CNN picks up on gold audit hearing

Section:

Ron Paul Worries Fort Knox Gold Is Gone

By Jennifer Liberto
CNN Money, Atlanta
Friday, June 24, 20121

http://money.cnn.com/2011/06/24/news/economy/ron_paul_gold_audit/

WASHINGTON -- With the price of gold at record highs, presidential candidate Rep. Ron Paul wants to make sure the U.S. gold bars at Fort Knox are really there.

Paul called a congressional hearing Thursday to grill federal officials about his bill to audit and inventory all of the gold reserves at Fort Knox, Ky., West Point, N.Y., and Denver, even though Treasury officials insist that the gold is audited annually and is all there.

During the hearing, Paul suggested that the Federal Reserve of New York, which has 5% of the U.S. gold reserves, has the ability to secretly sell or swap gold with other countries without anyone knowing.

... Dispatch continues below ...



ADVERTISEMENT

Prophecy (TSXV: PCY) Secures Russian Far East Seaport Allocation
and Updates Ulaan Ovoo Mine Production

Company Press Release, June 14, 2011

VANCOUVER, British Columbia -- Prophecy Coal Corp. TSX-V: PCY)(OTCQX: PRPCF)(Frankfurt: 1P2) has arranged with the Port of Sovgavan in the State of Khabarovsk, Russia, so the company will have initial access to port allocation of 25,000 tonnes of coal per month starting this month, potentially expandable to 50,000 tonnes per month, representing 300,000 to 600,000 tonnes annually. Prophecy also will be assigned a coal storage area at the port.

This arrangement provides Prophecy's Ulaan Ovoo thermal coal mine with immediate access to the Asian seaborne export coal markets. Sovgavan is strategically located on the seaboard of the Russian Far East. The port is privately owned and can accommodate seagoing vessels of up to 160 meters in length, with the depth of loading site of 9.5 meters. The port has loading capacity of 6,000 tonnes per day and direct connections to Trans-Siberian railroads and uncongested Russian state highways.

Securing the port opens Prophecy to a significant number of coal buyers, and the company is placing top priority to conclude rail transport within Russia and coal offtake contracts.

Prophecy's Ulaan Ovoo mine commenced production in 2011. So far this year the mine has produced 200,000 tonnes of coal, which are being stockpiled. The average quality is 4,200 kcal/kg NAR with 5 percent ash and 0.5 percent sulphur. Those attributes compare favorably to the coal being purchased by local Russian and Mongolian power plants.

For the complete company statement, please visit:

http://www.prophecycoal.com/news_2011_jun14_Prophecy_Secures_Russian_Sea...



"The Fed is pretty secret, you know," said Paul, who leans Libertarian. "Congress doesn't have much say on what's going on over there. They do a lot of hiding."

Paul, a Texas Republican who wants to convert the U.S. monetary system to one based on the gold standard, says the federal government owes it to taxpayers to make sure U.S.-owned gold is safe. (Ron Paul: Bernanke's biggest critic)

"This is one of the few legitimate functions of government: To check our ownership and be fiscally responsible and find out just what we own and whether it's really there," said Paul, who is among those running for the Republican presidential nomination.

Audits by the Treasury Department and Government Accountability Office are based on samples. Paul wants to open up Fort Knox and other reserves and count the bars manually.

"We know where it is. We know how much there is. We know it's there. None of it has been removed," said Treasury Inspector General Eric Thorson.

Ron Paul, John Boehner, Nancy Pelosi: Peek at their wealth
In September, Treasury completed its latest audit, showing that U.S. gold reserves total 9,300 tons with a market value of $320 billion, Thorson said. The recent run-up in gold prices -- the precious metal is trading at about $1,515 an ounce -- puts the market value at $340 billion as of Wednesday, according to Thorson's testimony. He added that each gold bar weighs about 27 pounds and is worth around $500,000.

Paul said that his questions were partly in response to the numerous Internet conspiracy theories, including those that accuse the government of secretly selling all of the gold in Fort Knox.

Thorson said Treasury doesn't believe that anyone, including the Fed, has taken the gold or laid claim to U.S. gold bars. Any further audit as proposed by Paul's legislation would be redundant, he said.

"There is no movement. There is nothing there that can happen, once those doors are sealed," Thorson said. "It's very obvious if those seals are ever broken."

William Lacy Clay, a Democratic representative from Missouri, said that doing a complete audit as Paul is calling for is a waste of federal manpower and could cost tens of millions of taxpayer dollars.

Thorson reported that the U.S. Mint told him that moving, counting and testing the gold would cost around $60 million. Paul said he had heard from Treasury that it would only cost $15 million.

Part of the expense would be due to the bill's requirement to "assay" all the gold, said Gary T. Engel, a director of Financial Management and Assurance at GAO. Assaying means drilling little holes in all the gold bars in order to test its purity. But that process is "basically destroying whatever that piece is."

Finally, Engel cautioned, "There will be some loss of the gold from the bars through the assaying process if you do that for every single bar that's out there."

* * *

Join GATA here:

Gold Rush 2011
GATA's London Conference
Thursday-Saturday, August 4-6, 2011
Savoy Hotel, London, England

http://www.gatagoldrush.com

Support GATA by purchasing gold and silver commemorative coins:

https://www.amsterdamgold.eu/gata/index.asp?BiD=12

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:

http://www.goldrush21.com/

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16



ADVERTISEMENT

Lewis E. Lehrman on How to Solve the U.S. Debt Problem

Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, advises that to reduce the $1 1/2 trillion U.S. deficit, the Republican Party must initiate an investment program.

Working Americans are not saving, which enables the banks to lead the country into a cycle of debt, leverage, boom, panic, and bust.

Lehrman says: "Eliminating the budget deficit of a trillion and a half dollars cannot be done overnight. The proposal by U.S. Rep. Paul Ryan was very dramatic -- one Republican called it radical -- but it was not happily received. The solution, of course, is to design an American program for prosperity, because you can solve these entitlement problems with a growing economy.

"We need a tremendous program of investment, and investment comes from savings. When you pay savers, middle-income professionals and working people, 0 percent at the bank, you are not going to encourage them
to save. Then we are left with a bank cycle of debt, leverage, boom, panic, and bust."

To read more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit:

http://www.thegoldstandardnow.org/gata