Every modern state has strategic reserves of gold. Such a reserve is stored mainly in storage facilities intended for this purpose. Today, the United States is a state whose gold and foreign exchange reserves are the largest in the world. Protected from prying eyes, more than seven thousand tons of precious metal are securely stored in America's main storage facility - Fort Knox.
Vault security system
Fort Knox covers an area of more than 400 square meters.
km and is located in Kentucky. Despite the fact that this military base belongs to the American army, the military is not directly involved in the protection of gold reserves. But if a threat arises, an arsenal of helicopters and tanks, about 30 thousand soldiers with the highest level of military training will begin to solve the problem. The gold storage itself is located in the depths of the earth. Its walls are built of solid granite and covered with a thick layer of concrete. The door at the entrance is made of hardened steel and weighs about 20 tons. It has a security code, which members of the repository administration are partially familiar with. However, none of them have any idea about the complete combination of numbers. Due to the fact that the door is opened extremely rarely, mainly for inspection purposes, there is no need to regularly update employees.
Under suspicion
To understand what happened next, you need to travel to New Orleans, the hometown of Lee Harvey Oswald, where he last visited in 1963. On the evening of November 22, an argument occurred between Guy Banister and Jack Martin in a local bar. Banister ran a small detective agency here, Martin worked for him. The reason for the quarrel had nothing to do with the Kennedy assassination, it was purely a production conflict. In the heat of the argument, Banister pulled out a pistol and hit Martin in the head with it several times. He shouted: “Are you going to kill me the way you killed Kennedy?”
Police officers lead Lee Harvey Oswald. Source: Wikimedia Commons
The phrase aroused suspicion. Martin, who was admitted to the hospital, was interrogated, and he said that his boss Banister knew a certain David Ferry, and he, in turn, knew Lee Harvey Oswald quite well. The victim further claimed that Ferry convinced Oswald to attack the president through hypnosis. Martin was considered not entirely normal, but in connection with the assassination of the president, the FBI pursued every theory. Ferry was also interrogated, but the case did not receive any further progress in 1963.
And more interesting facts about Fort Knox and the US gold reserve
Fact No. 1. For many decades, gold was taken from the vault in very small quantities, only to check its purity.
Fact No. 2. In the 1940s, during World War II, the highest gold reserves were recorded: 20,205 tons. Just imagine, this is more than 500 railway cars!
Fact No. 3. The weight of a standard gold bar is 11.34 kg.
Fact No. 4. Fort Knox cost $560,000 to build and was completed in December 1936.
Fact No. 5. Previously, Fort Knox also housed the Declaration of Independence, the US Constitution, the Articles of Confederation, Lincoln's address, and three volumes of the Gutenberg Bible.
Fact No. 6. The access code to the Fort Knox door is divided into parts among people; no one knows this code in full.
Fact No. 7. During World War II, the base also housed other valuables, including British crown jewels. Also, many European countries temporarily moved their gold here, fearing a German invasion.
Fact No. 8. The gold reserves of many countries are stored in the United States. There are about 60 of them in total, but data on them is not published. For example, 45% of Germany’s gold is also stored in the States.
Fact No. 9. Since most of the gold reserves are in the United States, control of the International Monetary Fund's gold reserves also belongs to the United States.
Fact No. 10. During the election period, Donald Trump promised after his inauguration to conduct a comprehensive audit of the Federal Reserve System, as he believes that the real reserves of gold in US vaults do not correspond to those declared.
How Fort Knock came to be
Everyone who follows the history of states sooner or later asks themselves the question - when, in fact, did this or that object appear? We are trying to unravel a more accurate age of the pyramids in Egypt, the temples of antiquity. What about Fort Knox? And historians have not ignored him. And it was like this.
The Army base was established during World War I in 1918 as a permanent post for the U.S. Army. In January 1932, Fort Knox was created as a permanent base to house the 1st Cavalry Regiment. In the 1930s, it also served as an induction center for the Civilian Conservation Corps (CCC).
The base was converted into an armored force headquarters during World War II. In October 1940, an armored forces school and armored force replacement centers were also established at the base. The base was used to train soldiers in specific areas of armor tactics, tank artillery, communications, and maintenance during the war.
