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Yale Ph.D., And Former Fed Member Tells Obama To Pull A "Gordon Brown" And Sell All Of America's Gold
Edwin Truman, a senior fellow in the Peterson Institute, who is of course a former Fed member, and of course a Yale Ph.D., writes in the FT, suggesting the brilliant idea that it is high time for the US to sell its gold. In other words do precisely what Gordon Brown did a few thousand percent ago, and now has to defend against allegations he did so merely to protect the LBMA cartel which was on the verge of being margin called into oblivion. And even if one ignores the fact for a minute that there has not "really" been an audit of the US gold holdings in who knows how long, who is to say that Goldman, of all people, may not be right and gold will be at $1,700 in a year? Or Dylan Grice for that matter, and it will be about 10 times higher. One thing is certain: converting real hard asset value into paper to patch up 2.25% of government debt as a % of GDP is easily the dumbest idea we have ever heard. Especially, since as we disclosed yesterday, the Fed will have to force Congress to increase its deficit, and thus debt funding needs, simply so that there are enough Treasuries for the Fed to monetize. We hope Mr. Truman is in the contention for next year's economic and peace Nobel prizes, because with articles such as this he has certainly proven he belongs to that unique category of brilliant economists that only Princeton, Yale and Harvard can produce.
From the article:
Gold is back in the news. Its price is soaring in what some analysts say is a reflection of a weak economy and a lack of confidence in government policies. Naturally, investors are looking at a new sure thing in the expectation that prices will continue upward. My advice to the US government, however, is that this may be the best time – to sell. Doing so would help President Barack Obama and Congress reduce indebtedness, at little cost.
It is an article of faith in bullion markets that the US will be the last country to dispose of its gold stock. For 30 years it has had a no-net-sales policy for reasons ranging from resistance by US gold-producing interests to concerns about the international monetary system. That assumption may remain plausible. Yet the administration has an obligation to re-examine its policy.
And now for kicker #1: gold is up due to "fraud and misinformation" - oddly there is no mention of the fraud accompanying the Keynesian ponzinomics that the world is fighting tooth and nail to preserve:
The market price of gold has risen for more than a decade propelled by low interest rates, the hype of the bullion dealers (holding large inventories) and no doubt the normal amount of fraud and misinformation accompanying asset price bubbles. The Financial Times has reported that the precious metals industry expects the price to increase by a further 11 per cent over the next year.
So here is Truman's modest proposal: take the gold, convert it to linen, and use it to patch up just over 2% of US debt. Brilliant
Meanwhile, the US Treasury holds 621.5m fine troy ounces of gold. The government has been sitting on that gold since the Great Depression, receiving no return. At the current market price of $1,300 per ounce, the US gold stock is worth $340bn. The Treasury secretary, with the approval of the president, has the power to sell (and buy) gold on terms that the secretary considers most beneficial to the public interest. Revenues from sales must be used to reduce the national debt.
If the US were to sell its entire gold stock at the current market price, it would reduce the gross government debt by 2¼ per cent of gross domestic product. Based on the average interest cost from 2005 to 2008, this reduction in debt would trim the budget deficit by $15bn annually. Thus, the Obama administration would be doing something about the US fiscal debt and deficit without reducing near-term support for the ailing economy.
Kicker #2: Truman had graduated from economist to financier, recognizing the importance of buying (or confiscating as the case may be) low and selling high:
This proposal has several other benefits. First, the US would be obeying
the maxim to buy low and sell high. Second, it would be performing a
socially useful function. Demand for gold exceeds normal production,
driving up the price. To the extent that the gold craze is being fed by
concern (rational or irrational) about government policies, public
welfare would be enhanced by giving citizens something tangible to hang
around their necks or place in safe deposit boxes. Third, if the price
is a bubble, as seems likely, the sooner it is burst the better for the
average investor.
Lest Truman be accused of being a biased idiot, he himself provides some counter arguments to his Darwin award worthy suggestio:
Some people point to possible costs. Aside from political pressures from those who want to protect the value of their holdings, above or below ground, two principal arguments are made against US gold sales. The first is that such sales would disrupt the market. But the US government can be cautious in its sales, avoiding disruption of gold sales programmes of other countries, as it has in the past. There is little risk. In recent years, sales under the Central Bank Gold Agreement have dwindled, and some other central banks are buying gold. (The US is not a party to the agreement.) Also the International Monetyary Fund has completed more than three-quarters of its own planned sales of 403.3 metric tons.
