If there is still gold in Fort Knox, will it be distributed to the American people? Fat chance. From George F. Smith at mises.org:
“Economics, in its most elegant form, is the study of cause and effect.”—John Rogers, Voting in Context: A Brief Economic History of American Politics
In 1933, people thought the world was ending and urged government to do whatever it could to relieve the pain of the Depression. In compliance thereof, FDR issued Executive Order 6102 on April 5, 1933 “forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States.”
Note the word, “hoarding”—a word with a negative tinge, suggesting the person hoarding is deliberately restricting supply for personal advantage. (See “The Virtue of Hoarding”). For many it summons the image of an anti-social miser. No one wanted to be branded a miser, especially by a president as beloved as FDR. Hoarders of gold, which was synonymous with owners of gold, were allegedly causing harm, therefore, hoarding had to stop.
What harm did hoarding cause? It was preventing government inflation of the money supply. Inflation would cause prices to rise, which the government thought was a good thing, especially in the current deflationary environment.
FDR commanded Americans to deliver their gold “to a Federal Reserve Bank or a branch or agency thereof or to any member bank of the Federal Reserve System” on or before May 1, 1933. Not exactly a long lead time, but this was an emergency. Civilization’s money since King Croesus of Lydia (modern Turkey) ordered gold coins struck around 550 BC was suddenly no longer doing its job.
