A few weeks ago, CNBC announced that Ron Paul, the esteemed congressman from Texas, hoped to audit the supply and purity of the thousands of tons of gold stored in Fort Knox. Of course, Paul’s wish makes one minor assumption…that there’s actually still gold in Fort Knox.
The Origin of Fort Knox?
The strange tale of Fort Knox, also known as the United States Bullion Depository, begins in 1933. On April 5 of that year, President Franklin Delano Roosevelt issued Executive Order 6102 which, in effect, forced American citizens to turn in “all gold coin, gold bullion, and gold certificates” to the Federal Reserve. The federal government built Fort Knox in 1936 in order to store its newfound treasure.
Citizens received $20.67 for each troy ounce of gold they turned over to the government. Subsequently, President Roosevelt offered other nations the opportunity to buy or sell gold at $35.00 per ounce, an inflationary measure designed to end the rising Great Depression. It didn’t work. However, with most other assets undergoing deflation, the higher gold price attracted massive amounts of sellers from around the world. As such, by 1949 Fort Knox held nearly 70% of the entire world’s known gold supply.
The End of the Gold Standard?
During the 1950’s, the tide began to swing the other way. The U.S. continued to transact gold at $35 per ounce. However, due to the declining value of the U.S. dollar, other nations were now buyers rather than sellers. The sell-off lasted until August 15, 1971 when President Richard Nixon “closed the gold window.” By ending the last remaining links between the U.S. dollar and gold, he also ended the need for a bullion depository. Thus, Fort Knox became little more than a glorified, high-security warehouse.
Guerrilla Explorer’s Analysis
So, that brings us to the main question. What, if anything, is still in the facility? According to official records, Fort Knox holds 4,578 metric tons of gold bullion, or roughly 2.5% of the entire world’s known gold supply. At the present spot price, that works out to $225 billion dollars.
However, that amount comes with an asterisk. You see, no visitors have actually been inside the facility since September 1974. And an official audit has not been performed since January 1953. Even worse, that audit was flawed in numerous ways. It lasted only seven days and tested just a small fraction of the gold. With so much wealth and secrecy rolled into one location, it’s not surprising that Fort Knox has given rise to a flood of conspiracy theories. The most popular theory is that the vault is empty or perhaps, filled with fake gold bars.
Personally, I doubt that Paul’s efforts will prove successful, at least in the near-term. But one can always hope. If he does manage to crack the facility’s cloak of secrecy, we will finally know the answer to one of the greatest mysteries of American history. Does Fort Knox truly hold 4,578 metric tons of gold? More? Less? Or is it just an empty warehouse? And if it’s empty, more questions arise. Questions that could prove just as difficult to answer. Questions such as…
Who took the gold? And what did they do with it?