The U.S. has the world’s largest gold reserves—worth $1 trillion at market rates. But repricing that hoard ‘would backfire in a big way,’ analyst says
Source: Fortune ·
"Far-fetched? Of course, but these days I have learned to never be shocked by anything anymore."
From the source
With the federal budget deficit at $2 trillion and debt-interest costs topping $1 trillion a year, it may be tempting to look for extra cash under the sofa cushions. Urgency has grown in recent months as Treasury yields have soared to the highest levels in more than 20 years, putting more pressure on interest expenses. The Treasury Department has tried some unconventional measures recently to take the heat off yields, including buybacks of more long-dated debt and its intervention to prop up the yen that let Japan avoid selling its Treasuries. Given such surprises, speculation has grown around even more far-out tactics. One idea that comes up from time to time is for the Treasury Department to price its immense gold holdings at market rates. The U.S. has the world’s largest gold reserves, which total about 261.5 million ounces, or more than double what No. 2 holder Germany has. But the U.S. hoard’s official price was set by Congress in 1973 at $42.22 per ounce, and it hasn’t changed…