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No Gold in Ft. Knox?

04 Jan

U.S. Bullion Depository at Ft. Knox

U.S. Bullion Depository at Ft. Knox (Photo credit: cliff1066™)

On today’s radio show (Financial Survival, 4PM to 5PM East coast time), I was reading from an article by Mr. Przemyslaw Radomski that explored the possibility that there’s no longer any gold in the U.S. depository at Ft. Knox:

•  “An audit of the US gold holdings has  been demanded by some for years, but the government will not allow it.   The gold belongs to the American people, so why won’t they let us see  it?  Many think it is because it is no longer there.  If that is indeed  the case, do we not face a ‘financial Armageddon’?

“At first it may sound shocking, but the last audit of gold stored in Fort Knox took place in 1953. No typo here, 1953, just after U.S. President Dwight Eisenhower took office. [However,] No outside experts were allowed [during that audit] and the audit team tested only about 5% of gold hoarded in the fort. So, there hasn’t been a comprehensive audit of Fort Knox in over 60 (!!!) years.”

•  “Congressman John R. Rarick demanded a Congressional investigation and, on September 23, 1974 six Congressmen, one Senator and the press were allowed to enter Fort Knox to see for themselves if the gold was there or not.  The tour showed that there was gold in Fort Knox but, all the same, it sparked even more controversies.

Only a fraction of the gold reserves were available to see. A photo of one Congressman published by Associated Press suggested that gold bars held in the fort may have been less heavy than would be usually expected.  This resulted in even more doubt about the fineness of gold in Fort Knox. . . . [This is]  important if you consider that counterfeit ‘gold bars’ have been showing up in New York recently and that fake gold bars turned up in LBMA Approved Vaults in Hong Kong.”

•  “In 2012, the German federal court ordered that the German central bank, Bundesbank, conduct an audit of German gold reserves stored abroad, particularly in the U.S., U.K. and in France. The German authorities have never before conducted a comprehensive audit of their foreign gold reserves and the last time they were [even] able to see their gold stored in the New York Federal Reserve vaults was supposedly in 1979/80. Because of that, 150 tons of gold will be shipped from the U.S. to Germany to assess the fineness of the bars.”

All of this–no comprehensive audit in over 60 years, Congressional doubt as far back as A.D. 1974, German doubt in A.D. 2012, and counterfeit “gold bars”– illustrates that there are legitimate reasons to doubt the U.S. gov-co’s claim to currently store about 8,200 metric tons of gold at Fort Knox and/or the Federal Reserve Bank of New York.

Mr. Radomski provided a chart to illustrate the relationship between U.S. National Debt and the currently claimed U.S. treasury of gold (8,200 metric tons):

Gold to Debt Ratio1

The red line shows changes in the number of metric tons of gold held by the U.S. Treasury over time.  The yellow line signifies the National Debt as measured in dollars of debt per ounce of gold.  

Mr. Radomski used this graph to illustrate that back in the 1920s, the government had virtually no National Debt and therefore the ratio of debt to an ounce of gold was 0 to 1.  However, over time the National Debt (yellow line) increased until today there are $60,000 in National Debt for each ounce of gold allegedly held in the U.S. Treasury.

Mr. Radomski doesn’t argue that the price of gold should therefore be $60,000/ounce.  But he does believe that, much like fractional reserve banking, at least 10% of the National Debt should be backed by gold and therefore the current price of gold might reasonably be about $6,000/ounce.  He adds that if it turns out that there is little or no gold in Ft. Knox, the price of gold should skyrocket.

•  I look at the graph and a couple of points jump out at me:

Gold to Debt Ratio2

•  First, from A.D. 1917 to 1939, the U.S. treasury of gold grew in a fairly orderly, “stair-step” manner from 2,500 tons to about 8,500 tons.

•  Second, in A.D. 1939-1940, the U.S. treasury of gold suddenly jumped from 8,500 tons to about 19,500 tons.  That’s a 130% increase in about one year.  That’s fantastic.

I don’t know why our holdings in gold increased so dramatically.  I presume that with the onset of WWII, foreign nations in the European or Asian theaters of war decided to store some of their gold in the comparatively safe USA.  But, if so, I don’t understand how an influx of foreign gold intended to be merely stored in the USA could be counted as an addition to the U.S. Treasury.  I therefore presume that when WWII started, America’s first response was to sell food, and/or military equipment and supplies nations at war–and sell it for gold.

Whatever the reason, the onset of WWII was extremely profitable for the U.S. Treasury.

(In fact, WWII was so initially profitable that I’m left to wonder if the onset of a WWIII could be similarly profitable.  If so, could a WWIII be started for the purpose of increasing our Treasury’s supply of gold?)

•  Third, our gold supply grew more or less slowly from A.D. 1939 (19,500 tons) through A.D. 1957 to about 20,500 tons.

