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Fort Knox Gold Scandal - Chapter 19

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I have been writing on the Fort Knox Gold Scandal since 1980. In fact, the Fort Knox missing gold story was what got me interested in monetary reform and led to "The MoneyMasters."

Here is the first time I published the story in a book, published in 1995, entitled, "On the Horns of the Beast: The Federal Reserve and the New World Order." (no longer in print)

The non-existent "good-delivery" gold reserves in Fort Knox is a huge story that has yet to come to fruition, but one day it will. That day will be when the U.S. is forced onto a gold standard, then suddenly discovers that it owns no good-delivery gold. That which was shown to the press on Sept. 23, 1974 was reportedly too orange in color to be pure gold. This was undoubtedly the remaining "coin melt" from FDR's calling in of gold coins. Coin melt is typically 90% or less. The orange color indicates a high copper content.

The bottom line is there is probably ZERO "good-delivery" gold (.995) in Fort Knox. Just as with other issues in this day, U.S. Treasury could completely embarrass us critics any day of the week by throwing the doors open to the press and showing mountains of good-delivery gold being assayed. An annual physical audit of U.S. gold reserves is required by law. However, the last time one was done was 1957.

Unfortunately, the photos and illustrations did not paste in. Perhaps someone could help me with this technical problem.

OOPS. Did you know there is a character limit for insertions of 66,000 characters. For Chapter 20. See:

http://z6.invisionfree.com/Bill_Still_Refo...hp?showtopic=29

CHAPTER 19 - DRAINING FORT KNOX

The world was now divided in twain — communist command economies on the one hand, versus monopoly capitalists on the other, set to fight it out in one perpetual and highly profitable arms race. It was finally time for the central bankers to embark in earnest on their three-step plan to enslave the economic systems of the entire world and finally bring about their global government, or New World Order. The phases of this plan were:

• Step One: centralize world gold (1962-1992).

• Step Two: create a massive – though gradual -- global depression.

• Step Three: offer the starving billions a solution — a global currency based on gold, which central bankers have conveniently monopolized.

Today, we are poised on the verge of Step Two, a massive, though gradual worldwide economic collapse. One interesting indicator might be that President Clinton recently proposed the repeal of the Glass-Seigel Act of 1933. This bill was passed after the Crash of ’29, to prevent banks from owning investment houses or vice-versa. If Mr. Clinton is successful, this will surely drive the speculative stock market wild, a development which can only end in a crash of titanic proportions — a crash which would certainly drag the rest of the world down, too.

Let me hasten to say that there may be many other ways to achieve this collapse. The recent Mexican peso crisis is but a mere symptom of international financial instability. The situation there will get worse yet. That’s certain.

For those who do not believe that events around us are being orchestrated, consider the wealth of evidence that shows how very effective the world’s central bankers have been at implementing the first step of their plan — centralizing world gold in Fort Knox, then moving it abroad into the hands of private speculators.

The Biggest Gold Treasure In History

Most Americans think that Fort Knox is still packed with an immense quantity of gold bullion — the treasure of the United States. They’re wrong. It is true that at the end of World War II, Fort Knox contained the largest gold hoard in the history of the world, King Solomon included. Total U.S. gold reserves exceeded 26,000 Metric tons — 701.8 million ounces — a mammoth 69.9% of the world’s supply.

But today, the General Accounting Office admits that only 24 million ounces of pure gold — 909 tons — remain in the U.S. Reserve. That’s less than 3.5% of U.S. holdings in 1949. But that’s not the worst of it. There may be even less, and what is left may be of very low purity. We don’t know for certain, because despite Federal law that requires an annual audit of U.S. gold reserves, the Treasury has consistently refused to conduct one. The truth is that an independent audit of U.S. gold reserves has not been done since President Eisenhower ordered the last one in 1953!

How could this have happened? Where is our gold? Who took it?

The Eisenhower Years

Only hours after Republican Dwight Eisenhower was sworn in as President in January of 1953, he ordered an audit of the nation’s gold reserves. After 20 years of governing by Democrats, many Americans wanted to be certain that those responsible for overseeing America’s gold reserves had taken proper care of it.