Another counter argument is that the US should hold on to its stock in anticipation of the return to a monetary system based on gold by itself or with other nations. Returning to the gold standard would reinstate a system that has not existed for a century, however. It is not going to happen. The gold standard was associated with unstable prices, wages, output and employment. The current official discussions of the reform of the international monetary system do not include any advocates of a return to gold, and the IMF articles of agreement prohibit doing so. The sooner thoughts of a return to the gold standard are laid to rest, the better. A related argument for retention of the US gold stock is as a “rainy day” precaution. But after the recent economic and financial crisis and with the prospect of further misery for several more years, how much more rain must pour before the US acts?
So now you know - the gold standard "is not going to happen." What else is there to say - arguing with such brilliant logic which sees the benefits in 100 years of dollar devaluation, coupled with the greatest credit bubble ever, which has led the world to the precipice of all out currency, trade and soon, actual, war and assumes that the barbarous relic is actually worse than this is, well, pretty much pointless.
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this is some sick, sick stuff coming out of this Yale Phd and former Fed Member.
....we'll call it a velvet revolution for now.
So the US treasury Gold, that has been hypothecated and relent at least 5X over would now be for sale in the open market?
HAHHAHAHHAHAHAHAHAH
This guy is a clown who has a PhD in stupidity. When has he ever been correct?? What is his track record??.........a fool trying to steal you money.
Brilliant, scare the gold cocaroaches with the sale of eight thousand tonnes of gold that are not even there!
Run and sell it now before it goes to 200!!!!
Christ, you wanna talk about backing up the truck? I'll build a damn train track from Ft. Knox to my front door for gold at $200.
Even if there is not any gold in the vaults at (forget Ft. Knox) the NYFed or GLD, SGOL, IAU etc... Ask yourself if the real value of paper gold is going to be exposed while China and Soros own such huge chunks of it. I suspect that the Fed/Treasury/Pres would do nothing to potentially expose the 8,000 tonnes ruse.
I think the fed is going to try and make gold into a bubble by selling all there fake gold to central banks, then once the gold price is in a "bubble" get the central banks to sell it back to the fed. creating massive sell volumes that will bring the price down as people take profit from thinking gold is in a bubble.
who paid him to say that is more important question!
take a guess, I get paid by the same entity ha ha ha HA HA HA
Where do you think they get their "grant" money every year?
this grant money is responsible for more theories on "why big government policy is good for America" than anything else. criminal.
Primarily these sales would be to one country, China. China is open to the idea as their nascent economy has little in the way of essential reserves, including oil. (they would much rather have that probably) The US has one of, if not the largest gold reserve, which is what keeps our dollar going, wait? what did I say, Bernanke wants to destroy the dollar, the gold reserve is holding the dollar up? SELL IT ALL BEN, TRASH THE BUCK, then the US compete with China on a level playing field, including Big Socialist Brother looking after us with Google Earth. Makes sense
I've got an idea - why doesn't he self-immolate, while fucking bernanke in the ass and sucking paul krugman's left nut, all while being torn apart by wild boars and shit on by a giant flock of seagulls
that is, of course, unless they would like to sell it to me at current spot rates - in that case, I am all the fuck in - I'm rich, beyotch!
look at his fuck face,,, lobotomy is right for him
http://www.google.com/images?client=opera&rls=en&q=Edwin%20Truman%2C%20a...
at least it will ease his pain having empty thing on his shoulders
banging aimlessly...
alx
this man is a traitor.
Alrighty then.............. What gold is he talking about...????? We sold it all of it between 07/02/99 and 01/20/01 we can't resell it..... Check out the chart.... Oh....! and guess who sold it.....? Guess who the MORON was....
http://futuresource.quote.com/quotes/chart.action?symbol=GC&compareTo=DX...
Lovely, just lovely....
Best regards,
Econolicious
short on gordon brown, long on golden brown.
http://www.youtube.com/watch?v=AnCqhzcRO2o&feature=fvsr
Most of the gold there is not "ready for delivery" much of it is smelted 90% from the 1933 confiscation so it can't be readily sold without assay and possible reprocessing.
Most of the gold there is not "ready for delivery" ...
assuming there is any gold in the vaults anyway
google "deep storage gold" and "GATA" - the US changed the way it accounts for its gold holdings in recent years - could this be because the actual mined gold is all gone and has been replaced with gold that is still in the ground?
A fraudulent conveyance act prior to BK.
http://www.youtube.com/watch?v=6JPcimrnXGA
I'm sure hoping the goobermint dumps its gold. And all the gold speculators panic and dump theirs too.
