I’ve been following Judy Shelton online for years. I’m also reading her new book “Good as Gold: How to Unleash the Power of Sound Money.” For decades she’s been articulating a perfectly reasonable monetary policy that works for everyone who works. Here’s her latest interview in Gold Telegraph: The Authentic Judy Shelton: A Maverick Economist Takes on Washington. It’s one of the better interviews recently so I figured I’d do a quick writeup. The content below is drawn from the interview itself, and I also weave in my own comments as well.
Judy Shelton is a serious economic thinker. She’s been arguing forever that money should actually mean something and that it should hold its value over time. In that sense, the average American on the street would surely agree. And she thinks that governments should not be free to just print money at will, which only destroys the property of anyone who must work for a living. It’s utterly immoral what’s been done to us in the name of colonialist policies implemented intentionally like free trade, deindustrialization, outsourcing, endless rehypothecation, constant price inflation, and much more. For the last few decades, official Washington thought Shelton was eccentric at best, but it’s also clear that she’s been a threat to them all long. So, what do we have now? Economic confidence has collapsed throughout the Western world while stable monetary collateral assets like gold, silver, and Bitcoin have hit record highs denominated in every major currency globally. More and more people are finally starting to realize Shelton has been right from the beginning.
How It Started: The Soviet Union
Although she talks about gold constantly, Shelton’s path to sound monetary policy didn’t began with gold but instead started with the collapse of the Soviet Union. Back then she was a post-doctoral fellow at the Hoover Institution studying the internal monetary and financial condition of the USSR. She noticed something that others had missed. The Soviet Communists were running a massive internal budget deficit, financing losing enterprises, and printing money to cover the gap. But because prices were fixed, the inflation didn’t show up as rising costs. The problem, however, was visible as empty shelves, lack of growth and prosperity, and long lines to purchase necessary daily goods.
“I ended up thinking with like a green eyeshade accountant,” she said, “that the country was going bankrupt.” Some of her colleagues at Hoover, disagreed, such as Condoleezza Rice, who was focused on Soviet military capabilities and felt that it would be militarization that would take down the government. Shelton and Rice used to argue about the issue. Shelton stuck to her view that economics would destroy the Soviet Union. She was right. Over time her book at the time, The Coming Soviet Crash, caught the attention of former President Richard Nixon, who reportedly kept rereading it after 1991. He even began sending her handwritten letters, which she displays in her home and showed the audience during the interview with Gold Telegraph. In one letter, Nixon described her as “a star being blessed with both beauty and brain.” Sounds like Nixon.
But what mattered more than Nixon’s flattery was his candor about the monetary system itself. When Shelton told him her next book would be about Bretton Woods, the economic agreement that tied the dollar to gold after World War II until Nixon ended the policy in 1971, he wrote back: “I know very little about monetary policy.” She found that extraordinary because he was the man who ended the system and said so himself. Although a well known expert in foreign policy and geopolitics, Nixon was never skilled in financial matters. What’s interesting is that he felt confident enough to state that directly.
What Was Lost in 1971
Nixon’s August 1971 speech in which he directed the Treasury to “suspend temporarily the convertibility of the dollar into gold” was supposed to be a short-term fix. Others outside the power elite at the time knew differently. However, years later Shelton met former Fed Chair Paul Volcker in 1994 at a conference marking the 50th anniversary of the Bretton Woods agreements, and he largely supported Nixon’s policy. Volcker said he thought they might need to reprice gold from $35 to perhaps $38 or $40 an ounce, and then reinstate the old system. That’s obviously not what happened.
“Did we essentially trade discipline for flexibility when we ended the gold standard?” Shelton was asked. Her answer was careful and pointed. “Flexibility is kind of a weasel word that can sound good,” she said. “What it really means is the flexibility to not be disciplined, and then that translates into the flexibility to reduce purchasing power, to incur inflation, to debase the currency.” In other words, it was intentional. She invoked James Madison, who argued in the early years of the country’s founding that depreciating the currency is the same as stealing property and that’s unconstitutional. The founders, she said, would be appalled. “Madison was so clear on that. He said a depreciating currency is just like stealing property.” She didn’t mention Hamilton, but you have to think that he would have been equally outraged about how the system he largely created eroded over the generations.
The early republic, she pointed out, treated the mint as the first priority. Jefferson saw a common currency as something that would bind the new country together, strengthen its commerce, and honor the work of its people. When citizens earn money, she argued, that money is property. Inflation expropriates it without due process. It’s theft, basically. They’ve stolen our money. They’ve destroyed our future.
The Nomination Fight: Pundits and the Washington Machine
In 2020, Shelton was nominated by President Trump to the Federal Reserve’s Board of Governors. The confirmation hearing in the Senate that followed was unlike anything she had expected, she said. I remember watching the hearings myself. It was clear that it was a hit job from both Democrats and Republicans to make sure that Shelton didn’t end up on the Federal Reserve. Given the politics in 2020, that result was expected. But I was struck by the obvious ignorance being articulated by the Senators. They just don’t know very much at all and certainly don’t deserve to be seen as leaders of anything.
Things weren’t much better in the financial or general media, though. “I was amazed at the power of pundits who I knew didn’t know as much as I knew about monetary systems and history,” she said. The attacks were personal and ideological. She was called a “gold bug” among other things. Her advocacy for sound money was described as a “dog whistle” to right-wing extremists, a common attack that represents nothing more than idiocy. Senator John Kennedy called her ideas “nutty,” which for him only serves as self reflection. Several other Republicans announced they were concerned. The nomination failed in November 2020 and the broken system continued.