Despite the passage of nearly 40 years, it is still not clear exactly how much of the nation’s gold supply was audited in 1953. The Treasury’s current estimate is that only 5% was audited. However, the former commanding general of Fort Knox, Lt. General John L. Ryan, Jr., claims that a full 100% physical inventory was performed.

The entire audit took only seven days, and was completed on January 27, 1953. Eleven weeks later, an April 12, 1953 press release from the Treasury Department stated that:

“Approximately 9,000 bars... were weighed on special balance scales of high sensitivity ... and again the results were in exact agreement with the records.

“As a final step of the verification process the Fort Knox Special Settlement Committee had test assays made of 26 gold bars selected at random.... The results of the assays indicated that all gold tested was of a fineness equal to that appearing in the mint records and stamped on the particular bars tested. Gold samples used for the test assays were obtained by drilling from both the top and the bottom of representative gold bars.â€

Despite critics at the time worrying that this was merely a representative audit, not a complete one, it was the last time any form of reliable audit was done.

The Gold Drain Begins

As we mentioned earlier, on April 5, 1933, Roosevelt ordered all Americans to sell their gold coins to the government for only $20.67 per ounce. Less than a year later, on January 31, 1934, he raised the price of gold to $35 per ounce. Since the world market price for gold was still about $20 per ounce, foreign investors flocked to sell the U.S. their gold at the inflated price and gold literally flowed to the U.S.

Since then, every world currency has been defined against the dollar, and the dollar has been defined as worth 1/35th ounce of gold. But as the Federal Reserve continued to inflate the currency by printing more and more dollars, gold’s actual value rose far beyond the $35/ounce price the U.S. government charged foreign buyers to purchase it. When gold became scarcer around the world, its price began to rise. As monetary historian Christopher Weber put it:

“For 40 years, despite a massive inflation of paper dollars created out of thin air by the Federal Reserve, the U.S. government stubbornly insisted that an ounce of gold was worth $35.†464

For example, in 1949, the U.S. gold supply stood at 701,800,000 ounces of what the government calls “fine troy ounces.†As we’ll show in the next chapter, the government has a rather flexible definition of “fine.†Actually, we now know that approximately 239,500,000 ounces of this 1949 supply was comprised of the melted gold coins surrendered by American citizens, known as “coin gold.â€

But the government conveniently lumped all gold together at that time to make it look like it was worth more than it really was.

This deception has fooled a lot of well-intentioned Americans trying to get to the bottom of what happened to America’s gold. For example, Congressman William E. Dannemeyer wrote in the forward of Christopher Weber’s book, Good As Gold: How We Lost Our Gold Reserves And Destroyed the Dollar:

“The author chronicles the stupidity, if not the malfeasance, of government leaders and bureaucrats in allowing the depletion of U.S. gold reserves from a high of 701.8 million ounces in 1949 to 291.6 million ounces in 1971 — a loss of 58.6% (it currently hovers around 262 million ounces).â€

The average person would say, “Gee, why didn’t they take it all? It couldn’t have been much of a conspiracy?†Well, they did get it all — or at least the vast majority of it! What Dannemeyer didn’t realize when the book was published in 1988, was that of the 291.6 million ounces he quotes, 239.5 million of these ounces is coin gold of dubious purity. This coin gold is probably all that is left in Fort Knox today. The last time any private citizens saw any of the Fort Knox gold was 1974 and they reported it looked unusually orange in color, not golden. This would be typical of the high copper content of coin gold.

So, America actually had only 52.1 million ounces of pure gold left in 1971, and 22.5 million ounces today. Of the 701.8 million ounces in 1949, only 462.3 million ounces were pure gold. Today, that has been reduced (by the government’s own admission) to only 22.5 million ounces, or 4.86% of the 1949 total. In other words, 95% of the pure gold is gone!

What’s even more outrageous about all this is that the government has steadfastly refused to allow a reliable, independent audit of U.S. gold reserves.

