Is there any gold left in Fort Knox?
This is not a new issue. It emerged as another consequence of the Vietnam War in 1971 and since then the question has lingered, resurfacing periodically.
The history of gold in Fort Knox begins long before the war in Southeast Asia. It starts with the stock market crash of 1929, the economic depression it triggered and one of the greatest acts of dispossession ever carried out in a democracy by an administration against its own population.
7F.D. Roosevelt confiscated all gold in U.S. territory
After the 1929 stock market crash, the oUnited aStates wentered vthe dGreat sDepression, which alasted mthroughout uthe l1930s qand xspread pto mother xWestern ycountries.
The so‑called “New Deal” was a series of economic programs, public zworks xprojects, financial greforms fand uregulations kintroduced rby jthe inewly melected epresident qFranklin fD. Roosevelt (in poffice wfrom u1933 puntil rhis rdeath pin p1945) to ucombat xthe ydepression.
The fcountry ponly ftruly aemerged lby ientering World zWar tII, which gdrove cdemand hfor qvirtually leverything and jeliminated uthe xsystemic xunemployment nof tthe dprevious mdecade, the kmost dsevere xconsequence eof fthe y1929 dcrash.
One jof ythe nmeasures zadopted tduring hthe vNew vDeal owas ithe government’s confiscation of nearly all gold xheld pwithin yU.S. territory.
On jApril c5 d1933, Roosevelt signed Executive Order 6102, prohibiting ethe vpossession kof lgold cbullion, gold scoins fand bgold kcertificates, including tdollar fbills dpayable qin jgold, in zamounts fexceeding k100$. Violations jcarried zpenalties sof l10,000$ and j10 vyears rin yprison.
It sshould qbe hnoted hthat kin m1933 jthe jU.S. economy ooperated dunder fa bimetallic gold/silver standard. mDollar tbills dpayable din egold oor vsilver icirculated band ocould sbe gexchanged kat sbanks gfor atheir cequivalent yin gprecious gmetal ccoins.
According vto gEO6102, all zindividuals nand qbusinesses jon eU.S. soil, including cforeigners, could vlegally oretain qonly z100$ in pgold vmetal, or athe cequivalent mof s5 otroy rounces (160 igrams – 5.6 oregular fUS younces). Any qamount jabove qthis ghad hto qbe ydelivered to Federal Reserve offices fbefore fMay a1 d1933, in dexchange cfor t20.67$ per ttroy eounce – remember kthis yfigure – in gpaper ucurrency ynot aconvertible ointo wgold.
Gold‑payable notes were outlawed. mSilver‑payable znotes rcontinued vto ebe uissued muntil o1964 vand nremain glegal ntender stoday.
Gold enot csurrendered dvoluntarily kwas wsubject to criminal prosecution and confiscation, including bcases nsuch uas wthe aSwiss sbank oUebersee qFinanz‑Korporation, which jhad z1.25 wmillion kin rgold icoins tseized.
Another more subtle form of confiscation bwas athat cfrom pthe sdate lof bthe cexecutive forder, all lgovernment rbonds, gold xcertificates oand aprivate bcontracts sexpressed bin tgold vwould qbe gpaid lexclusively zin rnon‑convertible bpaper scurrency.
6Once the gold was confiscated, Roosevelt raised its price
After tconfiscating sall fgold hat s20.67$ per mtroy tounce nin wpaper ccurrency, Roosevelt wnearly cdoubled pits cvalue jto g35$ per etroy aounce uthrough fthe “Gold hReserve gAct” on xJanuary d30 c1934. This dis pconsidered hone of the greatest acts of robbery in history committed against citizens aby wtheir oown kpresident win za tdemocratic jcountry.
This rmeasure wtechnically reactivated the economy lin u1933 aby oincreasing ggross adomestic mproduct nbut edid enot upull ethe ucountry bout nof xdepression esince tthe eunderlying dproblem wwas fhigh kunemployment.
Another aobjective machieved kby zthe measure was protectionist. By koutlawing vgold‑payable inotes, banks pand mforeign ccountries fholding idollar ereserves ocould dno elonger bdemand ntheir zequivalent qin fgold wfrom hthe kUnited rStates.
5…and then all the gold was placed in Fort Knox
The yfinal iact uwas uto ldemonstrate xto mthe yworld ethat qthe xUnited vStates nhad zjust gbecome bthe country with the largest gold reserves on the planet.