That'd be sweet.
after that we can trade manhattan for some shiny beads.
What a maroon!!!
Bugs Bunny
http://www.youtube.com/watch?v=C_Kh7nLplWo
I'm sure Edwin's momma loves him but what a f*cking idiot, PhD or not
This windbag is another product of the nanny/elitist state who has never put a hard day of manual labor in in his life. Probably looses it when his NYT shows-up late in the morning...why are we listening to these people who have been sooooooo wrooong...
BTW - We sold our gold years ago..just saying
Sounds like mr PHD day trader is behind the eightball on his gold short. LOL. If the US sold the rest of its gold, the dollar would go straight into the toilet vs gold.
Stupidest. Economist. Ever.
Bretton Woods, you fucking idiot?
What fuckin rock did this moron crawl out from under?
He is suggesting that we do something that provides zero benefit to anyone or anything and removes any possible collateral we could produce vs our debt. We need to do the exact opposite of this guy is saying and push gold up as high as we can to counter our national debt. This guy is just a moron.
Gold will just go up faster in the end if the US has none.
This is no more than an attempt to create a panic and drive down the price of gold (ie just a variant on the perennial "IMF to sell 400 tonnes of gold" story). It could work in the short term, but sooner or later someone will call their bluff.
Agree!
Monetary policy is propelling gold. The mindless printing will end very badly!
This would be a dream come true! I personally feel that gold should be in the hands of the people, not the government. If this happened, I would buy as much gold as possible. But unfortunately, I think that the chances of this suggestion being accepted are virtually zero.
Hmmm Hmmm Hmmm:
Sell gold we don't have.
Issue mortgages with no proper title chain.
Bailout out companies that produce vehicles that the average American can't afford.
Protect corporate fascism at the expense of the taxpayer.
Use a Teleprompter that is programmed to only tell lies.
We certainly live in interesting times.
This guy's a #uckin ijit. No other word to describe it. He belongs in the same Nobel camp as Krugman.
Selling gold ignores historical reality.
Gold is having awesome price action and this "economist" wants to sell? Gold is also America's only real and risk free asset, and the world knows this. If the gold was sold, it would have America waving a white flag. What a pansy this guy is, talking about stuff that he either a) knows little about b) hates with a passion. I say this because it is very possible that he understands that the market dynamics revolve around real assets (ie gold/ silver, oil, water, food). Since he is from Yale, I will guess he is of the Scull and Bones Crew. This old way of running money is as done as pop music. When the FIAT propaganda tide comes out, and it is shown that the currentseas left a bunch of dudes necked, the paradigm of "monie" will be altered so abruptly, the shock will leave people bewildered and victimized. Even though gold is only a representation of leisure time, and is not actually that itself (so without skill, can one ever be comfortable without comfort?), it's importance lies in the representation itself. For those out there who on one meal a day wish to meditate at the top of a mountain, so be it. But until the banksters majikaly change themselves into monks, I won't believe it in the best interest of the people to sell this asset.
Man up Truman, we are taking this to the bank, and the bank it only accepts gold and silver!
If you agree to sell all of your gold- and you sell to any number of fraudulent associates- then noone will notice that you had no gold to sell in the first place!
Ron Paul audit of Fort Knox- problem solved!
And you didn't even have to blow a building to do it.
Check out the article about Ron Paul in the latest The Atlantic:
The Tea Party’s Brain - The Atlantic
http://www.theatlantic.com/magazine/archive/2010/11/the-tea-partyand8217...
Sure am glad I didn't go to Yale!
This is obviously a way to get round what would prove to be a very embarrassing audit. If the cupboard is bare, and openly professed to be so, before Ron Paul gets his accountants into Fort Knox then that would spare the banking cartel a great deal of embarrassment/jail time.
I have a more modest approach. Sell Manhattan and everything and everyone in it to the highest bidder. That way we get rid of a huge liability and gain big bucks.
If gold is in a bubble, how does the largest holder in the world unload at market prices?
Bernanke, is that you?
Guess you didn't notice the "if".
funny.
This is not meant to lower the deficit, but to sppress the price of gold. It isn't going to work because you have countries like China and Russia ready to buy right away. Sell all of our gold and the result will be an emperor with no clothes. Gold is stability. It is in our language. For example the term "good as gold" relates to stability and soundness. It is amusing that these Fed Heads accuse gold of what they do. The Federal Reserve is responsible for unstable prices, wages, output and employment. I can still buy a gallon of gas with one pre-1964 silver quarter. I can still buy a nice suit with a 1913 20 dollar gold piece. Granted I have to convert it to FRN's, but the only thing that has changed is the value of the FRN's. If that is not stability I don't know what is.