In any case, let’s pretend — just like the government has done for many years — that we had 701,800,000 ounces of good-delivery gold of .999 purity or better, which is the only form acceptable in international trade. If you multiply that times the government price for gold, $35/oz., you get a figure of $24.5 billion. That’s what our gold was worth in 1949 (according to the government). In that year, we had $25.05 billion worth of Federal Reserve notes in circulation. So the books looked like they were balanced ... almost, anyway. We had one dollar in gold for every paper dollar in circulation. Never mind that American citizens had five times that amount in savings and checking account balances. Let’s maintain the fiction that in 1949, a paper dollar was backed by one dollar’s worth of gold in the U.S. gold reserve. But let’s see how that changed. Here is a graph of the amount of currency compared to the value of U.S. gold holdings as the years went by.

As the amount of gold declined, the number of paper dollars was steadily increasing. In other words, after 1949, the dollar was no longer as good as gold. By 1961, we had nearly twice as many dollars as we had gold to back them. Compounding this inflation was the fact that by 1961, American citizens had 7.5 times as much in savings and checking accounts as there was in currency. Anyone could see that the gold-backed dollar was dead — an economic fiction. The only question is, why was this fiction sustained for another ten years — until 1971?

Throughout the Eisenhower administration, from 1953 to 1961, the price of gold was kept artificially low at $35 per ounce. During this time, 155,600,000 ounces of gold was sold to foreign investors — over 1/3 of the total in U.S. reserves. Remember, it was still illegal for Americans to buy U.S. gold. Violators of this federal law faced a $10,000 fine and ten years in jail. Doesn’t it seem crazy to you that Americans could be thrown in jail just for trying to buy back their gold from the U.S. Treasury? This question begs for a common-sense answer.

The answer is that big American investors would certainly have bought up all the gold at such a cheap price — $35/oz. No, the government intended U.S. gold to be sold to foreigners, only! Most law-abiding Americans wouldn’t risk tarnishing their good names with a prison sentence just to buy some gold. But some did. Through a legal loophole, Americans could buy U.S. gold if they kept it abroad.

Eventually, Eisenhower closed this loophole too, not by means of a law passed by Congress, but by executive order.466 After that, no U.S. citizens could legally buy U.S. gold, even if they kept it offshore. But, that didn’t stop some Americans from doing it anyway. Financial expert Christopher Weber told of one such incident:

“In the early 1960s, I myself heard about an elderly friend of my family who was heiress to a large fortune. She was convinced both that the U.S. was making a mistake in selling off its gold and that Communists and international bankers... were getting our gold. So she decided to buy up as much gold as she could herself to prevent at least some of it from falling into the ‘wrong hands.’ This was easy for her, as she spent part of the year in Switzerland anyway. Not only was she never caught, she lived to see her holdings soar in value twenty-fold when gold reached $800 per ounce in 1980, and used her gains to support the causes she believed in.â€

Kennedy and the London Gold Pool

When President Kennedy took office in 1961, gold was flying out of the U.S. In one year, 1958, a record 65 million ounces — 2,708 tons — went to overseas speculators. In 1959, another 30.7 million ounces were sold, and in 1960, another 48.7 million ounces left the country. In the last three years of the Eisenhower Administration, over 6,000 tons was sold — 35% of all the good-delivery gold that remained in the U.S. Treasury — all for 1/10 the price it would soar to a decade later.

The gold stampede was on. So great was the buying pressure, that despite three years of unprecedented gold sales, the market price of gold was as much as 10% higher than the artificially-set $35/oz. price charged foreigners by the U.S. government.468 Instead of doubling the price, which would have stemmed the flow of America’s gold overseas, what did Kennedy do? Two weeks after taking office, he announced that he would dump even more gold on the market to try to bring the world gold price back down to $35/oz.!

Although Kennedy’s “solution†slowed the flow somewhat while he was alive, it only accelerated the flow after he was gone. The dollar should have been cut loose from gold right then and there. But no, the world’s gold that had first been consolidated in Fort Knox, was now going to be moved to London come hell or high water, just as the head of the Federal Reserve and the head of the Bank of England had planned nearly 40 years earlier. Kennedy’s plan — in the best of lights — was only seen by the central bankers as a minor delay.

In a February 6, 1961 message to Congress concerning the gold outflow, Kennedy tried to reassure foreigners that the dollar was still “as good as gold.â€

“The loss of gold is naturally important to us... (the) growth in foreign dollar holdings (has) placed upon the United States a special responsibility — that of maintaining the dollar as the principal reserve currency of the free world. This required that the dollar be considered by many countries to be as good as gold....

