Gold Is Signaling a Monetary Reset in 2026 | Judy Shelton
Summary
Gold: The guest frames gold's near-record price as a signal of dissatisfaction with current monetary arrangements and increased central bank buying.
Gold-backed Bonds: Strong advocacy for a 50-year, gold-backed US Treasury bond, arguing it would lower borrowing costs, signal fiscal discipline, and attract global demand.
Sound Money: Proposal positions a return to discipline via gold linkage as a way to restore trust, including auditing Fort Knox and revaluing gold to market on the government's balance sheet.
De-dollarization: Discussion of BRICS efforts to reduce reliance on the US dollar, currency volatility (CAD, MXN, BRL), and how a gold link could stabilize trade and reinforce dollar leadership.
Policy Timing: Suggests a July 4, 2026 issuance tied to the US 250th anniversary to underscore long-term commitment and strengthen international monetary credibility.
Federal Reserve: Critiques administered rates and balance-sheet policies, preferring supply-side growth and market discipline over central planning and restrictive rate regimes.
Historical Context: References Bretton Woods, Nixon's gold window closure, and Volcker's views to argue for rule-based monetary integrity.
Tickers: No specific public company tickers were pitched or recommended during the discussion.
Transcript
Gold has kicked off 2026, trading near all-time high levels. The question is now, is it signal or is it noise? Are we closer to a monetary reform or are we further away from it? Is it just flows of funds that are pushing gold higher or are we really seeing a change in the monetary system? I've invited a brilliant guest to join me to discuss this today. Her name is Judy Shelton. She's a former adviser to the Trump administration. She's a former uh, you know, adviser to the US Treasury Department. And I'm really looking forward to hearing from her because we have the 250th anniversary of the US coming up and I feel like on July 4th maybe there might be an announcement about a goldbacked bond as well. So really curious to get her take on all of this and what the gold price means in that concept context. But a before I switch over, happy new year to all our viewers and b hit that like and subscribe button. It helps us out tremendously because our goal is to reach 100,000 subscribers by the end of Q1. And I think with your support, we can achieve that. Now, uh, let me introduce my guest here, Judy. It is a great pleasure to welcome you back on the program. Happy New Year. It's good to see you again. >> Thank you. Great to see you. I appreciate your inviting me. >> Absolutely. Yeah, Judy, you're a perfect guest to discuss really what is happening in the gold price and connected with the monetary system that we're seeing crumble in front of our own eyes here. And maybe that's the opening question as well. $4,500 gold per ounce, is it signal? Is it noise? How close are we to a monetary reset here? >> Well, I think it signals something um a dissatisfaction among individuals with existing monetary arrangements. We we already know that voters really don't like inflation, but I think it also shows that central banks are purchasing gold. I recall um at one point during my nomination process to be a Fed governor, there was an an article in the Washington Post sort of dismissing me or anyone who had mentioned gold in the context of of um monetary policy or what central banks might be doing. And uh I sent an email to Alan Greenspan at the time saying there seems to be a certain hysterical antagonism against the gold standard which was his famous opening line from a paper he wrote in the 60s about that. And he emailed back he said if gold is such a worthless metal why does the US government and all major governments hold so much of it? So there you kind of have it from someone who who has been in the arena really a legendary central banker who thinks that there's a very legitimate connection between gold as a a monetary bull work for international monetary integrity let alone stability. >> Absolutely like gold is in the headlines everywhere across the globe. The question now is like is it just speculation, is it just hype? Or are you hearing and seeing proper monetary regime change? Are you seeing discussions pop up about this? >> You know, um, Robert Mandell is is someone I I look up to. I mean, he won the Nobel Prize in 1999 for talking about international monetary systems. And uh I know Bob would say that the structure of international monetary arrangements is predominantly determined by the configuration of power among the big players around the world. And so I think the US is is obviously competing with China but we are dominant not just because we have the world's largest official gold holdings but um because the dollar is the the dominant reserve currency. So you have to first say is it in the US interest to um maintain the status quo or to seek new international monetary arrangements. I think we've already witnessed that it matters very much to President Trump who is clearly calling the shots because we are a military power as well that countries do not seek alternative currencies. He he posted on truth social back in July that he considered it anti-American when Brazil hosted a conference of the BRICS nations because they seek to displace the dollar from its primary role. That doesn't mean that the US is is pushing for any kind of dollarization. And and there you can see quite a contrast. We know that the European Union over decades forged monetary union precisely to bring about economic integration and for regional security. But the US has been kind of of two minds. We see that we we don't want our neighbors to use other currencies and particularly we don't want them to switch to the yuan, China's currency. And yet we're not really pushing the idea of dollarization. >> The dollar is an interesting topic in that debate of course because you you propose a goldbacked bond for example. The question is like does it undermine the US dollar perhaps when when you announce something that is goldbacked cuz well it's not dollarbacked anymore. It's goldbacked now which we believe is potentially the better asset. Um so how does that fit together? The ddollarization trend versus having gold maybe partially backing your currency or your financial instruments here. Well, I think it would be clear that if the US were to offer a gold back treasury bond, it's out of strength, not out of weakness, because the dollar is already the number one reserve asset held by central banks. Number two is gold. It has displaced the euro. So, we have the number one and two top positions. we almost have a monopoly on um dictating what the monetary unit is for world trade because it's the currency we issue our fiat currency and the fact that we have the largest gold reserves. So, I think that if we combine those, that would be a way to tell the world that we are working toward sound money. That means we're we're going to tackle our fiscal problems, which everyone admits are unsustainable, but no one's doing much about putting us on a sustainable path. I think that if we issued a 50-year bond backed in gold, we'd be putting our our gold where our money is instead of just our money where our mouth is. I I think that it would be a really strong signal that we believe in a level international playing field. And we could demand that other countries who want to be our trade partners likewise establish some kind of link between their currencies and gold so that we don't have these girrations that that undermine the the trading relationship. I noticed that um if you look at the three prominent currencies in the western hemisphere, the Canadian dollar, the Mexican peso, and the Brazilian realale, they all in the last five years have moved 30% in terms of their their highest rate against the dollar and their lowest rate against the dollar. And