US congressman proposes gold-backed dollar, but does America have enough bullion?
Republican Congressman from West Virginia Alex Mooney has proposed a bill “to define the dollar as a fixed weight of gold.” The problem is that the US may not have enough physical gold to back the greenback, an expert tells RT.
In bill number 5404, dated March 22, Mooney criticizes US monetary policy, citing the fall in the dollar’s purchasing power after the gold standard was abolished.
“The United States dollar has lost 30 percent of its purchasing power since 2000, and 96 percent of its purchasing power since the end of the gold standard in 1913. Under the Federal Reserve’s two percent inflation objective, the dollar loses half of its purchasing power every generation, or 35 years,” the bill says.
The congressman goes on to describe the advantages of having a gold-backed dollar.
"The gold standard puts control of the money supply with the market instead of the Federal Reserve. The gold standard means legal tender defined by and convertible into a certain quantity of gold. Under the gold standard through 1913, the United States economy grew at an annual average of four percent, one-third larger than the growth rate since then and twice the level since 2000,” Mooney says.
However, there are questions surrounding the ability of the US government to back the dollar with physical gold. America claims to hold 8,133.5 tons of physical gold in its official reserves. Fifty-eight percent is reportedly held in Fort Knox, Kentucky, 20 percent at West Point in New York, 16 percent is said to be at the US Mint in Denver, Colorado, and five percent is held at the New York Fed.
Singapore’s BullionStar precious metals expert Ronan Manly previously told RT that America’s actual gold reserves are likely much smaller.
“The entire story around the US gold reserves is opaque and secretive. There has never been a full independent audit of the US gold reserves, and the custodians of the gold, the US Mint and the Federal Reserve of New York will not let anybody into the vaults to view the gold or to count it,” Manly told RT.
The expert was also sceptical about the purity of the gold stored in American vaults.
"Even the details that have been provided on the supposed US gold holdings show that a majority of the gold bars are low purity and in weights that don’t conform to the industry standard ‘Good Delivery’ gold bar specifications,” Manly said. According him, this gold can’t be traded on the international market because of the low quality.
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