America's gold fever

Conspiracy theorists believe more than $400 billion of gold is missing from Fort Knox.

President Trump says he will visit Kentucky with Elon Musk to see if the gold is there.

Some economists and historians say this tells us more about the economy in general than security of gold resources.

Today, On Point: America's gold fever.

Harold James, professor of history and international affairs at Princeton University. Official historian of the International Monetary Fund. Author of "Seven Crashes: The Economic Crises That Shaped Globalization."

Stephen Mihm, history professor at the University of Georgia. Author of the Bloomberg article "What’s Fueling America’s Gold Bar Conspiracy.”

Part I

(MONTAGE)

MAN #1: What if I told you the gold that backs America's financial system might not even exist?

MAN #2: Some people believe that some of the gold bars in official reserves are maybe even counterfeit gold-plated bars of tungsten or other metals.

WOMAN #1: The real winner is if it turns out they're not all the gold, there is maybe Moscow and Beijing, because a scandal of this magnitude would serve as the ultimate proof that the U.S. financial leadership has been built on deception.

MAN: Other people believe the U.S. gold has been swapped or loaned out secretly, we want some clarity.

MAN: We wanna know, is the gold real? Is it actually there? And if it is there, is it owned by the United States of America or is it pledged to someone else? 

MEGHNA CHAKRABARTI: Gold fever in the form of fever dream conspiracy theories is back. And it's very online, and it's caught the attention of Donald Trump, president of the United States, a man who's dabbled in a conspiracy theory or two himself in his time, such as questioning the fact that former president Barack Obama was born in the United States.

Last month, President Trump was aboard Air Force One, when he casually mentioned that he isn't sure all the gold stored at Fort Knox is still there. So much as Geraldo Rivera once made a spectacle of cracking open Al Capone's vault.

President Trump says he's going to reveal the truth. He's gonna take matters into his own hands.

DONALD TRUMP: We're gonna go to Fort Knox, the fabled Fort Knox, to make sure the gold is there.

CHAKRABARTI: Or in the parlance of truthers everywhere, Trump is going to do his own research. This isn't the first time the President has suggested that someone has somehow made off with part of more than $425 billion worth of gold stored at Fort Knox.

TRUMP: We're gonna open up the doors. I'm gonna see if we have gold there. We wanna find out. Did anybody steal the gold in Fort Knox?

Fort Knox. You grew up hearing about Fort Knox, you can't get in. You can't even see it. Nobody sees it.

So we're gonna open those doors. We're gonna take a look, and if there's 27 tons of gold, we'll be very happy. I don't know how the hell we're gonna measure it, but that's okay. We wanna see lots of nice, beautiful, shiny gold in Fort Knox. Don't be totally surprised. We opened the door. We'll say, there's nothing here. They stole this too.

CHAKRABARTI: Trump has often asserted that the gold at Fort Knox hasn't been seen in decades.

That is wrong. Because the last visit to Fort Knox happened in Donald Trump's own first administration, Kentucky Senator Mitch McConnell, and then Treasury Secretary Steven Mnuchin visited in 2017. The Treasury Department has actual photographs of Mnuchin and McConnell signing a wall at Fort Knox with a head high stack of gold bars behind them.

And by the way, while we're on the subject, as an aside, the McConnell-Mnuchin visit received some scrutiny from the Treasury Inspector General at the time because the visit just happened to be rescheduled for the exact same day and worked around the exact same minutes as the total solar eclipse of 2017.

Solar protective glasses were provided to the politicians, as was a special brief about the marvels of Eclipse totality. So the people want to know, was the trip about the gold or was it about the sun? What do they not want you to know? I don't know. Do your own research. Okay. Anyway, actually, back to reality.

Sorry, I got ahead of myself there, but back to actual truth. Doug Simmons used to work at Fort Knox, and he's seen the gold with his own eyes. He says, somehow absconding with almost half a trillion worth of gold bars is, well:

DOUG SIMMONS: If someone was to go in there and remove all that ore, it would take a massive operation with a lot of vehicles and someone would've noticed it.

