Fort Knox gold all there

The accountants said there is no missing U.S. government gold and no gold that has been pledged or encumbered at a hearing yesterday before Rep. Ron Paul and his House of Representatives Domestic Monetary Policy and Technology Subcommittee.

The U.S. Mint has custody of 95 percent of the nation’s gold stockpile. It consists of 699,515 gold bars weighing 27 pounds with finenesses ranging between .470 and .999, with the overall average of .9006, as one would expect of gold bars that in the main were created by melting recalled .900 fine U.S. gold coins in the 1930s.

Eric M. Thorson, inspector general of the Department of the Treasury testified.

“100 percent of the U.S. government’s gold reserve in the custody of the Mint has been inventoried and audited,” he said.

He stated “security is absolute” and said it is even tighter than he had experienced in the Air Force with nuclear weapons.

He said he had observed the gold and security himself.

The Mint has three deep storage gold sites: the well-known Fort Knox, Ky., and the West Point and Denver Mints.

As of 2010, Thorson said, there were 245,000 million troy ounces under Mint protection in 42 compartments.

From 1975-1986 the Treasury, Mint and New York Fed conducted annual audits that placed 97 percent of the supply under official government seal. Further annual audits have been conducted by the office of inspector general since 1993. The 2011 audit is going on now.

He showed the committee examples of the wax seals, tape and wires that are used to seal the compartments.

He quoted what he was told by Treasury when he asked whether the gold was somehow pledged or encumbered by other entities.

“Not one troy ounce is encumbered,” Thorson told the hearing panel.

Paul and other panel members changed the subject.

The inspector general does not audit the Federal Reserve.

The New York Federal Reserve has 5 percent of the nation’s gold supply, or 13 million troy ounces

“Who has responsibility at the New York Fed?" Paul asked.

Thorson said the office of the inspector general gets New York Fed reports.

Gary T. Engel, director of financial management and assurance of the Government Accountability Office also testified.

In answering questions from Rep. Blaine Luetkemeyer, Engel reported that the Mint keeps a working gold inventory of 3 million troy ounces.

For anyone keeping track of whether the numbers tallied for the total reported gold reserve of 261 million troy ounces, the 245 million, 13 million and 3 million add up to 261 million ounces.

Luetkemeyer asked Engel if the gold was used as collateral.

“No,” was Engel’s answer.

“It’s just sitting there?” Luetkemeyer asked.

“Yes.”

Luetkemeyer asked about gold contributed by the United States to the International Monetary Fund.

After several back and forth questions and answers, Thorson said he did not audit the IMF, but he was at the hearing “representing that this is Treasury gold, so it is not part of the IMF.”

Will that satisfy skeptics?

Paul himself at one point seemed more concerned that he would be accused of spending over $60 million because his legislation, H.R. 1495, that requires another assay and audit that could prove to be redundant.

He pointed out that in terms of spending, he was the most conservative member of Congress. Besides, the audit cost could be paid for without a congressional appropriation because the Mint could pay for it out of its more than $400 million annual profits, he said.