Has the Government Looted the Gold
at Fort Knox?
Saturday, June 7, 2008
A group called the Gold Anti-Trust Action Committee claims that the U.S.
government has defrauded the American people out of the nation's wealth.
group claims that the U.S. has secretly sold, leased or otherwise
frittered away half of its entire
gold reserves to pay for past military adventures abroad and other ill-conceived
actions. Furthermore, the group claims that the government has intentionally
covered up this loss of gold reserves through accounting fraud.
Are they right?
Well, as described by Darryl Robert
Schoon in his book "How to Survive the Crisis and Prosper in the Process":
See also this.
Frank Veneroso is the author of the Gold Book Annual, probably the
most comprehensive study and analysis of gold markets available today.
One of the world’s foremost financial analysts, Veneroso’s
clients have included the World Bank, the Organization of American States,
sovereign nations and global money managers.
Frank Veneroso is also chief investment strategist for RCM Global Investors,
the equity investment arm of Allianz Dresdner, the giant German insurance
conglomerate which also owns the PIMCO bond funds, the bailiwick of
(Article continues below)
It was in compiling the statistics on gold markets that Veneroso discovered
that the Central Banks were hiding the vast majority of their gold loans
from public view. Veneroso estimated that by the late 1990s, the highly
lucrative and still hidden gold-carry trade amounted to 10,000 to 15,000
tonnes of gold.
The Central Banks pointed to their books which showed receipts showing
large amounts of gold on deposit. What Veneroso suspected and found
to be true, however, was that the gold wasn’t there. Ten to fifteen
thousand tonnes of gold, an amount far larger than the Central Banks
would admit, had been loaned to the investment banks in order to suppress
the price of gold and now, in Veneroso’s opinion, were never coming
Veneroso noted that the amount of physical gold lent, 10,000-15,000
tonnes, is far too large for investment banks to repurchase without
causing the price of gold to explosively rise, the very result the Central
Banks had set out to prevent.
The success of the gold-carry trade had led to its failure. Now, at
the cost of almost half of their gold reserves, the Central Banks are
left only with promissory notes from investment banks instead of the
tons of physical gold they had once possessed.
Whereas someone you know, perhaps even yourself, may in the very near
future be forced out of their foreclosed home by bank order, rest assured
that the investment banks will suffer no consequence for not repaying
the gold they borrowed from Central Banks, gold that belonged to the
nations that lent it, not its Central Bankers. In matters of finance,
especially, the “even hand of justice” is reserved primarily
for those that cannot afford it. It is estimated that in the past, Central
Banks’ holdings of gold totaled 32,000 tonnes; and Veneroso’s
figures show that perhaps 50 % of that is gone. This newly-discovered
charade of Central Bank bookkeeping is as fraudulent as Enron’s;
and as with Enron, the bookkeepers were complicit in the deception.
Are Veneroso and GATA right? I don't know.
But given that the wealth and stability of our nation is at stake, we should
support their attempts to find out. The group has launched a campaign and
filed a freedom of information act request to uncover the truth.
If you don't have any background in the
history of gold, here is a very brief history:
- The world's leading currencies (or
"reserve currencies") have traditionally been backed by gold, at least
since the days that shells were the preferred trading standard
- At the end of World War II, it was
agreed by the wealthiest nations through the Bretton Woods agreement
that the U.S. would be the world's reserve currency, but that the U.S.
dollar would be backed by physical gold (the "gold standard")
- Because of huge over-spending on
foreign military adventures, the U.S. had a gold deficit and was on
the verge of economic disaster, and so in 1971 Richard
Nixon suspended the gold standard (i.e. he de-linked the dollar
from its gold backing)
- GATA and others allege that the
U.S. and other wealthy nations have since intentionally suppressed the
price of gold so as to make their non-gold backed currencies seem more
valuable, and to hide the true level of inflation effecting paper money
- Part of this suppression has allegedly
included dumping gold from Fort Knox and foreign gold repositories onto
the gold market whenever the price of gold has drifted upward too much
for their liking
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