Auditing America’s Gold Is Not Just Important, It’s Critical

An X exchange over the weekend is bringing new light to an issue long shrouded in mystery — the status of America’s purported stockpile of 8,133 tons of gold stored in Fort Knox and other government vaults across the country.

News aggregator ZeroHedge tweeted at President Trump’s head of government efficiency, Elon Musk, “It would be great if @elonmusk could take a look inside Fort Knox just to make sure the 4,580 tons of US gold is there. Last time anyone looked was 50 years ago in 1974.”

Mr. Musk responded, “Surely it’s reviewed at least every year?”

Senator Paul of Kentucky then jumped in, tweeting, “Nope. Let’s do it.”

A national leader on this front, American bullion dealer Money Metals jumped into the viral fray on X, urging passage of legislation sponsored by the former congressman, Alex Mooney, the Gold Reserve Transparency Act.

The stated goal of Mr. Mooney’s bill is to “provide for the first true audit of gold owned by the United States in more than 65 years, and subsequent audits every 5 years.”

The bill, the bullion dealer contended on X, “would require regular, credible audits of America's gold,” which would include “an accounting of any pledges, leases, swaps, or other encumbrances placed upon U.S. gold by BIS, the Exchange Stabilization Fund, the Fed, or other government people.”

It’s understandable why one might think America, the country with the largest gold stockpile, would occasionally audit its vault holdings, similar to the way any private depository would. 

However, since the last credible audit in the 1950s, America’s gold reserves have been subject to limited, flawed, and theatrical inspections.

In 1974, the government conducted a highly publicized inspection of Fort Knox gold --wherein members of Congress and a few media viewed just a single gold compartment –that did not qualify as an audit in any respect.

This public relations spectacle was followed by a somewhat more credible process by the General Accounting Office and the Department of the Treasury that kicked off in 1974 and concluded in 1986.

Putting aside the fact that this was not a truly independent audit, Money Metals gold researcher Jan Nieuwenhuijs has discovered that roughly half of the government reports from this process are now missing, and seals on some of the gold compartments appear to have been tampered with at various times.

With a renewed desire for government transparency, Mr. Musk and his team of auditors could turn their focus to one of America’s greatest open questions.

Since 2014, the Sound Money Defense League, which I head, has been pushing for an audit of America’s gold, including securing the introduction of the “Gold Reserve Transparency Act.”

Other proposed legislation, including H.R. 2559 in 2019 and H.R. 3526 in 2021, called for the Comptroller General of the United States to conduct and complete the following procedures at least once every five years:

— A full assay, inventory, and audit of all gold reserves, including any gold in “deep storage” of the United States at the place or places where such reserves are kept;

— An analysis of the sufficiency of measures taken to ensure the physical security of such reserves;

— A full accounting of any and all encumbrances, including those due to lease, swap, or similar transactions presently in existence or entered into at any time during the past 15 years with respect to the gold reserves;

— A full accounting of any and all sales, purchases, disbursements, or receipts at any time during the past 15 years – whether directly or indirectly undertaken – with respect to the gold reserves, including the specific terms and parties involved in such transactions; 

— A full accounting of all gold in which the American government, including the Board of Governors of the Federal Reserve System or any other federal agency, presently has a direct or indirect interest. That includes gold that may be held by third parties, including, say, the Bank of International Settlements, the International Monetary Fund, the Exchange Stabilization Fund, any foreign central bank, or any other party, public or private.

This full accounting would be completed within nine months of the law’s enactment and would then be done every 5 years thereafter. 

For good measure, the comptroller general’s report shall be made available to the public, and no redactions would be permitted -- except to protect sensitive details regarding physical security.

An audit like this has drawn support from sound money champions like the former congressman, Dr. Ron Paul, and a former Trump nominee to the Federal Reserve, economist Judy Shelton. 

A longtime advocate for American gold transparency, Chris Powell of the Gold Anti-Trust Action Committee said, “The big issue is not so much whether gold remains in the depository as much as whether it is encumbered by leases or swaps undertaken by the Federal Reserve or the Treasury Department.”

While the sound money movement at the state level has seen success over the last decade, federal progress towards restoring sound money leaves everything to be desired, including a lack of support for a bill that would block the IRS from assessing a 28% federal capital gains tax on the monetary metals.

If America wants to shore up confidence in its currency, it must begin with a comprehensive audit of the country’s classical monetary asset — gold.

Originally published on NYSun.

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