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The Great Gold Audit Gathers Momentum

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September 02, 2010 – Comments (15) | RELATED TICKERS: CEF

This is a huge groundswell of support and consciousness relating to one of the more important fiscal questions facing our country. How much unencumbered, uncompromised, untampered, unleased, and unsecuritized gold really exists at Fort Knox and the NY Fed?

A full and independent audit is the only way to answer that question, and anyone resisting an audit must be presumed to have something to hide. If the gold is there in the reported quantities, with no encumberances whatsoever, then this proposal for an audit should generate no opposition from the Fed, the Treasury, the President, nor anyone in Congress.

This editorial piece by The New York Sun is a phenomenal piece of reporting, and I celebrate the resulting conveyance of the importance of this simple, non-threatening task of merely ensuring that the U.S. holds 100% of the unencumbered gold that it claims. Given the range of stresses and challenges facing the U.S. dollar, what could be more important at this juncture?

The Gold Audit

"By our lights a weak dollar policy is a strategic mistake for America. We felt that when President Carter and his treasury secretary at the time, W. Michael Blumenthal, were running a weak dollar. We’ve never credited the idea that one cannot have a strengthening dollar and a growing economy, an idea that should have been thoroughly discredited during the Reagan years and the Clinton years. One could say that a strong dollar is a good idea that is bi-partisan in pedigree. But what good can come of a weak dollar policy, such as the one being pursued by Messrs. Obama, Geithner, Bernanke, Mrs. Pelosi and the others who have various levels of constitutional — or, in the case of Mr. Bernanke, non-constitutional— authority over policy in respect of America’s money? As the value of the dollar evaporates, why in the world wouldn’t ordinary Americans want to have the gold holdings they’ve been told about for so many years given a full and independent audit?"

Ron Paul's interview with Kitco

Fox News report on the issue

"He said there is "reason to be suspicious" about U.S. gold holdings and suggested officials were manipulating the price of gold to prop up the perceived value of paper money. Paul said "it is a possibility" that neither Fort Knox nor the New York Federal Reserve vaults have any gold. He also said he will call for the U.S. government to legalize the use of gold and silver as "legal tender" alongside the U.S. dollar. Let them compete, he says."

 

15 Comments – Post Your Own

#1) On September 02, 2010 at 12:14 PM, ChrisGraley (30.21) wrote:

And while their at it they can audit the bullion banks.

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#2) On September 02, 2010 at 1:34 PM, HansHauge (32.63) wrote:

If you own gold you are praying for this to happen. I bet it gets blocked though. Too much politics.

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#3) On September 02, 2010 at 1:34 PM, 100ozRound (29.66) wrote:

This needs to happen quickly too before they "smuggle" it back in (that is if there isn't anything there)

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#4) On September 02, 2010 at 1:49 PM, carcassgrinder1 (< 20) wrote:

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/4/7_Andrew_Maguire_%26_Adrian_Douglas.html

....must listen, very relevant to your topic.

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#5) On September 02, 2010 at 1:50 PM, Schmacko (74.81) wrote:

Why does this need to happen at all?  We aren't ever going back to the gold standard and using gold as legal tender (in the US) is probably not going to happen either since it would require completely different merchant infrastructure to be put in place.  Society moves more and more toward being cashless, using gold as legal tender seems like a step backward.  I know there's a small minority of people that want this (gold as cash) but the costs of implementing that change aren't worth it just to make a few people happy.

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#6) On September 02, 2010 at 3:46 PM, BillyTG (29.75) wrote:

Schmacko, no offense but your comment reaks of naivety and irony.

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#7) On September 02, 2010 at 4:55 PM, G8BigBoom (71.04) wrote:

Schmacko has a good point. Purchases for online would be a little difficult using actual gold. Cash is a little more realistic in our economy I would think and bringing gold back as the standard would bring troubles of it's own. People seem to think everything worked great in the good ole days of gold but we still had issues.

The topic post was awesome and the audit should happen yesterday. Very scary that the government would refuse to audit. Makes a person wonder.