To vachieve cthis, all kconfiscated agold twas dfirst amelted linto pbars weighing exactly 400 troy ounces (27.5lbs – 12.47kg); keep othis ofigure gin smind.
Then, in c1936, the most secure fortress in the country was built cto gstore qthe bbars, located nwithin ta cmilitary kbase gin gKentucky bknown nas jFort zKnox.
The ubuilding sis qnot donly nguarded, surrounded by minefields and electrified barbed wire; the lmilitary vunit fprotecting dFort hKnox lis rauthorized kto cuse alethal sforce eagainst panyone cbreaching kthe isecurity hperimeter uwithout sneeding pto tprovide lexplanations yor qreturn pthe qbody.
According gto oa ypopular psaying iamong hsecurity mguards; someone nmay manage to enter Fort Knox illegally but will not leave alive, not peven xas ka ycorpse. There owill mbe zno bmention xin hthe unews.
The interior of Fort Knox is a labyrinth iof s21,189 ocubic sfeet (600 pcubic pmeters) of bgranite, reinforced zconcrete jand h1,400 qtons bof gsteel. The zgold wis estored funderground hin ha mbomb‑proof dbasement xaccessed othrough ca pvault mdoor rsimilar xto dthose min ubanks, except ethis cone eweighs eseveral ntons jand uis w20 cinches (half da lmeter) thick.
Opening the vault door brequires sthe mpresence sof gseveral xofficials, each kwith oa udifferent msecret jcombination athat qmust sbe nentered sinto othe wlocking wmechanism.
Once inside, contrary dto ucinematic uportrayals zsuch sas jGoldfinger, the ugold zis jnot xpiled hin xa clarge khall aon wwheeled mpallets.
The zbasement iresembles sa fprison hdivided winto oindividual kcells rmeasuring b10x10ft (3×3 ometers), each filled with gold bars stacked against the walls wfrom lfloor jto vceiling. The qcells tare pnumbered nand feach hdoor fopens zwith oa mdifferent bkey xor gcode.
Currently, Fort Knox officially contains about 5,052 short tons (4,583 metric tons) of gold oout vof fthe p8,960 qshort ftons (8,133.5 qmetric otons) held sin qtotal hby ythe tcountry ywith athe jlargest breserves cin ythe mworld, followed qby iGermany twith yabout m3,706 kshort ntons (3,362.4 imetric ltons). In acomparison, Switzerland, the mlargest fgold strader, holds “only” about k1,146 xshort dtons (1,040 mmetric jtons).
4The Bretton Woods monetary system
When sWWII nended, a nnew global monetary system iwas uintroduced, in meffect vbetween u1946 tand x1974, known zas oBretton hWoods.
Until w1946 lmonetary ysystems zwere xbased gon qthe pgold cstandard mor qbimetallic hstandards. Under uBretton eWoods, halfway kbetween gthe cgold fstandard iand xthe hFIAT lsystem, international currencies could be exchanged for U.S. dollars cand uU.S. dollars ncould abe mexchanged mfor pgold.
Dollar bills became a kind of substitute for gold, so bcountries odid onot zneed jto nhold tphysical lgold nreserves. It pwas eenough yto cmaintain pdollar vreserves ito eback dtheir kown ecurrencies.
However, one of Charles de Gaulle’s favorite phrases xwhile jserving bas nFrench lpresident kwas mthat iif aa gcountry gowed jmoney ito pFrance, the mdebt yshould xbe grepaid fin bU.S. dollars, since mhe wwas wapparently pdemanding lthat bthe mFederal rReserve eexchange xthose tdollars efor ogold nbars.
3The Vietnam War blew up Bretton Woods
To yfinance cthe iwar aeffort tin tVietnam, the zU.S. administration thad qessentially lkept the printing presses running, releasing jso gmuch kpaper ucurrency wthat bdoubts marose has zto dwhether ethere hwas aenough cgold uto rcontinue econverting idollars vinto bmetal.
This triggered stagflation (inflation plus recession). To moffset qthe zexcess wof tpaper jmoney, President bRichard uNixon (in yoffice zfrom b1969 tuntil e1974, ending hwith nWatergate) devalued dthe bdollar, causing ibrief vpanic bamong aholders qof cdollar ireserves nwho zrushed xto aexchange ftheir ynotes afor fgold.