Paul Vulker, another legendary central banker, always said that that just that just puts the lie to free trade. You really can't have legitimate trade or know where to invest when you have gyrating currencies. >> No, absolutely. Like the question is, and we discussed that last time as well, is a question of trust. There's an erosion of trust of course in the US dollar. We're seeing it. Debt is rising like you would not believe, but there's also a trust issue whether the US actually has the gold. Like, how would you address that? I think we talked about this last time, but it's really important to bring that up again, Judy. the the obvious way to address it and by far the most impactful is to have President Trump, whether or not he includes Elon Musk with him, both both gentlemen have spoken of this, walk through Fort Knox and then have an official audit taken, that the gold is not only there, but that there are no incumbrances. And um I think that would be the perfect way to set up issuing a gold back bond. first to affirm that we do indeed have it and it would be very dramatic. It would capture the public attention and I think highlight that um for so long gold was part of our our monetary integrity and now we're carrying the gold we we own at such a low value. I mean $42 per ounce. So you have something like a hundred times I mean that the windfall profit if we could find a way by issuing goldback bonds of capturing the difference between that official rate at which we're carrying it the book value for a total of 11 billion compared to the 1.2 trillion that it's worth at market value. That would be a huge boon and maybe the beginning of tackling those fiscal imbalances. What interest rate would you put on that that bond? Like what the mark or would the market expect the interest rate to be for a bond like that? >> Well, I think the market would end up paying such a premium for a a gold back treasury bond. Not just because it's it's sort of the novelty of it. Although I I've run into many people that's that's all they remember about anything I've ever said on monetary policy who say, "Oh, I would buy those for every one of my grandkids." Um, I think that there would be a premium because people would would bid up the price and of course that brings the interest rate way down. I think it would be the cheapest way for the US government for the treasury to borrow money and uh it would really be a matter of people a you have to assume they would have the confidence that it will be paid off. Uh you're going to lose um the value of their willingness to pay a premium unless you can prove that that we're really setting aside as official collateral the gold holdings backing those treasury issuance. There can be no doubt that they will be paid off in gold and and the terms would be honored. But assuming that we can do that, that goes to your issue of trust in government. That has to be sacrianked. So that has to be legally assured. But assuming you can do that, then it's a matter I think the interest rate would reflect how much people are willing to pay for effectively a gold futures contract and that depends on their market estimates of the future of gold. So you'd have to look at at the moment that the the bond was available to the public. What are public expectations about the future value of the dollar relative to gold? So it'll be a combination of of um trust in the Fed's judgment and that may that may be looking at interest rates if you believe interest rates determine inflation or it could be a matter of whether you think the the demand for gold will continue and maybe even increase. Staying on that topic, would the US government, the US Treasury in that case have to reerate the value of gold on the balance sheet itself before that could happen? So we can actually attach proper value to it. >> I think so. I think so. I believe the European um central bank carries their gold at market prices. We did it. We we adopted this idea because when Brettton Woods ended in August of 1971 under President Nixon effectively ended, he really just closed the gold window. And um Paul Vulker at the time who advised Nixon to do that and Vulker was uh under secretary for monetary affairs. He went with Nixon to Camp David and but he was cringing as as Nixon gave that speech because Vulker thought it was imperative to stress that this was temporary, that we were going to have a new international monetary system which would basically be resurrecting the old Breton Woods approach where a US dollar was convertible into gold at the rate of $35 per ounce of gold. that would remain the anchor, but you just had to change so that the the rate of convertability would reflect a devalued rate. That is, you'd move it up to 36 or 37. He thought maybe 40 at the worst. But as it turned out over the next um 18 months or so, they the US dollar had been so inflated through the guns and butter policies of big social entitlement programs plus the Vietnam War that um the runaway inflation could not be captured. You couldn't you couldn't come up with a gold price that would stay at the same rate into the future. Too many dollars out there. And so by uh February of 1973 through something called the Smithsonian agreement um they had gone up to $422 as a potential rate of convertability for the US dollar in terms of gold and they stopped and said that's it. And then that became the what we call the statutory price. So that is the book value price that we carry it at. And I'm saying I don't see why we couldn't mark it up to market value, especially since we're using it officially as collateral. And uh and and so you want to be honest and saying what the collateral is worth backing this bond, which would be an official responsibility of the Treasury to honor. So contractually I think it could be part of part of the whole setup but yes you would change it on the balance sheets of of assets owned by the US government. >> How do you think the market would interpret that kind of move? Um revaluing gold definitely higher obviously about 100 times higher or what is it 120 times higher now than it is right now. Um how do you think the market would react to that? >> I I think presentation is important but I would expect them to be excited. I think it would be it should be framed as as a in terms of our 250th anniversary of our existence after the Declaration of Independence. What we would be saying if we issued a 50-year bond is we expect to still be here in another 50 years. We want to be the world's premier country, the the freest, the greatest, the strongest um in um in 50 years at our 300th anniversary. And we recognize that the fiscal path is a real obstacle in the way of of achieving that goal of standing tall in 50 years. So, we're addressing it and um we we realize that that sound money is what our founders had in mind in the constitution in article 1 section 8 when they said that um congress could regulate the money, but they they gave that power in the same sentence as they granted congress the power to define the official weights and measures for this new nation because money was meant to be a measure and it was meant to be unvarying. and Washington and Jefferson and Hamilton thought that the US dollar which was then defined in terms of specific weights of gold and silver would not only be perpetual and defined as that's that's how you define a US dollar but it would become universal. So they sought to make it the most precise weight. And then um the first buildings that the founders sought to to do as part of the new United States government was to set up mints. And and it was never a matter of the government was guar guaranteeing its paper money with with uh gold. It was the mints were set up that you could bring in the gold you held and they would certify through the weight and finess that this was a dollar or $10. This was the new US money unit. So all the government