Fort Knox became a test site for the Navy in April 1942 with the creation of a mock-up of the Landing Ship Tank (LST). In 1943, the armored force was renamed the Armored Replacement Training Center (ARTC). But the base was not just a military stronghold all the time - Fort Knox was the main prisoner of war camp from February 1944 to June 1946. Agree, an excellent prison for soldiers - the impenetrable walls of the base did not give the slightest chance of freedom.
In whose hands is the US gold reserve?
Fort Knox is an isolated area, inaccessible not only to ordinary people, but also to the president himself. The Ministry of Finance is responsible for the safety and replenishment of data from reserve systems.
The history of the impregnable fortress took shape in the first half of the twentieth century. During the Great Depression, the economic situation in the country required urgent drastic decisions. One of these actions was F. Roosevelt’s decree, according to which any ownership of gold bars, coins and certificates was prohibited to all American citizens. This decision left no choice for ordinary people, who had to sell all their gold to the Federal Reserve for almost nothing. However, such a policy bore fruit: in the first four years alone, the US gold reserves tripled.
The government agencies that were responsible for Fort Knox changed periodically: ownership passed from the Federal Reserve to the central banking system, then to the Treasury, then control returned to the Fed. To this day, in New York, the Fed monitors all transactions with gold.
Fort Knox: truth and legends
Fort Knox is a heavily equipped military base. The largest depository of US gold reserves cannot be accessed without lengthy preliminary permitting procedures. Constant surveillance and guarding by paramilitary men makes Fort Knox inaccessible.
In 1937, a huge amount of money was invested in the construction of this project, but this did not allow it to take the place of the first largest storage facility. This role is assigned to the New York Treasury's huge savings facility.
In addition, the Fort Knox fortress is shrouded in many legends and fictions. The guards stationed in the towers on every corner are said to wield super-powerful laser weapons that can independently detect a moving object. There are also rumors that the territory adjacent to the protected area is mined. Where is fiction and where is truth is unclear, since it is impossible to find any reliable source of information.
However, one can consider the version that, in addition to valuable metal, reserves of opium and morphine were stored here for some time, it can be considered quite reliable. Most likely, the purpose of such reserves was to ensure the necessary painkillers in the state in case there were interruptions in the supply of narcotic substances from Central Asia. But such resources did not last long, since after the invention of artificial analgesics, the entire volume of stored drugs was destroyed.
Where is Germany's gold stored?
Doubts about the presence of gold reserves near Manhattan also arose after the situation with Germany. This country is the second largest in the world in terms of gold reserves. She often buys precious metal abroad and leaves it there for storage, since it is convenient; you can always sell gold without transporting it. Only a third of the stock is at home, the rest is located in other countries.
It is known that Germany's gold reserves in the United States have been stored in the basement of New York for a long time. There were no problems until the German authorities decided to return the gold to their country. Of the 674 tons, the Americans initially returned only five, and then completely refused to do so, explaining their behavior by saying that the process could drag on until 2020. Then German representatives demanded to visit the storage facility and were refused. As a result, the German authorities retreated, deciding that everything was in order with gold, but rumors spread in the country that the United States was trading gold in Germany and there was almost no gold left. These guesses were supported by the following fact: the part of the metal that was returned was not the same as what was given for storage. For some reason the gold was melted down into new bars.
Recently, many countries have concluded that storing gold in America is not as reliable as it seemed. This is not the first time that institutions in this country have sold something that does not actually exist. For example, in 2012, Goldman Sachs sold certificates supposedly backed by real gold, but it turned out that this was a hoax and there was actually no yellow metal.
The Federal Reserve System of the United States is a very closed organization, it has held gold from different countries for many years, and it was safe and secure, countries did not worry about gold reserves. Today the situation has not changed for the better, so one can only guess what the US gold reserves are in 2014.
So far, the United States is believed to have the largest reserve in the entire world. This year, according to official data, the mass of stored gold is 8133.5 tons, which is 71% of the foreign exchange reserve of this country. Germany is in second place with 3,386 tons of gold, followed by Italy. For now, things are like this, but everything could change if a real, detailed audit takes place that will reveal all the secrets of the Fort Knox vault and gold reserves in New York. Numerous ambiguities and omissions in this question force us to look for different answers to it, arousing the interest of many countries around the world.