Even Kentucky's former governor, Republican, Matt Bevin has stepped up to defend the security of the vault.

MATT BEVIN: It is so ridiculously secure that it is not possible to sneak anything out of there.

CHAKRABARTI: What's not so ridiculous is that the president of the United States is pumping up those conspiracy theorists, and it's happening at an important time.

Again, an important time in the actual real world, because at the moment, the price of gold continues to head stratospheric. And historically, whenever that happens, it's because Americans have real concerns about the actual economy. And therein lies the connection between gold flecked conspiracy theories and why we should actually care that the president of the United States says he wants to fly to Fort Knox.

So let's understand that connection with Professor Harold James. He teaches history at Princeton University and is the official historian of the International Monetary Fund. Professor James, welcome to On Point.

HAROLD JAMES: It's great to be with you, Meghna.

CHAKRABARTI: Is the gold there at Fort Knox, Professor James? The people want to know.

JAMES: Yes, they do want to know, but I obviously don't know any more than you do or than Donald Trump knows. So indeed, it is a subject, and it's also quite an interesting reflection. Would it really make any difference if the gold weren't there? In some ways, that's also a point that I think is worth making at this moment.

CHAKRABARTI: I'm glad you said that because of the list of very online conspiracy theorists that we played at the top, about people saying, this would be a scandal of all scandals. The first gentleman there says, this is the gold that backs. Let me get the exact quote, because I wouldn't want to misquote a conspiracy theorist, would I?

He says it's the gold that backs America's financial system. Is that true? Professor James, does gold back the American financial system?

JAMES: No, that's absolutely not true. What is true is that for thousands of years, gold and silver was at the center of the financial system, and so currencies had printed on them and notice that they could be converted into gold, and people could go into a central bank and get gold.

For them, paper money. But since the middle of the 20th century, that basically has not been true. And since the 1970s, there is no connection between the dollar and gold anymore. So in that sense, gold is clearly not anymore the center of the financial system.

CHAKRABARTI: I think it's probably the other way around, is gold's price as connected to the dollar right now is what really matters.

But to be clear, it was, what, and correct me if I'm wrong, it was under President Nixon that the gold standard was completely and officially abandoned. Or do I have that wrong?

JAMES: Yes, that's right. On the 15th of August 1971, President Nixon in the official polls at the time closed the gold window.

That is, that gold was no longer going to be given out against U.S. dollars, but actually that hadn't been true for some time. From 1968 onwards, gold was only allowed for official transactions. So it's only other central banks in other countries that could exchange their dollars for gold. Individuals, normal banks, they couldn't do that.

And the long story of the departure of gold from being the financial center of the world, is really only just finished in 1971. It had been long underway already before that.

CHAKRABARTI: Understood. Okay. So just, I'll put the fun that I was having with conspiracy theories aside, and just to be clear, the United States dollar is not backed by gold.

Gold does not back the U.S. financial system and has not for a long time. But the existence of Fort Knox, Professor James, that's quite an interesting story in and of itself. Because it has to do with, what? The United States, under Roosevelt, although I can't say I remember which Roosevelt, deciding that it was going, the government was going to be the sole arbiter of the value of money.

So help me understand that story.

JAMES: That's absolutely right. It's FDR. So Franklin Roosevelt, and in 1933, Franklin Roosevelt, very quickly in his presidency, took the U.S. dollar off gold. And at that time also, prohibited individuals and institutions from holding gold. So every individual had to turn in gold coins, gold bars, whatever they had in the way of physical gold to the U.S. Treasury.

And in that sense, this demonetization of gold is already there in the 1930s. And that's where Fort Knox was the answer. So Fort Knox was constructed in the middle of the 1930s, and they started to move the gold into these newly constructed vaults. And they completed that in 1941. And there is, I think, a link historically between having big gold reserves and being prepared to fight wars. Because you need, in the middle of a war, you need something that is accepted as a currency by everybody. If you want to get mineral resources from elsewhere, if you want to make complex steel alloys, you need mineral resources. In the middle of a war, paper currency may not be accepted. And so that's where gold still had a role in the 1930s.

