In his essay this week marking the 50th anniversary of the re-legalization of monetary gold in the United States in 1974 --
https://stuartenglert.substack.com/p/a-toast-to-50-years-of-legalized
-- researcher and author Stuart Englert noted the opposition by Arthur Burns, then chairman of the Federal Reserve Board.
That opposition remains especially noteworthy today because of some details in Burns' testimony to Congress about gold legalization on December 5, 1974, testimony Englert this week called to your secretary/treasurer's attention:
https://fraser.stlouisfed.org/files/docs/historical/burns/Burns_19741205.pdf
https://www.gata.org/sites/default/files/ArthurBurns-Testimony-1974.pdf
Burns' opposition was weak as he framed it himself -- mainly a matter of fear that if private gold ownership became legal again, Americans suddenly might move all their savings into the metal, sparking speculation in silver and commodities and a wave of inflation. Burns saved his true concern about the legislation for the end of his testimony.
Burns wrote:
"The risks associated with a reopening of the gold market extend also to the exchange value of the dollar in international markets. Apart from sales by the Treasury, any substantial demand for gold by our citizens would have to be met by gold imports. The consequence might be a worsening of our international balance of trade and downward pressures on the dollar in foreign exchange markets.
"These pressures on the dollar could, of course, be checked by sales of gold from our nation's monetary reserves. But there are risks associated also with this course of action.
"Since the precise role of gold in the international monetary system is yet to be determined, it would hardly be desirable to dispose of any sizable part of our reserve assets. Clearly, therefore, various adverse consequences for our financial markets and our economy may stem from a reopening of the gold market at the end of this month. No one can now say with any confidence how serious these consequences are likely to be.
The risks associated with private ownership of gold are, however, postponeable, and I see no material advantage to the nation in incurring these risks under present circumstances. ...
"We should be ready, nevertheless, to make prudent use of the Treasury's holdings if demands for gold threaten to have adverse economic or financial consequences.
"For example, if large imports of gold exerted significant downward pressure on the exchange value of the dollar, prices of imported products would rise, and this would tend to worsen our inflationary problem. Sales from the Treasury's gold stock could lessen this difficulty, and I therefore endorse the Treasury's intention to auction 2 million ounces of gold early in January."
That is, Burns first told Congress that gold would compete with the dollar as a currency and store of value, and, second, that this would compel the U.S. government to try to defeat the competition by intervening in the gold market to knock the price down, as by strategic sales from the U.S. gold reserve.
Contrast Burns' begrudging candor in 1974 with the assertion made early this month by his latest successor as Fed chairman, Jerome Powell: that gold and bitcoin compete with each other but not with the dollar:
https://qz.com/bitcoin-gold-us-dollar-federal-reserve-chair-powell-1851713794
What has changed since 1974 to prevent gold from competing with and potentially disciplining the dollar's excesses?
Nothing at all.
What has changed is only that the highest government officials now regularly lie about gold, and that the most important financial news organizations now refuse to ask critical questions about government policy on gold.
Even a single critical question could explode the whole racket.
For example, the U.S. Commodity Futures Trading Commission could be asked whether it has jurisdiction over manipulative futures trading in the monetary metals undertaken by or at the behest of the U.S. government, or whether such manipulative trading is outside the commission's jurisdiction and perfectly legal.
GATA and U.S. Rep. Alex Mooney, R-West Virginia, repeatedly have put that question to the commission and have repeatedly been refused an answer:
https://www.gata.org/node/19917
Unfortunately the New York Times, Washington Post, the Financial Times, and the Wall Street Journal, along with all other mainstream financial news organizations, have not yet dared to ask and to report the answer or refusal to answer.
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