“Whenever a government runs out of money, it doesn’t go looking under the couch cushions like the rest of us. No, it grabs a pen, changes a number on a piece of paper, and calls it prosperity. Now, they’ve dusted off an old trick—revaluing gold. The same pile of metal that’s been sitting in the vault since your grandfather’s day hasn’t grown an ounce heavier, but by scribbling a new price tag on it, the wizards in Washington reckon they’ve found themselves a trillion dollars. It’s the oldest con in the book: turning accounting smoke into spending fire.”
“So the question isn’t whether they can pull this off—they can, and they’ve done it before. The question is what they’ll do with the fresh paper riches. Pay down the debt? Not likely. Tuck it away for a rainy day? Don’t bet on it. More spending, more promises, more inflation—that’s the surest wager in town. Gold may be eternal, but political honesty never seems to last longer than an election cycle. As Twain might say, history doesn’t repeat, but it does enjoy rhyming—especially when the rhyme sounds suspiciously like the printing press.”
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Core Concept: Gold Revaluation
- The Federal Reserve published a paper (Aug 1) discussing how governments could revalue their official gold reserves as a way to create money without raising taxes or borrowing more.
- The U.S. Treasury’s gold is officially valued at $42.22/oz, while market prices are ~$3,300/oz. This creates a huge “hidden” gain on the balance sheet.
- By updating that value, the government could claim about $1 trillion in “new” money.
🎯Why Revaluation Matters
- Debt Crisis: U.S. debt-to-GDP is over 120% and growing, with budget deficits worsening. Policymakers want ways to “spend more” without borrowing or taxing more.
- Budget-Neutral Trick: Gold revaluation is framed as “budget-neutral,” meaning it provides spending power without formally increasing debt or raising taxes.
- Inflation Risk: In reality, this is a form of money printing. While it doesn’t require selling gold, it creates new dollars against “paper” gains, which adds inflationary pressure.
🏦Methods of Revaluation (from the Fed paper)
- Balance Sheet Boost – Central bank raises gold’s book value; assets and liabilities both rise, with the “gain” transferred to government.
- Revaluation Account – Value change is logged in a special account, then transferred to government.
- Central Bank Profit Cover – Used internally by the central bank to offset its own losses (less relevant for the U.S.).
For the U.S., only methods 1 or 2 are likely.
🔮The “Bitcoin Act” (2025 Proposal)
- A bill in Congress (S.954) proposes revaluing gold certificates held by the Fed at market prices.
- The Fed would owe the Treasury the difference in cash, effectively creating ~$1 trillion.
- The Act directs that money to be used for buying Bitcoin within 5 years.
- Treasury officials deny plans to buy Bitcoin—but if Congress passes it, they’d have no choice.
📜Historical Precedent
- 1934 (Gold Reserve Act, FDR): U.S. confiscated private gold and revalued it from $20.67 → $35/oz, instantly creating more dollars for government spending.
- 1971 (Nixon): U.S. ended gold convertibility, leaving gold to float in markets.
- Gold revaluation has been used before to expand spending capacity without admitting to money printing.
✅Key Takeaways
- What it is: An accounting maneuver—declaring gold worth more on paper, so the government can print and spend the difference.
- Why now: U.S. debt and deficits are exploding; policymakers are searching for new ways to fund spending.
- Impact: Creates new money → inflationary, even if sold as “budget-neutral.”
- Scale: Could unlock about $1 trillion, but in the face of $37T+ debt, it’s a short-term patch.
- History shows: It’s been done before, and revaluation is not unprecedented.
- Inflation will continue unless we crash… Oh, well.
👉 In plain English: Gold revaluation is like the government saying, “We’ve been pretending our house is worth $50,000, but the market says it’s $500,000. Let’s update the books, print the difference, and spend it.” It doesn’t fix debt, but it gives temporary cash at the cost of future inflation.
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