Should the U.S. sell off its gold reserves to pay down debt? That’s the latest idea being tossed around by gold bug Ron Paul. Not only would selling Old Yeller help the U.S. pay its bills, says libertarian Paul, but it would put more gold in the hands of the American people and pull back the reins on the Federal Reserve, which is printing money like mad and debasing the value of our currency.
So insistent is Paul about this strategy that he challenged the government to a gold audit to make sure its stash of bullion at Fort Knox is really all there. (According to the Treasury’s inspector general, it is.) So is selling it a good strategy, or is Paul just a crazy kook?
When it comes to the concept of gold, it can be hard to tell. With the price of gold up 24% in the past year, the gold bulls are everywhere. And our country has a long history of obsessing over gold, which Thomas Frank describes quite well in the latest issue of Harper’s Magazine: I do not mean to scoff at gold bugs – or not much, anyway.
Money cranks are part of a long tradition in American life, and just as there was an attractive democratic subtext to the free-silver agitation of the 1890s, so there is an attractive moral idea behind the hard-money mania of the present day. It’s the old story of hubris, of man getting above himself and crashing inevitably back to earth. Even if the central bankers’ intentions are good, reasons the metalhead, they are still bound to screw things up.
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