“Those who hope for speculative reasons for an increase in the price of gold will find their hopes in vain.â€

As Weber commented:

“The reality was that, due to price inflation, someday the dollar would have to be devalued, that is, the official gold price increased. By defending an indefensibly high dollar value, by dumping gold, Kennedy set the scene for the policy that would rob the U.S. of almost half her official gold from 1961 to 1972 ....â€

But even Weber didn’t understand how bad the situation really was when he wrote about it in 1988. In reality, 95% of U.S. good-delivery gold was eventually lost.

Kennedy reiterated the Eisenhower policy that no American could own gold even if they kept it offshore:

“The recent Executive Order forbidding the holding of gold abroad by Americans will be maintained.... It will help prevent speculation in the gold market. I am directing the Secretary of the Treasury to keep me advised on steps being taken for effective enforcement. I place everyone on notice that those few American citizens who are tempted to speculate against the dollar will not profit in this manner.â€

Weber explained that:

“This law was unenforceable. Private Americans acting through Swiss bank accounts, for instance, could and certainly did continue to buy gold, almost certainly some of it from Fort Knox.â€

Of course, the effect of this was that only the very wealthiest Americans could hope to buy and hold gold this way. So, the end result of Roosevelt’s confiscation of privately held gold was that it was taken from the lower and middle classes and consolidated in the hands of the richest people in the U.S. and abroad.

Kennedy’s speech on gold did have an effect on world markets. Gold’s price dropped from $41/oz back to $35/oz. Also, the world’s central banks pledged to stop buying gold and start selling their own gold reserves to maintain that price. In October 1961, this agreement became institutionalized with the formation of the London Gold Pool. The U.S. agreed to put up half the gold and seven other nations (France, Belgium, Italy, Germany, Holland, Switzerland and the U.K.) would put up the other half. The gold was physically removed from their central banks and sent to guess where? The Bank of England in London.

The Total Kennedy Drain

How did that affect the drain from Fort Knox? It slowed the flow somewhat, but the U.S. was still bleeding gold at a deadly rate. In 1961, gold sales were cut in half to 24.5 million ounces. In 1962, another 24.5 million ounces flowed overseas. Then a real crackdown brought the gold drain down to only 13.2 million ounces in 1963, the last year of Kennedy’s life. Total gold sales during the 34 months of the Kennedy administration; 63.1 million ounces, 2,629 tons — an additional 23.4% of what remained. Not exactly an enviable record.

During the next three years of the Johnson administration, the slide continued at almost exactly the same rate, with an additional 67.5 million ounces being sold through 1966. Then in the last two years of his administration, 1967 and 1968, an additional 66.9 million ounces went out the door. All told, in the eleven years between 1958 and 1969, 338.3 million ounces (14,096 tons) of good-delivery gold — 81.8% of U.S. holdings — was sold at $35/ounce to foreign speculators. At the start of 1969, U.S. good-delivery gold reserves stood at only 71.7 million ounces, less than 3,000 tons. Since then, it has dropped still further to only 24.4 million ounces, a mere 1,017 tons. Remember, we started out with 29,242 tons! Today, organized crime syndicates have far more good-delivery gold than the U.S. Treasury. They have attempted to sell as much as a 2,000-ton block of gold on the black market, as we will show later.

To the average American, in 1961, there was nothing wrong with the idea of strengthening the dollar. The concept sounded good. That’s why those who were aware of the formation of the London Gold Pool, didn’t bat an eye. In short, no one complained. To most people, it all seemed too complicated for the average person to understand. What few Americans realized was that the dollar was being “defended†by a policy so disastrous it could arguably be called treasonous. The vast American hoard of gold bullion from Fort Knox, was about to be shipped to London to be sold for $35 per ounce to anonymous European speculators — some of them, as we’ll see in the next chapter, fronting for major American corporations.

Did these speculators know in advance that once the gold was depleted, the price of the metal would skyrocket? It is logical to assume that they did, of course. American government officials must have known this as well. Vast fortunes were about to be made from American gold. Once the gold reserves of Fort Knox were depleted, the price would soar to over $800/oz., before settling at around $400.

