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 http://www.constitution.org/:
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.
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That would be a great question for Rep Paul to ask.
ReplyDeleteSimple, direct, wiggle proof.
That is why he probably won't do it.
I know. My post is simply rhetorical, but it made me feel better to put the issue in public.
ReplyDeleteThe problem with the notion that the gold isn't there is the same problem with other government conspiracy theories: it requires that every single person in the know doesn't talk. I assume that if gold were missing, someone would say something, and that hundreds (?) of people would in some way be involved in gold storage.
ReplyDeleteBut maybe they wouldn't necessarily know that a discrepancy exists between the accounts and the physical? Or the existence of swaps and leases?
debts can be settled not only with gold, but also with land, property, companies, various favours, base metals, other commodities and many other instruments. It is weird that so many think only PM and taxes would be the only sources to repay the debts. It is much more complex than that.
ReplyDeleteBut that bell, once rung, could never be 'unrung'.
ReplyDeleteThat may explain the hesitation.
Katie bar the door...
U6: don't take that this the wrong way, but there's a lot that goes on behind the scenes that doesn't get "disclosed." That's why the Fed is spending millions to fight the audit bill and why Geithner stated publicly that he opposes a Fed audit.
ReplyDeleteThe problem with that argument, and many people have tossed your argument out there, is that by the same logic, since no one has explicitly stated that OJ Simpson committed murder, it must not have killed those 2 people. Is that what you believe with regard to that case? You would be in a very tiny minority of people it that's the case.
Now, the best contra-argument to your view is that, GIVEN that enough people have challenged the Govt on this, and GIVEN that the Govt just chooses to ignore the issue, rather than settling the issue by having a bona fide independent PHYSICAL count and assay verification of random bars, it means the Govt has something to hide.
There is no other explanation. As besides that, we have over $12 trillion in Govt issued debt (nothwithstanding all the backstops/guarantees/etc) and only $310 billion of gold. That is in direct violation of the Constitution.
OldSouth's comment is the most relevant to this issue and it's probably why Ron Paul does not put the Fed's/Treasury's peoples' feet into the fire.
Dave,
ReplyDeleteYou know I am a big gold lover and and I see many ugly manipulations going in the paper area, but I have to say I do believe all the gold the US is "supposed" to have is indeed mostly at Fort Knox and whatever central banks (NY, San Fran, ?) need it to do things with. Why do I think this? You answered it yourself:
The US has $310 Billion in gold at today's prices.
What gain could really be had by selling it off? Not much. Now perhaps there are paper linked games involved with our gold (swaps, leases, etc) but that is a different story. I would instead ask a question like:
"Has any of the documented 8000 tons of gold ever left posession of the United States? Yes or No will do."
I think we are talking about shades of the same question, but i do think its all there.
gyc, first of all, it is a fact that most of the gold at Ft. Knox was moved from Ft. Knox to "deep storage" at West Point. Google, that but if cited sources, it was be "et al." Second not all of the U.S. Mints "mint" gold and silver coins or keep bullion there.
ReplyDeleteWhat do they have to gain? I thought you subscribed to Midas/Lemetropolecafe.com
I don't want to reinvent the wheel, but please go to www.gata.org and sift thru the essays and research material. There's no way you would make the same statement just posted here twice if you've been doing your research and were armed with all the common knowledge/facts.
www.lemetropolecafe.com - you can do a 2-week trial subscription with just your email account -you don't even have to put up a credit card.
When you go to www.gata.org, read the old work by Reg Howe and an essay by James Turk on the U.S./German gold swap.
Comment from Thomas...
ReplyDeleteThe reference to "state" may be literal--no state. Back in the 19th century, states used to issue currency. The constitution may be saying, "fine and dandy but only if it is gold or silver."
Dave,
ReplyDeleteOuch! Sorry to exhibit my limited grasp.
Many facts can be bring to open through such direct & straight forward question but no one will dare to it.
ReplyDeleteHey gyc: My comment wasn't intended as an "ouch" comment in any way. Sorry if it came across that way. I was in a hurry to post a reply because I'm trying to get comments posted as quickly as I can and I had to run out to a meeting.
ReplyDeleteThe only reason I know some of the details and facts that I do is because I don't do much outside of work - at least during the week - and I've focused on this sector almost exclusively for nearly 9 years now. You pick up a lot of stuff - good and garbage along the way.
What I will say is that every single person who has been around for the duration of this bull market, and has followed the work of GATA, will tell you that the U.S. GOvt has largely dumped/leased its gold as tool to manipulate the gold price. Several guys have done forensic work which underlies this view. Most of it is buried on the GATA website.
