Why Did Trump and Musk Suddenly Go Silent on Fort Knox Gold?

Why aren’t Donald Trump and Elon Musk talking about visiting and auditing Fort Knox anymore? There are two main reasons relating to the Fort Knox gold audit, writes former investment banker James Rickards in a story published on the Daily Reckoning portal.

Below we publish Rickards’ story in full:

You may remember what hap pened earlier this year. Trump and Musk made a big announcement about their plans to visit Fort Knox, where most of the US gold reserves are stored. They wanted to make sure the gold was still there. The newspapers picked up on the story, and Musk said that his Department of Government Efficiency (DOGE) was ready to “audit” the gold bullion and make sure nothing had gone missing. I had a different take on that statement, which I will discuss in this piece.

The US gold reserves amount to 8,133.5 tons, and a little less than half of that is stored at Fort Knox. The rest is kept in a secure location at West Point, New York. The exact location of the latter is secret, but I happen to know where it is. A small portion is also kept at the Denver Mint, where coins are made. Legally, the gold is owned by the US Treasury Department, but in reality, virtually all of the gold is controlled by the US military. Fort Knox and West Point are essentially military bases.

Fort Knox Show

These nuances did not hold back Trump and Musk. In the public eye, Fort Knox is the main repository of US gold reserves. Because of this, they wanted to visit it and inspect the gold. Elon Musk even talked about doing a live video broadcast using his Starlink satellite system. Trump warned that if the gold is missing, then those involved will have to be held accountable. The plot was ready. The ensuing drama seemed irresistible.

Musk wants to audit Fort Knox gold that has been in the dark for 50 years

I was hoping that Trump and Musk were in good shape and had been lifting weights. Gold is heavy! It is one of the densest materials on the periodic table, except for radioactive elements like uranium and some trace elements that normally exist in small quantities. Central banks hold 400-ounce gold bars, which weigh about 12.5 kilograms. I have held them in my hands many times when I have visited the vaults. I always smile for the camera, but inside it takes a lot of strength to keep a gold bar in the air. I was afraid that Trump and Musk might hurt their backs during the media show .

Trump also mentioned the Fort Knox visit during a meeting with French President Emmanuel Macron. He also spoke about it on his Air Force One flight. He also mentioned it at several subsequent events.

But then suddenly the whole thing just disappeared. After February 26th, Trump never mentioned it again. Musk’s radio stopped talking about it on April 6th. There was no visit to Fort Knox. There was no statement as to why there wasn’t a visit. It was like nothing had happened. It just disappeared.

Now, Elon Musk is leaving his position as head of the Department of Government Efficiency (DOGE). This was always known, of course. Musk was a temporary government employee, and he was always going to leave. But why did he skip the gold bar show ? It just didn’t happen.

The Question Is, Why?

Let’s start by answering this question with the obvious fact that the gold is still in Fort Knox. Rumors of the gold being stolen or lost have been circulating since the vault was built. Some have claimed that European bankers stole the gold in the 1930s. Others say that the Rockefeller clan stole the gold. The plot of the 1964 James Bond film was based on the theft of this gold.

This speculation creates a lot of buzz, but the gold is there and the records are there. The last public audit was in 1974, but the Treasury Department conducts annual audits of the vault. True, the results of that audit are not made public. Treasury Secretary Scott Bessent recently said, “I can tell the American people… all the gold is there.”

If all the gold is there, why not visit Fort Knox? It would be a great PR move and would help calm skeptical Americans.

Money Printing Monopoly

There are two reasons why the visit did not take place and why we hear nothing more about it.

First, the US government and the Federal Reserve do not want to draw attention to the role of gold as a monetary asset. The Federal Reserve (and commercial banks) have a monopoly on printing money. The government has done everything it can to diminish and deny the role of gold as money. This began in 1933, when Roosevelt decided to confiscate the gold of US citizens. It continued with Nixon, who decided to abandon the gold standard. Since then, we have had three generations of students who know practically nothing about gold.

Gold is not discussed in economics. Economic policymakers or the Federal Reserve do not discuss gold. Younger students do not even know that the United States was on a gold standard. They do not know that gold coins once circulated as money. The government has tried to rid itself of the memory that gold is money.

Why revive it with a visit to Fort Knox? If you want to maintain your monopoly on money, it is easier to ignore gold

Of course, gold is a monetary asset. As mentioned, the US gold reserves amount to 8,133 tons. Germany has 3,351 tons. Italy has 2,452 tons. France has 2,437 tons. Russia has 2,333 tons. China reports that they have 2,292 tons, but they are not transparent and probably have considerably more gold.

Among multilateral institutions, the European Central Bank holds 506 tonnes of gold and the International Monetary Fund (IMF) holds 2,814 tonnes of gold. All eurozone countries hold a combined 10,770 tonnes of gold. The total reserves of the world’s countries amount to 36,118 tonnes, and this is important for understanding the context.

Why have such high gold reserves been maintained and increased over the past century if gold is not money? The question answers itself, because gold is money.

Countries simply don’t want to admit it because they want to maintain their monopoly on paper money. Or they are secretly buying gold and don’t want prices to skyrocket. One of the classic Marx Brothers puns was: “Who do you believe… me or your own eyes?” When it comes to gold, I believe my own eyes. Countries hold 36,118 tons of gold and that’s all I need to know.

Gold Lending Scheme

There is an even more insidious reason why Trump and Musk skipped visiting Fort Knox. Even assuming that gold does indeed exist at Fort Knox, a deeper question arises: was this gold borrowed?

Gold lending is a well-established market, but it is not widely understood by non-experts. Even stock and bond market specialists know little about gold lending. Essentially, it is a way for the owner of gold to earn income from it. Gold does not pay dividends or interest like stocks or bonds. But it can be lent to a third party and earn about 2 percent per year on it. The person lending the gold does not truck it out of the vault. The gold stays in the vault. Gold lending is purely a paper transaction.

The person who lends the gold receives a profit on it. The person who borrowed the gold from another party receives the right to lend it to the next party. And that party can lend it to a fourth party. Given this dynamic, one ton of gold can be linked to 100 tons of “paper gold” transactions.

In this chain, each party acts as if the gold were their own. They can lend it out or sell it as “unallocated” gold. Each of them is exposed to gold price movements – if gold goes up, they profit, if it goes down, they lose. The same principle applies to gold futures, options, swaps, ETFs and all other gold-related derivatives. The leverage of paper gold is about 100 times that of real physical gold.

Physical vs. paper gold: what are the main threats to virtual gold?

The danger is very obvious. This system is no different from a bank run, where everyone starts withdrawing their deposits. If a group of paper gold investors suddenly demands physical delivery of the gold, then the parties have to start buying that gold on the spot market. Because they don’t have the physical gold in their hands. The gold market is liquid, but not enough to allow most of the gold to be delivered. A full-blown panic could come very quickly. The price of gold per ounce would quickly go to $25,000 per ounce in such a scenario. And no investor would even have time to shout, “Buy!”

I think someone sat down (possibly Scott Bessent) and explained the reality of paper gold to Trump and Musk.

If you learn how the paper gold market actually works, you’ll skip the Fort Knox visit. The paper gold ideologues at Goldman Sachs and JPMorgan prefer to keep the gold under wraps. They need to keep playing the game. And that’s why Trump and Musk aren’t going to Fort Knox anytime soon.

For everyone else, the solution is simple – you need to own gold.