It wasn't there for private transactions, but governments facing war thought that they needed gold.

CHAKRABARTI: That is an important point. In fact, that's a, what, a human truth that goes back thousands of years, right? That having great reserves of mineral, or in this case, elemental wealth, in the form of gold is what pays for wars.

Now, one little, again, just geographic fact check. Fort Knox is actually U.S. military installation. And the United States Bullion Depository is next to it. So I guess there's always confusion about what, do the two get conflated? Do we know actually where the gold is at the depository or at Fort Knox?

JAMES: I would think it's in the depository. But not all the U.S. gold is there. It's about half of the U.S. government's gold that is in Fort Knox. There's some of it in West Point, the West Point Mint. There's some of it in Denver and in Colorado. There's a little bit also in New York, in the Federal Reserve Bank of New York.

Part II

CHAKRABARTI: A little earlier in the show, I mentioned that the last time anyone visited Fort Knox. It was in fact during President Trump's first administration in 2017, and that was then Treasury Secretary Steven Mnuchin and Senator Mitch McConnell.

Now, more recently, in fact, just after President Trump started repeating the conspiracy theories around gold at Fort Knox, Steven Mnuchin went on CNBC and reflected, reminisced on his experience at Fort Knox.

STEVEN MNUCHIN: The gold was there when I visited it. I hope nobody's moved it. I'm sure they haven't.

I was the first treasury secretary to go there in, I think, over 50 years. There's very serious security protocols in place, obviously, to protect the gold that I can't talk about, but we went, we saw it, and if President Trump wants it to be audited, that's obviously something that can be easily done.

CHAKRABARTI: So it's not just President Donald Trump that says he wants to visit Fort Knox. Elon Musk says the same thing, and in fact, Trump says he wants to visit Fort Knox with Musk. And Musk has repeatedly used his social platform X to post about the possibility of gold being stolen from the vault at Fort Knox.

Here he is in an interview during the 2025 CPAC Summit, just last month.

ELON MUSK: We wanna go see it and just make sure, like somebody did a spray paint, some lead or something. (AUDIENCE LAUGHS) Is this real gold? Bite at the bar, didn't dent. But I think honestly, part of this also is let's have some fun.

And like I said, this, all this gold at Fort Knox, it's the public's gold. It's your gold. So I think you have a right to see it.

CHAKRABARTI: Okay, so that's Elon Musk last month at CPAC, the Conservative Political Action Conference. Now, here's Stephen Mihm. He's a professor of history at the University of Georgia, and he's written about the intersection of gold and conspiracies throughout history, including in an article titled, "What's Fueling America's Gold Bar Conspiracy," was in Bloomberg earlier this week.

And Professor Mihm says the current conditions of the U.S. economy are actually ripe for creating conspiracy theories around gold and that we've seen this situation before.

STEPHEN MIHM: Anytime there's a moment or phase of monetary anxiety, perhaps default, inflation, hyperinflation, you name it. You have these moments where the confidence that we have in our otherwise worthless currency begins to shake and people begin looking to gold as the kind of historical go-to stability backing or at least sanctuary in a moment of risk.

So that creates conditions where people can really get pretty bent outta shape about gold, both in investing in it, but also conspiracy theories about it no longer being there.

CHAKRABARTI: Mihm says the current circumstances around gold fever conspiracies are somewhat unique though, because beforehand in different times of economic tumult, what elected officials sought to do was reassure the public, but that's not what's happening here. President Trump, as we've been talking about, is continuing to traffic the conspiracy theory that the gold at Fort Knox might have been stolen. And Mihm says that's a pretty dangerous political position to take.

MIHM: The problem with using conspiracy theories in politics or for political advantage is that they have a funny way of putting you in situations and leading you to say things that may actually undermine your own position.

And so in invoking the possibility, which is a conspiracy theory, that the gold is gone, and in particular, it's somehow been stolen, obviously. It's not like it evaporated. It is throwing people's faith and the solidity and sanctity of the dollar and so forth into some question and that could have real world economic consequences.