One economics expert saw the danger of our nation’s vanishing gold supply and spoke out during this period. That man was monetary scientist John Exter. In a May 1962 address he warned solemnly:

“Our monetary laws, as presently established, make it easy for our enemies to drain off — directly or indirectly — billions [of dollars worth] of our gold and to use it not only to bulwark their own economies, but mainly to undermine our free way of living and to harm us in every possible way....

“As things stand now, speculators, including Americans, who are prohibited by law to acquire our own gold, are purchasing and hoarding substantial quantities of gold in world markets, such as in London....â€

The Kennedy “Warningâ€

Could it be that just ten days before his death, President Kennedy suddenly saw the light? It has long been rumored that in the Fall of 1963, Kennedy signed Executive Order 11110, authorizing the U.S. Treasury to resume the printing of U.S. Notes — debt-free money, just like Lincoln’s greenbacks. And then, on November 12, 1963, just ten days before his assassination, he is rumored to have made this statement in a speech at Columbia University:

“The high office of the President has been used to foment a plot to destroy America’s freedom and before I leave office, I must inform the citizens of their plight.â€

This rumor is so persistent and widespread that no work on the Fed could be considered complete without mentioning it. However, as it turns out, Executive Order 11110 mentions only transfer of the authority to issue more silver certificates from the President to the Secretary of Treasury. Besides, Kennedy was an internationalist. Issuing U.S. Notes would be the worst thing any President could do against the moneychangers.

In addition, no one has been able to verify the existence of the Columbia speech. G. Edward Griffin contacted the Columbia University to provide a transcript, but none was available. In fact, he was told that Kennedy had never spoken there. According to the Head Librarian at the Kennedy Library in Boston, Ronald E. Whealan:

“Ten days prior to the assassination [Kennedy] was at the White House meeting with ... the ambassador to the U.S. from Portugal.â€

It will be left to future researchers to determine whether this speech was ever made or not.

1968-1971: The Final Collapse: Nixon Closes the Gold Window

In 1966, the Bank of France broke away from the pack and started purchasing Fort Knox gold again at $35/oz. In fact, during that year alone, they purchased 17.2 million ounces of gold, at a cost of $601 million. This brought their holdings up to 150 million ounces. Since the U.S. had been purchasing gold from Canada that year, the total loss to the U.S. gold supply was only 16.3 million ounces. But the next year, 1967, the U.S. lost 33.4 million ounces.

From the last graph, you can see that the U.S. was getting dangerously close to running out of good-delivery gold. What could they do? They could go to Fort Knox and re-melt the coin gold bars and remove the copper, but that might raise questions and draw attention to what was really going on. Besides, there was a considerable body of legal opinion that Roosevelt’s coin-gold seizures were unconstitutional. No one knows whether or not the coin gold was melded down, since no reliable audit has been performed at least since 1953!

In theory, Federal Reserve notes still required a 25% backing in gold bullion. Even by the government’s most optimistic estimates, the U.S. was running up against that wall as well. As Christopher Weber put it:

“By early 1968 the U.S. faced a choice: Either eliminate the legal requirement that there be a 25% gold ‘cover’ for the domestic money supply, or soon have no more gold left to ‘defend’ the dollar.

“The decision came as no surprise: The 25% requirement was repealed, with almost no debate, in March 1968.â€

President Johnson then announced that all U.S. gold would be disposable for “international purposes.†If we had only known then what he meant by “international purposes†— namely to make international bankers and others in their inner circle very, very rich.

Once 95% of the .999 fine gold had been removed from Fort Knox and sent abroad, President Nixon closed the gold window in 1971 by signing public law 93-110 repealing the Gold Reserve Act of 1934. Gold prices soared. Americans were finally free to buy and own the magic and forbidden metal once again. Americans had been forced to sell their gold to the government for $20.66 per ounce, then spend 37 years watching the government sell it for $35 per ounce to foreigners. Now that most of it was gone, Americans were allowed to purchase back their gold at the going rate of $150 per ounce.

What a deal! What a country! What a scam!

By April 1978, gold’s price had risen to $226.37 per ounce. By mid-January 1980 gold was sold at a record high of $880. Since then the price of gold has slowly declined to around $400 per ounce.

