pahueg on Nostr: New US Treasury Secretary Scott Bessent recently said: โ๐๐'๐๐ ...
New US Treasury Secretary Scott Bessent recently said:
โ๐๐'๐๐ ๐๐๐๐๐ ๐ก๐ ๐๐๐๐๐ก๐๐ง๐ ๐กโ๐ ๐๐ ๐ ๐๐ก ๐ ๐๐๐ ๐๐ ๐กโ๐ ๐๐ ๐๐๐๐๐๐๐ ๐ โ๐๐๐ก ๐๐๐ ๐กโ๐ ๐ด๐๐๐๐๐๐๐ ๐๐๐๐๐๐. ๐๐ ๐๐๐ ๐๐๐๐๐ ๐ก๐ ๐๐ข๐ก ๐กโ๐ ๐๐ ๐ ๐๐ก๐ ๐ก๐ ๐ค๐๐๐, ๐๐๐ ๐ผ ๐กโ๐๐๐ ๐๐ก'๐ ๐๐๐๐๐ ๐ก๐ ๐๐ ๐ฃ๐๐๐ฆ ๐๐ฅ๐๐๐ก๐๐๐.โ
CT is still wondering what Bessent meant by this.
Hereโs one (likely) interpretation:
๐ ๐ผ๐ฟ๐ฒ ๐๐๐๐ฒ๐๐ (๐ฆ๐๐๐ณ๐ณ ๐๐ต๐ฒ ๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ ๐ข๐๐ป๐):
The US government (US Treasury) owns a lot of gold. Think of the US Treasury like the governmentโs bank account.
Revaluing this gold to todayโs market price would increase the US Treasuryโs assets.
The US Treasury currently holds 261,498,926.241 troy ounces of gold, equivalent to approximately 8,134 tons. At todayโs market price of $2,900 per troy ounce, the total value amounts to around $758 billion.
However, this gold is still recorded at a book value of $42 per troy ounce, totaling just $11 billion. This means the market value is nearly 68 times higher than the official book value.
By revaluing its gold reserves to reflect current market value, the government would instantly recognize an additional $747 billion in assetsโeffectively realizing a substantial increase in its wealth without selling a single ounce of gold.
๐ ๐ผ๐ฟ๐ฒ ๐๐ถ๐ฎ๐ฏ๐ถ๐น๐ถ๐๐ถ๐ฒ๐ (๐ช๐ต๐ฎ๐ ๐๐ต๐ฒ ๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ ๐ข๐๐ฒ๐):
To balance this out, the government issues "gold certificates" (fancy IOUs backed by gold) to the Federal Reserve (the US central bank).
These certificates tell the Fed: โHey, we now officially say our gold is worth more. Hereโs proof you can use to balance your books.โ
๐ ๐ผ๐ฟ๐ฒ ๐๐๐๐ฒ๐๐ (๐ฉ๐ฎ๐น๐๐ฎ๐ฏ๐น๐ฒ ๐ฆ๐๐๐ณ๐ณ ๐ผ๐ป ๐๐ต๐ฒ ๐๐ฒ๐ฑโ๐ ๐๐ฎ๐น๐ฎ๐ป๐ฐ๐ฒ ๐ฆ๐ต๐ฒ๐ฒ๐):
The Fed receives those new gold certificates from the Treasury.
These certificates increase the Fedโs assets because they represent valuable claims backed by US gold.
๐ ๐ผ๐ฟ๐ฒ ๐๐ถ๐ฎ๐ฏ๐ถ๐น๐ถ๐๐ถ๐ฒ๐ (๐ ๐ผ๐ป๐ฒ๐ ๐ข๐๐ฒ๐ฑ ๐ฏ๐ ๐๐ต๐ฒ ๐๐ฒ๐ฑ):
Hereโs where it gets interesting: the Fed, in return, credits the US Treasuryโs checking account (called the Treasury General Account, or TGA) with new money equal to the increased value of the gold.
The Treasury can now spend this newly credited money on public projects, debt repayment, or stimulusโwithout borrowing or raising taxes.
๐๐ผ๐ ๐ง๐ต๐ถ๐ ๐๐ ๐๐ถ๐ธ๐ฒ "๐ฆ๐ฒ๐ฐ๐ฟ๐ฒ๐" ๐ค๐๐ฎ๐ป๐๐ถ๐๐ฎ๐๐ถ๐๐ฒ ๐๐ฎ๐๐ถ๐ป๐ด (๐ค๐):
Normally, the Fed prints money (QE) by buying bonds from the market to pump cash into the economy.
But in this case, the Fed is not buying anything from the public. Instead, itโs crediting the Treasuryโs account simply because the gold is now valued higher.
