U.S. Treasury Would Rather Hoard Gold Than Sell, Even If The Government Defaults

  @MeaganKaym.clark@ibtimes.com on October 04 2013 10:13 AM
Gold Ingots
Gold ingots. Reuters

The U.S. Treasury’s gold is not for sale, not even if the government defaults on its debt.

The government has shut down until Congress can agree on raising the debt ceiling. If that doesn’t happen in two weeks, the government will soon after not be able to pay its bills. But Treasury officials say delaying all government payments, from Social Security to debt interest, would be a less-harmful way of dealing with that scenario than selling gold.

“Selling gold would undercut confidence in the U.S. both here and abroad and would be destabilizing to the world financial system,” a spokeswoman for the U.S. Treasury told MarketWatch. She quoted the official position Senator Orrin Hatch established last year, noting that essentially the Treasury believes gold is more valuable than the government's promises and commitments.

The Treasury stockpiles about 8,100 metric tons of gold. That’s about $340 billion at current prices, enough to keep the government running for a month.

 

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