CHAKRABARTI: Mihm also says the conspiracy theories about gold, the unusual buying behaviors, all of this should actually be taken very seriously. I am appropriately charted on that, not necessarily as theories, but as symptoms, quote, in the same way a sick patient exhibit symptoms, because he says the rise of these theories can be a sign as that people are losing faith in something really big.

MIHM: These moments where there's anxiety, conspiracy about gold holdings, who holds them, who's buying it. They're symptomatic of an underlying unease, an underlying malady with how ordinary investors may be feeling. Ordinary citizens may be feeling about how the money supply relates to the nation. And that should be maybe a little troubling and worth monitoring closely, because it's a useful indirect or proxy measure of how people have faith or lack of faith, in this case, in the United States.

CHAKRABARTI: That's Stephen Mihm, professor of History at the University of Georgia. Professor Harold James. Respond to that. Do you see this conspiracy theory amplification as evidence of real disintegration of faith in the U.S.?

JAMES: I think there are two things. One is that the position of the U.S. in the international system is in doubt being challenged in a way that is quite unique at the moment.

And so that is a big story that is quite independent of the story of gold and gold conspiracy. The second point is if you really want to think that there's something rational behind stoking conspiracy theories about the absence of a proper backing for the U.S. dollar, then you might think that the administration would really like to talk down the dollar a bit.

It thinks that the dollar is overvalued relative to other currencies, and that gives foreign export is an advantage and puts American producers at a disadvantage because American goods become more expensive if the dollar is more expensive, so fewer people buy American goods. If you can talk the dollar down.

That's one way of getting the trade balance to adjust, and that might be possibly a rational thing to do. It's one of the, at least possible explanations, if you really think that there is a rationale behind it. In some ways, as your introduction suggested, I think, in some ways, what the government is doing, what the president is doing. What Elon Musk is doing is to try to discredit everything that has gone on up to now. And it's a kind of radical demolition exercise.

CHAKRABARTI: Oh. Professor James, to your point, you're saying if there's a rational aspect to this.

I think I hear your, the weight that you're putting on the word if, because honestly, trying to correct a trade imbalance by talking the dollar down, through questioning whether gold is at Fort Knox, seems like the Mad Hatters Tea party when you could actually just have more sensible trade policy. No?

JAMES: Yes. Yeah. That's right. But in essence, this is something that in the middle of the 1980s, the Reagan administration did. And the then treasury secretary James Baker did it in a very skillful way and had a negotiation about that. But before the negotiation could take place, there was indeed a weakening of the dollar already, and that may be what this kind of rumor mill is supposed to do.

CHAKRABARTI: Tell me more about that story. I don't know about what you're talking about regarding Reagan and Baker and the dollar. Tell me more.

JAMES: So in the first half of the 1980s the U.S. dollar soared, and it was a consequence of the mix of a really tight monetary policy from the Federal Reserve and a very expensive fiscal policy that was financing the arms buildup with the Strategic Defense Initiative. And that really cost many American jobs. And there was a really increasing push in Congress to do something about that and to put tariffs on. And the Baker Initiative was really designed to head off that congressional pressure and to pull the dollar down.

And so they met in the Plaza Hotel in New York in September '85 and with other treasury secretaries from the five, six big other countries and other central bankers. And they agreed to talk down and to intervene also, to keep the dollar at a lower rate. And it was very successful.

CHAKRABARTI: Ah, okay. But gold didn't have anything to do with it then. Did it?

JAMES: No. Absolutely not. No. There was no discussion of gold at that particular point.

CHAKRABARTI: I wanna know though, why it seems that this, let's see, hyper interest around gold doesn't actually seem to be limited to the United States.

I understand that there are several other, quite large countries out there, that are also trying to build, at least build up their gold reserves or they're paying more attention to that. Is that true professor?

