Is a Fort Knox Gold Audit Inevitable?

Is a Fort Knox gold audit inevitable?

Hard to say. But President Trump has suggested one is coming.

Some have rolled their eyes at the suggestion that stated gold numbers aren't accurate. But it’s worth noting that former Congressman Ron Paul tried to pass legislation to have our gold reserves audited in 2011.  But to date, no audit has been done. Congress never passed that bill.  Which begs the question: why would our government not want to confirm those gold counts?

Here’s a segment of Paul’s presentation to Congress in 2011 …

For far too long, the United States Government has been less than transparent in releasing information relating to its gold holdings. Not surprisingly, this secrecy has given rise to a number of theories about the gold at Fort Knox and other depositories.

Some people speculate that the gold has been involved in gold swaps with foreign governments or bullion banks. Others believe that the government secretly shipped it out of Fort Knox and sold it. And, still others believe that the bars at Fort Knox are actually gold-plated tungsten.

Historically, the Treasury and the Mint have dismissed these theories rather than addressing these concerns with substantive rebuttals. No one from Congress has been allowed to view the gold at Fort Knox in nearly 40 years. Recent photographs of gold holdings seem to be hard to come by. And the Mint and the Inspector General’s audit statements contain only the bare minimum of information.

Because the Government has for so long refused to provide substantive information on its gold holdings, it is not surprising that so much confusion abounds, both within and without the Government.

The difference between custody and ownership, questions about the responsibility for U.S. gold held at the New York Fed, and the issue of which division at Treasury is ultimately responsible for the gold reserves are just some of the questions that have come up during the research for this hearing. In a way, it seems as though someone decided to lock up the gold, put the key in a desk somewhere, and walk off without telling anyone anything.

Journalist Guy Walters recently penned a piece about this. And he highlighted  3 conspiracy theories that have emerged about the gold at Fort Knox. This, mostly as a result of the government being unwilling to do a proper audit.

1. The government sold some of the gold to pay off some of the country’s debt.  Given the massive amount of debt on our books, such a thing wouldn't even register as an accounting error.  So I don’t buy that for one second.
2. There’s never been any gold at Fort Knox.  The entire facility is just a huge bluff to deceive global markets. Indeed, this would make for the premise of an excellent political thriller starring Ralph Fiennes and Sydney Sweeny in low-cut blouses and traditional blazers.  But alas, it would likely be impossible to pull off such a massive deception given that 147.34 ounces of gold would be a hell of a lot to fake.
3. The gold at Fort Knox isn't really gold, but instead, gold-plated tungsten. As Walters pointed out, this theory actually gained some traction after the Chinese reported fake gold bars had emerged on the international market. Some of which supposedly originated from US reserves. Tungsten and gold have similar densities, which would have likely gone unnoticed in the past. But given the technology we have today, it would take only seconds to prove or disprove this theory.   
   

While it would make sense to verify these reserves, to date, there’s really been no legitimate effort to do so.

A Fake Fort Knox Gold Audit

Former treasury secretary Steve Mnuchin visited Fort Knox during Trump’s first term. He said that it was important for him to see the gold and make sure it was there.  But it’s not as if he could just walk in there and verify that all the gold that was supposed to be there, was, in fact, there. 

Truth is, it would take more than a year to complete a legitimate audit of Fort Knox. And cost a few million bucks, too.  Make no mistake: Mnuchin’s visit was not to “make sure the gold was there.”  Some have even suggested the whole thing was an excuse to go to Fort Knox so he could watch the eclipse.  Apparently, it was an excellent location to watch it.

I don’t know if that’s true or not.  Seems a bit far-fetched, if you ask me.  If anything, I suspect it was just another dog and pony show. Something that allowed him to get his dirty hands on all that gold so he could have a micro-orgasm over it while posing for pictures.

Of course, I’m not saying that Fort Knox is missing any gold.  But I am saying that the mere questioning of gold counts is certainly enough to add to the already bullish appetite for gold.

To be sure, Trump has stated that he plans to visit  Fort Knox to see if any gold is missing.  But I don’t believe that’ll happen.

Again, it’ll cost too much money and take too long.  And honestly, I don’t see how uncovering, potentially, one of the greatest thefts of U.S. assets ever would benefit Trump.  He’s not doing anything unless it benefits him personally.  Sowing doubt about our national assets while a global trade war is wreaking havoc in the markets doesn't seem like a very strategic move. Especially for a guy that’s probably one of the most gifted and wily social and political influencers since Ronald Reagan. Although the two couldn’t be more different.

In any event, as long as questions remain about Fort Knox. And those questions are openly discussed by the White House. Expect to see even more interest in gold from the investment community.

Worth noting: It is that easy to question the accuracy of gold counts at Fort Knox. But it's not so easy to question the accuracy of gold reserves that have not yet been mined. 

You see, unmined gold reserves are verified through a variety of avenues, including: core samples, statistical modeling and geological exploration.  Findings are also made public.  They're also verified through third parties because no one will invest in a gold mine without some assurances that the gold is actually there.  It’s actually a far more transparent and verifiable process than anything we’ve seen done at Fort Knox.

To be sure, gold’s store of value ultimately lies in its existence, not in its location.  Which is why I’m particularly bullish on NatGold. 

If you’re unfamiliar, NatGold allows you to buy unmined gold.  Also known as “stranded” gold reserves.  

With verified “stranded” gold reserves, you could potentially gain access to nearly 60,000 metric tons of unmined gold. The total value of all that gold is around $6 trillion. And unlike the gold at Fort Knox, this CAN be verified.

Now my good friend and colleague, Brian Hicks, recently interviewed the founder and CEO of NatGold, Tony Wile.  I invite you to watch this interview as it explains this opportunity in its entirety, and really gives you all the information you need to get a piece of this action for yourself.

I don’t know if we’ll ever get a proper audit of all that gold at Fort Knox.  But I do know that gold’s value will only continue to climb behind the backdrop of inflationary pressures, global trade wars, economic uncertainty, and yes, even conspiracy theories about Fort Knox.