In recent days, President Donald Trump, Elon Musk, Senator Rand Paul, and some others have pressed for an audit of the US gold reserves, with a special focus on the gold at Fort Knox. This is perfectly reasonable given that the US gold reserves—which are the property of the US Treasury and not the Federal Reserve—have not undergone even a partial audit in at least forty years.
Part of the reason for the audit is to discover if any of the gold has been stolen. The US Mint, the government agency that acts as custodian of the gold, has reported for many years that the official size of the gold reserve is 8,133.46 metric tons of gold. Since there has been no audit in so many decades, though, the Mint’s position is essentially “trust us, bro.” Trusting federal bureaucrats has never been a particularly wise policy, and this is why there are ongoing demands for some sort of transparent audit.
If the total size of the US’s gold holdings is revealed to be a number below the official number, then it will just be the latest reminder that there a great many thieves and incompetents among the people running the US federal government. After all, if there is less gold than reported in the US gold reserves, it was presumably stolen at some point.
This would be a fitting destiny for the US government’s gold since much of that was stolen to begin with. When I say “stolen,” I don’t even mean in the sense that “taxation is theft” and that the US bought the gold using tax dollars. In truth, the way the US Treasury acquired much of its gold hoard is even more underhanded than ordinary taxation.
Rather, it is likely that most of the gold at Fort Knox, as with the US regime’s gold in general, is gold stolen from ordinary Americans as a part of Franklin Roosevelt’s efforts to end the gold standard and confiscate private gold holdings in the United States. That is, the US gold reserves are a legacy of the way the US government reneged on its promises to redeem US dollars in gold. Rather than pay out the gold that was owed to holders of US dollars, the US government hoarded it instead. That stolen gold is what the auditors will be counting if the US government ever allows an honest accounting of the Treasury’s gold reserves.
Where Did the Gold at Fort Knox Come From?
In his 1994 article for The Journal of Economic Education, economist William C. Wood writes that “the Fort Knox depository is now an artifact of gold standard days.“ He then adds, “The gold currently in Fort Knox came from the melting of Depression-era gold coins, from lend-lease arrangements in War II, and from government operations under the gold standard.”
That reference to “Depression-era gold coins” is telling. Most of those gold coins were likely the coins confiscated from private owners by the US government following Roosevelt’s Executive Order 6102 which outlawed the private ownership of gold. Few Americans owned gold bars, of course, and the gold that was in non-institutional private hands was mostly gold coin. Roosevelt’s edict required that private citizens hand this gold over to the US government in exchange for what was effectively below-market prices. And what if you would rather not give up your property to the US government? Too bad.
Moreover, private banks and the central bank held gold in the form of coins for dollar holders who, prior to confiscation, would occasionally present US dollars for redemption in gold. This is, in part, the gold in Fort Knox that that Wood classifies as gold held for “government operations under the gold standard.” After 1933, however, banks did not need to hold onto any gold coins for this purpose since Roosevelt’s effort to end the gold standard included a prohibition on banks paying out gold.
So, these coins ceased to have an immediate market value among banks. Where did all these gold coins end up? Most ended up with the US Treasury after the Treasury took possession of the Federal Reserve’s gold in 1934.
Evidence of this can be found in the nature of the gold that is now held at Fort Knox. In a footnote, Wood notes that the gold there is not the type of gold usually found in gold bars used for international transactions: “The gold resulting from melting of coinage has considerably lower quality than the ‘fine’ or ‘good delivery’ gold commonly used in international trade. The majority of the gold in Fort Knox is the lower-quality coin gold.”
The legacy of the US regime’s gold theft is not limited to the coins that happened to be in private hands in 1933, however. Much of the gold that is in the US gold reserves today is gold that would have been paid out to the private sector had the US government not reneged in its promises to pay war bonds in gold.
The 1934 Default on Gold-Based Liberty Bonds
Every time there is a debate over the so-called “debt ceiling,” various servants of the US regime like Jerome Powell or Janet Yellen claim that “the United States has never defaulted.” This is a lie.
Arguably, it was a default, in the broad sense, when Roosevelt’s regime refused to make good on its obligations to dollar holders under the gold standard. The US also defaulted in a formal and legal sense when it refused to pay its World War I Liberty Bonds in gold as promised. Specifically, in 1934, the United States defaulted on the fourth Liberty Bond. The contracts between debtor and creditor on these bonds was clear. The bonds were to be payable in gold. This presented a big problem for the US, which was facing big debts into the 1930s after the First World War. As described by John Chamberlain:
By the time Franklin Roosevelt entered office in 1933, the interest payments alone were draining the treasury of gold; and because the treasury had only $4.2 billion in gold it was obvious there would be no way to pay the principal when it became due in 1938, not to mention meet expenses and other debt obligations. These other debt obligations were substantial. Ever since the 1890s the Treasury had been gold short and had financed this deficit by making new bond issues to attract gold for paying the interest of previous issues. The result was that by 1933 the total debt was $22 billion and the amount of gold needed to pay even the interest on it was soon going to be insufficient.
So how did the US government deal with this? Chamberlain notes “Roosevelt decided to default on the whole of the domestically-held debt by refusing to redeem in gold to Americans.”
In other words, thanks to its profligate deficit spending, the US government was running out of gold by the early 1930s. So, the regime defaulted on the gold bonds. The gold that would have passed into private hands was hoarded by the federal government and declared off limits to the public. Much of that gold remains in the US gold reserves today.
Defaulting on International Gold Obligations
Not all of the US Treasury’s gold is stolen from ordinary Americans. Some is stolen from foreign governments. Another illustration of US regime lies behind the “we never defaulted” narrative is the fact that the US government defaulted in 1971 on its obligations to foreign government under the Bretton Woods system. That is, rather than pay what was owed to foreign governments, the US government once again decided to steal this gold and simply said “tough luck” to everyone with a legal claim to the gold. Or, as Treasury Secretary John Connally said at the time, the dollar “is our currency, but it’s your problem.”
US Gold Reserves: A Legacy of Theft and Lies
Like most everything else the US government “owns,” the gold in the US gold reserves is there due to many years of lies, gaslighting, and deception. The gold is there because the US regime defaulted on its debts and reneged on its promises to back dollars in gold. One could argue that the gold stolen from foreign governments was not as egregious in the same way as the gold confiscation of 1933 and 1934. That’s arguably true since the gold “owned” by foreign central banks was largely founded on defaults and thefts resulting from the abolition of the gold standard in those countries years earlier. Even if this is the case, the fact that Bandit A (the United States government) robbed Bandit B (i.e., foreign governments) that hardly makes Bandit A a hero.
If a true auditing team is ever allowed to actually examine the US regime’s gold, it will be examining the evidence of crimes from long ago. The auditors will be counting the gold stolen from our ancestors to enrich the state and its friends.