sought to do was to certify a unit that would then become the common currency for these formerly 13 separate states. >> I appreciate that it was insights there, Judy. Um, has the current administration reached out to you recently? Has Scott Besson's given you a call? >> I I honestly wouldn't wouldn't say. Um, I mean, I have some contacts and um and some suggestions of of talking about things, but I wouldn't want to I wouldn't want to go further. Sorry. >> Okay, fair enough. Fair enough. since the betting markets are running hot anyway and about your role with the with the Fed and the Treasury in general. So, um coming to that actually um because I know you've retweeted and you post about it uh jokingly to a degree as well is really the betting odds on like will you become a Fed governor in 2026 or perhaps even the the next Fed chair in 2026. Uh Fed Governor the odds are at 12% which is not too bad. Fed chair is about 2% right now. Where do you put the odds yourself uh aside from the betting market here? >> Well, I'm not seeking it. I have um I've met the Treasury Secretary, but just because I I'm invited to certain functions at at Treasury. I'm I'm a great admirer of our Treasury Secretary and I I had thought he would make an excellent Fed chairman. I that would be he would be my first choice because he has a perspective. That's a course he used to teach at Yale was um um for the last century how there were um how there were booms and busts and the Fed's role in that. So I think he would be great. Um but uh I don't know how would I put my own chances. I don't know. I don't I don't I don't participate in either Poly Market or Khi, but I do enjoy looking sometimes. that I hadn't I'd I'd looked at my chances for Fed chair um but I I hadn't looked at uh Fed governorship although I guess that will come up. Um technically Stephen Myron's term runs out I think on the 31st of this month but I believe he can stay in until there's a replacement and I believe he's doing an excellent job and enjoys it. I just watched him um this morning in fact on Maria Barto Romo and sent him a a quick direct message saying I thought he was very good. Um and uh um I guess I know the other contenders. I like Kevin Hasset. I don't know Kevin Walsh very well, but I do like that he um talks about shrinking the Fed's balance sheet. I would like to see that. I think the only kind of chair it makes sense to have is someone who believes that monetary policy should align with the basic supply side progrowth economic agenda of the Trump administration. I certainly believe that and I think access to capital is what's important. not trying to curtail growth and risk increased unemployment um because the Fed's model says you have to stop economic activity to tame inflation. I think that's a a misguided model and um I hope they're moving away from that. >> Well, the the Fed introduced nonQE. Um we need to come up with a better term by the way, but um what do you make of that? they changed tactics or course a little bit in the last meeting. Uh getting more aggressive now, seeing unemployment is the big, you know, the big demon we need to fight here or um what do you make of that policy change here? >> I think that um probably from President Trump's point of view, whatever it takes, if if the Fed says we're going to lower rates because we're concerned about unemployment, okay, fine. But I don't think that's the reason. I don't think lowering rates is something you do out of out of weakness. I think that it's I mean look at the economy with unbelievable growth numbers, tremendous growth numbers in terms of GDP. So I don't think that um you do it out of out of weakness because if if you had more people working for me that if they have access to capital so you have small business able to borrow and expand plant and equipment which means they're hiring people. So you're increasing the the number of people employed that's how you increase supply and it's all about demand and supply for loanable capital. So while the Fed tries to decrease demand, I really think the answer to fighting inflation is to put out more goods and more services and that brings down price levels because demand is there. Demand is still pretty strong. So I don't buy reducing rates because of economic weakness and and um increasing unemployment. And I think that's important because otherwise if we start having a great year next year, then you're back to that model that says now we take away the punch bowl. And when you have fiscal stimulus constantly, which is now modus operandi for our government, and then you try to get the Fed to restrain it through restrictive interest rates, you're really just empowering government. They're going to pay those rates no matter how high they are. They have to. It's an auction for Treasury securities. The ones it hurts are people in the private sector. So, I don't want a Fed whose main policy entails empowering government at the expense of the private sector. That's what we need to get away from. >> Yeah. Like how dire is the economic situation in the US in general? You just mentioned it like it's economic growth is present. The consumer is spending money. Doesn't feel like the consumer is hurting too badly. Of course, if you look under the hood, there are certain cracks appearing. Obviously, I think we're all aware of that. But like, is the gu is the Fed maybe overdoing it? Like you you hinted at it like they're using perhaps unemployment as a scapegoat and maybe as an excuse to lower rates. Is it maybe political pressure that they have to do that? >> Well, as I say, they may as an excuse the political pressure is surely going to be to lower rates. I mean, even even Chair Pal who resisted President Trump for so long and kept insisting that we would have tariff-caused inflation now seems kind of weary and and wants to have at least one more rate cut um and then get out. Of course, we don't know. Chair Pal is still playing it rather koi. when you talk about whether you have um any disruptive effects in monetary policy or it's being politicized, I would say the primary political move is by Chair Powell in not saying definitively whether or not he will leave in May. It would be so easy for him to say like almost every other Fed chair, when my four-year term is over, I will step down. Instead, he's he's leaving that possibility that he can technically stay another 20 months as Fed governor because those terms go for 14 years and he would have that much longer left to him. And in that role, then you would have a situation where the Federal Open Market Committee, which is the committee that establishes um monetary policy and decides what the interest rate should be, um they could actually elect Powell to be the chairman of that committee, even if you had an alternative official chairman of the Fed who went through the Senate approval process and was basically appointed by by President Trump. So those kinds of games should just be eliminated. But I only know of one Fed chair who didn't leave the Fed when his term ended as chair, and that would be Mariner Eckles. He stayed on as a governor. So we'll see what Pal does, but um hopefully he'll leave. [laughter] >> No, I think for 180K I I would I'd be out there as soon as I could to be honest. You know, I'm not sure that's worth it. I'm not sure. >> Is he having fun? You don't think he's having fun? I don't know. >> I'm not sure. Sometimes he looks quite stressed on that podium. So, >> um, yeah. No, it's a I think it's changing like the mood. Like it really depends. I I'm I'm not sure I'd stay on just for the trouble. It'd give me ulcers quite honestly. I'm not sure I'd enjoy it. So, but maybe Judy, stepping way back, if you were to design the monetary system in the US right now from scratch, would you even include a Fed? In an ideal world, I would say no. Um, the most I believe in free markets versus fixed prices. I don't think it