How The US Federal Reserve Can Immediately Back The US Dollar With Gold And Hot Have To Buy It/ Mine It.
The reason the US dollar retains any value with all the fiat printing that goes on incessantly is because it is backed by the labor and productivity of the American people. That is a little on the skids recently thanks to the Covid 19 emergency. Oh for the good old days of a Gold Standard backing the dollar with Gold. Well maybe. There actually may not be enough gold mined on earth to back all the US dollars that the US economy requires for liquidity. That is a big problem . Talk of a renewed gold standard actually seems rather silly because gold backed by US work productivity has worked fairly well . For a lot of people a Gold link would be nice and if ever foreign creditors demanded Gold only in payment it might be nice to have the gold standard .
One draw back of gold backing is even a large dominant central bank can run out of reserves. That is what happened after world war 1. China one day might require payment in Gold when it has the dominant position to do so. Another drawback of gold is having to mine it. Mining gold is a wasteful enterprise. You spend big money mostly on energy resources used for mining and smelting and transporting and then on security only to lock it in a vault to sit there doing nothing till it gets moved and re-secured again. When Diesel is burned to grind down mountains where most gold newly mined comes from today it takes tons of material for every ounce produced and that uses up costly fuel . It does give us some economic activity but it is a bit like going to war and wasting lives. Burning fuel to mine the stuff is almost as bad as mining bitcoins in the unnecessary waste. We drive up fuel costs by mining gold if we need it badly just to settle accounts. There are several better ways.
The alternatives that work are actually both physical gold but they have to be either mined and not mined. For mined gold it can be possible now for ordinary people to have a federal reserve deposit scheme. People and banks can deposit gold in an etf like vault but unlike the average shareowner be able to go to the bank and receive gold bars equal to gold bars on deposit or just to pledge them in cyber space . The deposit of gold could earn interest as it does not do stored in a safe deposit vault or under the bed. The federal reserve can standardize a new unit system in return for the deposited gold.
As for Unmined gold this is where the real benefits will come from . The United States has a lot of properties that have major proven unmined gold reserves . These can just stay in the ground and be put on deposit for some minimal interest. So rather than wasting energy and effort mining we use the earth as the new gold vault. And it does not just have to be Gold. Other mineral deposits unmined proven reserves in the ground can also be deposited and The USA government actually owns some of the largest reserves in the world. The US government also owns the most timber that can remain uncut and water resources including fresh water in the great lakes and also electric power potential above dams.
Owning a gold mine is expensive. No one sells a real gold mine but if they can lend the proven reserves , This solves various environmental problems . Eventually an asteroid will be towed to earth orbit and mined with infinite gold and platinum and we can pave the streets with it instead of using asphalt but till then we can back the reserve currency of the USA with real gold , not mine it and also have full faith and credit from labor productivity as we have now. What would someone withdrawing gold get when they did? paper saying they own x amount of the reserve value of the gold in unmined mines.....people buy this kind of stuff all the time on exchanges.