•  Fourth, starting about A.D. 1957, the U.S. Treasury’s holding of gold began to fall precipitously from 20,500 tons to a reported 8,500 tons in about A.D. 1972.  I don’t know what caused that steep decline, but I suspect that the cause may have been some sort of policy change or treaty under the Eisenhower-Nixon administration.

There was severe unemployment in A.D. 1958.  It’s remotely possible that the government began to sell off its gold as a means to “stimulate” the economy.  (If so, I can also imagine how government would eventually realize that they couldn’t use up all of their gold and therefore opted to create of a pure fiat that could be used to “stimulate” the economy without actually spending any gold.  I wouldn’t bet that notion is true, but it’s an interesting possibility.)

Whatever the reason, the U.S. government admits to having reduced its gold holding from 20,500 tons to 8,500–almost 60%–in the 15 years from A.D. 1957 to 1972.  That’s a huge reduction, and I wonder what the rationale may have been.  (How th’  Hell was that allowed to happen?)

•  Fifth, the U.S. disposed of another 200 to 300 tons of gold between A.D. 1972 and A.D. 1980.  Since then, our reported gold supply has remained at a constant 8,200 tons.  Reportedly, the U.S. Treasury hasn’t bought or sold an ounce of gold of the past 32 years.

I wonder why?  Is 8,200 the “magic number” that represents exactly how many tons of gold we should have?  Not too much.  Not too little.  But juuuust right! . . .  Right?

Actually, it strikes me as extremely odd that our Treasury hasn’t reported buying or selling one more ounce of gold–nor have they allowed us to inventory the national treasury of gold–for over 30 years.  Very, very odd.

As illustrated by the green dotted line on the graph above, by about A.D. 1972, our reported hoard of gold was almost exactly the same (8,500 tons) as it had been prior to the onset of WWII.  Another oddity.  To this day, our reported national gold holdings are almost identical to those of A.D. 1935.  I wonder why.

•  Here’s another variation on the previous graph that focuses on the loss of American gold from A.D. 1957 through A.D. 1972.  I added a blue dotted line to hypothetically extend that rate of loss (from ’57 to ’72) on through A.D.1978–about when our Treasury’s gold holdings would’ve been completely depleted.

Gold to Debt Ratio3

The reasons for this extension (dotted blue line) are an interesting story reported by Mr. Radomski and an insight provided by one of today’s radio show listeners that struck me as profound.

First, Mr. Radomski’s story.  Speaking about claims that the Ft Knox holds no gold, Mr. Radomski wrote,

“This is no new topic. One of the first written accounts questioning the amount of gold really stored in Fort Knox appeared in 1974 in a tabloid, the National Tattler. An unnamed informant claimed that there was no gold left in Fort Knox. The sensational nature of the story, and of the newspaper, didn’t contribute to the credibility of the account but it was later revealed that the informant, Louise Auchincloss Boyer, secretary to Nelson Rockefeller, had fallen out of the window of her New York apartment and died three days after the publication in the Tattler. The tragic incident resulted in controversies over the possibility that the U.S. Bullion Depository may have misstated the actual amount of gold held in Fort Knox.”

You don’t need a tin-foil hat to see the conspiracy theory in that story.  A secretary to Nelson Rockefeller reports that there’s no gold in Ft. Knox, and three days later she dies under violent and mysterious circumstances.  Assuming these two events (the report and the death) are linked rather than coincidental, they imply that the secretary was murdered for telling the truth–the gold was already gone from in Ft. Knox all the way back in the early 1970s.

(Incidentally, if the gold was removed from Ft. Knox, where did it go?  Who got it?  Insofar as Nelson Rockefeller’s secretary died, it might follow that Rockefeller ordered her death.  How much more of a leap would be required to presume that Rockefeller also received at least some of the theoretically missing gold?)

•  Now, here’s the insight provided by one of my radio show listeners that struck me as profound:  Did President Nixon close the “gold window” (redemption of foreign-held paper dollars with U.S. gold at the rate of $35/ounce) in A.D. 1971 because he didn’t want to bleed any more gold out of the U.S. Treasury?  Or did Nixon close the “gold window” because the gold was already all gone?

Closing the “gold window” and thereby reducing the paper dollar to a pure fiat currency wasn’t Nixon’s only option.  He could more easily have simply devalued the dollar from $35/ounce to $100/ounce–or even $200 per ounce.  Sure, such devaluation would cause an uproar in global trade, but declaring dollars to be worth only 1/100th of an ounce of gold could not be as bad as declaring dollars were worth no gold whatsoever.  If Nixon had devalued the dollar from roughly 3% ($35) of an ounce of gold to 1% ($100) or 0.5% ($200) of an ounce of gold, the dollar would at least have still been “as good as gold”–not as much gold as formerly, mind you, but still, some gold.