it makes any more sense for the Fed to seek to manage the economy than than it did for ghost plan in the old Soviet Union to seek to manage the economy. That is central planning. That's anathema to free markets and believing in in that free markets deliver optimal economic outcomes and overall a much higher level of prosperity because they permit innovation. And I will always take the private sector over the government in terms of being productive and innovative and and delivering better economic results. So, um, I would say no. The most important price in a free market economy is the price of loanable capital because we're talking about capitalism. And um, and so you should not have central planners fixing that price. And it's a particularly offensive since the Fed doesn't do it the oldfashioned way. At least under Paul Vulker. um the Fed had to interact with financial markets in that um the Fed could only try to affect the money supply by buying or selling treasuries that would influence the level of reserves because in those days when Vulker was fighting inflation, banks had a reserve requirement. So depending on the amount of reserves in the system, you could raise or lower the overnight rate because banks could borrow overnight from banks that had surplus reserves to banks who needed reserves to meet the requirement. We don't have that now. The Fed is uses what they call administered rates, which sounds very Soviet because it really is by dictat. The only interest rate the Fed sets is how much interest they pay to commercial banks to leave money sitting in cash at the Fed financing nothing. They basically after 2008 and and largecale asset purchases like you say QE under Bernenki, they purchased trillions in treasury securities and and ratcheted up the level of reserves sitting at the Fed so high, but at the same time they began paying interest on those reserves. And that has become a way for the Fed to to facilitate and accommodate the fiscal deficit spending and yet then try to insulate itself from criticism by keeping that that monetization of debt from entering the real economy and causing inflation by creating the excess money which they literally do out of thin air just with a keystroke is how they pay for the securities they high from banks. So the Fed coerces banks not to put that money to work in the real economy by paying high interest rates on that money. So I would prefer not to have any kind of mechanism along those lines, any kind of institution. I will say and this is very Hamiltonian of me. My Jefferson side says don't have a national bank. Don't have a central bank. it can be abused and exploited and governments will inevitably cave to doing that. But Hamilton argued that there are efficiencies and it really means kind of in emergencies and then we get into the lender of last resort function. um the Fed's ability to do what it can do. It's maybe constitutionally dubious, but Congress allows it and um maybe we as a nation allow it because in the event of a of an emergency, whether it was 2008 where I think that was an emergency, I don't know who was more responsible for it than the Federal Reserve, but um COVID um a geopolitical exogenous shock, or all of these things. Do we want a lender of last resort to just open the floodgates and provide so much liquidity that it can stave off panic and when markets just freeze up? And then I think the question becomes all right do you want an institution that can deploy the airbags just before a crash maybe to mitigate injury but it's very important you have to quickly then get rid of the airbag so you can see through the windshield again so you can see over the dashboard and get that car back on the road and that road should then have as its determinance free market mechanisms that that go back to what we know brings about the most productive economic outcomes. >> Yeah, I think the car is spending a long time in the shop right now. So >> while the Fed seems to enjoy the power of managing this dynamic huge economy and I would rather have I mean that's why I would talk about gold standards or the Breton Woods system when you have automaticity when you have discipline in a system and especially the classical international gold standard um in a way it was better than the Breton Woods system because it was so organic. It was the the players, the actual agents within an economy, meaning everyone participating in an economy. Anyone could decide at what point they thought things were getting frothy. Now, you're relying on the judgment of the people who make up the market. And if they thought things were getting frothy, they could always cash out of paper money into the dollar into gold. Sorry. Yeah. >> Into gold. Absolutely. Judy, very last question. July 4th is coming up here, 250 50th anniversary. Given the context of what we've just discussed, should we brace for anything exciting? Should we expect big fireworks and surprises here from the monetary? >> I'm pushing I'm pushing for it. Um, and there are people who matter, who are aware. I was very happy when the Wall Street Journal ran my piece calling precisely for a gold back Treasury security to be issued on July 4th, 2026. Um, that was circulated at high levels. I I can't say. I I I would like to think that there's a chance, but I I don't know. I won't be the decider. >> No, absolutely. No, I really appreciate your cander here, Judy. Much appreciated. Of course, we can't influence the betting markets in any direction, although it'd be always fun to to watch the the percentages just shift perhaps. So, much appreciate your insights, Jud is is great way to chat with you as always. Um, where can we send our audience uh to to follow your work? Um, you have an exhandle, I know. So, where can we send them? >> Uh, my exhandle is uh at Judy Shell. Um but I think my works are probably best accumulated um at the website for the independent institute and they have archived my articles and um I usually post um video appearances and podcasts and newscasts and um and things I find interesting on X. But but to have a easily cataloged approach uh where you could find something probably um googling or looking looking for the specific articles um at the independent institute or you can usually pull up the most recent dozen or so if you put in my name and put in Wall Street Journal then you can find the most recent pieces. >> Awesome. Judy, we're obviously rooting for you here at Sore Financially. We understand your approach fully and support it. Thank you so much for joining us. Really appreciate your time. Happy New Year again. All the best for you in 2026. Can't wait to catch up with you. Um hopefully before July 4th, we'll see if we can get you back on and to see where we stand. Maybe there is a bit of movement in the discussion that we just had. Maybe there is a path to a gulp back bond uh visible by the time we catch up again. So it' be great to see to see and speak with you again. So thank you so much, Judy. >> I look forward to >> everybody else. Thank you so much for tuning in. Happy to new year again to you as well. much much appreciate your support here on the channel. Let us know what do you think of a goldbacked convertible or goldbacked bond in general 50 years. Should it be 50 years? Should it be 30 years? Should be 100 years? Let let us know down below. Really want to hear from you uh because your feedback really means a lot to us. We read the comments and we try to include them into our conversations. I've posted a a poll here on X actually this morning asking for your input and questions. I hope we address those as well. So, keep keep a lookout for those. And if you haven't done so, hit that like and subscribe button. It is our goal to reach 100,000 subscribers at the end of Q1. Really appreciate your support of doing that with us. Much appreciate you watching. Thank you so much. Health and wealth. Take care out there.
