The problem in the 70's was the US insisted on printing money and keeping the dollar price of gold at a fixed level as well. The French government called bullsh*t and said pay us with gold instead.

The new proposals would require that the gold be remonitized and sold to the public. The transactions would be tax free making it a competing currency. This would extinguish the debt.

From the FOFOA article.

http://fofoa.blogspot.com/2011/05/return-to-honest-money.html

"In my mind, it would be infinitely better for the USG to acknowledge Freegold, declare a starting price of, say, $10,000/ounce, and then open the vaults and let the price float. They buy and sell at the market price through the banks, starting at $10K.

The price would soon stabilize, much higher than $10K of course, but the two-way market would be in effect. The gold would not be gone. The currency would be stable once again."

The net effect would be to set the gold price at a level that recognizes all the inflation that has taken place since the US left the gold standard in 1932. The last time gold was convertible by the public.

I don't think they will do this voluntarily. They will do it to save the system.