US Treasury just opened the door to a major gold comeback — now America’s fiscal fate could change forever

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Gold just gained something more valuable than another bullish forecast: a voice inside the U.S. Department of the Treasury.

With America's national debt above $40 trillion (1), Secretary of the Treasury Scott Bessent has brought in an economist whose ideas could change what Washington offers investors in exchange for their money.

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Her name is Judy Shelton. And she has spent years developing a proposal that would give buyers of certain government bonds a powerful choice. You can take repayment in dollars — or collect a predetermined amount of gold.

On Oct. 9, the Treasury announced (2) that Shelton would serve as a counselor to Bessent, advising him on currency policy, with a particular focus on evaluating financial conditions in China.

That puts the architect of a gold-linked borrowing proposal inside the department responsible for financing the federal government.

Shelton outlined the mechanics in a 2012 paper (3) published in the Cato Journal, proposing instruments called "Treasury Trust Bonds."

These bonds would pay no periodic interest, and at maturity, holders could choose between a fixed dollar payment and a specified quantity of gold. For investors worried about the dollar losing ground against the metal, that option could make Washington's debt more attractive.

Shelton argued that buyers who expect gold to be worth considerably more than the promised dollar payment — because they "suspect too many dollars will be printed in the meantime" — would pay a substantial premium for that escape hatch.

More recently, Shelton has put a longer horizon on the idea.

In a December 2024 interview, she proposed (4) a 50-year Treasury Trust Bond, giving holders the right to redeem it in gold at maturity. She even proposed that they could be issued on July 4, 2026, so that they would come to maturity on July 4, 2076 — the nation's 300th anniversary.

That didn't happen, but Shelton is still keen on the idea.

"This instrument would literally make the dollar as good as gold," she said.