Ron Paul Calls for Gold Audit, Questions Whether Fort Knox Is Empty

From Fox News: There's gold in them thar hills. Or is there?

Texas Rep. Ron Paul, suggesting America's reserves may not be as robust as officials claim, is calling for an independent audit of the U.S. gold held at Fort Knox and other facilities.

The Republican congressman known for his fierce opposition to virtually everything the Federal Reserve does says the public deserves to know what's behind the fortified walls of America's gold vaults -- particularly in case gold is ever reintroduced as a basis for U.S. currency.

"It'd be nice for the American people to know whether or not the gold is there," Paul told Fox Business Network. And if it is all there, he said, the public should know whether any of it has been obligated.

A spokeswoman told FoxNews.com the congressman wants to introduce the bill in September when Congress returns from recess.

Fort Knox claims billions of dollars worth of gold are stored away in its secret vault. The Fort Knox facility, a hyper-secure fortress in Kentucky that is part of quintessential American lore, is encased in 750 tons of reinforced steel, as well as thousands of cubic feet of concrete and granite. No visitors are allowed.

Though Paul no doubt wants a more thorough inspection, the U.S. Mint is subjected to regular audits, including at Fort Knox. The Mint claims gold is removed in "very small quantities" for this purpose alone, and that no other gold has been transferred in or out of the facility for a long time.

The latest audit, conducted by KPMG, did not appear to detail U.S. gold holdings -- dealing more with gold and silver sales, coin circulation, workplace environment and other issues -- but did state that gold and silver continue to be held at Fort Knox.

Scrutinizing U.S. monetary policy, though, is nothing new for Paul. Last year, he pushed on Capitol Hill a bill to audit the Federal Reserve, an effort that ended with a Fed audit provision tucked inside the financial regulation package.

Paul, in an interview last week with industry publication Kitco News, first outlined his next campaign.

He said there is "reason to be suspicious" about U.S. gold holdings and suggested officials were manipulating the price of gold to prop up the perceived value of paper money. Paul said "it is a possibility" that neither Fort Knox nor the New York Federal Reserve vaults have any gold. He also said he will call for the U.S. government to legalize the use of gold and silver as "legal tender" alongside the U.S. dollar. Let them compete, he says.

"If people get tired of using the paper standard, they can deal in gold or silver," he told Kitco News.

Representatives from the Treasury Department and U.S. Mint did not respond to requests for comment on Paul's proposal.

Gold and silver investment
has drawn renewed attention amid concerns about the stability of the U.S. dollar. The United States moved away from the gold standard in the early 1970s, but Paul said it's good to know what the United States holds just in case. He warned the U.S. government is setting the stage for a depression by trying to print, spend and regulate its way out of the last recession.

"Who knows, someday we might want to have a gold standard again and quit all this printing-press money, so it would be nice to know how much we have," Paul said in the interview with Fox Business Network.

JPM Shutting Down Their Proprietary Commodity Trading Operation?

From Jesse's Cafe American: J. P. Morgan said today that they will be shutting down their proprietary commodity trading operations in response to the Volcker Rule in the Financial Reform legislation.

The JPM proprietary commodity trading group is headquartered in London with a few traders located in New York.

Within the past month trading head Blythe Masters had reassured her traders that things in the unit would continue on as they had been despite losses and layoffs.

Employees are being told that they may apply for other positions now.

Speculation is that this is also in response to position limits and other reforms in the Commodity Markets spearheaded by Commissioner Bart Chilton which will make it more difficult for large players to dominate the short term markets through sheer position size.....read on

IMF Gold Assets Fall 16.85 Tons as Russia Adds to its Holdings

From Business Week: The International Monetary Fund’s gold reserves fell by 16.85 metric tons in July as Russia added 16.2 tons to its holdings, according to figures from the Washington-based lender.

Reserves of gold at the IMF were 2,917.07 tons at the end of July, compared with 2,933.92 tons a month earlier, data on the IMF’s website show. Russia increased holdings to 726.02 tons last month from 709.81 tons, according to the figures.

The IMF plans to sell a total of 403.3 tons of gold. India, Mauritius and Sri Lanka bought 212 tons last year, and the IMF in February said it would begin selling the remainder on the open market.

Central banks have increased holdings and gold-backed exchange-traded fund assets owned by investors yesterday climbed to the highest since at least 2003, according to data compiled by Bloomberg.

