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Gold Swindle: The Story Of Our Dwindling Gold Ch. 1: The Gold Hemorrhage

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copyright 1959, revised 1961 - George Racey Jordan, USAF Major (ret)

For over twenty-five years our Government has kept its vast hoard of all the monetary gold in the United States buried under the ground at Fort Knox and in other Treasury depositaries. This gold is carefully guarded day and night by every protection that human strength, ingenuity and electronic systems can afford against theft.

Not one of the 400-ounce gold bars in this hoard can be moved without the authorization of the United States Government, nor without massive security precautions being taken during an actual gold transfer.

The American people, whenever they stop to think about it, derive a deep sense of security from the knowledge that this gold backing, or solid base, for our money is safe on American soil, guarded by every device known to our security experts.

Ever since the Treasury demanded and secured all gold privately held by all individuals or banks, and Congress made private possession of the precious metal a crime (except in the form of newly mined or placer gold), the American people have regarded this buried treasure as a secure protection behind the paper tokens called dollars.

How could any part of this great treasure be lost, when by law the Government of the United States is pledged to preserve it, and every possible kind of protection is placed around it? It would be unthinkable, you will say, to have such doubts about the gold we were forced to give over to our Government to have and to hold.

Nevertheless the gold, most of which is still held physically within this country, is no longer ours legally. Only a fraction of it belongs to our Government. Irrespective of physical removal, it has been lost to us. In the past ten years we have lost $8 Billion by gold shipments abroad. We are losing today and there is every expectation that this outward flow will continue.

Why has this happened? Because, even though Americans may not exchange their paper money or checks for gold, claimants outside of the United States can demand gold for their paper money or silver if they wish. These claimants include foreign central banks, the depositors and customers of those banks, Americans living or doing business abroad, and international agencies, such as the United Nations, the International Bank, the International Monetary Fund, and other United Nations' subsidiaries.
This gold hoard is now in our Government's keeping, but really only under a warehouse keeping agreement - being stored at taxpayers' expense even though earmarked for international ownership.

No American can own gold in this country or abroad except for use in jewelry-making, dental work, and in certain arts and sciences. But any foreign trader, any foreign government receiving American dollars as foreign aid, any international agency receiving grants in dollars from the United States, can turn his dollars into gold on demand. It is a privilege not to be an American citizen.

The current drain upon our gold hoard is due to these foreign claims being "cashed in" by their owners. Furthermore, these foreign claimants have not as yet taken out all the gold they own. At the end of 1960 they still had the right to withdraw more than $20 billion of the total. Their dollar claims rise higher every day. In 1961 none of the gold bars in our Government's carefully guarded vaults, theoretically belonged to us. And the loss has not been stopped. In fact, it is only beginning. The banks and individuals outside our country who own dollars can legally demand from the central bank in the country of their operations all of this gold. They will get it, because the central banks can in turn demand the gold from our own privately owned Federal Reserve System, unless we declare an embargo.

The American people gave up their gold in trust to the Government. They worked hard and produced abundantly to maintain the national economy and the honor of the dollar. But the fine print in the law permitted a few venal individuals to establish preemptive claims to the metal backing of our money.

That gold is supposed to back our total money supply. But what has happened? Our gold hoard has been getting smaller while our total working supply of paper money and credit has been growing larger.

By law, we are supposed to have gold reserves in safekeeping to cover at least 1/4 of all currency in circulation and member bank reserves held within the Federal Reserve System. This serves as the hard core of the total of bank credit which may go up to six times the value of the bank deposits held by the Federal Reserve System. Our gold backing should represent at least 4% (23,120,000,000) of all obligations with 33 billions in currency, the 255 billions in bank deposits, plus a debt of 290.6 billions - a total of $587,600,000,000 dollars. Of course this does not even include Veteran's Administration or Social Security obligations, which must be considered.

Now it is true that most foreign owners of US dollars do not turn them in for gold. The role of gold is similar to that of insurance, that when and in times of emergency, it should be available as a reserve commodity. Therefore, in time of stress, we need more gold, not less.

The crisis that looms ahead of us comes from anew danger - that foreigners are losing confidence in the American dollar. When a government tinkers with its money, it may fool its own people for a long time, but it cannot fool hard-headed financial experts in other countries. A shaky money system can easily be toppled by foreign experts who refuse to believe fairy tales.

Let us sum up. Foreigners have the legal right under our laws to demand gold in exchange for dollars. They are withdrawing increasing amounts of gold from the supply in our Government's keeping. They have begun to distrust our teetering money system, so we have every reason to believe their demands will continue to increase.

As people outside the United States withdraw our gold, dollar for dollar, the reserves behind our currency grow smaller and smaller. As our gold backing declines, prudent financial experts here will become more and more dubious about the backing for our money in circulation, and will withdraw their gold with increasing rapidity, thus compounding the evil.

Furthermore, this uncertainty destroys public morale, an effect best avoided during these critical days when the insidious forces challenging our way of life are daily becoming more powerful.

The gold movement within the U.S. is a cloak-and-dagger operation. Gold is actually moved a few hundred feet from one set of cages in the Federal Reserve Bank by expensive armored trucks, merely to be re-checked and restored.

Inflation is like a slowly-growing fire in the woodwork or the cellar which causes almost no smoke or flame as long as it is kept under cover. But unless the fire is sternly checked someone, somewhere, is going to open the door and let in the air. Then the flames rise up, and consume the whole structure. It may be too late to prevent catastrophe since the Government has chosen the road to destruction by not reducing the national debt in time of peace.

continued in chapter 2: The Maze:

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Gold Swindle: The Story Of Our Dwindling Gold

available on Amazon:

Chris Indeedski!

Daily Paul cured my abibliophobia.

From Major Jordan's Diaries by George Racey Jordan

find it on amazon:

Great Daily Paul post here:

Chris Indeedski!

Daily Paul cured my abibliophobia.

Chapter 2: The Maze

available here


Chris Indeedski!

Daily Paul cured my abibliophobia.


Now to prepare for chapter two...

Chris Indeedski!

Daily Paul cured my abibliophobia.