Congressman Alex Mooney. Image courtesy of the United States Congress.
Republican Congressman Alex Mooney (West Virginia) caused a stir last March when he submitted proposals for a Gold Standard Bill, officially titled ‘The Gold Reserve Transparency Act’ (H.R. 2559). Last Tuesday, Mooney introduced this bill to the House of Representatives, in the hope of the act becoming law and forcing the US government to audit the nation’s gold reserves.
To date, the US is estimated to hold 8,133.5 tonnes of gold in storage – the most of any nation in the world. Mooney’s proposal seeks to direct the Comptroller of the United States to perform a full audit of America’s gold reserves – held in deep storage in a variety of locations including Fort Knox, Denver, and West Point, New York.
The inspection would involve an assay of the gold held, inventory counting in full detail of the gold specifications, and registering any third-party obligations the US might hold (sales and purchases) with regards the gold bullion. The proposal would also require such an audit to take place every five years, to ensure records were being kept accurately.
The West Point Mint in New York – home to some of the US gold reserves. Image courtesy of Daniel Case.
No such audit has ever been performed of the US gold reserves: in 1953, Eisenhower had an audit performed but this was a shallow stock take rather than an in-depth documentation of what gold the USA had, where it had come from, and if it were owed elsewhere. An attempt was made in the early 1970s by President Nixon to address this, following the abandonment of the Gold Standard, but inspectors found a lack of documentation (invoices, certificates etc) as well as evidence of tampering with packaging or containers holding the gold. As such, the inspection was aborted.
The act has backing from the Sound Money Defense League amongst others and is proposed at a time when Russia and China – major rivals to the US – are rapidly expanding their gold reserve totals. The lack of previous transparency is a concern to many, including Mooney, as it puts the existing US stated total into doubt.
Some of the gold reserves held at the West Point Mint. Image courtesy of Coinnews.net.
Speaking to reporters, Rep. Mooney said: “The U.S. Treasury has neglected to give the American people an understanding and inventory of our nation's gold holdings. After 65 years since the last audit, this legislation would lead to necessary transparency in accounting for our gold reserves.”
The next step for the bill will be discussion in the House of Representatives, with the potential for amendments to be made to the act before any vote takes place to push the proposal through the House. If the Gold Reserve Transparency Act passes in the House of Representatives, then it goes on to the upper chamber: the US Senate. If they pass the proposed bill then the act will become law, but there is still a chance for a presidential veto – something Donald Trump might consider (if the bill gets this far) given America’s gold reserves are likely not as large as is currently believed.