Ron Paul worries Fort Knox gold is gone

http://money.cnn.com/2011/06/24/news/economy/ron_paul_gold_audit/

Is Gold in Fort Knox Real? Ron Paul Wants to Know

Even if every single gold bar the US Treasury claims it has in its vaults is real gold (as opposed to tungsten-filled bars), there are no guarantees the bars are unencumbered.  The gold could have been swapped, leased out, or outright sold to other parties, including other central banks, commercial banks, ETF's, and metals exchanges in London and New York.  The "conspiracy theory" is gaining traction. 

http://www.cnbc.com/id/43391588

Are the gold bars in Fort Knox really made of the precious metal? Or has the U.S. government secretly sold off the nation's stockpile and replaced it with metal bars that are only painted gold?

AP

Ron Paul wants to find out.

Giving legitimacy to an Internet conspiracy theory that the gold in Fort Knox is fake, the iconoclast Republican congressman from Texas has asked adminstration officials to audit the purity of the nation's 700,000 gold bars held in Fort Knox, according to an internal Treasury document obtained by CNBC. Paul, a presidential candidate who chairs the House's subcommittee on Domestic Monetary Policy, had previously called for the U.S. gold reserve to be counted and for a return to the gold standard. He now appears to be going a step further in his request that representatives from the U.S. Treasury Department and the U.S. Mint testify at a subcommittee hearing on June 23 about the authenticity of the nation's gold.

The Treasury document says it would cost about $15 million to conduct an audit. The process would take about 30 minutes to verify the gold content of each bar, or 350,000 man hours; to do that would would take 400 people working for six months, according to the document. The Mint is audited annually by the Treasury's Office of the Inspector General. An audit of the "Schedule of Custodial Deep Storage Gold and Silver Reserves" was published in September 2010.

A Google [GOOG  511.825    7.095  (+1.41%)   ] search of the phrase "Is the gold in Fort Knox fake" returns 623,000 results. Many of them reference a single, unverified report in 2009 that the Chinese received a fake shipment gold that, in fact, was tungsten.

One conspiracy theory says that no one has actually seen the gold since the 1930s. But in a letter to Paul in September, the Treasury Inspector General said he had "personally observed the gold reserves located in each of the deep storage compartments."

As a postscript to the story, CNBC asked for a tour of Fort Knox to film the gold, since our only footage of Fort Knox is from 1974. An official at the Mint told us that not he was not aware that any member of Congress had toured the facility since that year. Fort Knox is "a closed facility," the official said.

And so the conspiracy theory continues...

The Great American Disaster: How Much Gold Remains In Fort Knox?

http://www.lewrockwell.com/orig11/weber-c1.1.1.html

Where Is America's Gold?: The Mystery of Ft. Knox

http://www.lewrockwell.com/orig11/weber-c2.1.1.html

China may increase gold reserves beyond 'Fort Knox' level – Hale

http://www.miningweekly.com/article/david-hale-2011-02-09

Fort Knox and conspiracy theories

Ft. Knox hasn't been independently audited since 1953 when Eisenhower was President. Many conspiracy theorists, including Ron Paul, believe the official numbers released by the Federal Reserve Bank are vastly overstated. GATA posits that each ounce of gold has been sold, swapped, or leased many times, as part of a surreptitious gold price suppression scheme, orchestrated by central banks with the help of bullion banks.

Even if the inventory numbers are true, Societe Generale believes the true value of gold is $6300/oz., based on USDollars floating in financial systems worldwide vs. above-ground gold tonnage.

As an aside, it was French President Charles de Gaulle who forced President Nixon to close the gold window, as the French wanted to redeem their USDollars for gold prior to 1971. Nixon had to end the gold standard, as the US Treasury had printed too many dollars to be backed by gold stored in Ft. Knox's vaults.

In any case, since the above-ground gold numbers are vastly overstated, $6300/oz. may be a conservative estimate for the price of gold.

Gold missing in Canadian mint

Back in June, after an audit by Deloitte & Touche discovered $15 million of missing gold bullion, the Canadian Mint called in the Royal Canadian Mounted Police for an investigation. It turns out mint official "double-counted" gold sales by mistake.