Gold Is Signaling a Monetary Reset in 2026 | Judy Shelton
Summary
Transcript
Gold has kicked off 2026, trading near all-time high levels. The question is now, is it signal or is it noise? Are we closer to a monetary reform or are we further away from it? Is it just flows of funds that are pushing gold higher or are we really seeing a change in the monetary system? I've invited a brilliant guest to join me to discuss this today. Her name is Judy Shelton. She's a former adviser to the Trump administration. She's a former uh, you know, adviser to the US Treasury Department. And I'm really looking forward to hearing from her because we have the 250th anniversary of the US coming up and I feel like on July 4th maybe there might be an announcement about a goldbacked bond as well. So really curious to get her take on all of this and what the gold price means in that concept context. But a before I switch over, happy new year to all our viewers and b hit that like and subscribe button. It helps us out tremendously because our goal is to reach 100,000 subscribers by the end of Q1. And I think with your support, we can achieve that. Now, uh, let me introduce my guest here, Judy. It is a great pleasure to welcome you back on the program. Happy New Year. It's good to see you again. >> Thank you. Great to see you. I appreciate your inviting me. >> Absolutely. Yeah, Judy, you're a perfect guest to discuss really what is happening in the gold price and connected with the monetary system that we're seeing crumble in front of our own eyes here. And maybe that's the opening question as well. $4,500 gold per ounce, is it signal? Is it noise? How close are we to a monetary reset here? >> Well, I think it signals something um a dissatisfaction among individuals with existing monetary arrangements. We we already know that voters really don't like inflation, but I think it also shows that central banks are purchasing gold. I recall um at one point during my nomination process to be a Fed governor, there was an an article in the Washington Post sort of dismissing me or anyone who had mentioned gold in the context of of um monetary policy or what central banks might be doing. And uh I sent an email to Alan Greenspan at the time saying there seems to be a certain hysterical antagonism against the gold standard which was his famous opening line from a paper he wrote in the 60s about that. And he emailed back he said if gold is such a worthless metal why does the US government and all major governments hold so much of it? So there you kind of have it from someone who who has been in the arena really a legendary central banker who thinks that there's a very legitimate connection between gold as a a monetary bull work for international monetary integrity let alone stability. >> Absolutely like gold is in the headlines everywhere across the globe. The question now is like is it just speculation, is it just hype? Or are you hearing and seeing proper monetary regime change? Are you seeing discussions pop up about this? >> You know, um, Robert Mandell is is someone I I look up to. I mean, he won the Nobel Prize in 1999 for talking about international monetary systems. And uh I know Bob would say that the structure of international monetary arrangements is predominantly determined by the configuration of power among the big players around the world. And so I think the US is is obviously competing with China but we are dominant not just because we have the world's largest official gold holdings but um because the dollar is the the dominant reserve currency. So you have to first say is it in the US interest to um maintain the status quo or to seek new international monetary arrangements. I think we've already witnessed that it matters very much to President Trump who is clearly calling the shots because we are a military power as well that countries do not seek alternative currencies. He he posted on truth social back in July that he considered it anti-American when Brazil hosted a conference of the BRICS nations because they seek to displace the dollar from its primary role. That doesn't mean that the US is is pushing for any kind of dollarization. And and there you can see quite a contrast. We know that the European Union over decades forged monetary union precisely to bring about economic integration and for regional security. But the US has been kind of of two minds. We see that we we don't want our neighbors to use other currencies and particularly we don't want them to switch to the yuan, China's currency. And yet we're not really pushing the idea of dollarization. >> The dollar is an interesting topic in that debate of course because you you propose a goldbacked bond for example. The question is like does it undermine the US dollar perhaps when when you announce something that is goldbacked cuz well it's not dollarbacked anymore. It's goldbacked now which we believe is potentially the better asset. Um so how does that fit together? The ddollarization trend versus having gold maybe partially backing your currency or your financial instruments here. Well, I think it would be clear that if the US were to offer a gold back treasury bond, it's out of strength, not out of weakness, because the dollar is already the number one reserve asset held by central banks. Number two is gold. It has displaced the euro. So, we have the number one and two top positions. we almost have a monopoly on um dictating what the monetary unit is for world trade because it's the currency we issue our fiat currency and the fact that we have the largest gold reserves. So, I think that if we combine those, that would be a way to tell the world that we are working toward sound money. That means we're we're going to tackle our fiscal problems, which everyone admits are unsustainable, but no one's doing much about putting us on a sustainable path. I think that if we issued a 50-year bond backed in gold, we'd be putting our our gold where our money is instead of just our money where our mouth is. I I think that it would be a really strong signal that we believe in a level international playing field. And we could demand that other countries who want to be our trade partners likewise establish some kind of link between their currencies and gold so that we don't have these girrations that that undermine the the trading relationship. I noticed that um if you look at the three prominent currencies in the western hemisphere, the Canadian dollar, the Mexican peso, and the Brazilian realale, they all in the last five years have moved 30% in terms of their their highest rate against the dollar and their lowest rate against the dollar. And Paul Vulker, another legendary central banker, always said that that just that just puts the lie to free trade. You really can't have legitimate trade or know where to invest when you have gyrating currencies. >> No, absolutely. Like the question is, and we discussed that last time as well, is a question of trust. There's an erosion of trust of course in the US dollar. We're seeing it. Debt is rising like you would not believe, but there's also a trust issue whether the US actually has the gold. Like, how would you address that? I think we talked about this last time, but it's really important to bring that up again, Judy. the the obvious way to address it and by far the most impactful is to have President Trump, whether or not he includes Elon Musk with him, both both gentlemen have spoken of this, walk through Fort Knox and then have an official audit taken, that the gold is not only there, but that there are no incumbrances. And um I think that