About That Gold in Fort Knox…

Yesterday, doom and gloom.

Today, opportunity.

With some gloom.

If you saw yesterday’s dispatch, you’ll know I responded to a reader’s question about what could happen if El Presidente de Mar-a-Lago were to re-establish the gold standard for the US buck. And if you didn’t read that dispatch… don’t! Absolutely no need to feel depressed and disconsolate all day.

As I noted at the bottom of that dispatch, I said I would come at gold today from what I think is a much more likely possibility. In fact, I’ll go so far as to say it’s 99.9% guaranteed to happen.

And that is: What happens when (not if) America revalues the gold it owns? (By the way, that 0.1% shortfall represents yesterday’s dark-case scenario—there’s no gold in Fort Knox. And if that’s the case, well, yikes…)

In his weeks’ old role as Treasury Secretary, Scott Bessent has begun talking about “monetizing” Uncle Sam’s balance sheet. That’s just a way of saying the current administration wants to find creative means of converting America’s assets into real Benjamins the government can spend on this, that, and the other thing.

I feel like a broken record saying this, but… I said this was coming.

I’ve written a few times that the government could deal with some of its debt issues by selling off assets like national parks to Disney and then sharing in the revenue stream. The sale would generate beaucoup bucks to pay down the debt, and it would come with substantial stipulations that ensure parks are not overly commercialized, are not sold off to become cargo airports or solar-farm arrays, and are not priced so that only the elite can afford to visit (seriously, have you seen Disney World ticket prices lately?).

Along with that monetization opportunity is the chance to revalue America’s gold stash, assuming the stash really exists.

For decades, the US has carried gold on its books at a price of just over $42 per ounce. But gold today is about $3,000 per ounce—meaning the value of America’s gold isn’t $11 billion, as the $42 price tag would imply, but closer to $780 billion.

Whoever said “a billion here, a billion there—soon you’re talking about real money” was dead-on accurate.

Frankly, this is a bit like the Antiques Roadshow, where Mildred Q. Snicklefrump from Paducah shows up with some frog-shaped paperweight that generations of her family have used as a doorstop, only to learn that it’s a famous, early American sculpture from Hortense J. Frumpleglot and it’s worth $18 quintillion dollars at auction.

Imagine you’re Mildred.

You can sell the frog… or you can keep it for future generations of Snicklefrumps, but borrow heavily against its value to upscale your lifestyle today.

That’s what America—particularly Trump—wants to do.

The audit of Fort Knox is the process that starts the ball rolling.

See, the gold will be there.

Whether or not the gold is in Fort Knox at this very moment… it will be there by the time the audit happens.

Right now, tons of the metal are relocating to the US from abroad. In fact, a record amount of gold is leaving London, the largest global storage and trading hub. Gold is also fleeing Switzerland and Singapore.

There’s a conspiracy theory going round—which I’m actually quite partial to believing—that this could very well represent some part the US government rapidly importing airborne flotillas of gold to fill empty vaults in preparation for the audit.

When the audit happens, Trump and Musk will see the gold… and Trump will duly announce in PT Barnum fashion that, “Yep—lots of gold. Saw it with my own eyes—which are some of the smartest eyes they’ve ever seen. But the gold—everywhere. Some say it’s the prettiest color of gold in the world. Pure American gold. The purest gold ever mined. The best gold, really.”

Then he will announce that he is revaluing America’s gold reserves to bring the US balance sheet into the 21st century. Instead of $42.22 per ounce, Uncle Sam’s bean-counters will now officially value America’s 261-ish million ounces at $1,000 per ounce.

And just like that, balls are in motion…

First, gold prices rise on the idea that America now officially sees gold as a real financial asset, and not a “waste of resources,” as former Fed poohbah Ben Bernanke once described it.

That, in turn, begins a monetary reset in America, which is probably where the gloom comes in, but back to that in a moment.

Trump will use the reset/revaluation to pull cash from the Treasury that he then uses to buy heaps and gobs and bundles of bitcoin and other digital assets as he sets about building the US Sovereign Wealth Fund he is very eager to have.

See, building a wealth fund demands, by definition, that you, well, have wealth. It’s right there in the name.

America, you might recall, has no monetary wealth. It manages the world’s largest Sovereign Debt Fund, now packed with more than $36 trillion in IOUs.

Revaluing gold gives Trump an asset he can draw against to build his wealth fund.

Trump revaluing America’s gold reserves would also undergird gold globally.

Some might logically think, “Wait, El Jefe. If gold is $3,000 and Trump revalues it to $1,000, well doesn’t the price just fall to $1,000?”

No.

The US values gold today at $42.22, yet the market price is $3k.

The only fact that changes is that America would officially agree that gold holds real financial value, which is bullish for gold.

It would also be bullish (temporarily) for the dollar, since the world would see that A) America does own the gold (even if proof of ownership is Kabuki theater) and B) the dollar will likely be quasi-backed theoretically by a hoard of bitcoin.

That strength would be short-lived because Trump will then convene a new Bretton Woods Conference (where the dollar took on reserve currency status in 1944). He will, without a doubt, hold it at Mar-a-Lago and it will become known across history as the Mar-a-Lago Accord (which plays elegantly into Trump’s lust for historical immortality).

That, however, is a very different dispatch. All I will say here is that the accord will aim to deflate the US dollar’s strength globally while maintaining the dollar’s hegemonic role as world reserve currency. Both are Trump-stated desires/demands.

And they’re both bullish for gold and bitcoin.

As for the gloom I’ve mentioned…

Well, financial resets are never all bright and cheery. Someone always has to lose.

In this particular game, the losers will be America’s middle class. A falling dollar will mean that the cost of living in America rises, since so much of the items we buy—clothes, shoes, electronics, fruits and veggies, useless knickknacks from Temu and Ali Baba—all come from overseas.

All of this—all the paragraphs up to this point—are why you absolutely want to own gold today. I know from emails I receive that lots of Field Notes readers have been lackadaisical when it comes to buying gold. They don’t see the urgency, they’re not sure how or where to store it, and they don’t know how to spend it (see my dispatch here).

But Trump revaluing gold is pretty much a done deal.

It’s clearly what he wants to do so that he can free up hundreds of billions of dollars for his Sovereign Wealth Fund idea—or for whatever other reasons he might have in mind.

And that just means gold prices go higher.

Of course, the flipside here is what if the gold supposedly in Fort Knox is not actually there at all… Trump can’t monetize the air in the vault to fund his gambits. And in that case, well, you really should have read yesterday’s dispatch…