The United States Bullion Depository, more often referred to as Fort Knox, has long been the source of great speculation and endless conspiracy theories.
Here’s a quick history lesson for those of you who might be unfamiliar with Fort Knox’s origins. In the 1930’s, the United States, as well as a multitude of other nations worldwide, went through extreme economic difficulties- the Great Depression. During this time, the United States was restricted by the Federal Reserve Act which stated every dollar in circulation must be backed by a minimum of 40% gold in reserves.
The onset of the financial downturn caused widespread panic; citizens traded in their paper for precious metals, namely gold. This, along with the decision of many foreign banks to repatriate gold held by the US, caused gold reserves to sink. Because of mandates restricting the creation of new money without gold backing, the economy was dying a slow and torturous death.
To “revitalize” the economy, Franklin D. Roosevelt issued Executive Order 6102, which called for the confiscation of all gold coins, bullion, and certificates from the American people. Citizens were given $20.67 in paper for each ounce of gold they surrendered to the federal government. Those who disobeyed the order faced up to ten years in prison and a fine of $10,000.
With the accrual of such a large amount of gold bullion, the need for a new depository was born. In 1936, the US government began construction on Fort Knox in Kentucky, to be completed by year’s end. Radical security measures make this one of the safest, most impenetrable buildings in the world. Several layers of physical fences, alarms, surveillance cameras, minefields, barbed wire, bomb-proof roofs, emergency flooding systems, and heavily armed guards make this a location you do not want to break into (if you could survive the attempt).
Since the creation of the vault, there has been one quasi-official audit of the building. In 1953, President Eisenhower ordered an audit of the depository; however, no outside assayers were utilized and those who did perform the audit admitted to testing less than 5% of the bullion held. In the 63 years since that “audit,” no formal inspection has taken place.
This is how we arrive at the premise that there might not actually be gold in Fort Knox, any longer. I know we should all have full confidence in our government and take their word at face value, right? Right…
Let’s look at the facts. When someone is accused of a crime, the first thing police consider is motive. Does the government have reason to cover the true inventory levels of gold held in Fort Knox? Of course. Gold prices are controlled by public perception and speculation on the state of the economy. Knowing our reserves are low or depleted would have significant ramifications on the value of gold, and (more importantly to the government), the US dollar. So, if the Fed had used reserves without public knowledge, they certainly have a reason to avoid an audit.
Furthermore, if they do not have anything to hide, why all the secrecy? Why not indulge the skeptical John Q. Public and perform an audit (a legitimate audit) and dispel the rumors? Some say we are safer not knowing the truth. I would disagree. Call me a traditionalist, but I figure this country could use some honesty and transparency.
What do you think lies in Fort Knox? Gold? Area 51 remains? More political hot air? Let me know your thoughts.
Take the opportunity to do something those in the 30’s were not allowed to do. Pick up some gold to prepare for your future.