JAMES: Yes, absolutely. That's really there from the middle of the 2010s. And so in particular, Russia, China, but also India, also Kazakhstan. Also, more recently, some central European countries have been adding to their gold reserves and the logic of that, I think, is quite simple. In that it follows from 2014 from the initial Russian attack on Ukraine, the incursion into Eastern Ukraine, the seizure of the Crimea, and then the application of sanctions.

So if you're worried about sanctions, you are worried that the U.S. government can control the dollar. You want to get out of the dollar, and you want to get something else and something else there. Is obviously the big attraction is gold. And that's exactly what Russia did, that's what China did. And the more you think that the United States is going to use the financial system in a weaponized way, applying sanctions.

So in the 2000's already, we had sanctions against North Korea. First of all, quite successful, then against Iran. And then after 2014, against Russia. More, much more after 2022, after the new Russian attack on Ukraine. And in those moments, countries are going to look for alternatives. And so that's, I think, the explanation of why Russia is doing that.

Why China is doing that. It has absolutely cast-iron logic.

CHAKRABARTI: Oh, so forgive me. I'm failing to understand the logic though, because at least in the United States, as we've established, gold does not back the dollar, but in these other countries, are they is the rupee in India?

Is the ruble in Russia? Is the renminbi in China? Are any of these actually linked to gold? I'm not quite sure how the gold helps these countries buffer themselves from the global financial system as a whole?

JAMES: No. No. There's no way in which any of those currencies is linked to gold in the classic way.

What the link though is that countries all over the world hold foreign exchange reserves, and they hold foreign exchange reserves in order to intervene occasionally in markets, sometimes quite regularly in markets. China in particular bought up U.S. dollars in order to keep the level of the renminbi down and to make life better for Chinese exporters.

You accumulated these big dollar reserves and then if you look at a growing geopolitical tension there is the likelihood that somebody might say you can't use our dollars. We're going to seize them. And indeed, after 2022, that's exactly what Europe and the United States did with Russia's foreign exchange reserves that were held abroad, that they froze them.

And so there's $300 billion or so of Russia's foreign exchange reserves that are frozen. If you have gold in your own gold reserves, you are not liable to that kind of action.

CHAKRABARTI: Interesting. Okay. But is there enough gold in the reserves of these countries? Let's stick with Russia for a second, to make up for what they lost when those assets were frozen.

JAMES: They have a lot of gold there, official figures, both China and Russia, officially report or just over 2,000 tons of gold. So much less than even in Fort Knox. In addition to that, Russia is a big gold producer, one of the world's two large gold producers. So it's quite likely that that it's possible to add much more to that figure.

CHAKRABARTI: Of course, there's what's still in the ground. Thank you for reminding me of that. But also, you had mentioned some other countries Hungary, Czech Republic, Poland. I understand that that even in Poland, they actually have a very public way of saying, here's how much gold we have.

JAMES: Yes. Yes. Indeed. So last year they had an enormous placard on the one side of the Central Bank building saying precisely how many tons of gold were kept in Poland as a reserve for the Polish currency.

CHAKRABARTI: Why? (LAUGHS) Like why are they? It's like a ticker. It's almost a gold ticker of how much gold is in Poland. Yes. But why?

JAMES: I think it goes back actually to a deep, deep story, in the sense that in the second World War, Poland had a substantial gold reserve. It evacuated it, at the last moment, it was a very dramatic story. They, the German tanks were moving in, they took it to the Romanian frontier, then they took it across the Black Sea to Istanbul.

And that story of the evacuation of the Polish gold is a kind of important story for the national consciousness. And in Poland, I think you can see, but also in the other central European countries, very clearly, the link between having a gold reserve and security issue.

So I was in Prague in 1999 on the day that Prague, that the Czech Republic joined NATO. And the Deputy Central Bank governor told me that was the day that they were selling all their gold reserves. Once they were in NATO, once they were securely defended, they didn't need any gold reserves. And so building up these gold reserves today indicates the degree to which they're afraid.

They're afraid because of Russia. They're afraid that they may be a target of Russian aggression. And building up gold reserves in those circumstances is also a way of reassuring the public. It's not just about inflation worries there, it's about security.

