Beginning as early as August of 2010, Congressman Paul has worked to gather support for an audit of the gold reserves held at Fort Knox and the Federal Reserve. It is his belief that the Treasury and the Fed have been engaging in gold swaps and loans and that much of our gold reserves may have been depleted. He believes that the people have the right to know if and how much we have on reserve. In an interview with Kitco News, Congressman Paul stated:
In the event “we ever get around to deciding we should use gold in relationship to our currency, we ought to know how much is there,”
Naturally, both the Treasury and the Fed have been less than transparent on the issue. This lack of transparency and cooperation has been the catalyst for his more recent support for selling our gold holdings which is seen as a “round about way of auditing the Federal Reserve”.
Here is the Congressman in his own words at a recent Monetary Policy Sub-committee hearing on the Fed (the relevant segment begins at 2:45):
“There had been suggestions made and I sort of…encourage the suggestion…if gold is not money and it’s an asset and you don’t even use it because it’s on your balance sheets and you don’t even use it at the real value…why shouldn’t the treasury just sell the gold? Give it back to the people. The people had it at one time. Let the people have it.”
This, contrary to popular belief, is not a fringe idea. A Heritage Foundation analyst has seconded the idea:
The gold holdings are “just sort of sitting there.”
“Given the high price it is now, and the tremendous debt problem we now have, by all means, sell at the peak.”
While it is true that Ron Paul has supported the suggestion, he would prefer not to sell the gold but to use it, along with the dollar, as money.