“I had a hard time understanding that the Washington machine, built explicitly to protect politicians’ ever-growing spending demands, quickly closed ranks,” she said. Her family was in the chamber for the hearings. Her mother came from Los Angeles in her nineties. Her husband was quiet and supportive. Everyone knew what was going on.
But she draws a direct line between the failure of her nomination and what followed. The Federal Reserve then unleashed a level of money printing that contributed to the worst inflation in a generation. She didn’t mention COVID during the interview, but that was “scary virus” time as you may recall. Seems shutting down the world and gutting millions of jobs may have had some consequences, eh? By the summer of 2022, inflation was running at 9.3 percent. Federal Reserve Chairman Jerome Powell called it transitory. It wasn’t. And nobody was fired. Nobody resigned. That’s the way it always works for people who hold power.
“Not only did Powell not apologize,” she said, “but he refuses to resign. I think that’s outrageous, and it’s cheap grace to say you take responsibility when nobody gets fired.” Price stability, she noted, is the stated mandate of the Federal Reserve. “We didn’t get price stability. We still don’t have it.”
The Fed’s Footprint and the Case for Reform
Calls for Federal Reserve reform are now coming from the highest levels of the Trump administration, including from Treasury Secretary Scott Bessent. Shelton understands why, although she would go further than most reformers.
“Inflation continues to be a lead issue for people,” she said. But her objection runs deeper than the inflation numbers. She’s troubled by the sheer size of the Fed’s presence in economic life and the way every financial decision is now made in reference to what the Fed might do next with respect to interest rate manipulation.
“We’d have a healthier economic system if people could just take for granted that the money is not going to depreciate, that a unit of account can figure into your planning for your whole future, and that you’re not just trying to keep up constantly with inflation and forced to put your money at risk.” She paused. “I think that would be a much better world.” Of course, she’s right. Her position is supported by people who need to make ends meet on a weekly basis, but certainly not the oligarchs hell bent on using the masses as their own little wage slaves.
As for who owns the Federal Reserve, she was way too careful. The legal structure is genuinely hybrid. There are twelve district reserve banks that are close to the private institutions in their regions. There are seven members of the Board of Governors, appointed by the president and confirmed by the Senate. Together they make up the 19-member Federal Open Market Committee. “It’s a quasi-public, quasi-private institution,” she said. “And that’s the arrangement that’s being tested now” under this second Trump Administration. It’s clear she knows more. It would have been nice to see her cut loose on the ownership issues like others regularly do.
Fort Knox, Treasury Trust Bonds, and a Live Video
One proposal that has attracted growing attention involves the gold held at Fort Knox. The last full audit was conducted in 1953. Shelton thinks an audit is long overdue, and not merely for symbolic reasons.
“There are a lot of Americans who don’t even trust the government to accept that the gold is there,” she said. “I think it’s needed.” But the audit would need to go beyond confirming the physical presence of the gold. It would also need to address whether any of it is encumbered, an issue no one ever talks about.
When asked whether she would support Elon Musk’s idea of a live video tour of Fort Knox, she didn’t hesitate. “I would love it!” she said. Can you imagine such a real time demonstration of reality? What if the vaults are empty? But what if they are overflowing with more gold than previously expected? Either way, it could be shocking to markets around the world and especially to Americans who have watched their life savings evaporate over the last few decades. We’ll never know, though.
But Shelton’s larger goal is to establish that whatever gold is actually in Fort Knox be held as official collateral for what she calls Treasury Trust Bonds, which she describes as long-term government obligations with a gold convertibility feature. The bonds would give holders the option at maturity to redeem the asset either at the nominal dollar value or in a pre-established amount of gold. She believes this kind of financial instrument would be massively popular. She also wants to prevent any future administration from simply selling the gold to capture a temporary windfall profit. Locking the gold reserves in as long term collateral, she argues, prevents exactly that.
The bonds, she believes, could inspire other sovereign nations to act accordingly as well. And the bonds could also become a condition of trade arrangements and a way to address currency manipulation without relying exclusively on tariffs. Shelton, says: “What does your currency do relative to gold, and what does our currency do relative to gold?” If one country depreciates more, that gap should be quantifiable. That, she argues, helps level the global playing field.
The Battle Never Ends
Toward the end of the interview, Shelton was asked about the risks of ongoing poor monetary policy. “I think what’s at risk is this sense of people increasingly [feeling] that they are victims of monetary favoritism, that the Fed maintains policies that increase the inequality of wealth and income, that they reward people who are already wealthy enough to have financial assets.” The people who cannot protect themselves are the people who work for wages, who save in dollars, whose property is quietly depreciated every year through pervasive inflation.
“I think we need a revolution of valuing honest work, honest government, and honest money,” she said. “And by that I mean celebrate people who actually make goods, who produce goods and services, not just people who arbitrage the anomalies of financial markets.” That’s an interesting comment. It clearly reflects the intention of the current Trump government as they implement policies to re-industrialize the United States after so many decades of willful decline.
She was then asked whether she would potentially join Trump’s new Board of Peace, which is focused on economic development as a tool of diplomacy to build global stability. She said she would join if she were invited. And that’s possible under the current administration given their similar positions.
And then, as the interview ended, she offered one last thought. It wasn’t a summary. It was a reminder of what we’re really facing. “The battle itself,” she said, “it never ends.” That’s sobering. It’s a battle. It’s a war. Instead of being passive, we have to actually get active and fight our own leaders to save our lives and build a future for our children. Just saying that feels reprehensible on every level. But that’s reality.
Imagine a world where Shelton’s simple, practical, sound monetary policies had been fully implemented? We’d all be thriving now. Perhaps that’s the problem. We’re not supposed to.