For most of recorded human history gold has been used as money. It is a tangible store of value, a unit of account and medium of exchange. It is durable, fungible, divisible, transportable and essentially has filled the roll of money better than the other items and commodities that have been attempted throughout the millennia. Gold is money.
The US Dollar was introduced by the US Congress in the Coinage Act of 1792. At that time, it was backed by a bi-metallic standard of gold and silver – but if we are pricing in just gold, $20.67 represented one ounce of gold and those dollars could be redeemed for the gold.
The 19th century represented tremendous growth in technology and the average American’s standard of living. But eventually governments are always inefficient and overspend and the US Dollar valuation couldn’t keep a consistent pricing in gold terms. Gold was repriced by FDR to $35 per ounce in 1934. The convertibility of dollars to gold was removed in 1971 by Nixon. Then in 1972, the US Senate repriced gold to $38 from $35 – and again to $42.22 in 1973. The IMF (International Monetary Fund) orchestrated/approved these moves as mandated by the Smithsonian Agreement of 1971.
According to the World Gold Council and the US Treasury the market value of the world’s central bank gold holdings is now larger than their holdings of US Treasuries ($4T vs $3.8T)
The 1971 cessation of the convertibility of US Dollars to gold was an attempt to remove gold from the monetary system and make gold essentially just a commodity. Of course, it was successful by many measures, but most countries and central banks held on to their gold and in 1975 the purchasing of gold for individual investors was legalized again. The price of gold in US dollar – and other paper currencies – has grown about 8% per annum since then.
The blizzard of paper money creation by the Federal Reserve (and other central banks around the world) since 1971 has been jaw-dropping. The simplest representation of the money madness is the $37 Trillion the US government is now in debt – but the profligacy is worse in other parts of the world. It’s a miracle how well the system is holding together…for now…
Strangely, during all these decades of ridiculous financial profligacy of our govt, the official price of the 8133 tons of gold on the Treasury’s books has remained $42.22 per ounce. The market price of gold is more like $3800 per ounce. Now there is a capital gain of about $1 Trillion that isn’t on the books anywhere. That leaves the question – will the book value of gold be adjusted higher? Treasury Secretary Bessent has hinted that gold may be revalued – but then seemingly contradicting that in different settings.
Theoretically, if the Treasury revalues gold higher on their books, they will have a $1 Trillion asset that they can borrow against rather than sell new notes and bonds into a marketplace hasn’t been aggressively buying new issues. Although this would be inflationary, it would support lower interest rates – at least theoretically. We will see if the Treasury makes an adjustment of the gold price on their books. In the meantime, take a look at a chart of the market value of our Treasury’s 8133 tons (261MM ounces) of gold…
The primary driving force of the rise in the price of gold has been foreign central bank buying for the last decade led by China, Russia and India. Over each of the last four years (2025 included,) foreign central bank purchases have totaled more than 1000 tons. That is roughly 30% of annual world gold production. The focus of the world’s monetary system is shifting to gold from the US dollar. Gold exchanges are mushrooming up around the world setting the stage for more of the world’s international trading to be settled in gold rather than in US Dollars.
Although the world’s central banks are making the headlines with their purchases of the precious metal, the buying of gold is not exclusive to central banks. Private investors including insurance companies, pension funds, 401K platforms and simply individual investors around the world have renewed interest in gold as it is being deployed as a capital asset again rather than just a valuable commodity sitting in someone’s safe. That’s right, there is an interest rate on gold (and silver) again as borrowing and lending of the metals is a rapidly expanding new marketplace!
The world’s monetary system is evolving and we are on the cutting edge of that change. Reach out to us if you would like more information on how to earn gold interest on gold holdings…
Regards and good investing,
Greyson Geiler
Market and industry data used in this presentation have been obtained from sources believed to be reliable. However, we have not independently verified such data and make no representation or warranty as to its accuracy or completeness.
Goldrush Yield Fund, LLC is managed by Andorra Capital, LLC, a Registered Investment Advisor. Andorra Capital has a conflict of interest in recommending the Fund to prospective investors. This material is informational only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The Goldrush Yield Fund is an unregistered private placement and is available solely to accredited investors. No securities commission or regulatory authority has approved or disapproved of the Fund, and there is no obligation to provide investment advice. Investing in the Fund involves risks, including the potential loss of principal. Past performance is not indicative of future results. Any forward-looking statements are based on current assumptions and are subject to change. Investors are responsible for conducting their own due diligence. Please review the Private Placement Memorandum (PPM) for detailed risk factors and consult with legal, tax, and investment professionals before considering any investment. For more information, please contact Greyson Geiler at ggeiler@andocap.com