Why did Nixon choose to “close the gold window” and turn the dollar into a pure fiat currency rather than simply devalue the dollar to $50, $100 or $200 per ounce of gold?  Was it because Nixon was a hard-nosed S.O.B?  Or was it because the Treasury could no longer redeem paper dollars for gold at any price for gold (not even $1,000/ounce) because the gold was already all gone?  Was the government’s primary objective in “closing the gold window” to prevent the American people and the world from “looking in” and learning that the U.S. was out of gold and therefore bankrupt?

•  Look back at the previous graph.

The government admits to losing 60% of our gold from A.D. 1957 through A.D. 1972.  But, according to Mr. Radomski, we haven’t had a comprehensive audit of Ft. Knox since A.D. 1953.

Thus, we don’t actually know how much gold is gone.  Ohh, you can bet that at least 60% of the former gold is gone.  Government has admitted that much gold is gone.  But, it’s entirely possible that government didn’t merely dispose of 60% of our gold during those 15 years.  Maybe they disposed of 70%.  Or, even 80%.  Or, even 99.9% of our national treasury of gold.  We have nothing to prove government’s claim that it’s kept 8,200 tons of gold since A.D.1973–except the government’s word of honor.

But we do see proof every day that government has no “honor” and will, instead, lie any time it suits the government’s interests.  What is the true inflation rate?  What’s the true unemployment rate?  What’s the true size of the National Debt?  How many of you believe government tells the truth about any of those numbers?  How many of you believe the government routinely lies?

If you believe government routinely lies, why would you believe government’s claim to have retained 8,200 tons of gold for the past 30 years–especially when government refuses to provide or even allow any independent verification of its claim?   The only reason to currently believe that government has retained 8,200 tons of gold is that a contrary belief is too fantastic to accept.  Surely, our beloved gov-co would never lie about such an important issue, right?  This parallels the “big lie” strategy first advanced by Adolph Hitler’s minister of propaganda, Joseph Goebbels.  In essence, the people may not believe government’s little lies, but they’ll never doubt gov-co’s big ones.

Could it be that our gov-co’s claim to hold 8,200 tons of gold is one of the world’s biggest–and therefore most believable–lies, ever?

•  If we extend the blue dotted arrow on the previous graph, we can see that at the rate gold was admittedly being lost between A.D. 1957 and 1972, all of the gold would’ve been gone by about A.D. 1978.

We’re told that Nelson Rockefeller’s secretary revealed that all of the gold was gone in A.D. 1974.

We know that President Nixon closed the “gold window” in A.D. 1971.

The graph, the secretary’s claim and closing the gold window all reflect events in the 1970s. That’s not proof, but it is a bit of coincidence.  Those three bits of “evidence” are all consistent with the possibility that all of the U.S. gold was gone sometime around A.D. 1970 (which, coincidentally, was in the midst of the Viet Nam War).

Is it possible that the gold reportedly stored at Ft. Knox hasn’t disappeared recently (as some suspect), but has been gone for over 40 years?

Inquiring minds wanna know.

(Finally, those of you who have tin-foil hats may want to don them while you relish yet another conspiracy theory:  Could it be that a primary purpose for the Viet Nam War was not to prevent the spread of communism, but to conceal the theft of all the gold from Ft. Knox?)

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16 responses to “No Gold in Ft. Knox?

  1. Robert Christopher Laity

    January 4, 2013 at 6:49 AM

    It was years ago that I heard reports that there “Is NO Gold in Fort Knox”. I wouldn’t be surprised.
    Currently,there ARE inpure Gold coins being discovered by investors. We MUST go back on the Gold Standard.

     
  2. indio007

    January 4, 2013 at 12:20 PM

    I’m trying to figure out what started the fall in gold reserves. According to the chart it looks like 1956 or 1957. Anyone know of any fishy events around then? Did some debt become due?

     
    • Adask

      January 4, 2013 at 1:22 PM

      Exactly. That graph indicates when the U.S Treasury started to acquire gold at a fantastic rate (A.D. 1930-1940) and then began to lose gold at a fantastic rate (A.D. 1956-1957), but the reasons for the sudden acquisitions and/or losses aren’t known to me. We can probably guess why the amount of gold dramatically increased just prior to WWII, but what triggered the 15 years of persistent losses starting about A.D. 1957? I’m hoping that some reader has an answer. I, as yet, do not.

       
      • pop de adam

        January 4, 2013 at 2:31 PM

        From Wikipedia: Bretton Woods (mid-page),

        From 1947 until 1958, the U.S. deliberately encouraged an outflow of dollars, and, from 1950 on, the United States ran a balance of payments deficit with the intent of providing liquidity for the international economy. Dollars flowed out through various U.S. aid programs: the Truman Doctrine entailing aid to the pro-U.S. Greek and Turkish regimes, which were struggling to suppress communist revolution, aid to various pro-U.S. regimes in the Third World, and most important, the Marshall Plan. From 1948 to 1954 the United States provided 16 Western European countries $17 billion in grants.

