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The U.S. dollar is “as good as gold,” right? Well,
not exactly. Those days and decades are long gone. The U.S.
remains in the midst of currency woes and a global credit crisis that refuses
to go away. Let’s look into what was once the foundation for the
buck - gold bricks in Ft. Knox,
Kentucky.
There are reports that more than 8,000 tons of gold are stored within
Ft. Knox and a few other national depositories. That’s definitely
a national treasure. How did it initially get there?
The U.S. used to be on a gold standard. The Constitution says
that Congress is responsible for producing the nation’s currency.
Unfortunately, Congress abdicated this responsibility in 1913 to what is now
known as the Federal Reserve. Of course, the Fed is neither federal nor
a reserve. It’s been downhill ever since.
In most cases, privatizing a national service is not a bad idea.
Check your local post office if you need further clarification. On the
other hand, giving monopolies to greedy bankers might not be the wisest thing
to do. Where exactly do you sign up for a license to print money?
Do you have to be born into that privilege?
The Ft. Knox depository was completed in 1936. The gold that was
initially placed within its vaults was a function of two historic events: 1)
The U.S. held a gold hoard as per its Constitutional duties, and 2) Franklin
Roosevelt confiscated U.S. citizens’ gold in 1933.
The old fort has also been the storage point for the Constitution,
Lincoln’s Gettysburg Address, the Declaration of Independence, the
Magna Carta, and even some of the Queen’s
crown jewels.
Up until 1933, U.S. citizens could exchange their personal holdings of
currency for either gold or silver. The government willingly
obliged. In 1933, after the gold theft by Roosevelt, local currency
could no longer be traded for gold metal. U.S. citizens still held
currency backed by silver, however. These were called Federal Reserve
Silver Certificates. They were deemed irredeemable by President Johnson
in 1968. Silver coinage was changed to base metals in 1965 and
1966. Silver thus followed gold and it’s been paper ever since.
As a side note, the U.S. Treasury has squandered some five billion
ounces of citizens’ silver since the 1950s. Where did it
go? To elitist insiders for the most part. This enormous hoard
was also used to suppress the price of silver. That game is now over,
and you can well expect silver to continue trading significantly higher on
its own merits.
Foreign nations could trade their currency for gold until 1973, when
Nixon reneged on that global promise. There has been nothing but
“good faith and credit” backing any global currency since that
ignominious event. We’re in a total fiat world. You can
judge for yourself how that’s worked out.
Whose gold lies within the walls of Ft. Knox? Clearly, if it is there, it belongs
to the citizens of the United States. The Fed and Treasury had
fiduciary responsibilities to safeguard this national treasure. It
hasn’t backed our currency for decades, but it deserves to be protected
and managed with care.
An entire book needs to be written on the Ft. Knox gold subject.
We will delve into a few highlights of the issue for the purposes of this
initial brief essay.
The last independent
audit of the Ft. Knox hoard transpired during the Eisenhower
administration. A reliable audit is accomplished by drilling and
assaying random bricks of the shiny stuff. Independent means someone
other than the government, Enron, O.J., or Arthur Anderson performed the
audit.
The sphere of gold is an incredibly murky place. There are
shenanigans wherever you look. Apparently, gold is more important than
some would have you believe. The current global debt and dollar crisis
is transpiring because there is no substance or discipline behind any global
currency. Both gold and silver have been stripped of their Constitutional
duties.
Since WWII, the U.S. dollar has been the world’s reserve
currency. Governments and citizens across the globe hold dollars as a
store of wealth. It is a tremendous advantage and responsibility to
issue the world’s reserve currency. It’s even been called
an exorbitant privilege.
That privilege has been exceedingly abused and is now coming to an
end. When you neglect and misuse the foundation of a house long enough,
it eventually crumbles.
We’re there.
Do I believe the Feds have also squandered our national treasure of
gold? There are definitely serious reasons to doubt that it remains
intact. It is our patriotic duty to demand openness and honesty from
our government. Even with such an esoteric subject as the contents of Ft.
Knox.
I will delve further into the golden ghost of Ft. Knox and my reasons
for doubting its presumed content in coming articles. You need to
comprehend the times and protect yourself with real assets.
Invest resourcefully,
Russel McDougal
Investor’s Daily Edge
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