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Gold revaluation shouldn't surprise, since it's an old story
9:54a ET Saturday, July 12, 2025
Dear Friend of GATA and Gold:
Lately there has been a big increase in speculation about an official revaluation of gold.
At YouTube this week Rebel Capitalist's George Gammon seemed surprised by the possibility as he called attention to financial letter writer Luke Gromen's recent report that the May edition of the Federal Reserve's Financial Accounting Manual for Federal Reserve Banks describes a mechanism by which the U.S. Treasury Department and the Fed can revalue the U.S. gold reserve:
https://www.youtube.com/live/oDNhrvbZV34
While this was news to Gammon, revaluation is an old story with gold. Gromen actually disclosed the mechanism in the Fed manual last year --
https://www.gata.org/node/23332
-- and had speculated about gold revaluation in 2023:
https://www.gata.org/node/22828
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That the U.S. government has the power to revalue gold shouldn't surprise anyone in the monetary metals sector or anyone somewhat familiar with U.S. history. Of course President Franklin D. Roosevelt famously revalued gold in 1934 after attempting to confiscate gold held by the public. As Mike Maharrey of Money Metals Exchange explained last year, the confiscation and revaluation constituted a plan to increase the U.S. money supply during the catastrophic deflation of what became the Great Depression:
https://www.moneymetals.com/news/2024/05/31/did-fdr-really-confiscate-everybodys-gold-003226
In February gold researcher Stuart Englert described other gold revaluations in U.S. history:
https://www.gata.org/node/23672
Gold revaluation has been a frequent topic in GATA dispatches over the years.
In 2007 GATA called attention to the study written a year earlier by R. Peter W. Millar of Valu-Trac Investment Research in Scotland, who maintained that occasional gold revaluations are necessary in debt-based fiat money systems to prevent catastrophic debt deflations:
https://www.gata.org/node/4843
In 2008 former Fed Governor Lyle Gramley, speaking on Business News Network in Canada, volunteered that the Fed's financial position could be made much stronger with an upward revaluation of the U.S. Treasury gold certificates it held:
https://www.gata.org/node/6989
In 2012 the U.S. economists Paul Brodsky and Lee Quaintance hypothesized that major central banks were already working toward gold revaluation, holding the monetary metal's price down with various market interventions while they rebuilt their gold reserves, whereupon they would reset gold's price way up, devaluing government's debts and restoring themselves to solvency:
https://www.gata.org/node/11373
In 2009 and 2011 financial letter writer Stewart Thompson foresaw gold revaluation:
https://www.gata.org/node/7090
https://www.gata.org/node/9955
Mexican gold and silver advocate Hugo Salinas Price wrote in 2016 that gold revaluation was coming:
https://www.gata.org/node/16126
For several years London metals trader Andrew Maguire has been saying the same thing:
https://www.gata.org/node/22685
https://www.gata.org/node/23958
Perhaps the most compelling disclosures about gold revaluation have come from gold researcher Jan Nieuwenhuijs.
In 2013, writing under a pseudonym, Nieuwenhuijs called attention to the minutes of a meeting held by U.S. Secretary of State Henry Kissinger and his assistant undersecretary of state for economic and business affairs, Thomas O. Enders, at the State Department in 1974. The minutes of the meeting show that Enders explained that gold revaluation is "the reserve-creating instrument" with which governments can increase their money supply, and warned that Western European countries, having acquired more gold than the United States, were now in a position to out-money the U.S. and change all financial valuations in the world:
https://www.gata.org/node/13310
Starting in 2023, Nieuwenhuijs revealed gold revaluation mechanisms in place with central banks outside the U.S.:
https://www.gata.org/node/22542
https://www.gata.org/node/22761
https://www.gata.org/node/23644
There have been many other commentaries about the possibility of gold revaluation.
With gold and now silver breaking away from the decades-long use of government-underwritten derivatives to suppress their price and support government currencies and bonds -- derivatives creating vast, imaginary supplies of the monetary metals, for which actual delivery now is being demanded -- revaluation seems closer than ever.
But by itself an official revaluation of gold wouldn't automatically trigger a change in the value of privately held gold unless some government imposed a convertibility requirement on itself, a requirement to buy and sell gold at the new price. That much self-discipline from a modern central bank or government seems very unlikely.
Instead, gold revaluation would be mainly an accounting gimmick for more money creation.
In the United States, the Treasury Department would direct the Federal Reserve to revalue the Treasury gold certificates it holds and then credit the Treasury's general account at the Fed with new dollars equal to the increased official value of the gold represented by the certificates. Then the Treasury Department could spend the new money or use it to liquidate debt, or both.
If the revaluation was large enough -- and there would be little point in doing it otherwise -- hundreds of billions or even trillions of dollars could be created and dispensed by the U.S. government. The government's debt limit, already a mere technicality insofar as it is raised by Congress whenever the threat of economizing closes in, would become a trivial detail of history.
With a massive revaluation of gold the government would achieve practically infinite money without issuance of debt and the awkwardness and embarrassment of monetizing bonds -- raw and direct inflation and currency devaluation.
The inflation produced by such practically infinite money, not gold revaluation itself, is what would increase the price of privately held gold and the price of nearly everything else -- at least until government attempted to confiscate gold or to impose "windfall profits" taxes on gold owners. Like gold revaluation, confiscation and "windfall profits" taxes have been used before too.
While the monetary metals are defenders of liberty, they can't do it all by themselves. Whatever happens, liberty's price will remain eternal vigilance.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
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