Jim Rickards MIND BLOWING Comments on Our Gold and Fort Knox
SilverDoctors.com
August 24, 2017
The United States Army and the whole entire system is hanging in the balance…
By Jim Rickards via Daily Reckoning
One of the little-known items on the Fed’s balance sheet is a vital asset it received from the U.S. Treasury a long time ago…
During the Great Depression, in 1933, President Roosevelt issued an executive order requiring anyone with gold to surrender it to a Federal Reserve bank or any member bank of the Federal Reserve system.
The Federal Reserve banks also required the commercial banks to hand over their gold to the Fed. Now, suddenly, the gold went out of the commercial banks into the Federal Reserve Bank.
But under the Gold Reserve Act of 1934, the Fed was ordered to surrender all its gold to the Treasury Department. All the nation’s gold in effect came under direct government ownership.
Now, this is key: The Federal Reserve is actually a private system, while the Treasury is an arm of the U.S. government. And the Fifth Amendment of the Constitution prevents the government from taking private property without just compensation.
To get around that legality, the “just compensation” was a gold certificate the Treasury issued to the Fed in exchange for its physical gold.
To this day, the Fed carries that gold certificate on its balance sheet.
The Treasury officially values its gold at $42 an ounce. That was the official gold price from 1973, two years after the U.S. abandoned the Bretton Woods system. Of course, the market price of gold today is almost $1,300 an ounce.
But if you take the face value of the gold on the Fed balance sheet, divide it by $42 an ounce and then come up with a number of ounces and convert that into tons, it comes out to over 8,000 tons.
That’s highly interesting, because that’s how much gold the Treasury currently owns.
The Treasury needs at least 8,000 tons of gold to back up that paper certificate it handed the Fed back in the 1930s to satisfy the Fifth Amendment.
If you take the 8,000 tons on the Fed balance sheet in the form of this gold certificate, market to market at $1,300, that mounts to well over $300 billion.
So the secret to the Fed’s balance sheet is its “hidden gold asset,” that gold certificate it received from the Treasury in the 1930s.
Nobody talks about this or admits it. But our whole system is based on gold.
But what about the gold in Fort Knox? Is it actually there?
There is a lot of confusion on this subject.
First off, Fort Knox was built in 1937 partly to house gold that the Treasury was scooping up after the Gold Reserve Act took effect. The gold had been kept it in vaults in the basement of the Treasury. But they ran out of space, so they built Fort Knox to house the gold.
Many gold bugs and conspiracy theorists say there is no actual gold in Fort Knox. They say the reason the government will not audit the gold, for example, is because the gold is not there.
But the truth is quite the opposite.
If you are the Fed or the Treasury and you want people to think that gold is unimportant — which they do — why would you audit it?
The Rest…HERE
