Sell Fort Knox's Gold, Some Say

Source:

"Selling that gold is just one level of 'crazy' away from selling Mount Rushmore."

Washington Post, Joel Achenbach

With the U.S. poised to slam into its debt limit today, conservative economists are eyeballing the gold in Fort Knox—147 million ounces worth. Gold's selling at ~$1,500/oz, so that's many billions of dollars in bullion.

"It's just sort of sitting there," said Heritage Foundation Senior Fellow Ron Utt. "Given the high price. . .and the tremendous debt problem we now have—by all means, sell at the peak."

fort knox


But not according to U.S. Treasury Assistant Secretary, for financial markets, Mary Miller; she said the U.S. should sell assets in an orderly, "well-telegraphed" manner, not in a "fire sale" atmosphere with a debt-limit deadline accelerating the process.

"It would be bad for the taxpayers. It would be bad for the markets," Miller said.

Another senior administration official, not authorized to speak for attribution, was blunter: "Selling off the gold is just one level of 'crazy' away from selling Mount Rushmore."

The U.S. has run-up a huge debt, but it is not poor; the federal government owns close to one-third of total U.S. land—plus 1M buildings, electrical utilities and the Interstate Highway System.

The Heritage Foundation on Tuesday released a plan for balancing the budget that did not include tax increases, but did include a proposal to sell $260B in federal assets over 15 years.

The administration recently did a rough calculation of U.S. gold reserves, including the stash at Fort Knox (technically, it's in the fortress-like U.S. Bullion Depository) and concluded that it was worth about $370B.

Although the country does not use the gold for anything, Treasury officials believe selling it could create the impression of desperation and rattle markets.

A sudden gold sale would also postpone only briefly the deadline for raising the debt limit.

"It's merely a procrastination technique. It would throw markets into turmoil, and you'd have to accept fire-sale prices."

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