At the end of this
Fox Business News video with Chris Powell, Secretary/Treasurer of the Gold
Anti-Trust Action Committee (GATA), it is learned that, if indeed all the
gold in Fort Knox is still there, it is worth less than all the bailout money
already paid to AIG.
That, in itself, is a
weighty argument for the yellow metal being undervalued at today's prices,
perhaps by a quite considerable margin. The current GATA media blitz is
related to their recent Freedom of Information Act request to see if they can
get someone to audit the contents of Fort Knox, besides the Treasury
Department, that is.
This report in the TimesOnline
provides many of the details:
Is there any gold inside Fort Knox, the world's most
It is said to be the most impregnable vault on Earth: built out of granite,
sealed behind a 22-tonne door, located on a US military base and watched over
day and night by army units with tanks, heavy artillery and Apache helicopter
gunships at their disposal.
Since its construction in 1937 the treasures locked inside Fort Knox have included the US Declaration of Independence, the Gettysburg Address, three
volumes of the Gutenberg Bible and Magna Carta.
For several prominent investors and at least one senior US congressman it is not the security of the facility in Kentucky that is a cause of concern: it is
the matter of how much gold remains stored there - and who owns it.
They are worried that no independent auditors appear to have had access to
the reported $137 billion (£96 billion) stockpile of brick-shaped gold
bars in Fort Knox since the era of President Eisenhower. After the risky
trading activities at supposedly safe institutions such as AIG they want to
be reassured that the gold reserves are still the exclusive property of the US and have not been used to fund risky transactions.
In other words, they want to be certain that the bullion has not been
rendered as valueless as if a real-life Goldfinger had stolen it.
“It has been several decades since the gold in Fort Knox was independently audited or properly accounted for,” said Ron Paul, the Texas Congressman and former Republican presidential candidate, in an e-mail interview with
The Times. “The American people deserve to know the truth.”
Mr Paul has so far attracted 21 co-sponsors for a Bill to conduct an
independent audit of the Federal Reserve System - including its claims to Fort Knox gold - but an organisation named the Gold Anti-Trust Action Committee (GATA) is
taking a different approach.
It has hired the Virginia law firm William J.Olson, PC, to test President
Obama's promise to bring “an unprecedented level of openness” to
the Government and next month it will file several Freedom of Information
requests for a full disclosure of US gold ownership and trading activities.
“We're taking the President at his word,” said Chris Powell, of
GATA. “If you go online you can find out how to build a nuclear weapon
but you won't find any detailed records on central gold reserves.”
A month after President Nixon resigned over the Watergate affair Congress
demanded to inspect the contents of Fort Knox but the trip to Kentucky was dismissed by critics as a photo opportunity. Three years earlier Mr Nixon
brought an end to the gold standard when France and Switzerland demanded to redeem their dollar holdings for gold amid the soaring cost of the Vietnam
Many gold investors suspect that the US has periodically attempted to flood
the market with Fort Knox gold to keep prices low and the dollar high -
perhaps through international swap agreements with other central banks - but
facts remain scarce and the US Treasury denies that any such meddling has
gone on for at least the past decade.
Interestingly, in what may have
been a fascinating editorial discussion, the Times saw fit to include a
number of other conspiracy theories at the end of the report.
They seemingly come out of nowhere at the end, right after they mention that
the Treasury Department says the gold holdings are audited every year, but
that no independent auditors are allowed access.
Tim Iacono is the founder of
Iacono Research which provides market commentary and investment advisory
services specializing in macroeconomic analysis and commodity based
investing. He also writes the popular blog The
Mess That Greenspan Made.