Swiss
Institutions Ask: Where’s the Gold? By Ron Holland |
September 15, 2010
"He who owns the gold makes the rules." ~ An
old adage
Have you ever wondered what would happen if most of the
claimed US gold reserves do not really exist? Can Washington
continue to operate under its own questionable and often
non-existent accounting rules if it doesn’t have the
gold reserves as promised? Should we worry about the old
idiom, "When the chickens come home to roost"
when a person, entity or a government pays dearly for a
mistake or something bad they have done in the distant past?
Well, the gold has to be somewhere but what if it is in
France, Germany and Switzerland rather than in Fort Knox?
The price of gold probably wouldn’t change much except
in dollars which would likely dramatically fall in value
as would US Treasury obligations. While the monetary elites
and their central banks might prefer to keep the question
under wraps, American citizens and foreign holders of dollars
and US debt deserve the same full disclosure and transparency
as required in the private sector.
Congressman Ron Paul Questions Whether There’s
Gold at Fort Knox and the NY Fed.
Quoting from The Hill website, "Rep. Ron Paul (R-Texas)
said he plans to introduce legislation next year to force
an audit of U.S. holdings of gold. Paul, a longtime critic
of the Federal Reserve and U.S. monetary policy, said he
believes it's "a possibility" that there might
not actually be any gold in the vaults of Fort Knox or the
New York Federal Reserve bank."
Is Washington Still # 1 In Gold Reserves?
Most of the 8,965 tons of gold is supposed to be at Fort
Knox and valued at over $350 billion dollars but is this
still true today? First the gold hasn’t really been
audited since the Eisenhower Administration. Although a
spokesman for the US Treasury recently stated US gold holdings
are audited every year by the Treasury’s Office of
Inspector General, I fear this is more like the internal
audits of Fannie Mae or the supposed audits of Madoff, AIG
and Enron.
The Swiss well remember the calls for an audit of Fort
Knox made after the 1974 Nixon impeachment following the
1971 Nixon Shock. This action unilaterally closed the gold
window and ripped off the nation of Switzerland but the
"fake audit" was little more than a photo opportunity
designed for home consumption in the United States.
Will the Nixon Shock of August 15, 1971 Be Followed
By An Obama Event?
Why should Switzerland and other nations or investors trust
the US Treasury? There are ominous parallels between 1971
and today and this is why I support Ron Paul’s call
to audit the gold at Fort Knox in 2011. In 1971 the costs,
deficits and debts of the Vietnam War were worrying foreign
nations just like the deficits and overhanging national
debt today threaten the dollar and Treasury obligations.
Therefore many nations including Switzerland and France
began demanding that Washington redeem their dollars for
gold as required by the Bretton Woods agreement. Switzerland
had redeemed $50 million in paper dollars for gold in July
but was stuck with the rest when Nixon arbitrarily and without
warning "closed the gold window," ending convertibility
between US dollars and gold on August 15, 1971.
I fear that much of Washington’s gold reserves were
lost back in 1971 prior to the Nixon emergency closure of
the gold window and was the reason for the sudden, secret
announcement sprung on investors and nations without even
consulting other members of the international monetary system.
In addition, the world’s central banks have kept very
quiet when questions arise about whether the Federal Reserve
has used the remnants of the US gold reserves through international
swap agreements to keep gold prices artificially low and
to hold up the dollar earlier in this decade.
Why Trust Washington?
The US Treasury claims to have the gold bullion reserves
but why should we believe them? Since the government stretches
the truth about almost everything else today, I seriously
wonder if they are giving us the true condition about Washington’s
gold ownership.
A recent poll has shown that 80% of the American people
don’t trust their government and when you add the
22 million government employees and their families, one
could say zero percent of productive Americans in the private
sector trust the government. So why should global investors
have any more confidence or faith in Washington than the
American people?
Just think back over the last few years. From the wars
in Iraq and Afghanistan, to the real estate bubble and collapse,
the Wall Street meltdown, the Gulf oil spill, the recession
that wasn’t expected, the recovery that never happened,
promised change with Obama, the bailouts from both political
parties etc. Can you think of one political promise kept
or one true statement out of Washington, the Federal Reserve
or Treasury? Therefore why should American citizens, foreign
nations or international investors believe for a moment
the US has the gold reserves claimed?
Here in Switzerland at Appenzeller Business Press AG publisher
of "The Daily Bell" and "Freedom Matters"
we believe American citizens certainly deserve a full and
complete outside audit of "claimed" United States
gold reserves during these trying economic times.
The same can be said in even stronger terms for international
investors, central bankers and sovereign funds that have
purchased trillions in US treasury obligations. Those who
still use the dollar as their currency of choice in business
transactions and as a safe haven in times of crisis on the
world financial stage need to do their due diligence concerning
the US gold holdings out of responsibility to their investors
and citizens.
Foreign investors are rightly concerned about accountability
and openness about supposed assets when there has been no
real audit for decades. Certainly, an audit is required
following the regulatory breakdown and oversight of the
American financial system and the misplaced trust in institutions
like Fannie Mae and Freddie Mac and the Fed which led the
world to the brink of another 1930’s style collapse.
