fiat currency dollars. But can you guess what the government did once it had control of the gold? They turned around and revalued it from $20.67 an ounce to $35 an ounce. Meaning everyone who held on to their rare and unusual coins, their gold went up 70% in value. Whereas everyone who had the fiat currency, they lost a massive amount of their purchasing power overnight.
But for everyone holding the Liberty bonds, the ones that were redeemable in gold, it said so right on the contract. The next year, the US Treasury called them in and instead of gold, guess what? The US defaulted on that clause, refusing to pay out in physical gold, only paying out in fiat currency. And to add insult to injury, they refused to acknowledge the devaluation that had just happened the year prior. So, the bond holders lost 40% of the principal right off the bat. They got rugpulled by their own government.
And in the last 100 years, I'm afraid not much has changed. Today, in order to make this proposal work, you would have to first of all make sure that the gold is actually there, right? Can you trust that there's enough gold to be payable at redemption? Now, Judy Shelton herself acknowledges this, saying that we would need to do a complete audit of Fort Knox, which I'm sure all of us would love to see, but that's only the first part of this puzzle.
The second piece that's the most concerning is that you have to trust that 50 years from now the US government will allow redemption in physical gold. What's to say that the government won't break its gold payment promise again? In fact, right now we're celebrating 55 years of President Nixon temporarily suspending gold convertibility. 55 years temporary. Give me a break. They can change the rules all they want. Which is why we always say if you don't hold it, you don't own it. Anytime you have a paper promise or a digital promise, there is going to be counterparty risk. You run a risk whenever you rely on gold redemption from someone else instead of just making sure you have the physical in your possession.
Now, none of this is to say that I'm not a huge fan of Judy Shelton and her work. She is a vocal critic of our current system. She is a huge sound money advocate. I personally own and have read her book, Good as Gold, and I agree with her wholeheartedly on her critiques of the Fed and the unsustainable debt path we're on. But I have been asked by some of you recently, do I think that this proposal would save the current dollar system from the path that we're on?
The idea is powerful and it could very well come to fruition sooner than most people think. It would be great for those of us already holding gold and I do think that it would temporarily create more demand for US debt. But this isn't about returning to a gold standard. This is about putting a price on the face of the dollar. And in a system that is failing like this, in a system that is needing to return to gold, you do not want price exposure. You want ownership.
Shelton is pushing to have the first Trust Treasury issued July 4th, 2026 on the US's 250th anniversary. And whether or not that comes to fruition, one thing is already abundantly clear. The debt crisis is not fixing itself. And central banks have been fooled one too many times from the US, which is why they are buying physical gold in record quantities because they know this is a certainty. It's not a promise, it's a guarantee.
What's coming next impacts your savings, your purchasing power, your family's financial future. And every reset throughout history, we see the same things happen. Governments adapt because they make the rules. Institutions survive. And individuals, everyday people, only the ones who are positioned before what comes next. Only the ones who are positioned before are the ones who survive the reset. Those who wait until afterwards, it's too late. and most lose everything.
As the world and now the US turn back to gold for the new monetary system, it has never been more clear what we as individuals can be doing to protect our wealth from what's coming next. Now, if you want to learn more about gold and silver and the different functions they serve, the different types. We have a resource. It's completely free because we believe everyone should have access to this information. It is the gold and silver guide. You can download your copy again completely for free by scanning the QR code and clicking download. There's a download link in the description below. Either way, make sure you have your copy so that you can have as much information as possible about gold and silver and what's coming next.
And if you're concerned about a global reset, inflation leading to hyperinflation, confiscation fears, or a gold revaluation that will make it that much harder for you to transfer your fiat currency into gold. Call us now at the number below or scan the QR code and set up a time to talk to one of our expert analysts so that you can create a strategy. We at ITM Trading, we are a full-service physical gold and silver dealer. But not only that, we specialize in helping people just like you create a strategy specifically tailored towards what's coming next. And in the meantime, thank you so much for being here. I'm Taylor Kenny with ITM Trading, your trusted source for all things gold, silver, and lifelong wealth protection. Until next time.