The Great American Tragedy: How Much Gold is Left in Fort Knox?
Posted by Chris Weber, Weber Global Opportunities Report
We need to unravel a terrible secret
Yesterday was the 39th anniversary of the day the US government declared bankruptcy. Oh, they called it something else back then. But on August 15, 1971, that's exactly what happened - the United States broke its promise to pay gold for dollars.
Until this day, gold was the legal core of the world monetary system. Although each currency was defined in relation to the US dollar, the value of the dollar itself was 1/35th of a troy ounce of gold.
Since then, the international monetary system has remained without a central element. The “reserve currency” remains the US dollar. But now there is no official definition of what this dollar is. As with any other currency, its value in foreign exchange markets changes every ten seconds. This is a promise to pay nothing. It gets cheaper year by year. Moreover, since then, a lot has happened in the world currency markets: buying, selling, manipulation... and none of this has added productivity to the global economy. Oh, sure, foreign exchange investments have made some of us rich, but is it really the same as what Steve Jobs made with Apple?
After the breaking of this last peg to gold there was no need to maintain a firm dollar exchange rate. In 2009, only 18 cents remained of the 1971 American dollar, according to the Inflation Calculator. Thus, over the past 39 years, the dollar has lost more than 80% of its purchasing power.
Between 1934 and 1971, only foreigners could legally present their US dollars and receive gold from the American government. On August 15 of that year, this last driving force of free exchange of currencies was blocked.
In 1934, gold was confiscated from American citizens, melted down from coins into bars, and collected over the next few years in a new storage facility at Fort Knox, Kentucky. After this, the official price of gold rose from $20.67 to $35, and the currency was devalued to try to lift the economy out of depression. It didn't work, but it turned out that there was an unprecedented amount of gold in one place.
At a time when deflation was suppressing the prices of all assets, a strong rise in the price of gold led to the fact that everyone around them wanted to sell their gold to the US Treasury. For many years, the price of $35 per ounce remained above the market price, so it was very profitable for foreign sellers.
The maximum amount of gold in Fort Knox reached 701 million ounces, this was in 1949. This amount represented 69.9% of all world gold; Never before had so much yellow metal gathered in one place.
But soon after, gold began to be removed from Fort Knox and sent to foreign citizens and organizations, who shelled out $35 in Federal Reserve Bank notes for every troy ounce of gold. At one point in 1950, the price of $35 an ounce proved too low for gold.
From then until 1972, at least 75% of the official US gold reserves were taken out of the country in exchange for paper dollars that could be printed without permission. However, I think the total amount of real gold remaining is even smaller. According to official data, there are currently 147.3 million ounces in storage. Compared to the maximum, the amount of gold decreased by 79%.
In 1988, 22 years ago, I wrote a book about Fort Knox, the gold that was stored there, and the documented history of official lies, subterfuge and incompetence of those in charge of that gold.
I say "documented history" because, while writing the book, I was careful to include only official documents and private correspondence of members of the American government between 1934 and 1987. Using their own answers to questions about how much gold was left in the vault and what its quality was, this book describes for the first time the government's attempts to justify gold policy. Their answers shocked me.
And nothing has happened since 1988 to change my opinion.
The story of a great man
My path to writing this book was interesting. I was in the right place at the right time. A man named Edward Durell had been corresponding with the highest American government officials for many years when he asked me to come to his farm in Virginia and write a book based on his work. He was almost 90 years old, a wealthy industrialist who had financed the campaigns of many politicians for decades. He was dying (he died a few weeks after the book was published) and wanted all his fears to be published before his death. All his life he fought to restore honesty and transparency to the monetary system. (He heard about me from Congressman Ron Paul . Five years earlier, in 1982, I had written half of Paul's book, The Argument for Gold, as a literary "Negro.")
When President Nixon closed the gold window exactly 39 years ago, Durrell began hearing conversations that made him wonder about the quantity and quality of gold remaining at Fort Knox. A lifelong Republican, Darrell never trusted Nixon and considered him a first-class liar.