would be the perfect way to set up issuing a gold back bond. first to affirm that we do indeed have it and it would be very dramatic. It would capture the public attention and I think highlight that um for so long gold was part of our our monetary integrity and now we're carrying the gold we we own at such a low value. I mean $42 per ounce. So you have something like a hundred times I mean that the windfall profit if we could find a way by issuing goldback bonds of capturing the difference between that official rate at which we're carrying it the book value for a total of 11 billion compared to the 1.2 trillion that it's worth at market value. That would be a huge boon and maybe the beginning of tackling those fiscal imbalances. What interest rate would you put on that that bond? Like what the mark or would the market expect the interest rate to be for a bond like that? >> Well, I think the market would end up paying such a premium for a a gold back treasury bond. Not just because it's it's sort of the novelty of it. Although I I've run into many people that's that's all they remember about anything I've ever said on monetary policy who say, "Oh, I would buy those for every one of my grandkids." Um, I think that there would be a premium because people would would bid up the price and of course that brings the interest rate way down. I think it would be the cheapest way for the US government for the treasury to borrow money and uh it would really be a matter of people a you have to assume they would have the confidence that it will be paid off. Uh you're going to lose um the value of their willingness to pay a premium unless you can prove that that we're really setting aside as official collateral the gold holdings backing those treasury issuance. There can be no doubt that they will be paid off in gold and and the terms would be honored. But assuming that we can do that, that goes to your issue of trust in government. That has to be sacrianked. So that has to be legally assured. But assuming you can do that, then it's a matter I think the interest rate would reflect how much people are willing to pay for effectively a gold futures contract and that depends on their market estimates of the future of gold. So you'd have to look at at the moment that the the bond was available to the public. What are public expectations about the future value of the dollar relative to gold? So it'll be a combination of of um trust in the Fed's judgment and that may that may be looking at interest rates if you believe interest rates determine inflation or it could be a matter of whether you think the the demand for gold will continue and maybe even increase. Staying on that topic, would the US government, the US Treasury in that case have to reerate the value of gold on the balance sheet itself before that could happen? So we can actually attach proper value to it. >> I think so. I think so. I believe the European um central bank carries their gold at market prices. We did it. We we adopted this idea because when Brettton Woods ended in August of 1971 under President Nixon effectively ended, he really just closed the gold window. And um Paul Vulker at the time who advised Nixon to do that and Vulker was uh under secretary for monetary affairs. He went with Nixon to Camp David and but he was cringing as as Nixon gave that speech because Vulker thought it was imperative to stress that this was temporary, that we were going to have a new international monetary system which would basically be resurrecting the old Breton Woods approach where a US dollar was convertible into gold at the rate of $35 per ounce of gold. that would remain the anchor, but you just had to change so that the the rate of convertability would reflect a devalued rate. That is, you'd move it up to 36 or 37. He thought maybe 40 at the worst. But as it turned out over the next um 18 months or so, they the US dollar had been so inflated through the guns and butter policies of big social entitlement programs plus the Vietnam War that um the runaway inflation could not be captured. You couldn't you couldn't come up with a gold price that would stay at the same rate into the future. Too many dollars out there. And so by uh February of 1973 through something called the Smithsonian agreement um they had gone up to $422 as a potential rate of convertability for the US dollar in terms of gold and they stopped and said that's it. And then that became the what we call the statutory price. So that is the book value price that we carry it at. And I'm saying I don't see why we couldn't mark it up to market value, especially since we're using it officially as collateral. And uh and and so you want to be honest and saying what the collateral is worth backing this bond, which would be an official responsibility of the Treasury to honor. So contractually I think it could be part of part of the whole setup but yes you would change it on the balance sheets of of assets owned by the US government. >> How do you think the market would interpret that kind of move? Um revaluing gold definitely higher obviously about 100 times higher or what is it 120 times higher now than it is right now. Um how do you think the market would react to that? >> I I think presentation is important but I would expect them to be excited. I think it would be it should be framed as as a in terms of our 250th anniversary of our existence after the Declaration of Independence. What we would be saying if we issued a 50-year bond is we expect to still be here in another 50 years. We want to be the world's premier country, the the freest, the greatest, the strongest um in um in 50 years at our 300th anniversary. And we recognize that the fiscal path is a real obstacle in the way of of achieving that goal of standing tall in 50 years. So, we're addressing it and um we we realize that that sound money is what our founders had in mind in the constitution in article 1 section 8 when they said that um congress could regulate the money, but they they gave that power in the same sentence as they granted congress the power to define the official weights and measures for this new nation because money was meant to be a measure and it was meant to be unvarying. and Washington and Jefferson and Hamilton thought that the US dollar which was then defined in terms of specific weights of gold and silver would not only be perpetual and defined as that's that's how you define a US dollar but it would become universal. So they sought to make it the most precise weight. And then um the first buildings that the founders sought to to do as part of the new United States government was to set up mints. And and it was never a matter of the government was guar guaranteeing its paper money with with uh gold. It was the mints were set up that you could bring in the gold you held and they would certify through the weight and finess that this was a dollar or $10. This was the new US money unit. So all the government sought to do was to certify a unit that would then become the common currency for these formerly 13 separate states. >> I appreciate that it was insights there, Judy. Um, has the current administration reached out to you recently? Has Scott Besson's given you a call? >> I I honestly wouldn't wouldn't say. Um, I mean, I have some contacts and um and some suggestions of of talking about things, but I wouldn't want to I wouldn't want to go further. Sorry. >> Okay, fair enough. Fair enough. since the betting markets are running hot anyway and about your role with the with the Fed and the Treasury in general. So, um coming to that actually