Gold Revaluation Means Dollar Devaluation
Raising Official Bullion Price Would Debase U.S. Currency
Recent anomalies in the gold market, including London delivery delays, repeated record highs and unusually large bullion shipments to U.S. vaults, have precious metal analysts speculating about an official revaluation of the gold price.
If “deep storage gold” on the U.S. Treasury’s balance sheet were increased from its present $42.22 an ounce to improve the nation’s fiscal position or borrowing capacity, the move would constitute a devaluation of fiat dollars—technically Federal Reserve Notes—against gold.
Gold revaluation isn’t out of the question. It’s happened before.
It could happen again despite what Treasury Secretary Scott Bessent did or didn’t imply earlier this month by suggesting the Trump administration is “going to monetize the asset side of the U.S. balance sheet for the American people.”
Gold revaluations and dollar devaluations have occurred several times in U.S. history.
President Jackson Revalued Gold Against the Silver Dollar
Passage of the Coinage Act of 1834 revalued gold higher against the silver dollar by raising the silver-to-gold weight ratio from 15-to-1 to 16-to-1. By signing the act, President Andrew Jackson lifted the official gold price to $20.69 a troy ounce, up from $19.39.
It was the nation’s first gold revaluation since the gold-silver ratio was established by the Coinage Act of 1792, which defined the dollar in terms of the purity and weight of the monetary metals.
From the nation’s founding, the United States was on a bimetallic standard and the dollar was defined as 371.25 grains of pure silver. By reducing the content of $10 gold Eagle coins from 247.5 grains to 232.2 grains of fine gold, Jackson and his supporters in Congress altered the gold-silver ratio.
Jackson was a hard money advocate and deficit hawk who despised the central bank. He slayed the interest-taking Second Bank of the United States in 1832 by refusing to renew its charter and eliminated the national debt in 1835. It was the first and only time the nation hasn’t been burdened by the fiscal albatross.
While Jackson’s gold revaluation didn’t contribute to his phenomenal feats, it motivated gold miners in Georgia and North Carolina, increased the circulation of gold coinage and boosted gold imports, just like the influx occurring today.
Precious metals flow toward premium prices. They always have and always will.
Another slight adjustment to the silver-gold ratio was made by the Coinage Act of 1837. By minimally reducing the standard weight and size of the silver dollar, the law reduced the official gold price by two cents to $20.67 per troy ounce. It was a rare case of gold being devalued against the dollar.
The gold price remained at that level on the Treasury’s ledger for nearly a century.
President Roosevelt Devalued the Dollar Against Gold
Amid the Great Depression, dollar devaluation was a centerpiece of federal policy aimed at promoting economic recovery.
After President Franklin Roosevelt outlawed private ownership of most monetary gold in 1933, his administration took deliberate steps to encourage gold production, increase gold imports and elevate the gold price at the expense of the U.S. dollar.
“The United States must take firmly in its own hands the control of the value of our dollar,” Roosevelt said during a radio broadcast on Oct. 22, 1933, before authorizing the Reconstruction Finance Corporation (RFC) “to buy gold newly mined in the United States at prices to be determined from time to time” and to “buy or sell gold in the world market.”
Formed during President Herbert Hoover’s administration, the RFC was a government-sponsored lender of last resort seeded with $500 million in federal funds to spur recovery during the severe economic slump. In 1933, the corporation bought 128 metric tons of gold for $134 million to raise its market price, devalue the dollar, increase commodity prices and expand U.S. exports. Through a series of purchases at progressively higher prices, the RFC achieved a gold price floor around $34 an ounce.
In 1934, Roosevelt signed a proclamation fixing the official gold price at $35 a troy ounce. His action devalued the dollar by 59 percent against gold, allowing the Federal Reserve to inflate the fiat currency supply in an effort to revive the depressed economy.
President Nixon Revalued Gold Twice in the Early 1970s
Attempting to salvage the 1944 Bretton Woods accord and combat deteriorating U.S. economic conditions, President Richard Nixon revalued gold on two occasions in the early 1970s.
Amid declining U.S. gold holdings and mounting trade imbalances, Nixon in 1971 stopped swapping gold for dollars with foreign nations at $35 an ounce. While delinking the dollar from gold stopped the drain on the nation’s bullion reserves, the greenback remained overvalued compared to other currencies in foreign exchange, contributing to the first U.S. material trade deficits in nearly a century.
In an effort to maintain dollar-gold convertibility, weaken the dollar and increase U.S. exports, Nixon raised the official gold price to $38 in 1972 and $42.22 in 1973, which together devalued the U.S. currency by 20 percent. Nixon’s devaluations, however, didn’t preserve the international gold standard.
Combined, gold demonetization and dollar devaluation allowed the U.S. government to spend and borrow fiat dollars unabated, causing inflation and depreciation of the currency against gold, whose price spiked to $800 an ounce in 1980.
Like his devaluing predecessors, President Donald Trump could revalue the nation’s gold if his Department of Government Efficiency (DOGE) auditing team confirms U.S. depositories contain the 8,133 tons of bullion claimed on the Treasury’s books. They’ll also want to verify that the gold, if present, isn’t legally encumbered in any way.
With gold closing in on $3,000 an ounce, revaluation of the nation’s gold to the market price could provide Uncle Sam with a $770 billion boon to spend or extinguish outstanding obligations. More than likely, revalued gold would be used to inflate the currency and finance more debt. In that case, revaluation would constitute a dollar devaluation against gold and further debase the nation’s currency.
Either way, revaluation could provide a bonanza for goldbugs. If gold’s official price were raised, bullion almost certainly would trade at higher levels as it did six decades ago, as long as gold ownership wasn’t outlawed, heaven forbid, as it was in 1933.
© 2025 Stuart Englert. All rights reserved.
Englert is the author of “Rigged: Exposing the Largest Financial Fraud in History.”
Well, what if we follow the constitution and any contracts not made with gold and silver(Article 1 section 10) would be null and void. If you want to get rid of the fiat banking system and the fed that should do through trick.
Then abandon the keynsian economic model for the Austrian using gold and silver.
No more wars by adding digits to a fiat money computer screen.
We need to get back to Constitutional basics if we want to make the USA truly great again.
I wish you well.
Thank you, Stuart, excellent post. The way I look at the monetary shift of the 20th Century is that we incrementally changed the money system from the Gold Standard (where gold and silver were money) to the Debt Standard (where to count as money, something must be a debt issued by commercial or central banks, and gold is relegated to the status of an "asset"). It's tough to explain that to people, but once someone understands it, it sure isn't long before they start buying gold and silver.