When President Franklin D. Roosevelt issued an executive order in 1933 that outlawed the private ownership of gold coins, gold bullion, and gold certificates, the Federal Reserve suddenly had more gold on its hands than it knew what to do with.
Thus, the United States Bullion Depository at Fort Knox, Kentucky, was born.
These days, the depository is the focus of much conspiratorial debate. Some people suspect that it may now be empty. After all, Fort Knox hasn't been officially inspected since Sept. 23, 1974.
And even then, the "inspectors" (members of the press, actually) were only taken to the anteroom in order to photograph a handful of gold bars.
Ever since, admission to the Fort's supposed gold deposits has been repeatedly denied.
So, is there gold at Fort Knox? Or is it all gone - lent, sent, and spent across the globe?
Here's what we do know about the gold "in" Fort Knox...
Searching for the Fort Knox Gold
Though the media and members of the government were permitted access in 1974 to take pictures, the last actual audit of Fort Knox occurred in 1953, right after President Eisenhower's inauguration. And even then only 5% of the gold was tested for authenticity.
According to CNBC, in 2011 a team of Congressmen, including Ron Paul, pressed for access to Fort Knox to inspect and confirm the validity of the gold reserves. The reason for their suspicion dates back to Nov. 12, 2009, when China claimed to have received a shipment of U.S. gold that turned out to be tungsten instead.
The Treasury's response to Ron Paul was an exhaustive and lengthy document outlining the entire gold authentication process: According to this report, it would take about 30 minutes to verify the gold content of each bar, or 350,000 man hours, which would require 400 people working for a total of six months.
Paul wasn't the only one requesting access to the U.S.' gold reserves. According to Spiegel Online, the German Bundesbank had been asking for access since 2002. Though they were denied, Der Spiegel claims that German parliament members started submitting proposals for the gold's use anyhow. Finally, in 2007, Bundesbank staff members were allowed to see the facility, but they reportedly only made it to the anteroom of the German reserves.
When, six years later, the German government asked for its gold back, according Nsnbc.me, the Fed simply said that it would take until 2020 to be able to accomplish that transfer.
Strangely enough, after all the hubbub and nagging, Germany was fine with this answer. Here's why...
Is There Gold at Fort Knox? Survey Says "Highly Unlikely"
There has been speculation for a long time that the Federal Reserve doesn't actually have much gold anymore - that it sold it off, lent it out, or used it as collateral for borrowings. And this latter suggestion is the most likely scenario.
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According to Charles Hugh Smith of Investing.com, the gold at Fort Knox was probably rehypothecated. Rehypothecation occurs when the securities you pledge as collateral for a margin loan are re-pledged to a bank or other lending institution to secure a loan to cover the firm's exposure to potential margin account losses.
But why is Germany's gold even in Fort Knox? During World War II and the era of the gold standard, many foreign countries feared that their reserves might be taken by an enemy. In 1939, the United States was still a neutral party so many European countries sent us their gold bars across the Atlantic to be stored here. Germany was not yet one of these countries, but this is how the practice began. Once the Cold War started, Germany shipped its gold rations over as well.
After some time, the checks and balances of storing other countries' gold wasn't proving beneficial - not when the U.S. was paying interest on it while coughing up the cost for its protection.
"So," writes Charles Hugh Smith, "we started issuing paper on the gold as if it were ours. Here is where the trouble began. It was pretty small potatoes for a good while, until we went off the gold standard in 1971 during the Nixon Administration. What good is having a precious metal to back fiat currency, when a promise is just as good? Enter the danger zone."
According to OfTwoMinds.com, the Fed decided to start melting down bits of stored gold bars to sell off as bullion. It skimmed a bit here and a bit there. But then debts started to accrue and the Fed got intensely greedy. Not wanting to use their own gold as payback, they began to melt down and offer up a lot more of the gold from other countries instead. And if that weren't bad enough, the Fed also started to issue paper promises on this gold as well.
You'd think the German government would have been livid when the Fed announced they couldn't return their gold until 2020. But they weren't because they've been doing the same thing with their gold reserves. And their rehypothecated rations have been sold to multiple people simultaneously too, because, like us, they're under the impression that not everyone will want it at the same time.
In short, no one knows for certain how much gold is being stored at Fort Knox today. Aside from staff, nobody has actually been permitted inside the vaults to see or inventory any of the gold for years, so there is no hard evidence that it actually exists.
What do you think - is there any gold at Fort Knox?
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