by Joseph P. Farrell, Giza Death Star:
E.G., K.L. and M.W. spotted this one(and a BIG thank you to them).
Before we get to it, I have to confess to a little bit of “I-told-you-so-ism” with this article, because over the past few years and months as banks, and then central banks beginning with the Bank of England started talking about gold-backed crypto-currencies, my immediate thought was, “Oh, they’ve rehypothecated it so much, that they need a way to keep that permanently secret.” Call it collateral fraud, you know, like taking out mortgages on non-existent buildings in vacant lots, or claiming that you have someone’s gold when you do not, as in the Schacht-Strong Affair of 1928, or putting tungsten inside gold coins, as recently was discovered in Canada.
This article indicates that there could be a few teensy tiny problems with the U.S.A.’s gold reserves and their audits:
First, let us note the author of the article’s allegedly less-than-warm reception:
My journey started in 2014, when I first discovered—in contrast to what I was accustomed to reading on blogs and in newspapers—that the US official gold reserves are audited every year. I published an article on my discoveries, titled A First Glance At US Official Gold Reserves Audits, which was basically a summary of all publicly available documents about the audits. Logically, these documents present a narrative that looks to be credible at the surface, but I found some questions left unanswered, and wrote in my article “this post will be part one of a series.” (Little did I know what I got myself into.) Given the importance of the subject, I intended to submit FOIA requests at the US government, in an open-minded attempt to have my concerns removed.
Since 2014 I have been prosecuting the US government. I have emailed staff of all related institutions—the US Treasury, The Office of Inspector General of the Treasury, the US Mint, and National Archives—that were initially replied, but as I got closer to the details, ceased altogether. I have submitted several dozen FOIA requests to all related institutions, some of which were honored, some not. In search of answers, I repeatedly called the Inspector General. In one of those calls, my contact simply hung up while I was talking. This incident is emblematic of this whole investigation.
The author continues by observing that yet another method to put him off the trail was to charge outrageous sums for his FOIA requests.
In other words, in the trust and transparency department, we’re off to a very poor start.
Then the bombshells begin. The author notes these audits were begun in 1971, with the objective of auditing all of America’s deep storage gold at West Point, the Denver Mint, Fort Knox, and the NY Federal Reserve, and that the sealing of the vaults after the audit and test assays was a crucial component:
The audit protocol follows that “these actions, having once been performed by an authorized committee, in accordance with established procedures, will not have to be repeated as long as the assets verified remain under an unimpaired joint seal.” Compartments physically verified were placed under Official Joint Seal (OJS) to “avoid the necessity of verifying all assets in each annual or special settlement (audit).” The US Treasury pledged to do a “periodic, cyclical inventory” to “ensure that about 10 percent of the gold” was physically inspected annually, eventually to have audited “all the gold for which the US government is accountable” “by 1984.” The essence of the “established procedures” was to open, audit and seal each compartment once. We will return to this fundamental topic later on.
Since the stated purpose of joint sealing was to avoid the need of “re-audits,” all the gold could (after 1984) be verified by simply checking if the seals were unimpaired. Great intentions, but this is not what happened.
He then recounts how former Congressman Ron Paul, one of the backers of the unpassed Gold Transparency Act, had spurred a congressional committee to dig into the gold matter (no pun intended). The testimony of the US Treasury’s then-inspector general is cited:
The current auditor of the US monetary gold is the Department of the Treasury’s Office of Inspector General (OIG). Representing the OIG, Eric M. Thorson attended the congressional hearing for the Gold Transparency Act (not enacted) that was initiated by Ron Paul in 2011. Mr. Thorson’s testimony at the hearing serves as the official statement by the government on the audits. Having weighed his words carefully, Thorson spoke under oath:
… 100 percent of the U.S. Government’s gold reserves in the custody of the Mint has been inventoried and audited. … I can say that without any hesitation, because I have observed the gold and the security of the gold reserves myself.
… the Committee for Continuing Audit of the U.S. Government-owned Gold [The Committee that started the audits] performed annual audits of Treasury’s gold reserves from 1974[*] to 1986. … by 1986, 97 percent of the Government-owned gold held by the Mint had been audited and placed under joint seal. So once you have done that, and that seal remains unbroken, then I am not sure what other benefit there would be to going back into it at that point. …
Since 1993, when we [OIG] assumed responsibility for the audit, my office has continued to directly observe the inventory and test the gold. In fact, my auditors signed the official joint seals … placed on those compartments, inventoried and tested in their presence. At the end of Fiscal Year of 2008, all 42 compartments had been audited by … the Committee for Continuing Audit of the U.S. Government-owned Gold, or my office, and placed under official joint seals.
Thus, in summary:
- From 1974 until 1986, 97 percent of the gold at the Mint had been verified by the Committee for Continuing Audit.
- In 1993 the OIG became responsible for the audits, and by 2008 all compartments had been verified and sealed.
The conclusions we derive from Thorson’s testimony:
- From 1987 until 1992, there were no audits.
- From 1993 until 2008, the remaining 3 percent of the gold was verified.
But as the article continues, the seals on several vaults were opened, when the US Mint did its own audit. This, observes the author, is more-than-fishy, since the US Mint is merely a custodian for the US Treasury. It is, he says, a little bit like a bank auditing it’s clients assets, or better, opening its safety deposit boxes and seeing what’s inside. In any case, these audit seals were never to be broken, but in fact, they were. When the Treasury Inspector General was asked about this, he offered the explanation that it is necessary to do so when gold is moved from one vault to another. We’ll get back to that one, because it’s a huge clue in my opinion as to what may be going on. But, it’s also a whopper doozie of a high octane speculation. The author handles this point in the following way: