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

Lost 7 Audit Reports

Doubts about America’s Gold Holdings

Question:  If the Bullion Depository still 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 a $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 still exists, and the revelation of missing gold might encourage other embarrassing questions …

Some 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.
• Germany requested (several years ago) the return of a portion of their gold stored at the New York Federal Reserve, but Germany was denied access to their gold and denied the return of much of their gold for about seven years. If the German gold still existed in New York, why were they denied the return of their property?  If the gold in New York was “missing,” it could have been replaced by gold from Fort Knox, if the Fort Knox gold still existed.  Apparently that did not happen.  What is the rest of the story?
• 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