Should The United States Sell Its Gold Holdings?
February 12, 2010 – With all of the economic hardships in the United States, many people likely think that the country should sell its vast reserve of gold coins and bars to make up some of the difference. While finding ways to raise funds for the good of the country and help fund the budget would be nice, selling US gold would likely do more harm than good.
The United States has the largest gold reserve in the world at over 8,000 metric tons. This total far exceeds Germany’s total of 3,400 tons. At today’s price of $1,090.80, this would amount to total of approximately $288 billion. This represents a tremendous sum of money, but the costs far outweigh the benefits of selling.
The first problem of selling the country’s gold coins and bars is that selling such a large amount would undoubtedly flood the market. “Even talk by the government of perhaps selling gold might cause the price to drop,” adds James Barth of the Milken Institute, an economic think-tank. Barth suggests that selling gold “could be viewed as a sign of weakness” by other countries and send the undesirable message that the U.S. is in danger of economic collapse.
The second problem is that even though the President has the power to sell gold, any proceeds from that sale would go directly to pay on the national debt, not fund the current budget. Although $288 billion is a large sum, it pales to the nearly $12.4 trillion owed by the country or even to next year’s $1.38 trillion budget. While serious steps are necessary, this isn’t a viable option to take.
For private investors, the decision to sell and buy gold coins and bars is an excellent decision. Gold has been one of the best investments for the past decade, rising in value for the past nine years. Private investors should study the market and then make a decision to buy and sell bullion and certified gold coins.
Michael Williams
Senior Staff Writer - Gold-Coin.com