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#8) On September 02, 2010 at 5:11 PM, BillyTG (29.75) wrote:

It's not necessarily about gold legal tender, per se. We could use practically anything, be it plastic, paper, metal, whatever. And it's definitely not about making "a few people happy." We're talking about stabilizing the economy, the foundation of American society (and therefore practically the rest of the world).The problem is that whatever we use as currency should be tied to something like gold, so that it has REAL value. It used to be. Not any more. Now, the federal reserve prints off money that is sort of tied to oil (petrodollar), but even that is quickly changing. Gold is proven.

http://www.youtube.com/watch?v=C7Xu3xUkpEE

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#9) On September 02, 2010 at 5:36 PM, 100ozRound (29.66) wrote:

G8BigBoom

There's an app for that

apologies in advance for the app reference.

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#10) On September 02, 2010 at 5:39 PM, Schmacko (74.81) wrote:

BillyTG, How so?

The easy answer as to why people might propose an audit of the reserve is that an independent audit costs money.  Money the federal government could better use on other things.   But say the audit is done and all the gold is accounted for... then what?  What's the end state?  Do gold bugs just sleep easier knowing we actually do have as much gold as we say we do?

Gold will not be made US legal tender again.  So auditing for that purpose is a waste of money.  To clarify that yes you can go spend your $1000 gold eagle for $50 worth of goods legally now, but the US is not going to mint gold or silver coins that have actual value equal to face value for you to use to go purchase your happy meals at McDonald's with.  We've done nothing but move away from that practice with our coins.  the govt also isn't going to give you the green light to purchase your groceries with nuggets and gold dust.     

We aren't going back to the gold standard either.  I seriously doubt the US will ever again issue notes that can be convertible into gold.  The system is just to inflexible. 

I could definitely see a new world reserve currency based around a baseket of currencies and gold being implemented, but the US returning to gold backing... no.

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#11) On September 02, 2010 at 6:28 PM, tfirst (36.37) wrote:

If currency is backed by gold, the government or the fed loses it ability to manipulate the value of said currency, and right now they want to control everything.

PS,,, Fort Knox is empty....

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#12) On September 02, 2010 at 7:52 PM, rd80 (98.55) wrote:

The easy answer as to why people might propose an audit of the reserve is that an independent audit costs money.

I bet the audit could be funded with private donations in less than a week.

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#13) On September 03, 2010 at 3:06 AM, BillyTG (29.75) wrote:

Schmacko, now you're making sense with your last sentence that "I could definitely see a new world reserve currency based around a baseket of currencies and gold being implemented." Kind of an aside, but I think we've been moving toward a New World Order of one supernation corporacracy for some time. The Euro is evidence. NATO is evidence. Though basically an impossibility right now, there is also a movement to a North American "Amero" currency. Don't be surprised if a bunch of Asian nations create their own currency. The Petrodollar is disappearing and already there is a push for using a basket of currencies: http://news.goldseek.com/GoldSeek/1256317200.php

 As to the rest of your post, see tfirst's post: "If currency is backed by gold, the government or the fed loses it ability to manipulate the value of said currency, and right now they want to control everything."

 It seems you are still stuck on this idea of turning gold into coins, and still aren't demonstrating the faintest understanding that dollars need to be backed by something to have any worth. The economic problems we face are a lot bigger than how to turn gold into usable currency.

No one believes that the US has enough gold to substantially back the dollars out there. It's impossible. An audit will never happen because it will expose the ugly truth of how weak the dollar really is, and could ultimately implode our economy.

Still don't think our economy is on the fringe of breakdown? Listen to this congressman on C-span: http://www.youtube.com/watch?v=pD8viQ_DhS4  The good stuff is 1:45-3:45 into the clip.

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#14) On September 03, 2010 at 4:07 AM, Starfirenv (< 20) wrote:

Strongman- Parabolic, good stuff here- bullion crisis, systemic crisis or currency crisis, banking? What's your call on the tipping point? 
 http://www.financeandeconomics.org/Articles%20archive/2010.08.18%20Gold.htm

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#15) On September 03, 2010 at 4:23 AM, silverminer (31.37) wrote:

I've always expected the tipping point to be a currency crisis at its core, likely involving a wholesale exodus from Treasuries amid a dollar drop that will make our heads spin.

That in turn becomes the trigger for the unwinding of paper leverage in bullion, and marks the end of the road for gold price suppression.

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