However, during Nixon's resignation in August 1974, Durrell contacted his longtime friend (and long-term recipient of Durrell's numerous campaign funds) William Saxbe . Saxby was not the first to meet: at the time he was the attorney general of the United States, the supreme representative of the executive branch of government. With a new president, Gerald Ford , whom Durrell considered more honest, he asked Saxby to conduct a full audit of the gold at Fort Knox.
Saxby quickly moved to please Durrell, and six weeks later, on September 23, 1974, Mary Brooks , director of the United States Mint, took six members of Congress and one Senator to Fort Knox. For the first time since Franklin Roosevelt's on April 28, 1943, anyone other than representatives of the Mint and the Treasury was allowed to visit Fort Knox. As far as I know, no strangers have been there since then.
This visit was not an audit or inventory of gold reserves - just a tour. But this trip was rather of a pleasure nature. While it seemed to reassure some members of Congress, after some reflection, several participants in the tour publicly stated that they were not satisfied with its results.
This and other stories are in my book, and I do not want to repeat myself. I am trying to make it available online and I think that by the time this article is printed I will be able to do so.
The book was not particularly successful. In fact, no book I have ever written has had so little impact. She appeared in a world that was not interested in this issue. The book was not a "sensation" because we did not shout that there was no gold left in Fort Knox. This approach would attract more press. Instead, our tactic has been to let official government responses speak for themselves, while highlighting how poor and unsatisfactory they are. We did not want to make unfounded accusations that would lead us to court: the book was compiled so carefully. I have sometimes thought that the mass indifference with which the book was received hastened Mr. Durrell's death, and I have felt uneasy ever since. Darrell was a great man and deserved better.
It was partly my fault. I paid little attention to distributing the book. I'm just not very good at advertising anything; I don't like being the center of attention and have always tried to avoid fame and attention. While I can say that I am good at avoiding fame, in this case I was the wrong person. With Darrell's death, I had to start promoting the book, and I let him down.
Maybe a good agent could get the public interested in the story of how America lost its gold, but in 1988 the gold bull market was a distant memory, so maybe nothing would have worked.
Of course, the title of the book was not the best; I forgot who invented it (maybe it was me). The first part (“On par with gold?”) is taken from a speech President Kennedy gave shortly after taking office in January 1961. As he said then, “increasing foreign dollar reserves places a special responsibility on the United States to maintain the dollar as the primary reserve currency of the free world. This requires that many countries perceive the dollar on an equal basis with gold. It is our responsibility to maintain this confidence.”
Unfortunately, Kennedy followed the same policies as every other president from Roosevelt to Obama. They all saw the value of the dollar as something worth sacrificing for other goals. The only reason the US dollar is still the world's reserve currency is because no other country can match the dollar with its own currency.
Instead, the dollar has long been no longer perceived as “on par with gold,” and all other currencies have also fallen in price relative to the precious metal.
The only "check" of Fort Knox
The only gold test at Fort Knox took place a few days after Dwight Eisenhower became president in January 1953. After a 20-year Democratic presidency, Americans wanted to make sure that the gold they had confiscated was still there. Thus, the new president ordered an audit within hours of taking office.
The main problem was that this test was not a test as such. Briefly it looked like this:
- Representatives of the audit team were allowed to set audit rules. No independent private experts were involved.
- These government bureaucrats involved in the review had no experience in solving such problems, as they themselves admitted.
- The complete verification of the largest gold reserve in history lasted only seven days.
- Only a small part of the gold was tested. Officials later admitted that this share was only 5%.
- Based on the verification of this miniscule quantity, the official commission reported that, in the opinion of its participants, if all stocks were examined, they would correspond to the figures they recorded.
- If the verification results were reliable, then in subsequent years more than 80% of the reserves went abroad. If they were not reliable, then the amount of lost gold could be even greater.
This first and only test convinced America in 1953. But this America is accustomed to taking official government statements at face value. Over the years, as lies about Vietnam, Watergate, and more have come to light, Americans today have lost much of their respect and faith in government claims. (In fact, some today view it as “their” government). And an audit of the 1953 model will satisfy almost no one today.
After 1953, hundreds of millions of ounces of gold flew out of the United States. And it is certain that wealthy Americans, operating behind the scenes of foreign organizations, were able to accumulate gold at favorable prices. But more importantly, America's enemies could do the same thing: exchange paper dollars for gold at $35 an ounce.
