I see that my old boss Ron Paul wants an audit of the nation’s gold holdings to make sure the gold is really there and isn’t lead bars covered with gold paint or something. This reminds me of a conversation I had with then-congressman Phil Crane many years ago.
Crane told me that one day he happened to be in Louisville, Kentucky and he had some time to spare so he drove out to Fort Knox. He went to the guard, introduced himself, and said he wanted to see the gold. The guard said that wasn’t possible because he didn’t have an appointment and a bunch of other reasons.
So Crane asked if he could use the phone and he called the Treasury Department and asked to speak to Bill Simon, who was then Treasury secretary. Because Crane was an important Republican congressman on the House Banking Committee, Simon took the call. According to Crane, Simon asked to talk to the guard and he told him to let Crane see the gold.
So Crane was allowed into the facility. But he was told that there wasn’t one vault, but many vaults. And they were all on timed locks with different timers for security purposes. Apparently, there was only one vault that could be opened that day. It was opened and Crane inspected the gold but didn’t have a test kit with him to be able to test it to see if it was genuine gold.
Over the years, I have heard various conspiracy theories about the gold that may have this incident at their core. One is that there is only one vault that has any real gold in it. If forced to show the gold to some official, this one vault is always the only one that can be opened that day. I’ve also heard that the real gold is on some sort of conveyor system and moves around from one vault to another depending on the timer system, so that the real gold is always available in whatever vault may be opened that day.
This is, of course, complete nonsense. The world’s gold supply is known to experts within a small margin of error. If the gold in Fort Knox had been secretly sold it would create double counting that would become known. Also, the revenue would have to turn up somewhere in the budget. And it’s hard to believe that vast quantities of gold could be removed without the soldiers guarding it knowing about it.
Unfortunately, I know from experience that when someone is committed to believing a conspiracy theory, no matter what evidence is presented against it, the result is simply to further confirm the original theory. I also know from experience that Ron Paul is very conspiracy-minded.
I recall one occasion when I was working at the Treasury Department and he was out of Congress, publishing an investment newsletter. He called to say that he had heard that the Treasury was building a new facility to print money with different designs and colors. The idea was to call in all the old money in order to catch drug dealers, tax cheats and so on. Ron told me that he had heard that a new high-speed currency printing plant was secretly being built in Texas.
As a courtesy to him, I actually looked into this. I was told that there were no such plans and that such a scheme would be impossible to implement without congressional authorization. I told this to Ron, but he published a piece in his newsletter saying that it was true. Of course, in the 20 years since the Treasury still hasn’t implemented its secret plan. Maybe it’s just waiting until it has enough black helicopters to confiscate all the guns at the same time.
Anyway, it seems that Ron is still on the same kick.