Donald Trump’s allies have floated a radical new economic weapon: gold-backed U.S. Treasury bonds. The idea is to offer investors the option to be repaid in either dollars or a fixed amount of gold. This would give markets a daily scoreboard showing whether the dollar is holding its value or losing it.
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Supporters say the plan would shake up the Federal Reserve’s power and give Americans a tool to protect their wealth against inflation. The concept comes straight from economist Judy Shelton’s book Good as Gold, which outlines how sound money policies could be restored in America.
Give the Market a Choice Between Gold and Dollars
The proposal is simple on the surface. The U.S. Treasury could issue zero-coupon bonds, maturing in five years. But at the end of the term, investors would have a choice: take the payout in dollars or in gold.
For example, if you buy a $1 million bond, you might receive 280 ounces of gold at maturity. If the dollar holds steady, investors might stick with cash. But if the dollar weakens, they’ll take the gold instead. That choice would send a powerful daily message to Washington and Wall Street alike.
Expose the Fed’s Manipulation of the Dollar
This idea is designed to highlight a key frustration: the Fed’s influence over interest rates and the economy. Trump’s backers argue that the central bank keeps trying to manage growth by adjusting rates, instead of just focusing on protecting the value of the dollar.
Supporters say the current system is flawed. They point out that interest rates today don’t reflect real market conditions. A three-month Treasury bill yields 4.3%, but in a truly free market, it might be closer to half that. Gold bonds would pull back the curtain, showing how much Fed policy distorts the cost of borrowing and the health of the economy.
Create Public Pressure through a Visible Signal
Every day, the price of gold bonds would act like a thermometer. If investors suddenly prefer gold over dollars, that’s a warning sign. It means trust in the dollar is falling and Washington would be forced to take action.
If the dollar weakens, Uncle Sam loses gold. That’s a hit the government would feel directly, since it holds 261 million ounces of it. A gold-backed bond would give Americans and global investors a concrete way to track the integrity of the dollar in real time.
Start a Broader Reform of U.S. Monetary Policy
Trump’s allies see this as more than a financial experiment. It’s the opening move in a much larger fight to overhaul how the Fed operates. The ultimate goal is to strip away its ability to manipulate the economy and return to a system where money simply measures value, not controls it.
The gold bond would act like a wedge. It wouldn’t eliminate the Fed overnight, but it would start to shift power away from central planners and back toward market signals. And if this bond gains traction, it could lay the groundwork for a long-term return to some version of a gold standard.
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