Published on 19. Oct, 2011 by Thomas Herold in Government.
You have probably heard comparisons made before to as safe as Fort Knox, or as sure as gold in Fort Knox. You may have wondered what the story is on the gold that the U.S. government keeps in the American Depository at Fort Knox.
The official government line is that this United States Bullion Depository contains an incredible 5,046 tons, or 147.2 million troy ounces, of gold bullion. This figure represents about 2.5% of the total gold ever mined and refined in the history of the world.
The problem with the impressive inventories that Fort Knox is supposed to hold lies in the suspicion that there is actually less than the full amount of gold there that the government claims to have.
What Was the Origin and Purpose of Fort Knox?
The government established its gold repository at Fort Knox because of a specific series of events. President Franklin D. Roosevelt outlawed private American citizen ownership of all gold bullion, coins, and even certificates in 1933. All citizens who obeyed this executive order had to sell their gold holdings to the Federal Reserve. This caused the Federal Reserve gold inventory to rise from $4 billion to an incredible $12 billion by 1937.
The Federal Government now possessed incredible gold reserves, yet they did not have the proper facility in which to store and safeguard this golden hoard. Because of this need, the Treasury Department started to construct the United States Bullion Depository in 1936 on the site of Fort Knox in Kentucky on a piece of land that the military transferred over to them. By December of that same year, the Gold Vault had been finished at the cost of $560,000, or the equivalent of $8.5 million measured in 2009 value dollars.
In the months of January through July of 1937, the very first shipments of gold to Fort Knox began. The bulk of American government gold reserves arrived at the American Depository at the fort in the form of melted down gold coins transformed into newly forged gold bars. The Treasury department also collected and stored older, purer bullion and bars, along with some of the U.S. citizen surrendered gold coins left in their original form. The U.S. Postal Inspection Service had the job to protect the gold transfer that encompassed five hundred rail cars handled via registered mail shipment to Fort Knox.
At one point in 1949, Fort Knox contained a verified 701 million ounces of gold. This represented the government’s greatest inventory in U.S history. In fact, the over 700 million ounces equaled nearly 70% of the gold on earth. You may be surprised to learn that there had never been such a large amount of gold stored in a single location on the planet before.
Who Owns the Gold that Was or Is in There?
The Fort Knox gold hoard is owned by the U.S. government. The official statistics claim that the United States still possesses a larger amount of gold bullion than any other single country in the world, at more than two times as much gold as gold holder number two Germany. Today’s American holdings supposedly include 368,000 bars of 400 troy ounce size. This would be worth an impressive more than $278 billion at the recent life time highs of gold at over $1,900 per ounce.
The World War II inventory of gold was valued at over $910 billion. You can see how much gold the United States has forfeited in the last sixty five years when you look at these numbers. This again assumes that all of the 147 million troy ounces of gold that the government claims on paper are actually in the fort.
You may think like many Americans that this gold kept at Fort Knox is owned by other nations. In fact, the U.S. has another gold depository at the Federal Reserve Bank of New York. This is actually the largest gold depository that the U.S. possesses. The 225 million troy ounces of gold found at this second site are held for other nations’ central banks, foreign governments, and international organizations, as well as for the Treasury.
When Was The One Official “Audit” Of Fort Knox?
President Dwight Eisenhower turns out to be the only U.S. President who presided over anything that resembled a fair audit of the gold inside Fort Knox. He ordered this audit of the nation’s gold just hours after he took office in January of 1953. This only above board government audit of the gold reserves is still fraught with problems and inconsistencies.
For example, the auditors were all government bureaucrats who later admitted that they did not have the experience needed to conduct an audit. Another suspicious element is that it only took them seven days to audit the biggest hoard of gold that had ever been gathered together in human history.
Besides this, the officials admitted that they actually tested a mere five percent of all the gold in Fort Knox. In the end, no outside audit experts were allowed to contribute to nor participate in the most important audit in the history of the United States.
Is There Any Gold in Fort Knox Today?
The government has freely admitted that at least eighty percent of the 1953 audited gold departed for overseas in the years that followed. Because suspicions began to be raised concerning how much gold was left at Fort Knox in the decades that followed, the Treasury department conducted an official media event tour of the facility in 1974. The under four hour tour took some elected and non expert officials through the vaults and showed them what the Treasury wished for them to see.
Only one of the thirteen compartments that supposedly held gold was opened up for the visitors to examine. Pictures were taken by the media as the attendant Congressman weighed a couple of bars, and none of these bars were assayed for purity. To make matters worse, the eyewitnesses of this last attempt at evidence that Fort Knox really still held gold looked at orange colored gold bars, a sure sign that these bars did not contain anything close to pure or even near pure gold.
The gold that the Treasury elected to show the world as representative of what the U.S. held in its reserves in 1974 proved to be the dregs of the once greatest hoard of gold that the world had seen.
You can understand that skeptics were not convinced by this charade of a public official tour. So Treasury consented to audit the gold in the vaults. The day after the tour ended, this partial audit commenced. Yet a mere 20% of the claimed gold holdings were audited. A year later, the government released its results from the audit that showed at best that 20% of the gold that the government claimed it still had was actually there.
What Happens When the Truth Goes Public?
Conspiracy theories on the American gold reserves have persisted since the bungled partial audit of 1974. The alarming possibility that all or nearly all of the U.S. gold reserves are actually long gone is not a theory held by far right or left wing extremists. Respected U.S. Congressman Ron Paul has introduced legislation that calls for a full and open audit of the U.S. gold reserves at the American Depository in Fort Knox.
He claims that the reasons you might be suspicious about any actual gold holdings there are legitimate and well founded. In fact, Ron Paul has charged that Treasury might not only be lying to you about the amount of gold or lack thereof at Fort Knox, but also about the supposed gold in the New York Federal Reserve vaults as well.
If the very real possibility that the U.S. has long ago spent all or most of its gold reserves turned out to be substantiated, you would see dramatic consequences. Gold prices would skyrocket when it was obvious that the amount of above ground vaulted gold is actually far less than everyone believes.
The U.S. dollar would decline sharply, as the value of the paper greenback has been underpinned since the U.S. left the gold standard by the firm belief that the U.S. continues to have the greatest gold supply in the world. This confidence in all of this supposed gold goes a long way to bolster faith and confidence in the American government and monetary authorities as they carry a stunningly heavy load of more than $14 trillion in debt.
If the U.S. Treasury has nothing to hide about the gold reserves, then why will they not agree to another fair audit more than fifty years after the only official one that they ever conducted?