CHAKRABARTI: Wow. Okay. That is very powerful, Professor James.

... We have about 30 seconds before our next break. When the deputy governor at the Czech Central Bank told you, we are selling all our gold today. Just take us back to that moment for a second. What was your initial response?

JAMES: It was very logical, because it's expensive to keep gold.

You need to protect it, as you said it. It needs to be secure. You need big installations, you need guards, you need all kinds of equipment. And if you have instead, foreign exchange reserves, they get an interest rate. And so you can earn money on that. And in that sense, you're paying something. You're losing money. To have a gold reserve.

Part III

CHAKRABARTI: Professor James, going back to the Fort Knox conspiracies for just a moment. I had mentioned that in 2017 then Treasury Secretary Steven Mnuchin and Senator Mitch McConnell visited Fort Knox. There have been a couple of other times as well. I think at least two other times, that the gold at Fort Knox has been quote-unquote checked to be sure that it's still there.

Is there something larger in the general economy? Is there a pattern between what was going on in the general economy and the moments where these visits to Fort Knox happened?

JAMES: Yes, indeed. The first of these visits, as far as I know, was in 1943. So this was in the war, and this was exactly one of those moments where the link between having physical gold and the security of the country, the security of the United States, the security of the Atlantic Alliance, was at stake.

And so it was important to demonstrate, I think, how solid the backing of the United States currency was at that moment. And the second moment is in the middle of the 1970s. So this is just immediately after the oil price shock in 1973. So the visitors in 1974, some members of Congress and some journalists came to visit.

And that was the moment when there was a substantial inflation and people were worried also there about the story of prices, but also the question of the security of the country, because the oil embargo from the Middle East and oil producers look like a security threat, as well as a monetary threat.

So I think this link between thinking about the existence of gold, physical gold, and the security of the country is the common factor in each of these stories.

CHAKRABARTI: So inflation, there definitely a strong commonality, right? Because we had that, what, seven-ish percent inflation spike in 2021, right?

Yeah. Due to a lot of things happening globally, pandemic related, but then as far as I can see, starting in late 2022, but definitely 2023, the price of gold starts going through the roof. At least for the past two years, I've seen what, more than 35% year on year return for gold. Have we seen that kind of rocketing before?

JAMES: Yes. That was the rocketing that took place in the 1970s. It was also immediately after the global financial crisis, global financial crisis in 2007, 2008, that the gold price sawed again.

But between the '80s and 2008, a gold price was falling and falling, and it looked as if really this was an irrelevance. And the surge after 2008 is really a reflection of the worry about the stability of the international system, but also more and more about geopolitics and its geopolitics since February '22. This has really pushed, I think, the surge in the gold price.

CHAKRABARTI: Right. Because we're talking about a global gold market, right? But I guess what I don't understand is gold as an investment has seemed to me, for a while now, been people aren't buying gold because they want the gold. There's gold ETFs for goodness sakes. It's more of a speculative tool, isn't it?

JAMES: Yes. I mean, that's exactly right. But it's an inflation hedge or it's a speculative tool. It can be both at the same time. So you also have to think, supposing the world becomes orderly again and calm returns, you are going to be back in the situation of the '80s and '90s, where gold doesn't look so attractive anymore as an investment.

CHAKRABARTI: But then I guess if you hold it for long enough and wait for the next great period of global instability, you'll be happy that you did. It's a different take on the buy and hold mantra for long term investment.

JAMES: Yes, of course. But you have to secure it. So you have to keep it somewhere.

And it's very vulnerable, obviously, in small quantities, at least to be stolen.

CHAKRABARTI: Yeah. To your point earlier about it's expensive to actually have, but this is why the existence of ETFs for gold really is fascinating to me. But so the other thing though that you mentioned about the '70s was that there was a genuine national security threat that was thought, if energy supplies were getting, were going to be potentially cut off from the United States. Regarding the U.S., not Europe, but regarding the U.S. I don't see that immediate national security threat as much as I do just domestic economic policy as being highly unstable.