In my book, I tell the sad story of how Washington tried to lower the price of gold in the 1960s through the London Gold Pool. It includes official and private statements on this issue.
It is clear to me that the last bull market trend in gold lasted 20 years, from 1960 to 1980. However, the price of the metal rose only in the 1970s. This situation arose because the price was constantly manipulated—suppressed—throughout the 1960s. When the manipulation stopped, prices rose hard and fast to reach the level they would have risen to without the suppression. The rise from $35 in 1971 to the January 1980 high of $850 an ounce was 2,329% at a time when all other asset classes were either falling or stagnant.
After a period of mild inflation that began in 1980, the gold market trend turned bearish. However, it hit a low at $256, well above the previous low of $35. In 2001, the price began to rise, and is still growing. However, its growth was barely noticeable; many people ignored this bullish trend.
Even after 10 years of steady annual increases, few people own it or are excited about gold.
I think gold still has room to grow. During this bull market, the price will reach much higher levels than most allow today.
There are people today who think that the price of gold was manipulated, that it was suppressed. If they study the history of the London Gold Pool, they will have to realize that any present supposed suppression is mere child's play compared with the measures carried out under official policy in the 1960s. If the gold price has been suppressed since 2000, then I say keep it up! Such suppression only benefits gold hoarders.
How the price of gold in US dollars has changed over the past 10 years
However, we are deviating a little from the main subject.
But most importantly, I learned that, according to the official statement, only a small portion of the gold remaining at Fort Knox meets the “reliable supply” standard. In fact, even if this is just my opinion, I wonder how little of that gold was left by August 1971, when Nixon had to close the gold window.
“Reliable Supply” means gold of at least 995 purity. Pure gold is 999 fine metal. However, 995 gold is considered normal and acceptable to buyers such as central banks and qualified investors. All the gold that remained at Fort Knox before the window closed 39 years ago was of the "safe delivery" standard.
Mr. Durrell heard a shocking admission that there was very little gold of this quality in Fort Knox from a top official at the US General Accounting Office (GAO).
This happened a few months after the September 1974 excursion. During this event, which lasted less than four hours, visitors were shown only what officials from the Ministry of Finance wanted to show these elected representatives (not experts). In fact, only one of the 13 cells in which the gold was supposedly stored was opened to visitors. As cameras flashed, Congressmen weighed several bars. None of them were analyzed.
But worst of all was the fact that these witnesses were shown ingots of a strange orange hue - a sign that they were not made of pure gold at all.
However, this should not come as a surprise. Remember, the gold confiscated from the Americans was usually in the form of gold coins. Pure gold coins are considered too soft and copper is usually used to make them stronger. American coins before 1933 were approximately 10% copper and 90% gold. Thus, bars made from molten coins often had the same composition. Some of the new bullion is smelted into copper: these gold bars with "safe supply" status left the gold window before 1971.
But much of the remaining metal, stored in one of the cells opened at Fort Knox, was apparently of poor quality. These were the meager remnants of what had once been the largest reserve of gold ever seen.
At the same time, the Ministry of Finance agreed to test the gold. However, officials agreed to test only 20% of the gold. It is assumed that the inspection was carried out over 30 days, starting the day after the end of the excursion.
The results of this “check” were made public in February 1975. Mr. Durrell was hardly impressed: this was certainly not what he wanted when he spoke to Attorney General Saxby. He rightfully felt that he (like everyone else) had been duped.
By February 1975, Saxby had become ambassador to India, so Durrell expressed his displeasure through the local Congressman in Virginia.
As a result, the Office of the Budget sent four employees to Durrell's Virginia farm to convince him of the legality of their reporting practices. The man in charge was Hyman Krieger , regional manager for GAO's Washington regional office.
The specific information announced during this meeting was sensational. Krieger acknowledged that only a small portion—24.4 million ounces—of the official gold reserves was .995 or higher. In other words, less than 10% of the 264 million ounces in Treasury holdings could be called “safe delivery” gold.
Krieger confirmed this in his letter to Durrell on April 11, 1975:
“We, as promised, analyzed a sample of gold bullion at Fort Knox and found that the amount of pure reliable delivery gold (.995 fine or better) at Fort Knox was 24,411,140 ounces.”
