Ron Paul: Sell the gold in Fort Knox

Posted by gadsden Breaking News, Finance, Headlines Wednesday, May 18th, 2011

By DAVID PIETRUSZA, nysun.com

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.

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.”

His comment came in the wake of not only the government having reached the statutory debt limit of $14.29 trillion but also the release of a report by the Heritage Foundation of a report on asset sales. The report outlined how a “partial sales of federal properties, real estate, mineral rights, the electromagnetic spectrum, and energy-generation facilities” might garner the federal treasury $260 billion over the course of the next 15 years.

The report did not mention the possibility of selling the government’s holdings of bullion, though the 261.5 million ounces of gold the Treasury Department lists in its reserve position would, at a recent price of $1,492 an ounce, would theoretically fetch $390.2 billion. The Wall Street Journal reported Monday that a group of Republican congressmen supports the idea of selling gold.

Officials of the Obama administration have taken notice — and disagree. The assistant Treasury secretary for financial markets, Mary Miller, wrote in a posting on the Treasury Department’s Website May 6 that “fire sale” of the government’s financial assets, including gold, would not be a “viable option.” She urged instead a raising of the debt limit.

An unnamed senior administration official was quoted by the Washington Post as saying, “Selling off the gold is just one level of crazy away from selling Mount Rushmore.” The Wall Street Journal, in its dispatch Monday, reported that Treasury “could be forced to rethink” their opposition if the budget talks fail.

A study of gold reserve sales in the late 1990s noted that seven nations — Australia, Austria, Belgium, the Netherlands, Portugal, and Sweden — had then recently sold off substantial portions of their gold reserves. The sales, which amounted to 48% of those reserves, presaged a 26% devaluation in their nation’s respective currencies. Between 1999 and 2002, in 17 separate auctions, Britain sold off half of its gold reserve, netting $3.5 billion. What Britain sold is now worth $10.5 billion.

To read more, visit:  http://www.nysun.com/national/selling-gold-at-fort-knox-emerges-as-next-big/87350/

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