by Jeff Berwick, The Dollar Vigilante:
Imagine it was 1937 and you stored your gold with someone… let’s call them Uncle Sam.
After about 20 years you told Sam that you’d like to see the gold and make sure it was still there. He said sure; you can come and take a quick look. And you did… and you were satisfied that it looked like the gold was still there.
Decades then went by… more than 40 years in fact… and you told Sam that you’d like to make sure the gold is still there.
He replied, “Sure, but you can’t count it or touch it or anything. You can just look through the window and see it is still there.”
“Oh, and another thing,” said Sam, “We get to select the person who can take a quick look.”
You’d start to get quite suspicious, wouldn’t you? It had been more than 40 years since you were even allowed to see the gold and more than 60 years since the last time Sam allowed you to count it.
“Who do you select to take a look for us?” you asked, eyebrows furrowed.
“Steve Mnuchin,” said Uncle Sam.
That is exactly what has happened with the gold supposedly stored by the US government in Fort Knox.
The last time the gold was even counted was in 1953. And the last time anyone was even allowed to take a quick peek at it was 1974!
And just this week, Treasury Secretary, Steve Mnuchin, went on behalf of the American people to take a quick look and confirm the gold is still there.
After all, who could you possibly trust more than Steve Mnuchin. The man who spent 17 years working in investment banking, most notably with Goldman Sachs, was a business partner with George Soros and was sued over his involvement with Bernie Madoff securities.
Yet, in the most nonchalant way possible, this week, Mnuchin quipped to an audience in Louisville, Kentucky, “I assume the gold is still there.”
And then, he mosied over to Fort Knox, walked in, walked out and tweeted…. And I kid you not, “Glad gold is safe.”
That’s it! He didn’t count it or check to see the books to see if it had been leant out to anyone, didn’t have some assays done to ensure it was actually gold and not an alloy.
None of that. He just took a quick glance to see there was some gold there. Good enough! No need to check again for another 50 years!
What else would you expect from a US federal government whose own auditors say their books have been completely unauditable for 20 years. Or how the Pentagram still can’t find over 6.5 trillion dollars.
So now, after nearly 50 years of nobody auditing the gold, one of the most untrustworthy people in the world took a gander and declared that everything is fine.
And the mouth breathing, government educated, fluoridated, chem-trailed, GMO’ed and vaccinated tax slaves in the US were too busy working three jobs even to notice.
We’d make more of a kerfuffle about the whole thing ourselves if it weren’t for the fact that the total amount of gold held in Fort Knox, if it truly is still there and still owned by the federal government, if sold today, would only cover the expenses of the US government for less than two weeks.
At today’s price of $1290, the total value of the gold holdings at Fort Knox, if they are really there (again, the only one who has seen the gold in the last half century is Steve Mnunchin) are worth about $200 billion.
In June, alone, the US government spent $429 billion.
So, if all the gold at Ft. Knox was sold, it’d cover about 14 days of expenses.
So, in terms of the importance of the gold holdings in the US government’s balance sheet, it is actually negligible.
Some, though, might say the gold held at Fort Knox is important if the US were to ever go back to a gold standard.
Well, for one thing, don’t hold your breath for that to ever happen.
If the US government put the US dollar on a gold standard that was managed by itself or by the Fed or Treasury to the extent that it was adopted in the classical sense it would bankrupt the government and/or severely tie its hands.
While this would be the best news possible for nearly everyone on Earth… What are the chances the US government would destroy itself on purpose? Not very likely.
And, even if it somehow did, it still wouldn’t be easy, nor necessarily very free-market.
It is hard to predict how they would do it if they did. That is, would they choose to have the dollar be backed by a weight in gold or would the gold price be fixed? Would the government erect state banks as it did before the Fed? Or would it redefine and use the Fed to regulate the exchangeability between dollars and gold? Or would it be the Treasury directly? Another way that has been discussed is to incorporate gold as a top tier asset under the latest Basel guidelines, which implies little difference in the analysis. Or they could create a Fedcoin backed by gold, and the token could rely on a program of some type of inflationism built into it.
But it’s not likely they would abandon fractional reserve banking altogether.
Whatever the case, if it is a government directive it is not likely to be “sound.” It is likely to be rigged. It is likely to tilt the playing field, as usual.
Some gold bugs, though, would point out that if the US were to somehow go back to a gold standard, the value of gold would likely have to increase dramatically.
Read More @ TheDollarVigilante.com