“The inspection by Members of Congress on September 23, 1974, of U.S. gold stocks stored at the Fort Knox Bullion Depository,” explained a 51-year-old press release, “marks a unique departure from the long standing and rigidly enforced policy of absolutely no visitors.”
As mentioned yesterday by Paul Jacob, the policy of No One Admitted No How was immediately reinstated after that date — at least Senator Rand Paul (R-Ky.), like his father before him, got nowhere when he tried to take a peak.
We have to go back to the days of Ike to reference a believable audit of the gold hoard. Which is why many people suspect all or most of the gold is actually gone.
The rabbit hole one can fall down while looking into this is like many other federal government rabbit holes: confusing, alarming, and dark.
But would it matter if the government — or, more precisely, the Federal Reserve, actually — sold it all?
Some say no. “Since The US Isn’t On The Gold Standard, It May Not Matter How Much Is In Fort Knox,” is an apt summary of one theory. “The amount of gold held at Fort Knox might not even matter. The US went off the gold standard in 1971, meaning gold no longer specifically relates to the value of the American dollar. With this move, the gold at Fort Knox remains part of the U.S.’s overall monetary wealth, but mostly as a Treasury Department commodity — something the department can trade with other countries.”
This Ranker article does answer the next logical question. “Why keep it then? According to former Federal Reserve chairperson Alan Greenspan, ‘just in case we need it.’”
Rumors amongst gold bugs (and “conspiracy theorists”) in the 1990s had it that Alan Greenspan was actually the man who divested the gold holdings — as a way to manipulate the perception of inflation while he inflated the money supply. The notion is that Greenspan sold gold every time gold spot prices spiked. His idea was to manage the price of gold as the best way to manage inflationary expectations of consumers. Such was the conjecture, anyway.
What is well known and understood is that Greenspan took the price of gold very seriously indeed, as his response to Rep. Ron Paul (R.-Tex.) over 25 years ago shows:
I think the price of gold has, over the decades, been a generally usable indicator of what the level of inflation has been. Obviously, during the period of an active gold standard, which was really prior to World War I, the price level pretty much locked itself in to the gold price. In fact, by definition it did.
The issue of buying and selling gold as the price changes is indeed exactly what we used to do. We used to, at a certain thing called the gold points, which was the price of gold plus the transportation cost differentials, we, that is, the United States Treasury, stood ready to buy and sell gold at a spread, as indeed all other participants in the gold standard did. So in that regard that was exactly what was happening.
But, needless to say, since we have gone off the gold standard, and especially since 1973, there has been basically a general float of the dollar vis-a-vis gold, which means that the gold price is like another commodity’s price.
Nonetheless, like a lot of commodity prices, and perhaps better than most, it has been useful, in my judgment, in trying to get some sense of what inflationary pressures have evolved in this country.
By the way, there are other conjectures out there about where the gold could have gone.
Finally, let us not forget one of the all-time goofiest heist concepts in movie history, involving a plot to irradiate the Fort Knox cache to make it useless as a backing for the dollar, in the 1964 Bond film Goldfinger.
But that was before Nixon destroyed the last vestige of the gold standard.