A gold audit is only prudent due diligence and this should
be welcomed in order to help restore confidence in the US.
It is time to bring down the wall of secrecy and restore
confidence and accountability to the US balance sheet. Therefore
I endorse Congressman Ron Paul’s initiative to audit
the American gold reserves.
Do You Know Where Your Gold Is?
Of course, if you have some emergency gold stored in your
local safe deposit box or hidden around the house or yard,
your gold is somewhat secure but we are talking about large
private gold holdings. Maybe the United States should protect
and guarantee the existence of much of the American gold
reserves formerly held by private American citizens but
stolen in Roosevelt’s 1933 gold confiscation by looking
at the private sector.
How Gold Is Privately Stored in Switzerland
Gold bullion can be stored in secure, non-bank vaults (we
don’t trust bank holidays even in Switzerland). They
can be insured for full value and stored in a tax-free zone
to avoid VAT costs used by large financial institutions
and Swiss banks.
Your gold should be fully and safely allocated and stored
in-kind in high security vaults and never leased, pledged
or used for international swap agreements.
The vaults and gold inventories should be regularly audited
by independent third parties including Swiss Customs inspectors
as well as audited by one of the private Big Four accounting
firms.
Your gold should be a specific amount or number of coins
or bars not fractions or digital units promised in some
prospectus but not tangibly existent. For example, your
holdings should be described as 100 Canadian Maple Leafs
or bars of a specific weight. All of this with reasonable
and transparent pricing, commissions and storage fees
Liquidity is king with gold ownership and you should be
able to take physical delivery or sell promptly and conveniently.
You should not be required to show up to take delivery or
initiate your transactions. You can effectuate all matters
by fax, e-mail, letter, or phone. You are not dependent
on the internet as all of this is particularly critical
in a severe crisis situation.
Gold delivery should be universal in Switzerland or internationally
on a cost basis utilizing respected international high-security
logistics firms. You might not be able to travel when banks
and stocks markets are closed, or crisis exchange controls
and travel restrictions are in place.
Finally concerned gold investors should never trust their
wealth to bankrupt governments, corrupt politicians or questionable
legal systems and this is why large gold investments above
emergency gold holdings should be stored in Switzerland
or other secure jurisdictions. Knowledgeable investors should
remember Roosevelt’s gold confiscation and Nixon’s
gold shock and defend their wealth accordingly.
More on Swiss gold storage can be found here.
What Does the Future Hold For Gold In the United
States?
I certainly don’t have a crystal ball but if the
gold reserves aren’t there or in the amounts promised,
there is a real risk during a future crisis of another Washington
gold confiscation event. Second, rather than trusting vague
statements out of Washington, I would give real credibility
to how the private sector views Washington gold reserves.
Watch the dollar, watch the price of gold and soon you
just may be able check the gambling odds on whether the
government will allow a real audit of Fort Knox and also
if the amount of gold claimed is really there. Christopher
Costigan, publisher of Gambling911 the leading gambling
website in the United States indicates that "soon odds
and betting may be possible on the questions above thanks
to the coming Ron Paul Fort Knox Audit Legislation."
A Call To Washington: Restore Confidence in US Gold Reserves
First a full private audit would do much to assure the
world that American gold reserves were not lost during the
Nixon Administration and that the gold holdings haven’t
been accounted away like the Social Security Trust Fund
or become little more than a Madoff-style Ponzi scheme of
vague paper promises and unaudited assets that do not exist.
We urge Congress to follow the leadership of Ron Paul and
to take the initial step to begin the restoration of world
confidence in the integrity and openness of the Treasury
gold reserves. It is time to put the sorry record of American
accountability with non-existent or over-valued assets in
Madoff, AIG, Enron and Fannie Mae–style scandals behind
us and we can start in 2011 with a full audit of the US
gold reserves.
The United States constantly preaches and demands full
disclosure, accountability and open transparency to governments,
investment industries and financial systems in the rest
of the world while failing to keep its own house in order
back home. I grew up on a chicken farm in North Carolina
and trust me, if and when the chickens come home to roost
on the gold reserves, the situation can quickly get very
messy. It is time for Washington, the Treasury and the Federal
Reserve to come clean and open the US gold reserves to a
full and complete private audit.
Otherwise, I don’t want to be around when the chickens
come home to roost and the sh*t starts flying. Until then,
I’m betting against the gold being at Fort Knox and
looking forward to the day when I can really bet on this
question and put my money on the line but for now just storing
gold outside the United States is an easy step to take in
the right direction.
An audit will answer the gold reserve questions, secure
the US economy and end the worry of American citizens and
foreign investors about US gold reserves. It is past time
to answer the question, "Where’s the gold"
and move forward.
Only an audit will tell if the Treasury is holding a Full
House or busted and bluffing but I choose not to play a
game with my wealth when the stakes are this high. I’m
walking away and urge you to do the same.
"You got to know when to hold 'em, know when to fold
'em, / Know when to walk away and know when to run."
~ Kenny Rogers, The Gambler.