And that's out of 710 million ounces, the estimated maximum. It turns out that without real and independent testing and sampling, we can't really be sure how much of it is there. The Treasury initially said there were 264 million ounces at the end of 1972, but that figure later changed to 147.3 million ounces, and is supposedly unchanged now.
How could there be only 147 million left instead of 264 million? How many—exactly—are left at Fort Knox? And how much of the remainder – exactly – meets the “reliable delivery” quality? What is the quality of the rest of the gold?
After an unsatisfactory attempt by the Treasury to respond to critics in 1976, the curtain came down. The next president, Jimmy Carter , was even worse. His people were even less interested in disclosing information than Ford officials.
And Reagan? Although he spoke of a return to the gold standard, his officials met any attempt at an honest and transparent audit of Fort Knox with slippery subterfuges that conveyed obvious mockery and ridicule.
There is not enough space here to list all the details, but it is all in the book. This is the most depressing story.
If the US Treasury was truly interested in rooting out all the issues, this could be done at any time by conducting a truly independent audit with the participation of recognized experts.
Instead, the decades-long history of their responses makes it seem like they have something to hide. They have worked to make ordinary Americans distrust the government, no matter which political party is in power.
Sometimes news slips through, after which you wonder how bad things really are. The State Assay Office in New York is the only department of the Treasury Department that has been melting and refining gold since the confiscation of 1934. Several years ago it was announced - in connection with another story - that more than 5 thousand ounces of gold were stolen from this laboratory. According to an official from the Ministry of Finance, "we may never know the whole truth because there are very few documents." Two Treasury officials were ultimately charged in this case, but who knows how many other similar cases there have been? Nobody is watching this. Everyone knows that behind every government scandal uncovered there are many more. This is partly done on purpose, partly due to simple incompetence.
After decades of mismanagement, it is clear that almost all good quality gold has disappeared from Fort Knox. If a real audit is ever carried out and made public, its results will shock the entire country.
In an era where the world is finally beginning to rediscover the value of gold, the US will only ever be able to regain its official gold reserves by purchasing the metal on the open market, or by confiscating it again from its citizens.
The government may indeed try to confiscate gold from the Americans again: you can expect anything from it. But Americans today are not the same as those in 1933. They are suspicious of their government and will act more like Europeans usually did: hide their gold from the government. The 1933 confiscation only worked because of the voluntary participation of citizens. Americans perceived giving away gold as an act of patriotism. This won't happen today.
Most likely, America will continue to undervalue gold, as it has done for decades. Most officials - in fact, almost all officials - have no respect for gold at all. And in this, American officials are very similar to American investors. Future historians will be greatly surprised by such a rapid decline in America since the end of the 20th century. As has often happened in the past (though not so quickly), not one of the great nations was able to abandon the gold standard and maintain greatness.
China encourages domestic demand for gold
China behaves completely differently. Over the past few years, he has been slowly but surely turning to gold. First, the Chinese central bank bought the entire volume of gold mined in the country. This boosted production so much that China became the largest supplier on the planet.
However, until then, the policy of controlling domestic commercial banks had for decades prevented the accumulation of gold, both by banks and by individual citizens. Now the situation is changing. On August 3, the government passed new laws allowing at least some banks to import and export gold for the first time in Chinese history since 1949.
It is safe to say that Chinese banks will not export gold. In fact, they were allowed to buy gold on world markets and sell it to their clients or simply keep it. The actual volume of gold trade in China is small because the government absorbs local production.
This new policy is intended to increase the availability of gold for the Chinese.
The laws don't just apply to local banks. Foreign financial institutions in China can also freely import gold and sell it to the Chinese.
A few weeks ago I published an article entitled "Is China Setting a Floor for Gold?" Its meaning is that Chinese demand for gold has reached such a level that any price corrections are insignificant and do not last very long.
As the price changes over the past few days have shown, the current state of affairs will continue. After gold rose to a record high of $1,261 in June, it will fall slightly. After such strong growth - more than 80% in 18 months - this is completely natural. I wouldn't be surprised if the price fell below last month's low of $1,155.
From then on, gold went up again. It looks like we shouldn't expect anything more significant than this 6-7 percent correction. Moreover, it lasted only a few weeks.
