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The idea of gold revaluation has been on the perimeter of the gold community for decades. But, recent comments from U.S. Treasury Secretary Scott Bessent who said “We’re going to monetize the asset side of the U.S. balance sheet” moved the idea of valuing gold at current market price into the mainstream in 
a hurry.
What is gold revaluation?
Currently, the U.S. Treasury’s gold reserves are valued at about $11 billion—but that’s based on a legacy Bretton Woods gold price of $42.22 per ounce. The gold valuation price on the books is dramatically less than the current price of gold around $2,900 an ounce.
A revaluation would simply involve marking the price of U.S. government gold to the market price of around $2,900 an ounce (or whatever price the government decides).
With the simple push of an accounting pen, a revaluation to current market prices would instantly increase the value of the Treasury’s gold reserves to about $750 billion. The Treasury would essentially record on the books its unrealized gains of American government gold assets.
What could revaluation mean for the gold market?
This would instantly create a floor underneath the price of gold – in effect bringing us back toward a type of gold standard. A revaluation would also reinforce gold’s role in the global financial system – elevating it on equal standing of fiat currency.
What could this mean for the U.S. debt?
One of the benefits of gold revaluation for politicians is that it would instantly add money into the U.S. financial system without having to issue new Treasury bills, notes or bonds. This could be considered another form of quantitative easing and it would dramatically increase the size of the U.S. balance sheet.
For politicians struggling over the deficit and the upcoming debt ceiling challenge that means the Treasury has more money to pay the government’s bills – as the revaluation would in a sense – create new money out of thin air.
Bottom line? This would allow the U.S. Treasury to spend hundreds of billions of dollars without an increase to the national debt. Some on Wall Street warn this could be an inflationary move in and of itself. But, for gold investors that would continue to support rising trend in gold prices not only in the short-term, but over the medium and long-run as well.
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The post Gold Revaluation Ideas Jump from Fringe to Mainstream appeared first on Blanchard and Company.
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What is gold revaluation?
Currently, the U.S. Treasury’s gold reserves are valued at about $11 billion—but that’s based on a legacy Bretton Woods gold price of $42.22 per ounce. The gold valuation price on the books is dramatically less than the current price of gold around $2,900 an ounce.
A revaluation would simply involve marking the price of U.S. government gold to the market price of around $2,900 an ounce (or whatever price the government decides).
With the simple push of an accounting pen, a revaluation to current market prices would instantly increase the value of the Treasury’s gold reserves to about $750 billion. The Treasury would essentially record on the books its unrealized gains of American government gold assets.
What could revaluation mean for the gold market?
This would instantly create a floor underneath the price of gold – in effect bringing us back toward a type of gold standard. A revaluation would also reinforce gold’s role in the global financial system – elevating it on equal standing of fiat currency.
What could this mean for the U.S. debt?
One of the benefits of gold revaluation for politicians is that it would instantly add money into the U.S. financial system without having to issue new Treasury bills, notes or bonds. This could be considered another form of quantitative easing and it would dramatically increase the size of the U.S. balance sheet.
For politicians struggling over the deficit and the upcoming debt ceiling challenge that means the Treasury has more money to pay the government’s bills – as the revaluation would in a sense – create new money out of thin air.
Bottom line? This would allow the U.S. Treasury to spend hundreds of billions of dollars without an increase to the national debt. Some on Wall Street warn this could be an inflationary move in and of itself. But, for gold investors that would continue to support rising trend in gold prices not only in the short-term, but over the medium and long-run as well.
Want to read more? Subscribe to the Blanchard Newsletter and get our tales from the vault, our favorite stories from around the world, and the latest tangible assets news delivered to your inbox weekly.
The post Gold Revaluation Ideas Jump from Fringe to Mainstream appeared first on Blanchard and Company.
Read more
