Fort Knox: “Glad Gold Is Safe!”

Secretary of the Treasury Steven Mnuchin visited Fort Knox on August 21. He tweeted “Glad gold is safe!” He told an audience in Louisville, “I assume the gold is still there.”

The Fort Knox Gold was last audited in the 1950s. Secretary Mnuchin’s statements were not helpful. Questions:

1. The gold is safe, but where is it? Has most or all Fort Knox gold been shipped to Asia?
2. How much gold is safe? A few bars? Hundreds of bars in a locked and dimly lit room visible only through a small window? Was it gold or gold plated tungsten?
3. Does his assurance reduce suspicions of “missing gold” or encourage those speculations?
4. To whom does it matter if the gold is safe? Total value at current prices for the Fort Knox gold supposedly vaulted is about $200 billion. The annual U.S. government deficit is several times that amount. The official national debt is 100 times larger. Yes, it is important if the gold is vaulted, as claimed, or missing. The truth should be reported.
5. Will the truth be more unsettling than the suspicions of “missing gold?”
6. When will an independent and comprehensive audit be conducted?
7. Assuming a “cover-up” exists, what information besides “missing gold” has been concealed?

From an article posted April 5, 2016:

Fort Knox Paradox

Officially the Fort Knox Bullion Depository contains 147.3 million ounces of gold. However, the last audit was performed over 60 years ago. According to reliable sources “audits” since then have been incomplete and inadequate.

Second Thoughts on US Gold Reserve Audits

Hiding the Elephant: Fort Knox’s Vanishing Act

Doubts about America’s Gold Holdings

Question: If the Bullion Depository contains over 147 million ounces of gold, why not audit it, prove the existence of the gold, and eliminate speculation? The US government spends over $70 billion on “food stamps” every year and nearly one $ Trillion per year on “defense,” so cost is not the issue.

Current policy seems to be “don’t ask, don’t tell” because the answer might be disconcerting, might destroy the narrative that the US gold exists, and the revelation of missing gold might encourage other embarrassing questions …

Speculation and possible scenarios:

Scenario One: Fort Knox Bullion Depository contains 147 million ounces of gold, as claimed, but the Department of the Treasury ignores calls for a comprehensive audit.

1. “Trust but verify” apparently applies to the nuclear weapons in other countries but not our gold. Why?
2. Why refuse to perform a comprehensive audit? Cover-up?
3. If an audit proved that 147 million ounces of gold were safely stored inside the vaults, it would be a political victory. Why would the Bush or Obama administration, such as in 2008 or 2016, NOT want a political victory when their credibility was weakening?
4. The implication is that an audit would fail and no political victory was possible.

Scenario Two: Fort Knox Bullion Depository is essentially empty – say it contains less than ten million ounces of gold.

1. That begs the questions: Where did the gold go? Who should be indicted? Why have politicians for the past 50 years lied about it?
2. Under scenario two the Department of Treasury cannot do an audit and desperately wants to avoid the scandal of missing gold.
3. The only viable option is “stonewall.” Maintain that an audit is unnecessary, too expensive, or already has been done.

Scenario Three: Fort Knox Bullion Depository is essentially empty of real gold – say it contains less than ten million ounces of gold but also contains perhaps 140 million ounces of gold plated tungsten.

1. A comprehensive audit would easily detect the fake gold.
2. The same questions from scenario two would plague the Department of the Treasury, the President, and the Federal Reserve.
3. The only viable option is “stonewall.” Maintain that an audit is unnecessary, too expensive, or already has been done.

CONCLUSIONS:

• If the Fort Knox Bullion Depository gold exists, as claimed, there is little reason to refuse a comprehensive audit.
• Since all requests for a comprehensive audit have been rejected, it seems likely that a “cover-up” continues.
• If an unpopular President wanted a political victory, he would have ordered an audit of the Fort Knox gold if an audit had been a viable option. Since no audit was initiated, it seems likely that a gold audit would have produced problematic results with unanswerable questions.
• Gold “leasing” has been documented. Gold leased by a bullion bank from a central bank can be sold in the international market, yet is still officially listed in the vaults of the central bank. Official gold can exist in two (or more) places at once …
• It is possible that most sovereign and central bank gold in the United States, including the Fort Knox gold, the United Kingdom gold, and German gold is no longer stored in western vaults, and has been melted down and converted to the one kilo bars preferred in Russia, India and China.
• An honest and credible audit would confirm or deny such speculation. Further “stonewalling” encourages such speculation. What is the rest of the story?

Gary Christenson

The Deviant Investor