If you look at the gold price chart over the past few months, it is clear that compared to the all-time high, this correction is the same as all previous declines since the beginning of this bull trend - very minor.
Buyers who wanted to enter the market by buying metal cheaply did not have time to do so.
It's probably better to say "Asia as a whole" instead of "China" setting the floor for gold. Chinese in Hong Kong and Singapore, as well as Indian communities in Asia, are buying. Don't forget Vietnam too. All residents of Asian countries are accumulating gold, not expecting a big correction. By doing this, they virtually guarantee that a major correction will not occur.
It's best not to try to wait for the right time to buy. Simply accumulate metal to the required level in your portfolio.
From the editor
I believe that you can draw conclusions from all this yourself by paying attention to some numbers. When Americans turned in their gold in 1933, they were paid $20.67 for every ounce. Just by losing one of those ounces behind the couch, they could trade it for $1,200 today. But if they took this $20.67 and did not find it until today, then now this money would be worth no more than the then $1.32.
Here's how the dollar has maintained its purchasing power since 1933. And this is how gold retained its value.
If Americans' gold is ever confiscated again, they will have to choose. Knowing their history, they will know that the last time gold was taken from the people, the government mistreated it. It allowed the metal to slip through their fingers, to be sold at a very low price in exchange for their own worthless pieces of paper. Who knows how much gold was simply stolen by government workers acting on their own? But probably a lot more metal was lost due to stupid programs like the one where the CIA parachuted millions of dollars worth of bullion into Poland to support a supposedly powerful underground anti-Soviet movement. In fact, the Soviets had destroyed the movement several years earlier by turning its top men into double agents and outwitting the CIA. As time passes, we learn more and more similar stories.
The Americans who remained with their gold were the rich who could buy it abroad. Thus, there was a movement of capital from the middle class to the wealthy long before people recognized this trend today.
In short, the US government created complete chaos, just as it destroyed almost everything it touched.
In fact, if Americans' gold is ever confiscated again, it will not be the central government that does it, because it has completely lost its legitimacy. Instead, there may be local security forces or warlords who have oppressed other countries in the past - even in Japan and Europe - and exist today in places like Afghanistan. Ahmed Shah Mossoud's Northern Alliance , are supported by the Americans; others are being fought against. The appearance of local warlords on American soil would be a manifestation of the tragic irony that is so beloved of history: instead of the States conquering Afghanistan, there will be States fighting the Afghan conquest.
I think we have reached the point that if honest money ever appears, it will happen along with the separation of money and the state.
The state had a chance to control money: it turned it into chaos.
Audit of gold reserves in New York
In New York, at a depth of two floors, there is the main storage facility for US gold reserves.
Manhattan's vaults contain 22% of the world's gold reserves, amounting to 216 million ounces. Here is not only metal from the United States, but also from dozens of countries around the world. The State Treasury manages all available wealth at its own discretion. In September 2012, the state of the gold reserves of New York's largest depository was to be checked. Everyone was looking forward to this audit, but several months passed without any results. Tension grew in the country, and Germany wanted to return its gold reserves located in the New York vault. Only then did experts from the US Treasury convince the public to calm down and in January 2013 they presented an audit report.
The experts began to study the document, and were very surprised that the report fit on only fourteen pages, thirteen of which were devoted to describing the laws and rules of auditing. Only on the last page was the test result. It turns out that the audit began on September 30, 2012 and ended on the same day. The document stated that 99% of the gold, totaling $23.890 million, was in a vault under the supervision of the Federal Reserve. The weight was also indicated - 466 tons, and no more information. It is difficult to call this check a real audit.
It seems that the Ministry of Finance was checking itself without independent people. Perhaps the officials toured the basements of Manhattan and saw gold bars, but that was all. The report turned out to be a mere formality, because it did not even hint at a physical check of the reserves. This is the impression that everyone who read it got. The heads of the Treasury and the Federal Reserve conferred and decided to present the audit in exactly this form.
Gold reserves of the world
It's no secret that every country has a reserve of gold, which is managed by the state ministry of finance or central bank. Initially, these reserves supported the national currency. But where is all this wealth stored?