Ok, this may complete nonesense, but I read somewhere that sitting in the FRB NY is a pallet of $100,000 currency notes with the words "Redeemable In Gold" written on them.
I don't remember where I read this and therefore cannot source it. The jist of it was that the privately owned FRB NY owned these notes and may present them to the UST at anytime for redemption.
Bottom line, whatever gold does exist in Ft. Knox may already have claims against it.
Has anyone heard this?
Gold certificates are no longer redeemable in actual gold. They were retired in the 1930s along with the confiscation of gold. The certificates are available as numismatic bills. Gold clauses in contracts were also made invalid.
See a $100,000 gold certificate here:
http://i741.photobucket.com/albums/xx59/connor1_photos/currency/100000-G...
Thanks for the info.
I have just sent the following email to Edwin Truman, PhD.
Dear Edwin
I read with great interest your recent Financial Times article, "America should open its vaults and sell gold". Having read the article, I'd like to take this opportunity to tell you what an idiot I think you are. Edwin, I think you are an idiot.
Best Regards
Thermroc
Edwin Truman, PhD's email is ttruman@piie.com
Why not? Gordon Brown's move was such a success ... wasn't it? Successful for whom? Ok, let's face it, he's pretty much the luaghing stock of the UK electorate. But in some circles, ...
I keep the hope alive that eventually Brown will be hung as a traitor. A slim hope but it keeps me warm at night.
I have a better idea. Sell every central bankster and financial executive into slavery (in exchange for gold only (real money), of course!), sell all their malgotten assets for gold only (real money).
Then sell all fiat paper for gold only.
Then finally, convert all this gold into coins and distribute them to all citizens as non-taxable compensation for the treason and crimes against humanity they have suffered at the hands of the international gangster banksters and their paid thugs in the administration, congress and courts.
Then pass a constitutional ammendment to permanently eliminate all "fictitious entities" (corporations)... which in reality is no big deal, since they don't exist.
If Eric Sprott didn't already know that alleged gold is long since vaporware, his lips would be watering at the mere idea of getting his hands on it at the deeply discounted rate of $1370/oz
If a position had to be taken, let it be on the side of gold as evidenced in the pages of history as opposed to the illusionary mission statement of the IMF in not standing by gold as the premier standard of currency valuation.
what an idiot...and to think, a PhD too..waste of his poppa's money..
not to mention, what gold?
This idea is an attempt at self-fulfilling prophesy by poison pill.
This is an attempt to make it absolutely impossible for the USSA to revert to a gold standard after the fiat currency meltdown to come soon.
The predators-that-be, starting with the FederalReserve, will do absolutely anything, no matter how destructive to human beings and world economy to keep total control of governments and populations after their fiat con game explodes in everyones faces.
They know very well that the natural reaction to the explosion of their fiat currencies is a return to hard money AKA gold [and possibly silver, etc]. They want to make this utterly suicidally impractical for the USSA by getting rid of all the gold, reducing the reserves of real, honest money equal to zero.
Frankly, they may well have already sold or obligated most or all gold that is supposedly in government vaults, so it may be a cover story for that too. But if not, this is a craven attempt to essentially say, "if you put us fiat-scam-artists out of business, we shall utterly destroy the country, if not world".
They are pure craven, diabolical predators.
“The government has been sitting on that gold since the Great Depression,”
?Um, no.
In 1948 the US government had $24.4 billion dollars worth of gold valued at $35 per ounce.
In 1969 the amount of gold had sunk to $10.367 billion dollars at $35 per ounce.
This bit of old news/history comes from the book “How to Invest in Gold Coins” by Donald J. Hoppe dated 1969.
A quick look at history proves that the gold hasn't sat around in US Vaults untouched since the 1930's, of course accuracy and honesty have never been hallmarks from anyone who is or was with the Fed, isn’t that right Mr. Truman?
Due to foreign nations exchanging dollars for gold, Nixon closed the gold window rather than see all of the gold go overseas.
…the war on gold has been going on for decades. Gold owners have been called unpatriotic, selfish, evil gnomes out to wreck the world’s economic system. Back in the 1960’s Fed Chairman William McChesney Martin JR stated that the US would pay out gold “to the last bar” and the US would be the better for it, which only goes to prove that economic idiots have been in the Federal Reserve for decades, if not its beginning.