The Ghost of Fort Knox Past: Part 2

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From the Archives : Originally published May 26th, 2009
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Category : History of Gold

In my precedent essay, we looked briefly into the Ft. Knox gold controversy.  Ft. Knox gold used to back circulating currency, but those days are long gone.  Whatever gold remains within this U.S. fortress is now just another Treasury “asset.”

Gold is always in vogue when currencies fall upon hard times, as is now the case with the U.S. dollar.  U.S. citizens need to know whether our gold assets are still in responsible hands.  If your government is not trustworthy, it’s best to recognize this fact ASAP.

We received considerable positive feedback on the last Ft. Knox gold article.  I was pleasantly surprised, as this is a pretty arcane topic.  IDE gives us free reign as to editorial content, and I am most grateful for these opportunities.

We will thus continue with the golden ghost of Ft. Knox topic.

How have the U.S. Treasury and Fed performed over the decades with their fiduciary responsibility of safeguarding this national treasure?  This is one murky and mysterious topic.  It’s best to simply present some historical facts as well as some conjecture, and allow you to form your own opinion.

To some, this analysis might smack of “conspiracy theory.”  That doesn’t bother me, especially when it comes to precious metals.  That particular label tends to close down a lot of inquiring minds and is utilized accordingly.  The ones who totally dismiss these issues are the naïve ones in my book.

Let’s start digging.  What are some key components of this Ft. Knox gold controversy?

#1: Look at how silver has been handled.

#2: The Edward Durrell story of President Lyndon Johnson losing our gold.

#3: Changing categories of U.S. gold hoard reporting

#4: Official gold is in play across the globe.

Silver is the world’s most common form of historical money.  I’ve owned silver at one time or another since 1973 and read most everything written about it for the past 15 years.  It is every bit as complex a subject as gold.

The record shows that the U.S. once held a tremendous hoard of silver.  It was used to back currency and as a “strategic reserve.”  An approximation of this hoard is some 5 billion ounces in 1950.  That’s a lot of silver!

But this silver hoard has been almost totally squandered over the past half century.  It has been doled out on the cheap to government-connected corporations and cronies.  This is fact, not conjecture.  I suggest reading the prolific works of two silver analysts – Theodore Butler and Charles Savoie - for further detailed information.

Both of these gentlemen eat, drink, and sleep silverThey have done yeomanly work with their analysis.  We have our differences of opinion, but all clearly believe silver prices have been manipulated downward for decades.

The key point is that U.S. citizens’ silver hoard is kaput.  Both gold and silver compete with unbacked paper currency and that is not to be allowed.  Silver has supposedly been “demonetized” and now is just another industrial commodity. 

Don’t believe it.

The markets should be free to decide what is “money” and what is not.  I don’t trust central planners on any continent.  Fiat experiments always fail.  Our current experiment is hanging by the skin of its teeth.  This is a global problem.  The world is set to soon rediscover silver.

What does silver have to do with Ft. Knox gold?  I see a definite parallel.  Incredible amounts of silver have been squandered on the cheap.  That is not up for debate.  This is in spite of silver being a “strategic” metal.

Can you trust these same blokes with our national gold treasure?  Especially a treasure that hasn’t received an independent official audit since the 1950s?

Good luck with that.

Unfortunately, you must at least suspect that gold has been treated similarly to silver over the decades.  A highway robbery has transpired.  Methinks it’s a federal highway.

We will continue with the Ft. Knox gold controversy in the coming weeks, point by point.  This is much more than sheer entertainment.  Your financial future is on the line.

Invest resourcefully,

Russel McDougal

Investor’s Daily Edge


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Dr. McDougal writes about natural resource investing for Investor's Daily Edge and has been an active investor for 25 years, holding everything from stocks, bonds and mutual funds, to options, futures, currencies, limited partnerships, private placements and rare coins.
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