As US debt soars and foreign central banks stockpile gold, a US senator today introduced a bill to require the first comprehensive audit of America’s gold reserves in decades. Sponsored by Sen. Mike Lee (R-UT), the Gold Reserve Transparency Act would require a full assay, inventory, and audit of all United States gold holdings, along with an upgrade in the purity of the gold so that it meets global market standards.
This measure will also require full disclosure of all transactions involving America’s gold, including any purchases, sales, loans, pledges, leases, swaps, and other encumbrances, dating back 50 years. Such activities have never been publicly disclosed.
“For over half a century, there has not been a comprehensive audit of America’s gold reserves. Americans should know whether their literal national treasure is safe and accurately accounted for,” said chief sponsor Lee.
“That means passing the Gold Reserve Transparency Act, opening Fort Knox, U.S. Mint Facilities, and the Federal Reserve Bank of New York to an audit, and then making the results public,” he said in a press release that listed individuals and groups in support of the measure, including Money Metals Exchange and Sound Money Defense League, former Federal Reserve board nominee and Independent Institute Senior Fellow, Judy Shelton, Club for Growth, and the Gold Anti-Trust Action Committee.
“The U.S. Government’s poor stewardship of America’s gold reserves wouldn’t pass muster in the private sector and has undermined confidence,” said Stefan Gleason, CEO of Money Metals Depository.
“Even if a credible audit, inventory, assay, and accounting had been conducted decades ago, proper auditing is an ongoing process; it’s never ‘one and done’ affair,” continued Gleason, whose company operates a maximum-security gold and silver vault in Idaho that is twice the size of the US Bullion Depository at Fort Knox.
The gold audit bill comes in an environment where some nations are growing concerned about their gold stored in the United States or who prefer to hold their gold domestically. For example, leaders in Germany are calling for repatriation of its gold held in the custody of the Federal Reserve Bank of New York.
Former Congressman Ron Paul said,
The Federal Reserve and Treasury should not be permitted to operate in secrecy, especially when it comes to the most important monetary asset on the planet, i.e. gold. Restoring trust as to America’s gold holdings is more important than ever when foreign central banks are scrambling to stockpile gold at incredible rates.
An inquiry into America’s sound money stockpile is more relevant than ever, given an inflationary environment where more than $38 trillion in US federal debt looms large and given that many central banks have been accumulating gold at record rates over the last few years.
Jp Cortez—executive director of the Sound Money Defense League—said, “Now is the time for transparency surrounding America’s gold. As gold is the ultimate form of money recognized the world over, safeguarding the US Treasury Department’s holdings of the only money mentioned in the US Constitution is very much a national security issue.”
“Only a thorough audit, not a public-relations stunt such as the ‘live walkthrough’ as Elon Musk and others proposed, will suffice,” he concluded. “This situation requires far more than a fun one-day field trip by politicians to Fort Knox, West Point, and other U.S. Treasury vaults.”
To fulfill their obligations under the Gold Reserve Transparency Act, the Government Accountability Office and external independent auditors would gain access to any depository or other public or private depositories where gold reserves are kept as well as related records. The process is expected to take up to a year to complete and would be repeated every five years.
Sen. Lee’s new bill includes a process and timeline for refining America’s gold so that it meets “good delivery” standards required by the global marketplace.
Most of US gold holdings are in the form of impure “coin melt” bars of roughly 90 percent pure gold created following President Franklin Roosevelt 1933 executive order making gold ownership illegal and requiring citizens to turn over their gold coins for paper notes at the $20 per ounce exchange rate—immediately before devaluing the dollar and resetting the gold exchange rate to $35 per ounce.
Cortez concluded, “While we do not desire for the U.S. to divest of any portion of its gold position, it’s vital America’s gold be fully liquid and universally accepted given the asset’s strategic importance.”
Sen. Lee has been a long-time leader on issues related to sound money. The full text of the senate version of the Gold Reserve Transparency Act can be found here. Reps. Thomas Massie, Warren Davidson, Addison McDowell, and Troy Nehls recently introduced a similar version in the House.
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