CoinVoice has recently learned from Jin10 reports that U.S. Senator Cynthia Lummis's previously proposed plan to fund Bitcoin purchases partially relies on the vast gold legacy owned by the United States—these gold reserves were left over from the era when the dollar was pegged to precious metals, allowing dollar holders to exchange dollars for gold at a fixed price.
Although the dollar has not been convertible to gold since the early 1970s, the Treasury and the Federal Reserve still hold approximately 8,100 metric tons of gold. The government values this gold at $42 per ounce, which is far below the current market price of $2,650.
Cynthia Lummis hopes that the Treasury can reassess these gold holdings at current market prices and use the paper profits to fund Bitcoin purchases without increasing taxes or issuing new national debt. However, critics point out that this operation is not a free lunch; it will require the Federal Reserve to cover the difference between the gold certificates held by the Treasury and the new valuations through a combination of printing money and asset sales.
Monetary economist George Selgin argues that this operation amounts to a government 'backdoor loan,' intended to avoid new debt, bypass standard appropriation processes, and obscure the truth. The Lummis bill relies heavily on gilded magic; George Selgin says, 'What better way to win public support than to make people believe this plan won't cost a dime?' [Original link]