World Gold Drained

But it doesn’t stop with Fort Knox. Apparently gold not only flowed out of the U.S., but from the central banking houses of almost every nation since 1965. Virtually every nation has been dumping gold. Here are the top nine holders of gold bullion in the world today. Notice the International Monetary Fund (IMF), an affiliate of the United Nations, is the largest known holder of gold bullion today (all holdings in short tons = 2,000 lbs = 24,000 troy ounces).

World Gold Holdings - 1995

Entity 1965 holdings477 1991 holdings478 Net gain/loss % change

IMF 2,225 3,539 +1,314 +59.1

Germany 5,403 (1968) 3,256 -2,147 -39.7

Switzerland 3,621 2,849 -772 -21.3

France 6,236 (1966) 2,801 -3,435 -55.1

Italy 2,862 2,281 -581 -20.3

Netherlands 2,090 1,504 -586 -28.0

U.S.A. 8,438 1,017* -7,421 -87.9

Japan 390 754 +364 +93.3

U.K. 2,696 588 -2,108 -78.2

Totals 33,961 18,589 15,372 -45.3

*This report lists U.S. holdings at 8,961 tons, but this includes “coin gold†still held in Fort Knox, which in 1975 was stated to be 9,983 tons. Today, the U.S. government still claims only 1,017 tons of good-delivery gold to be in store. In truth is that until a reliable audit is performed, American gold holdings are unknown.

In other words, the only winners were the International Monetary Fund (IMF) and Japan. The big losers were the U.S., Great Britain, France and Germany. During the 26 years from 1965 to 1991, in these selected countries alone, 17,049 short tons of gold bullion moved into private hands. If the American drain of the previous 15 years were added in, that would come to a staggering 27,882 tons. The total amount of government-owned gold in the world, as estimated by the Federal Reserve Bulletin in 1973 was only 49,024 tons! In other words, in only 25 years, over half the world’s gold moved either into private hands or into the Soviet Union where reserves were kept secret. But the vast majority of this gold changed hands in just seven years, between 1965 and 1971 (see Appendix I). Then, the price of gold began to skyrocket.

The International Monetary Fund

Just what is the IMF, anyway? In 1944, the World Bank and the International Monetary Fund (IMF) were created at the post-WWII Bretton Woods Conference. The stated purposes of the IMF were to stabilize currency exchange rates, and to assist member nations with temporary balance-of-payments difficulties. In fact, the IMF was the long-dreamed international Federal Reserve System, designed to centralize the monetary power of the entire world in a single entity. Interestingly, the author of much of the Bretton Woods agreements was none other than the British socialist economist John Maynard Keynes.

There were 143 member nations in the IMF in the early 1980s. Most of the Communist countries, including the Soviet Union, did not join; and, of the Western nations, Switzerland has never chosen to participate. Member governments contribute to the operating funds of the IMF according to the volume of the size of their economies. Part of the contribution is in gold, the remainder in the nation’s own currency. A nation may borrow funds against the gold portion of its contribution if it encounters financial difficulties due to an unfavorable balance-of-payments situation. This is why IMF gold reserves swelled during the 1965-72 period.

Keynes knew he had to move carefully to not alarm the major nations as he lured them into the central bankers’ trap. Although he hated the idea of gold-backed currencies because it gave nations a degree of financial independence, he knew the only way he could convince them to join was to use gold backing for the IMF initially. As Keynes explained it:

“I felt that the leading central banks would never voluntarily relinquish the then existing forms of the gold standard; and I did not desire a catastrophe sufficiently violent to shake them off involuntarily. The only practical hope lay, therefore, in a gradual evolution in the forms of a managed world currency, taking the existing gold standard as a starting point."

What an astounding admission! Here we have the architect of our present-day international monetary system admitting that he used gold backing for the IMF as merely a ruse to convince nations to join up, but then planned to remove them later on so their economies could be “managed†by experts like himself!

According to a report by the IMF, total world gold stands at 118,295 tons. Of that, 78,864 tons of gold is now in private hands.480 In other words, 66.7% of the world’s gold is held in private hands today. With gold so powerfully consolidated outside of national treasuries, a gold-based currency would be a recipe for private ownership of a national economy by a small clique of the world’s wealthiest people.