Result: The Treasury now has more cash to spend, similar to QE, but without the Fed purchasing assets from banks or investors.
โ๐๐'๐๐ ๐๐๐๐๐ ๐ก๐ ๐๐๐๐๐ก๐๐ง๐ ๐กโ๐ ๐๐ ๐ ๐๐ก ๐ ๐๐๐ ๐๐ ๐กโ๐ ๐๐ ๐๐๐๐๐๐๐ ๐ โ๐๐๐ก ๐๐๐ ๐กโ๐ ๐ด๐๐๐๐๐๐๐ ๐๐๐๐๐๐. ๐๐ ๐๐๐ ๐๐๐๐๐ ๐ก๐ ๐๐ข๐ก ๐กโ๐ ๐๐ ๐ ๐๐ก๐ ๐ก๐ ๐ค๐๐๐, ๐๐๐ ๐ผ ๐กโ๐๐๐ ๐๐ก'๐ ๐๐๐๐๐ ๐ก๐ ๐๐ ๐ฃ๐๐๐ฆ ๐๐ฅ๐๐๐ก๐๐๐.โ
CT is still wondering what Bessent meant by this.
Hereโs one (likely) interpretation:
๐ ๐ผ๐ฟ๐ฒ ๐๐๐๐ฒ๐๐ (๐ฆ๐๐๐ณ๐ณ ๐๐ต๐ฒ ๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ ๐ข๐๐ป๐):
The US government (US Treasury) owns a lot of gold. Think of the US Treasury like the governmentโs bank account.
Revaluing this gold to todayโs market price would increase the US Treasuryโs assets.
The US Treasury currently holds 261,498,926.241 troy ounces of gold, equivalent to approximately 8,134 tons. At todayโs market price of $2,900 per troy ounce, the total value amounts to around $758 billion.
However, this gold is still recorded at a book value of $42 per troy ounce, totaling just $11 billion. This means the market value is nearly 68 times higher than the official book value.
By revaluing its gold reserves to reflect current market value, the government would instantly recognize an additional $747 billion in assetsโeffectively realizing a substantial increase in its wealth without selling a single ounce of gold.
๐ ๐ผ๐ฟ๐ฒ ๐๐ถ๐ฎ๐ฏ๐ถ๐น๐ถ๐๐ถ๐ฒ๐ (๐ช๐ต๐ฎ๐ ๐๐ต๐ฒ ๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ ๐ข๐๐ฒ๐):
To balance this out, the government issues "gold certificates" (fancy IOUs backed by gold) to the Federal Reserve (the US central bank).
These certificates tell the Fed: โHey, we now officially say our gold is worth more. Hereโs proof you can use to balance your books.โ
๐ ๐ผ๐ฟ๐ฒ ๐๐๐๐ฒ๐๐ (๐ฉ๐ฎ๐น๐๐ฎ๐ฏ๐น๐ฒ ๐ฆ๐๐๐ณ๐ณ ๐ผ๐ป ๐๐ต๐ฒ ๐๐ฒ๐ฑโ๐ ๐๐ฎ๐น๐ฎ๐ป๐ฐ๐ฒ ๐ฆ๐ต๐ฒ๐ฒ๐):
The Fed receives those new gold certificates from the Treasury.
These certificates increase the Fedโs assets because they represent valuable claims backed by US gold.
๐ ๐ผ๐ฟ๐ฒ ๐๐ถ๐ฎ๐ฏ๐ถ๐น๐ถ๐๐ถ๐ฒ๐ (๐ ๐ผ๐ป๐ฒ๐ ๐ข๐๐ฒ๐ฑ ๐ฏ๐ ๐๐ต๐ฒ ๐๐ฒ๐ฑ):
Hereโs where it gets interesting: the Fed, in return, credits the US Treasuryโs checking account (called the Treasury General Account, or TGA) with new money equal to the increased value of the gold.
The Treasury can now spend this newly credited money on public projects, debt repayment, or stimulusโwithout borrowing or raising taxes.
๐๐ผ๐ ๐ง๐ต๐ถ๐ ๐๐ ๐๐ถ๐ธ๐ฒ "๐ฆ๐ฒ๐ฐ๐ฟ๐ฒ๐" ๐ค๐๐ฎ๐ป๐๐ถ๐๐ฎ๐๐ถ๐๐ฒ ๐๐ฎ๐๐ถ๐ป๐ด (๐ค๐):
Normally, the Fed prints money (QE) by buying bonds from the market to pump cash into the economy.
But in this case, the Fed is not buying anything from the public. Instead, itโs crediting the Treasuryโs account simply because the gold is now valued higher.
Result: The Treasury now has more cash to spend, similar to QE, but without the Fed purchasing assets from banks or investors.