Is Selling U.S. Gold Smart? IMF Sales Weren’t.

One question I've heard more lately: Now that the gold price is over $1,500 an ounce, shouldn't the U.S. sell its gold reserves—which were mostly acquired from U.S. citizens in 1933 at $20.67 or bought at $35 an ounce under the post-World War II Bretton Woods monetary system?

If, as Lewis E. Lehrman and I have shown, restoring the gold standard is necessary to sort out the U.S. economic and fiscal mess—specifically, preventing future episodes like the Great Recession of 2007-09, reversing the decline of U.S. international competitiveness and restoring lost Federal budget discipline—the answer is emphatically no: A growing U.S. economy will need more gold, even if the gold price rose no farther.

Yet even if not, the cautionary example of IMF gold sales is also decidedly negative. Since gold was demonetized by international treaty in 1978 during President Jimmy Carter’s administration, various IMF managing directors (mostly French Socialists) have successfully campaigned to sell chunks of the IMF's gold reserves (which were started along with the IMF in 1944). The biggest IMF gold sales occurred in 1976-80 mostly under Jacques de Larosiere, in 1999-2000 under Michel Camdessus, and in 2009-10 under Dominique Strauss-Kahn.

Since each trade essentially sold gold to buy goods to fund the IMF itself and give to poor countries, their wisdom can be gauged by converting U.S. consumer (or producer) prices into gold terms, as in the nearby chart. (Note that the swings were smallest under the gold standard, and greatest since the dollar’s last link with gold was severed in 1971.)

The record might look better decades hence if the gold price plummeted. But at the actual average gold prices of about $228, 232, and $1157, those IMF gold trades have lost about 56%, 77%, and 33% of their respective values so far, adjusted for changes in the U.S CPI.

The clear lesson: It’s far wiser to keep than sell U.S. gold.

U.S. CPI and PPI vs. Gold, 1800-2011

Vinaora Nivo SliderVinaora Nivo SliderVinaora Nivo SliderVinaora Nivo Slider

Exclusive Interview With the Hon. Steve Lonegan, Part 1

September 15, 2014

An extended interview with the Hon. Steve Lonegan, director of monetary policy for American Principles In Action"


Signs Of The Gold Standard Emerging From Great Britain?

by Ralph Benko

... Given Kwarteng’s current and, likely, future importance to the world monetary discourse it really would be invaluable were he to master the arguments of Jacques Rueff, and of Lewis Lehrman, as well as those of Triffin (who shared the same diagnosis while offering a different prescription).

Read More


The Federal Reserve System's James Narron and David Skeie, career officials with the Federal Reserve System, are two eminent historically erudite figures.  Writing in the New York Federal Reserve Bank's online publication, Liberty Street Economics, they recently provided a continuation of their valuable historical "revue," Crisis Chronicles: The Collapse of the...


Paul Krugman's Projection

Ralph J. Benko  |  Jul 14, 2014
On July 6th, Nobel economics laureate and Princeton Professor launched, in the New York Times, one of his occasional polemics, entitled Conservative Delusions About Inflation, against proponents of the gold standard.  Krugman Caricature under creative commons license from DonkeyHotey As usual, Prof. Krugman is, conveniently for the position he takes, beyond lopsided...
An article headline in Saturday’s Wall Street Journalread “Rate Talk Heats Up Within The Fed.” As Journalreporters Jon Hilsenrath and Michael Derby...
Jan 03, 1974
Key Monetary Writings
Lewis E. Lehrman

Reflections on the Monetary History of the West – 1700-1974

By 1700, the banking system of Europe had elaborated the institutions of money and credit we know today. And England...

Kathleen M. Packard, Publisher
Ralph J. Benko, Editor

In Memoriam
Professor Jacques Rueff

Now Available on Amazon and from The Lehrman Institute

Gold Standard 3-Pack

Three Gold Standard Titles for One Low Price. Only from The Lehrman Institute Store.

Buy from
The Lehrman Institute