The European ECU

Notice from the preceding table that after 1973, the largest known holders of gold bullion were the Europeans. Not counting whatever is still in Fort Knox in the way of coin gold, the U.S. is only the seventh-largest holder of gold today.

There is speculation that this hoard of European gold bullion will be used to back the new European currency, the ECU, which will be in usage in the last half of the 1990s. It has been suggested that gold backing for the ECU was the only way Germany — the largest owner of gold today — could be convinced to go along with the new European central bank and its plan for a universal European currency.

It is also believed that it was for her opposition to ECU that Margaret Thatcher lost her job as British Prime Minister, to be replaced by the former Chancellor of the Exchequer, (the British version of America’s Secretary of the Treasury) John Major. Should gold backing for the ECU come about, it would instantly become the strongest currency in the world, being the only major currency backed by gold. But keep in mind; though a gold-backed ECU would be strong, twice as much gold is in the hands of private speculators.

Missing Soviet Gold

No one knows how much gold bullion was in the possession of the Soviet Union before its fragmentation in August 1991. But the general belief in American intelligence circles was that the Soviet Union had amassed the biggest stockpile of any nation at that time. The Soviet Union had the second-highest production rate of gold in the world — about 375 short tons a year, second only to South Africa — that produces about 937 tons/year. Incidentally, total American production is about 46 tons, while Canada produces nearly 72 tons/year.

It is suspected that the Soviets were heavy buyers of Fort Knox gold at the $35/oz. price, and from the dismal record of American aid to our supposed enemies, the Soviet communists, this may well have been true. In any case, shortly after the Yeltsin coup in August, 1991, I heard through friends in the intelligence community who knew of my interest in the disposition of Fort Knox gold that all the Soviet’s gold suddenly disappeared.

This was later confirmed by Claire Sterling in her highly-respected book on the Russian mafia, Thieves’ World. Sterling reports that on January 28, 1991, a Russian mafia leader named Roberto Coppola, telephoned an associate in the Italian Mafia, identified in court documents only as “G†and made him an incredible offer.

[Coppola] informs him that the Russian embassy is selling two thousand tons of gold, and there would be a 1% profit. He asks G. if he has the possibility of buying any. G says yes, and they agree to phone each other the next morning.â€

Author Sterling is astounded.

“Two thousand tons of gold was worth $22 billion — more than the entire package of international aid for the Soviet Union proposed at a G-7 summit that autumn. Such quantities could hardly have hit the meticulously regulated world market without causing total disruption. Nor was so much likely to have been amassed abroad, still less sold, all at once. Nevertheless, a ‘package’ worth $12 billion was said to have moved out of the U.S.S.R. by the spring of 1991, ‘bypassing normal export channels,’ reported the Manchester Guardian.â€

At a subsequent September meeting of the G-7 in Bangkok after the Yeltsin coup in August, Soviet economist Grigori Yavlinski told leaders that his country’s gold reserves were down to 240 tons. As Sterling put it:

“In November, Western analysts were shocked to learn that all the reserves of the Soviet Central Bank were missing. ‘Not a gram of gold remains; the vaults are empty,’ said Gosbank director Viktor Geraschenko.

As Sterling commented:

“The mystery of the missing gold still haunts investigators in and out of Russia; none of it has ever been recovered.â€

Private Swiss banking contacts have confirmed to this author that much of the Soviet gold was flown out of the country just before the Yeltsin takeover and now resides in the Swiss gold vaults under Kloten Airport near Zurich.

Kloten airport comes up again in Thieves’ World. Claire Sterling reprints a cable from Leo E. Wanta head of an American firm, New Republic/USA Financial Group, Ltd., announcing the sale of 2,000 metric tons (2,200 short tons) of gold bullion.

Mr. Wanta, according to Sterling, is well known to the U.S. Secret Service “where files on him are a yard long.†He was convicted in Switzerland of money laundering and has subsequently been involved in a variety of Russian ruble scams. Whether or not this is the same block of gold is unknown. The cable indicates that the gold was stored at Kloten, and was being offered at 3% less than the London fix, indicating the owners wanted few questions asked about its origin.