As for the idea that "if it were true the word would have leaked" concept, let me analogize this to the famous quote from Kaiser Soze in "The Usual Suspects:" "The Devil's greatest trick is to make you think he doesn't exist."
If you start pouring over the work GATA has done, and you start reading Midas every night, you find the Devil in the details.
Dave,
ReplyDeleteno worries, I know you understand where I am on all this.
I never tried a "no one leaked" argument for the record, I think that is bunk. I did say it would serve no real gainful purpose but I can envision many fold paper plays to augment the gold into big bucks that would make a difference and I am sure that is what you meant. I have some reading to do! Cut me a break, it's my birthday tomorrow!
U6, GYC: here's a great example of the Government engaging in activity that never leaked out, courtesy of Jesse: word of the Manhattan project never leaked out and think about all of the people across the country that were involved in that. I know for a fact that underneath the field house at the University of Chicago, beneath the very squash courts I played on almost every day for 2 years, is a laboratory/facility that was used for one "leg" of building The Bomb.
ReplyDeleteHow do you know that words are not leaked out? With corporate control of the media, it won't progress to anything more than rumors. Nothing detrimental to the status quo would be substantiated. So what we are hearing now as rumors could very well be the leaks.
ReplyDeleteIn general, I agree with what say there. Especially in cases where the Govt is motivated to let something leak out. I really don't think they want anyone to press them on the gold thing, which is why the Fed, supported by Geithner, is fighting the Fed audit bill so vigorously.
ReplyDeleteIt would literally be a financial A-bomb dropped on our system if the true status of the U.S. gold supply were revealed.
Bravo on calling out the mostly feckless windbag from Texas, Ron Paul. I sometimes wonder if he isn't a plant (not a potted one, but close) created and employed by the farces of law and order to help maintain the sickening status quo. If we are to have a REAL force for REAL change for the better I dare say it will not look, act, or sound like RP.
ReplyDeleteYour point about RP has been in the back of lot of our minds. I haven't really figured out what the skeletons in his closet are. But when something is too good to be true, it usually is. RP, on the surface, is too good to be true.
ReplyDeleteDave, help me out here. Why is this such a big deal? Who cares if the gold exists or not? Our government can blow $300bil over the weekend. Everyone knows the dollar isn't backed by anything. Everyone knows we can't possibly ever repay the $12 trillion debt.
ReplyDeleteIs it because they use the imaginary 8000 tonnes to keep the price down, and once it's discovered the gold doesn't exist the price will skyrocket?
Good question Aman. And I know you know the answer to that. The foundation of the Bretton Woods was to establish the U.S. dollar as the world's reserve currency. A large part of the reason the dollar was selected was because, at the time, the U.S. Govt was by far largest gold owing entity in the world. If the U.S. did not have that gold, it would not have even been at the Treaty negotiating table.
ReplyDeleteIF that gold is not there, it means that since 1971, our whole system has been a fraud. One giant Madoff Ponzi scheme.
IF that gold is not there, and is proved to not be there, it could well trigger a global military conflict.
U.S. Government Article I, Section 10, Clause 1 is absolute proof that the FED is a total fraud and blight on humanity.
ReplyDeleteFor those of you that think a secret cannot be held this baby has been under the covers for almost 100 years.
Joe M.
Dave, I agree with your points. I'll raise you one more, most of the world's ecomomies are already ponzi schemes. Central banks all over are printing like mad, following the example of the U.S. The Fed, UN, IMF, World Bank are all there to keep the party going, bailing out the little guys (with stipulations of course) and keeping gold in check.
ReplyDeleteGreece will eventually be bailed out just like California, then Japan. The question is how long can this possibly last? The expansion of public debt is accelerating everywhere. What happens when the music stops? Weimar on a global-scale or just massive defaults? Perhaps we'll all be speaking mandarin or hindu.
Sorry to rant, but it seems we're all in the Matrix here, where nothing is real just computer simulations. I may need to up my "blue pill" dosage.
NO Aman! Don't give in to "The Brave New World" take-something-to-feel-good temptation. LOL
ReplyDeleteYou hit the nail on the head. Von Mises predicted this back in the mid-30's, Jim Dines reiterated over 10 years ago: in a world with a system of fiat currencies, there will eventually be a global race to devalue down to zero.
It's starting to accelerate and Obama appointing Yellen to the FOMC and Vice Chair signals this.
Just guy gold as much as you can hunker down! And enjoy life while you can. Feel free to rant anytime you want. It's one of the reasons I started this blog.