Wednesday, May 18, 2011

Don't Sell the Fort Knox Gold!

Since my post arguing against Ron Utt's call for selling the gold that is in Fort Knox, I have received many emails pointing me to Ron Paul's view that the gold should be sold. Here's my take on why we should think twice before selling any gold:

The gold does not belong to the United States government. It was forcibly taken from the people of the United States by FDR. explains (My emphasis):
Soon after taking office in March 1933, Roosevelt declared a nationwide bank moratorium in order to prevent a run on the banks by consumers lacking confidence in the economy. He also forbade banks to pay out gold or to export it... .

On April 5, 1933, Roosevelt ordered all gold coins and gold certificates in denominations of more than $100 turned in for other money. It required all persons to deliver all gold coin, gold bullion and gold certificates owned by them to the Federal Reserve by May 1 for the set price of $20.67 per ounce. By May 10, the government had taken in $300 million of gold coin and $470 million of gold certificates. Two months later, a joint resolution of Congress abrogated the gold clauses in many public and private obligations that required the debtor to repay the creditor in gold dollars of the same weight and fineness as those borrowed.
Here are more of the specifics from Build Freedom:
In 1933 President Franklin D. Roosevelt arbitrarily reduced the amount of gold the dollar represented from one twentieth of an ounce to one thirty-fifth of an ounce. This amounted to a 43% devaluation (or debasement) of the dollar - a declaration of bankruptcy stating that the U.S. Treasury would "settle" its debts by paying 57 cents in the dollar. It also meant, in terms of gold, that overnight the government had robbed the American people of 43% of their savings. By the standards of our Founding Fathers this was a crime punishable by death.
In 1934 Roosevelt's "New Deal" took away the American citizen's right to own gold, a right Americans had enjoyed since the first pilgrims arrived. This also meant the discontinuation of [Federal Reserve] gold certificates.
In 1963 [Federal Reserve]silver certificates were discontinued. On November 26, 1963, the day of John F. Kennedy's funeral, the first 50 million "no-promise" Federal Reserve Notes were released into circulation.

 President Nixon broke even more of the connection between gold and the dollar on August 15, 1971, by preventing global central bankers from redeeming dollars for gold. Notice in the original address, President Nixon says this move is "temporary":

Bottom line, it was a series of steps taken by the United States government to obliterate the connection between those holding dollars and their legitimate claim on the Fort Knox gold.

Thus, the gold doesn't belong to the United States government. It was stolen by contract breach by FDR and the contract was further breached by President Nixon by refusing to redeem dollars by foreign central banks holding dollars.(Note Federal Reserve notes at one time either stated that they were reedemable in silver or gold)

This gold doesn't belong to the United States government. It belongs to the people holding Federal Reserve notes. The dollar should be made redeemable into gold for those holding such Federal Reserve notes.

Ron Paul's argument on selling gold goes like this:

Dr. Paul told the Sun today that he reckoned the sale of gold reserves would be “a good and moral decision. An individual would have to do the same.”
Dr. Paul is surely thinking of  Fort Knox gold being rightfully owned by the United States government and is responding off the cuff to a reporter's question. However, I do not believe that the gold is rightfully owned by the government. Thus, the gold should not be sold and used to pay off Treasury debt. To examine this in terms of Dr Paul's argument that an individual would have to liquidate all his assets, if necessary, to pay off debts, one must ask, but what if the assets were stolen? If an individual stole a car, would he be required to liquidate the car and use the funds to pay off his debts? No, he would be made to return the car to it's rightful owner and creditors would only be able to fight over assets that weren't stolen.

Thus, the call on gold is clear here, it belongs to the holders of US dollars. The current supply of gold owned by the United Sates should be divided by the number of dollars (Some version of M1) and made fully redeemable to those holders.

As for the rest of U.S. assets, since most of those were taken via coercion (the tax system), they should be liquidated also, but given back to those who were forced to pay the tribute to the government. If somehow there are remaining funds after all these paybacks, then that money can be paid to the bastards who have supported government wars and an expansionary government here at home, by buying Treasury securities. But there is a lot of wrong that needs to be fixed before those bastards get a penny, and I don't see that even one ounce should be in the form of gold.


  1. I sense that you are holding back. Just go ahead and tell us how you really feel.

  2. Well put. I gather Paul was not distinguishing between different classes of creditors. The gold should be paid out, but not to mere post-1933 bond holders.

  3. What a dreadful man that Nixon was. He debases our money and then imposes a 10% tariff in the name of prosperity, equality and competitiveness. Truly Orwellian!

  4. What Ron Paul is doing is genius. He is putting the PTB into a box.

    -Calls the bluff that there IS NO GOLD in Ft. Knox

    -When the U.S. yells and screams that it CAN'T sell its Gold, because it's too important, it will further point out the importance of Gold to the American people.

  5. you make a good point and i agree with you, however, any sale of gold by the US government would ultimately make it weaker. I am all for that type of action by any government.