JAMES: Yes. I think that's right. And as you say, the inflation has gone down from the initial post-COVID inflation surge. But we're just at the moment embarking on a really series of tariff wars. And the immediate consequence of those tariff wars, I think, is very clear. It's going to give a big push to prices. Many goods are going to become more expensive, and so at least temporarily there will be more inflation.

And so the inflation story looks as if it's coming back in a big way.

CHAKRABARTI: Okay, that's a good point. But of course, it's self-inflicted inflation.

JAMES: Yes.

But it's still, the price is rising, and people are going to look at those prices and they're going to be worried about it.

CHAKRABARTI: Yes. It's inflation inflicted upon the American people by the U.S. government, point well taken. You had said something a little bit earlier that actually what I wanna explore a little more, it has to do with the dollar, right? Because you talked about all these countries, Russia, et cetera, building up their gold reserves in order to protect them from the dollar being used as a financial, a punitive financial weapon, against them.

But thinking about the trade wars that you very rightfully just brought up again, Professor James, the efficacy of the dollar depends on people or other nations really believing in it as the most important, as the global standard of currency. I'm wondering if, could that belief be shaken?

JAMES: Yes. It clearly could be shaken, and some of the suggestions that are being floated around, for instance, that short term foreign assets in the United States, holdings of treasury bills might be converted into longer term obligations, so into, say, a hundred-year bonds that looks like a threat to the dollar, and indeed, that is a possibility.

And that's maybe also one of the factors that is influencing the markets at the moment.

CHAKRABARTI: But there's something else going on, I think, at a more deep level, regarding the dollars position as the king of currencies in this world. And I think you've previously used this analogy of beforehand, you used an analogy with languages, that if you wanted to speak to some, you spoke German and you wanted to speak to someone in Spanish beforehand, your translator had to be an English speaker, right? Or in this case, the dollar. But that may not be true anymore. Can you help us explain what you mean by that?

JAMES: Yes, exactly. That's quite right. That's the way that for really hundreds of years, financial markets work, there are obviously lots and lots of pairs of different currencies.

And if you want to do a transaction between each pair, there isn't a deep market for that. So you need to go through a central currency. And in the late Middle Ages, in the early modern period, that was the Venetian ducat. In the more modern period, it was the British pound. Until the 20th century.

In the 20th century, it becomes the U.S. dollar. And so if you want to trade between, say, Britain and Argentina, after the hegemony of the dollar, you need to go through a dollar transaction. And it seems to me exactly as you say, like the way that translation works, that English has become the common language of the world.

It wasn't always the common language. Once upon a time, it was Latin, then it was French. It's possible that can also shift. But one of the interesting things is that if you are equipped with kind of standard mobile phone, a smartphone, you can use that phone to translate easily.

And so I can talk into my mobile phone in French, and it can produce Mandarin. And it seems to me that you can do that with currencies today, as well. We have much more technical opportunities to trade in very diverse currencies. And so the simple network effective, having one currency at the center, may be fading for quite independent reasons.

Just because of the technical capacity of doing trade in a different way.

CHAKRABARTI: I think this is absolutely fascinating though. So the dollar being at the fulcrum of global, of the global currency trade, as you're saying, for technological reasons, maybe diminishing, what, are there implications of that for the United States?

JAMES: Yes, this is just one of the areas where the United States is becoming less important, and the world is moving much more to a multilateral world. And we've seen the rise of China, the rise of India, the rise of Brazil, it's no longer a world that is just centered around one or two countries.

It's not Britain and the United States anymore. It's a much more diverse world and that's going to be reflected, I think, in the way the currency arrangements look. So indeed, that also tells you that the U.S. dollar, is likely to lose its role as the center of the international system.

CHAKRABARTI: So to be utterly fair, for countries like Canada, Australia that you mentioned, not having the Canadian dollar be at the central of global currency markets hasn't necessarily hurt Canada.