        My reasoning is: An outflow of dollars decreases their domestic availibility, increasing their own value. Suppressing availibility of these dollars correlates to a depression in the gold prices. If the price of gold drops then you need to sell more of it to create the same or increasing dollar number value. If we wish to maintain the dollars value this scheme seems require an outflow of both. In a more contemporary sense, what we see with the “increasing” price of gold is the shrinking of the dollars value, gold is not changing the value the dollar is.

        I realize this seems really counter-intuitive or internally conflicted, it is probably so. If anyone has an explaination, I am all ears as well.

        -pop

         
      • Cues

        May 29, 2013 at 11:12 PM

        The reason for the increase in the gold reserves in the 1930. FDR made it illegal to own gold, every citizen had to turn in there gold and were paid $30 an once. He did this to fight the depression and he took us off the gold standard at that time

         
  3. Anon4fun

    January 4, 2013 at 3:40 PM

    The closure of the gold window had to happen sooner or later, due to the so-called Triffin paradox. To issue the world reserve currency according to Bretton Woods, and so supply the rest of the world’s reserves with dollars, the US had to run its printing presses and maintain a balance of payments deficit which inevitably cheapened the dollar in terms of gold on the world market. The result was a run on the $35 gold in US reserves, causing Nixon to close the window.

     
  4. Anon4fun

    January 4, 2013 at 6:42 PM

    Regarding the war in Vietnam, the reason for it was to fight the spread of communism. Otherwise, all the communists in this country would not have been against it. No doubt there were a few goings-on of the tinfoil type as well, but disguising a lack of gold in Fort Knox is unlikely to be one of them. The causes of US military operations in the region go back to before the audit of 1953.

     
  5. brimp

    January 4, 2013 at 8:16 PM

    Every country “reports” their gold holdings. It should be possible to take the annual gold production numbers and reconcile the reports. If this is not the case, then there must be an unreported stash somewhere. Milton Friedman’s “A Monetary History of the United States, 1867-1960″ came out in 1963. Has there been any objective reporting since then?

     
  6. Anon4fun

    January 5, 2013 at 9:25 PM

    I’m not sure how objective a source Milton Friedman is, considering his admitted mentor and most important influence was Arthur F. Burns, Chairman of the Federal Reserve from 1970 to 1978.

     
  7. r4freedom

    January 6, 2013 at 8:32 AM

    Read about Congressman Louis McFadden, his charges of treason, and what he found out about how they stole all the gold. It’s been gone as Ft. Knox is just a fantasy to keep the “sheople ” believing its a “gold depository”.

     
  8. Yartap

    January 6, 2013 at 9:21 PM

    Yes – read the Congressman McFadden’s speech for the indepth understanding.

    Read Hear:

    http://www.libertyforlife.com/banking/us-mcfadden-re-frb.htm

     
  9. Lex Mercatoria

    January 16, 2013 at 7:08 PM

    Back in 1979 the then Treasurer of the U.S. admitted in a letter to the late Dr. Peter Beter that a rather large number of tons of gold (I forget how many) had been shipped from Fort Knox to England under the London Gold Pool Agreement, no doubt a scam. The pilphering of Fort Knox started back in WW2 when the Army Corp of Engineers made structural modifications to FK to widen the entrance(s), presumably to facilitate deposits & withdrawals of gold in larger volumes than before.

    The self-anointed Elite(tm) have brought in mental replacements for the old physical unit value systems of old. In this case we no longer have money but the idea of money instead.

     
  10. Cues

    May 29, 2013 at 11:27 PM

    BTW the tin-fold hats know that the gold went to the UFO Aliens after they flew over Washington DC in July of 1952 we gave it to them on 1953 so they stop.lol

     
  11. professionaltourist

    August 10, 2013 at 8:38 PM

    This is an old post but I didn’t see an answer to the asked question about why the good amount dropped so drastically in 57.

    We had a very serious economic crisis in 57-61 since most of the war efforts were closing down from WWII and Korea.

    This is also the time we started getting involved with in Vietnam, though there were no combat troops on the ground until 65.

     
  12. TAN

    February 25, 2014 at 11:41 AM

    The gold isn’t there, probably never was there. Follow the trail of murder victims who died after telling the truth about the gold and you get some idea as to who stole it. Why are truthers being referred to has people wearing tinfoil hats? You people admit the government can’t be trusted. Doesn’t that mean you should put on a tin foil hat? Maybe we should go on a tin standard. We do still have tin in this country I presume??!!!

     
    • Adask

      February 25, 2014 at 12:33 PM

      Yes, I’m prety sure we still have tin in this country–I think we use it to make dimes.

       

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