  6. SELL THE GOLD. Robert, you're better than this.

  7. I'm sure Ron Paul would agree with what you are saying. I think he made the remark with a couple of underlying ideas- Is there really any gold left to sell? (he's been trying to get an audit for years). Also, this would be a way to get the gold back into the hands of the people.

  8. C'mon guys... Robert is absolutely right! How can you NOT see this?

    Having said that, any country that sells Gold at this time is a country of fools. If anything, they should be buying Gold (as Mexico just did). I'm writing from Estonia again and I'm extremely sad to share this story with ya'll.

    When Estonia gained its independence from USSR in 1991, we had 11.4 tons of Gold. Our stupid leaders then sold 11.1 tons of it between 1992-1993. Let me remind you that Gold was around $350 back then. They sold Gold to buy different Government bonds. How stupid was that?

    We'd be WAYYYY ahead of everyone in Europe if only we had kept our Gold. Don't let your leaders make the same mistake, so you wouldn't have to make these calculations one day (when Gold is at 15,000 usd).

    Cheers ya'll!

  9. Robert, please respond to Bob Murphey's rebuttal of your "Don't sell" post.

  10. Yeah, Robert, sell the gold. I know what you're saying. The government stole the gold; true enough. They've stolen lots of things from all of us. They also stole a lot of land from the Native Americans. Even at that, it's unlikely that land will be returned to the Native Americans, but it is still better off in private hands.

    The same is true for the gold. It is unlikely to be returned, but it is better off in private hands. Sell it!

  11. I might be missing something, but for the government to sell gold we would buy the gold with federal reserve notes. You are calling for us to have the ability to redeem our federal reserve notes for gold. Aren't these positions similar? Ron Paul, if I remember and use my terms correctly, has previously called for the price of gold to be set by dividing the number of dollars by the amount of gold in Fort Knox, so couldn't his position be the exact same as yours? Basically, I'm saying aren't you arguing against a point by making the exact same point? This is posted with the full realization that I could be totally off, though.

  12. I agree with the three As: expose and weaken the criminally-run Federal government by selling the gold. The sooner the king is shown to have no clothes (i.e., gold), the sooner this immoral system fails and falls.

  13. Why sell the gold?

    Does anyone here actually believe that the Fed and this government will allow the sale to include individual investors? Hell no. IF they were to liquidate their gold assets (or OUR gold assets) it would go to other Central Banks across the globe (PBoC, India, China etc.).

    Is everyone really naive enough to think that the Fed would empower the people with real money? Get real.

    I think Ron is being a poker player here. Even though he hasn't officially stated so, I think deep down he believes there is no gold in Fort Knox. Either that, or it's fake. Doing so would force an inventory audit of the gold there and force the Fed to show its cards. If true, once the people realize they have been had for decades, all hell would break loose.

    I see no benefit to selling the gold. It will go into the wrong hands and the people of this country would truly suffer.

    Not to mention, selling off all gold reserves would barely put a dent into our debt problems. What is the point?

    $370 billion in gold liquidation sales cannot pay off $14T in debt. Hell, it can't even pay off the budget deficit that is somewhere around $1.3T.

    Move on folks, nothing to see here.

  14. Everything the government has was taken by force or threat of force. If the original owners are known then, by all means, return their property. If not, then sell it if it is still there. If the choice is between putting stolen property into private hands or stealing more private property I vote for the former.

  15. Mish thinks that the New York Sun mistook Ron Paul for Ron Utt of the Heritage Foundation:

  16. @James E. Miller: That puts a very interesting twist on it all. I was pretty surprised yesterday when I read that RP wants to sell the gold and called it "a good and moral decision". Odd.

    I just called Paul's DC office to see if he really said it and his staff couldn't answer right then. They're supposed to call me back. If they do, I'll post here.

  17. It's more likely than not that government assets, if sold, would go to TPTB, like Chicago's parking meters that are now in the hands of JP Morgan. When crooks are in charge, it doesn't matter what avenues are proposed to put things in proper order.

  18. Wenzel is right. I was assuming "sell the gold" meant his suggestion of making it redeemable for FRNs to the people of the US who it was stolen from in the first place.

  19. Mr Wenzel, I think the practical matter is that it would be impossible to return gold to its rightful owners or their inheritors. It would be far too difficult to track down everyone and figure out chains of custody.

    The benefit of selling the gold is that it accelerates the remonetization of gold through the Mengerian market process.

    I'm sure you're aware of the regression theorem. Gold will not be remonetized sitting in Fort Knox.

    Free marketers everywhere should wish the gold to be sold.

    Only those with a statist mindset would wish the gold to remain in the hands of the state, rather than in the market.

    I'm quite surprised you've taken this statist position.

  20. I read an article suggesting that Ron Paul is suggesting this tactic of selling the gold simply to gain momentum to audit the gold held by the US. I'm not saying this is true, but it is clever...and Dr. Paul is smart.

  21. Lol, what goes around comes around, is what this native thinks! Lies and greed is not the way!