Is There Gold in Fort Knox?
Source: CBS Money Watch, Constance Gustke (1/22/10)
"My attitude is, let's just find out what's there."
It's hard to know for sure. Few people have been inside Fort Knox, a highly classified bunker ringed by fences and alarms and guarded by Apache helicopter gunships.
A U.S. Mint spokesman said in an email statement to MoneyWatch that the accounting firm KPMG, which audits the Mint, "has been present in the vault at Fort Knox." The Mint won't comment on exactly how much gold is in there, though.
That's why Ron Paul (R-Texas), a 2008 presidential candidate known for his libertarian streak, wants to have a look around. Paul introduced a bill to audit the Fed, which includes Fort Knox's gold. "My attitude is, let's just find out what's there," he says.
Despite conspiracy theories, no serious Fed watcher thinks Fort Knox is wholly goldless—not even Paul.
Though Fort Knox's security overkill may seem a quaint relic of bygone days, the gold there and at U.S. Mints adds up to one of the world's largest bullion holdings.
"It may lend some confidence to investors that we have large gold reserves," says Mark Zandi, chief economist at Moody's. "But it's more symbolic than substantive."
The Fed's gold is valued at a tremendously low figure—just $42.22/oz. The rock-bottom figure was set in 1973, two years after we left the gold standard, primarily to avoid wild accounting swings. "What would happen if the price of gold drops dramatically?" asks Dimitri Papadimitriou of the Levy Economics Institute at Bard College. "The Fed balance sheet would be dramatically lower."