Central Bank Gold RV Accounts Are Real: What Are They Planning?

Discover the Secret Tool Central Banks Might Use to Avert Financial Collapse. Perhaps Even a Total Money Reset.

The question remains: will a dramatic revaluation of gold really solve the fiat currency debt system death trap? In the case of the United States, a practical scenario would not only require a sky-high revaluation of gold but also utilizing gold to outright back the ever-devaluing dollar.

This hypothetical approach raises several issues.

First, the price of gold would need to soar to unprecedented levels to cover the national debt, as shown by the required valuation of over $133,000 per ounce (as explained below).

Such a leap would fundamentally alter the global economic landscape and could undermine trust in the existing financial system. Additionally, backing the dollar with gold would necessitate a complete overhaul of current monetary policies and financial practices, potentially leading to significant economic upheaval.

This scenario forces us to confront the limitations of relying on fiat currency and question whether a return to a gold standard could truly provide a stable solution or merely shift the nature of economic challenges faced by modern economies.

Gold Revaluation Accounts (GRAs) might sound complex, but they play an essential role in the financial strategies of central banks. They record the increase in the value of a country’s gold reserves as gold prices go up. This article will explain what GRAs are and how they can help countries like the United States reset their monetary systems and reduce their debt.

What Are Gold Revaluation Accounts?

A Gold Revaluation Account (GRA) is a special account used by central banks to track the increased value of their gold reserves over time.

When the price of gold rises, the GRA records these unrealized gains. For instance, if a central bank bought gold years ago at a lower price and the price of gold increases today, the difference in value is recorded in the GRA.

Also Read: Europe’s Gold Agreement and Plans for a Gold Standard Currency (Part 1)

How GRAs Work for Central Banks

Let’s take the United States as an example. The US Treasury has 261,498,926 troy ounces of gold.

Originally, this gold was valued at $11,041,059,958. However, with today’s gold price at $2,400 per ounce, the value has increased significantly.

To calculate the current value of the US gold reserves:

• Current Gold Value: 261,498,926 ounces × $2,400 per ounce = $627,597,422,400

The difference between the original book value and the current value is:

• Unrealized Gain: $627,597,422,400 (current value) – $11,041,059,958 (original value) = $616,556,362,442

This $616 billion gain is recorded in the GRA, reflecting the increased value of the US gold reserves.

Using GRAs to Turn Gold Value into Money

Central banks can use the unrealized gains in their GRAs to improve their financial situation. They can move some of these gains to their capital accounts, essentially turning this “paper gain” into usable money without selling any gold.

For example, if the US Treasury needed funds, it could transfer part of the $616 billion gain from the GRA to cover expenses or increase its financial buffers.

This process involves adjusting the accounting records, not physically moving any gold.

How GRAs Can Help Cancel Government Debt

GRAs can also help reduce government debt. Central banks can use the gains in the GRA to pay off government bonds. This method reduces the debt without creating new money.

For instance, the US could use the $616 billion gain to cancel some of its outstanding government bonds. By doing this, the government reduces its debt burden, easing financial pressure without increasing the money supply.

The Impact of U.S. Debt on Gold Prices

The U.S. national debt currently stands at approximately $35 trillion. To understand the magnitude of this debt, consider the gold reserves of the U.S. Treasury and what would be required to pay off this debt using those reserves.

Currently, the U.S. has 261,498,926 troy ounces of gold. At the present gold price of $2,400 per ounce, the total value of the U.S. gold reserves is about $627.6 billion. This is a small fraction of the $35 trillion debt.

To pay off the entire $35 trillion debt with gold, the value of gold would need to rise dramatically. Specifically, each ounce of gold would need to be valued at around $133,837. This means that the price of gold would need to increase by over 55 times its current value to cover the national debt with the existing gold reserves.

This enormous required increase in gold prices highlights the severity of the U.S. debt situation. It shows just how far the financial system would need to stretch to resolve the debt through gold revaluation alone. The drastic measures required to achieve this highlight the scale of financial challenges faced by the government.

The Bottom Line

Gold Revaluation Accounts offer a practical way for countries to handle financial challenges. By using the increased value of their gold reserves, central banks can support government budgets and reduce debt.

For the United States, leveraging the $616 billion in unrealized gains from its gold reserves could provide significant financial relief.

However, the requirement for gold to be valued at $133,837 per ounce to cover the national debt highlights the catastrophic level of debt and the drastic measures needed to address it. This approach shows how gold, beyond being a precious metal, plays a vital role in modern financial management.

Supporting article: https://www.gainesvillecoins.com/blog/how-central-banks-can-use-gold-revaluation-accounts-in-times-of-financial-stress