Resumption of the Gold Dollar: Dollar Convertibility to Gold and Multilateral Currency to Gold
- America leads by the President announcing unilateral resumption of the gold monetary standard at a date certain, not more than four years in the future. Unilateral resumption means that the U.S. dollar will be defined by law as a certain weight unit of gold. The Treasury, the Federal Reserve, and the entire banking system will be obligated to maintain the gold value of the dollar. On the date of congressionally authorized resumption—that is, unrestricted dollar-gold convertibility—Federal Reserve banknotes and U.S. dollar bank demand deposits will be redeemable in gold on demand at the statutory gold parity. Further use by foreign governments of the dollar as an official reserve currency will entail no legal recognition by the United States.
- The President issues an executive order eliminating every and all taxes imposed on the buying, selling, and circulation of gold. The President issues an executive order providing for the issuance of Treasury bonds backed by a proportional weight of gold. Since Federal Reserve notes and bank deposits (money) are not taxed by any jurisdiction, the executive order specifies that gold is to be used as money and thus taxed in no jurisdiction in the United States nor abroad. Gold can be used to settle all debts, public and private. The Treasury and authorized private mints will provide for the minting and wide circulation of legal tender gold coin in appropriate denominations, free of any and all taxation.
- Shortly after the announcement (step 1), the United States calls for an international monetary conference of interested nations to provide for the deliberate termination of the dollar-based official reserve currency system and the consolidation and refunding of foreign official dollar reserves. The international agreement to be negotiated will inaugurate the reformed international monetary system, that is, multilateral currency convertibility to gold, without official reserve currencies.
- The conference—attended by representatives of the BIS, IMF, WTO, and the World Bank—would establish gold as the means by which nations would settle residual balance-of-payments deficits. The international agreement would designate gold, in place of reserve currencies, as the internationally recognized monetary reserve asset. Official foreign currency reserves, to a specified extent, would be consolidated and refunded. Stable exchange rates would be a necessary result, the value of major currencies being a function of their statutory gold value, a non-national impartial monetary standard.
- A multilateral, international gold standard—the result of the conference convertibility agreement—would effectively terminate floating and pegged-undervalued exchange rates. The reformed international monetary system, the true international gold standard, would establish and uphold stable exchange rates and free and fair trade—based upon the mutual convertibility to gold of major national currencies.