A Legislative Outline for a 21st Century Gold Standard

Define the Dollar in Gold

Effective 30 months after the date of enactment of this Act the Secretary of the Treasury shall define the dollar in terms of a fixed weight of gold, based on that day’s closing market price of gold. This will make the dollar literally as good as gold.

Disclosure of Holdings

During the 30-month period following the date of enactment of this Act, the United States Government shall take timely and reasonable steps to disclose all of its holdings of gold, together with a contemporaneous report of any United States governmental purchases or sales, thus enhancing the ability of the market and of market participants to arrive at the fixed dollar-gold parity in an orderly fashion.

Convertibility of the Dollar and Gold

  • Member banks of the Federal Reserve and all banks chartered or supervised by the United States government, or one of its agencies, shall make Federal Reserve notes and demand deposits exchangeable with gold based on the statutory gold definition of the dollar.
  • The Treasury shall make available for sale in unlimited quantity 400 oz. standard investment bars at the statutory gold definition of the dollar.
  • The U.S Mint shall make available for sale in unlimited quantity 1 oz. legal tender gold coins at the statutory gold definition of the dollar.
  • Gold bullion may have a redemption fee of up to 2 percent of the statutory gold definition of the dollar and a monetization fee of up to 1 percent of the statutory gold definition of the dollar.
  • Gold coins may have a redemption fee of up to 4 percent of the statutory gold definition of the dollar to allow for the exchange of dollars for gold in small scale.

Operating Principles of the Federal Reserve System

  • The Federal Reserve is mandated to 1) furnish an elastic currency and 2) act as a lender of last resort.
  • The Federal Reserve shall furnish an elastic currency through its open market operations, including the buying and selling of gold bullion according to market demand.
  • Gold bullion held by the Federal Reserve must be in metallic form of at least 85 percent purity. This bullion reserve shall not be encumbered in any way, via leases, collateral agreements, swaps, and so forth.
  • The gold reserve shall be audited on a basis, and the results of the audit made public immediately upon its completion.
  •  With notification to Congress and the President, the Federal Reserve may provide emergency lending of not longer than six months to solvent banks at above-market rates, secured by short-duration, high-quality, liquid collateral.