Is There A Secret Plan For The Gold In Fort Knox?


As the clock counts down before the U.S. Treasury runs out of cash, state officials make a highly unusual trip to Fort Knox, Kentucky. Does anyone want to know why?

Recently, U.S. Treasury Secretary Steve Mnuchin and Senate Majority Leader Mitch McConnell paid an ‘informal’ visit to Fort Knox to see our nation’s gold supply first hand.

Of course, while the government loves to ignore gold and downplay its essential economic importance, the fact is this lighthearted visit was anything but casual. In fact, it marks only the third Treasury Secretary in history to ever visit Fort Knox, as well as the first official visit from Washington, D.C. since 1974 – which supposedly was an effort at the time to dispel rumors that the bullion had actually gone missing.

So why the sudden impromptu visit by Mnuchin and McConnell? Does this revered military fortress still guard the country’s most valuable gold repository? Or is there perhaps an ulterior motive for confirming its there – a secret contingency plan for it in a time of dire fiscal need?


To better understand the answer to this question, it would first help to put the timing in perspective. September shall mark a pivotal moment for America’s financial future, as two critical dates converge towards month-end that could easily spell an economic disaster, particularly if Washington’s illustrious track record of ineptitude is any indicator.

There are two separate fiscal issues confronting this nation – both of which will require leadership and decisive action to resolve. The first strikes on September 29, the second on September 30.

On September 29, Fiscal Year 2017 will end, and Congress must pass a bill to continue to fund the federal government. Without an approved budget in place, non-essential government functions will be shut down on October 1, so things like national parks and some federal offices would be closed. Employees at these offices would be furloughed, meaning they would not go to work nor receive paychecks for the duration of the shutdown.

Separately, on September 29, the Treasury will officially run out of cash, and the U.S. will yet again hit its notorious debt ceiling. Although technically the Treasury Department hit the upper limit in March, it managed to use “extraordinary measures” to prevent a breach at that time. However, failure to raise the debt ceiling after September 29 – currently standing at $19.9 trillionwill result in an inevitable default on the full faith and credit of the United States.

Despite the sad fact that as it stands, virtually every citizen, world leader and foreign government knows with certainty that the U.S. can never repay its outstanding obligations, the limit on this infinite ‘monetary credit card’ that funds our nation’s foolish borrowing and spending excess must be raised nonetheless.


Because a failure to do so will result in nothing short of a catastrophe. First of all, it would wreak immediate havok upon the U.S. economy and global financial markets. Further, according to a report from Beth Ann Bovino, the chief U.S. economist at S&P Global Ratings, a shutdown and debt-ceiling breach could be worse than the collapse of Lehman Brothers in 2008.

So now with the timing in proper context, let’s return to the secret plan for the gold inside Fort Knox.

It turns out that the Treasury could actually get $355 billion in cash out of thin air – without increasing the debt – simply by revaluing the U.S. gold supply. Today, the the Bullion Depository at Fort Knox holds 147.4 million fine Troy ounces of gold, but it is valued at only a fraction of that. In fact, the gold is currently valued at $42.22 per ounce on the Treasury’s books, versus the market price of nearly $1300.

So once the Treasury revalues the gold, it could then issue new “gold certificates” to the Fed and demand newly printed money in the Treasury’s account under the Gold Reserve Act of 1934. Since this money comes from gold revaluation, it does not increase the national debt and no debt ceiling legislation is required.

This would be a way around the debt ceiling if Congress cannot increase it in a timely way, and this clever trick was actually used once before by the Eisenhower administration in 1953.

So was this the reason for their mysterious visit, or did they simply just want to make sure the gold was actually still there?

“I assume the gold is still there,” Mnuchin said. “It would really be quite a movie if we walked in and there was no gold.”

McConnell weighed in on the Treasury Secretary’s curiosity: “We’re going to find out.”

Well said, Senator. We’re all going to find out – soon enough.