In fact, every country has its own secluded place. So, in Russia, most of it is stored in the Central Vault of the Central Bank, and the rest of the gold reserve is in its branches throughout the country.
But the country whose gold reserves are far behind everyone else, according to the data, is the United States. Just imagine, today the gold and foreign exchange reserves of the Americans amounted to 8133.5 tons. And considering that the total amount of gold reserves of all countries is 33259.2 tons, the US reserves make up the lion's share.
Myth or reality
But the most curious question lies not in the protection of Fort Knox, but in the actual amount of gold. The last time there was a full audit was in the 1950s, and there were some audits in the 1970s. And the amount of reserves has not changed much over the past decades, which is also surprising, here are the official figures:
1970 - 9839.2 tons; 1980 - 8221.2 tons; 1990 - 8146.2 tons; 2000 - 8136.9 tons; 2010 - 8133.5 tons; 2021 - 8133.5 tons.
And public attention to the US gold reserve was suppressed in every possible way, and this gave rise to many theories about the real state of affairs:
So, some believe that gold is really located in Fort Knox, but it is no longer the property of the United States. There is an opinion that there is gold in the vault, but in a much smaller amount, and most of it has long been sold or used for credit transactions. Also There is a theory that gold reserves are equal to the stated figures, but mostly the bars were replaced with counterfeit ones.
Well, there is also a version that America’s gold and foreign exchange reserves are empty due to the fact that the country has huge debts to banks.
Conjecture, of course, is speculation, but the fact is that in 1971, President Nixon suspended the convertibility of the dollar into gold. At that time, the justification was the following: the discrepancy between the real purchasing power of the dollar relative to the declared gold parity. However, by the 1970s, the dollar gained such popularity in the market that it remained the main reserve currency. And yes, Nixon’s order was never repealed, which means that the dollar is not backed by gold.
Secrets of the Fort Knox gold reserve
The size and condition of the reserves of the famous Fort Knox storage facility are shrouded in darkness. Of interest is the fact that a comprehensive and complete verification of gold reserves has not been carried out since 1950. No, of course, partial audits were carried out in the 70s, but no one has clear and 100% information. And given that public attention to the state stockpile was specifically suppressed, versions of the contents inside the Fort Knox storage facility were very different:
- Many believe that the gold is located there, but is no longer the property of the United States.
- Some people think that the gold reserves are no longer in storage or remain in tiny quantities. Most of it was sold and used for various credit transactions.
- The number of ingots coincides with those reported, but many of them are counterfeit and replaced with tungsten ones.
- There are supporters of the version that the US gold reserves were completely empty due to the return of the state's debt obligations to banks.
Fort Knox Security
It is quite clear that the main US storage facility is very well guarded. So, there are even rumors that the guards have super-powerful laser weapons that can detect a moving object on their own. And also that the area around the base is mined. They also say that in addition to gold, reserves of morphine and opium were kept in Fort Knox for some time: this was a kind of insurance if there were suddenly interruptions in the country with painkillers and their supplies. But where is truth and where is fiction remains a mystery. Fort Knox is made impregnable by two factors: the fortress is under 24-hour military surveillance, and in addition, there are great difficulties in obtaining permission to visit the storage facility. The base also has a staff of 30 thousand soldiers and an arsenal of tanks and helicopters that can easily eliminate any threat.
Garrison
The total population of the Fort Knox base is approximately 75,000, including military personnel, retirees, trainees and civilians. The garrison at the base also includes the Mission and Installation Contracting Command (MCMC), the Military Materiel Command with the Logistics Readiness Center, and the Logistics Support Group (LST). Other members of the base include the Defense Finance and Accounting Service, the Irish Army Community Hospital, the Veterinary Treatment Centre, weather operations at Fort Knox and the Civilian Personnel Advisory Center (CPAC).
Fort Knox has a massive total building area of 17.57 million square feet, including 48 headquarters buildings, nine motor pools, 212 guest rooms, two general auditoriums, three dining halls and 21 general education buildings. It also includes a 31-bed Irish military hospital, military medical dispensaries, pharmacies and veterinary clinics. Other support facilities on the base include a commissariat, five stores, three theaters, libraries, a golf course, a bowling alley, six chapels, four child development centers and eight schools.
