Fort Knox is Broke?
February 24, 2009
Originally, I set out to write an article about selling the gold America held in Fort Knox to pay for the bailout. My hypothesis was going to focus on saving the interest charges incurred by federal government borrowing the money to pay for the bailout. Gold is at an all time high, and I believed America should capitalize on the high market value of gold and make a profit. When the economic conditions dictate, America could replace our gold inventories when prices fall. The question remained, does America have enough gold in Fort Knox to pay for the bailout? After a little research, I went to The US Mint (http://www.usmint.gov) website and discovered the United States Bullion Depository in Fort Knox, Kentucky currently contains 147.3 million ounces of gold.
This morning gold opened at $990.00 dollars an ounce and gold actually was as high as $1,005.00 this week. This was going to be a easy calculation, 147.3 million ounces of gold in Fort Knox at $990.00 an ounce is $145.8 billion dollars ($145,827,000,000). A much smaller number than I would have imagined.
The Bush administration approved $153 billion for the Economic Stimulus Act of 2008 and $800 billion for the Emergency Economic Stabilization Act of 2008. Together, the Bush administration approved $853 billion for the bailout. Obama's administration approved an additional $825 billion stimulus package.
Together the economic stimulus packages add up to $1.778 trillion dollars. Is Fort Knox is broke? America's piggy bank is short by $1.630 trillion dollars. Don't loose hope, there is always the Federal Reserve.