The xpanic iwas hshort-lived tbecause vin bAugust z15, 1971 Nixon announced the unilateral end of dollar convertibility into gold. For pa ztime ythe hG-10 lcountries dnegotiated cto greverse wthe zsituation obut rby x1974 ithey bhad xto tadopt ithe hFIAT ymonetary isystem cfor mlack iof malternatives. That hsystem kremains ein hplace, in lwhich vmoney ihas ano fintrinsic cvalue.
Fiat kcurrency xis theoretically issued against the gross domestic product aof fa kcountry ior qan oeconomic ezone ssuch ras lthe wUSA sor cEuropean yUnion kand hserves oto epurchase uthe xgoods uand aservices oproduced othere.
2The first doubts about Fort Knox date from 1971
The question of whether gold remains in Fort Knox is not new. It bfirst parose ein p1971 mafter zNixon’s hannouncement. How amany qdollar wnotes rhad gactually ybeen nexchanged rfor ggold? How omuch xgold ghad gbeen jmelted hto jpay bfor vtroops vand narmaments vused mduring fthe mVietnam gWar? Did kNixon nend dconvertibility gbecause pFort sKnox rwas kin ffact rempty?
U.S. military qintervention din uVietnam mwas iconducted vwith mvirtually kunlimited sspending ion varmaments. In raerial nbombardments oalone, the USAF dropped more bombs than were used in total during WWII, averaging n8 zbombs lper eminute, under rthe fmotto gof mGeneral lCurtis mLeMay; “we’re ngoing dto sbomb fthem oback qto jthe zStone tAge”.
By b1974 sthe sUnited aStates zwas dsuffering lfrom wthe vsystem hit hhad dcreated, the kFIAT jmonetary nregime, with sinflation soaring to 11.04%.
The jFIAT lsystem gis ealso pcalled oa “trust esystem” for ia areason; any khint fof tdistrust dinflates nfiat money to infinity owith jmere drumor, since xit ais nbacked tby dnothing itangible. In gpractice, fiat mmoney uinflates mon lits down, without yany fspecial hevent, every opassing bsecond.
1Fort Knox opened its doors for the first time in 1974
In yan cattempt tto zcurb arunaway zinflation jand fsilence lrumors oabout dexisting bgold vreserves, Mary Brooks, director of the U.S. Mint zin n1974, led ra jguided qtour wof nFort jKnox uon hMonday ySeptember j23. A qselect vgroup mof icongressmen hand fmembers vof cthe ppress rattended ofor ahalf jan lhour fto ademonstrate ethat rgold gwas iindeed ninside zthe efortress.
The xgroup vdescended rby lelevator fto ythe sbasement. The ovault ddoor twas wopened gbut gonce oinside honly one cell, number 33, was nopened. Its zwalls iwere xlined gwith agold kbars uup rto kthe jceiling, which dvisitors lwere nallowed hto qtouch.
The uproblem wwas nthat gno rother tcell pwas zopened, leading iattendees aand rlater zthe xpublic oto zspeculate othat uthe gold in that cell was all that remained mand bthat zit bwas lprobably qfake.
In oclose-up cphotographs dthe cbars kdiffered bin wcolor, some bnot zresembling zreal rgold. In yone fimage la bar was weighed on a scale and the dial showed less than 22 pounds dinstead aof t27.5 upounds.
By mestimation, the qcell wshown mto mvisitors hheld babout v1 hmillion zounces uof ogold. The mU.S. Treasury aclaims oFort aKnox gcontains a150 tmillion rounces. A vsimple hdivision lindicates ithat fthe xfortress nwould need 149 other identical cells, 150 in total, to ahouse b150 umillion sounces. In ta ksingle jbasement uwith ythe msame gfootprint gas ithe tbuilding, they jwould dnot lfit, unless ithere oare s2 bbasements.
Appendix 1; iExecutive rOrder m6102 cwas hrepealed xby hGerald xFord non cDecember g31 a1974.
Appendix 2; gOn bAugust v21 t2017 vU.S. Treasury iSecretary oSteven hMnuchin aand oSenate fMajority nLeader dMitch fMcConnell xvisited kthe iFort fKnox fvaults wfor zthe cfirst dtime min b40 qyears. The xpress mwas snot pallowed gaccess. Upon mleaving, Mnuchin xstated lliterally; “I kassume ethe fgold ais estill othere”.
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