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20091124/mint_mystery_091124/20091124?hub=TopStoriesV2

I'm not buying it, as central banks are notorious for performing gold swaps, and leasing out the same gold ounce multiple times to each other, in a surreptitious gold and silver price suppression scheme (scam).

The Canadian mint has now agreed to an independent audit of their precious metals inventory every three months--which is a big change of policy and one that contrasts sharply with the US Federal Reserve Bank. The Fed's gold reserves haven't been independently audited since 1953, which means no one has any idea how much gold is in the vaults of Ft. Knox, Kentucky and the Federal Reserve Bank of New York.

Kinross Says Gold Industry Faces Reserve Crisis

That's the title of a Bloomberg article. Tye Burt, CEO of Kinross Gold, Canada's 3rd largest gold producer:

"Globally, production has been in decline since the peak of 81 million ounces in 2001 to 77 million ounces last year, and we see that decline continuing long term."

Which is interesting, because according to Ed Steer:

"the bullion banks are short north of 31 million ounces of gold... that's 40.2% of last year's gold production!"

I'd love an independent audit of the commercial banks' vaults to verify the physical inventory. In fact, an independent audit of the Fed's gold reserves at Ft. Knox, KY and in New York's Federal Reserve Bank is in order. An independent audit has not been performed at Ft. Knox since 1953, when President Eisenhower was in office.

Does the amount of gold the Fed claims it has in its vaults exist? Why do other countries report declining amounts of gold, yet the Fed insists its' inventory has remained constant over the years? And if so, why don't they open up their vaults for audit? What are they hiding?

Here is Stewart Dougherty's account of KMPG's annual "audit" of the Exchange Stabilization Fund (ESF):

"Even the Treasury Department’s clandestine $50 billion Exchange Stabilization Fund (ESF), which is only one-fifth the value of America’s reported gold holdings, undergoes an annual audit. For fiscal year 2008, this audit was conducted by KPMG, a well-known, independent CPA firm. KPMG’s 2008 ESF audit uncovered “significant deficiencies,” “material weaknesses,” a “weak control environment,” and “several control deficiencies.” If a Treasury organization subject to annual audits could fail its recent exam as broadly as that, what are we to assume about the safety and security of the people’s gold supply, which, like the national money geyser, the Federal Reserve Bank is never audited? And if the ESF is audited each year, what legitimate rationale can there be for not auditing the nation’s gold supply? Something isn’t adding up."

Here's the full length, but insightful article:

http://news.goldseek.com/GoldSeek/1248373722.php

More crooks

Stephen Obie, Director of Enforcement with the Commodity Futures Trading Commission (CFTC), which oversees the futures exchanges, is on Fox Business News preaching about transparency, oversight, regulation, and enforcement, and waving his hands on TV like a Dale Carnegie salesman. He's saying how the SEC and investors didn't oversee and perform due diligence on Bernie Madoff.

What's unbelievable is that the commodity pits are rife with manipulation and corruption beyond imagination. Big commercial traders and banks have artificially suppressed prices on the futures markets for years--yet, the CFTC never investigates the commercials--they know where their bread is buttered. Naked shorting makes it possible for the commercials to dampen prices on commodities like gold and silver, with no intention for physical delivery on settlement date. In other words, they'll sell short a futures contract with no inventory, and no intention to deliver at that date. These are phantom contracts, much like the toxic credit default swaps which were uncollaterized. These naked short-selling commercials are selling vaporware, and their massive short positions alone can drive prices lower due to no other reason than market manipulation.

Instead, the CFTC goes after the small-time speculators for minor non-compliance, but they will not reveal who takes large positions on either side of a trade--including the commercials who manipulate the markets. Transparency? What a crock--Fort Knox hasn't had an independent audit for its gold reserves since the early 1950's. Many conspiracy theorists are saying half of what is reported in vaults has either been sold off or leased, yet is still counted.

Eventually, this con game will be exposed when a seller will default, unable to meet physical delivery demands. That day is approaching, as buyers in the middle east are scrambling to buy gold and dealers are unable to meet that demand.