Gold for immediate delivery traded at $1,249.15 an ounce at 8:06 a.m. in London. Prices climbed to a record $1,265.30 on June 21.

Tony Blair memoirs: we must be prepared for attack on Iran

From the UK Telegraph: The international community has to be prepared to take military action against Iran if the regime develops a nuclear weapon, Tony Blair has said in an interview to promote his memoirs, A Journey.

He said it was ''wholly unacceptable'' for Tehran to seek a nuclear weapons capability and insisted there could be ''no alternative'' to military force ''if they continue to develop nuclear weapons''.

Speaking to BBC journalist Andrew Marr, Mr Blair said: ''I am saying that I think it is wholly unacceptable for Iran to have a nuclear weapons capability and I think we have got to be prepared to confront them, if necessary militarily......read on

LOST GOLD OF TSARS ‘FOUND IN THE WORLD’S DEEPEST LAKE’

From the UK Express:

A RUSSIAN mini-submarine may have found billions of pounds worth of lost gold in a Siberian lake, it was revealed yesterday.

Explorers have long searched for lost Tsarist treasures dating from the Bolshevik Revolution, when forces loyal to the deposed royal family fled the advancing Red Army.

Legend has it that 1,600 tons of gold – which could now be worth billions of pounds – was lost when anti-Communist commander Admiral Alexander Kolchak’s train plunged into Lake Baikal, the world’s oldest and deepest freshwater lake.....read on

If Lehman Had "No Idea," Who Else Is Clueless?

By Graham Summers: Here's a zinger of a news story:

Barclays Plc had no idea how big Lehman Brothers Holdings Inc.'s futures-and-options trading business was when it considered taking over the defunct bank's derivatives trades at exchanges in 2008, a Barclays executive said.

"Lehman's books were in such a mess that I don't think they knew where they were," Elizabeth James, a director of Barclays's futures business, testified today in U.S. Bankruptcy Court in Manhattan. James worked on Barclays's purchase of Lehman's brokerage during the 2008 financial crisis......read on

The Keiser Report

The latest Keiser Report discusses the the huge increase in gold sales in China and around the world this year. In the second half of the show Max interviews an environment journalist about the BP gulf oil spill.

Ratio Analyses Suggest Gold & Silver will go higher

By Lorimer Wilson: At 8.5x the Dow/gold ratio is currently slightly above the long-term median of 8x. This means that gold is still relatively inexpensive in comparison with the Dow Jones. Bull markets tend to end in euphoria and excess, however, which is why we expect substantially lower values. In 1932 the ratio was 2x, and at the end of the last bull market the ratio was 1x. We think that values of 1-2x might be reached again as a result of the secular bull market.....read on

Bullion-Buying In China And India (part 2)

By Jeff Nielson: In Part I, I alerted readers to the problem with using Western labels and Western analysis to analyze the gold markets of other nations - especially the two titans of the gold market: China and India. More specifically, I pointed out that breaking-down demand into the categories of "retail investment" and "jewelry" demand was both arbitrary and inaccurate.

In fact, much of the gold/silver acquired under both of those categories simply represents "savings", rather than "investment" or the mere purchase of a luxury good (i.e. jewelry). Because of this inaccurate analysis, I suggested that (Western) analysts will likely consistently underestimate long-term demand, while overestimating the amount of "scrap" bullion which would/will return to the market.

While much of this analysis applies to both India and China, there are clearly important differences in these two, critical markets for precious metals. Previously, I pointed out that China had only recently removed/relaxed policies which severely restricted the ownership of precious metals. An astute reader immediately provided me with two, important observations.....read on

Bank of England will use 'all powers' to stave off any future crisis

From the UK Telegraph: In a major position paper, Charles Bean (Deputy Governor) said that the Bank had been powerless to prevent what he called the "Great Contraction" of 2008 because control of interest rates was not, in itself, a powerful enough tool.
He also hinted that the days of quantitative easing may not be over: "The deleveraging process is incomplete, the recovery remains fragile and a considerable margin of spare capacity is yet to be worked off," he said. "Further policy action may yet be necessary to keep the recovery on track."

He was speaking at the Jackson Hole Economic Policy Symposium in America the day after the Federal Reserve chairman, Ben Bernanke, buoyed the markets with an upbeat assessment of the US's growth prospects.

Mr Bernanke also hinted that he was prepared to employ more asset purchases if necessary.....read on