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How to Settle the Debate Over How Much Gold the U.S. Really Owns

|Includes: CEF, SPDR Gold Trust ETF (GLD), GTU, PHYS

It's simple, really. Everyone knows, or should know, that the U.S. Govt reports owning/holding - i.e. that gold is in secure custody, every ounce accounted for - a little over 8,000 tonnes. That's around 281 million ounces, or around $310 billion at today's price of gold. The problem is, this gold stash has not been independently physically audited OR verified for authenticity since Eisenhower was President. We are expected to put our full faith and trust that Government is telling us the truth about it. However,this number is nothing more than a simple ledger entry on the balance sheet of the U.S. Treasury. Don't forget, wealthy investors with Bernie Madoff received monthly statements which showed their account value - but it wasn't there until investors started asking for it back - and then it wasn't there.

Now, how many people out there have watched Ron Paul grill Bernanke or Paulson or Geithner or Greenspan just waiting for him to ask the dagger questions we all want answers to, BUT Ron Paul does nothing more than pontificate and display his knowledge of Austrian Economics, leaving little time for his questions to be answered (5 minute limit, of which Mr. Paul usually takes up 4 1/2 minutes of it)?  Every single time I wait for Ron Paul to fire off simple, direct questions and then wait for the answers.  He never does.

Here is my proposal - and I would love it if anyone reading this could put this in front of Congressman Paul.  All Mr. Paul has to do is ask this question:  "Secretary Geithner/Chairman Bernanke:  Can you please state for the record the amount of gold owned and physically possessed - free from lease and swap claims - by the U.S. Government - this is a two word answer only. Now remember you are under oath when you answer this question, and by answering this question you hereby authorize me to send, immediately, an independent auditor, by power of the Consitution, to go examine the gold that you have stated is owned and possessed by the U.S. Government, by directing my auditor team to the exact location of those holdings with FULL authority to audit, count and verify the authenticity of this gold."

Then Congressman Paul ceases speaking and waits for the answer.  Why is this not possible?  This is a Constitutional issue. Does anyone care about the Consititution anymore?  Here is what the Constitution says with respect to the official currency of the U.S. Government Article I, Section 10, Clause 1:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
It's right there.  Not many people realize this and our Government ignores this.  In fact, when Nixon closed the gold window back in 1971, it was a de facto default on U.S. obligations.  Up until that point in time, any foreign Government was able to redeem their claims on the U.S. Govt for gold.  Charles de Gaulle started a run on the U.S. gold by exercising this right.  At that point in time, because of the build-up in debts related to the Viet Nam war effort and Lyndon Johnson's welfare entitlement programs, if every foreign claimant had tried to follow deGaulle to the gold window, the U.S. would have not been able to redeem all of the claims with gold.  That's a debt default. Very straight-forward.

Here is commentary on that section of the Constitution from
Congress was originally understood to have no power to make anything legal tender outside of federal territories, under Art. I Sec. 8 Cl. 17 and Art. IV Sec. 3 Cl. 2, but in 1868 a Supreme Court packed by Pres. Ulysses S. Grant, in the Legal Tender Cases, allowed Congress to make paper currency issued by the U.S. Treasury, backed by gold, legal tender on state territory, a precedent that remains controversial to this day, when courts allow paper currency not backed by anything to be considered "legal tender".
So you can see, even by that Supreme Court decision, the amount of debt issued by the U.S. Government MUST be backed by gold.  The U.S. now has over $12 trillion of Government debt issued vs. a supposed $310 billion in market value of gold.  You make your own conclusions there.

Now I suspect, and consider myself correct, that the U.S. does not have ANY ability to redeem claims against it with gold. I really wish Ron Paul would exercise his ability to get to the golden truth of this matter.

Disclosure: none