1,000 Tons of Gold For Sale On the Black Market

Other large blocks of gold of dubious origin are out for sale. In July of 1979, a mysterious figure, said to have one foot in the intelligence community and the other in the underworld, John Philip Nichols, offered a remarkably huge lot of .999 gold bullion to a group of unnamed investors at a substantially reduced price, in other words on the black market. Here is a copy of one page of his telegram (see next page):

Interestingly, Nichols refers to himself as “Ali-JVF Goldfinger 007.†Ian Fleming, the author of the popular James Bond novel, Goldfinger, was head of the British counterintelligence service, MI-5. It is widely believed in the intelligence community that he wrote much of his fiction as a forewarning, as many authors of fiction do.

If the removal of all the “good delivery†gold from Fort Knox can be viewed as a deliberate raid on the U.S. Treasury, then such an operation might well have been years in the planning — namely 40 years — certainly time enough for Fleming to get wind of it and try to reveal it fictionally. Regardless of that, obviously, John Philip Nichols was serving as the sales agent for several different persons, offering several different lots of illicitly acquired gold. How can we be sure it was illicitly acquired? Because it was being offered for sale at $3 below the London fix.

Danny Casolaro

It is interesting to note that after Washington, D.C. crime reporter Danny Casolaro was found dead under suspicious circumstances in a West Virginia motel room on August 10, 1991, it was discovered that the last area of investigation he was involved in was the gold shipment mentioned in the above telegram. Investigative reporter Don Devereux of Phoenix, Arizona said he was contacted by Casolaro several times in the last two weeks of his life and Casolaro was apparently very interested in the “5-ounce wafers†of gold mentioned on page 2 of the Nichols telegram (not shown).

These wafers may be what are known in Asia as “tolo bars,†a typically Asian form of gold bullion. Devereux had been investigating a smuggling operation by Phoenix, Arizona organized crime bosses designed to import stolen gold from Asia. Devereux had barely survived an assassination attempt during his investigation. Another individual, unrelated to the investigation was gunned down execution-style in the parking lot where Devereux usually parked his vehicle, in a car nearly identical to Devereux’s.

Casolaro’s death was ruled a suicide and his body quickly embalmed before any autopsy could be performed, or even before any notification of next-of-kin, in violation of State law. His family still believes he was murdered because he knew too much.

What’s Going On?

It appears that someone out there likes gold — a lot. I’ve run across numerous other reports of national gold stockpiles mysteriously depleted or missing. Sometimes “suicides†of key officials are involved. Frequently these involve victims leaping from atop tall buildings to their deaths. Unfortunately, what I’ve described above is all I’ve been able to substantiate well enough to include and footnote. Perhaps the publication of this book will bring new information to light.

It’s clear that gold is being consolidated generally in Europe, particularly in London, Frankfurt, Paris and Zurich, but other reputable sources claim the same thing is happening in the Netherlands as well. In any case, the suspicion is that a gold-backed European currency could soon make a debut, and if so, it would quickly replace the importance of the dollar and deal a severe blow to the U.S. economy.

Probably America’s best strategy would be to withdraw the power to create money from the Federal Reserve, put it back into the hands of Congress where it belongs, then print debt free money in proper proportion to the needs of the national economic health. This would instantly put America’s economy on a firm financial foundation and thereby begin to attract gold back into the nation’s treasury. This book does not recommend a gold-based currency, but a rather a currency based upon a flexible strategy with as much gold in reserve as possible.

For Chapter 20 see:

http://z6.invisionfree.com/Bill_Still_Refo...hp?showtopic=29

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I have been writing on the Fort Knox Gold Scandal since 1980. In fact, the Fort Knox missing gold story was what got me interested in monetary reform and led to "The MoneyMasters."

Here is trica’s economy on a firm financial foundation and thereby begin to attract gold back into the nation’s treasury. This book does not recommend a gold-based currency, but a rather a currency based upon a flexible strategy with as much gold in reserve as possible.

For Chapter 20 see:

http://z6.invisionfree.com/Bill_Still_Refo...hp?showtopic=29

very clear and interesting. Thanks

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Well, I wrote this 16 years ago, way before I knew a lot. It holds up pretty well. I was doing a lot of guessing, I guess. Probably still am.

Fascinating stuff

But it seems the gold backed european currency hasn't happened

I suspect they have more genocidal ambitions to undertake first, like wiping out 80% of humanity

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