Mnuchin’s PR Visit to Fort Knox proves nothing about the US Gold Reserves

by Ronan Manly, BullionStar:

On the afternoon of Monday, August 21, US Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell, Kentucky Governor Matt Bevin, and Kentucky Congressman Brett Guthrie took a visit to the vault of the US Mint’s gold depository in Fort Knox, Kentucky, a vault which, according to the US Treasury, holds gold bars containing 147,341,858 fine troy ounces of gold (4583 tonnes of gold).

The trip was notable in that it is one of the rare occasions in history that a US political/congressional delegation has ever visited the Fort Knox depository, and Mnuchin is now only the 3rd treasury secretary ever to make this visit.

The trip was also notable in that unlike previous political excursions to the vault, the Mnuchin-led visit was very low-key, it was announced to the media and public at extremely short notice, and there is no evidence that any media representatives participated, or at least if they did, they have kept very quiet about it.

US Mint Depository, Fort Knox, Kentucky

US Mint Depository, Fort Knox, Kentucky

In contrast, the previous congressional visit to the Fort Knox depository in September 1974 was heavily publicised in advance, was accompanied by 100 news reporters and photographers, and it even documented the visit via photographs and film which were released to the public.

Mnuchin’s visit to the vault merely appears to have taken the form of a quick peek into one of the cramped vault compartments within the Fort Knox vault, and therefore can only be seen as an odd PR stunt whose real intent remains unclear, which does nothing to improve the transparency of the notoriously secretive gold depository, and which on balance has now re-opened scrutiny on how much gold is, or is not, actually stored in the compartments of the Fort Knox vault.

Short-Notice Whim?

The trip to the Fort Knox vault was only announced by Mnuchin on Monday morning, August 21 (the morning of the Fort Knox visit) during a speech to the Chamber of Commerce in Louisville, Kentucky, which Mnuchin and Mitch McConnell were attending.

As Grace Schneider, a business reporter for the Louisville, Kentucky based Courier-Journal tweeted that morning:

So Mnuchin announced the visit literally a few hours before it took place. Fort Knox is located about 40 miles south-west of Louisville. In his Monday morning speech at the Chamber of Commerce, the Washington Examiner reports that Mnuchin made the bizarre comment that “I assume the gold is still there”. McConnell, at the same time, quipped that “we’re going to find out”. Mnuchin’s comment is bizarre because as US Treasury Secretary, he is top official of the US Treasury.

The US Treasury owns the gold in Fort Knox. The US Mint is just the custodian. The Director of the US Mint and all other senior officials report to Mnuchin. At any time, Mnuchin can get a full and complete high-level briefing on the real status of the US gold reserves. He can also get a full de-briefing on the extent to which the US gold reserves have been audited over the years – or not audited as the case may be. To say that he assumes the gold is still there shows either a flippant view of the expected accountability of a US Treasury Secretary, or else a disregard for the responsibility to which the US public has entrusted him.

Media Presence

It’s not clear whether any journalists actually accompanied the politicians on last Monday’s visit to the Fort Knox depository. An article by an AP journalist from Kentucky named Adam Beam was published on August 22, the day after the visit to the Fort Knox depository.

Beam, based in Frankfort, Kentucky is listed as a Kentucky Statehouse reporter for AP, so would presumably, due to this role, be well-known in Kentucky political circles and would have privileged access to the Mnuchin & Co delegation. AP’s Beam wrote that:

Inside the famed vaults at Fort Knox, Senate Majority Leader Mitch McConnell held a 27-pound gold bar in his hands Monday as part of the first civilian delegation to see most of the country’s bullion reserves in more than 40 years.

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