um because I know you've retweeted and you post about it uh jokingly to a degree as well is really the betting odds on like will you become a Fed governor in 2026 or perhaps even the the next Fed chair in 2026. Uh Fed Governor the odds are at 12% which is not too bad. Fed chair is about 2% right now. Where do you put the odds yourself uh aside from the betting market here? >> Well, I'm not seeking it. I have um I've met the Treasury Secretary, but just because I I'm invited to certain functions at at Treasury. I'm I'm a great admirer of our Treasury Secretary and I I had thought he would make an excellent Fed chairman. I that would be he would be my first choice because he has a perspective. That's a course he used to teach at Yale was um um for the last century how there were um how there were booms and busts and the Fed's role in that. So I think he would be great. Um but uh I don't know how would I put my own chances. I don't know. I don't I don't I don't participate in either Poly Market or Khi, but I do enjoy looking sometimes. that I hadn't I'd I'd looked at my chances for Fed chair um but I I hadn't looked at uh Fed governorship although I guess that will come up. Um technically Stephen Myron's term runs out I think on the 31st of this month but I believe he can stay in until there's a replacement and I believe he's doing an excellent job and enjoys it. I just watched him um this morning in fact on Maria Barto Romo and sent him a a quick direct message saying I thought he was very good. Um and uh um I guess I know the other contenders. I like Kevin Hasset. I don't know Kevin Walsh very well, but I do like that he um talks about shrinking the Fed's balance sheet. I would like to see that. I think the only kind of chair it makes sense to have is someone who believes that monetary policy should align with the basic supply side progrowth economic agenda of the Trump administration. I certainly believe that and I think access to capital is what's important. not trying to curtail growth and risk increased unemployment um because the Fed's model says you have to stop economic activity to tame inflation. I think that's a a misguided model and um I hope they're moving away from that. >> Well, the the Fed introduced nonQE. Um we need to come up with a better term by the way, but um what do you make of that? they changed tactics or course a little bit in the last meeting. Uh getting more aggressive now, seeing unemployment is the big, you know, the big demon we need to fight here or um what do you make of that policy change here? >> I think that um probably from President Trump's point of view, whatever it takes, if if the Fed says we're going to lower rates because we're concerned about unemployment, okay, fine. But I don't think that's the reason. I don't think lowering rates is something you do out of out of weakness. I think that it's I mean look at the economy with unbelievable growth numbers, tremendous growth numbers in terms of GDP. So I don't think that um you do it out of out of weakness because if if you had more people working for me that if they have access to capital so you have small business able to borrow and expand plant and equipment which means they're hiring people. So you're increasing the the number of people employed that's how you increase supply and it's all about demand and supply for loanable capital. So while the Fed tries to decrease demand, I really think the answer to fighting inflation is to put out more goods and more services and that brings down price levels because demand is there. Demand is still pretty strong. So I don't buy reducing rates because of economic weakness and and um increasing unemployment. And I think that's important because otherwise if we start having a great year next year, then you're back to that model that says now we take away the punch bowl. And when you have fiscal stimulus constantly, which is now modus operandi for our government, and then you try to get the Fed to restrain it through restrictive interest rates, you're really just empowering government. They're going to pay those rates no matter how high they are. They have to. It's an auction for Treasury securities. The ones it hurts are people in the private sector. So, I don't want a Fed whose main policy entails empowering government at the expense of the private sector. That's what we need to get away from. >> Yeah. Like how dire is the economic situation in the US in general? You just mentioned it like it's economic growth is present. The consumer is spending money. Doesn't feel like the consumer is hurting too badly. Of course, if you look under the hood, there are certain cracks appearing. Obviously, I think we're all aware of that. But like, is the gu is the Fed maybe overdoing it? Like you you hinted at it like they're using perhaps unemployment as a scapegoat and maybe as an excuse to lower rates. Is it maybe political pressure that they have to do that? >> Well, as I say, they may as an excuse the political pressure is surely going to be to lower rates. I mean, even even Chair Pal who resisted President Trump for so long and kept insisting that we would have tariff-caused inflation now seems kind of weary and and wants to have at least one more rate cut um and then get out. Of course, we don't know. Chair Pal is still playing it rather koi. when you talk about whether you have um any disruptive effects in monetary policy or it's being politicized, I would say the primary political move is by Chair Powell in not saying definitively whether or not he will leave in May. It would be so easy for him to say like almost every other Fed chair, when my four-year term is over, I will step down. Instead, he's he's leaving that possibility that he can technically stay another 20 months as Fed governor because those terms go for 14 years and he would have that much longer left to him. And in that role, then you would have a situation where the Federal Open Market Committee, which is the committee that establishes um monetary policy and decides what the interest rate should be, um they could actually elect Powell to be the chairman of that committee, even if you had an alternative official chairman of the Fed who went through the Senate approval process and was basically appointed by by President Trump. So those kinds of games should just be eliminated. But I only know of one Fed chair who didn't leave the Fed when his term ended as chair, and that would be Mariner Eckles. He stayed on as a governor. So we'll see what Pal does, but um hopefully he'll leave. [laughter] >> No, I think for 180K I I would I'd be out there as soon as I could to be honest. You know, I'm not sure that's worth it. I'm not sure. >> Is he having fun? You don't think he's having fun? I don't know. >> I'm not sure. Sometimes he looks quite stressed on that podium. So, >> um, yeah. No, it's a I think it's changing like the mood. Like it really depends. I I'm I'm not sure I'd stay on just for the trouble. It'd give me ulcers quite honestly. I'm not sure I'd enjoy it. So, but maybe Judy, stepping way back, if you were to design the monetary system in the US right now from scratch, would you even include a Fed? In an ideal world, I would say no. Um, the most I believe in free markets versus fixed prices. I don't think it it makes any more sense for the Fed to seek to manage the economy than than it did for ghost plan in the old Soviet Union to seek to manage the economy. That is central planning. That's anathema to free markets and believing in in that free markets deliver optimal economic outcomes and overall a much higher level of