Is the “paper gold” scam the reason why Trump and Musk’s audit of US gold reserves was cancelled?
The planned visit to Fort Knox by Donald Trump and Elon Musk to verify the US gold reserves was cancelled without explanation. Why? James Rickards believes the high-profile audit of gold reserves was cancelled because the US government and
The planned visit to Fort Knox by Donald Trump and Elon Musk to verify the US gold reserves was cancelled without explanation. Why?
James Rickards believes the high-profile audit of gold reserves was cancelled because the US government and Federal Reserve do not want to draw attention to gold’s role as a monetary asset, as they have control over the paper money supply.
Additionally, they do not want to draw attention to the gold leasing scam, where physical gold is used to support “paper gold” transactions worth up to 100 times more than the physical gold stored. If investors were to find out and get nervous, and demand delivery of the physical gold they think they own, it could lead to a gold market panic.
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The following is paraphrased from Daily Reckoning’s article ‘The Truth About Fort Knox and Gold Leasing’ written by James Rickards, editor of Strategic Intelligence, Project Prophesy, Crash Speculator and Gold Speculator, and the author of several books.
The Fort Knox Visit That Never Happened
The proposed visit to Fort Knox by Donald Trump and Elon Musk, which was highly publicised and intended to verify the presence of the US gold reserve, ultimately did not take place. This is despite initial announcements and plans to livestream the event using Musk’s Starlink satellite system.
However, “Trump never mentioned it again after 26 February. Musk went radio silent on the topic after 6 April. There was no visit to Fort Knox. There was no announcement about why there would be no visit. It was as if the whole story never happened. It just went away,” Rickards wrote. Why?
The US Treasury holds 8,133.5 metric tonnes of gold in the US reserve position, with slightly less than half stored in Fort Knox, the remainder mostly stored in a secure vault at West Point, New York, and a small amount held at the Denver Mint for coinage purposes.
The exact location of the vault at West Point is classified and although the US Treasury owns the gold reserve, the US Army controls it since most of the gold is stored on two Army bases – Fort Knox and West Point.
The visit was initially highly publicized, with Trump mentioning it in meetings with French President Emmanuel Macron, aboard Air Force One, and at the National Governors Association Conference and the Conservative Political Action Committee (CPAC) annual meeting, but suddenly the story went away, with no explanation or announcement about why the visit was cancelled.
Rickards suggests that the reason for the cancellation was not due to any issues with missing gold, as the gold is all present and accounted for – the last public audit was conducted in 1974, annual audits are conducted by the US Treasury – but rather because the US government and the Federal Reserve do not want to call attention to gold’s role as a monetary asset.
Musk’s departure from his position as head of the Department of Government Efficiency (DOGE) was expected, but it’s curious why the visit to Fort Knox did not proceed while he was employed by DODE, especially given the potential for great public relations and reassurance to the American public, who are suspicious that some gold is missing, that such an event would have brought.
Manufacturing Gold’s Diminished Role
The US government, along with the Federal Reserve and commercial banks, has a monopoly on the money printing press and has taken steps to diminish the role of gold as money, starting with Franklin Roosevelt’s confiscation of gold from US citizens in 1933, following the Bank Holiday of 1933, and Nixon’s closure of the gold window for foreign trading partners in 1971.
As a result, there are now three generations of students who know very little about gold, and it is not taught in economics classes or discussed in economic or Fed policy circles, with many younger students unaware that the US was once on a gold standard or that gold circulated freely as a form of money.
Despite this, gold is still a monetary asset, with the US holding 8,133 metric tonnes, followed by other countries such as Germany, Italy, France, Russia and China, which have significant gold reserves. Multilateral institutions like the European Central Bank and the International Monetary Fund also hold substantial amounts of gold.
The persistence of large gold holdings by countries for over a century suggests that gold is indeed a form of money, but countries may not want to acknowledge this to maintain their monopoly on paper money or because they are still acquiring gold and do not want to drive up the price.
The fact that official holdings of gold bullion total 36,118 metric tonnes suggests that gold is still an important monetary asset, and Rickards believes that the evidence points to gold being a form of money, despite efforts by governments and institutions to downplay its role.
Related:
- The Great Taking: Have the global elite devised an elaborate plan to take everything we own?
- James Rickards: When the next financial crisis hits the elites are planning to freeze the financial system, worldwide
- The Great Taking: How to shield your wealth from the self-styled financial elites
- How to survive “The Great Taking”
The Paper Gold Market
The issue of gold leasing is also significant, as it allows gold holders to earn a return by leasing their gold to third parties, who can then lease it to other parties, creating a chain of “paper gold” transactions that can be leveraged up to 100:1 to physical gold.
This leverage creates a danger similar to a run on the bank, where if a group of paper gold investors demands physical delivery, the counterparties may have to buy gold in the spot market, as the leased gold is not in their physical possession.
Conclusion
The visit to Fort Knox by Trump and Musk was likely cancelled due to not wanting to draw attention to the gold leasing scam and the potential risks associated with it. Additionally, the desire to maintain the monopoly on paper money and avoid drawing attention to the role of gold as a monetary asset most likely played a significant role in Trump and Musk’s high-profile audit of gold reserves.
The gold market, although liquid, lacks sufficient liquidity to support delivery if demand for physical gold were to exceed a small portion of the paper gold market, which could lead to a full-scale gold panic. In the event of such a panic, the spot price of gold could potentially skyrocket to $25,000 per ounce before investors would even have the opportunity to react and make a purchase.
Rickards suggested that people, possibly including Scott Bessent, have informed Trump and Musk about the reality of the precarious nature of the paper gold market, which likely deterred them from pursuing any actions that could disrupt the status quo, such as visiting Fort Knox.
The major players in the paper gold market, including JPMorgan and Goldman Sachs, have a vested interest in maintaining the current state of affairs and avoiding any attention that could potentially disrupt the market.
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As a result, it is unlikely that Trump and Musk will be visiting Fort Knox anytime soon, and the recommended solution for individual investors is to buy physical gold to protect themselves from the potential consequences of the paper gold market.
You can read Rickard’s full article ‘The Truth About Fort Knox and Gold Leasing’ HERE.
Featured image: Gold reserves and vaults inside Fort Knox, aka the US Bullion Depository. Source: Adobe Stock
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