So it doesn't have to be all bad news for the United States, but there's something very intrinsic here about, and in fact, I do think it links back to psychologically these gold conspiracy theories. I wonder if part of this has to do with American's growing sense that whether they want to or not, this nation's importance as a global leader, they can see its sort of being eroded.

At the edges. So therefore, it may, it seems very deeply psychological to me to turn back to, even if it's in the form of conspiracy theories, wanting to know that something as real and as endlessly or infinitely valuable to the human race as gold is still there and in our control.

JAMES: That's right.

And I think actually it's interesting. So some countries that used to have big empires but don't have big empires anymore, actually liked to do that. So the two central banks that I know, where you can go in to see a museum and you can lift up a physical gold bar and see that it really exists, are Portugal and Britain.

So in the Bank of Portugal and in the Bank of England you can actually see a gold bar and you can feel it, and you can feel how heavy it is. So you have a sense that this is part of the story of those countries.

CHAKRABARTI: Oh, Professor James, what you just said doesn't actually put the U.S. in that great of a light.

You're talking about faded empires holding onto the artifacts of their empire and saying, as the rest of the world charges off into modernity, we're standing here holding gold and being like, but look at what we once had. That seems very sad to me.

JAMES: There is something of that.

In some ways, gold really does have, as you say, this deep psychological connotation. And if you think, for instance Germany, one of the national myths is about the gold and the river Rhine.

So this was what Richard Wagner in the 19th century did these big operas on. In Russia, the fact that icons have a gold backing is enormously important. And it's part of the story of the constant presence of gold in Russian spiritual life.

Yes, this is nostalgia in a way. Gold is nostalgia.

CHAKRABARTI: Gold is nostalgia. Okay. But the nostalgia itself loses its value when, as you said, are the things that drive down gold prices actually just like you said, economic and global stability? Is that a primary driver of that?

JAMES: Yes. The moment that we have more stability, the gold bubble will burst.

CHAKRABARTI: Oh God. So that's funny for, so for people who hold gold, they don't necessarily want a world that's less tumultuous.

JAMES: But it is looking for something that is independent of current fluctuations.

And the more there are current fluctuations, the more there is uncertainty. The more there's worry about inflation, there's more worry about security. That's exactly the moment that you get these movements into gold or other precious metals, as well. You'll see something like this in silver.

CHAKRABARTI: In silver as well. Okay. Professor James, I wanna just once again note that you are the official historian of the International Monetary Fund and the IMF has been, I would say, since basically its creation, also the target of many a conspiracy theory. So I'm wondering what you think about that, that in terms of like the organization of global economies, the way money moves around the world, et cetera.

It's always, maybe it's because it's actually quite challenging to understand. It's always ripe for people saying, they, those guys who gathered at Bretton Woods, they don't want you to really know how the money works. What are your thoughts about that?

JAMES: I think that's exactly wrong.

They do want you to know how it works, and one of the things that was absolutely at the center of the Bretton Woods Agreement was that countries, member countries of the International Monetary Fund, had to declare all kinds of information about their country so that you could see what everybody else was doing.

So countries had to report their gold reserves. The key reason why the Soviet Union never joined the Bretton Woods system, it was represented at Bretton Woods. There were the Soviet negotiators there, but they didn't join because they didn't want to give the information about the extent of Soviet gold holdings.

CHAKRABARTI: No kidding. Really, honestly, I did not actually know there was a connection between our conversation about gold and the formation of the IMF. That was really the thing that prevented the Soviet Union from joining?

JAMES: Yes, they were at the Bretton Woods negotiation, and then in December 1945, when the agreement was to be ratified in the U.S. State Department, they just didn't show up.

And I looked at these memoranda that Molotov prepared, and it was exactly about not joining, because there's something disadvantageous about joining. And it was to do with the provision of information.

CHAKRABARTI: Amazing. Okay. We have about 30 seconds left, professor, I can't resist. Have you bought gold recently? No speculation for Harold James, who is a professor --

JAMES: I believe in the return of stability.

CHAKRABARTI: I'm hoping for the same.