prosperity because they permit innovation. And I will always take the private sector over the government in terms of being productive and innovative and and delivering better economic results. So, um, I would say no. The most important price in a free market economy is the price of loanable capital because we're talking about capitalism. And um, and so you should not have central planners fixing that price. And it's a particularly offensive since the Fed doesn't do it the oldfashioned way. At least under Paul Vulker. um the Fed had to interact with financial markets in that um the Fed could only try to affect the money supply by buying or selling treasuries that would influence the level of reserves because in those days when Vulker was fighting inflation, banks had a reserve requirement. So depending on the amount of reserves in the system, you could raise or lower the overnight rate because banks could borrow overnight from banks that had surplus reserves to banks who needed reserves to meet the requirement. We don't have that now. The Fed is uses what they call administered rates, which sounds very Soviet because it really is by dictat. The only interest rate the Fed sets is how much interest they pay to commercial banks to leave money sitting in cash at the Fed financing nothing. They basically after 2008 and and largecale asset purchases like you say QE under Bernenki, they purchased trillions in treasury securities and and ratcheted up the level of reserves sitting at the Fed so high, but at the same time they began paying interest on those reserves. And that has become a way for the Fed to to facilitate and accommodate the fiscal deficit spending and yet then try to insulate itself from criticism by keeping that that monetization of debt from entering the real economy and causing inflation by creating the excess money which they literally do out of thin air just with a keystroke is how they pay for the securities they high from banks. So the Fed coerces banks not to put that money to work in the real economy by paying high interest rates on that money. So I would prefer not to have any kind of mechanism along those lines, any kind of institution. I will say and this is very Hamiltonian of me. My Jefferson side says don't have a national bank. Don't have a central bank. it can be abused and exploited and governments will inevitably cave to doing that. But Hamilton argued that there are efficiencies and it really means kind of in emergencies and then we get into the lender of last resort function. um the Fed's ability to do what it can do. It's maybe constitutionally dubious, but Congress allows it and um maybe we as a nation allow it because in the event of a of an emergency, whether it was 2008 where I think that was an emergency, I don't know who was more responsible for it than the Federal Reserve, but um COVID um a geopolitical exogenous shock, or all of these things. Do we want a lender of last resort to just open the floodgates and provide so much liquidity that it can stave off panic and when markets just freeze up? And then I think the question becomes all right do you want an institution that can deploy the airbags just before a crash maybe to mitigate injury but it's very important you have to quickly then get rid of the airbag so you can see through the windshield again so you can see over the dashboard and get that car back on the road and that road should then have as its determinance free market mechanisms that that go back to what we know brings about the most productive economic outcomes. >> Yeah, I think the car is spending a long time in the shop right now. So >> while the Fed seems to enjoy the power of managing this dynamic huge economy and I would rather have I mean that's why I would talk about gold standards or the Breton Woods system when you have automaticity when you have discipline in a system and especially the classical international gold standard um in a way it was better than the Breton Woods system because it was so organic. It was the the players, the actual agents within an economy, meaning everyone participating in an economy. Anyone could decide at what point they thought things were getting frothy. Now, you're relying on the judgment of the people who make up the market. And if they thought things were getting frothy, they could always cash out of paper money into the dollar into gold. Sorry. Yeah. >> Into gold. Absolutely. Judy, very last question. July 4th is coming up here, 250 50th anniversary. Given the context of what we've just discussed, should we brace for anything exciting? Should we expect big fireworks and surprises here from the monetary? >> I'm pushing I'm pushing for it. Um, and there are people who matter, who are aware. I was very happy when the Wall Street Journal ran my piece calling precisely for a gold back Treasury security to be issued on July 4th, 2026. Um, that was circulated at high levels. I I can't say. I I I would like to think that there's a chance, but I I don't know. I won't be the decider. >> No, absolutely. No, I really appreciate your cander here, Judy. Much appreciated. Of course, we can't influence the betting markets in any direction, although it'd be always fun to to watch the the percentages just shift perhaps. So, much appreciate your insights, Jud is is great way to chat with you as always. Um, where can we send our audience uh to to follow your work? Um, you have an exhandle, I know. So, where can we send them? >> Uh, my exhandle is uh at Judy Shell. Um but I think my works are probably best accumulated um at the website for the independent institute and they have archived my articles and um I usually post um video appearances and podcasts and newscasts and um and things I find interesting on X. But but to have a easily cataloged approach uh where you could find something probably um googling or looking looking for the specific articles um at the independent institute or you can usually pull up the most recent dozen or so if you put in my name and put in Wall Street Journal then you can find the most recent pieces. >> Awesome. Judy, we're obviously rooting for you here at Sore Financially. We understand your approach fully and support it. Thank you so much for joining us. Really appreciate your time. Happy New Year again. All the best for you in 2026. Can't wait to catch up with you. Um hopefully before July 4th, we'll see if we can get you back on and to see where we stand. Maybe there is a bit of movement in the discussion that we just had. Maybe there is a path to a gulp back bond uh visible by the time we catch up again. So it' be great to see to see and speak with you again. So thank you so much, Judy. >> I look forward to >> everybody else. Thank you so much for tuning in. Happy to new year again to you as well. much much appreciate your support here on the channel. Let us know what do you think of a goldbacked convertible or goldbacked bond in general 50 years. Should it be 50 years? Should it be 30 years? Should be 100 years? Let let us know down below. Really want to hear from you uh because your feedback really means a lot to us. We read the comments and we try to include them into our conversations. I've posted a a poll here on X actually this morning asking for your input and questions. I hope we address those as well. So, keep keep a lookout for those. And if you haven't done so, hit that like and subscribe button. It is our goal to reach 100,000 subscribers at the end of Q1. Really appreciate your support of doing that with us. Much appreciate you watching. Thank you so much. Health and wealth. Take care out there.