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US Mint Releases New Fort Knox “Audit Documentation”. The First Critical Observations

by Koos Jansen, BullionStar:

In response to a FOIA request the US Mint has finally released reports drafted from 1993 through 2008 related to the physical audits of the US official gold reserves. However, the documents released are incomplete and reveal the audit procedures have not been executed proficiently. Moreover, because the Mint could not honor its promises in full the costs ($3,144.96 US dollars) of the FOIA request have been refunded.

Thanks to my readers that donated to the crowdfunding campaign I’ve been able to force the US Mint through a Freedom Of Information Act (FOIA) request to hand over documents related to the physical audits of the US official gold reserves stored at the Mint; also referred to as Deep Storage gold. Although the PDF-package digitally sent to me is redacted, incomplete, includes pages copied twice and materials I didn’t ask for, it’s the closest thing that I’ve ever seen to physical audit documentation of gold at Fort Knox and the other Mint depositories drafted in between 1993 and 2008.

What is worrying is that the reports now in my possession reveal the audit procedures have not competently been executed. Combine that with the fact the documents are incomplete and redacted, and the result is suspicion of fraud. In this blog post we’ll have a first critical look at the reports and the problems to be found within.

This post is a sequel to A First Glance At US Official Gold Reserves Audits, Second Thoughts On US Official Gold Reserves Audits, US Government Lost 7 Fort Knox Gold Audit Reports, The Power Of The Gold Community: Crowdfunding For FOIA Request Fort Knox Audit Documents Completes Within 24 Hours, Dear US Mint, We Gave You The FOIA Funds, Now Give Us The Fort Knox Audit Documents! Also related are Where Did The Gold In Fort Knox Come From? and Former US Mint Director Clueless On Gold In Fort Knox.

US Government Tight-Lipped About Fort Knox Audits

For starters, allow me to expand on what I think happened at the Mint’s headquarter on the 8th floor at 801 9th Street NW Washington DC, before these documents were sent to me.

It should be clear that the US Treasury (owner of the gold), US Mint (main custodian), Federal Reserve Bank Of New York (second custodian), and the Office Inspector General of the US Treasury (head auditor), are reluctant to disclose information about the audits of the gold at the four largest depositories that store over 8,000 fine metric tonnes. Consider that the most seasoned gold analysts aren’t even aware this gold is audited.

About a year ago we read in the introduction of an interview with world-renowned gold commentators Jim Rickards, “unlike many today, Jim Rickards believes the gold is indeed in Fort Knox but has not been audited to avoid drawing attention to it and to downplay its role”. More recently, on 11 February 2017 the Financial Times wrote, “much of the world’s excavated gold is thought to be in Fort Knox, but nobody can be sure, since the US government will not allow the auditors in”. No, auditing Fort Knox is not a topic only the mainstream media are confused about. Gold advocates are in the dark as well.

Exhibit 0. Source. Overview of the four main depositories that store the US official gold reserves: Denver, Fort Knox, West point and the Federal Reserve Bank Of New York. Where the working stock is exactly located is not known (likely Washington DC, Philadelphia and West Point; perhaps also Denver and San Francisco). The Deep Storage gold is the metal in 42 sealed compartments spread over Denver, Fort Knox and West Point.

What nobody knows is that according the US government 100 per cent of the Deep Storage gold has been audited in between 1974 and 2008 (page 4). This period can be divided in two chapters: the first runs from 1974 until 1986 when the Committee for Continuing Audit of the U.S. Government-owned Gold verified the majority of the Deep Storage metal. The second chapter covers 1993 until 2008 when the residual was examined under the supervision of the Office Inspector General of the US Treasury. In my previous posts on this subject we focused on the first chapter, what is written below skims the surface of the second. As promised, eventually I will publish a full in-depth analysis of all chapters (there are additional chapters in the fifties, from 1986-1993, in 2009, 2010 and 2011).

Over the years my inquiries at the US government though regular channels have produced little intelligence about the physical audits of the Deep Storage gold. Some departments cooperated at first, but eventually they stopped replying emails or just hang up the phone while I was talking. The second layer of defense was raised when I started submitting FOIAs. Instead of honoring my requests they tried to delay and dodge most appeals. Clearly, the US government prefers not to answer my questions than to flaunt with the audit results.

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