Loading ...Executive Order 6102 had made it a criminal offense for U.S. citizens to own or trade gold anywhere in the world, with exceptions for some jewelry and collector’s coins.
The Gold Reserve Act outlawed most private possession of gold, forcing individuals to sell it to the Treasury, after which it was stored in United States Bullion Depository at Fort Knox and other locations. The act also changed the nominal price of gold from $20.67 per troy ounce to $35. This price change incentivized foreign investors to export their gold to the United States, while simultaneously devaluing the U.S. dollar in an attempt to spark inflation. The increase in gold reserves due to the price change as well as the confiscation clause resulted in a large accumulation of gold in the Federal Reserve and U.S. Treasury. The increase in the money supply lowered real interest rates which increased investment in durable goods.
The international community during the depression began to shift much of its gold reserves to the United States. Foreign investors clamored over the $15 increase in value from $20.67 to $35 per troy ounce, and exported their gold to the United States in record amounts causing U.S. treasury holdings to increase.
Comment:
Gold in 2001 was $250/oz and $1900 in 2011. You can bet your ass, TPTB needed gold to be turned in and delivered to SOMEWHARE or SOME place for obvious or private reasons. Nine eleven ’01 was a big hit, then summer ’08 another big hit. And there may be another big hit coming our way soon. $2900 the next time?