Yet, despite this public stance, the US government still holds one of the world's largest gold reserves.

So, what's really going on here? If gold is truly irrelevant, why does the government still treat it as a strategic asset?

Doug Casey: Governments hate gold because it's a discipline on the amount of currency they can create. Gold is money. Governments can't create it out of thin air. You might say that gold needs the government about as much as a fish needs a bicycle.

Gold is not a strategic asset. It shouldn't be viewed as something to buy or sell, like land, copper, or a factory. You don't buy or sell money; that's almost a contradictory concept. Gold is money itself, although fiat currencies are treated as money in today's world. Confusing gold with fiat currency is one of the terrible notions created by Keynesian economists. It's allowed mainstream financial commentators to dismiss gold as a pet rock.

As you said, the Federal Reserve officials and policy makers routinely downplay the importance of gold. They believe that fiat currency and central banking have made gold obsolete. They're 100% wrong.

Despite their theories and stated beliefs, governments around the world have been buying massive amounts of gold in recent years. They're dumping dollars. For 25 years after World War II, the major asset of other central banks has been US dollars.

It made sense at the time because the dollars were convenient and guaranteed to be redeemed at $35 for an ounce of gold up to 1971. Now, however, the US government backs its dollars by nothing. Foreign governments can see that the US government is fiscally and monetarily totally out of control. They've seen the US arbitrarily confiscate assets, impose sanctions, and levy duties. They're dumping dollars because it's increasingly obvious they're the unsecured liability of a bankrupt and unreliable government. They're accumulating gold.

The only solution to today's massive monetary problems is to go back to classical banking practices. What that means is gold and only gold is used as money. US Government debt should not be monetized. And fractional reserve banking has to be abolished.

There used to be a distinction between the two types of bank accounts—demand deposits (i.e., checking accounts) and time deposits (i.e., savings accounts). Banks have typically offered both, but they're two totally separate and very different businesses.

With demand deposits, you pay the bank to store your gold securely. You have the right to withdraw it at a moment's notice and write checks against it, making it simple to transfer it on the bank's books to another person.